Suitably Flip

Algore Obliges Terrorists' Bargain

As little heartache as the cancellation of a Goracle Mystery Tour stop causes me, it wouldn't be inaccurate to say that once we start diverting weepy, preening hippie concerts in reaction to threat of violence, we hand the terrorists a win.

LIVE Earth India, a concert scheduled for December 7 in Mumbai to raise money for solar energy projects, has been cancelled due to the terrorist attacks in the city.

"Due to circumstances beyond our control, we are saddened to announce that Live Earth India has been called off,'' said a joint statement from the organisers, including former US vice-president Al Gore.

Musicians lined up for the event included Pink Floyd legend Roger Waters, rockers Bon Jovi, Black Eyed Peas frontman Will.I.Am, Indian rapper Hard Kaur and the daughter of legendary sitar player Ravi Shankar, Anoushka.

Bollywood stars, including actors Amitabh Bachchan, his son Abhishek Bachchan and daughter-in-law Aishwarya Rai, Hrithik Roshan and Preity Zinta, were also due to perform.

Mr Gore, Live Earth co-founder Kevin Wall and Rajednra Pachauri, the head of the UN's Intergovernmental Panel on Climate Change, said everyone involved in the project was "stunned and distraught'' by the attacks.

(HT: JWF)

Spitzer's VIP Streetwalker Scores Record Deal, Pun

After a longer-than-expected delay, Client #9's best gal has finally embarked on her singing/dancing/writing/acting/modeling/handbag-designing/celebreality career.

The call girl who cost New York [Democratic] governor ELIOT SPITZER his job has signed a music deal with Violator Records - the same company behind rappers BUSTA RHYMES and MISSY ELLIOT.

Ashlee Dupree shot to fame when her relationship with married politician Spitzer hit the headlines in March (08).

An aspiring singer, Dupree benefited from the exposure and her songs Move Ya Body and What We Want, both posted on her MySpace.com webpage, went on to receive over 3 million internet hits.

And now Dupree has landed a record deal with Violator, according to the New York Post.

A source confirms to AllHipHop.com, "She deserved a fair shake and Violator isn't scared of the controversy."

CNBC Million Dollar Portfolio Challenge - Friday, Week 2

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

Remember that you need to submit your first set of Week 3 trades (and your trivia answers) by 1 pm, due to the early market closure.

In case you missed the email from CNBC, everyone will get full credit for Wednesday's missing trivia. 

Because trivia questions were not available on Wednesday, November 26, $12,000 CNBC Bonus Bucks will be credited to your account. The bonus bucks will count towards your final portfolio value for Week 2 of Trading.

Update: Here we go - first picks for Week 3.  The hour of redemption for all battered portfolios.

It's the same general strategy (negatively correlated, leveraged ETFs), with a bit of modification.

In Week 2, we ditched the leveraged Dow Industrials fund in favor of another helping of financials, because the Dow just wasn't quite volatile enough for us.  For Week 3, we're dumping the leveraged S&P 500 fund for the same reason.

Our new starting baskets consist of a leveraged Russell 2000 fund (smallcaps), a leveraged Nasdaq fund (primarily tech), and two leveraged financial funds.

1. Ultrabull, with double financials: RRY, QLD, UYG, RFL (25% each)
2. Ultrabear, with double financials:  RRZ, QID, SKF, RFN (25% each)

You can allocate your participating portfolios as you please - so long as half of them are in Basket 1 and half are in Basket 2.

Good luck and have a great weekend!

Consider all of the above to be for entertainment purposes and not meant to be used as real-world investment recommendations.  The goals and strategies of the Portfolio Challenge are not to be confused with those of sensible investing.

---

See all related posts in the CNBC Portfolio Challenge archive.

Week 2:  Monday, Tuesday, Wednesday, Thursday
Week 1:  Monday, Tuesday, Wednesday, Thursday, Friday
Pre-game:  CNBC Million Dollar Portfolio Challenge Is Back, Stragety Primer

Extra Stuff:  The Biggest Loser

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

---

Friday November 28th

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box:  Question:  In our Spirits of the Holidays slideshow, how does Gary Vaynerchuk describe Connemara Irish Single Malt?

    Answer:  the Scotch drinker's Irish

Squawk On the Street:  Question:  Which strategist told CNBC on Wednesday that investors ought to start buying into the 2009 recovery surge?

    Answer:  Allen Sinai of Decision Economics

The Call:  Question:  At the Financial Follies this year, how much did water cost during the cocktail hour?

    Answer:  $6

Power Lunch:  Question: In Daryl Guppy's blog post about "Identifying Capitulation", what World War II metaphor does he use for the market?

    Answer:  Stuka dive bomber

*** No Street Signs or Closing Bell questions today, due to the early market closure.  Remember to submit all trades before 1 pm today!

Weekly Quiz:

Question:  Publicly traded companies release earnings?

    Answer:  Quarterly

Mumbai Terror Attack - Latest Updates

Do what I do - just park at Allah's and keep refreshing.

Happy Thanksgiving

From Pumpkin and Pecan

On this gastronomically magnificent day, remember to give thanks to the hard-working camera-muggers who did the dirty work for you.

Also be thankful you're not so bitter and malnourished that you're driven to try and spoil everyone else's day in order to fill the grumbling emptiness that lurks within you.

Greg Gutfeld nominates several Turkeys of the Year.  All are well deserving.

Update: Also be thankful you get to celebrate Thanksgiving on Earth.  Blech.  (HT: HA Headlines)

CNBC Million Dollar Portfolio Challenge - Wednesday, Week 2

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

---

Okay - slightly special day, for a couple reasons.

1)  Tomorrow is a market holiday (something about pilgrims... I'm not sure).  That makes today's reallocations the final reallocations for Week 2, since those trades will execute at today's close and first incur price changes on Friday.

2)  I'm catching a noon flight out of town.

By now, you've grown accustomed to accommodating the occasional midday absences of a media darling like myself, so you won't be overly jarred by relying on your fellow readers for the answers to the 11, 12, 2, and 3 o'clock trivia questions.

Those answers will appear in the comment thread to this post.  Past experience suggests your fleet-fingered fellow readers will have those answers posted within minutes of their appearing on the CNBC website.

Because I'll be airborne when I'd normally be posting the afternoon reallocation scheme, we need to work together a bit.

To recap, going into today, our Week 2 "surviving" portfolios (i.e. portfolios that had achieved week-to-date gains of 13% or so as of yesterday) were split into the following 4 baskets:

1. Ultrabull, with double financial concentration:  SSO, QLD, UYG, RFL
2. Ultrabear, with double financial concentration:  SDS, QID, SKF, RFN
3. Ultrabull, with oil concentration:  SSO, QLD, UWM, DIG
4. Ultrabear, with oil concentration:  SDS, QID, TWM, DUG

Once it's clear which way the market is moving today (this might not be until mid-afternoon if it's another day like yesterday), check to see which of your "surviving" portfolios are performing well.  If any are down for the day, you can go ahead and sideline them until Week 3 (which, again, begins on Friday).  For any that are showing green intraday, split them evenly into the following two baskets (which are identical to #1 and #2 above).

1. Ultrabull, with double financial concentration:  SSO, QLD, UYG, RFL
2. Ultrabear, with double financial concentration:  SDS, QID, SKF, RFN

If you have only one surviving portfolio which is in the green today, allocate it according to your age.  If it's an odd number, go with Basket 1 (the ultrabulls).  If it's even, go with Basket 2 (the ultrabears).

And in the mean time, make sure to submit your best effort to our Biggest Loser contest and see if you can top our very elite cadre of craptacular portfolios.

Update:  Bonus Bucks appear to be offline for some reason: "Questions not available. Please check back later."

I'm off to the airport shortly.  If/when the trivia appears, it looks like we'll need readers to post the whole slate.  Keep an eye on the comments for updates.

Update:  Well, the first trivia question has appeared (see below for the answer).  About 11 hours late.  Not sure what the problem is.  Today was pretty clearly supposed to be a normal trivia day.  But bear in mind that you can answer today's questions (if the rest of them ever appear) up through 6 am Friday and still get credit.  So keep an eye out tomorrow.

From the rules:

Trivia Questions will be posted individually between 6:00AM and 4:00PM, and will be available to be answered on the Site until 6:00AM the following day, other than (i) questions posted on Fridays, which will be available to be answered on the Site until 4:00 PM that day, (ii) questions posted on November 26, which will be available to be answered on the Site until 5:59:59 AM on November 28, (iii) questions posted on November 28, which will be available to be answered on the Site until 1:00 PM on November 28...

Pay attention to that last clause too - for Friday's questions, you need to submit your answers by 1 pm for them to count.

You'll also need to submit your first set of Week 3 trades by 1 pm on Friday, due to the early market closure.

Update:  Curiously, many readers are finding this site today via web searches on the string, "In Monday's Mad Money Lightning Round TO segment, what did Jim Cramer suggest doing with Las Vegas Sands shares?"

