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Thursday, December 1, 2022


Federally Funded Friday – Top 1% Get $850Bn While GOP Votes to Starve the Poor

Kill, kill, kill, kill, kill the poor!  

That's what they were singing in the Republican side of the United States of America's House of Representatives (that's right, YOUR representives, carrying out YOUR will in YOUR name) as 216 Congresspeople (all Republicans) defeated 196 Democrats and 12 Republicans whe didn't think that passing a farm bill with ZERO food stamp money was going to be a good idea.  

That's right (and I know it sounds like an insane plot to a movie about society gone mad) the GOP actually took Food Stamps out of the Farm bill – effectively de-funding a program that feeds 47M Americans (the bottom 15%).  Fortunately, we still have a Democratic President and the White House has vowed to veto the bill, rather than simply cutting off food to 47M human beings at the end of the month.  A statement released overnight said that the food stamp program "is a cornerstone of our nation's food assistance safety net, and should not be left behind as the rest of the Farm Bill advances." 

Even in a chamber used to acrimony, Thursday’s debate in the House was particularly brutal. Democrats repeatedly called for roll-call votes on parliamentary procedures and motions to adjourn, delaying the final vote by hours and charging Republicans over and over again with callousness and cruelty.

Republicans shouted protests, trying to silence the most strident Democrats, and were repeatedly forced to vote to uphold their own parliamentary rulings.

"It's all about denying the working poor the right to food," Rep. Jim McGovern, D-Mass., claimed, accusing Republicans of attacking "poor people." 

Asked before the vote Thursday if he would allow a compromise bill to come to a final vote in the House, Speaker John A. Boehner of Ohio shrugged and said: “If ands and buts were candy and nuts, every day would be Christmas."

Now, before you say "Oh Phil, stop being such a Liberal, the Republicans are only trying to save some money" – let's consider that the United States spent $74Bn on food stamps last year.  This money, of course, goes right back to the local economy and helps keep your favorite grocery store open (well, maybe not Whole Foods, but the normal ones) and that creates jobs for grocery people and farmers, etc – which is why it's part of the FARM BILL!   

Sure we might want to shave $74Bn off our Governments $3,000,000,000,000 budget as that's a whopping 2.4% but just the other day, the Chairman of the Federal Reserve said he will continue giving $85,000,000,000 PER MONTH to Bankers, which they then use to pump up the markets which, unfortunately, makes food (a commodity) more expensive.  How sick is that?  

This ATROCITY is being carried out in YOUR name, by YOUR Representatives (if they are Republican) and if YOU don't let them know that YOU do care enough to feed your fellow countrymen – then they will just continue to do this, as well as many other terrible things – in YOUR name.  Write your Congressman here – PLEASE!!! 

JP Morgan (JPM), one of the poor Banksters the Fed is contributing to, made $6.5Bn over the past 3 months on $26Bn in revenues with $25Bn pouring into their Asset Management division (top 5%) and Investment Banking client deposits (top 1%) at $369.1Bn!  At least someone is putting that $85Bn a month to good use – not wasting the money on feeding the poor – bah, humbug!  

The picture on the right should be the company's logo – a picture of the founder beating a prole with a cane while his chauffeur tries to hold him back…

By the way, when I call for writing Congresspeople, you don't have to only write to evil Republicans – you can also take a minute to THANK those Representatives who stand up to them, especially the brave 12 Republicans who stood up to their own party as Boehner cajoled and threatened in an attempt to get all of his party in line.  12 men of couscience deserve a little praise now and then – for want of them Sodom and Gamorrah fell!

Speaking of Republicans of good conscience, kudos to "thank God he's not President" John McCain, who has teamed up with Super Senator Elizabeth Warren to introduce a "21st Century Glass-Steagall Act" aimed at separating trading activities from the Big Banks.  

It should be noted that, if trading activities were separated at JPM, they would have had a big miss this Q as Consumer and Community Banking Revenue was off 3%, Interest Income down 1% and non-interest revenues (activity fees) down 7%.  Even Mortgage Revenues were down 7% from last quarter and, had it not been for a .24 gain to net income from reducing loan loss reserves (ie. stupid accounting tricks) – the company would have missed expectations instead of beating by .16.  

