Akram's Razor's Instablog Akram is a 33 year old portfolio manager based out of Dubai. Akram's Razor http://seekingalpha.com/author/akram-s-razor/instablog What If Google Ran Monetary Policy.... http://seekingalpha.com/instablog/123608-akram-s-razor/343511-what-if-google-ran-monetary-policy?source=feed 343511 Lacker: Can we raise rates already your Netflix (NFLX) shares are back above $100?

Bernanke: Hold on a second

Yellen: What are you doing over there?

Duke: I thought we said no ipad's in committee

Lacker: Yea, what are you doing Ben?

Bernanke: I'm Googling (GOOG) it?

Yellen: What?

Bernanke: I got this new cool App. I was going to tell you about it, but I've been too busy playing with it.

Lacker: What is it?

Bernanke: It's called Googlomics.

Duke: What does it do?

Bernanke: In a nut shell, it provides the most accurate data on prices the world has ever seen.

Yellen: That's amazing.

Duke: What is it telling you?

Bernanke: That inflation is trending much higher than our data suggests.

Lacker: You don't need an app to figure that out Ben.

Yellen: How does it work?

Bernanke: It's crowdapping prices. Basically, aggregating everything from amazon's price app, gasbuddy, and the likes in real time.

Lacker: So, should we tighten?

Bernanke: Well, according to the Googlomics App Genius; Yes.

Lacker: Told you.

Bernanke: This App doesn't understand downside risks to growth like I do. It couldn't have possibly studied the Great Depression. Get me Sergey Brin on the phone; I want to have a conversation with the logic guys behind this. Need to make sure they have read Irving Fisher's debt deflation theory.

Duke: Hmm, this app may put us out of business. We might want to regulate it.

Bernanke: Good point. I'll get the message to Geithner.(please edit this out of the minutes)

Disclosure: I am long [[GOOG]].

]]> Tue, 28 Feb 2012 08:22:12 -0500 Lacker: Can we raise rates already your Netflix (NFLX) shares are back above $100?

Bernanke: Hold on a second

Yellen: What are you doing over there?

Duke: I thought we said no ipad's in committee

Lacker: Yea, what are you doing Ben?

Bernanke: I'm Googling (GOOG) it?

Yellen: What?

Bernanke: I got this new cool App. I was going to tell you about it, but I've been too busy playing with it.

Lacker: What is it?

Bernanke: It's called Googlomics.

Duke: What does it do?

Bernanke: In a nut shell, it provides the most accurate data on prices the world has ever seen.

Yellen: That's amazing.

Duke: What is it telling you?

Bernanke: That inflation is trending much higher than our data suggests.

Lacker: You don't need an app to figure that out Ben.

Yellen: How does it work?

Bernanke: It's crowdapping prices. Basically, aggregating everything from amazon's price app, gasbuddy, and the likes in real time.

Lacker: So, should we tighten?

Bernanke: Well, according to the Googlomics App Genius; Yes.

Lacker: Told you.

Bernanke: This App doesn't understand downside risks to growth like I do. It couldn't have possibly studied the Great Depression. Get me Sergey Brin on the phone; I want to have a conversation with the logic guys behind this. Need to make sure they have read Irving Fisher's debt deflation theory.

Duke: Hmm, this app may put us out of business. We might want to regulate it.

Bernanke: Good point. I'll get the message to Geithner.(please edit this out of the minutes)

Disclosure: I am long [[GOOG]].

]]> goog economy The Unemployed Shareholder and the Four Bears http://seekingalpha.com/instablog/123608-akram-s-razor/249714-the-unemployed-shareholder-and-the-four-bears?source=feed 249714 PUBLISHED: MAY 18TH, 2010 | CATEGORIES: MARKET COMMENTARY | 0 COMMENTS

A little market entertainment for you…..

The Unemployed Shareholder and the Four Bears

By Akram Annous

With his portfolio plummeting the ‘Unemployed Shareholder’ decided to leap into action. No, he’s not getting a Job!! Instead, he has decided to obtain a CFA so he can better manage the shares he intends to live off for the rest of his life.

On a study break, he has joined the Four Bears at their favorite watering hole ‘The End of the Earth’ for a drink and hopefully some precious market insight…..

 

Your Characters:

The Bond King- Managing Director of New Normal Investments …The Universe’s Largest Bond Fund

The Black Swan- Lebanese Philosopher Extraordinaire, and EEE( Extreme Events Expert)

Dr. Boom Doom- Asian based Market Master and C.B.A- Central Bank Antagonist

Dr. Doom- Economic Mastermind and Crash Predictor

The Unemployed Shareholder- Mysterious byproduct of capitalistic failures…still not sure what he stands for

Inside your local pub…. The End of the World……..

The Black Swan: Hey King, what you drinking?

The Bond King: The usual, you know, what I normally get.

Black Swan: It’s been a while I don’t remember, what goes in that drink of yours, three or four shots of tequila? Wait, are we talking ‘new normal’ or ‘old normal’ here?

Unemployed Shareholder: What’s the difference?

Dr. Doom: Well, the ‘new normal’ is well let’s just say less…

Bond King: Yes, Dr. Doom is right, the ‘new normal’ is less, but for me less equals more. So, I am still on the ‘old normal’ when it comes to my drinks. I’ll take four shots, it’s been a hell of a week.

Unemployed Shareholder: It sure has. What do you guys think of this euro package and the market reaction?

Dr. Boom Doom: Well, as you know you have a money printer over in the fed. You have another one in the BOE. And a third one in Japan. Now, they have been joined by this new printer in Europe.

The Bond king: Well, let’s be clear. The Ecb intends to sterilize their government bond purchases. So, we are not yet at Qe Dr. Doom.

Dr. Boom Doom: It’s Dr. Boom Doom. He’s Dr. Doom, not me. And yes that is what the money printer is saying, but that is not what he will be doing. I don’t trust money printers, and neither should you. Buy some agricultural commodities and some gold, but don’t go too crazy on the gold right now as it’s overbought. I also wouldn’t outright short equity markets here as we are a little oversold, but I’d sell the rallies and consider shorting at higher levels.

Unemployed Shareholder: Dr. Doom care to comment?

Dr. Doom: Sure, Dr. Boom Doom is correct, I am just plain Dr. Doom. But there is a good story behind that. We were both in Thailand a few years back, we were younger then, and market optimism left is with a lot of spare time on our hands. Anyway, we were having a couple of drinks when Dr. Doom turned to me, he was called Dr. Doom at the time, and said………

Unemployed Shareholder: Umm, Dr. Doom, we wanted to know your thoughts on markets.

Dr. Doom: (lol) Ah, I see. Right…..Well, your loss. I was going to tell you the story behind the boom in boom doom. Suffice to say, since that day, I became Dr. Doom and he became Dr. Boom Doom. As for markets, it’s really quite simple, the debt in the system is the problem. Europe is going to try massive fiscal consolidation. Can the population handle it? I don’t know. I think the Ecb needs to be more proactive or we will have outright deflation. My friend Dr. Boom doesn’t like money printers, but I have learned to live with them. The Ecb needs to follow the fed…

Waitress: Umm, Dr. Doom, sorry to interrupt, what kind of dip would you like with your wings?

Dr. Doom: Blue cheese is fine.

Black Swan: A single Dip Doom, no Double Dip? What’s gotten into you lately?

Dr. Doom: Leave it to the Swan to pick on me. Yes, no double dip. What are your thoughts Swan?

Unemployed Shareholder: Yes, Mr. Swan. We have not heard your thoughts on all of this.

Black Swan: Well it’s really simple.  See this glass that I am holding (Swan holds up his glass). It’s really fragile….right?

Unemployed Shareholder: Ok?? So?? How does that explain the market move on May 6th?

Black Swan: Well…( Swan drops the glass and it shatters on the floor). Fragile things can shatter!!

Dr. Doom: Damn it Swan!! Did you have to do that? Now that poor girl has to clean up your mess. I can’t take you anywhere. And they say you Lebanese guys are smooth.

Unemployed Shareholder: Yea, and I don’t understand what that has to do with markets.

Black Swan: Well, again it is really simple. Did you know I was going to drop the glass?

Unemployed Shareholder :No

Black Swan: Precisely, my dropping of the glass was a completely random act. I didn’t even know I was going to do it. But the glass still shattered because it was fragile. You were Fooled by Randomness. Fragility and Randomness my friends…..they explain everything!!!!

Bond King: Hey, isn’t that the ‘Big Shot’ over there interviewing that guy….

Unemployed Shareholder: You mean The Big Short?

Black Swan: Yea, that’s him, he was in my blind spot when I was driving to work this morning.

Unemployed Shareholder: You mean The Blind Side.

Dr. Boom Doom: Whose that? the money printer?

Unemployed Shareholder: You mean MoneyBall!!!!!

Dr. Doom: Yea, that guy lies every time he plays poker.

Unemployed Shareholder: Come on, am I taking crazy pills? The book was Liar’s Poker. What’s wrong with you guys that’s Michael….

Dr. Doom: Book? What the heck are you talking about? This guy bluffs every time he plays Texas Hold’em.

Bond King: Wait a second. Is he interviewing the Man in Black?

Black Swan: The Man in Black? King have you lost your mind?

Bond King: Sorry, I’ve been watching way too much Lost lately. It’s just that with me being a credit guy and all….. with no exposure to Europe or equities, the markets have been so boring lately, and Lost is getting oh so interesting. I need to know what the source is.

Dr. Doom: That’s not the Man in Black. That’s ChaTos!!

Unemployed Shareholder: The Enron Guy?

Bond King: Yea! And he’s eating Chinese food.

Dr Boom Doom: Jimmy is that you back there?

ChaTos: Yea, it’s me……

Dr. Boom Doom: What the hell are you doing dressed like that?

ChaTos: Sorry guys, I’m a sucker for some good orange chicken, but ever since I went bearish on China all the takeout places won’t deliver to me. I’m trying to keep a low profile.

Bond King: Well, that’s what happens when you short 1.2 billion people. Word gets around fast.

ChaTos: Yea, I know. I’m used to the backlash that comes with shorting anything by now. When I shorted Enron, they tried to cut off my power. But I expected nothing less from them, this Chinese food ban kind of hurts my feelings. I am doing them a favor. By the way, is that the unemployed shareholder I see sitting with you guys?

Dr. Doom: Yea, that’s him

ChaTos: What’s he doing here?

Bond King: He’s on a CFA study break.

ChaTos: Unbelievable, this guy will do anything not to work. He should become an economist. Could you get a job already!!!

Unemployed Shareholder: (on the phone) sell 200 shares apple at market and transfer the funds to my checking account. Buy me 1000 shares of BP at mkt. Pick me up some euro contracts limit 1.23. Route all orders through my guy at the squid…. thanks …..(off the phone) You were saying?

…..meanwhile somewhere deep inside the black box Hal 9000, which has been offline since the Smartest Guy in the Room shut him down on may6th(sometime between 2:40-3:00pm est), has started to stir…..

Hal 9000: Alternate power source obtained. Rebooting all systems. Running diagnostics……………

Previous power drain accelerated by Adobe Flash.

Steve Jobs was correct.

Removing all adobe software.

Shifting to more stable Apple OS.

Re-establishing link to all markets. ….Logging into the App store…Downloading Terminate Euro Shorts App…. Downloading Crash the Yen protocol….. ….loading fiscal consolidation in U.S.A App… disabling unemployed shareholders iphone

Unemployed Shareholder: HAL!!!!!!!!!!!!!!

To Be Continued……

(NOTE: The characters and content of this EMAIL are purely fictional, although in some instances they may refer or represent people or places that have influenced the author in some way, any resemblance to actual person or places, living or otherwise, is purely coincident

]]> Tue, 03 Jan 2012 12:49:50 -0500 PUBLISHED: MAY 18TH, 2010 | CATEGORIES: MARKET COMMENTARY | 0 COMMENTS

A little market entertainment for you…..

The Unemployed Shareholder and the Four Bears

By Akram Annous

With his portfolio plummeting the ‘Unemployed Shareholder’ decided to leap into action. No, he’s not getting a Job!! Instead, he has decided to obtain a CFA so he can better manage the shares he intends to live off for the rest of his life.

On a study break, he has joined the Four Bears at their favorite watering hole ‘The End of the Earth’ for a drink and hopefully some precious market insight…..

 

Your Characters:

The Bond King- Managing Director of New Normal Investments …The Universe’s Largest Bond Fund

The Black Swan- Lebanese Philosopher Extraordinaire, and EEE( Extreme Events Expert)

Dr. Boom Doom- Asian based Market Master and C.B.A- Central Bank Antagonist

Dr. Doom- Economic Mastermind and Crash Predictor

The Unemployed Shareholder- Mysterious byproduct of capitalistic failures…still not sure what he stands for

Inside your local pub…. The End of the World……..

The Black Swan: Hey King, what you drinking?

The Bond King: The usual, you know, what I normally get.

Black Swan: It’s been a while I don’t remember, what goes in that drink of yours, three or four shots of tequila? Wait, are we talking ‘new normal’ or ‘old normal’ here?

Unemployed Shareholder: What’s the difference?

Dr. Doom: Well, the ‘new normal’ is well let’s just say less…

Bond King: Yes, Dr. Doom is right, the ‘new normal’ is less, but for me less equals more. So, I am still on the ‘old normal’ when it comes to my drinks. I’ll take four shots, it’s been a hell of a week.

Unemployed Shareholder: It sure has. What do you guys think of this euro package and the market reaction?

Dr. Boom Doom: Well, as you know you have a money printer over in the fed. You have another one in the BOE. And a third one in Japan. Now, they have been joined by this new printer in Europe.

The Bond king: Well, let’s be clear. The Ecb intends to sterilize their government bond purchases. So, we are not yet at Qe Dr. Doom.

Dr. Boom Doom: It’s Dr. Boom Doom. He’s Dr. Doom, not me. And yes that is what the money printer is saying, but that is not what he will be doing. I don’t trust money printers, and neither should you. Buy some agricultural commodities and some gold, but don’t go too crazy on the gold right now as it’s overbought. I also wouldn’t outright short equity markets here as we are a little oversold, but I’d sell the rallies and consider shorting at higher levels.

Unemployed Shareholder: Dr. Doom care to comment?

Dr. Doom: Sure, Dr. Boom Doom is correct, I am just plain Dr. Doom. But there is a good story behind that. We were both in Thailand a few years back, we were younger then, and market optimism left is with a lot of spare time on our hands. Anyway, we were having a couple of drinks when Dr. Doom turned to me, he was called Dr. Doom at the time, and said………

Unemployed Shareholder: Umm, Dr. Doom, we wanted to know your thoughts on markets.

Dr. Doom: (lol) Ah, I see. Right…..Well, your loss. I was going to tell you the story behind the boom in boom doom. Suffice to say, since that day, I became Dr. Doom and he became Dr. Boom Doom. As for markets, it’s really quite simple, the debt in the system is the problem. Europe is going to try massive fiscal consolidation. Can the population handle it? I don’t know. I think the Ecb needs to be more proactive or we will have outright deflation. My friend Dr. Boom doesn’t like money printers, but I have learned to live with them. The Ecb needs to follow the fed…

Waitress: Umm, Dr. Doom, sorry to interrupt, what kind of dip would you like with your wings?

Dr. Doom: Blue cheese is fine.

Black Swan: A single Dip Doom, no Double Dip? What’s gotten into you lately?

Dr. Doom: Leave it to the Swan to pick on me. Yes, no double dip. What are your thoughts Swan?

Unemployed Shareholder: Yes, Mr. Swan. We have not heard your thoughts on all of this.

Black Swan: Well it’s really simple.  See this glass that I am holding (Swan holds up his glass). It’s really fragile….right?

Unemployed Shareholder: Ok?? So?? How does that explain the market move on May 6th?

Black Swan: Well…( Swan drops the glass and it shatters on the floor). Fragile things can shatter!!

Dr. Doom: Damn it Swan!! Did you have to do that? Now that poor girl has to clean up your mess. I can’t take you anywhere. And they say you Lebanese guys are smooth.

Unemployed Shareholder: Yea, and I don’t understand what that has to do with markets.

Black Swan: Well, again it is really simple. Did you know I was going to drop the glass?

Unemployed Shareholder :No

Black Swan: Precisely, my dropping of the glass was a completely random act. I didn’t even know I was going to do it. But the glass still shattered because it was fragile. You were Fooled by Randomness. Fragility and Randomness my friends…..they explain everything!!!!

Bond King: Hey, isn’t that the ‘Big Shot’ over there interviewing that guy….

Unemployed Shareholder: You mean The Big Short?

Black Swan: Yea, that’s him, he was in my blind spot when I was driving to work this morning.

Unemployed Shareholder: You mean The Blind Side.

Dr. Boom Doom: Whose that? the money printer?

Unemployed Shareholder: You mean MoneyBall!!!!!

Dr. Doom: Yea, that guy lies every time he plays poker.

Unemployed Shareholder: Come on, am I taking crazy pills? The book was Liar’s Poker. What’s wrong with you guys that’s Michael….

Dr. Doom: Book? What the heck are you talking about? This guy bluffs every time he plays Texas Hold’em.

Bond King: Wait a second. Is he interviewing the Man in Black?

Black Swan: The Man in Black? King have you lost your mind?

Bond King: Sorry, I’ve been watching way too much Lost lately. It’s just that with me being a credit guy and all….. with no exposure to Europe or equities, the markets have been so boring lately, and Lost is getting oh so interesting. I need to know what the source is.

Dr. Doom: That’s not the Man in Black. That’s ChaTos!!

Unemployed Shareholder: The Enron Guy?

Bond King: Yea! And he’s eating Chinese food.

Dr Boom Doom: Jimmy is that you back there?

ChaTos: Yea, it’s me……

Dr. Boom Doom: What the hell are you doing dressed like that?

ChaTos: Sorry guys, I’m a sucker for some good orange chicken, but ever since I went bearish on China all the takeout places won’t deliver to me. I’m trying to keep a low profile.

Bond King: Well, that’s what happens when you short 1.2 billion people. Word gets around fast.

ChaTos: Yea, I know. I’m used to the backlash that comes with shorting anything by now. When I shorted Enron, they tried to cut off my power. But I expected nothing less from them, this Chinese food ban kind of hurts my feelings. I am doing them a favor. By the way, is that the unemployed shareholder I see sitting with you guys?

Dr. Doom: Yea, that’s him

ChaTos: What’s he doing here?

Bond King: He’s on a CFA study break.

ChaTos: Unbelievable, this guy will do anything not to work. He should become an economist. Could you get a job already!!!

Unemployed Shareholder: (on the phone) sell 200 shares apple at market and transfer the funds to my checking account. Buy me 1000 shares of BP at mkt. Pick me up some euro contracts limit 1.23. Route all orders through my guy at the squid…. thanks …..(off the phone) You were saying?

…..meanwhile somewhere deep inside the black box Hal 9000, which has been offline since the Smartest Guy in the Room shut him down on may6th(sometime between 2:40-3:00pm est), has started to stir…..

Hal 9000: Alternate power source obtained. Rebooting all systems. Running diagnostics……………

Previous power drain accelerated by Adobe Flash.

Steve Jobs was correct.

Removing all adobe software.

Shifting to more stable Apple OS.

Re-establishing link to all markets. ….Logging into the App store…Downloading Terminate Euro Shorts App…. Downloading Crash the Yen protocol….. ….loading fiscal consolidation in U.S.A App… disabling unemployed shareholders iphone

Unemployed Shareholder: HAL!!!!!!!!!!!!!!

To Be Continued……

(NOTE: The characters and content of this EMAIL are purely fictional, although in some instances they may refer or represent people or places that have influenced the author in some way, any resemblance to actual person or places, living or otherwise, is purely coincident

]]> "The Unemployed Shareholder goes to Mykonos" http://seekingalpha.com/instablog/123608-akram-s-razor/237754-the-unemployed-shareholder-goes-to-mykonos?source=feed 237754 Somewhere inside the Unemployed Shareholder's favorite Greek restaurant………The Last Great Gyro………(Originally published June 26, 2011)

 

 

Icarus: So, what brings you to the greek islands this time of year, you on vacation?

 

Unemployed Shareholder: Well, not exactly Icarus , I'm here to make an investment. I want to buy an island.

 

Ic: Ahh, you sneaky devil you. You know the parliamentary vote is tomorrow, and you are trying to make a play on the greek islands before the austerity measures go through. Anything it for me?

 

US: Becarefu Icarus, you might get your wings clipped if you mess with markets. Stick to brokering its what you do best. I'm looking to diversify. How much for Mykonos?

 

IC: Mykonos is not for sale, but how about Patroklos?

 

US: What's the asking price?

 

IC: 300mln euros.

 

US: Ok, i'll take it. Who do i cut the check to?

 

IC: Well you can make the 30mln euro check out to cash.

 

US: Thirty Million? You said 300 million?

 

IC: Ah, Mr. Unemployed i need to explain a few things to you. This is not America. We work a little differently here. Your island is valued by the land office at thirty million. So, you will need to pay a 9% tax to the government on the sale..

 

US: But the island asking price is 300 million?

 

IC: Yes. We will draw up a contract for sale at 30 million, but then we will do the transaction at 300 million. This happens all the time.

 

US: Ok. And that's it?

 

IC: Well, not exactly. First we need to find out who owns the island.

 

US: What do you mean who owns the island? I thought it was selling for $300million?

 

IC: Well, yes. But we don't really know who owns it. It could be stvros, or nikos, or the the church, or even papandreu. Since we have no land registry , it could be just about anyone.

 

US: ( looking quite perplexed)You have a land office but no land registry? I thought you created one ten years ago to solve this very problem.

 

IC: Ahh, what you are referring to is a 60 million EU grant to create a registry. That didn't really work as we had some cost overruns.

 

US: Cost overruns?

 

IC: Yes. The cost of the project went from 1300 euros per square kilometer to 30,000 euros.

 

US: That's insane.

 

IC: Yea, the boys at the EU told us the same thing. But you have to understand things tend to come up here that  you cant account for off the bat.

 

US: So, what do we do?

 

IC: Its really quite simple. If you give me about 10million euros i can clear the red tape needed to be cleared to find out who owns the island. At that point if he is comfortable with the 300 million asking price we can proceed. But you are very lucky as this island has a very nice 20 million euro penthouse on it.

 

US: Finally some good news. Maybe i will move in there and work on my tan while i wait for the sale to go through.

 

IC: No, no that;s not possible. Its rented. 

 

US: What do you mean its rented? You just told me nobody knows who owns the island.

 

IC: Yes, that is true, but the minister of traffic moved in after the last sale; we just don't know who it was to yet since the documentation has not been found,

 

US: How does a minister of traffic afford to live in a 20million euro penthouse. 

 

IC: Oh, its quite affordable. His rent is only 350 euros a month.

 

US: 350 euros? Are you mad? What happens when i own the property…how do i get him out?

 

IC: Well, you can file a request for proposal for rental increase at the office of tenancy. Once that is processed he has 12 months to respond as to why he does not think his rent should be raised. 

 

US: 12 months?

 

IC: Yes, but you can file an inquiry of objection if you think his proposal is unreasonable or without merit. After about 18 months you should have a hearing.

 

 

 

US: Ok, i give up, this is madness.

( Unemployed stands up and gets ready to leave befre a strange man with white towel approaches him)

 

Eurozone Hitchhiker:Before you go Mr Unemployed Shareholder; I suggest you read the chapter on the greeks in the Hitchhikers Guide to the Eurozone.

 

(the hitchhiker hands the Unemployed Shareholder a Guidebook to the Eurozone which he promptly opens to the section on Greece)

 

Greeks: The most bureaucratic members of the eurozone. They wouldn't even lift a finger to save their own grandmothers from a Turkish invasion without orders signed in triplicate, sent in, sent back, queried, lost, found, subjected to public inquiry, lost again, protested, and finally refiled. On no account should you ever allow a greek to negotiate with you.

 

 

US: Wow, this is pretty handy stuff, wish i had one of these before i came here.

(Unemployed picks up his phone)

 

Tell the boys at the squid we are back on!

 

IC: What are you doing?

 

US: What i should have done a long time ago…..shorting this bureaucratic bubble.

 

IC: But the bailout is tomorrow, you will lose money.

 

Umm, i don't care. These people have been living in a bubble. Austerity will never be accepted. And if it was accepted it would never work as getting something done here is virtually impossible. I may lose money for a day or two or even a few months, but one way or another they will default. There is no getting around that.

]]> Fri, 18 Nov 2011 15:54:38 -0500 Somewhere inside the Unemployed Shareholder's favorite Greek restaurant………The Last Great Gyro………(Originally published June 26, 2011)

 

 

Icarus: So, what brings you to the greek islands this time of year, you on vacation?

 

Unemployed Shareholder: Well, not exactly Icarus , I'm here to make an investment. I want to buy an island.

 

Ic: Ahh, you sneaky devil you. You know the parliamentary vote is tomorrow, and you are trying to make a play on the greek islands before the austerity measures go through. Anything it for me?

 

US: Becarefu Icarus, you might get your wings clipped if you mess with markets. Stick to brokering its what you do best. I'm looking to diversify. How much for Mykonos?

 

IC: Mykonos is not for sale, but how about Patroklos?

 

US: What's the asking price?

 

IC: 300mln euros.

 

US: Ok, i'll take it. Who do i cut the check to?

 

IC: Well you can make the 30mln euro check out to cash.

 

US: Thirty Million? You said 300 million?

 

IC: Ah, Mr. Unemployed i need to explain a few things to you. This is not America. We work a little differently here. Your island is valued by the land office at thirty million. So, you will need to pay a 9% tax to the government on the sale..

 

US: But the island asking price is 300 million?

 

IC: Yes. We will draw up a contract for sale at 30 million, but then we will do the transaction at 300 million. This happens all the time.

 

US: Ok. And that's it?

 

IC: Well, not exactly. First we need to find out who owns the island.

 

US: What do you mean who owns the island? I thought it was selling for $300million?

 

IC: Well, yes. But we don't really know who owns it. It could be stvros, or nikos, or the the church, or even papandreu. Since we have no land registry , it could be just about anyone.

 

US: ( looking quite perplexed)You have a land office but no land registry? I thought you created one ten years ago to solve this very problem.

 

IC: Ahh, what you are referring to is a 60 million EU grant to create a registry. That didn't really work as we had some cost overruns.

 

US: Cost overruns?

 

IC: Yes. The cost of the project went from 1300 euros per square kilometer to 30,000 euros.

 

US: That's insane.

 

IC: Yea, the boys at the EU told us the same thing. But you have to understand things tend to come up here that  you cant account for off the bat.

 

US: So, what do we do?

 

IC: Its really quite simple. If you give me about 10million euros i can clear the red tape needed to be cleared to find out who owns the island. At that point if he is comfortable with the 300 million asking price we can proceed. But you are very lucky as this island has a very nice 20 million euro penthouse on it.

 

US: Finally some good news. Maybe i will move in there and work on my tan while i wait for the sale to go through.

 

IC: No, no that;s not possible. Its rented. 

 

US: What do you mean its rented? You just told me nobody knows who owns the island.

 

IC: Yes, that is true, but the minister of traffic moved in after the last sale; we just don't know who it was to yet since the documentation has not been found,

 

US: How does a minister of traffic afford to live in a 20million euro penthouse. 

 

IC: Oh, its quite affordable. His rent is only 350 euros a month.

 

US: 350 euros? Are you mad? What happens when i own the property…how do i get him out?

 

IC: Well, you can file a request for proposal for rental increase at the office of tenancy. Once that is processed he has 12 months to respond as to why he does not think his rent should be raised. 

 

US: 12 months?

 

IC: Yes, but you can file an inquiry of objection if you think his proposal is unreasonable or without merit. After about 18 months you should have a hearing.

 

 

 

US: Ok, i give up, this is madness.

( Unemployed stands up and gets ready to leave befre a strange man with white towel approaches him)

 

Eurozone Hitchhiker:Before you go Mr Unemployed Shareholder; I suggest you read the chapter on the greeks in the Hitchhikers Guide to the Eurozone.

 

(the hitchhiker hands the Unemployed Shareholder a Guidebook to the Eurozone which he promptly opens to the section on Greece)

 

Greeks: The most bureaucratic members of the eurozone. They wouldn't even lift a finger to save their own grandmothers from a Turkish invasion without orders signed in triplicate, sent in, sent back, queried, lost, found, subjected to public inquiry, lost again, protested, and finally refiled. On no account should you ever allow a greek to negotiate with you.

 

 

US: Wow, this is pretty handy stuff, wish i had one of these before i came here.

(Unemployed picks up his phone)

 

Tell the boys at the squid we are back on!

 

IC: What are you doing?

 

US: What i should have done a long time ago…..shorting this bureaucratic bubble.

 

IC: But the bailout is tomorrow, you will lose money.

 

Umm, i don't care. These people have been living in a bubble. Austerity will never be accepted. And if it was accepted it would never work as getting something done here is virtually impossible. I may lose money for a day or two or even a few months, but one way or another they will default. There is no getting around that.

]]> "The Unemployed Shareholder Visits Salesfarce.com" http://seekingalpha.com/instablog/123608-akram-s-razor/237748-the-unemployed-shareholder-visits-salesfarce-com?source=feed 237748 “The Unemployed Shareholder Visits Salesfarce.com”

 

Unemployed Shareholder: I’d just like to say that I am really excited about my visit. This cloud stuff is just so fantastic, and I am dying to learn more about it. Like can I move all my appliances to the cloud?

 

Salesfarce PR Rep: Yes, the cloud is truly amazing and we here at Salesfarce are leading the way. Soon all your data will be available on the cloud for all to steal.

 

Unemployed Shareholder: Huh?

 

SPRR: (LAUGHING) Just kidding, that’s an inside joke…………. anyway, we’d like to present you with a welcome gift for visiting our headquarters.

 

(SPRR hands the Unemployed Shareholder an envelope with a red ribbon wrapped around it)

 

US: What is this?

 

SPRR: Just a gesture of our goodwill.

 

(Unemployed opens the envelope and discovers a stock certificate)

 

SPRR: Congratulations, you are now a shareholder in Salesfarce.

 

US: Wow, you shouldn’t have. This is worth like $140 that’s very generous of you.

 

SPRR: Really, it was nothing we print these all the time. Now, let’s get started with your tour.

 

(SPRR takes Unemployed to  accounting/finance)

 

SPRR: So, this is Bob he heads up accounting which is our most important department.

 

US: Why is that?

 

SPRR: Well, this is where we manufacture our earnings. Tell him how it works Bob.

 

Bob: Sorry guys we are really busy today. Magic Bean just used all our cash to buy some domain name and hire Lady Gaga and Kim Kardashian for Dreamfarce 100. At the same time he wants to build some megaplex beanstalk and wants me to convince everyone involved to accept stock options in lieu of cash.

 

US: You are using stock to pay your expenses?

 

Bob: Yeah, we been doing it for years, nobody cares. We pay all our utilities in stock these days, same thing with our suppliers. Pretty much anyone who does business with us gets shares in return.

 

US: And your shareholders don’t complain?

 

BOB: Why would they? Our stock just keeps rising. Nobody knows why, but supposedly magic bean has it all figured out.

 

US: And what about GAAP?

 

Bob: That’s where I come in. I back out all the expenses and presto NON-GAAP earnings appear.

 

US: Wow, that is impressive.

 

SPRR: Ok, bob that is enough for the day. Time to take Unemployed to lunch.

 

Bob: Nice meeting you, and here is a little gift from me and the boys in accounting.

 

(Bob hands Unemployed 10 certificates of Salesfarce)

 

US: Wow, this is really generous of you. This is worth like $1400.

 

Bob: Really it was nothing we print these all the time…..enjoy the rest of the tour.

 

(SPRR and US head to the cafeteria)

 

SPRR: So, our cafeteria is really great. We have Wagyu Beef, Maine Lobsters, Caspian Caviar, and the best Black Cod and spicy toro tuna you ever tasted. We also have five star chefs on staff full time so you can order off the menu if you like. And Magic Bean has put together one hell of a wine collection so feel free to indulge.

 

US: Wow, how do you pay for all of this?

 

SPRR: Oh, it’s not free, every employee has to pay for their lunch or dinner. Even you will have to pay. But don’t worry the cashier takes Salesfarce certificates.

 

US: Amazing. It’s like you have created your own currency.

 

SPRR: (smirking) Yes, we’ve heard that before. Now finish up so we can continue the tour.

 

(after devouring a 7lb maine lobster Unemployed resumes his tour)

 

SPRR: Our next visit will be the Offices of our CEO Mr. Magic Bean.

 

SPRR: Is he in?

 

Magic Bean’s Secretary: He’s just finishing up a brainstorming session…. go on in

 

SPRR: Mr. Bean I have the Unemployed Shareholder here today to meet you.

 

(Magic Bean puts down his book Fiat for Dummies: How to print your way to success….by Ben Bernank)

 

Magic Bean: It’s a pleasure to meet you. I was just hanging out with Mic Jagger and the boys …we got something real special planned for DreamChatcloudNine 2.

 

US: Wow, that’s awesome. This company is an amazing place. How do you guys do it?

 

MB: Well, you’ve seen all you needed to see, you should have it figured out by now.

 

US: Umm all I’ve seen is the accounting department, your office, and the cafeteria. I have not seen the business yes.

 

MB: Of course you have…that is the business…well that and our great Salesfarce sales people.

 

US: What about all the technology….where is it?

 

MB: Look up…what do you see?

 

(US looks up through the skylight in Magic Beans office)

 

US: I see clouds.

 

MB: Exactly! It’s all in the cloud.

 

US: Wow, this cloud computing is something else.

 

MB: (smiling)I know. Now let me give you a goodbye gift so you can be on your way.

 

(MB reaches into his drawer and pulls out a 1000 Salesfarce stock certificates)

 

MB: Here are 1000 shares of Salesfarce. Thanks for visiting us…..please come again.

 

US: 1000 shares…that’s like $14,000….i can’t accept this.

 

MB: Really, it was nothing we print these all the time.

]]> Fri, 18 Nov 2011 15:44:11 -0500 “The Unemployed Shareholder Visits Salesfarce.com”

 

Unemployed Shareholder: I’d just like to say that I am really excited about my visit. This cloud stuff is just so fantastic, and I am dying to learn more about it. Like can I move all my appliances to the cloud?

 

Salesfarce PR Rep: Yes, the cloud is truly amazing and we here at Salesfarce are leading the way. Soon all your data will be available on the cloud for all to steal.

 

Unemployed Shareholder: Huh?

 

SPRR: (LAUGHING) Just kidding, that’s an inside joke…………. anyway, we’d like to present you with a welcome gift for visiting our headquarters.

 

(SPRR hands the Unemployed Shareholder an envelope with a red ribbon wrapped around it)

 

US: What is this?

 

SPRR: Just a gesture of our goodwill.

 

(Unemployed opens the envelope and discovers a stock certificate)

 

SPRR: Congratulations, you are now a shareholder in Salesfarce.

 

US: Wow, you shouldn’t have. This is worth like $140 that’s very generous of you.

 

SPRR: Really, it was nothing we print these all the time. Now, let’s get started with your tour.

 

(SPRR takes Unemployed to  accounting/finance)

 

SPRR: So, this is Bob he heads up accounting which is our most important department.

 

US: Why is that?

 

SPRR: Well, this is where we manufacture our earnings. Tell him how it works Bob.

 

Bob: Sorry guys we are really busy today. Magic Bean just used all our cash to buy some domain name and hire Lady Gaga and Kim Kardashian for Dreamfarce 100. At the same time he wants to build some megaplex beanstalk and wants me to convince everyone involved to accept stock options in lieu of cash.

 

US: You are using stock to pay your expenses?

 

Bob: Yeah, we been doing it for years, nobody cares. We pay all our utilities in stock these days, same thing with our suppliers. Pretty much anyone who does business with us gets shares in return.

 

US: And your shareholders don’t complain?

 

BOB: Why would they? Our stock just keeps rising. Nobody knows why, but supposedly magic bean has it all figured out.

 

US: And what about GAAP?

 

Bob: That’s where I come in. I back out all the expenses and presto NON-GAAP earnings appear.

 

US: Wow, that is impressive.

 

SPRR: Ok, bob that is enough for the day. Time to take Unemployed to lunch.

 

Bob: Nice meeting you, and here is a little gift from me and the boys in accounting.

 

(Bob hands Unemployed 10 certificates of Salesfarce)

 

US: Wow, this is really generous of you. This is worth like $1400.

 

Bob: Really it was nothing we print these all the time…..enjoy the rest of the tour.

 

(SPRR and US head to the cafeteria)

 

SPRR: So, our cafeteria is really great. We have Wagyu Beef, Maine Lobsters, Caspian Caviar, and the best Black Cod and spicy toro tuna you ever tasted. We also have five star chefs on staff full time so you can order off the menu if you like. And Magic Bean has put together one hell of a wine collection so feel free to indulge.

 

US: Wow, how do you pay for all of this?

 

SPRR: Oh, it’s not free, every employee has to pay for their lunch or dinner. Even you will have to pay. But don’t worry the cashier takes Salesfarce certificates.

 

US: Amazing. It’s like you have created your own currency.

 

SPRR: (smirking) Yes, we’ve heard that before. Now finish up so we can continue the tour.

 

(after devouring a 7lb maine lobster Unemployed resumes his tour)

 

SPRR: Our next visit will be the Offices of our CEO Mr. Magic Bean.

 

SPRR: Is he in?

 

Magic Bean’s Secretary: He’s just finishing up a brainstorming session…. go on in

 

SPRR: Mr. Bean I have the Unemployed Shareholder here today to meet you.