Are some people seeing this question on today's trivia page?

Update:  From CNBC:

Because trivia questions were not available on Wednesday, November 26, $12,000 CNBC Bonus Bucks will be credited to your account. The bonus bucks will count towards your final portfolio value for Week 2 of Trading.

Consider all of the above to be for entertainment purposes and not meant to be used as real-world investment recommendations.  The goals and strategies of the Portfolio Challenge are not to be confused with those of sensible investing.

---

See all related posts in the CNBC Portfolio Challenge archive.

Week 2:  Monday, Tuesday, Wednesday
Week 1:  Monday, Tuesday, Wednesday, Thursday, Friday
Pre-game:  CNBC Million Dollar Portfolio Challenge Is Back, Stragety Primer

Extra Stuff:  The Biggest Loser

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

---

Wednesday November 26th

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box:  Question:  Why did Phil LeBeau say he understands Ford CEO Mulally's sense of superiority over GM & Chrysler?

    Answer: Ford's liquidity is best of the Big 3

Squawk On the Street:  NA*
The Call:  NA*
Power Lunch:  NA*
Street Signs:  NA*
Closing Bell:  NA*

* Everyone gets the full $12,000 in Bonus Bucks today, due to the technical difficulties.

Weekly Quiz:

Question:  Publicly traded companies release earnings?

    Answer:  Quarterly

CNBC Million Dollar Portfolio Challenge - The Biggest Loser

Well, after 6 days of trading, we've certainly succeeding in courting volatility.  That, of course, is central to our group strategy of going after the weekly prizes (and accompanying tickets to the final round) and we've thus far managed to ride the frenetic roller coaster of this market by playing perfectly negatively correlated, leveraged ETFs each day.

As a result, each day roughly half of our portfolios rise (usually by a lot), while the other half falls (usually by a lot).  After incurring more than a week of such bifurcated buffeting, about 10% of participating portfolios are currently ranked in the top 0.05%, with gains of more than 60%.

Likewise, about 1/10 of our portfolios are languishing at the bottom of the barrel.  As I've noted already, this is no reason for despair.  1) It shows that the strategy is working as expected, and 2) these embarrassingly devalued portfolios are at a significant advantage going into the following week, as the weekly diet of $62,000 Bonus Bucks become far more valuable on a percentage basis.

I know based on the path of daily allocations approximately how many of our portfolios are enjoying this privileged but pauperly status, but I'm curious how low our biggest losers have sunk.

The worst of my own 5 portfolios is ranked 435,675th (out of about 438,000) this morning.  Happily, the best of my slate is ranked 174th, but since it's not in a position to be competitive for this week's top spot, I'm actually more excited about ol' 435,675.

That one will get a boost of more than 8%  from Week 3's bonuses, whereas my "best" portfolio will get less than 4%.

Anyone in our group showing a lower (or similar) position?  I'm hopeful that, in addition to our readers who are nipping at the leaderboard, we may also be well represented in the foulest nether regions of the rankings.

Tell us about your most god-awful performers in the comment thread.

---

See all related posts in the CNBC Portfolio Challenge archive.

Week 2:  Monday, Tuesday
Week 1:  Monday, Tuesday, Wednesday, Thursday, Friday
Pre-game:  CNBC Million Dollar Portfolio Challenge Is Back, Stragety Primer

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

Flip's In the Strategy Room at FoxNews.com: Tuesday 11-1

Tune in here.

CNBC Million Dollar Portfolio Challenge - Tuesday, Week 2

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

---

Decent start to Week 2 yesterday, with our ultrabulls enjoying a nice double-digit gain.  Going into today, our participating portfolios are split into four baskets:

1. Ultrabull, with double financial concentration:  SSO, QLD, UYG, RFL
2. Ultrabear, with double financial concentration:  SDS, QID, SKF, RFN
3. Ultrabull, with oil concentration:  SSO, QLD, UWM, DIG
4. Ultrabear, with oil concentration:  SDS, QID, TWM, DUG

Come back this afternoon for today's picks and reallocation methodology.

Update:  Stocks are mixed so far today, so we won't know which of our 4 baskets wins out until a bit closer to the close.  Watch for the new allocations at around 3:00 pm.

Update:  Broadly speaking, the bears are doing better today, but there's actually not a huge difference among our 4 baskets.  So to determine whether you're still in the "winning group", check each portfolio and see whether "Gain/Loss, Weekly" + "Gain/Loss, Intraday" equals at least 13%.

For any participating portfolios that meet that threshold, keep them in the mix going into tomorrow.  We'll be using the same 4 baskets, with a different allocation scheme.

Determine your basket by the last digit of your phone number.

• 0-2:  SSO, QLD, UYG, RFL  (ultrabull, with double financial concentration)
• 3-5: SDS, QID, SKF, RFN  (ultrabear, with double financial concentration)
• 6-7:   SSO, QLD, UWM, DIG  (ultrabull, with oil concentration)
• 8-9: SDS, QID, TWM, DUG  (ultrabear, with oil concentration)

If you have more than 1 portfolio that exceeds the threshold, then allocate the first portfolio according to your phone number, the second portfolio according to the next basket down the list, etc.

For example, if you've got 3 qualifying portfolios (with 13%+ in weekly plus intraday gains) and your phone number ends with a 7, you'd allocate those portfolios as follows:

1. SSO, QLD, UWM, DIG  (6-7)
2. SDS, QID, TWM, DUG  (8-9)
3. SSO, QLD, UYG, RFL  (0-2)

And a quick reminder about the holiday schedule...

The market will be closed on Thursday for Thanksgiving, but open on Friday.  In keeping with the once-a-day reallocation rules, you'll need to submit your 4th and final reallocation for the week by 4 pm on Wednesday.  These picks will execute at Wednesday's close and show up in your portfolio on Friday when the markets reopen.

Consider all of the above to be for entertainment purposes and not meant to be used as real-world investment recommendations.  The goals and strategies of the Portfolio Challenge are not to be confused with those of sensible investing.

---

See all related posts in the CNBC Portfolio Challenge archive.

Week 2:  Monday, Tuesday
Week 1:  Monday, Tuesday, Wednesday, Thursday, Friday
Pre-game:  CNBC Million Dollar Portfolio Challenge Is Back, Stragety Primer

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

---

Tuesday November 25th

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box:  Question:  Which strategist told CNBC Monday that Citigroup's common stock "was toast"?

    Answer: Christopher Whalen

Squawk On the Street:  Question:  According to Jon Najarian's Nov. 24 Stock Blog post, how far is Nucor stock off its summertime high?

    Answer:  down 70%

The Call:  Question:  How long has Saudi Prince Alwaleed bin Talal been a Citigroup shareholder?

    Answer:  more than 18 years

Power Lunch:  Question:  According to the feature, Holiday Shopping with Deflated Stocks, what could you buy with a share of Microsoft?

    Answer:  10 lb. Butterball turkey

Street Signs:  Question:  When Fast Money's Dylan Ratigan appeared on The View, he used what metaphor to explain vanished credit?

    Answer:  money heaven

Closing Bell:  Question:  Which bank stocks does Peter Sorrentino of Huntington Asset Advisors see in a "huge" 2009 rally?

    Answer:  Wells Fargo

Weekly Quiz:

Question:  Publicly traded companies release earnings?

    Answer:  Quarterly

Crazed Scientologist/Amateur Samurai Fatally Shot By Scientology Celebrity Centre Security Guard

Whouldathunk all that brainwashing and sci-fi scripture could go so wrong?

A security guard at the Church of Scientology's Celebrity Centre in Hollywood on Sunday shot and killed a man wielding two samurai swords, police said.

Police detained the guard for questioning but said that a surveillance tape at the facility backed his claim that he fired his semiautomatic handgun to protect himself and two colleagues.
...
Det. Wendi Berndt said the man was involved with the church "a long time ago."

"There was a previous relationship, but it is unclear to what degree," she said.

A teenager who saw the man arrive in the parking lot said he stopped the car abruptly in the driveway and climbed out with a 5-foot sword in his hand and an angry expression on his face.

Tony Marquez, 17, said the man, who was bald and had tattoos on his arms, walked toward the building, then returned to the car to get the other sword.

CNBC Million Dollar Portfolio Challenge - Monday, Week 2

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

Watch this space for today's updates, picks, and reallocation methodology...

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Here we go again.  Clean slates all around.  Don't let your Week 1 red ink get you down - poorer portfolios have an advantage as we begin this new week, as your daily diet of Bonus Bucks will now pad your percentage gains more fatly than they do portfolios with higher starting values.

Our group strategy managed to deliver our best performing subgroup a cool 44% last week, which was enough to beat out 99.96% of the competition, but not quite enough to grab the first weekly ticket to the finals, which was secured by Christos Vellios of Chicago.

Not to worry - we've got a few tweaks ready to roll out this week.

Come on back this afternoon for the next set of picks and allocation methodology for participating portfolios.

