https://www.youtube.com/watch?v=zEyUWKJFER8
“The first step to solving a problem… is admitting you have one. I remember when America:
- Stood up for what was right.
- Waged war on poverty, not on poor people.
- Sacrificed, and cared about her neighbors.
- Put our money where our mouths were, and never beat our chests.
- Made technological advances, explored the universe, and cured diseases.
- Cultivated the world’s greatest artists, AND the world’s greatest economy.
- Reached for the stars, and acted like men.
- Aspired toward intelligence, and never let it make us feel inferior.
- Never identified ourselves by who we voted for in the last election.
- AND we didn’t scare this easily.”
Substitute ‘Thank you’ for ‘I’m sorry’:
- ‘Sorry’, doesn’t advance a conversation - ’Thank You’ does.
- ‘Sorry, I’m late’ becomes: ‘Thank you for your patience’.
- ‘I’m sorry we got disconnected’ becomes: ‘Thank you for calling back.’
- It’s subtle, but makes all the difference moving from Separation to Connection.
“In bear markets, doomerism sells. In bull markets, hopium sells. Beware of both, as they’re high noise and low signal strength.”
The Market:
Sam, you’re worse than Bernie and Elizabeth… Bernie Madoff and Elizabeth Holmes never used the excuse, “I'm sorry. I really f_!@_k’d up." Bernie and Elizabeth were unapologetic criminals that knew exactly what they were doing. But Bernie and Elizabeth only stole from the rich. Sam, you stole from everyone. You didn’t f__k-up, you flat-out stole people’s money. You pocketed +$6B out of millions of hard-working people’s accounts who trusted you. Sam, somehow cleaning toilets in prison for the rest of your life – just isn’t enough for ruining millions of their lives.
Sam, stop whining like a toddler. You’re whining about how unfair things are from a $40m penthouse in the Bahamas. You continue to blame the refs, the conditions, and the score keeper. Try and grasp: understanding, humility, and how to give back to a community. Learn that FIXING comes with taking responsibility and leads to healing. Unfortunately, whining just continues your dark comedy of errors.
“Wall Street wants profits and cash flow… and is now less enamored with: grow at any price”… Josh Brown the Reformed Broker.
“This bond drawdown is the worst of all time… and if you don't own any bonds, maybe this is the right time to consider them. I added AGG for the first time in my life”… Howard Lindzon of StockTwits.com.
InfoBits:
- Theranos founder Elizabeth Holmes… was sentenced to 11 years in prison, plus 3 years of supervised release.
- As Twitter’s layoffs continue… does anyone else believe that this was Musk’s plan all along? 90% of a software company’s productivity is driven by 10% of its workforce. By my count, he still has twice as many people as he needs.
- 49% of bars and restaurants were unable to pay their rent in October.
- The housing market has hit a wall… Redfin cut 13% of its staff as housing slides into the 2nd-worst correction since WWII.
- Amazon founder Jeff Bezos plans on giving away… a majority of his $124B to fight climate change and to support global unification.
- Amazon is beginning to lay off 10,000 people… in corporate and technology. These will be the largest job cuts in the company’s history.
- “It will take until mid-2023 until companies begin to accept the resetting of their valuations. When this happens, capital markets will reopen to IPOs”… Goldman Sachs CEO David Solomon.
- "Consumers have reduced personal savings from 9% down to 3.3%... and have pushed credit card balances to record highs”... Upstart CFO Sanjay Datta.
- Disney’s “Black Panther: Wakanda Forever”… raked in $180m in North America. It was the second-biggest box-office of the year and the highest-grossing November debut ever.
- Walmart reported earnings and revenue above expectations… due to a +6% growth in its grocery business. Consumers are switching grocery to more down-market alternatives such as WMT.
- Credit card balances rose 15% YoY… the largest annual jump in 20 years as consumers spend their way into more debt.
- U.S. housing starts fell 4.2% in October… led by declining single-family projects. October’s rent growth was the slowest in 18 mos.
