XLC Holdings

 This post will go through some of the holdings in XLC. Many of these have horizontals at gaps. Most look doomed, including Disney, but I'm here for a bounce, not a long-term hold.

Rally Snapped

SNAP lowered their guidance after hours. It comes a month after they reported earnings. This sent the whole sector down, including Facebook, Twitter and Pinterest among others. The larger takeaway is that business has deteriorated enough in one month that guidance is already coming down. At every turn, there's yet another shoe dropping on the bulls. If this sell-off escalates into tomorrow, a challenge of the lows could be imminent. If not, then this rally is made of sterner stuff and still has room to run before the bearish trend overwhelms it again.

Takeover Strategy: Lift an Account Ban in Exchange for 1 Share of Twitter

What if Elon offered users an restoration of their account in exchange for 1 share of Twitter? The owner can hold the share, but must transfer proxy rights to Elon so that he has the shares for any shareholder votes. How many shares might Elon control in that scenario?

Parag Agrawal Should Be Stripped of Citizenship and Deported

Why do Americans allow traitorous foreigners into their country, and let them take political control from the people by denying their God-given right to freedom of speech?

On 6 December 2021, in a case of anti-Christian bias, Agrawal banned almost all members of Twitter who identify themselves as Christian, but banned very few members identifying as Muslim, Jewish, or atheist.

Twitter hijacked American democracy and it is run by a clearly seditious foreigner who is anti-American. It's a slam dunk case in a sane America that protects its own people and its own interests. It is considered beyond the pale in a nation that has inverted its morality, to where being abused, oppressed, victimized and ultimately killed by death or suicide is the highest value. America's ruling class is a death cult.

Twitter is a Publisher

You'd think people would learn, but we are treated to endless stories of "so and so was banned from Twitter today." Twitter is a publisher, as is Facebook. You can be kicked off Twitter for the same reason Tucker Carlson would be kicked off the NYTimes website. You are not promoting their narrative! They have editorial discretion, which they characterize as "misinformation," but it really means you have opposed their editors. Yes, this means Twitter is legally liable for everything on their site because you do not own you Twitter account nor do you have editorial discretion. If you do not want censorship, there is Gab. For those into capitalism and crypto, there is Twetch.

Speaking of Twitter, it too has formed the deaded h-pattern that will either be a bear trap or lead to the next collapse in the stock price. At this point, it is a borderline worthless company. Everything good about it can be cloned. Competitrs such as Gab and Twetch are emerging. It's like MySpace before people realized MySpace was dying, the place people go because "everyone else" is there.

Prediction: Twitter will be purchased sub-$10. Nearly all the staff except for useful engineers will be fired by the acquirer.

Twitter is Social Media for Ignorant People, Google Search for Ignoramuses, YouTube for the Clueless

Summit News: YouTube Censors Bombshell Joe Rogan Interview With Cardiologist Peter McCullough

Trying to access the video results in the message “This video has been removed for violating YouTube’s Community Guidelines.” A “learn more” link re-routes to YouTube’s Community Guidelines overview, and the company’s COVID-19 medical misinformation policy.

...In addition, Twitter appears to be suspending people for retweeting clips of Rogan’s McCullough interview:

Google owns YouTube. They had better hope there isn't a political revolution that puts in power politicians who might view censoring important medical information as worthy of severe financial penalties.

Twitter Suspends Maxwell Trial Tracker Account

Why is Twitter afraid of a sex trafficking trial? Or who has enough power and connections to have Twitter ban a news feed?

Twitter Censors the American Heart Association

Maybe...maybe...this will be the one that causes online censorship to jump the shark. This also could be the type of screw-up that puts the issue in front of people who think all the warnings about vaccines are nonsense.

ZH: Twitter Slaps 'Unsafe' Label On American Heart Association mRNA Vaccine Warning

Sinking The ARK Part 3

The next 10 largest holdings across the ARK funds. I left of any ones that are in part 1 or part 2 of the series.

Going for 1000 Percent in 2020

The U.S. media establishment and incompetent bureucracy, both medical and government, provided a gift to speculators in 2020. The political and media branch didn't cover the coronavirus because they were too busy trying to impeach President Trump. They downplayed it at the start in order to call Trump racist again, and even "experts" said travel bans don't work and that the risk of the virus was low. Then they overreacted and enacted boneheaded and excessive lockdown policies. As a result, speculators had ample time to load up on short positions and made substantial gains as everyone was terrorized.

I lost money early on because stocks kept rising in Februrary. I wondered if the Fed's intervention was too much, if the virus might end up being less serious than it seemed, or if it was only a matter of time. I stayed in my positions and eventually came out very far ahead.