And make sure to keep answering all the daily trivia questions (as well as the new weekly quiz question, unveiled today).

Update:  Today's reallocations...

It's looking like a solid up day (with our ultrabulls enjoying a double-digit gain), so for participating portfolios, you only need to address the ones currently holding the ultrabull basket (SSO, UYG, DDM, QLD) or any modified version you may have implemented.

Today, we're splitting those bulls into 4 groups, according to your birth month, as follows:

• Jan-Mar:  SSO, QLD, UYG, RFL (ultrabull, with double financial concentration)
• Apr-Jun: SDS, QID, SKF, RFN (ultrabear, with double financial concentration)
• Jul-Sep:   SSO, QLD, UWM, DIG  (ultrabull, with oil concentration)
• Oct-Dec: SDS, QID, TWM, DUG   (ultrabear, with oil concentration)

If you have more than 1 portfolio currently in the bull group, then allocate the first portfolio according to your birth month, the second portfolio according to the next basket down the list, etc.

For example, if you've got 3 surviving portfolios (currently holding the ultrabulls) and you were born in August you'd allocate those portfolios as follows:

1. SSO, QLD, UWM, DIG (Jul-Sep)
2. SDS, QID, TWM, DUG  (Oct-Dec)
3. SSO, QLD, UYG, RFL (Jan-Mar)

Also, a quick note regarding this week's holiday schedule...

The market will be closed on Thursday for Thanksgiving, but open on Friday.  In keeping with the once-a-day reallocation rules, you'll need to submit your 4th and final reallocation for the week by 4 pm on Wednesday.  These picks will execute at Wednesday's close and show up in your portfolio on Friday when the markets reopen.

Update:  Yowza. With the rally accelerating in the final hour of trading, our ultrabulls are now looking at a one-day gain of roughly 20%.

Update:  Meh.  A bit of a pullback at the close.  We'll have to settle with 16% for the day.

Consider all of the above to be for entertainment purposes and not meant to be used as real-world investment recommendations.  The goals and strategies of the Portfolio Challenge are not to be confused with those of sensible investing.

---

See all related posts in the CNBC Portfolio Challenge archive.

Week 2:  Monday
Week 1:  Monday, Tuesday, Wednesday, Thursday, Friday
Pre-game:  CNBC Million Dollar Portfolio Challenge Is Back, Stragety Primer

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

---

Monday November 24th

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box:  Question:  When does Mike Duke effectively take the CEO post at Walmart?

    Answer:  Feb. 1, 2009

Squawk On the Street:  Question:  Which central banker told CNBC Friday that his peers seek a "new world order"?

    Answer:  Brazil's Henrique De Campos Meirelles

The Call:  Question:  Which super-investor told the Fast Money team Thursday that the dollar is going to drop "like a stone"?

    Answer:  Peter Schiff

Power Lunch:  Question:  What nightmarish phrase did Pimco's Mohammed El-Erian use to warn bank investors?

    Answer:  "the unthinkable"

Street Signs:  Question:  Which strategist told CNBC Friday, "All financials will be owned by the U.S. government in a year"?

    Answer:  Hugh Hendry

Closing Bell:  Question:  In Allen Wastler's Nov. 20 blog post, who is the first possible Treasury Secretary candidate he names?

    Answer:  Timothy Geithner

Weekly Quiz:

Question:  Publicly traded companies release earnings?

    Answer:  Quarterly

Citi Field Redesign

In light of the federal government's decision to inject $20 billion into Citigroup and to backstop up to $300 billion of the bank's losses, the Treasury, FDIC, and the Federal Reserve are pleased to unveil a redesign of the new home of the New York Mets.

Previously christened "Citi Field", the new stadium's naming rights were purchased by the bank for $400 million in late 2006.  In the two years since, Citi shares (NYSE: C) have shed more than 90% of their value.

Market analysts are cautiously optimistic that this more representative re-branding of the stadium will help restore investor confidence in the financial giant and the banking sector generally.

Update:  Hey - the New York City Council stole my bit. (HT: JWF)

Hillary's Emolumental Problem

Barack Obama's nomination of Clinton to be Secretary of State may invite a Constitutional rowdydow.

Perhaps not the best way to begin his term.

Doesn't Barack Obama, a graduate of Harvard Law School, know the constitution? From the Washington Post-

Even if the vetting problems involving former president Bill Clinton's finances can be resolved, Sen. Hillary Rodham Clinton may face another roadblock on her way to the secretary of state's chair.

It's called the Constitution of the United States, specifically, Article One, Section Six, also known as the emoluments clause. ("Emoluments" means things like salaries.) It says that no member of Congress, during the term for which he was elected, shall be named to any office "the emoluments whereof shall have been increased during his term." This applies, we're advised, whether the member actually voted on the raises or not.

In Clinton's case, during her current term in the Senate, which began in January 2007, cabinet salaries were increased from $186,600 to $191,300.

Is the erstwhile Constitutional Law professor instructor unaware of this restriction?  Or was he planning to ask Congress to lower Hillary's salary to $186,600, the way Nixon did for his Attorney General appointee William Saxbe in 1973?  Or is it a shrewd plan to appear magnanimous, then reluctantly acknowledge he can't appoint his former rival after all?

Based on a friend of mine who suffered through Obama's Con Law class at Chicago Law and labels him "the worst teacher I've ever had," I'm going to go with door #1.

24: Redemption

The show doesn't really return until January, but tonight Fox airs a feature-length inter-season movie called "24: Redemption".

In the special, Jack Bauer is caught in a military coup in Africa, while a new president -- a female president -- is being inaugurated back at home.

How prescient!  Oh, wait...

Of course, in the world of 24, black Presidents are downright passe, with two having already passed through the Oval Office.

President-elect Allison Taylor would do well to watch her back, as her 7 Presidential predecessors have managed average terms in office of less than 21 hours' worth of show time.

With this 2-hour special eating into her expected longevity, she can expect to be sniped, bombed, arrested, or shot down by the 19th episode of the new season.

Update: Line of the night, from Jack Bauer to a U.N. peacekeeper advocating "talking to" the murderous rebels descending on the school:  "Why don't you go hide in the shelter with the other children?"

Chuck Schumer Titters Over Stimulupalooza II

When a $150 billion consumer stimulus package fails utterly, you can choose to learn one of two lessons:

1)  "Stimulating" the economy by sending checks to consumers is ineffectual.

2)  We just haven't done it BIG enough!

Our old friend "Trickle Up" Chuck chooses to believe the latter.

Sen. Charles Schumer, D-NY, said Sunday that he thinks the economic stimulus package should be between $500-700 billion.

In an interview with ABC's This Week, Schumer said, "I believe we need a pretty big package here," Schumer said, adding that Congress is working on getting the economic package to president elect Barack Obama by inauguration day. "I think it has to be deep. In my view, it has to be between $500 and $700 billion dollars and that's because our economy is in serious, serious trouble."

"It's a little like having a new New Deal, but you have to do it before the Depression. Not after," Schumer added.

If you want to something "big", something "deep", and you want to have an actual chance of materially improving the economy, there are much easier ways to go.

• Eliminate the federal capital gains and dividend income taxes (0% for everyone), rather than simply postponing plans to raise them.
• Lower the corporate income tax rate (without raising other tax rates simultaneously, as Charlie Rangel slipperily suggests).

Either (or ideally, both) would attract capital, encourage sustainable job creation, and fuel output growth.  Both economic theory and empirical evidence leave little doubt about it.

Schumer's half-trillion-dollar giveaway, on the other hand, while expensive, is highly unlikely to yield any meaningful results.  Its foreseeable fecklessness is likewise supported by both economic theory and historical evidence.

Aides Say Obama Likely To Hold Off On Poisoning the Economy

For a couple years, anyway.

Daley:

Obama adviser Bill Daley says Obama will "more likely than not" postpone a tax increase for the rich until 2011, when the Bush tax cuts expire, rather than pushing to repeal them now.

He made the comment on Meet the Press, and it's a suggestion that Obama will tailor his initiatives to avoid burdening the struggling economy -- even at the cost of a widening deficit.

Axelrod:

President-elect Barack Obama may consider delaying an election promise - to roll back tax cuts on high-income Americans - as part of his economic recovery strategy, a senior aide and an adviser said on Sunday.

David Axelrod, one of Obama’s closest confidants chosen to be a senior White House adviser, was asked if the tax cut could be ended later than Obama called for during the campaign. “Considerations will be made,” he said on “Fox News Sunday.”

This is one trial balloon that won't likely go over well among the screaming nutroots and other "social Democrat"circles.

Long Island School Named After Unemployed Former Senator

Criminy.

It was only a matter of time. A New York school has been renamed in honor of President-elect Barack Obama.

The former Ludlum Elementary School, in Long Island’s Hempstead Union Free School District, was renamed at a school board meeting Thursday — effective immediately.

School officials say most of the 440 students there are black or Hispanic, and Obama’s victory is a source of great pride.

