Friday 31 July 2020
A First Look At Four Big City Hot Properties With Spectacular Views - Forbes.
Millions face economic and social disaster as Wall Street celebrates - WSWS. The inflation that boosts the stock market and impoverishes workers is the logical conclusion to low interest rate policies.
On Twitter: Liz Ann Sonders @LizAnnSonders: "Except for tech sector, buybacks have been virtually nonexistent in past 3 months @SoberLook @DeutscheBank": chart.
Olivia de Havilland, star of Hollywood’s “Golden Age,” dead at 104 - WSWS. Born during the first world war, that is a long life.
Spain sets temperature records, UK sees hottest day of 2020 - Phys.org. "San Sebastian on Spain's northern coast witnessed 42 degrees Celsius (107 degrees Fahrenheit) on Thursday—the hottest temperature there since records began in 1955, the national weather agency said."
A number of US companies concentrate on the short term boosting of their share price through dividends and share buybacks. Some borrow more to buy back shares, which reduces the shareholder equity value (NAV = net asset value). Total investor return consists of growth + dividend or share buybacks. The policy works well as long as the growth continues. When the economy weakens, the growth component disappears, and profits are under pressure, it is only the equity value per share that provides a support level. That equity value is now a fraction of the share price.
For the NAV per share to increase more than the profits, shares should be bought back when the share price is less than the NAV. Buying back shares when the share price is above the NAV means some of the profits are lost, just like paying a dividend. Unlike a dividend, the shareholders don't see the money either, except as an undefined boost to the share price.
Thursday 30 July 2020
Amazon (AMZN) results: Q2 revenue +40%, EPS from $5.22 to $10.30, price/earnings = $3051.88/$26.01 = 117, price/sales = $3051.88/$639.7 = 4.8. Shareholder equity per share +$25 to $147 (capital + stored profits, 12m profits = $26.01).
Apple (AAPL) smartphones. results Q3 revenue +11%, shares -5.3%, dEPS from $2.18 to $2.58, price/earnings $384.76/$13.15 = 29, dividend yield 4x$0.82/$384.76 = 0.9%, shareholder equity per share -$4.36 to $16.60 (stored value after dividends paid out, including share buybacks). On an earnings yield of 3.4%, after paying 0.9% dividend, they have 2.5% left for share buybacks.
Alphabet Class A (GOOGL), Alphabet Class C (GOOG) results: Q2 revenue -2%, shares -1.8%, dEPS from $14.21 to $10.13, price/earnings = $1538.37/$45.47 = 34, shareholder equity per share +$13.98 to $301.77 (lost money somewhere compared to profit of $45.47).
Facebook (FB) results: Q2 revenue +10%, shares +0.1%, dEPS from $0.91 (still fine?) to $1.80 ($1.76 two years ago), price/earnings = $234.50/$8.19 = 29, shareholder equity per share +$3.21 to $38.36 (lost part of the $8.19 profit).
D. R. Horton (DHI), Homebuilding. results Q2 revenue +9.9%, shares -2.4%, dEPS from $1.26 to $1.72, price/earnings = $66.15/$5.52 = 12, dividend yield = 4x$0.175/$66.15 = 1.1%.
Alexion Pharmaceuticals (ALXN) Biotechnology. results Q2 revenue +20%, shares -2.2%, dEPS from $2.04 to -$4.84, equity -6.9%, price/sales = $105.40/4x$6.55 = 4.0.
California Pizza Kitchen Declares Bankruptcy - Zero Hedge.
The Grifters, chapter 1 – Kodak - Epsilontheory.
Lloyds Tumbles To 8 Year Low As Covid Hit Is Deeper Than Expected - Talk Markets.
Peter Schiff: The Dollar Is Not Just Going Down; It’s Going to Crash - SchiffGold. The fact that people are willing to keep cash investments at 0% interest whilst money is being diluted at 25% suggests they are willing to lose money in dollars. Real wages have declined for decades, and yet workers keep voting for the same politicians.