 

(Magic Bean puts down his book Fiat for Dummies: How to print your way to success….by Ben Bernank)

 

Magic Bean: It’s a pleasure to meet you. I was just hanging out with Mic Jagger and the boys …we got something real special planned for DreamChatcloudNine 2.

 

US: Wow, that’s awesome. This company is an amazing place. How do you guys do it?

 

MB: Well, you’ve seen all you needed to see, you should have it figured out by now.

 

US: Umm all I’ve seen is the accounting department, your office, and the cafeteria. I have not seen the business yes.

 

MB: Of course you have…that is the business…well that and our great Salesfarce sales people.

 

US: What about all the technology….where is it?

 

MB: Look up…what do you see?

 

(US looks up through the skylight in Magic Beans office)

 

US: I see clouds.

 

MB: Exactly! It’s all in the cloud.

 

US: Wow, this cloud computing is something else.

 

MB: (smiling)I know. Now let me give you a goodbye gift so you can be on your way.

 

(MB reaches into his drawer and pulls out a 1000 Salesfarce stock certificates)

 

MB: Here are 1000 shares of Salesfarce. Thanks for visiting us…..please come again.

 

US: 1000 shares…that’s like $14,000….i can’t accept this.

 

MB: Really, it was nothing we print these all the time.

]]> crm The Story of Agent Clean Slate http://seekingalpha.com/instablog/123608-akram-s-razor/218539-the-story-of-agent-clean-slate?source=feed 218539 ( As financial policy drifts further into the realm of fiction there is very little need to take policymakers seriously anymore. Meet Agent Clean Slate the future of financial policy.)

 

Money Honey: So I hear you have a story for me.

 

Agent Clean Slate: Yes, my name is Agent Clean Slate. I'm here from the not so distant future in a last ditch effort to save the global economy.

 

Money Honey: Come on, you don't expect me to believe this nonsense. How did you get this meeting?

 

Agent Clean Slate: Believe what you will, but I spent seven long years at TIBET preparing for this mission, if I fail then all hope is lost.

 

MH: You are from Tibet?

 

ACS: Yes, the agency for Time Interfering Based Economic Therapy, or TIBET for short. The abbreviation throws off the Chinese.

 

MH: Agency? Chinese?

 

ACS: Yes, we are ETC's, economic time cops. Project TIBET is part of the Clean Slate Initiative.

 

MH: Clean Slate Initiative?

 

ACS: See, where I come from, or more appropriately, when I come from; the earth's economy is a mess. 2/3 of the S&P 50 trades at a negative enterprise value. Central Banks are bust. Gold has been banned by the governments.

 

MH: S&P 50?

 

ACS: Yes, after a wave of consolidation and bankruptcies the index is whittled down to fifty firms.

 

MH: And what about gold, why has it been banned?

 

ACS: Governments believed that the loss of confidence in paper money was due to gold, and they figured this could be reversed by banning the metal altogether. Anyone caught holding gold is to be charged with high treason.

 

MH: So, what do they do with the confiscated gold?

 

ACS: All gold on the planet is stored in Iceland.

 

MH: Iceland?

 

ACS: Yes, iceland is the most advanced and stable economy on earth. Having abandoned markets and banking altogether and returned to their roots, the Icelandic people experience an economic rebirth. Breakthroughs in fishing and geothermal power allow iceland to become an economic powerhouse. They then volunteer to take over global financial regulations.

 

MH: That makes no sense. You want me to believe Iceland is an economic power. What about Japan, the U.S., China…….

 

ACS: There is no Japan.

 

MH: No Japan……Was it a Tsunami or an Earthquake?

 

ACS: Worse, it was AHDS.

 

MH: AHDS, what's that?

 

ACS: Advanced Hyper Deflation Syndrome. It's a nasty little bug.

 

MH: Hyper Deflation destroyed Japan. That's a bit much. No economic problem can be that bad.

 

ACS: My friend if you have seen a hundred year bond trading at 1bp you would understand what I was talking about. And if I fail in my mission I can assure you that you will live to see that day.

 

MH: 100 year bond? What are you talking about?

 

ACS: In 2012 the Governments of the World Institute the 100 year protocol to end the sovgn debt crisis. All sovereign debt is rolled over to 100 year maturities. It ends up being the worst financial policy decision in history.

 

MH: Why?

 

ACS: It completely destroys the time value of money. Money tomorrow becomes worth the same and in many instances more than money today. Finance collapses, and Governments follow. That is why Japan is now the home of the Apple community. A post apocalyptic UI driven society started by its predecessor the Apple corporation.

 

MH: Apple owns Japan?

 

ACS: No, Apple is Japan. Once the Yen collapsed Apple bought the island on the cheap and stopped selling its products to the rest of the world. If you want to use Apple products you have to move to the Apple island and convert to Jobsism. Basically, Apple concluded that they had reached the limits of the classical UI experience. To preserve Jobs' vision Apple needed control over all expects of daily life. Call it technological evolution. Their new slogan is "An Apple a Day for the Rest of your Days".

 

MH: Wow, and what about Europe?

 

 

ACS: After flirting with the idea of a fourth reich, Germany chooses an isolationist path. It is now the Wonka state. Plenty of goods come out of there, but nobody is ever allowed in. The rest of Europe is a mess.

 

MH: And China?

 

ACS: The Chinese are doing ok. Around 2020 we discovered that they were behind the housing bubble and the collapse of the US economy, and that Greenspan was a Chinese agent. But by that point the US military, after a decade of austerity inspired budget cuts, is in such a state of disrepair that there is nothing they can do about it. Outside of Germany and Iceland the rest of the world is at the mercy of China and their economic and military power. That's where I come in. The goal of CSI was to develop time travel technology so that we could travel back in time and fix the great economic policy mistakes of our ancestors. Hindsight replaces stimulus. The project is top secret and funded by the few remaining members of the S&P 50 and the investment bank Goldman Farmorgan.

 

MH: Goldman Farmorgan?

 

ACS: Yes, Morgan Stanley, Jp Morgan, Wells Fargo, and Goldman are merged into one bank.

 

MH: Wow.

ACS:So, Goldman Farmorgan provided a bridge loan for the project with GooGamaZon ventures putting up most of the equity.

 

We code named it TIBET to confuse the Chinese who we knew would do anything in their power to stop this project from succeeding. And we located the primary research facility underneath the abandoned World Cup mega complex in Qatar because that's the last place we figured anyone would look for anything.

 

MH:What is your mandate?

 

ACS: To develop the ability to successfully send someone back in time to stop the collapse of Lehman

 

MH: So Lehman was a mistake?

 

ACS: Not exactly, the stimulus that followed Lehman was the mistake. Lehman was just the excuse. By stopping it we aim to temporarily slow the chinese down and buy ourselves time to fix the real problems.

 

MH: Why not just go back and replace Greenspan?

 

ACS: It's not that easy. Time travel is complicated. We are using an Einstein-Scholes bridge to enter and exit through funding holes in the time based capital structure. We never know when we will arrive, and we lack the power to remove principal actors. We can simply seek to influence, but as Greenspan is an agent for the Chinese that wont work.

 

MH: So how does it work then?

 

ACS: Well, the Googamazon search engine locates funding gaps in the time structure and then send agents in to fill those gaps.

 

MH: How do you fill the gaps?

 

ACS: With Gold from iceland of course. It still has financial value in your time. We structure a swap between two parallel universes, and presto the bad debt is gone.

 

MH: But how do you hedge your parallel exposure?

 

ACS: We don't. If we do our job right our universe will cease to exist, thus we are inherently delta neutral.

 

MH: Is that all?

 

ACS: No there is one more thing.

 

MH: What's that?

 

ACS: We fix the bankers.

 

MH: What do you mean you fix the bankers?

 

ACS:Well, every TIBET agent must deal with your investment bankers. Why do you think we wear these suits?

 

MH: Yes, you are kind of like those guys from the film MIB.

 

ACS: We are MIB's. Men in Brioni, and there is a good reason for that. We need bankers to trust us before we give them them their BONUS back.

 

MH: What? You are going to give them a bonus?

 

ACS: Yes, a bonus. A banker's onus.

 

MH: A banker's onus?

 

ACS: It's a sense of responsibility. We give them their b-onus by taking away their bonus.

 

MH: Ok, i'm confused.

 

ACS: Well,every agent has neuralizer which can be used to wipe memories. Much like the movie MIB except that we use our neuralizer to simply readjust the memory of investment bankers. We don't wipe, we plant powerful suggestions.

 

MH: And how does that work?

 

ACS: We make them believe they don't deserve their bonus.

 

MH: So what?

 

ACS: It's actually a very powerful tool. Once a banker believes he or she never deserved their bonus they become overwhelmed with guilt. They then feel that they have a debt to society that they must repay.

 

MH:How can you be so sure?

 

ACS: Easy, I was the first person this was tested on.

 

MH: You are a banker?

 

ACS: I was an investment banker. That is why I am here today.

 

MH: What do you mean?

 

ACS: I told you I was here to stop Lehman.

 

MH: Yes.

 

ACS: And i told you that when it comes to principal actors in time we can only seek to influence and that we cannot remove them.

 

MH: Correct.

 

ACS: Well then, how do you think i am going to stop Lehman?

 

MH: Convince the government to bail them out I guess.

 

ACS: There is no way for me to change the events of that weekend. There are too many actors involved and too many opposing forces at work.

 

MH: Then, you need to go back in time and convince Dick Fuld to sell Lehman before it is too late. But how are you going to convince Dick Fuld of anything?

 

ACS: (Smiles) Thanks for your time.

 

MH: That's it?

 

ACS: Oh, I almost forgot, one more thing.

