Happy Thanksgiving everybody!
What a day we had yesterday with a huge market rally spurred on by a surprisingly light Jobless Claims report (407,000 jobs lost). But was it surprising? Was it even light? Sorry but it's no to both. This is just another very blatant example of how Wall Street Banksters use information not available to the General Public to manipulate the markets and steal Billions of dollars from unsuspecting investors on a daily basis. To them, the average investor is just one gigantic turkey they will carve up and serve up until it's picked to the bone and, by then, they will have fattened up another sucker and drawn him in for the kill.
They drew in a lot of suckers with yesterday's rally (on very low volume) but we followed through with our plan to go short at the top and we'll see where that gets us. What didn't we like about the Unemployment numbers that everyone else seemed to love. Well, first of all, they were based on 4 days, not 5. Unemployment claims are usually counted Friday through Thursday and yesterday was Wednesday so they kind of skipped a day in the report. Amazingly, not one MSM commentator I heard all day, other than Art Cashin, seemed to notice and CNBC very quickly glossed over his comment as it did not fit the bullish script.
Of course, it's not just the fact that the "financial news" station didn't analyze the short week numbers but they also failed to mention that the seasonal adjustments had changed and that the unadjusted data showed 462,927 initial unemployment claims, which was UP 52,490 from the previous week.
Also, the advance unadjusted number for persons claiming UI benefits in state programs totaled 3,839,033, an increase of 103,105 from the preceding week. A year earlier, the rate was 3.9 percent and the volume was 5,081,961. The total number of people claiming benefits in all programs for the week ending Nov. 6 was 8,532,502.
Isn't it just awful to hear the truth? No one wants the truth, we can't handle the truth! As Howard Beale said in Network over a quarter-century ago, Americans don't have the stomach for bad news and they don't want to watch shows that give it to them or read papers that tell it to them or vote for politicians who are not willing to lie to them, as he said:
It's like everything everywhere is going crazy, so we don't go out any more. We sit in the house, and slowly the world we're living in is getting smaller, and all we say is, "Please, at least leave us alone in our living rooms. Let me have my toaster and my TV and my steel-belted radials, and I won't say anything. Just leave us alone."
Well, I'm not going to leave you alone.
I want you to get mad!
The media works for you but that entire equation has been flipped around in America and it's you who work for them. You work your ass off all year long so you can buy what they tell you to buy and they get to wash your brain 5 hours a day (the average American's TV consumption) to make you into a good corporate citizen, who would rather plunge themselves into intractable debt than face the shame of not shopping.
Let's get back to jobs because I'm still not done unraveling that BS yet. Aside from the seasonal adjustment revision, which turned the data from negative to positive, we also got the report that continuing claims fell by 142,000. Wow, that sounds great doesn't it? We heard reporters and analysts gushing over that number all day long but that number too was seasonally adjusted and, even worse – not ONE news source I could find mentioned this little tidbit:
TUR Triggers (that push people into extended benefits) expired on November 6th in Alabama, Colorado, Delaware, Florida, Idaho, Illinois, Indiana, Kentucky, Missouri, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, and West Virginia and they expired on Nov 7th in New York and on the 13th in Arizona, California, the District of Columbia, Georgia, Maine, Nevada, Virginia, and Wisconsin. That threw all those people off the continuing claims rolls and into the Extended Benefits program with expires on December 4th since Congress failed to pass an extension. So we are now just one week away from over 2M families being completely cut off from all income so brace yourself for unexpected house-guests this holiday season as 2% of American families are completely wiped out overnight.
Fortunately, this will happen to them AFTER Black Friday and AFTER Cyber Monday and the analysts are counting on Mr. and Mrs. America to continue to shop until they drop right below the poverty line and maybe they will. It's a fact for 2M families that they will be bankrupt in December so they may as well max out those credit cards while they can.
As I mentioned to Members yesterday, there is an excellent article by Charles Hugh Smith on Wealth Distribution and it points out very neatly that it really doesn't matter how many of the bottom 80% of our population get laid off or cut off without benefits as they are already effectively broke so the Republican logic of not paying them in order to make sure the top 5% have as much money as possible is now actually logical as we have already thrown the middle class completely under the bus and now it's a question of whether we scrape off their bloody carcasses and move along without their dead weight or whether we stop and waste our time and effort trying to revive them.
We heard loud and clear from the voters that it's time to cut our losses and dump those suckers and that gave the markets a huge, enthusiastic pop in early November and I'd feel better about ignoring the plight of this nation's 20M unemployed and underemployed people if it wasn't for the fact that consumable commodities have gotten so high. I don't care how much money Donald Trump has but the World Record for corn eating is 46 ears in a sitting so, no matter how hard The Donald tries, he can't consume enough corn to make up for the millions of people who have to cut back this holiday season. While 3D TVs and IPhones and Mercedes only need a few million customers to have a good year – it doesn't make sense for broadly consumable commodities to assume the bottom 80% can continue to buy at these prices:
So be very thankful today if you are one of "us" and not one of "them" because they are having a very rough time this year and if you want to remain "one of us" then I would suggest you be wary of the speculative frenzy that is going on at the moment and, as we have done since the last top, let's wait patiently for some real data to come in. We may see some very good shopping numbers this weekend but that won't tell us if the merchandise is being sold at a profit or how margins are holding up with all the PPI inflation pressure we've been seeing that, so far, has not been passed on to the consumer because the VAST MAJORITY of consumers in this country ARE BROKE!
That doesn't mean the markets will go down or that the economy will suffer, as you can see from the pyramid above and as I told you last year, 2010 is "A Tale of Two Economies" and one is going up and one is going down and may God have mercy on your soul if you are unlucky enough to be trapped in the bottom of this structure as it narrows every day. It narrows every time you go to the pump and pay $3 for a gallon of gas which is $126 per barrel of oil that TBoone pulls out of the ground at a cost of $20 or that JP Morgan buys for $50 and puts millions of barrels on tankers until they can sell them for $85 (to the refiners who mark them up to $126) so they can report to their investors what clever market timers they are.
Like our friend, Mr. Morgan, we too can be "market timers," even without resorting to being market manipulators as so many of his successors are today (when it finally gets to the point that the FBI has to step in – it's pretty bad!). Keep in mind though, that the key to good market timing is being ready, willing and able to act when that time is right. That's why on Tuesday, at 11:33 in Member Chat, I called for "killing the short directionals and going long into the Fed." We need to watch those ranges on a daily basis and this weekend we'll discuss where those ranges seem to be taking us and what we can do about it.
Keep in mind that this country was founded by a man who was totally lost (he thought he was in India) and that the first Thanksgiving feast was deer and seafood, with not a turkey in sight but it is said that the Pilgrims made seven times more graves than huts, yet they set aside a day to give thanks for what little they had. As Ellen Orleans once said:
I have strong doubts that the first Thanksgiving even remotely resembled the "history" I was told in second grade. But considering that (when it comes to holidays) mainstream America's traditions tend to be over-eating, shopping, or getting drunk, I suppose it's a miracle that the concept of giving thanks even surfaces at all.
Let's all do our best to keep that spirit alive and, PLEASE – Don't take any wooden nickels!
Have a Happy Thanksgiving,
– Phil