I can't say it better than Ed Morrissey, from whom I yoinked this link, so I'll just pilfer his commentary too.

We regularly name schools after presidents in the US.  Public schools with names like Washington, Lincoln, Kennedy, Roosevelt and Jefferson can be found in every corner of the nation.  Usually, though, we name these schools after presidents have served at least a day in office...

Did anyone name a school after Richard Nixon in November 1968?  If they had, they would have been pretty embarrassed to have that name by August 1974, wouldn’t they?   Hopefully Obama’s administration won’t end that way, but maybe school boards ought to wait and find out first.

CNBC Million Dollar Portfolio Challenge - Friday, Week 1

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

Watch this space for today's updates, picks, and reallocation methodology...

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Oh me, oh my.  That was another whopper of a day for the ultrabears, who added another 13-14% to their equity portfolios Thursday.

Our best performing subgroup has mustered a cumulative 30% going into this final day of Week 1.  That's all well and good, but the leaderboard toppers are boasting gains of more than 40%, so we need to order up another big, heaping bowl of volatility today.

While our teeming horde has a bit of work to do if one of us to grab that first ticket to the finals, I'd note that another of our readers - Brad Pine, who took home a 3rd prize share in last year's $1,000,000 - is enjoying a 19th place overall rank today (and 5th place in equity performance).  Since all Week 1 trades are now locked in, maybe Brad can be convinced to share his current allocation with us.  Or maybe it's a secret he wants to guard, for use in future weeks.  (Couldn't blame him - he's figured something out...)

Anyone else with sitting pretty on the leaderboard, please sound off and let us know.

And be sure to come back to this post this afternoon for the first set of picks for Week 2, which need to be submitted by 4 pm today to count for Monday.

Update:  Thanks to those of you who helped cover the trivia questions during my absence this morning.

With the market hovering around the center line, it's still anybody's guess whether we'll close up or down, but happily (since today's trades only affect Week 2), we don't need to know what happens today to make our allocations.

From the comments, Bob laments that he's effectively out of competition now and can't catch up.  But that's the beauty of the 10 weekly bids for the finals.  No one's ever out of competition.  Every Friday, things effectively reset.  In fact, if you've got a couple of really pummelled portfolios (I've got a couple myself), you're at a considerable advantage compared to healthier portfolios when it comes to vying for the weekly prize (since Bonus Bucks will now give you an even larger percentage gain each day).

If it weren't for this weekly resurrection, we wouldn't be playing such mindlessly volatile baskets of funds.  This group strategy hinges on the fact that we don't care if half of our portfolios get slaughtered every day, so long as the other half are soaring.  Only one person can win the weekly prize.  Anything shy of 1st place might as well be 100,000th place.  It's worth just as much, and it leaves you in precisely the same position for the next week (i.e. untainted).

Anyway, those of you with participating portfolios are going to find the Week 2 kick-off quite simple.  Just make sure you've got half of your portfolios in the ultrabull basket, and the other half in the ultrabear basket.  We'll get back to birthdays and zip codes next week (along with a couple of modifications to this week's strategy that might give us a bit of extra juice).

• Ultrabear portfolio: SDS, SKF, DXD, QID
•  Ultrabull portfolio: SSO, UYG, DDM, QLD

If you're using an odd number of portfolios, give the extra one to whichever you feel luckier about for Monday.

Update: Turned into a very nice up day, thanks to a late afternoon surge, which followed the announcement that Obama would tap NY Fed President Tim Geithner as Treasury Secretary.  Our best performing subgroup is going to book roughly a 44% gain for this 4-day week.  Definitely solid (and good enough to reach the "Top 0.0%" or the top 200 out of 425,000), but unfortunately not quite enough to grab the first weekly ticket to the finals.

Perhaps one of our readers that was already on the leaderboard managed to pull it off... should know within a few hours, once the portfolios recalculate.

Have a great weekend, everyone.  See you Monday morning.

Consider all of the above to be for entertainment purposes and not meant to be used as real-world investment recommendations.  The goals and strategies of the Portfolio Challenge are not to be confused with those of sensible investing.

---

See all related posts in the CNBC Portfolio Challenge archive.

Week 1:  Monday, Tuesday, Wednesday, Thursday, Friday
Pre-game:  CNBC Million Dollar Portfolio Challenge Is Back, Stragety Primer

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

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Friday November 21st

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box:  Question:  According to Julia Boorstin, how much revenue did China Central TV's primetime ad space auction yield?

    Answer: nearly $1.4 billion

Squawk On the Street:   Question:  What disaster did Jim Paulsen of Wells Capital Management say "we've created" this week?

    Answer:  TARP crisis No. 2

The Call:  Question: Jim Cramer said HP's Q4 pre-announcement yielded no "pin action." Who did he say could have benefited from that action?

    Answer:  all of the above

Power Lunch:  Question:  Which investor said Thursday that they'd raise their Citigroup stake by 1%?

    Answer:  Saudi Prince Alwaleed

Street Signs:  Question:  Which strategist told CNBC there won't be a bottom 'til Valentine's Day?

    Answer:  Bob Doll of BlackRock

Closing Bell:  Question:  On Thursday, Warren Buffett's Berkshire Hathaway lost 48.1% from its all-time high. Where did it close?

    Answer:  at $77,500 a share

Weekly Quiz:

Question:  The Dow Jones Industrial Average consist of:

    Answer:  30 stocks

Life Imitating Art About Artificial Life That Imitates Eddie Furlong's Dorky Teenspeak

"By the time SkyNet became self aware it had spread into millions of computer servers all across the planet. Ordinary computers in office buildings, dorm rooms, everywhere. It was software, in Cyberspace. There was no system core. It could not be shut down."

And this is how it started.

The Pentagon has suffered from a cyber attack so alarming that it has taken the unprecedented step of banning the use of       external hardware devices, such as flash drives and DVD's, FOX News has learned.

The attack came in the form of a global       virus or worm that is spreading rapidly throughout a number of military networks.

"We have detected a global virus for       which there has been alerts, and we have seen some of this on our networks," a Pentagon official told FOX News. "We are       now taking steps to mitigate the virus."

(HT: Jawa Report)

Different Bat Time, Same Bat-Strategy Room

After three tours with Eric Bolling in the "A.D.D. Hour", I'll be recuperating in the Strategy Room's 11-12 hour today at FoxNews.com.

One Is the Loneliest Number

Confirmed: Adolf Hitler was monorchic.

CNBC Million Dollar Portfolio Challenge - Thursday, Week 1

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

Watch this space for today's updates, picks, and reallocation methodology...

---

What a difference a day makes, eh folks?

Yesterday's volatility catapulted all participating portfolios in the ultrabear basket into the top 1% (in some cases, the top 0.5%), with a cumulative 15-16% gain.

We're not quite on the leaderboard yet, but collectively we should have close to 100 portfolios in that top 1%.  Since we're evenly divided among ultrabears and ultrabulls going into today, another volatile session could land a bunch folks in striking distance of the first weekly prize (and the first guaranteed spot in the finals).

Remember that because of the once daily reallocation, today is effectively the last trading day of Week 1 (since the picks you make by 4 pm today will be the final reallocation to impact Friday's performance).

Check back in between 2 and 3 pm (once we've got a reliable read on today's market direction) for the final allocation methodology for participating portfolios.

Update:  Technical difficulties.  Many of you have written in that you're having trouble accessing the contest site.  I'm not sure what the problem is, but I'm having them too - can't get any contest pages to load.  Possibly just an issue of traffic putting too much of a burden on the site.

I've got a note into Customer Care and will update the post with any news.

Anyone who is currently able to access the site, please let us know, including where you're located, what kind of browser you're using, and the URL through which you were able to enter the site.

Update:  The site is back - for me, and for several readers who just simultaneously wrote in (12:50 pm).  The outage seems to have lasted about 3 hours.

Update:  Studies show: Suitably Flip readers make better traders.  I've heard from two readers today (both of whom were familiar faces/usernames around here during last summer's Portfolio Challenge) who've already leapt into the top 100, at #12 and #79.

Update:  We're crossing the center line too frequently to have any reliable sense of whether we'll close up or down, so our final reallocation methodology may not hit this post until 3ish.  Make sure to come back during that last hour or so, to make sure you get your final allocation of Week 1 submitted on time.

Update:  Paulson will be speaking at 2 pm.  Hopefully that'll inspire a big knee-jerk move either up or down.

Update:  From the comments, reader Arthur K is sitting at 9th place overall using a modified ultrabear strategy.  Another reader emails that he's currently ranked 64th.  Way to go!  That's at least 4 readers enjoying top-100 rankings.

Update:  Okay, it looks like we're heading for a lower close, so congratulations to all you ultrabears.  The time we spent in positive territory appears to have been the result of the short-lived rumors of a deal struck on the awful auto bailout.

For today's final reallocation for Week 1, our leading subgroup essentially consists of anyone ranked in the top 1% who's in the ultrabear group (SDS, SKF, DXD, QID) today.

