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Thursday, December 1, 2022


Wednesday the Rally Resumes on the Japan Scam

RUT WEEKLYAnd up we go again!  

AAPL had OK earnings and it's up about 3% overnight so that's pumping 0.6% into the Nasdaq from that stock alone.  The big news of the day is Euro-Zone PMI Reports coming in better than expected, pretty much across the board.  Forget the fact that they are, overall, at 50.1 on a scale where 49.9 is contracting – 50.1 is NOT CONTRACTING!!! 

Not contracting?  That is FANTASTIC!  Let's have a party.  And a party is exactly what Europe is having, with the indexes up 1% or more across the board.  Sure, unemployment is at a record high – but you can't make an economic omelette without breaking the hopes and dreams of a few million workers – can you?  

Of course, what people tend to forget is that the Purchasing Managers Index is a survey of the expectations of Purchasing Managers for the NEXT 6 months.  In other words, Draghi promises free money, people with high-paying jobs who are not unemployed believe him, and their expectations improve.  This is what's raising the market 1% – isn't that silly?

Even sillier is that, in Europe, good news is good news but, in China, BAD news is good news too as their PMI FELL to 47.7 (clearly contracting) and investors in the US and Europe are hoping that means China will jump on the stimulus bandwagon and flood the World with even MORE FREE MONEY.  

Asian investors, however, think bad news is still bad news and China’s stocks fell for the first time in three days, led by financial and commodity companies, as an unexpected decline in a preliminary manufacturing index boosted concern the economic slowdown is deepening.  

Another "positive" being spun in the Western World is Japan's exports rising 7.4% from last year to 6.06Tn Yen.  That's also exciting the EU and US markets ahead of the bell but boy oh boy are they schmucks!  Surely I can't be the only person in the Western World capable of doing currency conversions, can I?  

The reason the Nikkei futures (/NKD) are languishing at 14,850 while our Futures celebrate Japan's export numbers is because, last year 6,060Bn Yen converted at a rate of 78.5 Yen to the Dollar, so $77.2Bn and this year, 6.060Bn Yen converts at 100 Yen to the Dollar for $60.6Bn.  That's a drop of $17Bn (28%), not an increase of 7.4%!  

Why does no one in the MSM report this?  Why would they treat a catastrophe like a victory?  Are they trying to fool you – or are they fooling themselves?  Perhaps you should ask your favorite media pundits WTF is going on over there?  Usually, we ignore currency fluctuations because they are relatively minor and not worth the mental strain but THIS is a massive change in the value of the Yen, purposely engineered by the Prime Minister (Abe) and the Central Bank (BOJ) to devalue the currency and create exactly this sort of false recovery.  Does that mean we all have to actually play along??  No thanks….

Pyramid of Capitalist SystemAnd, if they are lying to you about Japan, what other lies is the media telling you?  I often put up the "Pyramid of Capitalism" to make a point and today I'll point out that the Church ("We Fool You") has been replaced in modern society by the Media (see Marshall McLuhan) and most of us spend a lot more time worshiping the idiot box than we ever did at the pulpit.  

It's not even called "the idiot box" anymore.  Not because it's any less idiotic but because the generation that grew up without them and thought that people staring at flashing images for hours on end were being turned into idiots have been replaced by their idiot children and their idiot children had children (my generation) and now my children think anyting that happened in "black and white days" was pure rubbish. 

Those idiot boxes ended up making so much money that the companies that ran them have now taken over all of the media and almost all of our entertainment to the point where we now only have to say: Viacom, Disney, Time Warner, Clear Channel and News Corp to list the owners of 90% of the media in America.  

Time Warner also runs the magazines and publishes books, Rupert's Fox is into book publishing and newspapers and also happens to own Dow Jones and Company – who publish Barron's, Smart Money, the Wall Street Journal and, of course, the Dow Jones Industrial Average.  What kind of "news" do you think you're going to be getting from them?

Capitalism is great, Billionaires are great guys, taxes suck, regulation are killing jobs, rich people are creating jobs, Elliott Spitzer is a villain and Jamie Dimon's a hero…  that kind of news!  

