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Leftfield

Leftfield
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  • Better To Risk Worse Recession; Recovery Compounding Matters Far More [View article]
    The article well states the fallacy of the crony capitalist efforts to save incumbent elites and politically favored interests from any failure at the expense of the taxpayer balance sheet since it has clogged the economy with so many inefficient players and false signals, that genuine entrepreneurship cannot rise re-invigorate the economy with any confidence.

    If domestic businesses cannot ascertain the latest inside information from the monetary and political manipulators or receive direct government checks, they cannot invest with any confidence on Main Street where demand suffers anyway as the whole process has business formation and self- and private employment is at record low levels.

    This is not surprising as interest rates, proliferating rules and the eroding value of the fiat currency become more engineered from the top than ever leaving uncertainty since 2008 unabated as government debt and obligations tower larger and the endlessly proclaimed and absurdly exorbitantly financed "recovery" now clearly lags any more normal results that would have bounced off a deeper but less-manipulated dip.
    Aug 1, 2014. 11:24 AM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: Condensate Leaves U.S. Shores As Industry Demands Export Guidelines [View article]
    gnnpa - Read "eBay: A Short Idea On PayPal's Upcoming Woes" by AltonRa Partners on SA today for an alternative view on Paypal's prospects.

    Paypal grew mainly via millions of captive customers on Ebay and that management has a record of seeking short term profits at the expense of small sellers, a lack of vision and of clobbering unlucky customers who have stumbled into it's sights by seizing their Paypal accounts without respecting their rights. And David Marcus, Paypal CEO, was recently hired by Facebook, a company whose management culture is far more attuned to freethinking ideas about the future possibilities of IT.

    Ebay's marketplace has been stunted by CEO John Donahoe's management allowing Amazon and now Alibaba to equal or exceed it's size and Paypal faces lots of hurdles and questions about whether or not it will split from Ebay and whether or not they really have what it takes to outcompete in online payments as many other larger players loom who have the clout and innovative skills to succeed and possibly prevail in that arena.
    Jul 31, 2014. 10:14 AM | 1 Like Like |Link to Comment
  • How Do You Like Them Textiles? [View article]
    Looks like Amazon has stuck it's toe into too many businesses even as it benefited disproportionately because while so many ZIRP-fueled Bernankebucks have been available to drive financial asset prices higher, Amazon's "story" has been successfully sold as representing the "future."

    Shorter term, the market functioned as a voting machine as enough investors have bought Amazon hype and sent it's stock skyward for several years despite a lack of earnings and forward prospects in it's proliferating and increasingly competitive areas of business, but it appears increasingly likely and imminent that it's valuation when the market acts as a weighing machine must be far lower.
    Jul 29, 2014. 08:33 AM | 4 Likes Like |Link to Comment
  • Beyond Gallup [View article]
    Problem for average US working people is that the more they fall behind, the less the establishment cares to issue statistics or policies that are relevant to their actual experience.

    Policymakers and academics who seem to exist primarily to justify and solidify the widening gap in the status quo enjoyed at the top are well-supported by the conventional endlessly massaged statistics they issue as well as a increasingly centralized MSM all of whom ignore fast-rising actual costs of living while finding no issue with conflating the low-wage and part-time employment opportunities of today with the high-income jobs lost while ignoring weakness in total employment and $trillions of mounting public debt, to maintain a narrative of "recovery."

    The declining state of the diminishing US middle class particularly in the vanishing privately employed sector, has become solidly perpetuated by a status quo that that features an upper tier that has never had it better and which finds no shortage of willing allies in politics, academia and media who demonstrate a clear willingness to follow the money at the expense of objective truth, and this leaves most working middle Americans increasingly far behind and forgotten.
    Jul 28, 2014. 08:58 AM | 2 Likes Like |Link to Comment
  • The Amazon.com 'Come To Jesus' Earnings Report [View article]
    The scope of Amazon's accounting deception combined with the level of delusion and potential financial loss encompassed by it's stock valuation has the potential to end in an Enron-type scandal.

    When this latest financial asset bubble market goes south when the supply of Bernankebucks slows it's rate of increase, the greatest losses will be suffered by highflyers whose valuation cannot withstand sober scrutiny nor an even weaker economy. There will then be plenty of angry investors and grandstanding politicians and DA's to examine the likes of Amazon for just the accounting shenanigans described in this article.
    Jul 25, 2014. 09:38 AM | 12 Likes Like |Link to Comment
  • The Problem Is Not Debt? [View article]
    "Also, while there was indubitably outright fraud, one cannot forget that those loose lending standards were there because of governmental policies that were conducive, if not encouraging, to this."

