Thanks for reading.

Enjoy the weekend.

Be safe.

We are all day traders now! 

You just cant make this up: 

Thomas C

Mudrick Capital all out of AMC stock and debt - CNBC

Mudrick Capital, which quickly jettisoned a stake in AMC NYSE on Tuesday, also no longer holds any AMC debt, CNBC's David Faber reports.

Mudrick sold the 8.5M shares of AMC it acquired Tuesday for a profit and now it has also shed AMC debt, Faber reports, citing sources.

Mudrick also reportedly told clients AMC shares were "massively overvalued."

By quickly getting out of the stake, Mudrick missed out on AMC's rally Wednesday where shares doubled.

Shares of AMC are bouncing around positive and negative territory this morning, currently down 2.2%.

Looking to still capitalize on the rally that has shares up 2,300% year to date, AMC is asking shareholders to approve the sale of 25M more shares.

But it says it will not issue any more equity until 2022.

Meanwhile, passive investors are feeling second-hand effects for the meme excitement, with AMC the top-weighted stock in the Russell 2000 NYSEARCA and the Russell Value 2000 NYSEARCA.

From Peter Boockvar:

As we hear rationalizations for the current meme stock craze as this time is different, I want to show some charts of stocks from the late 1990's for those that weren't around and as a reminder to those that were watching. Here are the names shown: Iomega, JDS Uniphase, Verisign, Ciena, TimeWarner/AOL, Emulex (the most extreme of this short list), Lucent and Nokia.

IOMEGA

JDS UNIPHASE

VERISIGN

CIENA

TIME WARNER/AOL

EMULEX

LUCENT

NOKIA

I will be out of the office from 1-3 pm as I have a business appointment.

There is little consistency to this market - from day to day. 

Just an observation.

Net payrolls grew in May by 559k, below the estimate of 675k. The private sector contributed 492k of this vs. the estimate of 610k. The two prior months were revised up by 27k. The household survey said 444k got employed and when compared with the 53k person drop in the size of the labor force, the unemployment rate fell to 5.8% from 6.1% and the all in U6 rate is now 10.2% from 10.4%. I know the Fed is trying to retain again the 3.5% unemployment rate seen pre COVID but the average over the past 40 years is 6.2% which we are now of course below. The U6 has averaged 10.5% over this same time frame. 

Substantial progress? 

Hours worked held at 34.9 for a third month which is just off a multi decade high. This is because the participation rate remains low as it fell one tenth to 61.6% vs. 63.3% pre COVID and companies are stretching existing employees more because of the difficulty in finding new workers. The employment to population ratio rose one tenth to 58%. The pool of available workers fell to the lowest since last March. 

This in turn lifted wage growth where average hourly earnings jumped +0.5% month over month, more than double the estimate of up +0.2% and follows a +0.7% rise in April. And it was a jump in pay for leisure and hospitality workers that led this increase as they rose by +1.3% month over month for these people. Manufacturing wages rose +0.6% month over month and by the same amount for construction workers. These are all areas where the labor market is tight. Maybe the Phillips Curve theory still has validity after all. 

With respect to individual job categories, construction hiring fell by 20k and I will blame the exploding rise in construction costs for that. Here is a quote I saw this week from a homebuilder with regards to these cost issues: "This could be industry killing if things continue going the way they're going. We're putting projects off. We've got clients that are hitting their price ceiling." (I have frequently written about the risk to housing of reduced affordability.) 

Manufacturers added 23k after losing 32k last month. Retail jobs fell for a second month but after a jump in the month before. Leisure and hospitality not surprisingly led the way with hires as it added 292k jobs vs. 328k in April, 227k in March and 413k in February. 

After losing 22.4 million jobs last March and April, the economy has added back 14.8 million. So while we're still 7.6 million below where we were, it is becoming crystal clear that the main problem with the labor market right now is the supply side and we're seeing higher wages in response to encourage people back. We'll see later this month what impact on hiring we'll see in those states that are nixing the enhanced benefits and we'll see what happens when school ends. That said, more and more baby boomers are retiring and not coming back into the labor force. As for the Fed, if the only thing they are going to look at in driving monetary policy is the almost 8mm that are not back, they are not doing their homework. The economy is running TOO hot and stagflationary situations are popping up left and right. 

