MGM Is Not Making Any Friends In Las Vegas
MGM Incorporated is not making many fans with their legal maneuver to sue the victims of the October 1st shooting from the Mandalay Bay hotel in which 58 victims were killed and more than 500 wounded. It was the largest mass murder in U. S. History. Faced with laws suits from close to 1,000 victims of the assault and the potential for hundreds more the Company elected to strike back and sue the victims!
The company’s aggressive legal approach, which stirred outrage on social media on Tuesday, turns on an interpretation of federal law that one of MGM’s own lawyers admits he discovered only a few weeks ago. Apparently this tactic has never before been used to try to shield a company from liability. MGM is not suing for money, but the company wants a federal court to rule that it cannot be held liable for the shooting of more than 1,000 victims and others it named in the suits. The company said it named only people that have already sued or given notice that they intend to do so.
MGM’s claim is based on a federal law passed after the 9-11 terror attacks, which is known as the Support Antiterrorism by Fostering Effective Technologies or Safety Act. The law is intended to shield federally certified manufacturers of security equipment and providers of security services from liability should they fail to prevent a terrorist attack. The law defines a terrorist attack as an unlawful act that causes mass destruction to citizens or institutions of the United States.
MGM contends that under the law, which Congress passed in 2002, it is immunized from liability because it met two conditions: A security company that was hired for the concert had a certification from the Department of Homeland Security and the shooting qualified in the company’s view, as an “act of terrorism.” However, it is far from clear how successful the company might be in using this law to its advantage.
One thing is for sure. MGM is not going to win any public service awards from this lawsuit. They may win and have the lawsuits thrown out if they can prove the shootings were an act of terrorism which is highly unlikely. They have already lost in the court of public opinion. Even though they sued the innocent victims for no money. The cost to the victims to defend themselves from the suit will be millions. I wouldn’t want to be an MGM attorney living in Las Vegas and have my name on the suit. They may be the next ones to seek out a security company.
Ask Mr. Seifert
I am constantly asked questions about trading and how to exploit certain market factors to insure success. Each week I will answer one of those questions here with a short paragraph.
Question: What is the best way to initiate a credit spread?
Getting the spread on correctly is important. Novice traders blow themselves up trying to get the “edge” on the market makers. Forget about that strategy. It won’t work. You are not going to be able to out execute the market makers. There are a couple of ways that work will work when getting a spread in place.
First you can “leg” the spread on by buying the long side of the trade first and selling the short leg second. I use this strategy when I have a preference in market direction. I get my limited risk leg on first and then try to sell the credit side with more premium. Second you can set your browser on the site you are using to find out where the spread is trading in the market. You should be able to get filled within a few cents either way once you know where the spread is trading in the live market. The third way is always wrong. It is to leg the spread on by selling the short option leg first. This is selling a naked option and will eventually end up as a big loser. You are not going to beat the wise guys at their game. Eventually the impossible will happen and as soon as you sell the naked option, Houston will get 50 inches of rain and you will take a possible risk of $280 and turn it into $3000! You will then email me and tell me that I don’t know what I am doing and the risk is much greater than what I claim it is. Remember bulls and bears make money in the market, pigs get slaughtered! Don’t be a pig. There is plenty of money to be made doing it the right way.
The Wise Guy Report: The View From The Floor
Each week I talk about how the Wise Guys (floor traders) find the soft spots in the market and take advantage of price dislocation in three major commodity markets: Gold (GC), Crude Oil (CL) and Long-Term Interest Rates (ZB). On the equity side, I cover the MSS which is the Mister Seifert Sez Composite Index. This is a proprietary index that I created which measures the dollar flow of the four major indexes (S&P 500, Nasdaq 100, Russell 2000 and the Dow Jones Industrials) on an unweighted basis.
NASDAQ Makes A Key Reversal (Possible Blow Off Top)
Gold and crude stepped back from center stage this week as there was virtually no price movement while those markets remained stable. Interest rates are sleeping but if you have followed the markets long enough you know that when things are quiet, the action usually shifts to something else. This week the shift was to the Nasdaq, which on Wednesday made an all-time high only to close lower on the day. Technical analysts call this a key reversal day and site a better than 50% chance that the market has made a near term top. There was follow thru on Thursday and Friday as the technical index lost more than 4% for the week. One of the victims was Facebook, which saw the biggest one day percentage plunged by a major stock in the history of the exchange, gapping down more than 18% after its earnings were released. This market bears watching to see if this is a buying opportunity or the near-term tops are in.
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The option trades and strategies offered by The Optionomics Group are very unique in that they all have limited risk while creating great leverage. Our basic BL – BR Credit Spread Strategy (and all of the others) let you control 100 shares of a $200 stock ($200*100 = $20,000) for only $500 (the spread differential) or 40:1 leverage with your risk limited to only $500. Plus our strategies produce winning transactions in four out of five possible outcomes.
The Optionomics strategies let you become the casino whereby you have a mathematical edge that lets you grind out consistent returns in any kind of market environment. These strategies are designed to produce good returns over a short to intermediate term time frame. It is an approach to the stock market which will be hot, cold or average over time, but the end result should be very good in any type of market environment.
I offer a FREE Two-Week trial to the various subscription services with no cost or strings attached. Each strategy is explained in a 5-7 page booklet which includes sample recommendations and model portfolios. I doubt that you have ever seen anything like this. During your FREE trial, you can paper trade the various strategies and get a feel for the deal without risking a penny. Simply click on the appropriate tab on the Optionomics’ Home page to access the informative booklets and then sign up for one or all of the weekly subscriptions.
- The Bullish – Bearish Credit Spread Strategy: The basic strategy of trading weekly credit spreads.
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Each Monday morning by 11:00 EST, the plays for the upcoming week plus updated model portfolios for each strategy are posted on the site. The prices in the reports are Monday morning’s opening prices. In addition, I have a webinar on Thursday afternoon where I discuss various option strategies, what is happening on the floor and answer any questions that you may have. Don’t worry if you miss the show. They are archived on the site. Sound Good? Good! You can subscribe to one or more of the subscriptions for only $19.95 each per month on a month to month basis with no contract or strings attached. If you subscribe to three, it is only $49.95 per month while you can subscribe to all six for only $79.95 per month, a 33% discount. I think you will agree that this is a super offer so give it a try. Click on www.optionomicsgroup.com to access the Optionomics Group web site and get started today doing what the pros do –
“Don’t Buy Them – Sell Them”.
Mr. Seifert