- The average 401(k) balance… fell 23% YoY.
- The US Treasury curve is now more than 70% inverted. In the last 50 years, every time we have surpassed this threshold a recession has followed.
Crypto-Bytes:
- When FTX raised $420m in October 2021… didn’t investors care that Sam used $300m of it to buy back some of his own personal FTX shares.
- Either Nexo has a guardian angel or someone smelled an FTX stink… because just hours before FTX shut down withdrawals, Nexo withdrew $220m from their FTX accounts.
- FTX's implosion cost: Pantera -$130m, Galois -$40m, Paradigm -$278m, SoftBank -$100m, and others. Solana is in trouble, and Genesis Global, BlockFi, and Salt have bit the dust.
- "NOT YOUR KEYS, NOT YOUR COINS”. Investors are taking the phrase seriously as the number of Bitcoin users who hold their BTC assets in self-custody wallets has hit an all-time high.
- The new FTX boss condemned Sam Bankman-Fried… "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information.”
- Ukraine was a major investor in FTX… and Sam was the Democrats second largest donor ($40m) after George Soros.
- What are the ‘whales’ doing during this crypto-pocalypse? They’re practicing an old Wall Street adage: “Be fearful when others are greedy, and greedy when others are fearful.”
TW3 (That Was - The Week - That Was):
Monday: Do we continue the melt up this week? I think our markets have ju-ju in ‘em for a while longer. Looking at some charts, I like what I see on AMPB. There’s a ton of options buying in AMPB, so maybe someone knows something.
Tuesday: Today we heard from HD and WMT and both beat estimates. Walmart even approved a new $20B share buyback. Re-checking the economy, things seems to have gone from bad to worse.
- In layoffs: Amazon is -10,000+ this week, Twitter’s headcount is down 50%, Snap is off 20%, Meta is -11,000, Credit Suisse is off 5%, and Apple & Disney have hiring freezes.
- FTX has caused $2T to leave crypto.
- 80%+ of tech stocks are in bear market territory.
- We have the fastest falling housing market since 2011.
- And we have the worst earnings since Q3 2020.
- That’s why this is a bear market bounce.
Wednesday: UK inflation hit a new 41-year high with consumer prices rising 11.1% YoY. Mastercard, Wells Fargo, and Citigroup launched a 12-week experimental digital dollar pilot with the New York FED. Total household debt just had the largest quarterly increase since 2007. Given the DOW’s rejection at the 34,000 level, I could see a pullback to the 200-day moving average at 32,500. In bear market bounces, the fear of missing out becomes stronger than the fear of getting punched in the gut.
Thursday: The bear bounce could be over because crypto is imploding as exchange after exchange goes belly up. Seeing that amount of $B’s disappear will have a follow-on effect inside of the equities markets. FED-head Bullard is out this morning claiming that the FEDs have further to go, and may go as high as 7% in rates. The Debt market is coming apart at the seams, the 2-Year is at 4.42%, and the inversion steepens daily. The Philly FED manufacturing index is down 19 against estimates of negative 6. It’s a crazy, manipulated mess out there.
Friday: It’s just another string of odd days. Why is oil down? Has demand evaporated or have supplies increased? Nope. Container ship prices have decreased, but that's not enough. Something odd is going on.
AMA (Ask Me Anything…)
Alexa, play “Bad Blood”… Taylor Swift fans have a major beef with Ticketmaster. On Tuesday, the ticket platform suffered outages after millions of Swifties tried buying tickets to Taylor’s 2023 tour – her first in five years. Presale tix were going for $49 to $500 on Ticketmaster, but resellers quickly began listing seats for as much as $22,000 on StubHub. Ticketmaster’s advance sales for 2023 are on track to surpass this year’s shows.
Sam Bankman-Fried… had a direct message exchange with Vox reporter Kelsey Piper which produced such gems as:
- Sam: “f#ck regulators – they make everything worse”.
- Sam: “I said a lot of dumb shit on other interviews that was not true."