Kandi launches cheapest EVs in US, $13,000+ after incentives - Electrek. A car is usually a very bad investment, so you want to buy the cheapest. However the survival rate in these small cars after an accident can't be good.
Why TESLA is Losing to AUDI & RENAULT in Europe - Youtube.
On Twitter: CNN Breaking News @cnnbrk: 'Speaking at his funeral, House Speaker Nancy Pelosi says Rep. John Lewis "insisted on the truth in the Congress of the United States" https://cnn.it/3gfVaum' That is very unusual for a politician. The rest of the Congress must have been confused.
On Twitter: Gold Telegraph @GoldTelegraph_: "Central bankers ignoring asset inflation, like": video.
On Twitter: David Rosenberg @EconguyRosie: 'Was it Archie B who sang "didn't need no welfare state..."? Second quarter wages & salaries: -$680bn. GDP: -$2.15tn. Consumer spending: -$1.528tn. But income: +$1.4 trillion. Why? Gov't handouts: +$2.42 trillion.'
US economic output (GDP) relative to the amount of money in circulation (M2 money supply):
Wednesday 29 July 2020
Virgin Galactic Reveals Incredible Design for Its Spaceship — See Inside - Travel + Leisure.
Shopify (SHOP) website developer, Canada. results Q2 revenue +9.7%, dEPS from -$0.26 loss to $0.29, price/sales $1058.45/~4x$5.82 ~ 45. Extremely expensive.
ViacomCBS adds 70 shows to CBS All Access, will keep price the same and rebrand by early 2021 - CNBC. Television broadcasters have a few people deciding on content, whilst Youtube has millions of individuals generating their own unique content.
Visa class A (V) results: Q3 revenue -17%, dEPS from $1.37 to $1.07, price/earnings = $198.58/~4x$1.07 = 46.
PayPal (PYPL) results Q2 revenue +22%, dEPS from $0.69 to $1.29 (non-GAAP $1.07), price/earnings = $184.60/~4x$1.07 ~ 43, price/sales = $184.60/~4x$4.44 ~ 10.4, net profit margin = 24%.
Lam Research (LRCX) Semiconductor Equipment. results Q4 revenue +18% (-9.3% over 2 years), dEPS from $3.51 to $5.06, price/earnings = $360.83/$15.10 = 24, price/sales = $360.83/$67.37 = 5.4, net profit margin 22%.
Equinix (EQIX), Specialized REITs. results Q2 revenue +6.1%, shares +3.7%, dEPS from $1.38 to $1.52, price/earnings ~ $770/~4x$1.52 ~ 127, price/sales = $770/~4x$16.72 ~ 10, price/equity = $770/$118.20 = 6.5, dividend yield ~4x$2.66/$770 = 1.4%. Extremely expensive.
General Motors (GM) results Q2 revenue -53% (Q1 -6.2%), EPS from $1.66 to -$0.56 loss, price/sales = $26.33/~$46.87 = 0.56.
Spotify (SPOT) results Q2 revenue +13.3% (Q1 +22.3%), dEPS from -$0.42 to -$1.91, price/sales = $267.12/~4x$10.13 ~ 6.6.
Spotify says listener habits are almost back to pre-pandemic levels - Engadget. Having people in lockdown with nothing to do is probably the optimum circumstances, and that didn't create a profit.
Ray Dalio Commentary - The Changing World Order: The Big Cycles Over the Last 500 Years - Yahoo Finance.
Unboxing The World's Cheapest New Car Reveals It's So Much Better Than You Think - Jalopnik, Youtube.
The Impressive Engineering Behind The Cheapest Electric Car In The World - Jalopnik, Youtube.
Tuesday 28 July 2020
Eastman Kodak to get $765 million U.S. loan to make drug ingredients - Talk Markets. Was the contract awarded after a public tender process? Less import means less exports.