We already shorted the overall banking sector by selling FAS calls in our Short-Term Portfolio.  WFC is our other major reporting bank and it is PURE COINCIDENCE, I assure you, the the two best banks are the first to report in earnings season.  Warren Buffett owns a lot of WFC and they beat estimates of .98 by .04 with 0.9 of the gain (10% of total earnings) coming from reversing loan loss reserves and the bank bought back 26.7M of their own shares, out of about 5Bn so there were half a percent less shares to divide the earnings into this quarter – smart!  

XLF WEEKLYWith the stock trading 33% higher than last year, what could possibly go wrong when they spend $1Bn buying their own stock?  After all, it worked out so well during the buying frenzy of 2007 and 2008, didn't it?  $1Bn is .20 per share so that's what was spent to increase earnings by 0.005 per share.  On the whole, I'd rather get the diviidend, thanks.  

We sold the FAS Aug $70 calls for $3.35 on the 10th for our virtual Short-Term Porfolio and we backed it with a Jan $70/78.33 bull call spread at $3.45 – just in case we're wring and XLF stays above $20 (FAS $71) but it's not JPM and WFC we thought would miss but we do expect tepid guidance in their Conference Calls (later this morning).  

We've had a bit of a pullback in oil (/CL on the Futures) and we just caught another short opportunity at $106 this morning but we already crushed it from $107 all the way back to $104.50 yesterday for a $2,500 per contract gain so we're not very excited about shorting oil into the dangerous weekend pump-job and expect it to settle around $105 into the weekend – to maximize the consumer gouging.  

NYMOOn the whole, I'm very concerned that the markets are dangerously overbought and, overall, the Global news-flow still SUCKS – so it's hard to get excited about buying long positions at this very toppy-looking market.  As you can see from Dave Fry's McClellan Chart, we're as overbought as we've been since last September, just before the S&P fell from 1,474 back to 1,343 (9%).

To get me to change my mind, we want to see this indicator fly back to neutral on the smallest pullback – that would be encouraging.  I hate to mention fundamentals (and see this morning's news rundown, via Twitter for our morning news round-up) but it IS earnings season and, generally, it's a good idea to wait a bit and see which sectors are doing well and which ones are not before tossing money into stocks that are trading at or near their all-time highs.   

But I'm old-fashioned that way. 

Have a great weekend, 

– Phil



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Now here's some comfort for those seeking privacy: "Microsoft does not provide any government with blanket or direct access to SkyDrive, Outlook.com, Skype or any Microsoft product," it said.  The revelations come as three Swedish technology entrepreneurs seek donations for a smartphone messaging app that, it is claimed, will be impervious to the type of spying used by the NSA. In less than two days, more than $137,000 (£90,000) has been raised for the Heml.is app which has the backing of Pirate Bay co-founder Peter Sunde. "We're building a message app where no one can listen in, not even us," the entrepreneurs said in a video explaining how Heml.is would work."


Feel better, now that you know the Easter Bunny is real?  Well, you shouldn't:  the D-Wave Gen II quantum computer, purchased by Google, Goldman Sachs and NASA, among others, can reputedly crack any code algorithm conceivable — within minutes. This link doesn't mention this assertion, but, given that it can solve classification problems 3,600 X faster than IBM's fastest computer, it's not hard to believe.  http://blogs.nature.com/news/2013/05/quantum-computer-passes-speed-test.html

Spooky device: we all know what the internet is for- what if its a device that had several models- spooky stuff, sexy woman noises, fat bastard sounds- farting and burping, etc, annoying sounds- crying baby, water dripping, meowing cat and wimpering dog etc. I know i would be in for 2 or 3…. my wife always goes balistic when the dog has an accident so I bought some rubber dog shit had every once in a while Ill bring it out- never fails- one of the kids goes yewwwww… then she hits orbit.

Cool quantum computing interviews if you're bored this weekend:

1/ D-Wave founder Eric Ladzinsky:  http://www.youtube.com/watch?v=fArXhQBLDWE


2/ There are a raft of other quantum computing interviews, some by D-Wave techs, many others by theoretical physicists, mathmaticians and Michio Kaku, who seems to give interviews about virtually everything.  But Ladzinsky actual lays out how it was created.  Just "Bing" quantum computing — I have eliminated Google from my computer, nuff said.

