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Game Time

"In life, as in a football game, the principle is to hit the line hard.”
-Theodore Roosevelt
If you want to make it in this business, have your own process and patiently prepare. When you see a high probability opportunity to win - hit the line hard. Otherwise, just buy an index fund and/or ask you friends for their “best ideas.”
If you want to approach this game hitting the line hard on every market move (trust me, in the last decade of my making mistakes trading markets with live ammo I’ve tried it), you’re going to have a short shelf life. The investment season is long and hard. Pick your spots. Timing and sizing is everything when it comes to winning.
With the SP500 trading lower in 4 out of the last 5 sessions, and the media carting out everyone from David Tice (on Bloomberg), Nouriel Roubini (on CNBC), to some head and shoulders double top technician, I see a big opportunity.
Two days ago I posted an intraday note titled “Buying Red”, and yesterday I posted another one titled “Game Time.” When your investment process leads you to high probabilities of economic reward, it’s not time to take a show of hands – it’s time to do up your chinstrap and make the call.
My call is this – take advantage of the generational level of groupthink that you are seeing out there and buy low. Until the US market’s intermediate term TREND of Dollar down = everything priced in Dollars up breaks down, don’t fight it – capitalize on it.
A lot of levered long investors called themselves “event driven” funds at the manic highs of 2007. In many cases, unlike tangible merger arb events, these “events” were soft catalyst in nature (like say buying shares of something wild Bill Ackman was about to file an Ackmanist position in). That greater lemming strategy obviously doesn’t work when the market is going down. But what about macro “events” that you can have Research Edge on in a market that’s going up?
You see, the problem a lot of these levered long super duper stock picking dudes have with macro is that a company’s CFO can’t get them comfortable with macro catalysts. There is no super special “one on one” that a portfolio manager can sign up for to get that Global Macro memo. Macro matters, and so do the macro events.
My global macro “event” is Ben Bernanke’s FOMC statement.
Game Time: today - 2:15PM EST.
If Bernanke panders to the political pressures of maintaining this ridiculous rhetoric of “Depressions” and “emergency level” interest rates, the US Dollar will put in another lower-high, and start to retrace it’s year-to-date lows. If he doesn’t pander, he still might confuse the currency market and I win that way too. I think he panders.
On our 1PM EST Macro Monthly Strategy call today, I’ll go over one of my Q3 Macro Themes, “Burning The Buck”. Since March, if you’ve only bought stocks/commodities/currencies, etc. on US Dollar up moves, you have been absolutely crushing it in your 2009 season.
Again, the US stock market has been down 4 out of the last 5 trading days. Over that time period, the US Dollar has rallied +2.5%. The US Dollar remains broken across all 3 of my key investment durations (TRADE, TREND, and TAIL). Stocks, commodities, and currencies remain bullish across all 3 durations.
That’s why I am choosing to hit this line hard. In the Virtual Portfolio, I have 28 longs and 6 shorts. In the Asset Allocation Model, I have taken my position in US Cash down to 32%. Until I don’t see these buying opportunities for what they are, I will keep taking these shots.
That’s all I have for you this morning. It’s Game Time.
Best of luck to you out there on the field today,


XLK – SPDR Technology Tech and Healthcare remain the two sectors most primed for accelerating M&A activity in Q4. Both look great from an intermediate term TREND perspective, but at a price.

EWC – iShares Canada We bought Canada on 8/11 ahead of Bernanke’s pandering. Canada has what THE client (China) needs, namely commodities, which we believe will reflate as the buck burns.   

USO – Oil FundWe bought USO on 8/10. With Bernanke as the catalyst for the USD breaking down we want to be long oil.

QQQQ – PowerShares NASDAQ 100 We bought Qs on 8/10 to be long the US market. The index includes companies with better balance sheets that don’t need as much financial leverage.

COW – iPath Livestock This ETN tracks an index comprised of two thirds Live Cattle futures, one third Lean Hogs futures. We initially began looking at these commodities because of recession inspired capacity reductions combined with seasonal inflections. A series of macro factors including the swine flu scare, a major dairy cattle cull in response to collapsing milk prices and the collapse of the Argentine agricultural complex due to misguided policy provided us with additional supporting fundamental data points for the quantitative set up in price action.  