Another moment of asymmetry may, I stress may, be at hand with the presidential election. The mainstream media won't acknowledge any "evidence of voting irregularities" despite there being more evidence than existed for the competely fabricated Russiagate story that they pushed for 4 years. In both cases, all the media cares about is narrative. There is zero investigation going on. Social media is also working overtime "debunking' posts that have potential evidence of fraud. They are suspending and banning accounts. The "establishment" and their allies in the public are beyond ignorant. They are pushing a counter-narrative that Trump is the one trying to steal the election by asking that claims of voting fraud be investigated. In short, we are in the middle of an information war and the first casualty in war is the truth.

Are the Trump side's claims accurate? I don't know for sure, but the people I interact with and follow on social media are honest. They've gotten it right before when the media was wrong. There are data scientists putting their name to claims that there's enough smoke to warrant an investigation. I give them, and myself, the benefit of the doubt. That said, even if they are right about fraud, I don't know if the fraud was enough to overturn the election results. President Trump must prove substantial fraud in at least 3 states to overturn the result.

I can't put odds on an election overturn, but I believe this is a situation similar to the coronavirus in January. This is a major issue and the mainstream is totally ignoring it or actively putting out anti-information. Not simply mistaken information or false information, but a 180 degree opposite narrative. They are not simply wrong, they are perfectly wrong. They aren't in a position of skepticism or waiting for more information. The media is putting out pure narrative. Social media is banning people who question anything about the election. This opens the door for speculators to win on information asymmetry.

Trump can lose this election, but if in the process a single state reverses its result because of fraud, media credibility will be annihilated. None of the major media outlets you can name off the top of your head, including Fox News, will function as mediators in the national debate going forward. They will all be zero'd out by Trump supporters and many independents, neutering their ability to shape a common narrative. A loss of media credibility isn't really an investable event short-term, but the narrative shock will be. The vast majority of market participants believe the election is over. They know the final result isn't official, but they expect nothing will change. If at any moment there is a change, it will rock financial markets. There will be a sudden panic because the media will start pumping out the "Trump Hitler" "Trump stealing the election" narratives.

Where is the most likely area of profit opportunity? The key will be the U.S. dollar. Would the world react in shock and the dollar be a safe haven? Or do all roads lead to dollar depreciation and a shock would trigger a sell-off? I'm also not sure that the U.S. dollar is reacting to the election at all given the past week. There is also the matter of a large short position in 30-year treasury paper complicating the issue. Recent history says the dollar and government bonds will probably rise amid a sell-off in stocks, but it's possible that the dollar and bonds sell-off while investors bid up stocks on currency depreciation, or for all three to tumble in a flight-from-everything trade. Gold and Bitcoin are potential hedges against a nightmare market scenario. However, Occam's Razor says the dollar would rise and if it does, I'll more confidently press the bearish side.

Another complication: President Biden's team is talking about another draconian lockdown and small cap stocks have started looking weak after the virus surge. The small cap ETF IWM made a breakout thanks to dividends, but the Russell 2000 looks like it may have double topped.

Everything considered, macro looks rather messy for a Trump shock. Therefore, I'm looking at micro. The behavior of BigTech during the run-up and aftermath of the election has been atrocious. I think it is a safe bet that Google and Twitter could be targeted for precise political vengeance by President Trump in a second term. This whole post is in the realm of speculation and hypothesis, so let me hypothesize how Google might behave: I think it could experience an island reversal (gap down) and move back into its long-term uptrend if investors worried about Trump flipping the election result. This opens as much as 30 percent downside while still staying within the uptrend.

Twitter appears to have a nice basing pattern created over the stock's lifetime, but it recently broke uptrend from March and that former support line has provided resistance. It has been the most aggressive with censorship, exceeding Facebook's efforts. Facebook is probably due for a drop too in this scenario, but the chart has less bearish potential.

I'm already partially short Nasdaq via QQQ. It looks similar to Google and I think there are reasons entirely apart from election risk for being bearish.

Conclusion

Usually I discuss my ideas in various places, but I haven't really discussed this outside of a small social media account. People do not want to hear this thesis. The media has convinced people it's impossible, that it is the ravings of Trump supporters who cannot accept the loss. For the record, I accepted the results after Election Day and if I had to bet today, I'd bet that whoever wins the Presidency might destroy their party for a generation because the economy is in such a precarious state. Were Trump to run again as a more humbled, more "presidential" candidate in 2024, he might with with a majority so large in 2024 that Republicans can amend the Constitution. Or someone else running on Trump's platform will. Moreover, I suspect a Biden admin will be better for my gold miner holdings. Trump flipping one state, or three states to win, is only my preferred political scenario if indeed there was fraud because in that case it cannot be allowed to stand. I want all fraud exposed whether it changes the result or not. If there is not enough fraud to turn the result however, I do not at all want Trump to somehow flip the result with legal tricks if that were even a possibility, which it isn't.

I believe there is serious evidence of fraudulent voting. The pubic is anti-informed of the risk. They have a clue, but it is an anti-clue. They are more ignorant than they were of coronavirus lockdowns in February. The odds of something happening aren't approaching 100 percent like in February, but the asymmetry means it could cause a bigger shock in some parts of the market. Final point: at this moment I'm already bearishly positioned in tech, albeit lightly. As long as the charts tell me that's a hold or add, then election risk is a free kicker. If my short-term bearish outlook in the Nasdaq changed, the election risk thesis becomes a far more difficult trade because the odds of payoff are low.

$2 Trillion Fine for Facebook

The media may have wrecked Facebook (FB) in its zeal to find some dirt on Donald Trump. There was no "hack" of Facebook in the sense of breaching data servers, all Cambridge Analytica did was figure out how to obtain the publicly exposed data. It exposed reality to hundreds of millions of clueless users who don't realize their Facebook data is insecure.

Endgadget: Facebook may have broken FTC deal in Cambridge Analytica incident

Facebook, for its part, said that it "reject[s] any suggestion" that it violated the consent decree. It maintained that it "respected" users' privacy settings.

If the FTC did find violations, Facebook could be on the hook for some very hefty fines -- albeit fines that aren't likely to be as hefty as possible. The decree asks for fines as large as $40,000 per person, but that would amount to roughly $2 trillion. Regulators like the FTC historically push for fines they know companies can pay, which would suggest fines that are 'just' in the billion-dollar range. Given that there are already multiple American and European investigations underway, any financial penalty would be just one piece of a larger puzzle.

Only last week there was a flaw that exposed partial payment data from user accounts.

Security Week: Facebook Flaws Exposed Friend Lists, Payment Card Data

Facebook users can prevent others from seeing their friends, but the vulnerability discovered by Franjković could have been exploited to obtain this information regardless of the targeted user’s privacy settings.

GraphQL is an open source data query language designed by Facebook for its mobile applications. GraphQL queries can only be used for Facebook’s own applications—only whitelisted query IDs are allowed—and they require an access token.

Franjković discovered that he could use the client token from the Facebook app for Android, and he could bypass the whitelist by sending a request containing a “doc_id” parameter instead of “query_id.”

The list of things he obtained with this query:

first 6 card digits (BIN), identifies the bank that issued the card

last 4 digits

expiry month and year

card type

cardholder first name

zip code and country

Social media through the mid-2010s was a peak social mood industry. Users still willingly give tons of personal information that is exposed to the public, including anyone who might want to use it. Platforms such as Facebook also aren't walled. Friends, family and acquaintances are all lumped together. This is a peak social mood format because at peak mood people are more open and outgoing, all the way through political arrangements (the euro launched right as mood peaked in the year 2000). As social mood turned more negative, conflict increased on social media, particularly on open platforms such as Facebook. (One interesting data point to chart would be the number of blocks/mutes per user on social meia, I suspect the chart might look similar to Bitcoin over the past couple of years.) In response, Twitter, Facebook and others are regularly banning users for content because users upset with content were leaving. Advertisers getting blow-back because their ad appearing next to objectionable content (objectionable being whatever might get a few dozen people on social media worked up about) also complained. Now users are leaving because of censorship, exacerbated by a clear political bias in what gets deemed to be abusive content.

Back to Big Tech and social media: the tide is turning against these firms. The public is growing weary of their power and the potential for abuse. The Internet was supposed to be a decentralized and open technology connecting the world, but a handful of companies sit at the crossroads and control what content is seen by users. The companies themselves are turning authoritarian in their control, another sign of increasingly negative social mood. Social media is suffering because its users are fracturing along with the culture and media. There is no longer a "mainstream" in America. When people are pushed together on social media in a time of negative mood, it increases tensions. These companies are almost in a no win situation, the only way out may be to do as consumer companies do and segment their customers with multiple brands. Otherwise, they can't win. Censorship free, open platforms causes users to quit. Censorship causes users to quit. An angry public will increasingly call for regulation of the industry.

The outlook for big social media is negative unless it can successfully fracture its market and appeal to all users. Otherwise, it will break apart as it becomes hated by everyone.