On Twitter: Peter Brandt @PeterLBrandt: "Two interesting things happened to me today. Got a haircut. Barber told me to buy Gold -- said the Fed is printing too much money. Got a tire fixed. Owner of shop told me to buy Silver -- said the Fed is printing too much money."
Starbucks (SBUX) results Q3 revenue -38%, EPS from $1.12 to loss -$0.58, non-GAAP EPS from $0.78 to loss -$0.58, price/sales ~ $74.64/~4x$3.613 = 5.2, net profit margin was 13.6% in 2019.
On Twitter: Lance Roberts @LanceRoberts: "The market capitalization ratio and the S&P 500 price-to-sales ratio - @yardeni. Uhm...P/S is at the highest level in history on both a forward as well as a trailing basis.": chart.
McDonald's Corp (MCD), restaurants. results Q2 revenue -30%, dEPS from $1.97 to $0.65, price/earnings $201.25/~4x$0.65 ~ 77, price/sales ~ $201.25/~4x$5.025 ~10. They did have a high net profit margin of 29% in 2019, but a price/sales of 10 is extreme.
3M Company (MMM), Industrials. results Q2 revenue -12.2%, dEPS from $1.92 to $2.22.
Want To Escape From America? 12 Countries Where You Can Buy Citizenship (And A Second Passport) - Forbes.
Monday 27 July 2020
Louis Vuitton owner flags June turnaround after sales slump - Reuters. "especially improved in China". Probably because the Chinese are not travelling to Europe and buying there. Revenue was down -27%, and 6 month dEPS down from €6.48 to €1.04. LVMH. The 28 July share price is €382.00, -4.8% on the day.
On Twitter: zerohedge @zerohedge: Robinhood Holders of SLV
On Twitter: Gold Telegraph @GoldTelegraph_: "MONEY PRINTERS GO FULL BRRRRRRRR IN CANADA. WOW! chart. Canadian TV housing shows made the scale of the bubble apparent. The average house price in Toronto is C$1.1M up 26.2% over a year (Zola)
Under Armour executives receive Wells notice from SEC - Reuters.
Researchers identify microRNA that shows promise for hair regrowth - MedicalXpress.
Protecting beta cells against stress may guard against type 1 diabetes - MedicalXpress.
China’s AG600 amphibious aircraft clears sea trial on its way to being used in emergencies and South China Sea - SCMP. How long before China replaces Boeing and Airbus passenger planes? Trump can speed up that process too by restricting Boeing sales.
RV shipments surge as Americans opt to carry home with them to avoid airports, hotels - Reuters.
Australian government sues Google for misleading consumers in data collection - Engadget. Adverts mysteriously appear on websites for products you recently searched for (but made no attempt to buy).
Facebook sues EU antitrust regulator for excessive data requests - Reuters. "The company has since then provided 315,000 documents equivalent to 1.7 million pages to the Commission". EU bureaucracy runs amok again.
A sharp rise in the gold price wasn't sustainable in the past. It usually falls back to form a valley. Given the big increase in US money supply, the US$ gold price could settle at a permanently high level, along with drop in the US$.
10 of the World’s Most Overrated Cities - Youtube.
Sunday 26 July 2020
GM-Related Wuling Hong Guang MINI EV Priced In China From $4,100 - Inside EVs.
On Twitter: The Great Martis @great_martis: "Nasdaq: I'm very concerned." chart.
On Twitter: Jo Jorgensen @Jorgensen4POTUS: ' “Taxation is theft, purely and simply, even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match. It is a compulsory seizure of the property of the State’s inhabitants or subjects.” - Murray N. Rothbard'. It forces the public to pay for services they would not willingly pay for, which is against the principles of a democracy.
Valuation Inflation - Talk Markets. If a government doubles the money supply and distributes it in proportion to the money people have already, and all prices double, it will make no difference to the economy. If there is any economic growth, it is because wages fall behind. US M2 money supply has doubled in 9 years, whilst wages are up 32%.