    Why the either/or interpretation of government/lenders? Both are partners in crime who have worked together, particularly since the inception of the Federal Reserve, to enable each others' grandiose ambitions. The Federal Reserve institutionalized the insider banker looting of the American currency and economy while the federal income tax, the Fed's evil twin passed as a quid pro quo, permitted the buildup of the monstrous omnipresent US government that is everything the Founders warned us against replete with worldwide empire.

    Coercion and special advantage organized on a massive scale is the hallmark of both multinational corporations/TBTF Wall Street and Washington who watch each other's back and make sure no important participants from either side of this same coin ever face personal or criminal consequences from their operations.
    Jul 25, 2014. 09:20 AM | 4 Likes Like |Link to Comment
  • A World Without Consequences [View article]
    Lack of principles and accountability at the top, supported by voters too many of whom are on the take themselves, is certainly stretching credulity and irresponsibility to new levels while consequences are postponed until another far worse day of reckoning cannot be avoided.

    But as sufficient numbers of beneficiaries of the present putrescent order are finding themselves sufficiently recompensed to support the status quo and all it entails, their party seems unlikely to end until consequences strike in the only place that seems to matter, financial reversal.
    Jul 24, 2014. 02:55 PM | 2 Likes Like |Link to Comment
  • The Stock Market Has Reached "A Permanently High Plateau" -- If The Fed Does Not Mess Up Again [View article]
    Naw, the ability to project sincere phoniness while advocating falsehoods is a gift that runs deep and it has never been a more important qualification than for key advocates of the public, fiscal and monetary policies we have now. It appears doubtful that many of them have the insight to deviate from the party line even in private.

    Of course, the top rung has never been more profitable vis a vis the rest of society than now and both are heading in opposite directions, so their incentive to conform to the conventional lies is greater than ever.
    Jul 24, 2014. 02:26 PM | Likes Like |Link to Comment
  • The Stock Market Has Reached "A Permanently High Plateau" -- If The Fed Does Not Mess Up Again [View article]
    "This is the inverse of 'The Death of Equities' article, now seen as the perfect time to go long equities."

    Yes, bringing up a reprise of Irving Fisher's immortal "permanently high plateau" assessment from 1929 and applying it - seriously! - to today's Fed and debt-pumped equities casino using cherry-picked supporting data only, is best seen as a ringing of the bell near the top.
    Jul 24, 2014. 02:19 PM | 3 Likes Like |Link to Comment
  • What We're Reading This Morning — July 23, 2014 [View instapost]
    Thanks for some most interesting and worthwhile reading.

    Brief, too!
    Jul 23, 2014. 01:03 PM | Likes Like |Link to Comment
  • Making The Rich Richer [View article]
    Rolling Stone magazine article in 2009 by Matt Taibbi referring to Goldman Sachs (NYSE:GS), the world's most powerful investment bank: "A great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

    Macro Investor - Yes, we should worry about giant squids.
    Jul 22, 2014. 06:04 AM | Likes Like |Link to Comment
  • The Fed's Rocket To Nowhere [View article]
    The herd assumes Treasuries are "risk-free" and are thus sure to remain the asset of choice in any "flight to safety" and will that they will only gain in value if the economy continues to tank even though that will result in an even more ludicrous level of supply.

    Tank it does, on Main Street during this pathetic statistical "recovery" bought by the most expensive public debt-fueled "wealth effect" ever devised. As the world has been flooded by unprecedented Treasuries and other Western debt yet bid this paper to it's highest levels ever along with the obvious junk, little attention has been given the increase of risk that goes by definition with excess supply which are claims which the issuers are expected to pay.

    This (payment of interest, let alone principle) becomes impossible short of printing even more fiat currency (Quantitative Counterfeiting) when "recovery" fades which at some point interest rates will rise rather than fall during the next economic dip due to an even more grossly excessive supply of debt and a belated recognition of a national solvency crisis.