The three year inflation breakeven is up by 2 bps and back to 2.70% I believe in response to the wage data, while nominal yields are little changed with the mix of the jobs miss relative to expectations. The 10 year breakeven is up by 1 bp to 2.44%.

I heard someone on tv yesterday argue that the slowdown in money supply growth was a sign that the 'market' was basically initiating a taper notwithstanding no such thing from the Fed. I want to point out that there is NO slowdown in the pace of money supply growth when viewed m/o/m this year. The ONLY reason it has slowed y/o/y is because of the very tough comps from last year's MASSIVE increases in March, April and May 2020. Money supply growth in the first 4 months of data this year is averaging an increase of $244b per month. That compares with the average in the last 6 months of 2020 of $159b. The average m/o/m rate of change in the last 6 months of 2020 was .83%. The average year to date thru April is 1.25% m/o/m. This chart of M2 also says it all visually that there is actually a re-acceleration in money supply growth going on.

This also ties into the action in the meme stocks as cash is just sloshing around everywhere and here is an updated chart of the Goldman Sachs Financial Conditions Index. On Wednesday it closed to match the record low seen in early May. Human nature WILL NEVER CHANGE. It responds to incentives and the more extreme the incentives...

GS FINANCIAL CONDITIONS INDEX (The lower, the easier)

While I appreciate hearing from so many Fed members in between meetings as we get to hear their thoughts, it does get frustrating at times when there is a big disconnect between reality and what some of them say. Today I'm referring to what I heard yesterday from the NY Fed President John Williams who said "The economy has improved, and I think it's on a good trajectory, but to my mind, we're still quite a ways off from reaching the 'substantial further progress' that we're really looking for, in terms of adjustments to our purchases." We have the most intense and widespread inflationary pressures since the 1970's and a record 8.1mm job openings and he says "quite a ways off from reaching the substantial progress"? Is he only looking at the 8mm that have not come back to work relative to pre Covid and nothing else?

From Evercore: 

We are getting questions on the number be goldilocks. UST yields didn't go up, they are lower, so that is a positive for risk assets. That being said, it would be easier to call this number goldilocks if payroll growth was stronger, but wages were lower than expected. The very strong wage number implies higher inflation over time. Especially if the unemployment rate continues to drop and we get some very large payroll numbers going forward. As unemployment insurance rolls off.What do we think? Everyone remains short 10yr bonds and today's number didn't do much to change the outlook. So 10yr consolidates. That is good for the market today and potentially a number of days. But the threat of tighter financial conditions will remain, like it has for the last few months. That is not a bad thing for equities assuming inflation expectations don't gap higher (it slows the pace of returns as PE's contribution to returns declines and fundamentals are the larger driver), but it is not goldilocks. The backdrop will still favor short duration vs very long duration assets within equties (shorter duration tech companies that have strong growth will do great).

If we have weaker wage growth going forward and strong payrolls, that is more goldilocks. Bottom line.

Thomas Sosnoff's analysis of the new market paradigm on CNBC is sub optimal. 

And so is AMC  (AMC) Aron's courtship with the Redditt traders. 

Their core argument is misplaced - as the Redditt traders are not owners - just as the dot.com traders were. Today's traders, too, are renters - as evidence by the daily trading of 2x the outstanding shares of AMC. 

Rationalizing this all, as Sosnoff does, on the advancements in technology and the existence of no commission trading have nothing to do with the gambling that is going on.

dougie kass

I wanted to mention something important.
I try not to write with authority and with caveats.
Though sometimes it sounds like I am lecturing I am not.
I believe there is a value in skepticism and objecting to group stink and the stocks du jour.
If presented analytically.
I show all my blemishes and don't hide them with band-aids or rhetoric.
As I write, opinions are like assholes, every has one.
And that includes me.
I am often wrong and always in doubt.
Dougie

dougie kass

I disagree with Jim Cramer on AMC's (AMC) Aaron.
I think Aaron is pandering to a bunch of gamblers - who are not necessarily investors in his company.
Dougie

* And some advice from my former horse trainer, Delvin Miller

I have launched my new hedge fund, Seabreeze Capital Partners LP, because I believe -- despite the mushrooming in commission-free trading activity at Robinhood and elsewhere, the emergence of the redditt/Wallstreetbets boards as an important (and even dominant) market influence, the abundance of traders worshiping at the altar of price momentum and the growing acceptance of gambling in equities -- that there is sound value in experience.

These influences, at times, artificially impact stocks, particularly over the near term, creating an opportunity for grounded traders and investors who have a sense of fundamental value.

Consider these recent falls from grace:

* The schmeissing of special purpose acquisition company (SPAC) equities that were previously and routinely touted in the financial media.

* The swift fall of speculative gewgaws earlier in 2021(Marathon Digital (MARA) , Canaan Inc. (CAN) , MicroStrategy Inc. (MSTR) , Plug Power (PLUG) and so on).

* The standard bearer of this era's speculation, Tesla (TSLA) (still on my Best Ideas List as a short has dropped from above $900 to under $575 a share).

Cycles come and go, but market participants are ever-changing, and there is an important lesson from this observation.

My first harness horse trainer, Delvin Miller, was a friend of presidents and the best friend of golfer Arnold Palmer (he and Arnie, who was my race horse partner, developed Florida's AdiosGolf Club together). He retired very wealthy.

Delvin once looked out at the Harrisburg Yearling Sale (the largest in the standard-bred industry) crowd and said to me something I will never forget, "Dougie, there is a reason that the buyers in this audience change often over the years, but the breeders/sellers of the yearlings are almost always the same."

I have spent the last few weeks discussing the benefits of experience and the difference between knowledge and experience.

Here is a simple chart that vividly illustrates my view:

"I never knew the game of baseball was so easy until I entered the broadcasting booth."

- Mickey Mantle

At times, the markets can be quite exciting.

And during the halcyon periods of prosperity and abetted by many (like the financial media who have no dog in the hunt), traders who act like gamblers are encouraged to "play the trend" and, increasingly, do so en masse and as a "community."

History proves that this all ends badly and will result (as it did in the early 2000s and in the late 2000s) with an exodus of individual traders/investors out of the markets.

Stay grounded and stick with your discipline, time frames, investing objectives and risk profile/discipline.

I am.

And hide your children and portfolios from those that embrace and endorse the undisciplined philosophy and activity of a group of high-profile traders who know everything about price and nothing about value.

Most of these traders will fail to survive the current market cycle and will not be around in the next cycle. 

"I am going to write a good Diary on Real Money Pro today... and I am going to help people. Because I am good enough, I am smart enough and doggone it, people like me."

- Daily Affirmations With Dougie Kass

Today's Affirmations is about the plethora and growing supply of digital currencies.

According to Yahoo Finance there are at least 383 cryptocurrencies.

Apparently, like an ostrich, the Securities and Exchange Commission (SEC) has its head firmly in the sand as as much as a 100-1 leverage is employed by gamblers/traders.

This ends in tears and the SEC is a bunch of effete idiots.

Meanwhile, as noted in my previous Tweets of the Day, Elon Musk broke up with Bitcoin in the middle of the night.

Here is what I have written on the subject of Bitcoin leverage and expanding supply:

* Cryptocurrencies are vulnerable

As I have written:

"The problem with fiat currencies, like the U.S. dollar, is that monetary authorities can create an unlimited amount of new dollars or other currencies - making it look, to some, like a Ponzi scheme.

The problem with cryptocurrencies, like Bitcoin and Ethereum, is that anyone can make an unlimited number of new cryptocurrencies- making it, too, look to some like a Ponzi scheme. Ponzi schemes and scams are only visible to those that have no sense of history or want to believe in magic.

I believe cryptocurrency is like Tinkerbell's light - its power source is based solidly on enough children believing in it."

*Cryptocurrency Leverage Uncovers Systemic Risks, the Potential for Collateral Asset Class Damage, and Spurs Digital and Stock Volatility

* I Am Not Here to Chew Bubble Gum

* Will Bitcoin's Fall in Price Be the Market's Canary in the Coal Mine?

*I Remain a Non-Consensus Bitcoin Bear

*What Could Possibly Go Wrong With Bitcoin?

I am not a licensed therapist, though.

"I deserve good things. I refuse to beat myself up. I am an attractive person. I am fun to be with."

Elon breaks up with Bitcoin:

I remain a Bitcoin bear: