Putting aside the very usual fact that markets quite often turn on news events (the so-called "buy the rumor, sell the news"), there is also something else at work here.

Put simply, the market can quite often interpret the same piece of news on completely contradictory ways, for no particular reason.

Take for instance the Japanese Yen (FXY) and the U.S. Dollar (UUP)

In the past 6 months, the Yen is down heavily. The reason? The Bank of Japan is printing left and right, and as everybody knows, printing money leads to currency weakness. It's thus no surprise that the Yen is imploding.

But wait. The Federal Reserve is doing exactly the same! And guess what, in the last 6 months the U.S. Dollar is up strongly, not down. On precisely the same kind of policy, to boot. So why is currency printing bad for the Yen but good for the Dollar? Well, the rationalization would be that the printing in the U.S. is making the economy better, so the Dollar strengthens. Obviously, any kind of rationalization is just that … a rationalization. The true driver is just one of supply and demand, and on the same piece of news people have decided to sell Yen, but to buy Dollars.

This even applies to stocks

All along its ascent, Apple (AAPL) carried low earnings multiples. Why? Because with each conquest, the fear was that it would be the last conquest, that the summit had been reached. And when the summit was indeed reached (at least for a while), then Apple got punished yet again.

At the same time, each time Amazon.com (AMZN) presented horrid earnings -- and this repeated itself quarter after quarter for two and a half years - the posture was different. The posture was always "well, yes, these were horrid, but they're investing and soon they'll be producing huge earnings!". Never mind that just getting to where Amazon.com was during 2010 would already be like climbing the Everest.

Not just a game of expectations

The first thing someone would say here was that it's all a game of expectations. That, too, wouldn't quite capture it. Amazon.com's expectations always went down along with earnings. Apple's mostly went up. Plus nobody really believes the Federal Reserve is doing anything to build a sustainable future, or Bank of Japan for that matter (but at least there the currency implodes).

Demand and supply, allocation

Whatever the reasons, it all comes down to demand and supply for the assets. That's pretty obvious. But what dictates demand and supply is the allocation that all investors want to any given asset. That allocation can be influenced by fundamental factors where news would be relevant, but it can also be influenced by what investors think other investors will do in those assets.

This perhaps gives credence to the phrase "you have nothing to fear but fear itself". The reason why the Yen drops is because everybody dumps it. The reason why the USD climbs is because people don't dump it, at least not yet. At least until they fear others might dump it themselves.

In the markets, this applies to almost everything and can explain why everything is dandy regarding Greek and Portuguese debt one day, and nobody wants to touch it the next day. The reasons not to hold it -- the news saying one ought not to hold it - were certainly well-known years ago. But as long as others hold it, nobody sees a problem in doing likewise.

This is perhaps something which should be kept in mind when holding, say, U.S. Dollars or Amazon.com stock. The reasons not to hold those are well-known now, but since others are still holding, nobody has a problem with them. This won't last forever.

Conclusion

While taking place, many news can be used by the market to run either way. Indeed, the same piece of news can be used to run both up and down. But at some point, if a given development has deep fundamental implications, it usually ends up having an effect. This effect usually comes when those, sedated by the others' willingness to hold a given asset, see such willingness melting away.

Disclosure: I am short [[AMZN]]. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

But this article is not really on how expensive the bitcoin has gotten, or how they might be some kind of alternative money or something like that. Instead, it's on something much more amazing. It's about how bitcoin showcases the incredible strength of Capitalism.

Mining bitcoin

To produce bitcoin, a user must solve a complex algorithm. Also, this algorithm gets increasingly difficult to solve.

To solve this algorithm, programs were first conceived which ran on a computer's CPU (Central Processing Unit).

Then, as people sought ever more efficient and faster ways to mine, miners started using the massively parallel power of GPUs (Graphical Processing Units) typically used for gaming to solve the bitcoin algorithm. This allowed for an order of magnitude improvement in speed and efficiency in mining bitcoin.

Afterwards, the more enterprising miners turned to using FPGA-based (Field-Programmable Gate Array) systems. These are systems which use ICs (Integrated Circuits) which can be configured after manufacture for a given application. They turned out to be an order of magnitude faster than GPUs.

However, it didn't stop there. A few even more enterprising companies went even further. They designed and produced systems based on ASIC (application-specific integrated circuits) chips. That is, these companies went as far as using chips designed specifically to handle part of the bitcoin algorithm! Why? Again to get more speed and efficiency. ASICs turned out to be as much as an order of magnitude faster than FPGA systems.

The power of competition

Given a task which was already being handled by fast computers and a money incentive, the bitcoin community, through sheer ingenuity and the clever use of technology, accelerated the process of generating bitcoin at least 1000 times.

Such is the power of Capitalism and competition. It's this power that's at work every day in every sector that's open to competition.