    At some point given the hopeless addiction of Western politicians to the vastest Tulip Mania of all time, sovereign debt issuance, the teaser rates on public debt to finance parasitism, paper profits and elite bailouts at the expense of productive enterprise will expire and the paper issued to finance this, Treasuries, for the most grandiose of all Ponzi schemes will head towards it's true, far lower, value.
    Jul 21, 2014. 08:25 AM | 2 Likes Like |Link to Comment
  • eBay Has Its Positives, But Don't Buy It Just Yet... Here Is Why [View article]
    "A lot of the "potential" that many speculators are claiming Alibaba has to significantly alter the current system is over-blown."

    What part about Alibaba charging 3-4% fees as compared with Ebay charging small sellers 10% plus 4% for using Paypal which is required, is over-blown as an advantage to sellers? It's actually simple: Ebay and Amazon have become hooked on massively overcharging for their services to pad management bonuses and have left the door open for another site to charge at the level Ebay once did when it expanded to become the once-dominant site in e-commerce. It's not complicated how they relinquished their competitive advantage via excessive charges and destructive rule-changes.
    Jul 20, 2014. 06:25 PM | Likes Like |Link to Comment
  • eBay Has Its Positives, But Don't Buy It Just Yet... Here Is Why [View article]
    "Perhaps the company is actually a strong company, but unfortunately structured in a way that cannot allow management to realize its full potential."

    The problem is an upper management culture that is addicted to short-term fixes for quarterly bonuses and which is utterly out of touch with and alienated against it's natural core constituency and customers - small sellers.

    Technologically Ebay has always been a day late and a dollar short on it's site (it's not in Amazon's league) and likely with Paypal as compared with competitors and with possibilities that Paypal could facilitate such as the vast potential for serving customers via reducing transaction and currency conversion costs perhaps through an e-currency. No, it is mostly left to others more enlightened to carry out worthwhile endeavors that genuinely serve customers rather than the focus on the overcharging that is CEO John Donahoe's core business strategy.

    Viral internet support and far greater success overseas were easily within Ebay's grasp but for the antipathy Donahoe brings to small sellers who are recognized as failures by definition to Ebay and thus carelessly alienated and cast aside. This has created an amazing and entirely unnecessary culture clash that has hobbled one of the most obvious and successful cash cows of all time - the online Ebay marketplace - and it's growth to below the rate of online commerce generally.

    If CEO John Donahoe is replaced, there could be a serious chance yet for Ebay and Paypal to present an investment opportunity with real possibilities, but until then Ebay will continue to wither as compared against competition which it once dwarfed while focusing on it's misguided efforts to ape Amazon and in finding new ways to overcharge it's customers rather than better ways that enable them to succeed in a relationship of mutual benefit.
    Jul 20, 2014. 11:16 AM | 1 Like Like |Link to Comment
  • The Counterfactual Case Against ZIRP [View article]
    Nice summation of many factors that constitute the distortion of signals that ZIRP provides markets that gives insider participants perverse incentives to game the system for personal short term paper gains that create no wealth or value outside the small circle of these beneficiaries. And clearly the "wealth effect" that has benefitted the wealthy so disproportionately has not trickled down to Main Street which remains comatose.

    Many paper positions will be unwound forcibly under more normalized conditions and it is seen who has been swimming naked. And leverage will be found to have been used more than ever by Wall Street to magnify their gains in this artificially low interest rate environment that will dwarf the excesses exposed in the 2008 meltdown as is clearly evidenced by the record margin debt that is one of the props to equities now.

    This doesn't even address the use of Quantitative Counterfeiting to keep ZIRP on track. And when ZIRP teaser rates expire, governments spending and obligations will be found overcommitted to say the least, which will create unprecedented havoc at just the wrong moment since the gross misallocation of capital is a hallmark of Western governments on a grander scale than ever before given record low rates for Treasuries and even lower rates for Greek and Spanish bonds LOL.

    ZIRP has been a fraud and it facilitates fraud by obliterating legitimate economic signals while benefiting the few and enabling governments to bloat via unprecedented deficits while private jobs and productive wealth creation languish. Eventually it will dawn on enough participants that no viable stream of income or assets is backing much of the record mountain of debt issued, which will create an unwind like no other even as the devastated taxpayer balance sheet and unmerited "confidence" in fiat scrip no longer provide cover for even more extravagantly "extraordinary" measures.
    Jul 18, 2014. 08:10 AM | 1 Like Like |Link to Comment
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