 

MH: What?

 

(Agent Clean Slate flashes MH with his neuralizer)

 

ACS: You will remember nothing about the conversation we just had other than the fact that you really enjoyed talking to me.

 

MH: Wow i really enjoyed this conversation….Mr……..

 

ACS: Fuld…..but you can call me Dick.

 

MH: Dick Fuld? You know that's the same name as the former Ceo of Lehman. And you kind of look like him….that must be a tough combo.

 

ACS: Yeah, i know. I get it all the time. They tell me if i was just 25 years younger i'd be a dead ringer for him.

 

MH: Yep. (MH's phone rings) Just give me a sec Dick I need to take this. (MH steps away to take the call)

 

Agent Clean Slate: Ok.

 

(MH returns)

 

ACS: Sorry, Dick that was……. that's strange where did he go?

 

(Agent Clean Slate has vanished)

 

To Be Continued



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
]]> Tue, 20 Sep 2011 15:49:23 -0400 ( As financial policy drifts further into the realm of fiction there is very little need to take policymakers seriously anymore. Meet Agent Clean Slate the future of financial policy.)

 

Money Honey: So I hear you have a story for me.

 

Agent Clean Slate: Yes, my name is Agent Clean Slate. I'm here from the not so distant future in a last ditch effort to save the global economy.

 

Money Honey: Come on, you don't expect me to believe this nonsense. How did you get this meeting?

 

Agent Clean Slate: Believe what you will, but I spent seven long years at TIBET preparing for this mission, if I fail then all hope is lost.

 

MH: You are from Tibet?

 

ACS: Yes, the agency for Time Interfering Based Economic Therapy, or TIBET for short. The abbreviation throws off the Chinese.

 

MH: Agency? Chinese?

 

ACS: Yes, we are ETC's, economic time cops. Project TIBET is part of the Clean Slate Initiative.

 

MH: Clean Slate Initiative?

 

ACS: See, where I come from, or more appropriately, when I come from; the earth's economy is a mess. 2/3 of the S&P 50 trades at a negative enterprise value. Central Banks are bust. Gold has been banned by the governments.

 

MH: S&P 50?

 

ACS: Yes, after a wave of consolidation and bankruptcies the index is whittled down to fifty firms.

 

MH: And what about gold, why has it been banned?

 

ACS: Governments believed that the loss of confidence in paper money was due to gold, and they figured this could be reversed by banning the metal altogether. Anyone caught holding gold is to be charged with high treason.

 

MH: So, what do they do with the confiscated gold?

 

ACS: All gold on the planet is stored in Iceland.

 

MH: Iceland?

 

ACS: Yes, iceland is the most advanced and stable economy on earth. Having abandoned markets and banking altogether and returned to their roots, the Icelandic people experience an economic rebirth. Breakthroughs in fishing and geothermal power allow iceland to become an economic powerhouse. They then volunteer to take over global financial regulations.

 

MH: That makes no sense. You want me to believe Iceland is an economic power. What about Japan, the U.S., China…….

 

ACS: There is no Japan.

 

MH: No Japan……Was it a Tsunami or an Earthquake?

 

ACS: Worse, it was AHDS.

 

MH: AHDS, what's that?

 

ACS: Advanced Hyper Deflation Syndrome. It's a nasty little bug.

 

MH: Hyper Deflation destroyed Japan. That's a bit much. No economic problem can be that bad.

 

ACS: My friend if you have seen a hundred year bond trading at 1bp you would understand what I was talking about. And if I fail in my mission I can assure you that you will live to see that day.

 

MH: 100 year bond? What are you talking about?

 

ACS: In 2012 the Governments of the World Institute the 100 year protocol to end the sovgn debt crisis. All sovereign debt is rolled over to 100 year maturities. It ends up being the worst financial policy decision in history.

 

MH: Why?

 

ACS: It completely destroys the time value of money. Money tomorrow becomes worth the same and in many instances more than money today. Finance collapses, and Governments follow. That is why Japan is now the home of the Apple community. A post apocalyptic UI driven society started by its predecessor the Apple corporation.

 

MH: Apple owns Japan?

 

ACS: No, Apple is Japan. Once the Yen collapsed Apple bought the island on the cheap and stopped selling its products to the rest of the world. If you want to use Apple products you have to move to the Apple island and convert to Jobsism. Basically, Apple concluded that they had reached the limits of the classical UI experience. To preserve Jobs' vision Apple needed control over all expects of daily life. Call it technological evolution. Their new slogan is "An Apple a Day for the Rest of your Days".

 

MH: Wow, and what about Europe?

 

 

ACS: After flirting with the idea of a fourth reich, Germany chooses an isolationist path. It is now the Wonka state. Plenty of goods come out of there, but nobody is ever allowed in. The rest of Europe is a mess.

 

MH: And China?

 

ACS: The Chinese are doing ok. Around 2020 we discovered that they were behind the housing bubble and the collapse of the US economy, and that Greenspan was a Chinese agent. But by that point the US military, after a decade of austerity inspired budget cuts, is in such a state of disrepair that there is nothing they can do about it. Outside of Germany and Iceland the rest of the world is at the mercy of China and their economic and military power. That's where I come in. The goal of CSI was to develop time travel technology so that we could travel back in time and fix the great economic policy mistakes of our ancestors. Hindsight replaces stimulus. The project is top secret and funded by the few remaining members of the S&P 50 and the investment bank Goldman Farmorgan.

 

MH: Goldman Farmorgan?

 

ACS: Yes, Morgan Stanley, Jp Morgan, Wells Fargo, and Goldman are merged into one bank.

 

MH: Wow.

ACS:So, Goldman Farmorgan provided a bridge loan for the project with GooGamaZon ventures putting up most of the equity.

 

We code named it TIBET to confuse the Chinese who we knew would do anything in their power to stop this project from succeeding. And we located the primary research facility underneath the abandoned World Cup mega complex in Qatar because that's the last place we figured anyone would look for anything.

 

MH:What is your mandate?

 

ACS: To develop the ability to successfully send someone back in time to stop the collapse of Lehman

 

MH: So Lehman was a mistake?

 

ACS: Not exactly, the stimulus that followed Lehman was the mistake. Lehman was just the excuse. By stopping it we aim to temporarily slow the chinese down and buy ourselves time to fix the real problems.

 

MH: Why not just go back and replace Greenspan?

 

ACS: It's not that easy. Time travel is complicated. We are using an Einstein-Scholes bridge to enter and exit through funding holes in the time based capital structure. We never know when we will arrive, and we lack the power to remove principal actors. We can simply seek to influence, but as Greenspan is an agent for the Chinese that wont work.

 

MH: So how does it work then?

 

ACS: Well, the Googamazon search engine locates funding gaps in the time structure and then send agents in to fill those gaps.

 

MH: How do you fill the gaps?

 

ACS: With Gold from iceland of course. It still has financial value in your time. We structure a swap between two parallel universes, and presto the bad debt is gone.

 

MH: But how do you hedge your parallel exposure?

 

ACS: We don't. If we do our job right our universe will cease to exist, thus we are inherently delta neutral.

 

MH: Is that all?

 

ACS: No there is one more thing.

 

MH: What's that?

 

ACS: We fix the bankers.

 

MH: What do you mean you fix the bankers?

 

ACS:Well, every TIBET agent must deal with your investment bankers. Why do you think we wear these suits?

 

MH: Yes, you are kind of like those guys from the film MIB.

 

ACS: We are MIB's. Men in Brioni, and there is a good reason for that. We need bankers to trust us before we give them them their BONUS back.

 

MH: What? You are going to give them a bonus?

 

ACS: Yes, a bonus. A banker's onus.

 

MH: A banker's onus?

 

ACS: It's a sense of responsibility. We give them their b-onus by taking away their bonus.

 

MH: Ok, i'm confused.

 

ACS: Well,every agent has neuralizer which can be used to wipe memories. Much like the movie MIB except that we use our neuralizer to simply readjust the memory of investment bankers. We don't wipe, we plant powerful suggestions.

 

MH: And how does that work?

 

ACS: We make them believe they don't deserve their bonus.

 

MH: So what?

 

ACS: It's actually a very powerful tool. Once a banker believes he or she never deserved their bonus they become overwhelmed with guilt. They then feel that they have a debt to society that they must repay.

 

MH:How can you be so sure?

 

ACS: Easy, I was the first person this was tested on.

 

MH: You are a banker?

 

ACS: I was an investment banker. That is why I am here today.

 

MH: What do you mean?

 

ACS: I told you I was here to stop Lehman.

 

MH: Yes.

 

ACS: And i told you that when it comes to principal actors in time we can only seek to influence and that we cannot remove them.

 

MH: Correct.

 

ACS: Well then, how do you think i am going to stop Lehman?

 

MH: Convince the government to bail them out I guess.

 

ACS: There is no way for me to change the events of that weekend. There are too many actors involved and too many opposing forces at work.

 

MH: Then, you need to go back in time and convince Dick Fuld to sell Lehman before it is too late. But how are you going to convince Dick Fuld of anything?

 

ACS: (Smiles) Thanks for your time.

 

MH: That's it?

 

ACS: Oh, I almost forgot, one more thing.

 

MH: What?

 

(Agent Clean Slate flashes MH with his neuralizer)

 

ACS: You will remember nothing about the conversation we just had other than the fact that you really enjoyed talking to me.

 

MH: Wow i really enjoyed this conversation….Mr……..

 

ACS: Fuld…..but you can call me Dick.

 

MH: Dick Fuld? You know that's the same name as the former Ceo of Lehman. And you kind of look like him….that must be a tough combo.

 

ACS: Yeah, i know. I get it all the time. They tell me if i was just 25 years younger i'd be a dead ringer for him.

 

MH: Yep. (MH's phone rings) Just give me a sec Dick I need to take this. (MH steps away to take the call)

 

Agent Clean Slate: Ok.

 

(MH returns)

 

ACS: Sorry, Dick that was……. that's strange where did he go?

 

(Agent Clean Slate has vanished)

 

To Be Continued



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
]]> "Netflix; Ignore the Girl in the Red Dress" http://seekingalpha.com/instablog/123608-akram-s-razor/133063-netflix-ignore-the-girl-in-the-red-dress?source=feed 133063 “The Matrix is a system, Neo. That system is our enemy. But when you're inside, you look around, what do you see? Businessmen, teachers, lawyers, carpenters. The very minds of the people we are trying to save. But until we do, these people are still a part of that system and that makes them our enemy. You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it.�- Matrix, 1999
 
 
 
I really am a glutton for punishment. I did everything I could to avoid Netflix in this earning season. I think there might be some 25 companies reporting this week that I know extremely well and could find some way to trade, but for some strange yet compelling reason I feel it’s time for me to revisit this trade and potentially hit it hard. The last time I traded Netflix it was 140$.  It closed on Friday at $182.  Did anything happen over that time period that warranted another 50% rise in the stock? Great earnings, a major industry shift in their favor, a brilliant acquisition? NOPE, none of that for good old Netflix. The stock rose on what is commonly referred to as good old fashioned momentum. Up, up, and away became popular, and Netflix, a short favorite, was a good place to be to make fast money.
 
So, why do I think now is the time to call an end to this momo party?
 
The way I see it there are five reasons to be short Netflix this earnings announcement.
 
 
1)      Material Industry Landscape shifting news in the past couple of weeks that doesn’t bode well for Netflix
 
Amazon.com consolidates Lovefilms- Amazon, a minority equity holder, in the ‘Netflix of Europe’, had always been rumored potential acquirer. So, this is not exactly surprising news to most of the people following this space, but it is now official. This means that Netflix will need to contend with an entrenched and very deep pocketed Amazon if it decides to venture into Europe, and I only expect this combination to get better as Amazon leverages its imdb.com asset to enhance the  Lovefilms user experience. Expansion to Europe was often listed as the next big catalyst for the stock by most momo traders. This deal becoming Official/Headline stuff just hammered that thesis.
 
FCC signs off on Comcast-NBCU Merger- This has been an ongoing and closely watched regulatory situation as the FCC’s conditions to this merger have potential far reaching industry implications. The review process took one year and involved extensive lobbying on both ends. What came out of it was surprise surprise good news for Comcast-NBCU. The ‘conditions’ were for most of us a lot softer than expected, particularly in the on-line video space, were they left a lot of room for Comcast to slow, or depending on how you view things, kill the OVD disruption. (I will say I never really viewed online video streaming as a true disruptive tech because in my eyes the technology infrastructure in the form of vod has been there….it’s really been more of UI phenomena and media conglomerate lack of strategic direction pricing/loophole exploiter than the genuine disruptor it was to rental chains) Comcast is now sitting on a large equity stake in a competing OVD service (Hulu) and controls a huge content empire. The cord cutting hype that was behind Netflix shares in 2010 is now being replaced by a much harsher reality. The companies best possible outcome now remains what I thought it was before,  a very fragmented distribution/content market. The Comcast deal allows  more investors to recognize that the Netflix story of getting content for next to nothing and access to distribution infrastructure for next to nothing was in fact TOO GOOD TO BE TRUE. It’s like exploiting a loophole or a glitch in the matrix, it works right up until the point that it doesn’t. What determines that is largely beyond your control. If OVD’s have to deal with likes of Comcast and Time Warner going forward, the cord free universe dream fades away. Dream stocks without a dream attached often lead to disastrous returns.
 
FCC Net Neutrality- At this juncture I’d say the rules are a Net Neutral for Netflix, though ultimately I am leaning in the direction that they are bad news as the cost of internet streaming relative to traditional bundled consumption is likely to go up which ultimately is an issue for disruptor/switch based model and as we get more details on managed service rules. At the end of the day, OVD’s will have to accept the fact that the only way to get completely around the potential discrimination issues is to build or acquire their own networks.  Anyway, as far as nflx shares go,  this was another regulatory issue that doesn’t exactly favor their long-term model that was resolved over the past few weeks.
 
 
2)      If the first week of Earnings are an indication, Netflix type stocks are not exactly the place you want to be this earnings season
 
Netflix shares are up 257% over 12 months. The stock is currently the best performer in the SP500 over a 1yr period. Those are not under the radar numbers, and going into earnings this could be a serious advantage for short-sellers. Citigroup, Goldman Sachs, and F5 networks were all high expectation stocks that got hammered last week. The latter two on what were respectable reports. A similar but less extreme pattern of stock behavior was observed in the energy, fertilizer, or mineral names that reported last week. Good news was just not good enough for most of these stocks. And remember we are talking about names with fundamental stories that are INTACT and ROCK SOLID. Nobody is questioning the fact that F5 is dominating one of the hottest segments in the networking space or that energy, food, and metals are good places to be. So, if these stocks can get cracked, you need to respect the tape. And what I saw in the tape last week was value/underperforming names drawing interest/ rotation.(ms/ge) If I am shorting a momo, I like to see signs of this type of action in the broader market. The fact that this momo has its own issues is icing on the cake.
 
3)      Analyst sentiment on the name now favors the shorts
 
I don’t usually rely on sell-side analysts for anything more than a temperature check when I am putting on a trade, but I will have to say I have been impressed by the number of analysts who have stuck to their guns and continued to highlight the disconnect between the business model challenges and stock price. The recent industry wide developments have led more than a few analysts to get cautious on NFLX shares which is in sharp contrast to the tape I was shorting into last year. I counted 8 analysts with price targets that are 10%+ below the current share price when I think there were only 2 names in this category last august. This tells me that no matter what nflx reports, the bearish analysts are likely to be growing even more confident in their case and will continue to spin news flow in favor of their longer term bear case on the shares despite the near term business model momentum. Basically, every nflx announcement will now be viewed through an Amazon in Europe and Comcast in US competitive prism along with the typical content cost margins issues. If you’ve been buying based on headlines and the fact that you felt momentum was on your side, this is a cause for major concern.
 
 
4)      This is the perfect time for some shareholder unfriendly Corporate Action
 
Netflix’s cash situation has been going in the wrong direction for the past four quarters. With recent developments in the space, one does wonder what Reed Hastings is thinking. He should be shoring up his balance sheet here and raising some cash for the likely expensive content/network access road ahead. It’s the smart thing to do. I think a secondary to the tune of $500-$750mm for general corporate purposes including acquisitions, content licensing deals, etc should not be ruled out. In fact, I’d be pushing for this if I was advising them.
 
 5) First look at a business model in transition
 
This earnings will be the first time mgmt really has to offer guidance for the transitioning model. Up until now nflx mgmt has had the luxury of cheap content driving streaming while they continued to run their core mail in model. Now, things get a bit more complicated. Nflx is going to be paying big bucks for content in 2011 and at the same time still supporting the mail in dvd model infrastructure. This usually doesn't bode well for margins and might have something to do with the recent dvd que elimination. Mgmt isnt one to do anything to mess with their sub base, so this move really stood out to me as a sign hastings and co want to accelerate the shift to pure digital. Basically, if you are going to spend 500-1bil a year on content you might as well ditch make sure you are completely ditching the mail in model. Mgmt obviously has some accounting room to operate as far as amortizing these costs, but i think it is fair to say it is going to be hard not to give the street a clear picture of what the 2011 nflx will look like tooday, and that their is potential for a very negative surprise as mgmt has chosen to kick this can down the road over the past few quarters. Well, that is no longer an option. 2011 is here, you still have mail in, you will be paying a lot more for steaming content, and one of your biggest sources of content output is up for negotiation. This is what i am looking at and not the q4 numbers. I think everyone on the street will concede q4 will beat expectations on subs and top line.
 
 
Conclusion- Putting these five factors together I have decided to put my hand back in the nflx fire. I also would point out that stock price action, at least from the perspective of a trader who has seen similar behavior in momentum names in the past, favors the bears. The shares are a good 24% above where they were going into the last report, and less than 12% off its all time closing high. I would characterize the trading pattern as almost just waiting for an excuse to fall. By that I mean I expect the market not to assign much weight to the financial metrics that will be reported after the close on Wednesday. This would be consistent with past nflx share price behavior as you could convincingly argue their last two earnings reports were disappointing and yet they were disregarded by the market in favor of  ‘story’ based buying. Well, with the ‘story’ element now a much harder sell overall, and especially at this price point, you do have to wonder what type of earnings report nflx needs to prevent a share decline/crash.
 
Anyway, I would caution anyone that decides to get involved that this is a risky trade, and that my recent history(I was on the other side of the trade in dvd rental days…but that now seems like ages ago) with nflx has been abysmal. The first time I shorted the shares they were 45% below where they are today, though I will say that my instincts told me the price action in the weeks after the july report said to cover and join the herd on their stampede; I have consistently been surprised by the willingness of investors to pile into the ‘story’ without any regard for what one would think are almost plain vanilla gargantuan business model challenges ahead.
 
I will note that I expect the stock to shift into consistent weakness mode after this report. So a low risk way to play this trade would be simply to sell calls if you can or to just wait for earnings and then short. Basically, you hope it doesn’t crash immediately, and you hop on for a longer term correction once you confirm that the shares are incapable of rallying. Normally, if I was approaching a story like this as an outsider who was not familiar with the name that is how I would play it, but in this case I will say I have just a bit more confidence that the nonsense of the past six months will be corrected.
 
Ignore the girl in the red dress, she is a distraction. It’s time to unplug. At least that’s how I am playing this.
  ]]> Wed, 26 Jan 2011 11:16:55 -0500 “The Matrix is a system, Neo. That system is our enemy. But when you're inside, you look around, what do you see? Businessmen, teachers, lawyers, carpenters. The very minds of the people we are trying to save. But until we do, these people are still a part of that system and that makes them our enemy. You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it.�- Matrix, 1999
 
 
 
I really am a glutton for punishment. I did everything I could to avoid Netflix in this earning season. I think there might be some 25 companies reporting this week that I know extremely well and could find some way to trade, but for some strange yet compelling reason I feel it’s time for me to revisit this trade and potentially hit it hard. The last time I traded Netflix it was 140$.  It closed on Friday at $182.  Did anything happen over that time period that warranted another 50% rise in the stock? Great earnings, a major industry shift in their favor, a brilliant acquisition? NOPE, none of that for good old Netflix. The stock rose on what is commonly referred to as good old fashioned momentum. Up, up, and away became popular, and Netflix, a short favorite, was a good place to be to make fast money.
 
So, why do I think now is the time to call an end to this momo party?
 
The way I see it there are five reasons to be short Netflix this earnings announcement.
 
 
1)      Material Industry Landscape shifting news in the past couple of weeks that doesn’t bode well for Netflix
 
Amazon.com consolidates Lovefilms- Amazon, a minority equity holder, in the ‘Netflix of Europe’, had always been rumored potential acquirer. So, this is not exactly surprising news to most of the people following this space, but it is now official. This means that Netflix will need to contend with an entrenched and very deep pocketed Amazon if it decides to venture into Europe, and I only expect this combination to get better as Amazon leverages its imdb.com asset to enhance the  Lovefilms user experience. Expansion to Europe was often listed as the next big catalyst for the stock by most momo traders. This deal becoming Official/Headline stuff just hammered that thesis.
 
FCC signs off on Comcast-NBCU Merger- This has been an ongoing and closely watched regulatory situation as the FCC’s conditions to this merger have potential far reaching industry implications. The review process took one year and involved extensive lobbying on both ends. What came out of it was surprise surprise good news for Comcast-NBCU. The ‘conditions’ were for most of us a lot softer than expected, particularly in the on-line video space, were they left a lot of room for Comcast to slow, or depending on how you view things, kill the OVD disruption. (I will say I never really viewed online video streaming as a true disruptive tech because in my eyes the technology infrastructure in the form of vod has been there….it’s really been more of UI phenomena and media conglomerate lack of strategic direction pricing/loophole exploiter than the genuine disruptor it was to rental chains) Comcast is now sitting on a large equity stake in a competing OVD service (Hulu) and controls a huge content empire. The cord cutting hype that was behind Netflix shares in 2010 is now being replaced by a much harsher reality. The companies best possible outcome now remains what I thought it was before,  a very fragmented distribution/content market. The Comcast deal allows  more investors to recognize that the Netflix story of getting content for next to nothing and access to distribution infrastructure for next to nothing was in fact TOO GOOD TO BE TRUE. It’s like exploiting a loophole or a glitch in the matrix, it works right up until the point that it doesn’t. What determines that is largely beyond your control. If OVD’s have to deal with likes of Comcast and Time Warner going forward, the cord free universe dream fades away. Dream stocks without a dream attached often lead to disastrous returns.
 
FCC Net Neutrality- At this juncture I’d say the rules are a Net Neutral for Netflix, though ultimately I am leaning in the direction that they are bad news as the cost of internet streaming relative to traditional bundled consumption is likely to go up which ultimately is an issue for disruptor/switch based model and as we get more details on managed service rules. At the end of the day, OVD’s will have to accept the fact that the only way to get completely around the potential discrimination issues is to build or acquire their own networks.  Anyway, as far as nflx shares go,  this was another regulatory issue that doesn’t exactly favor their long-term model that was resolved over the past few weeks.
 
 
2)      If the first week of Earnings are an indication, Netflix type stocks are not exactly the place you want to be this earnings season
 
Netflix shares are up 257% over 12 months. The stock is currently the best performer in the SP500 over a 1yr period. Those are not under the radar numbers, and going into earnings this could be a serious advantage for short-sellers. Citigroup, Goldman Sachs, and F5 networks were all high expectation stocks that got hammered last week. The latter two on what were respectable reports. A similar but less extreme pattern of stock behavior was observed in the energy, fertilizer, or mineral names that reported last week. Good news was just not good enough for most of these stocks. And remember we are talking about names with fundamental stories that are INTACT and ROCK SOLID. Nobody is questioning the fact that F5 is dominating one of the hottest segments in the networking space or that energy, food, and metals are good places to be. So, if these stocks can get cracked, you need to respect the tape. And what I saw in the tape last week was value/underperforming names drawing interest/ rotation.(ms/ge) If I am shorting a momo, I like to see signs of this type of action in the broader market. The fact that this momo has its own issues is icing on the cake.
 
3)      Analyst sentiment on the name now favors the shorts
 
I don’t usually rely on sell-side analysts for anything more than a temperature check when I am putting on a trade, but I will have to say I have been impressed by the number of analysts who have stuck to their guns and continued to highlight the disconnect between the business model challenges and stock price. The recent industry wide developments have led more than a few analysts to get cautious on NFLX shares which is in sharp contrast to the tape I was shorting into last year. I counted 8 analysts with price targets that are 10%+ below the current share price when I think there were only 2 names in this category last august. This tells me that no matter what nflx reports, the bearish analysts are likely to be growing even more confident in their case and will continue to spin news flow in favor of their longer term bear case on the shares despite the near term business model momentum. Basically, every nflx announcement will now be viewed through an Amazon in Europe and Comcast in US competitive prism along with the typical content cost margins issues. If you’ve been buying based on headlines and the fact that you felt momentum was on your side, this is a cause for major concern.
 
 
4)      This is the perfect time for some shareholder unfriendly Corporate Action
 
Netflix’s cash situation has been going in the wrong direction for the past four quarters. With recent developments in the space, one does wonder what Reed Hastings is thinking. He should be shoring up his balance sheet here and raising some cash for the likely expensive content/network access road ahead. It’s the smart thing to do. I think a secondary to the tune of $500-$750mm for general corporate purposes including acquisitions, content licensing deals, etc should not be ruled out. In fact, I’d be pushing for this if I was advising them.
 
 5) First look at a business model in transition
 
This earnings will be the first time mgmt really has to offer guidance for the transitioning model. Up until now nflx mgmt has had the luxury of cheap content driving streaming while they continued to run their core mail in model. Now, things get a bit more complicated. Nflx is going to be paying big bucks for content in 2011 and at the same time still supporting the mail in dvd model infrastructure. This usually doesn't bode well for margins and might have something to do with the recent dvd que elimination. Mgmt isnt one to do anything to mess with their sub base, so this move really stood out to me as a sign hastings and co want to accelerate the shift to pure digital. Basically, if you are going to spend 500-1bil a year on content you might as well ditch make sure you are completely ditching the mail in model. Mgmt obviously has some accounting room to operate as far as amortizing these costs, but i think it is fair to say it is going to be hard not to give the street a clear picture of what the 2011 nflx will look like tooday, and that their is potential for a very negative surprise as mgmt has chosen to kick this can down the road over the past few quarters. Well, that is no longer an option. 2011 is here, you still have mail in, you will be paying a lot more for steaming content, and one of your biggest sources of content output is up for negotiation. This is what i am looking at and not the q4 numbers. I think everyone on the street will concede q4 will beat expectations on subs and top line.
 
 
Conclusion- Putting these five factors together I have decided to put my hand back in the nflx fire. I also would point out that stock price action, at least from the perspective of a trader who has seen similar behavior in momentum names in the past, favors the bears. The shares are a good 24% above where they were going into the last report, and less than 12% off its all time closing high. I would characterize the trading pattern as almost just waiting for an excuse to fall. By that I mean I expect the market not to assign much weight to the financial metrics that will be reported after the close on Wednesday. This would be consistent with past nflx share price behavior as you could convincingly argue their last two earnings reports were disappointing and yet they were disregarded by the market in favor of  ‘story’ based buying. Well, with the ‘story’ element now a much harder sell overall, and especially at this price point, you do have to wonder what type of earnings report nflx needs to prevent a share decline/crash.
 
Anyway, I would caution anyone that decides to get involved that this is a risky trade, and that my recent history(I was on the other side of the trade in dvd rental days…but that now seems like ages ago) with nflx has been abysmal. The first time I shorted the shares they were 45% below where they are today, though I will say that my instincts told me the price action in the weeks after the july report said to cover and join the herd on their stampede; I have consistently been surprised by the willingness of investors to pile into the ‘story’ without any regard for what one would think are almost plain vanilla gargantuan business model challenges ahead.
 
I will note that I expect the stock to shift into consistent weakness mode after this report. So a low risk way to play this trade would be simply to sell calls if you can or to just wait for earnings and then short. Basically, you hope it doesn’t crash immediately, and you hop on for a longer term correction once you confirm that the shares are incapable of rallying. Normally, if I was approaching a story like this as an outsider who was not familiar with the name that is how I would play it, but in this case I will say I have just a bit more confidence that the nonsense of the past six months will be corrected.
 
Ignore the girl in the red dress, she is a distraction. It’s time to unplug. At least that’s how I am playing this.
  ]]>