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Ben Bush

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  • More on the Netflix (NFLX) - Dreamworks Animation deal: The partnership between the two media players calls for 300 hours of original programming and appears to be a deeper commitment by Netlflix toward children's programming. Though Netflix let a deal for content from Viacom's Nickolodean expire early this year, it now has Dreamworks and Disney (starting in 2016) supplying it with content for kids. Financial terms weren't disclosed. NFLX +1.4% premarket [View news story]
    Netflix may not even exist by 2016. These deals are all pie in the sky! The company's cash flow is so largely negative, they need new subscribers in order to pay for future commitments. What a great business model.
    Jun 17 02:42 PM | Likes Like |Link to Comment
  • Netflix Does Its Tech Homework [View article]
    The cloud and expertise are not even mentioned as part of their business model. This is all part of the hopium in NFLX. Liabilities are constant and increasing as current and non-current content as an asset are declining in value.
    Aug 1 10:00 AM | Likes Like |Link to Comment
  • Netflix Does Its Tech Homework [View article]
    Hard to be a cloud company when they rely on Amazon Cloud services to implement their business. Even harder to be a cloud company when content is obsolete and carried as an asset at cost against an off-setting liability of an equal amount. They have purchased an item for debt and believe that item is worth the same amount as the debt. Seems to me the real estate market has learned that items purchased with debt do not retain value.
    Jul 31 02:01 PM | 3 Likes Like |Link to Comment
  • Online Streaming: Netflix's 'Magic Pill'? [View article]
    Netflix probably enjoyed all of the additional viewing hours because a large part of the country was suffering from a heat wave and needed something to occupy their time while sitting at home. They took advantage of the promo offers instead of venturing out in the 100+ heat. I bet as temps start to cool off, the promos do not turn into subscribers, and viewing hours drop dramatically.
    Jul 11 04:11 PM | 1 Like Like |Link to Comment
  • Watching the USD Drop? Here's What You Should Really Be Watching [View article]
    The real war is not being waged by soldiers in Afghanistan, Iraq, or in the Middle East…the real War is a Trade War being fought in the currency markets. “The U.S has been trying to avoid a liquidity trap, and the best way to prevent that, is not to let it happen in the first place.”
    © Eric Janszen itulip.com
    The Federal Reserve / Treasury have many weapons to prevent this from occurring.
    How to avoid a liquidity trap
    • Expand the monetary base (official orthodox)
    • Run fiscal deficits (official orthodox)
    • Reduce long-term interest rates (official unorthodox)
    • Buy private assets (official unorthodox)
    • Depreciate the currency (unofficial)
    © Eric Janszen itulip.com
    The ultimate weapon at the Fed’s disposal is to allow for the currency to devalue (either by flooding the market with dollars or sell side intervention). This causes inflation expectations to rise as interest rates are kept close to zero, people use the dollar as a carry trade (borrowing in dollars (shorting to hedge currency risk) and buying / chasing assets with higher returns; i.e. stocks, commodities, higher yielding currencies. In the U.S. this raises the value of all assets as the dollar depreciates, yet lowers the standard of living domestically. It also makes U.S. manufactured goods cheaper, allowing companies to generate earnings.
    There has been much talk of replacing the U.S. dollar as the world’s reserve currency and an impending dollar crisis whereby the dollar crashes to new lows. This ironically benefits the bailout of the U.S. since inflation is exactly what the Fed would like to achieve since this raises the value of dollar denominated assets above the debt levels incurred on those assets, this dramatically improving the balance sheets of all the financial institutions.
    This unofficial currency devaluation would produce a runaway stock market (March 2009 – present), higher commodity prices (gold, crude, silver, grains), and hopefully a turn real estate prices.
    Bernanke and Geithner repeatedly say the official U.S. policy is for a strong dollar; though the dollar is down over 15% since March 2009.
    Will the rest of the world, especially China allow the dollar to drop? This is why a real trade war is brewing in the currency markets. If the dollar gets weaker, other countries will not be able to run positive trade surpluses with the U.S. We have witnessed a number of interesting events in the last couple of weeks 1) Brazil has imposed a tax to prevent outside investment (read dollar carry trade) 2) An article reporting that the IMF is concerned about asset prices being pushed up in Hong Kong by the dollar carry trade 3)A steel trade war with China.
    China is becoming the 800 pound gorilla, and everyone is afraid they and the rest of the world will dump dollars or create some other reserve currency. This is exactly what the U.S. hopes will happen, and everyone is aghast that the dollar will lose its role in the world. BUT let’s look at another plausible outcome that would benefit China and the rest of the world. If instead of dumping / selling dollars they began to buy / hoard them. Since China in particular has the largest stock pile of dollars, this would cause a massive short squeeze in the U.S. dollar causing the carry trade to be unwound an U.S. equities, crude, and commodities to collapse. In the end China would hold most of the dollars as prices collapsed in the U.S. due to real deflation / deleveraging. This would also keep their products cheaper. But the biggest benefit would be the ability to buy U.S. assets for the pennies on the dollar with their huge surplus of $s due to the resulting collapse of both residential / commercial real estate as well as financial assets. Has China allowed for the world to be short the dollar via the carry trade? Have they actually encouraged the media to bash the dollar and create another world reserve currency? If the dollar crashes who would benefit the most? The U.S.!!! If the dollar turns and catches the whole world in a short squeeze, the one with the most dollars at the end of the day benefits the most. China!!!
    The U.S. government knows the worst outcome is for asset values to fall again, for as Buffett so aptly states, “When the tide goes out, we see who is swimming without trunks.”
    China is the obvious 800 pound gorilla in this scenario, but does anyone believe the rest of the world is going to allow the U.S. such an easy out by devaluing the U.S.?

    What to watch for: 1) A move in the U.S. $ above 76.70 would cause a massive short squeeze 2) Crude Oil would drop to below $50 / barrel 3) Gold would be down over $50-$100 in a couple of days 4) U.S. financial institutions would see their books severely impacted (much lower prices). The world is very crowded with the dollar carry trade, and U.S. government’s intention to depreciate the currency to inflate asset values. What institution / person would not borrow dollars for virtually nothing and buy a higher yielding asset? It is akin to being given money to buy everything that is going up. The trade has worked well, but what happens when it reverses? Who benefits?
    This is the real war that is upon us.
    Nov 10 10:48 AM | 15 Likes Like |Link to Comment
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