Conclusion

More than being an alternative form of money or a safe asset, bitcoin is a display of the power of competition and the fruits it can bear when there's a decent monetary incentive.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

This decision by Portugal's Constitutional Court might lead Portugal's Government to call it quits. The Court's decision will mean that the Government would have to drop several measures affecting the country's best-paid pensioners. This in turn would mean that other cost-cutting measures or tax increases would have to be found.

This development has had little media exposure outside Portugal. Tomorrow, the Government will convene after the decision is known today. So it's possible that the government could fall during the weekend, possibly prompting elections.

This, in turn, could have a negative impact on the Euro (FXE) and maybe on the equity markets as well. I must say, however, that I'm broadly positive on the Euro, and regarding the equity markets after a session like today's -- which opened with a gap down - the odds are 2/3rds favorable for a gap up on Monday.

Conclusion

In a little-known development for those outside Portugal, Portugal's Constitutional Court will announce its decision regarding the constitutionality of Portugal's 2013 Budget in a few hours' time. This might lead to Portugal's Government calling it quits over the weekend.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Weird, isn't it?

Yesterday, again, a similar story hit the web. Martin Bekkelund, a Norwegian blogger, tells the story of a friend of his whose Kindle and Amazon.com account were blocked and all the content she had bought was erased and kept from her. Martin shows the Kafkaesque exchange of e-mails between his friend and Amazon.com's customer support, where basically Amazon.com says his friend's account was connected to some other account which had done some kind of wrongdoing and as such his friend's account was being wiped clean.

This story is now going viral in all sorts of places, from the media to Facebook and seems likely to present a significant public relations nightmare for Amazon.com. Once again, customers are being exposed to the theory that when they buy e-books from Amazon, it's more like they're renting than owning the books, since at any point Amazon.com seems able to wipe the books from under the customer's nose.

Likely motive

Regarding this particular case, it's being speculated that the likely motive stems from Martin's friend, Linn, also being a Norwegian living in Norway, but buying books from Amazon.co.uk. It's speculated that there might be regional copyright issues, and thus that Amazon.com is wiping out the account to keep itself from facing those issues. It's impossible to tell, though, without Amazon.com straight out stating it.

Other issues remain

If Amazon.com can wipe out anything that's in its accounts or Kindles even if people have bought it fair and square, then the question beckons. What about the cloud? Increasingly Amazon.com is incentivizing the use of its cloud for storage, including free storage for any content bought from Amazon.com. But that leaves customers exposed to Amazon.com's arbitrary deletion of content. This case might thus be seen as a deterrent towards relying more extensively on cloud storage.

Competition

This snafu going viral might present a chance for Barnes & Noble (BKS) to take some market share in the e-book market, if it can credibly promote the thesis that no such event could take place with its own Nook device. This seems somewhat similar to Nokia trying to capitalize on Apple's Mapgate.

Not the only snafu

As I've said recently, Amazon.com seems like a gusher when it comes to news, particularly negative news. Predictably, the viral snafu above is not the only ongoing snafu in the last couple of days. AWS is again having trouble, after having had several outages in the last year. Increasingly, AWS' reliability image is taking lumps, in a field - the cloud - where reliability is paramount, especially for those businesses whose web presence is the entire business.

Amazon now says library is accessible

In the middle of this PR fiasco, Amazon.com is now indicating that having a suspended account should not restrict access to one's library. Also, Martin's friend says she has gotten access to her account again. Amazon.com seems to have reacted quickly to the building momentum on this particular story.

Finally, what's with all the rumors?

In just the last week, we've had rumors of Amazon.com buying Texas Instrument's mobile SoC business, Amazon.com buying a Brazilian bookseller and Amazon.com buying British online clothes retailer Asos. If these deals were all to become true, Amazon.com would have to put up $5 billion or more. But above all, it's weird that so many of these rumors are cropping up all at once, and this on the heels of Amazon.com actually buying its headquarters for $1.16 billion. It's not like Amazon.com was swimming in cash, either, with its current ratio already approaching 1 in the last quarter.

Conclusion

Again, Amazon.com generates a couple more negative news. It's quite amazing to see a company that not only regularly manages to produce bad press, but also shows deeply declining earnings and imploding earnings estimates. And Amazon.com does all this while carrying a $106 billion market capitalization and a forward 2012 P/E of 343. At this point the only phrase that comes to my mind is "what could ever go wrong?".

Anyway, Amazon.com continues to have huge downside. It's not going to trade at 300 times earnings forever and there aren't many reasons to believe earnings will manage to turn strongly upwards, not with Amazon.com embroiled in low margin businesses while facing every tech giant simultaneously and trying to beat those in their own playgrounds.

Finally, all the acquisition rumors - unrealistic as they seem - might still portend the kind of hubris that not only can make Amazon.com stumble and fall, but can actually risk its very existence.

Disclosure: I am short [[AMZN]]. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

So what did Ben Bernanke do? He did his very best so that Barrack Obama gets elected instead.

He put the printers on full speed, helping the stock market rally and thus increasing Barrack Obama's chances of winning the election.