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Tuesday, November 29, 2022

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Jobless Thursday – Max Keiser Bashes Banks

This is a good one!

 

I've never embedded a video before but you just have to see this so I'm learning a new trick.  Keiser puts out some gems like:

  • Goldmans Sachs, JPM, CitigGroup are all engaged in accounting fraud
  • The American peasants have got to be the stupidest people in the World today.  They don't mind becoming peasants, they don't mind living like peasants and, if that's the case, then we should do nothing to stop them from sliding into a peasant class. 
  • Banks are just stealing money outright from the World economy.
  • There is no liquidity being provided by the banks, they are hoarding their cash and non-disclosing their losses.
  • In part 2 of the video: "The reality is people are dying due to the actions of JPM, GS and the Wall Street Jihadists"

Max compares Wall Street bankers to suicide bombers and predicts it is only a matter of time before they are back before Congress with a gun to their heads threatening the destruction of America if they don't get another bailout.  I'm glad he said it an not me because I get enough hate mail from GS fans…  Keiser makes the point that, while the American people may put up with this nonsense, the leaders of Europe and Russia and China look at what's going on here and have no faith in our currency.

I think this is great as it saves me from ranting and raving this morning.  I had my fill in yesterday's post when I said the only way to play this market to the bull side is to suspend all logical disbelief.  Fortunately, we had a huge, ridiculous run-up in the morning that gave us tremendous shorting opportunties.  Even as the market was rising, in my 9:56 Alert to Members, we targeted the DIA $99 puts at $1.30 and those finished the day at $2 (up 54%) and in my 10:32 Alert to Members we sold the FAZ $19 puts for $1.80 and those finished the day at $1.20 (up 33%).  We also took short plays as the market topped on MS, IYT, CS, ICE, V, GMCR, DD, EBAY and even our beloved AAPL as the market was just too ridiculous looking to be bullish

As usual, we jumped on top of the Beige Book and right at 2:02 I commented that the headlines didn't seem so hot and by 2:50 we had a thorough breakdown and determined that SRS was the way to go as the statements regarding Commercial Real Estate were downright scary (highlights and colors are added from my analysis):

The weakest sector was commercial real estate, with conditions described as either weak or deteriorating across all Districts. Banking also faltered in several Districts, with Kansas City and San Francisco noting continued erosion in credit quality (often with more expected in the future). One bright spot in the banking sector was lending to new homebuyers, in response to the first-time homebuyer tax credit. Finally, labor markets were typically characterized as weak or mixed, but with occasional pockets of improvement.

Of course we are not going to let all this negative data fool us into getting bearish again.  Our plan (which worked already) was to make a quick 20% on our bearish plays and get the hell out as 20% is plenty to make on a day trade and you have to be disciplined in this market as almost no trend lasts past the close.  

The bears did come out to play last night with Morgan Stanley's Richard Berner taking aim at three recovery myths: that inventory cycle benefits are almost tapped out; that consumers will be deleveraging for years; and that last year's store closings are artificially boosting spending numbers and Doug Kass explained why earnings season is a racket –  Sure, lots of companies reporting earnings are beating: "One of the single-most overhyped statistics extant given the degree to which estimates move around prior to reports," Kass points out.  . Investor relations departments and Wall Street analysts are very good at getting numbers down to the right level before reports are released. As a result, the actual results vis-a-vis expectations or consensus do not vary materially from historical experiences, in good times and even in bad times.  

Hey, don't shoot the messinger, I'm still trying to get bullsih! 

It's hard to maintain a PMA (positive mental attitude) when we lost another 531,000 jobs last week and it would look worse except they raised the prior reading by 7,000 jobs to 521,000 so it looks like we "only" lost 10,000 more jobs this week rather than 17,000 more jobs than the last BS number they gave us.  Continuing claims were also drastically altered, adjusted up from 5.992M all the way up to 6.021M last week, which made this week's 5.923M look like an improvement as well – at least until it's revised up next week anyway…

Of course, at $50 a tank again, many of those people couldn't afford to drive to their low-wage jobs anyway so let's consdider this just a normal market correction as we get ready to see the Leading Economic Indicators and the FHFA Housing Price Index at 10 am, which is the same time that Christina Romer (Chair of the President's Council of Economic Advisers) spins the Administration's outlook to Congress' Joint Economic Committee.  That should be good for some quotes!