Speaking of villains turning to heroes (or vice versa, depending on which end of the top 1% or bottom 99% you reside at), the Wall Street Journal is celebrating today the $5M annual payday snagged by former SEC Enforcer, Robert Khuzami, as he takes a position with one of the law firms (Kirkland and Ellis) that represent the clients he used to prosecute.  Well, not actually prosecute – as no one on Wall Street actually gets prosecuted, do they?  

Fortunately for Kirkland, keeping their clients out of The Clink is big business, with the firm billing $2Bn last year.  That's just one firm!  The SEC's entire budget, which the Republicans want to cut in half, is currently $1.3Bn.  Have you ever gone to a trial where your side had one attorney and the other guys had five?  How did that work out?

Now that I've gotten that out of my system, the next question we need to ponder is:  Is it then, a bad thing that the media is owned by business and spins stories to favor the elite of this nation, who control almost everything we see and hear?  After all, it's a consumer-driven economy and a happy/complacent consumer is one who spends and that spending keeps the money flowing and, ultimately, puts people to work and gets the economy going (the old trickle-down theory). 

This isn't a new thing, it's been going on since after WWII, when propaganda techniques that were developed to destroy our enemies and bend them to our wills were turned on American Citizens by our Corporate Masters – in order turn us from a nation of savers into a nation of spenders.  In fact, it worked so spectacularly that we've since racked up over $16Tn in National Debt – enough to boost our GDP by 5% for the last 4 decades!  

Would we bet better off or worse off in a less robust economy?  Is it wrong to use psychological pressure to get you to go into debt to buy more clothes than you need, more food than you need, bigger homes than you need – to be embarrased to drive a car that's 5 years old – or is it just good Capitalism?  

All those same tools that get you to BUYBUYBUY consumer products are now being employed by the media to get you to BUYBUYBUY stocks.  Traditional valuation metrics are downplayed and "story" stocks are celebrated.  Think about it, what are you going to click on – "10 Summer Stocks that are Ready to Sizzle" or "Our Favorite Long-Term Value Plays"?  That's right – good doggie!  

I think we're being sold a bill of goods with these "record" market highs.  The earnings simply aren't supporting the prices and it's all very likely to end in tears.  I hate to stay bearish as we seem to be missing out and I hope the above gives you a little more insight as to why I'm so skeptical.

As I said yesterday, and last week, and often before – it's not like we don't have any bullish plays, we have new ones evey day.  But they are long-term, sensible plays, not chasing after the hot stocks of the moment.  I know it's hot out – let's just try to keep our cool.

After all – despite all our rage, we are still just rats in a cage



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I wrote the Senator about the crooks, she wrote about subsidies ..

Thank you for contacting me regarding federal subsidies for oil and gas companies. It was good to hear from you.


As you know, the federal government has a variety of taxpayer funded subsidies for the oil and gas industry. I believe these subsidies are not only unnecessary, but also are extremely costly to U.S. taxpayers, totaling nearly $4 billion each year. 


Over the last decade, BP, Chevron, ConocoPhillips, ExxonMobil, and Shell have posted nearly $1 trillion in profits and at the same time benefited from tens of billions of dollars in taxpayer funded subsidies, and I believe it is irresponsible that these huge companies, which continue to make record breaking profits continue to enjoy taxpayer subsidies. I have consistently supported legislation to end these subsidies.


Our country needs to develop a long-term energy policy to reduce our dependence on traditional fossil fuels, and ending subsidies for major oil companies is an important step in this process. I firmly believe that we must move forward and invest in progressive policies that promote alternative energy, energy conservation and efficiency. Throughout my tenure in the U.S. Senate, I have supported energy policies that benefit consumers and encourage diversification of our nation's energy sources. As Chairman of the Senate Budget Committee and a member of the Appropriations Committee, I have fought for increased funding of important alternative energy research and development programs across the nation and in Washington state.


I will continue to work with my Senate colleagues to ensure these subsidies are ended.  Thank you again for writing, and please keep in touch. 


Patty Murray
United States Senator

Phil/ Any new entry on gold?

Good call on TZA Phil




SHLD/Phil: Thanks, I was wondering how you came to that conclusion, i think its cool take.

Sold my sbux 72.5/70 bear put spread. Earning is in tomm. Maybe I’m being too cautious.

Phil: Thanks-

Hi Phil.  When you analyze owning stocks versus options, your analysis appears not to account for taxes, that is, long term rates (stocks) versus short term (options).  Isn't this critical to the analysis if you are in higher tax brackets?

