“Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.” – Bruce Kovner

1. Warren Buffett Pulls Back On Oil Company Investments — FuelFix reported Warren Buffett selling off the vast majority of his stake in ConocoPhillips (NYSE:COP) and dumping some of his holdings in Phillips 66 (NYSE:PSX) and National Oilwell Varco (NYSE:NOV). The move looks prescient, as U.S. crude prices have dropped from ~$107/bll in mid-June to less than $94, and energy stocks went from being among the best performers on Wall Street to the middle of the pack.
2. Argentina Aims To Skirt U.S. Court, Bring Debt Under National Law — Reuters, Argentina is looking to push bondholders to swap defaulted debt for new notes, in order to dodge a U.S. ruling that prevents the government from paying creditors. last interest payment of $539M was blocked by a NY court, resulting in the country’s sovereign default on July 30.
3. Bank of America (BAC) in $16.5 Billion Deal with U.S. Gov’t Over Mortgage Bonds — Reuters, Bank of America is expected to pay around $9B in cash and provide customer relief valued at approximately $7B in a settlement with federal and state authorities over its role in mortgages leading up to the financial crisis. The record $16.5B payout is the largest in a series of increasing penalties against banks, and requires BofA (NYSE:BAC) to acknowledge the misrepresentations of the quality of MBSs of companies BofA acquired (Countrywide and Merrill Lynch).
4. Toyota To Cut Prices of Lexus Auto Parts in China Amid Anti-Trust Concerns — Toyota is now the latest automaker to cut its auto parts prices in China, reducing parts on its Lexus models by an average of 26%. In recent months, many foreign automakers have lowered price tags due to the ongoing anti-trust investigation in the country’s auto sector. Toyota’s (NYSE:TM) price cuts come just one day after China’s anti-monopoly regulator issued a $201M fine on 12 Japanese companies over price manipulation.
5. U.S. Eyes Wider Action on Islamic State — WSJ, the U.S. has indicated that it will be expanding its international campaign to combat extremists of the Islamic State, and will likely extend its fight from Iraq into neighboring Syria. The Obama administration has outlined several different fronts to combat ISIS, including continued airstrikes, support for the new Iraqi central government and influencing Persian Gulf states to halt the funding their citizens may be providing the extremist forces.
6. Federal Reserve Chairwoman Janet Yellen in No Rush to End Easy Money But Admits Risks — the Fed Chairwoman Yellen defended the need for extraordinary monetary policy as unprecedented dangers to the economy swirled. She acknowledged progress in the labor market and gains toward healthy inflation. Oversall, she seemed committed to leaving rates near zero for some time.

The week ahead — Economic data from Econoday.com:

“A great trader is like a great athlete . You have to have natural skills, but you have to train yourself how to use them.” – Marty Schwartz