Asia held up fairly well this morning with about a 0.5% sell-off following the sharp afternoon dip in the US.  The Hang Seng was stick-saved off a 300-point morning drop and camee back to that 22,200 mark, down 107 for the day.  China's good news of the day was official economic data showing China's gross domestic product growing by 8.9% from a year earlier in the third quarter, following the 7.9% gain in the second quarter. The expansion in industrial output, the backbone of the manufacturing-heavy economy, accelerated further to 13.9% in September from 12.3% in August.  As I pointed out to Members in yesterday's chat, China has no debt and a $5Tn economy with $2Tn in cash.  They can stimulate their economy at a rate of $1Tn a year (20%) for 7 years and they STILL won't have a debt/GDP ratio as high as the US or Europe so don't expect that party to come to an end any time soon.

Japan also had a big recovery after lunch, rising 120 points to retake the 10,200 mark and finishing down "just" 66 on the day.  This was despite the fact that Exports were down 30.7% on the year, perhaps because it was better than the shocking 36% drop measured in August and Imports "improved" to, down "just" 36.9% vs. down 41.3% in August.  This makes 12 consecutive months of declines for Japan, whose Central Bank is working very hard to keep the dollar over 90 Yen to try to turn those export numbers around.

Europe is down around 1% this morning (9 am) with UK Retail Sales flat for September (weaker than expected) but that may worsen as Mail Workers hold a 2-day strike this morning – perhaps this will finally stop the Pound from rising against the dollar for a day… CS had good results but not good enough (so a home run on our short sale!) and financials are dragging the EU markets as is ERIC, with a 71% drop in net profits.

The strong Swiss Franc tanked Nestle's sales and they were the only candy maker to blow earnings this Q so shades of things to come for EU companies if the dollar slides any further.  The German government plan to cut taxes and run deficits by "reclassifying" expenses to get around those pesky rules that require a balance is being attacked by their former allies in the Social Democrats, who accused the center-right parties of planning tax cuts for businesses and better-off voters, and hiding the resulting public debt in a "shadow budget."  Some economists were also critical. Klaus Zimmermann, head of the German Institute for Economic Research, a nonpartisan think tank in Berlin, likened the proposed vehicle to a "slush fund" that would allow the new government to neglect the hard work of balancing the budget in coming years.

Lots of data at 10 am and now we have to work hard just to get back to our "must hold" levels of:  Dow 10,087, S&P 1,096, Nasdaq 2,173, NYSE 7,204 and Russell 623, all of which were blown yesterday.  Until we get back over 3 of 5 of those levels, we have little interest in new bullish plays. 

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Link was not right.  Try again.  PPH and BBH  both are moving in a downtrend.

North America segment sales, representing the Company’s U.S. and Canadian sites, were $2.84 billion, up 23% from third quarter 2008.
International segment sales, representing the Company’s U.K., German, Japanese, French and Chinese sites, were $2.61 billion, up 33% from third quarter 2008. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, International sales grew 35%.
Worldwide Media sales grew 17% to $2.93 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter sales grew 18%.
Worldwide Electronics & Other General Merchandise sales grew 44% to $2.36 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter sales grew 45%.

SPRWA – chart always has gaps after earnings, then they go and fill them up.  Look at the 1 yr chart with earnings….

java, the slope can change because it’s computing it from the option close price but the current stock price, which means that the 95s are wildly ‘underpriced’. So it shouldn’t be an issue tomorrow.

AXP not so great
 
The third-quarter results included a $180 million non-recurring benefit associated with the company’s accounting for a net investment in consolidated foreign subsidiaries
 
Excluding that benefit, American Express posted adjusted earnings from continuing operations of 44 cents per share.
 
Total revenue fell 16 percent to $6.0 billion.

AMZN – Had a small portion of Nov 85/90 Put spread @ 1.70 credit.
Tomorrow it should nice and green. Instead of cashing-out right away, I may roll the 85 Puts long to Dec and wait to sell the short leg later.

I hope any longs are selling into the AMZN excitement.   Good results; but still a very rich valuation and guidance aside, headwinds still lie ahead.
then again, its such a manipulated bugger who cares ?

100KP: Man – AAPL just keeps getting worse!

Pharmboy,
What is your opinion of PARD? Own stock at 7.35 and sold Nov 5 P + C, about even all around now.
Thanks

Eric, thanks for the after-hours pricing insight!

BTW – Larry McMillan (author Options as a Strategic Investment) is on TOS live today…. a little late getting to the site, but due any minute.

javaben/AAPL…….My take is that it is wise to stay  long on AAPL and…………… fuggedaboutit.   Well, not exactly forget about it, but the point is that AAPL is on a relentless upward trend.  There is NO negative news on this company and it isn’t likely to lose you money if you stay long for the next few months at least. 

AMZN 93.45 to 107.44…WOW!  No positions (regrettably). 

Very little after hours volume in AMZN now;  about 20,000 shares last 15 minutes. 
 
Seems kind of odd …  16,341,000 for the day, including after hours; let’s see what it is by 8 pm.

WFR buying SunEdison (private company) which does commercial installation, sales and financing of solar systems.  Interesting.

Phil, what do you mean by this?
 
TZA $11/12.50 spread for .55
 
are you selling the 11 puts and selling the 12.50 calls  or what and what months?

is there any member chats after hours in a different location, or is this here it?

dman – chat is here until tomorrow.  TZA spread is buy 11, sell 12 (1:1) for net debit .55.  So you can lose 55c or gain 45 max.

After hours update … AMZN shares now total 16,393,000.
That’s another whopping 52,000 shares (likely most back and forth between market makers).   In 1/2 hour.
 
You would think either buyers would be wildly buying or shorts wildly covering.
 
To me, this is just another indication of a phony stock.  The powers that be want it up 15% on earnings.  So it is.
 
I also have COF on my screen tonight.  About 1,000 shares have traded in the past 1 hour.
 
There is no real demand for stocks. 
 
The after hours action on earnings of these two companies is proving that.

Phil
Time share at Marriott… that is at the Lake, and it is paradise for sure. You can walk to some of the best skiing in the world – Heavenly Gondola is everybody’s favorite, not to mention all of the other magnificent benefits of Lake Tahoe. The  real estate market euphoria is, at this time, isolated to the single family home, wherein business entrepreneurs are buying a home and moving lock stock and barrell to the area, in order to avoid the taxes imposed in CA. When capital is tight for a guy in the early stages of his business, or even after, and trying to expand, then every burden (including taxes) becomes very important. This is a great place to raise a family and build a business. California has taken for granted the psyche of the entrepreneur, and has assumed they will pay whatever is asked of them, but in their stupidity, the limit has been reached, and some of the best are leaving. Lots of changes are in the future, mostly politically, as a result of this miscalculation IMO.

AMZN 16,518,400
 
About 200,000 shares since 6 pm.
 
Just came back from a softball vame; one of my teammates works for a big options firm.  Says all the volume is HFT.  Very little real volume in the market.  Says its a joke; complete illusion.  FWIW.

Phil, did you just come back from another Moveon.org meeting ?  😉

Cap, if you don’t have the juice to weather out a HFT surge then it can be a costly joke.  The fact is, they can move the market pretty much at will.  As long as there’s no volume.  And it appears there is only significant volume when there is something upsetting the norm.  Which is infrequently and short lived.  If you’re not in it for the long haul, you kind of have to respect a move whether it’s low volume or not.  Low volume got us here from March.  Sad but true.

I know Matt ….. its unbelievable and it is getting shockingly little public discussion ….

It really bothers me that KBR and Halliburton ESG are still lumped together by groups like KOS.  It’s not even the same company!  I’ve worked for Halliburton ESG for close to 10 years now, and I’ve never met someone that worked for KBR even when Halliburton and KBR were under the same umbrella years ago.  Halliburton bought KBR for it’s upstream oil and gas construction business increasing it’s vertical integration in the energy business, but split them off years ago.  I have no idea how a tiny part of KBR that handled supply chain operations got associated with a good solid energy company.  Just an example of poor reporting I guess.

Phil, can you indicate how the 5 % rule can be applied to gold / silver prices . I have tried it but results were disatrous…..re gold taking 1000 as base a pullback of 10 would have been due once gold reached 1050….is this a proper interpretation of the 5% rule…

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