Thanks. Got it.  I'll be looking into that status!

Phil, it seems most likely you’d hit the target on sbux. I’m just happy with the profit I took. 🙂

Pharm, good timing to call the spy put. I rolled my position. 😎

Phil – thanks for the input on NSC, and for the comments on FB and FFIV – all appear to be on target. $ in my pocket!

Good showing from QCOM – up $2 AH.

FB and FFIV up noticeably. AKAM down a bit.

GOOG coming up with some new interesting stuff:


At an event where everyone was expecting a new Android tablet ( and got one) Google announced something far more interesting and important: The Chromecast, a small stick that jacks into the back of your television via HDMI and allows you to sling content via Wi-Fi from your phone, tablet or computer to the big screen. It costs $35, and comes with three months of free Netflix (even for existing subscribers), which means it effectively costs $11 plus shipping. On paper at least, it’s the best device Google has ever announced.

Chromecast is delightfully cross-platform. It works with Android and iOS phones and tablets, Chromebooks, and the Chrome browser for Mac and Windows. The original device controls playback–so if you want to turn up the volume on your TV, simply turn up the volume on your phone. Any program that uses the Googlecast SDK can send content–Google specifically mentioned Netflix and YouTube, and says Pandora is on the way. The Chrome browser itself can also sling content via “Chrome tab projection.”

That last point is huge. It means no matter what the web video or audio source (with the exception of Silverlight and Quicktime video) you should be able to play it on your TV if it plays in your desktop browser tab. That opens the door to web-based entertainment options right out of the gate without having to wait for the developers to take advantage of Google’s SDK. Google confirmed to WIRED that you could run Hulu, Rdio, and HBO Go right out of the gate. You can project your Flickr photos, your web-based presentations, really just about anything that runs in the browser. (Like, say, porn. As one WIRED staffer put it, “this is the pornslinger.”) That’s pretty amazing.

There have been a few other solutions that try to pull something similar off like Apple’s AirPlay and Roku’s Streaming Stick. But both of those have required you to buy a $100 device to connect to your TV. Nothing else has been so device independent, cross platform and, well, cheap.

And that new Nexus 7 compares very nicely to the competition:


How the New Nexus 7 Stacks Up to the Competition

1920 x 1200 resolution – that's 3x the iPad Mini until they get a retina display.

well, I was right about FB.

Jabo– no FU TSLA today????


FU TSLA!!!!!

Phil – itineraries – that's like you 1:05 into this clip. LOL

Phil nailed it with CAKE, FFIV, & FB.  Sometimes logic pays in this market.

lol Phil–we should increase our regisration fee especially if you decide to wear a tie

LV Meeting

could I please hear from the following who did commit but have not confirmed as yet







If you e-mailed me — please re-send —thx

bdc—are you coming to vegas

Savi – I'm still working out my schedule at this point.

Savi – I paid yesterday – did you get it?

Savi – unfortuntely LV is out for me this year. 

haven't researched their 'research' yet but an interesting read…

"When the team further untangled the web of ownership, it found much of it tracked back to a "super-entity" of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 per cent of the total wealth in the network. "In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network," says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group."


CROX/Phil  Whats this world coming to?  Either people are just now realizing Crocs are ugly (doubt that after all these years)  or things are becoming so tight for the 99% that they can't even afford a rubber shoe.

Phil, Market analisis, So Dow futures down maybe 100, Dollar down against Euro/Yen. Volumes overall low- Is the market really still going up & this little bump is a currency thing? Is there no reality ( FEAR-GREED-ANIMAL SPIRITS) ? Is POMO, Media (Kramer & CO over exuberance ) Fed funding Treasuries, & Huge market manipulators able to control all this so easily? Every time I consider being bullish I feel like were climbing a mountian in a very thick fog & wondering if the next step is a cliff? There is no chart history up here, or is there a chart indicator dial that can adjust out all this noise? I noticed all the doji’s on this last leg up believing every one was a transition “alert” – yet gap and wiggle was the rule of every day. I am sure were now all in the worlds biggest casino! I am coming to appriciate your “levels” as a guide throu the fog. Any one elese feel this way or am I alone?

StJ – always appreciate your comments after the charts, they've been missing last couple of days…your comments usually complement Phil's take on things nicely…

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