For those participating portfolios, we'll be splitting into ultrabears and ultrabulls one more time, according to the final digit of your zip code.

• Even number:  Leave the ultrabear portfolio as is (SDS, SKF, DXD, QID)
• Odd number:  Swap into the ultrabull portfolio (SSO, UYG, DDM, QLD)

Don't fret if you're holding ultrabull portfolios that are now in the toilet.  As of tomorrow, the slate will be wiped clean, as picks you make beginning tomorrow will count toward Week 2's percentage gain.  In fact, a lower Week 2 starting value will mean your Bonus Bucks are more valuable on a percentage basis, so you'll in fact be at a considerable advantage versus richer portfolios.

Update:  With 30 minutes to go, the ultrabears are looking at another double-digit gain.  If this holds (or steepens), I suspect the leaderboard will be positively infested with readers tomorrow.

Update:  Yes, indeed.  Another 13% for our ultrabears today (plus about 1% in Bonus Bucks).

Consider all of the above to be for entertainment purposes and not meant to be used as real-world investment recommendations.  The goals and strategies of the Portfolio Challenge are not to be confused with those of sensible investing.

---

See all related posts in the CNBC Portfolio Challenge archive.

Week 1:  Monday, Tuesday, Wednesday, Thursday
Pre-game:  CNBC Million Dollar Portfolio Challenge Is Back, Stragety Primer

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

---

Thursday November 20th

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box:  Question:  According to our Big Budget Events slideshow, how much did the Louisiana Purchase cost in today's dollars?

    Answer:  $217 billion

Squawk On the Street:  Question:  On the day KISS frontman Gene Simmons rang NYSE's opening bell, whose employees rang Nasdaq's bell?

    Answer:  Rambus

The Call:  Question:  According to Jeffrey Saut of Raymond James, when did the market bottom?

    Answer:  Oct. 10

Power Lunch:  Question:  What did Pentagon press secretary Geoff Morrell say is the solution to marine pirate attacks?

    Answer:  a holistic approach

Street Signs:  Question:  In Jim Cramer's Wednesday Lightning Round OT, which stocks did the Mad Money man praise?

    Answer:  British Petroleum

Closing Bell:  Question:  According to research firm IDC, global info tech spending will grow by how much in 2009?

    Answer:  2.6%

Weekly Quiz:

Question:  The Dow Jones Industrial Average consist of:

    Answer:  30 stocks

Oil Dips Below $50

Unreal.

Crude oil has fallen nearly $100/barrel in four months.  I was bearish for the first $70 or $80 of the decline, but with prices this low, I'm starting to think it might be time to put the gang's oil speculation plan (i.e. fill a bunch of trash cans with gasoline and wait for it to appreciate) into action.

Auto Bailout Might Fail By Virtue Of Not Being Awful Enough

There's word today that a bi-partisan group of Senators have reached a tentative deal on the auto bailout debate (supposedly involving carving that $25 billion out of the existing TARP money, but curtailing some of the "conditions" that Congress wanted to attach to the funding).

CNBC is reporting that House Democratic leadership calls the agreement a "non-starter" due to its removal of those politically savory conditions.

This is good news for everyone who's not a Democratic Congressman, Ron Gettelfinger (or another union heavy), or Darly Hannah.  These conditions had precisely nothing to do with making the automakers more competitive, or more accountable to shareholders, or more financially sustainable.  They constituted unrelated political goodies, like compelling the Big 3 to make currently unjustifiable business decisions in pursuit of greener, hempier, more electrified (read: more expensive, less marketable) cars.  It goes without saying that layering on these additional restrictions can only make automakers less competitive versus their foreign counterparts and only strengthens the already strong likelihood that the bailout cannot save any of these companies from eventual bankruptcy and reorganization.

Pelosi balking at the lack of crippling conditions wrought on the industry is an unlikely savior from this already toxic bailout, but I'll take it.

Sad News: Al Franken Stricken Blind

After weeks of digging through poorly lit trunks and squinting into the dark recesses of his basement in his continuing search for wayward bags of Franken-friendly ballots, the Democratic Senate candidate has tragically lost all visual faculties.

The poor fellow had to ask the Minnesota election canvassing board to help him glean the intent of the voter who cast this ballot.

That’s the only challenge in the special envelope in Plymouth so far, according to Sandy Engdahl, the city clerk and the official running the city recount.
...
Eight of the 24 precincts had been counted by 1:45 p.m., and the only challenged ballot, in Engdahl’s view, was clearly a vote for Coleman. Nevertheless, the Franken campaign was allowed to seek a second opinion.

Brave little guy.

(HT: American Spectator, via Ace)

CNBC Million Dollar Portfolio Challenge - Wednesday, Week 1

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

---

As many of you have pointed out, the crediting of Bonus Bucks to your portfolios continues to lag by an extra day (trivia bonuses are supposed to hit your portfolio by the following day's opening bell).  By this point, we should see up to $24,000 accrued (plus $5,000 for those who registered before 11/14 and $5,000 for those who nabbed the refer-a-friend bonus).  Instead, you're likely seeing just $12,000 in maximum trivia bonuses.

The leaderboard is also carrying a lag, as the top players are all showing equity portfolio values of $912,000, which is the initial $900,000 allocation, plus $2,000 for the weekly trivia bonus, plus $10,000 in early registration and referral bonuses.  So they're missing Monday's and Tuesday's daily trivia bonuses and any stock performance from yesterday.

In case you're curious, based on the numerical and percentile rankings, there appear to be approximately 370,000 portfolios participating in the contest.  I believe that's ahead of the count during the first week of the summer contest, though there were closer to 750,000 by the final week.

If you're participating in our group strategy, you should show a to-date gain of 1.1% or 2.0% (give or take, depending on your non-trivia bonuses).  While things could certainly change by 4 pm, today is looking like a down day; our ultrabear portfolio is showing an intraday gain of 7%, midway through the session.

Assuming the market is still down going into the close, today's reallocation is relatively simple.  If you have a portfolio in the bear basket, you'll either 1) leave it as is or 2) swap it out for the bull basket, according to the day of the month you were born.

• Even numbered day: Leave the ultrabear portfolio as is (SDS, SKF, DXD, QID)
• Odd numbered day: Ditch the bears and swap into the ultrabull portfolio (SSO, UYG, DDM, QLD)

If you have more than one portfolio currently in the bear basket, you get to continue playing both strategies. (If you have 2 bear portfolios, put one each in the bull and bear basket; if you have 3 bear portfolios, put one in each, and allocate the third according your birthday; if you have 4 bear portfolios, put 2 each in the bull and bear baskets.)

Update:  What a day for the ultrabears!  The Dow, S&P, and Nasdaq declined 5.1%, 6.1%, and 6.5%, respectively, while the Dow Financials shed 11.2%, led lower by Citi.

Add in the 2x leverage and our ultrabear basket is looking at a one-day gain of 13.3%.

That should leave our leading sub-subgroup with a portfolio value of roughly $1.154 million once they're recalculated overnight (or $1.166 million if the bonuses catch up).  None too shabby after just two rounds of trades.

By comparison, the top trader today (reflecting equity gains through Tuesday) was Mary Noble, with $1.091 million.

Anyone who was holding the ultrabear portfolio today should find themselves in the top fraction of one percent tomorrow morning.

---

Consider all of the above to be for entertainment purposes and not meant to be used as real-world investment recommendations.  The goals and strategies of the Portfolio Challenge are not to be confused with those of sensible investing.

---

See all related posts in the CNBC Portfolio Challenge archive.

Week 1:  Monday, Tuesday, Wednesday
Pre-game:  CNBC Million Dollar Portfolio Challenge Is Back, Stragety Primer

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

---

Wednesday November 19th

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box:  Question:  On Nov. 17, which ag stock did Pete Najarian praise for its "phenomenal pipeline"?

    Answer:  Monsanto

Squawk On the Street:  Question:  In Tuesday's "CEOs Sound Off", which chief executives gave CNBC their outlooks?

    Answer:  All of the above

The Call:  Question:  What does Click Capital Research's Colin Gillis fear about investing in Yahoo?

    Answer:  the wait for a new CEO

Power Lunch:  Question:  On Tuesday, analyst Tina Vital offered CNBC her oil stock picks. Which company is on her 4-star list?

    Answer:  Marathon Oil

Street Signs:  Question:  How much of ConocoPhillips did Warren Buffett's Berkshire Hathaway hold, as of Sept. 30?

    Answer:  84 million shares

Closing Bell:  Question:  According to Daryl Guppy, what sort of traders use a "pump and dump" strategy?

    Answer:  desperate individuals

Weekly Quiz:

Question:  The Dow Jones Industrial Average consist of:

    Answer:  30 stocks

Mitt the Michigander Prescribes Auto Failure

Amen.

(HT: Hot Air)

A Pleasant Fantasy

The grieving process seems to be stuck in stage 1.