On Twitter: Value Investor Journal @VJ_Rabindranath: "Before you invest, decide if a business is worth investing because it will last, not because it's doing well right now. -- Warren Buffett". Businesses do not last in the long run, because the products of society changes. Monopolies are especially bad at adapting.
Saturday 25 July 2020
Covid-19 Can Cause ‘Prolonged Illness And Persistent Symptoms’ Even In Young People: Study - Forbes.
Intel’s ‘stunning failure’ heralds end of era for US chip sector - TechCentral. When the US under Trump restricts access to semiconductor products, other countries have no choice but to make their own.
Pompeo’s Surreal Speech on China - The Atlantic. Trump and Pompeo have clearly never seen a scientific publication. Scientists and engineers like to share knowledge to advance technology.
Free money: When government spending knows no limits - Economist.
Friday 24 July 2020
How Not To Buy Gold - Talk Markets.
On Twitter: Otavio (Tavi) Costa @TaviCosta: "Race to the bottom. This is a global synchronized debasement. All fiat currencies headed to total value destruction." chart. That is what makes it difficult to find an absolute reference for inflation, except gold.
On Twitter: Silver Watchdog @Silver_Watchdog: "Who's buying US treasuries?" chart. If the public uses government aid to pay off debt, the government is effectively printing money to pay for debt. The US M2 money supply is $18.4T and total debt is $77.6T.
Wealthy Elites Buy Private Islands To Isolate From "Coronavirus Storm" - Zero Hedge, You still need food and support services like medical. The more remote the location, the more difficult delivery is.
On Twitter: Ron Paul @RonPaul: "The Fed is counterfeiting trillions of dollars. The government has created mass unemployment and is spending way beyond what it takes from us in taxes. While the livelihoods of the American citizens are destroyed, government refuses to shrink."
The Numbers Tell Us That The ‘Economic Recovery’ Is Dead And Businesses Are Failing At A Staggering Pace - Talk Markets.
Fed regulator is fed up with hedge funds’ behaviour - FT.
On Twitter: Lori Shemek, PhD @LoriShemek: "An Astounding Statistic: 200 years ago, the average American ate only 2 lbs. of sugar a year. Today, the average American consumes 156 lbs of sugar in one year. This is equal to 3 pounds a week." Regulations should require that the percentage of sugar be stated in big letters on the front of food containers.
US charges four scientists for hiding ties to Chinese government, including one ‘in hiding at consulate’ - SCMP. It looks like the contribution Chinese students have made to technological development in the US will be coming to an end, and the technological shift towards Asia accelerate. Only 5.5% of US students were international iie, but half were in science, technology, engineering, and mathematics (STEM) disciplines:
From 1 Nov 19: Foreign STEM Students in the United States - Congressional Research Service. In 2016-17 23% of STEM degrees were earned by foreign students. "This percentage is even higher for graduate degrees, as foreign students accounted for 54% of master’s degrees and 44% of doctorate degrees issued in STEM fields in the United States in SY2016-2017".
From 7 Aug 2019: Chinese students and US universities become pawns in the trade war - Nikkei Asian Review: "America clamps down on visas while China urges students to stay away".
China orders US consulate in Chengdu to cease operations in retaliation for Houston closure - CNN.
When Trump used the expression "it is going to be huge", he was referring to a Huge Depression all the time.
Distressed Sale 40 Room 5 Star Boutique Hotel in Mallorca, Spain: "The plans and licenses are all in place the current cost of the Hotel is negotiable at €3.5m with a development cost of €2m the finished project as has been given a valuation of €9.75m by the bank offering a great return on investment"
Thursday 23 July 2020
Amazon Met With Startups About Investing, Then Launched Competing Products - The Wall Street Journal.
On Twitter: Sam Ro @SamRo: "S&P 500 vs. S&P 5 vs. S&P 495": chart. The power of monopolies.
Moderna loses challenge to Arbutus patent on vaccine technology - Reuters.
Tesla sues Rivian for allegedly stealing secrets, poaching employees - CNBC.
Chelsea Handler Recreates Martha Stewart's Viral Pool Selfie — and the Lifestyle Guru Has Thoughts - People.
Lab grown and do-it-yourself: two emerging routes to an artificial pancreas - Horizon.
On Twitter: Jesse Felder @jessefelder: "People are going to re-examine how they view money. You are going to have a marked shift permanently in the propensity and the desire to save, which is not something we are used to in an economy that is normally about 70% consumption." - @DiMartinoBooth. https://bloomberg.com/news/articles/2020-07-22/recession-shocked-savers-rein-in-rates-with-a-20-trillion-hoard". After living on debt, the next phase could be living off government, like all socialist countries.
On Twitter: Daniel Lacalle @dlacalle_IA: "Spain. Hotel stays in June fall 95% from the previous year. A small improvement from May. July and August will be key to see whether the Tourism industry (14% of GDP) survives." chart. Looks like the ideal time for some-one with a lot of cash to buy a cheap hotel in Spain.
Carnival's Princess Cruises to extend some voyage suspensions until December - Reuters.
China harboring military-linked fugitive scientist at San Francisco consulate, FBI says - CNN.
Hyundai Motor second-quarter profit slumps due to weak international demand - Reuters.
In the future will vandals throw stones at the windows of a Tesla Cybertruck to see if it breaks? The demonstration used at the unveiling could have set a bad precedent.
Wednesday 22 July 2020
Whirlpool (WHR) household appliances. investor. Q2 net sales -22%, EPS from $1.04 to $0.55, or ongoing from $4.01 to $2.15, price/earnings = $159.09/?, price/sales = $159.09/~4x$64.47 ~ 0.62, dividend yield 4x$1.20/$159.09 = 3.0%.
On Twitter: backoftheenvelope @backoftheenvelo: "Japan PE ratio 1995-2020. Interest rates asymtotically zero for the whole period, no effect to PE ratio..." chart. An earnings yield of 7% suggest that the stock market did not believe the official inflation rate.
On Twitter: Daniel Lacalle @dlacalle_IA: "Global Debt to GDP will reach new record-highs in 2020. The crisis will lift global debt levels to a new high of 249% of GDP in 2020 (from 222% in 2019) and barely reduce it to 246% in 2021 if we believe in a fairytale V-shaped recovery." chart.
On Twitter: St. Louis Fed @stlouisfed: "Rich countries have had higher levels of education for a long time, but poor countries are catching up. However, increased education for poor countries hasn’t translated to catching up economically http://ow.ly/vxi650AFy0h" chart, chart.
Tesla (TSLA) results: Q2 revenue -5%, EPS from -$2.31 to $0.05, or non-GAAP from -$1.12 to $2.18, price/sales = $1592.33/~4x$29.16 = 13.7. Total deliveries -5% to 90,891, model 3 deliveries +3% to 80,277. All compared to a year ago.
Microsoft Corp (MSFT) software, results: year revenue +13.7% (Q4 +12.8%), EPS from $5.06 to $5.76 (Q4 from $1.71 to $1.46), P/E = $211.75/$5.76 = 37, dividend yield = $2.04/$211.75 = 1.0%.
Opinion: The feared jumbo mortgage debacle is here — thanks to the coronavirus — and ready to pound the housing market - Market Watch. That is why government must prevent asset bubbles by raising interest rates.
Existing-Home Sales Climb in June - Advisor Perspective.
Mars is the latest arena in the US-China rivalry, with both countries launching probes this month - CNN. China’s First Mission to Mars Could Launch This Week - Next Big Future.
Burger King wins dismissal of vegans' lawsuit over Impossible Whopper - Reuters.
On Twitter: Nisar Ahmed @Nisar_Ahmed17: "Pomegranates improve markers of aging, longevity, mitochondrial aging & have proven their anti-aging effectiveness via gut bacteria converted to the molecule 'Urolithin A' contained in the fruit."
New drug targets clots: A potential treatment for heart attack and stroke prevention - Medical Express.
Slack takes on rival Microsoft with antitrust complaint to EU - Financial Post.
The gold price in US$ is going up because the US$ is going down, at least against countries that produce gold. The price spikes don't last, because industrial demand falls. Same goes for dollar price of platinum, palladium, rhodium, iron ore (1 June 2020: Australian Dollar Jumps into June Aided by Surge in Iron Ore Prices and Rallying Stock Markets - Pound Sterling Live).
Tuesday 21 July 2020
Coca-Cola Company (KO). results Q2 revenue -28%, dEPS from $0.61 to $0.41, price/earnings = $48.49/~4x$0.41 ~ 30.
60,000 LG OLED TVs Found To Need Critical Overheating Repair - Forbes.
COVID floors aero suppliers after years of planemaker blows - Reuters.
On Twitter: Holger Zschaepitz @Schuldensuehner: "#ECB balance sheet has hit fresh ATH at €6,332.6bn as Lagarde keeps printing press rumbling. Total assets rose by €13.4bn in the past week on QE. ECB balance sheet now equal to 53% of Eurozone GDP, fresh record as well!" chart.
How Donald Trump Moved Millions From His Campaign Donors To His Private Business - Forbes.
On Twitter: Charl Bester @charlbester1975: "Johnson & Johnson 20 year dividend history. +50years of dividend increases. Dividend King." chart. Johnson & Johnson's dividend grew by +11.7% per year for 39 years, compared to M3 money supply growth of 6.0%. For the last 10 years the dividend grew 6.9% year, compared to M3 money growth of 5.8%. Revenue growth for 2019 was only +0.6%, and dividend yield 2.5%. The M3 has now gone up by 25%, which means with zero revenue growth, the share price needs to fall -90% for the dividend yield to match inflation.
Johnson & Johnson (JNJ), Health Care Equipment. website Q2 revenue -10.8%, EPS down from $2.08 to $1.36, adjusted EPS down from $2.58 to $1.67, dividend yield 4x$1.01/$150.34 = 2.7%.
Should You Pay Off Your Mortgage? - Talk Markets. During a time of high inflation (money printing) the simple answer is no. The value of the home increases with inflation. The home loan is inflated away to nothing. The lenders/savers are the big losers.
Tesla secret project Palladium: new Model S and Model X are coming - Electrek. At $2100 per ounce or $74 per gram, compared to gold $1838 per ounce, they could only use tiny amounts 470g of palladium is equal to the price of a Tesla Model 3.
Coronavirus: EU leaders reach recovery deal after marathon summit - BBC. That appears to be $859B/~$15.6T = 5.5% of Gross Domestic Product. The European Union's GDP (27 countries) of $15.6T in 2019 is lower than the $16.24T in 2008 Worldbank, whilst the Eurozone (19 countries) M3 money in circulation grew 38% over that time (Fred). The Eurozone M3 money supply was €13.79T in May 2020, which is +9.0% higher than the €12.65T of a year ago (FX Empire).
What could possibly have driven populations to get involved in world wars? We are now seeing a glimpse of the poverty and unrest that result from governments' printing of money. To pay for the enormous debt that has accumulated due to low interest rates, a lot of money will be printed, leading to another Great Depression.
Sweden without lockdown, has tested 6.7% of the population for the Wuhan virus, and has had 558 deaths per 1 million people. They are 5th in the world for the highest number of deaths per population size. The US has tested 14.8% and has had 434 deaths per million.
The inevitable fate of corporate bonds; the day comes to show it are emptied bags - Gold Market Girl.
On Twitter: Walter Bloomberg @DeItaOne: "U.S. SMARTPHONE SALES FELL 25% IN Q2, 9TO5MAC REPORTS. In Q2, U.S. smartphone sales fell 10% y/y for Samsung and 23% for $AAPL, with U.S. smartphone sales down 25% overall."