EWG – iShares Germany Chancellor Merkel has shown leadership in the economic downturn, from a measured stimulus package and budget balance to timely incentives such as the auto rebate program. We believe that Germany’s powerful manufacturing capacity remains a primary structural advantage; factory orders and production as well as business and consumer confidence have seen a steady rise over the last months, while internal demand appears to be improving with the low CPI/interest rate environment bolstering consumer spending. We expect slow but steady economic improvement for Europe’s largest economy.

XLV– SPDR Healthcare Healthcare has lagged the market as investors chase beta.  With consumer confidence down and the reform dialogue turning negative we like the re-entry point here.

CAF – Morgan Stanley China Fund A closed-end fund providing exposure to the Shanghai A share market, we use CAF tactically to ride the wave of returning confidence among domestic Chinese investors fed by the stimulus package.  To date the Chinese have shown leadership and a proactive response to the global recession, and now their number one priority is to offset contracting external demand with domestic growth.

CYB – WisdomTree Dreyfus Chinese Yuan The Yuan is a managed floating currency that trades inside a 0.5% band around the official PBOC mark versus a FX basket. Not quite pegged, not truly floating; the speculative interest in the Yuan/USD forward market has increased dramatically in recent years. We trade the ETN CYB to take exposure to this managed currency in a managed economy hoping to manage our risk as the stimulus led recovery in China dominates global trade.

TIP– iShares TIPS The iShares etf, TIP, which is 90% invested in the inflation protected sector of the US Treasury Market currently offers a compelling yield on TTM basis of 5.89%. We believe that future inflation expectations are currently mispriced and that TIPS are a compelling way to own yield on an inflation protected basis, especially in the context of our re-flation thesis.

GLD – SPDR Gold - Buying back the GLD that we sold higher earlier in June on 6/30. In an equity market that is losing its bullish momentum, we expect the masses to rotate back to Gold.  We also think the glittery metal will benefit in the intermediate term as inflation concerns accelerate into Q4.

UUP – U.S. Dollar IndexShorting the USD on a strong 3-day rally to another lower high. Your catalyst is Bernanke pandering to political consensus on Wednesday. We believe that the US Dollar is a leading indicator for the US stock market. In the immediate term, what is bad for the US Dollar should be good for the stock market. Longer term, the burgeoning U.S. government debt balance will be negative for the US dollar.

DIA  – Diamonds Trust- We shorted the financial geared Dow on 7/10 and 8/3.

EWJ – iShares Japan –We’re short the Japanese equity market via EWJ on 5/20. We view Japan as something of a Ponzi Economy -with a population maintaining very high savings rate whose nest eggs allow the government to borrow at ultra low interest levels in order to execute stimulus programs designed to encourage people to save less. This cycle of internal public debt accumulation (now hovering at close to 200% of GDP) is anchored to a vicious demographic curve that leaves the Japanese economy in the long-term position of a man treading water with a bowling ball in his hands.

SHY – iShares 1-3 Year Treasury Bonds – If you pull up a three year chart of 2-Year Treasuries you'll see the massive macro Trend of interest rates starting to move in the opposite direction. We call this chart the "Queen Mary" and its new-found positive slope means that America's cost of capital will start to go up, implying that access to capital will tighten. Yields are going to continue to make higher-highs and higher lows until consensus gets realistic.

Chart of The Day: Game Time

Bernanke’s Bucks are on the line. We are t-minus 6 trading hours here until game time. To pander, or not to pander, remains the question…


I made the call on The Maintenance Man (Bernanke) in my Early Look today… and to be clear, I want to make it again:


  1. I am short the US Dollar into/out of the next 3-6 trading days of this FOMC statement
  2. I am long most things that anchor on the price of the US Dollar declining
  3. I am expecting group-thinkers to short low and cover high all the while


The US Dollar remains broken across all 3 of our key investment durations (TRADE, TREND, and TAIL). See the chart below for our resistance levels. This is one of my key macro roadmaps:


  1. 1.       TRADE = $79.96
  2. 2.       TREND = $81.03
  3. 3.       TAIL     =  $82.82


Buying red,



Keith R. McCullough
Chief Executive Officer


Chart of The Day: Game Time - km811



Taking Cues from Europe's Larger Economies

Research Edge Position: Long Germany (EWG)


Over the last week there were many critical European data points released. Below we’ve revisited the fundamental landscapes of Germany and the UK within the larger direction of the Eurozone in light of these newly reported facts.  We have a bullish stance on Germany (currently in our portfolio) and believe that despite improved fundamentals in the UK, the market will continue to underperform its Western European peers.  


Managed Deflation?


Eurostat reported that June Eurozone industrial producer prices fell 6.6% annually and increased by 0.3% from the previous month, confirming the present deflationary environment that we’re seeing. The large drop on an annual basis is better understood in the context of last year’s manic energy prices, and while producer prices rose 0.3% on a monthly basis, excluding the energy sector, prices fell 0.1%.  We’ve held that both PPI and CPI (which Eurostat recently estimated at -0.6% annually in July) are in aggregate at a relatively comfortable level given the region’s downturn and helped encourage the ECB and BOE to keep rates unchanged at 1% and 0.5% when they met late last week. That said, we are seeing a divergence in the inflationary outlook in Germany and the UK.


Germany was one of the few countries in the Eurozone to report a decline in PPI on a monthly basis at -0.1% in June, (or -4.3% annually) and today released that CPI fell 0.5% in July Y/Y, with consumer prices remaining unchanged at 0.0% from the previous month. In contrast, the UK PPI recorded a 1.0% gain in June over the previous month, and was down 8.5% from the previous year. On the margin June’s inflationary number is just one data point among many macro factors we follow, yet it points to a larger theme we’ve been making:  if producers can’t pass on savings to the consumer it’s one less cog to get consumers to spend to ignite growth.


As we measure changes on the margin, for the UK, the sequential uptick in PPI (with an inflationary CPI reading of +1.8% in June) signals that inflation may be getting ahead of growth, whereas Germany is benefitting from imported deflation.



Critical Metrics Improve Across Germany and the UK


Leadership: For the balance of the last year we’ve been vocally long German Chancellor Angela Merkel’s leadership and short UK PM Gordon Brown’s, and it hasn’t disappointed. Not only did Brown and Co. not demonstrate leadership throughout the country’s downturn, they haven’t pretended to proactively manage the economy. Last week furthered this thread, with the BOE increasing its purchasing program by 50 Billion Pounds ($84 Bill.), with the BOE saying that “the recession appears to have been deeper than previously thought”.  We believe Mr. Market will continue to choke on this… 


Germany, on the other hand, has maintained a sober fiscal policy, prizing low government debt and low (future) taxes. Merkel has combined the early issuance of its cash for clunkers program with support for the all important auto industry vis-à-vis a bridge loan to GM’s Opel division (before seeking a private buyer), all of which has helped to offset significant declines in export levels and order demand.


Industrial Production and Factory Orders: while German industrial output eased 0.1% in June on the month (after surging 4.3% in May), forward-looking Factory orders rose 4.5% in June M/M, according to last week’s release from the German Economics Ministry. Not only did the Factory number far outpaced a forecast of +0.6%, but added to May’s +4.4% upward charge. As we’re still looking for signs of life from an export picture, positive momentum from factory orders and increased demand from China will be critical to move the scales.


Confidence: sentiment continues to improve across the Eurozone, jumping to 76 in July from 73.2 in the previous month. Germany has now recorded months of sequential improvement in both consumer and business confidence, while the UK’s July consumer confidence number shot up to 60, the highest reading in over 14 months. We hold that that sentiment is an important metric to drive market performance and engage consumer spending, yet believe that for the UK there is a disconnect with reality: the country’s compromised financial system pared with rising unemployment should sting sentiment and continue the FTSE’s measly performance, which currently stands at 6.5% YTD.


Retail Sales and Housing Landscape: UK retail sales far outpaced expectations and rose 1.4% in June M/M or +1.8% Y/Y, according to the British Retail Consortium.  This is a clear divergence from Eurozone retail sales, which were down 0.2%, and Germany where despite sequential improvement, sales registered -1.8%. For the UK, we believe that growth in retail sales will not be sustainable unless inflation backs off. In the intermediate term we could see it dip down around the 1% level Y/Y. 


While there are incremental signs that the housing market may be improving in the UK, with mortgage approvals, (though a third lower than at the start of 2008) reported as reaching a 14 month high in June and Halifax saying that home prices increased 1.1% in July, we see the overall housing bubble and property devaluation in the UK as a serious fundament risk to growth. On the flip side, debt averse Germans largely avoided the housing mess.


Unemployment: interestingly July unemployment in Germany remained stagnant at 8.3%. While we expect this number to push out in the back half of the year and into 2010, the stability of the number (though lagging) for now is bullish. UK unemployment has now reached historic highs. As this number pushes out we expect sentiment to erode.


Purchasing Managers’ Index: bullishly improving across the Eurozone, Germany, and the UK.