As the president-elect faces a once-in-a-century opportunity to remake the regulatory apparatus governing Wall Street, some of Obama's fellow Democrats and investor groups are urging him to bring sweeping changes to banks, hedge funds and executive pay. His closest economic advisers, men like Robert Rubin, Lawrence Summers and Paul Volcker, may recommend otherwise: go slow. If Obama takes their counsel, the 44th president, who succeeds Bush on Jan. 20, may not clamp down all that hard on a financial industry whose excesses have pushed the nation -- and much of the world -- into a recession.

"This is a group of people that understands the markets, respects the free-market system and understands government has an important role to play,'' says Eugene Ludwig, a former U.S. comptroller of the currency who is himself an Obama adviser. "But there are limits on what government can or should do."    

CNBC Million Dollar Portfolio Challenge - Tuesday, Week 1

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

Watch this space for today's updates, picks, and reallocation methodology...

---

Well, it turns out those triple-leveraged ETFs we were eyeing are indeed ineligible.  Despite meeting the  minimum trading volume and share price requirements, the fact that they've existed for less than 100 days means they don't technically have a 100-day average volume.

Ah, well.

The double-leveraged funds will have to suffice.  Yesterday, we split the group evenly into ultrabulls and ultrabears (by birth year).  Today, we'll be doing precisely the same thing, using precisely the same ETFs (only a different splitting methodology).  The idea is that whichever half of yesterday's portfolios wind up gaining today (the ultrabulls if the market goes up and the ultrabulls if it goes down) will in turn be split in half and reallocated evenly into the ultrabull and ultrabear basket for tomorrow.  Then we repeat twice more, giving some sub-sub-sub-subset four consecutive days of ultra-gains by Friday, which will hopefully catapult someone into the first weekly winner's circle.

If it turns out you've got one or more portfolios in the winning group, to determine today's reallocation, you'll need to inspect your driver's license or non-driver ID.  If you discover you were born between January-June, you're in the ultrabull group.  July-December is today's ultrabear group.

If you have just one surviving portfolio, allocate it according to the birth month scheme.  If you've got more than one portfolio holding yesterday's winning group, split those winners evenly between the ultrabull and the ultrabear, giving the extra to your designated group if it's an odd number of portfolios.

Ultrabull Basket: SSO, UYG, DDM, QLD

Ultrabear Basket: SDS, SKF, DXD, QID

Don't worry if you're not yet seeing any movement in your portfolio values.  Yesterday's picks weren't added to your portfolios until after yesterday's close, so any movement in those stocks/ETFs won't kick in until after today's close (and possibly won't wash through your on-screen reporting until tomorrow).

That said, as soon as folks start seeing results (last time around, you could view limited intraday gain/loss data in real time), let me know how you're doing.

Update:  It's looking like an up day, so (assuming that holds), anyone with participating portfolios will want to address the ones they currently have in the ultrabull basket.  If you've got just one ultrabull portfolio, determine whether to keep it there or switch to ultrabear according to birth month (Jan-Jun = ultrabull; Jul-Dec = ultrabear).  If you've got two, leave one ultrabull and change the other to ultrabear.  If you've got three, leave one bull, change one to bear, and determine the third according to birth month.  And so on.

Update:  Stocks are back to being mixed, so this day could go either way. You can still handle all of your participating portfolios, without knowing how today will shape up.  As described above, reallocate your existing bull portfolios such that half of them remain bulls and half become bears.  Then reallocate your existing bear portfolios such that half of them remain bears and half become bulls.  (Again, in the case of an odd number of bull or bear portfolios, give the extra to your birthday-designated basket.)

You'll still wind up with roughly half bulls and half bears among your portfolios, but it's important to undertake this reallocation, such that whichever group wins out today will be split evenly going into tomorrow.

Update:  Stocks took a negative turn in afternoon trading, so make sure both that half of your current bull portfolios are switched to bears AND that half of your current bears are switched to bulls.

To clarify, this means that if you're participating with 4 portfolios (2 of which are currently in the bear group and 2 of which are in the bull group), you would switch one of the bear portfolios into the bull group (leaving the other in the bear group) and switch one of the bull portfolios into the bear group (leaving the other in the bull group.

It does not mean that you co-mingle bull and bear picks in the same portfolio.  Each portfolio should always remain purely bear or purely bull.

Update:  Well, most major indices managed to close higher, but the Nasdaq was virtually unchanged and financials finished lower, so neither of our leveraged baskets moved much (ultrabulls up 0.15%, ultrabears down 0.73%).

The good news is that this is a real rarity in the current market.  On almost any other day, one of these groups would've soared while the other tanked (which is what we're looking for).  Fingers crossed for a more volatile session tomorrow!

Consider all of the above to be for entertainment purposes and not meant to be used as real-world investment recommendations.  The goals and strategies of the Portfolio Challenge are not to be confused with those of sensible investing.

---

See all related posts in the CNBC Portfolio Challenge archive.

Week 1:  Monday, Tuesday
Pre-game:  CNBC Million Dollar Portfolio Challenge Is Back, Stragety Primer

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

---

Tuesday November 18th

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box:  Question: According to the Stock Blog post, Options Action: Dangerous Videogame Play, what must happen for the break-even trade?

    Answer:  Stock must drop more than 8%

Squawk On the Street:  Question:  In Friday's Stop Trading! segment, Trouble for Coal, Jim Cramer said which energy stock has a "double whammy"?

    Answer:  Kinder Morgan

The Call:  Question:  In the Stock Blog post, Five Stocks to Fight The Recession, how does Manuel Schiffres label Pfizer?

    Answer:  All of the above

Power Lunch:  Question: In Vince Farrell's blog post, Lower Oil Price Equals A Tax Cut, the CIO offers what scientific view of petroleum "info"?

    Answer:  "dissection"

Street Signs:  Question: Enjoy our Holiday Cigars slideshow. Now name the only 2-time winner of Cigar Aficionado's No. 1 Cigar of the Year.

    Answer:  The Padrón Family

Closing Bell:  Question:  In "Apple Investors' Hope for the Holidays" which "long-time" tech industry analyst does Jim Goldman refer to?

    Answer:  Gene Munster

Weekly Quiz:

Question:  The Dow Jones Industrial Average consist of:

    Answer:  30 stocks

HowObamaGotElected.com

As featured on Hannity and Colmes.  Good for a laugh.

Then a long sigh.

Then a head in the oven.

And here's something similarly frightening.

Zogby Poll

512 Obama Voters 11/13/08-11/15/08 MOE +/- 4.4 points       

97.1% High School Graduate or higher, 55% College Graduates   

Results to 12 simple Multiple Choice Question      

57.4% could NOT correctly say which party controls congress (50/50 shot just by guessing)

CNBC Million Dollar Portfolio Challenge - Monday, Week 1

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

Watch this space for today's updates, picks, and reallocation methodology.

As discussed last week, we're going to start off with a negatively correlated, triple-leveraged ETF strategy in our crowdsourced attempt grab those weekly prizes (and the corresponding tickets to the final round of the contest).

Later today, the specific baskets of ETFs to be used by any participating portfolios (and the methodology for determining which basket to jump into) will be made available as an update to this post.

You don't need to do anything special to participate.  As long as you were registered for the contest by 9:30 this morning, you're invited to join in.  And you can use 1, 2, 3, 4, or all 5 of your portfolios.

And whether or not you take part, do make sure you answer all of the trivia questions (6 per day, plus the weekly quiz).  These count toward your weekly gain and they do have a way of adding up, particularly in the early weeks when they constitute a larger percentage of your portfolio value.  Answering all of the questions correctly will boost your Week 1 gain by 6.2%, so come on back throughout the day for easy access to the answers.  (It's not cheating.)

Don't forget to enter your trades by 4 pm ET.

Update: Okay, minor snag.  Now that the list of eligible stocks and ETFs is available, it appears that none of the tripled-leveraged ETFs are on it (despite all of them meeting the volume and minimum price thresholds).  We'll see if we can get that rectified, but in the mean time, we're going to have to settle for double-leveraged funds.

No position can be allocated to more than 25% of a portfolio, so we've got two baskets (ultrabull and ultrabear) of four ETFs each.  The baskets consist of equal parts Dow Industrials, Dow Financials, S&P 500, and Nasdaq 100.

We'll split all participating portfolios into two groups - if you were born in an even-numbered year (e.g. 1968, 1976), start with the ultrabull basket.  If you were born in an odd-numbered year (e.g. 1977, 1983), start with the ultrabear basket.

If you're using just one portfolio for this initiative, go with your designated basket.  If you're using more than one portfolio, split them evenly between the ultrabull and the ultrabear (with the extra going to your designated basket, if you're using 3 or 5 portfolios).

Ultrabull Basket: SSO, UYG, DDM, QLD

Ultrabear Basket: SDS, SKF, DXD, QID

These will get added to your portfolio at today's close and will therefore not be affected by today's market moves, so don't shy away from the ultrabull just because the market's down today.

Consider all of the above to be for entertainment purposes and not meant to be used as real-world investment recommendations.  The goals and strategies of the Portfolio Challenge are not to be confused with those of sensible investing.

---

See all related posts in the CNBC Portfolio Challenge archive:

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

---

Monday November 17th

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk On the Street:  At the start of the Oct. 29 CNBC.com video, Solid Gold Demand, how high is the Dow as displayed onscreen?

    Answer:  9084.47

The Call:  In the Market Insider post, Stocks That Survived 1929, which Jazz Age stock is not on the list?

    Answer:  National Salt

Power Lunch:  In Matt Nesto's Oct. 31 stock blog post, what "No. 1" gainer did he call the "hottest stock on Earth"?

    Answer:  Office Depot

Street Signs:  In the story, Stocks Could Get a Short Post-Election Bounce, who said Obama offered markets a "big positive"?

    Answer:  Bruce Fenton of Atlantic Financial

Closing Bell:  3:00 pm*

* I'll be on the Strategy Room at FoxNews.com from 3-4 and therefore won't be at the blogging machine to update this final question.  Check the comments below where I'll bet one of your fellow readers was kind enough to update it in my stead.

Update:  Closing Bell question: Our slideshow, The Many Sides Of Sarah Palin, depicts her meeting "Vikings and Valkyries" in which ethnic festival?

    Answer:  Norwegian

Weekly Quiz:

Question:  The Dow Jones Industrial Average consist of:

    Answer:  30 stocks

Rangel Wants To Cut* Taxes!

Sounds like good news.

New York Representative Charles Rangel said he's revising his tax overhaul proposal to reduce U.S. corporate tax rates to 28 percent, down from the current rate of 35 percent.

On its own, that would be tremendous.  The U.S. corporate tax rate is the second highest in the world.  Add in state-level corporate taxes and it's frequently the highest.  Lowering this superlative disincentive to corporate productivity would do wonders to fuel economic growth, attract capital to our shores, and create countless jobs.

Sounds like a neat trick, but it's precisely what would happen - and precisely what we need, especially during tough economic times.

But Charlie's got another, far less crowd-pleasing trick up his sleeve.

The down-side of Rangel's tax package, of course, is tax increases on individuals. Rangel intends to raise individual tax rates to a marginal 44 percent on people making over $200,000.

44% would be the highest top marginal rate in 23 years, eliminating even the fallacious "we did well enough with higher taxes under Clinton" argument.

Obama Transition Team Scrubs Fannie

The co-leaders of Barack Obama's transition team for State Department review have impressive resumes, including significant roles at erstwhile mortgage giant Fannie Mae.

As detailed in their change.gov bios:

Tom Donilon is a partner at the law firm of O’Melveny & Myers and serves on the firm’s global governing committee. Tom served as Assistant Secretary of State for Public Affairs and Chief of Staff at the U.S. Department of State during the Clinton Administration. Since leaving the Department he has remained deeply involved in the national security arena. He is a member of the Council on Foreign Relations, the Aspen Strategy Group, the National Security Advisory Group to the Congressional Leadership, the Brookings Institution Board of Trustees, the Miller Center of Public Affairs Governing Council, and the Trilateral Commission.

Wendy R. Sherman is a Principal of The Albright Group LLC and of Albright Capital Management LLC. Ambassador Sherman served as Counselor and chief troubleshooter for the State Department, as well as Special Advisor to President Clinton and Policy Coordinator on North Korea. Sherman is a recognized expert on national security issues and serves as a frequent analyst in major news outlets. She was recently appointed by Congressional Leadership to serve on the Commission on the Prevention of Weapons of Mass Destruction Proliferation and Terrorism.

Did you not see the Fannie mentions?

It's not you.  Those tidbits seemed to have slipped through the crack.  WSJ's Washington Wire fills in the blanks for you.

Donilon was Fannie’s general counsel and executive vice president for law and policy from 1999 until the spring of 2005, a period during which the company was rocked by accounting problems. Donilon’s co-leader for the State Department review,  Wendy Sherman, also has ties to Fannie Mae that weren’t mentioned in her Obama-Biden Web site bio. A fellow veteran of the Clinton State Department, Sherman headed up Fannie Mae’s charitable foundation from 1996-1997.

CNBC Portfolio Challenge: Trading Begins Monday

Are you ready?

Before you answer, consider the fact that just because you participated in the previous contest and still have a valid CNBC.com login doesn't mean you've registered for this contest.

If you haven't already done so, go to the site and make sure you're able to create your 5 portfolios.  You need to do this anyway and it's a good way to make sure you're registered for the new contest.

Those of you who participating in our crowdsourced strategy last time around will recall the basic approach.  The idea is that, with hundreds of participating portfolios, we have an opportunity to play in a coordinated manner that gives us a significant leg up (while remaining fully within the bounds of the rules).  Each of us is using just one account (with up to 5 portfolios) and we're all trading on our own behalfs.

As discussed previously, the winners of large cash prizes will be the top scorers in the 2-week "finals" that follows the 10-week contest (this is a change from the summer rules, back to the 2007 rules).  20 players will compete in the finals with reset $1 million portfolios. Those 20 players will consist of the 10 top scorers overall and the 10 weekly winners.  Our crowdsourced strategy is significantly more useful at the weekly level than at the overall level, so that's going to be our primary thrust.  Last time, that meant we were primarily striving for the weekly prizes.  This time, it means any weekly winners will also advance to the finals and compete for the $800,000 in prize money.

We go for these weekly wins by viewing each week in isolation.  To embrace this strategy, you need to completely eschew your fear of incurring huge losses, because they're going to happen.  A lot.  The good news is that your score is effectively reset every week, since the weekly winner is determined solely by the percentage gain during that week alone.

If you choose to participate in this strategy, you can commit as many or as few or your 5 portfolios to it as you choose.  Of course, you can also choose to do your own thing completely and if you do, hopefully you'll still come around for the triva questions and to stay up to date on contest chatter and general market commentary and trading ideas.

Because there will be hundreds of thousands of competing portfolios, the only way to have a shot at winning a given week is to strive for as much volatility as humanly possible.  You need to learn to crave and lust after volatility in a very unnatural way.  And we're actually not terribly concerned about whether that volatility takes us up or down.  So long as things are swinging wildly (and assuming we're able to find trades on both sides of that volatility), then at least some subset of our collective portfolios should see big gains.  As long as some of our portfolios are up huge, we don't care that others are down just as huge (because 2nd place is just as useful as 100,000th place).  And if we can chase down and capture some truly reckless volatility 5 days in a row, then some sub-sub-sub-sub-subset of our portfolios will have managed to step through 5 consecutive days of enormous, compounding gains.

During the summer contest, the primary driver of market volatility was the price of crude oil.  We typically played this by investing half of our portfolios in oil companies (which tend to rise and fall with oil prices) and half in airlines (which tend to move in opposition to oil prices).

That was just a few months ago, but it's a gross understatement to say we've got a whole new market now.  Lucky for us, it's a ridiculously, unprecedentedly volatile market.  Even luckier for us, the new contest rules allow the use of exchange traded funds (ETFs). These are tradable vehicles that track either a stock index, a particular industry, a commodity, a currency, etc.  In previous contests, we were limited to single-company stocks, which exposed us to company-specific issues that tended to get in the way of our macro-volatility plays.  Better still, there exist some very special ETFs that behave like an underlying index, but are levered (up to 300%) to magnify the gains/losses.

These are ideal for our purposes and will play a major role in our attempt to grab those weekly bids in the finals.

You may recall that - because equity trades are only booked once a day, at 4 pm - every week effectively begins on the previous Friday.  You make your trades before 4 pm on Friday, those positions get added to your portfolio at the end of the day, and incur their first moves while in your possession on Monday.  Likewise, your Thursday trades (entered before 4 pm) are effectively your final trades of a given week.  But Week 1 is a little different. Since the contest doesn't formally begin until Monday at 9:30 am, it is effectively a 4-day week.  You'll make just 4 equity reallocations - before 4 pm on Monday, Tuesday, Wednesday, and Thursday.  (You'll also make a reallocation on Friday - but it'll only affect Week 2.)

With that in mind, you'll want to come back here on Monday - well before 4 pm. At that point, the specific ETFs to be picked up by any participating portfolios (however many of your 5 you choose to use) and the allocation methodology (who picks which) will be available.

Also recall that - unlike equity trading - currency trading is available continuously.  Like it or not, 1/10 of your portfolio is allocated to currencies and you can't transfer funds between the two accounts, so it's worth acquainting yourself with the currency trading tools and resources (including a practice account you can access now) on the contest site.

As with last year, trivia questions and answers will be posted throughout each day of the contest as they become available.  In addition to our primary initiative of winning those weekly spots, additional trading ideas and contest commentary will all be posted regularly.

Good luck and make sure to sign up for e-mail updates if you haven't already.

---

Previously:  CNBC Million Dollar Portfolio Challenge Is Back

See all related posts in the CNBC Portfolio Challenge archive.