Dow, NYSE and S&P looking a tad toppy today but look at the frakin' Russell and NASDAQ! These guys are almost up 10% in a month. They are indices for cryin' out loud, not individuals stocks or 3x ETF. And they are holding back AAPL – but not AMZN, PCLN and GOOG apparently. 

From the look of these moves you would think that there are tons of free money floating around. Oh wait!

Article re: Seeking Alpha & MLP's as "Ponzi Schemes"



Lots of Chinese data on Sunday and we'll get an update on free money from Ben Wednesday and Thursday. And Friday, the G20 get together to coordinate the free money flow! We might get to Dow 36,000 by Friday.

Good article pstas… I am going to start writing articles for SA. I'll start with "Why TSLA will hit $1000 before AAPL". That should get me my $10 quickly.

Aggregator Phil – so here's how I'd suggest we make this something compelling: Utilize some of the on campus talent from our colleges, who have an interest in becoming a journalist in the 21st century. This could be a way for them to start a career and gain some notoriety, as well as hopefully some cash. To do this I'd suggest we seek a student/captain for any institution, to help us recruit writing talent – ideally with a business/econ/journalist interest. We could establish a small fund, and then go get some kickstarter money as a match. If those here involved agree to contribute not only a little cash, but also a regular article, we should be able to gain some readership, and perhaps a little advertising cash. We'd also could use someone who's in charge of code/site – but you amy already have that.

Please add/critique etc – I'd really like to make this work not only for the business gain – which as you point out might be nil – but because we need it for financial journalism in general. Thx

I thought Jesse's observation ont he markets yesterday was right on:

"Despite the faux exuberance from Wells Fargo and JPM earnings reports, the market action seemed 'heavy' even with the light volumes.

I thought it was notable that JPM made most of its profit from investment banking and 'trading.'

The market looks tired after a remarkably parabolic run."

Following the discussion on network security – does anyone have any views on PANW?

With all due apologies to those whom might be offended, this is, bar none, the funniest thing I've ever seen on network television!!!   http://www.chicagotribune.com/news/la-me-ln-tv-stations-airing-of-racist-pilot-names-sparks-furor-20130713,0,5088279.story

Phil — good Friday post. Good stuff.

Peak Oil website shuts down.   I guess they read Phil's posts..!

Guest Post: Gold Manipulation, Part 2: How They Do It (And How To Hedge It)




Second part of a three part article

Phil/TWTWTW (That Was The Week That Was)

I have to thank you for excelling yourself during this past week. I have spent a good few hours going over your notes and comments and there are so many gems on repairing and rolling trades that I have been beavering away on paying special attention to my major positions and analysing them using your approach on Tuesday. It certainly gives important perspectives on how much commitment you have made to a set of trades, and what that commitment really means, particularly when short positions move ITM. Being able to look at a group of trades on the same underlying (in this case AAPL) and taking a detached view by assessing the impact of the underlying reaching different price points was extremely reassuring. 


Too often in the heat of battle, rationale thought is a scarce resource – and particularly when so many trade ideas are flying around and everyone's personal ground war is going against them. During the week, as one of my key positions (PCLN) looked like it was getting away from me and about to leave me mortally wounded – this weekend, after following your example, the adjustments needed became obvious and I was able to construct a plan which, if executed to its conclusion (which will take many months to achieve), should allow me to grasp victory from the jaws of defeat.


Thanks Phil for what you do, and although sometimes you are a hard taskmaster, it is the only way to learn.


Last week really was a tide in the affairs of this particular man (hat tip the Bard).

Hi, my RSS has problems of getting updated messages from this feed today. Does anyone have the same problem?

That could not be a more appropriate, no.  Here is the article.

Very nice set of charts and commentary by SpringHeel Jack.  He also has a series that is in the beginning of the article that I encourage all to read…..

RSS problems,

It looksl like there is a malformed message blocking the RSS feed sometime after July 13 9:24am.  Phil's message at that time is the last one I got.

Good morning!

Re: Pharm's link to Springheel Jack- SPX 1965 by 2014- I'm in. 

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