Trade Gap: The UK trade gap was released today at 6.5 Billion Pounds ($10.7 Billion) compared with 6.2 Billion pounds in May. This isn’t a huge surprise as the UK is import heavy, however an increasing trade deficit will only further burgeoning government debt levels. The Euro trading around $1.42 continues to be a headwind for German exports, yet the region’s largest exporter continues to register a monthly surplus.





The data points released last week help confirm an improving trend in Europe’s economy. We continue to see a divergence in market performance across economies, based on unique underlying fundamentals, including uncorrelated trends . Eastern Europe has been a great example of extreme positive market performance with glaring negative fundamentals and admittedly we lost money with Italy on the short side for a TRADE, a country we believe has a very bearish fundamental outlook as its balance sheet blows out with increased governmental debt.


We have conviction that a measureable recovery in Europe will not come without the improvement from the region’s big three: Germany, France, and the UK.  Already we’re seeing the slack in the demand picture tighten for the larger economies, which will greatly aid the peripheral countries that rely so heavily on the EU for trade. 


For the intermediate term TREND, we believe that Germany’s powerful manufacturing capacity remains a primary structural advantage that may propel growth in the final half of the year as the country benefits domestically from imported deflation. We see the UK constrained by its financial leverage and believe that inflation may be getting ahead a growth, a cocktail we don’t want to be long. 


As we’re subject to the data, we’ll change as the data does; however at the right price we want to be long Germany and short the UK.  


Matthew Hedrick



Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.37%
  • SHORT SIGNALS 78.32%

China: Raw Power

Research Edge Portfolio Position: Long Chinese equities via CAF


July Trade and Industrial Output data released last evening by national Bureau of Statistics disappointed some observers looking for continued sequential year-over-year improvement spurred by the massive stimulus injection earlier this year. On the news, the Chinese equity market closed higher on the day for the 1st day in the last 5.


On a year-over-year basis, July trade data is mildly disappointing, but should be taken in context. For starters, viewing last month’s figures this way creates obvious distortion since it is a comparison against the final frantic month of activity last summer before the massive disruption of the Olympic Games in Beijing.  Viewed on an absolute basis however, the actual trajectory and power of the rebound since the beginning of the year remains arresting (see chart below). 


(discussion continued after chart)

China: Raw Power - a1


Although Industrial Output data for July registered at a respectable 10.8% Y/Y, the third consecutive month of acceleration, the glass half empty crowd looking for signs of fatigue in the recovery cycle may attempt to find one in this number since the rate of sequential improvement appears to be moderating. We do not subscribe to this view. The data shows continues strength, with heavy industry and domestic demand driven components like automotive continuing to expand at double digit Y/Y rates.


We continue to be positive on China’s economic recovery cycle, with focused stimulus programs driving internal demand in the near term while developing broader consumer demand patterns for the long term. This will not completely offset lost external demand, nor will it happen fast or smooth: China is a poor nation in many ways and has a consumer base still in an early developmental stage and, as such, it would be absurd to think that the emergency measures enacted in late 2008 by the government there will return the patient to full health with no side effects or recuperation time.


What we do believe however is that all data continues to suggest that the operation has been a major success and the patient is well on the way to recovery. We remain focused on the negative impact of monetary loosening on asset valuation and other risk factors, but for now the data continues to provide us with confidence on our thesis on the recovery and development of the real economy.


We bought more CAF on a red tape today as some investors flee because the news is merely great and not perfect.


Andrew Barber



11 AUGUST 2009




It’s harder than ever for ‘jobbers’ to find product to feed into off-price retailers. There’s another 2 quarters where favorable buys that were subsequently ‘packed-away’ will boost results. But then what’s there to maintain peak margins?


One area in apparel where we think we have a particular edge is in the off-price channel and getting a sense of the incremental change in buyers’ ability to find deals on certain brands. In that regard, there is no question in our minds that the flow of excess inventory is tightening in the domestic market. After retailers and suppliers cut inventories way back, the amount of goods sitting in warehouses and in limbo is diminishing. This should not be a shocker to those listing the standard retail tag line over the past year ‘we’re managing inventories closely, blah blah bah…’.  As such, what we’re seeing is meaningful momentum at TJX and ROST – not to mention peak margins and inventory over the 2 quarters baked due to elevated levels of ‘pack-aways’ purchased over the past year. But let’s not ignore the chart below, which shows how such favorable inventory/sales for the apparel industry has driven gross profit growth over the past decade. This WILL matter as we head into 2010…

2010 IS NOT THAT FAR AWAY - Avg ROST TJ and Sales Inv Spread



Some Notable Call Outs


  • One did not have to work too hard to determine the age of some of the merchandise at DSW’s “secret” Gucci sale. A quick glance through the leather planners clearly included vintage 2007 calendars. While DSW probably got a deal on the goods, at least some of the inventory has been sitting in a warehouse for quite some time.


  • BKS agreed to purchase Barnes & Noble College Booksellers for $596 million from the company’s founder and owner, Len Riggio. As many people know, Len is also the founder, Chairman, and largest shareholder of BKS. While the board engaged a special committee to explore and evaluate the transaction, it was interesting to learn that the College business was not shopped to any third parties. Even more interesting, is the parallelism to a previous transaction in which BKS purchased Babbage’s (from Riggio) and combined it with Funco (both are predecessors to GameStop). At that time the transaction was viewed with some skepticism, but ultimately shareholders won out. A quick check shows that the original investment by BKS in Babbages/Funco was about $400 million in ‘99/’00. Today GameStop’s enterprise value is $4.4 billion.




-UK retail sales values across all retail sectors rose 1.8% on a like-for-like basis and 3.6% on a total basis during July - July showed an improvement on June – when like-for-likes were up 1.4 per cent - but the growth was versus a weak July 2008. Sales in department stores were mixed during last month, but the category benefitted from the wetter weather in the latter part of the month. Clothing sales fell back to just below the July 2008 level last month. During the good weather in the early part of the month, summer ranges sold well during the Sales. However, stronger discounting was needed towards the end of the month. The cooler, wetter second half of the month meant that new autumn ranges had a good start, with rainwear, jeans, leggings, tights and light knitwear proving popular. Casual ranges outperformed formal ranges and childrenswear outperformed adult ranges. Footwear sales were strong during the month. Sandals and casual footwear sold well on sunny days, especially when Sales were extended or increased. Footwear retailers implemented deeper discounting than last year and shoes drove sales in the wetter second half of July. Children’s footwear showed the strongest gains helped by back-to-school. Non-food, non-store sales, which include the internet, mail-order and phone sales, in July were 20% higher than a year ago, bolstered by clearance Sales. The mixed weather hit women’s and men’s clothing but not footwear or children’s clothing which all had another good month. <drapersonline.com>


-The supermarket buy-one, get-one free (bogof) offers could be banned under a Government plan to reduce Britain’s food waste - The Department for Environment, Food and Rural Affairs is demanding that grocers agree to a tough target on reducing food waste or face legislation that forces them to make savings. They could be told to ditch bogofs in favour of half-price deals and package food in a greater range of sizes to suit the single person’s fridge as well as that of a family. The series of reports – called Food 2030 – has been welcomed by food specialists. Defra and the Food Standards Agency are preparing new guidance to reduce confusion about date labels on food. However, the BRC said it would resist attempts to restrict bogofs.  <retail-week.com>


-Privacy clearly has its attractions for online retail - While online discounters such as Bluefly and Overstock have been around for years without impressive results, the online sample sale format known as a “private sale” has caught on worldwide like Champagne at a wedding, showing impressive growth and attracting venture funding. The hype and froth over firms such as Vente-Privee, Gilt Groupe, Rue La La and Ideeli are reminiscent of the dot-com bubble. On the one hand, it seems too good — or too gimmicky — to be true. On the other hand, the off-price market has been estimated at $29 billion a year and it stands to reason at least some percentage of that could move online. (In the apparel world, online retail accounts for about 10 percent of sales.) The magic words seem to be “private” and “sale.” The bargains are hidden behind a firewall where only members can see them — although becoming a member is usually not difficult. (Some sites are invitation only, and others will accept anyone who registers.) The sales are up for a limited time, usually 36 hours, and generally focus on only one brand. Returns and exchanges tend to be limited. Discounts can run as high as 70 percent off. Because nonmembers (and search engines) can’t see what labels are for sale, even luxury and designer brands such as Gucci, Zac Posen and Carolina Herrera don’t mind clearing their excess inventory this way. The deep discounts, the aura of exclusivity and the convenience of shopping online appeal to consumers — who are signing up in the millions to join the sites. The results? Many items sell out within minutes.  <wwd.com/business-news>