See older posts in the Summer 2008 - CNBC Portfolio Challenge archive.

Consider all of the above to be for entertainment purposes and not meant to be used as real-world investment recommendations.  The goals and strategies of the Portfolio Challenge are not to be confused with those of sensible investing.

New Jobless Claims Highest Since September 2001, Dow Stages 3rd Largest Point Rally In History

Go figure.

Stocks sold off early after the Labor Department said the number of newly laid-off individuals seeking unemployment benefits jumped last week to the highest level since right after the Sept. 11, 2001 terrorist attacks. There was also more evidence of a severe pullback in consumer spending -- a worsening trend that had pummeled stocks earlier in the week. Wal-Mart Stores Inc. trimmed expectations for full-year earnings, and Intel Corp. late Wednesday cut more than $1 billion from its sales forecast.
...
The Dow rose 552.59, or 6.67 percent, to 8,835.25, after falling as low as 7,965.42 and rising as high as 8,876.59. That's a trading range of 911 points. The Dow did not sink below its Oct. 10 trading low of 7,882.51.

In the five weeks since the Dow set its multi-year low, it has successfully re-tested that level twice (plunging nearly 1,000 points over three days to an intraday low of 8,143.59 on October 27th and bottoming out at 7,965.42 today).

It's hard to read any reliable sentiment (other than frenzy) into the market with the VIX still flirting with 70, but given the two successful tests and the historically huge rally that took hold today in the face of unexpectedly bad economic news, a case can be made that market bears are gradually being ousted from the driver's seat.

Terrorist He Barely Knows Acknowledges President-Elect As a "Family Friend"

Shrewd timing there, Bill.

[William] Ayers, a professor at the University of Illinois at Chicago, adds few new details about his relationship with Obama in the afterword to Fugitive Days: Memoirs of an Anti-War Activist. The book is being reissued this month.

“We had served together on the board of a foundation, knew one another as neighbors and family friends, held an initial fund-raiser at my house, where I’d made a small donation to his earliest political campaign,” he writes.

(HT: Ace)

I <3 Strategy Room

I'll be heading back to the Strategy Room at FoxNews.com today at 3 pm, where I'm determined to score one of those stylish new "I <3 Strategy Room" t-shirts.

Too Quaint To Fail

Bailout creep reaches a new low.

William Kane, a quality analyst for a prescription benefits administrator in Kingsland, Ga., sent an email to his local Congressional representatives, the White House, the Treasury Department and Barack Obama’s transition team telling them of the financial hardship his mother’s St. Mary’s, Ga. small antiques business faced. Sales, he wrote, fell from averaging $12,000 a month in 2007 to less than $2,000 a month in October 2008. (His mother’s business, Kane’s Kollectables, is pictured to the above right.)

After listing off the huge sums of money some of the huge banks are receiving under Treasury Secretary Henry Paulson’s financial-rescue plan, he said it’s only fair that a small business get its share of federal aid.

He wrote:

“We do not have any pockets to line, pork to add, or monetary promises to make. I can promise a vote, and our word that will we not use our money to add to our overhead by purchasing another failing business. We will not hold $400,000 executive getaways on your tab. We may use your money to expand our business, but we certainly will not do so in a way that will set us up for failure. We aren’t asking for billions. We as taxpayers are paying for it, I think it’s only fitting some of the smaller fish in the pond have access to the funds.”

Kane doesn't seem to indicate whether some of the money will be put toward more visually alliterative signage.

The Latest On Al Franken's Magical Vote Conjuring Skillz

Power Line gets you caught up with their seventh in an indefinite series tracking the pro-Franken irregularities and profound statistical anomalies that underlie Minnesota's pre-recount number shifting.

The blog's John Hinderaker appeared on Hannity and Colmes last night to discuss.

Your Tax Policy Is Like Bad Medicine

You really shouldn't knock Obama's plans to raise income tax rates.  Hoover and FDR aptly proved that soaking the rich not only makes us feel better, it stops recessions dead in their tracks.

After all, "recession" is hardly the first word we associate with the 1930s.

If we needed further proof, we need only look to the Carter administration.  Raising the top marginal tax rate to nearly 70% and inflicting windfall profit taxes on evil oil companies once again had a delightfully cathartic effect, which helped salve the assuredly unrelated "malaise" that struck the country under his watch.

(HT: Power Line)

Flip On Fox News' Strategy Room: Tuesday 3-5 pm

It's an online show, so it's a great opportunity to neglect your workplace duties for a couple hours without leaving your desk.

Eric Bolling and Harris Faulkner will likely be hosting.

You can catch the live stream here.

You can also email the show or follow/contribute to the unofficial Twitter feed by using the #strategyroom hashtag.

Change You Can Scrub

That's why pencils have erasers, folks.

Over the weekend President-elect Barack Obama scrubbed Change.gov, his transition Web site, deleting most of what had been a massive agenda copied directly from his campaign Web site.

Gone are the promises on how an Obama administration would handle 25 different agenda items - everything from Iraq and immigration to taxes and urban policy - all items laid out on his campaign Web site, www.BarackObama.com.

Instead, the official agenda on Change.gov has been boiled down to one vague paragraph proclaiming a plan “to revive the economy, to fix our health care, education, and social security systems, to define a clear path to energy independence, to end the war in Iraq responsibly and finish our mission in Afghanistan, and to work with our allies to prevent Iran from developing a nuclear weapon, among many other domestic and foreign policy objectives.”

“We are currently retooling the Web site,” said Obama spokesman Nick Shapiro.

Previously:  Obama Softens Plans To Enslave American Youth

Having Swept Obama Into Office, Al Gore's Internet Now Set To Vanquish Manbearpig

Settle down, Al.  We still remember that you exist.

Former US vice president Al Gore said an Internet revolution carrying Barack Obama to the White House should now focus its power on stopping Earth's climate crisis.

The one-time presidential contender turned environmental champion told Web 2.0 Summit goers in San Francisco Friday that technology has provided tools to save the planet while creating jobs and stimulating the crippled economy.
...
"Web 2.0 has to have a purpose" Gore said.

"The purpose I would urge is to bring about a higher level of consciousness about our relationship to this planet and the imminent danger we face. We have everything we need to save it.

Obama Softens Plans To Enslave American Youth

Not even elected four days and already he's going back on campaign promises.  This reversal is making me question whether my blind idolatry of the man might've been premature.

Reliable Investments

Okay, one real post today.

This is a vintage SNL clip that takes on renewed relevance today.

(HT: My Dad)

No Blogging Today

On the road all day.  Back at it tomorrow.

Market Stat Of the Day

Change in Dow from Bush's inauguration through election day 2008: -9.1% (10,587.59 - 9,625.28).

Change in Dow in two days following Obama's election (as of 1:15 pm): -9.3% (9,625.28 - 8,730.6).

Update:  Worst two-day plunge in history.

And You Thought New York Had High Taxes Before

New York's nearly superlatively punitive tax scheme is - amazingly - the product of a legislature whose upper house has been in Republican hands almost exclusively since the late 1930s.  While Democrats have long-controlled the State Assembly, the State Senate was New York's final GOP holdout once Client #9 became Governor.

In 2006, the 4-seat majority was narrowed (no thanks to me).  And yesterday, it officially vanished.

The single most powerful institution in the history of New York state politics has fallen: Senate Republicans have lost the majority after controlling the chamber for all but one year of the past seven decades.
...
Democrats seized two seats from the Republicans, picked up one vacant seat, and protected their most hotly challenged incumbent, while the GOP picked up one vacant seat and preserved two hotly contested Republican seats.
...
"Today, change begins," said Senate Democratic Leader Malcolm A. Smith, who is expected to become Senate majority leader when the Democrats take over in January.

Albany's screwy political architecture means the power in each house is unusually concentrated in the hands of the majority (something Senate Democrats and Assembly Republicans have historically lamented in unison).

In all likelihood, this handover thus heralds a dramatic shift toward even more liberal economic policies in New York State.  Perhaps now we can finally win back our #1 ranking from New Jersey as the worst business tax climate in the country, having wallowed at 2nd worst for the last few years.

For a sense of how much economic damage this might inflict on American business generally, consider the fact that the 40-some Fortune 500 companies based in New York City alone account for well over a trillion dollars in annual income (roughly the GDP of Brazil).

State Senate Dems undoubtedly salivate at the though of this bottomless piggybank which they can now use without obstruction to fund their bloated adventures in big government.  Past experience has given us little reason to assume they'll stop to consider the impact of increasingly punitive taxes on job creation, the value of investment portfolios (retirement accounts) that hold stock in large companies, or the general health of the state economy, already nearly crippled by a tax scheme that gives capital and successful businesses every incentive to relocate across state lines or overseas.

McCain's Concession Speech

For those of you watching networks that didn't bother to carry it.

(HT: Allah)

Obama Wins Ohio

Race over.

Update: Melanie Morgan is already looking ahead: