Media Perfidy! (FB)

There’s a great deal of difference between a man who’s knowledgeable about a broad scope of subjects – a college professor, say, or a journalist – and the actual things he professes or writes about.

 

Take politics, for instance.  A great many men study and write about the subject, but that doesn’t mean they know how to do it.  Send a’one of them out on the hustings and see how long they last…  Ho! Ho!

 

No way.  Politics is made for people who have no concern whatever for what others say or think about them.  It takes what some people call a ‘thick skin’ to survive in the business, though we prefer to call it what it really is: a callous, sociopathic outlook on everything save one’s public image.  That is to say, if accused of being a liar, or a thief, or a bigamist, the savvy politician will not for a moment consider the truth or falsehood of the claim.  Rather, he’ll just worry about how to respond such that his image comes out with a minimum of tarnishing.

 

That means saying or doing ANYTHING to achieve the goal.

1

Those who write about the political game, on the other hand, or about sports or business or the markets are almost always folks who have no ‘skin in the game’, nor, in most cases, have they ever.  They don’t have a whit of first-hand experience of what they speak and write about day after day.

 

And that means they possess precisely no wisdom on the topic.

 

Full stop.

 

Because wisdom comes from the hands.

 

Until you’ve scrimmaged live, or milked that goat or stumped for a seat on city council, you’re just a talker, and in most cases you had better shut up.

 

Like we used to say in high school –

 

Those who can, do.

Those who can’t, teach.

Those who can’t teach, teach phys.ed.

 

Cute, no?

2

And that leads us to this week’s trade.

 

The problem with open societies like ours is that there’s such a preponderance of bad information circulating.  We’d venture that 95% of what passes for ‘information’ is actually nothing of the sort.  It’s politics: an attempt to influence the masses using a smattering of information (not always sound) and a great deal of rhetoric.  All too often it’s the rhetorical faculty that gets Joe B. Journalism his readership, and not his fact gathering or contact building skills.

 

Today, let’s face it, academia and journalism are nothing but politics.  Gone even is the appearance of even-handedness and rigor.  In today’s ‘elite’ world, you either toe the party line (usually left, but increasingly less so), or you continue with your job search.

 

Internet Excesses

 

The rise of the internet has pushed this tendency to the brink.  Anyone who can string together a sentence or two in convincing fashion now has the power to influence countless souls, for better or worse.

 

And the general level of discourse and root sources of genuine information have become drastically diluted thereby.

 

Until recently, this was a natural phenomenon, an organic outgrowth, if you will, of the free and open nature of the worldwide web, one that allows one and all to participate more or less on their own terms.  If it was difficult to discern truth from falsehood, or get to the bottom of a matter that concerned you, with persistence and some old fashioned gumshoe, with time, you could usually pull it off.

 

But the picture got a muddier more recently when mega corporations acting in the social media sphere decided it would be both profitable for them and beneficial in a ‘political’ sense to attempt to control the discourse on the platforms they operate.

3With thanks to the Feral Irishman

 

In this manner they could both push a political agenda and later be rewarded for it by their partners in Washington via legislation that furthered their goals, including the goal of acquiring ever greater control of what people read and know.

 

The best example of this comes from Facebook (NASDAQ:FB), where a number of former employees recently ratted out their Zuckermachers, admitting that editors, not algorithms decided which stories would be trending on the site’s news section, and that liberal slanted items got priority.

 

But Facebook is not the only example of a major internet player attempting to influence the news cycle, or, worse, black out news that was not to its likingTwitter, too, and Google regularly intervene to set the news to fit with their corporate political outlook.

 

Yechhh…

 

Why is this problematic?  Well, as the chart below points out, a whole lot of people are potentially influenced by these platforms and the stories they’re trying to shape –

4

Literally billions of people are affected by just the three websites we’ve listed above.  And if the goal is to push a single political agenda – as is now becoming clear – then the potential for abuse is enormous.

 

Yet companies like Facebook and Twitter haven’t lost much in the way of revenue after being outed for the scoundrels that they are.  The outcry was brief and loud and then went away, a development that likely emboldened the Silicon Valley reprobates.

 

We therefore believe they’ll turn their crafty little intrigue to great advantage.

 

For that reason, we’re going to initiate a Facebook trade today that bears on the company’s ability both to tweak its website in favor of its Washingtonian playmates and to receive quid pro quo compensation for its efforts.

 

Have a look at the chart –

5

This is the weekly paste-up of Facebook for the last three years, and the stock’s trajectory is clear.

 

But what the technicals also show is that the stock has traced a bearish, rising wedge pattern for the last twelve months.  Know it well – the rising wedge is always bearish.  The trigger comes when the stock cracks below the bottom trendline.  At that point a significant selling event can be expected.

 

We would add that diminishing volume (in blue) and divergence from the RSI and MACD indicators (in green) also militate negatively against the stock.

 

When will it happen?

 

There’s the rub.  We don’t know.  By virtue of the vectors of the two red trendlines, we can extrapolate the latest possible date for the breakdown, and that arrives some ten months from now, in June of 2017.

 

But we don’t expect to wait that long.

 

In fact, we see the election itself as a break-point.

 

Until then, expect a slight rise or sideways movement from the stock.  After that, a definitive break lower.

- Content protected for Normandy Executive Lounge, Wall Street Elite, Executive Lounge members only]

There’s currently no November expiry available.

 

With kind regards,

 

Hugh L. O’Haynew

Share your thoughts...

We encourage people to join in on the discussion. Please keep in mind however, that all comments are moderated according to our comment policy, and all links are nofollow. Let's keep the conversation professional and meaningful.