-It’s the 11th hour for Escada AG - The German fashion house said Monday it would file for insolvency later this week if its bond exchange offer fails to reach an 80% acceptance rate. The tender period for the bond exchange of 200 million euros, or $287 million at current exchange, expires today at 3 p.m. European Standard Time. The offer has already been improved and extended, but Escada said given the company’s imminent illiquidity, it is not possible to do so again. Results of the offer aren’t expected to be known until Wednesday, however. Escada’s supervisory and management boards will meet Wednesday to determine what further steps to take if the financial restructuring fails. Under the improved exchange offer, bondholders are being given 400 euros, or $572, and 10 Escada shares per 1,000 euros, or $1,430, of debt. The exchange is a crucial part of Escada’s financial restructuring program, and is required to set up future credit lines as well as permitting the planned capital increase to go through. <wwd.com/business-news>


-Best Buy puts an e-commerce industry veteran in charge of global marketing - Barry Judge, who helped launch BestBuy.com, has been promoted to executive vice president and chief marketing officer. Judge has held the chief marketing officer title since February 2008. <internetretailer.com>


-Knitwear firm Hampshire Group cuts more jobs - Hampshire Group Ltd. on Monday reported a wider second-quarter loss and job cuts that will bring its global head count to half of what it was at the start of fiscal 2009. The Anderson, S.C.-based knitwear firm is in the final phase of a restructuring that began in April and will shed 93 further jobs, or 29% of its current staff. The majority of the latest cuts will come as a result of consolidation of its Asian operations, but will also include some in its executive level, the company said. Hampshire expects to save $9.3 million in selling, general and administrative expenses through the restructuring. Since the start of the fiscal year, the company has shed about 160 positions, or 50%of the workforce. <wwd.com/business-news>


-The United Football League said its online retail store, GetUFL.com, will launch Monday, August 10th - The UFL's e-commerce launch is in advance of the League's press conferences next week in Las Vegas, San Francisco, Orlando and New York to announce team names, unveil "Premiere" season uniforms and commence ticket sales. Team merchandise will be available next week after each team name is revealed.  <sportsonesource.com>


-New York Knicks' Harrington promotes affordable footwear - A new challenger has entered the sneaker arena and with the endorsement of several high-profile athletes and one rapper, Protege hopes to provide an affordable alternative to the big-name shoe brands. On Saturday at the Kmart on Wabash Avenue in Northwest Baltimore, about 500 people were on hand to meet New York Knicks forward Al Harrington and his guest, rapper Fat Joe, at the Protege Basketball Block Party. Harrington, who helped develop the shoe line, is one of the first athletes to sign with Protege. The brand is sold exclusively at Kmart and Sears, with most pairs retailing at $34.99. The brand is also worn by Golden State Warriors guard Stephen Jackson and several WNBA players. "It's all about giving back," said founder and chairman Rodney Henry. "They have great hearts. It's not about the money. It's a chance to give back to the kids - inspire and uplift them." Said Harrington: "It's a give-back brand. We did it for our community. Made it affordable so people can look good and feel good wearing it. ... Kids see me and Stephen wearing them every night so they know they're battle-tested." <baltimoresun.com>


RESEARCH EDGE PORTFOLIO: (Comments by Keith McCullough): KSWS


08/10/2009 10:41 AM


See McGough's note titled "Warming To A Dog." This dog is down today. Buying red. Everything has a price. KM



UA: Gene McCarthy, SVP of Footwear, was either awarded or purchased 35,000shs ($840k) the 8K filing does not disclose if these shares were awarded, but we assume it may be part of Mr. McCarthy’s employment plan.




2010 IS NOT THAT FAR AWAY - SV 8 11 09



Macau casino billionaire Stanley Ho’s condition became unstable two days ago, according to the Apple Daily.   The Chinese-language newspaper did not cite anyone but stated that Ho, 87, is in a semi comatose condition following brain surgery to remove a blood clot. On August 7, Chan Un Chan, Ho’s third wife, told reporters that her husband was recovering.   




Commission caps were officially approved by the Macau government yesterday.  Casinos will, from September 9th, be limited in the amount of commission they can pay VIP junket operators.  Amendments to Macau’s 2002 administrative regulations on junket licensing outline fines of up to MOP500,000 and other penalties for casinos or junkets found to be disregarding the rule. The regulator will have the power to suspend or revoke junket licenses.


The secretary for economy and finance will announce the official cap through a separate announcement.  Observers expect the announcement to be in line with casino operators’ recommendation that the cap be set to 1.25% of VIP revenue.