- And he declares himself the victim: “FTX's downfall could have been avoided had it not declared bankruptcy, which took financial matters out of my hands.”
Next Week: A Calm before another Volatility Storm?
Markets pause and no SPX breech…. After last week’s blistering CPI print, the markets took a pause. Market correlations remain relatively high.
Living in the Upside-Down… where bad news for the economy is often good news for the markets, and vice versa. It’s much easier to invest when we’re NOT in an upside-down world.
Target is the reality, and cooling inflation is not… Target badly missed earnings this week, and warned about the consumer softening going into the holiday season. A CPI print cooling by 0.2% is fairly meaningless when the FED comes out and tells you that they’re going to be raising rates higher – for longer.
Are energy and financials rolling over? Last week we touched the 3931 level, bounced, and ended the week around 3974. But a couple elements that jumped out at me were:
- (a) the dollar ($DXY) flattened out for the week,
- (b) bonds rallied a bit,
- (c) volatility (VIX) is still in the 20’s – which is TWICE the level that it was for the last decade,
- (d) financials (XLF) breeched the lower end of their Expected Move before finishing down for the week, and
- (e) energy (XLE) also finished on the lower edge of their Expected Move – but has almost rallied back to 2014 levels.
- Energy and financials are critical to moving the S&Ps higher.
The SKEW is picking up… which means that the Pros are back to hedging via buying PUTs inside of the SPX instead of by buying CALLs inside of the VIX.
Get your Trade On:
- OIL (/CL)… the movement in Oil last week is nothing short of recessionary. If it loses the $75/barrel level – it’s a straight shot down to $60.
- Tip #1 = GOOGL… go lower = BOT Dec. PUT Spread = +$100 PUT / -$90 PUT
- Tip #2 = NFLX… go lower = BOT Jan. PUT Spread = +$275 PUT / -$265 PUT.
- Tip #3 = TSLA… go lower = BOT Jan. PUT Spread = +170 PUT / -$160 PUT.
SPX Expected Move (EM):
- Last Week’s EM = $99, and for a change of pace we remained inside the EM.
- Next Week’s EM = $72, but there is only a 3.5-day trading week due to the holiday season. Thanksgiving week is traditionally an ‘up week’, but the week after is when we see another JOBS report and a FED meeting is on the horizon.
Tips:
HODL’s: (Hold On for Dear Life)
- PHYSICAL COMMODITIES = Gold @ $1,752 /oz. & Silver @ $20.98 /oz.
- AGG – BOT some bonds (AGG = $97 / in at $93)
- **BitFarm (BITF = $0.65 / in at $4.12)
o Selling CCs for income,
- **Bitcoin (BTC = $16,500 / in at $4,310)
- **Ethereum (ETH = $1,175 / in at $310)
- EGY ($5.37 / in at $5.30)
- GME – DRS’d and HODL
- GOOGL (Downside PUTS):
o BOT Dec / +$100 / -$98 PUT Spread
- GS (Downside PUTS):
o BOT Jan / +$340 / -$330 PUT Spread
- IBM (Downside PUTS):
o BOT Jan / +$130 / -$120 PUT Spread
- Innerscope (INND = $0.011 / in at $0.0052)
- NFLX (Downside PUTS):
o BOT Jan / +$275 / -$265 PUT Spread
- RIG ($4.14 / in at $3.47)
- SBUX (Downside PUTS):
o BOT Jan / +$85 / -$75 PUT Spread
- SPY (Downside PUTS):
o BOT Dec 16 / +$357 / - $347 SPY PUT Spread
o BOT Dec 16 / $285 DIA PUT
- TSLA (Downside PUTS):
o BOT Jan / +$170 / -$160 PUT Spread
- VIX (Upside CALLS):
o BOT Dec 16 / +$30 / -$35 CALL Spread
Follow me on StockTwits.com to get my daily thoughts and trades – my handle is: taylorpamm.
Please be safe out there!
Disclaimer:
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