As print journalism struggles, two YouTubers are selling their own-brand magazines on newsstands - Business Insider SA.
Mars Curiosity Rover - Nasa.
Monday 20 July 2020
IBM (IBM), IT Consulting & Other Services. website Q2 revenue -5.4%, EPS down from $2.81 to $1.52, price/earnings ~ $126.37/~4x$1.52 ~21.
Philips (PHIA) website Q2 revenue -6%, EPS down from €0.26 to €0.23, price/earnings ~ €45.58/~4x€0.23 ~50.
On Twitter: Trevor Noren @trevornoren: "Americans aged 55 or older own 75% of US equities, up from 52% in 1990. https://berenberg.de/en/publications/": chart.
On Twitter: John Kemp @JKempEnergy: "GLOBAL BRITAIN: China was the most important destination for U.K. exports in 2018 outside the European Union and the United States": chart. Developed countries mostly trade amongst themselves, because they have made their exports expensive through import restrictions and subsidies. Their economies are likely to decline further as Asia develops.
Commerce Department Adds Eleven Chinese Entities Implicated in Human Rights Abuses in Xinjiang to the Entity List - US Dept of Commerce. It forces China to develop more technology to replace US products, as if the US hasn't lost world market share fast enough.
On Twitter: Callum Thomas @Callum_Thomas: "Insider selling climax h/t @BrightramLLC $SPX $SPY": chart.
Hoarding Cash - Armstrong Economics. Hoarding cash does not make sense at the high rate of money supply growth.
Fox News Hit With Lawsuit Alleging Sexual Misconduct by Top Talent - Hollywood Reporter.
Chinese autonomous driving start-up AutoX wins driverless car permit for tests in California - SCMP.
Why backing housing stimulus in an economic downturn is a safe bet - Real Estate Australia. Housing is one of the reasons the Australian economy has declined since 1975 as shown below. Building new houses contributes to the economy once, and then it becomes a white elephant. The rise in house prices was probably not recorded as part of inflation, thus leading to a housing bubble, and impoverishing young people who don't own a home.
Sunday 19 July 2020
On Twitter: Peter Schiff @PeterSchiff: "Janet Yellen claims we need to extend supplemental unemployment benefits because we need the unemployed to spend. No, we need the unemployed to work. It's the goods and services they help produce that adds value. If they consume without producing its prices that go up not growth."
Steering Towards A Cliff Edge – Chris Martenson - Talk Markets.
The “Frugal” Countries Are Right - Talk Markets.
The policy of lowering interest rates to grow the economy has only created asset bubbles, which have enriched the wealthy asset holders. From 1996 the M2 money supply in green started to exceed interest rates in red, which appeared to result in investors chasing after stocks for inflation protection, shown below as the Nasdaq bubble in 2000 in blue. Interest rates (red) were initially raised during the bubble, but lowered after the bubble popped, whilst money supply (green) increased, which resulted in a housing subprime bubble in 2008 in search of yield. Interest rates were again raised during the bubble, but after 2008 lowered, and money supply increased leading to the present bubble. The situation is far worse now than during the previous bubbles. Interest rates are near zero whilst money supply is growing at 25%. The workers/consumers and savers are being wiped out, and cannot support businesses at their present valuations.
Saturday 18 July 2020
On Twitter: Jesse Felder @jessefelder: "Insider sales by executives last week were up 103% from the same week a year ago. Here are the sales reported Friday over $1 million (via http://openinsider.com)".
Australia beef exports ‘rescued’ after China ban by demand from US, South Korea - SCMP. Once again showing that trade will remain in balance. If China imports more from the US, it will import less from elsewhere. If the US exports more to China, it will export less to other countries.
Coronavirus: keenly awaited dexamethasone trial results confirm life-saving benefits – and risks - SCMP.
Stock markets are not responding to bad economic news, and share prices remain at extreme levels. This is very typical. It is only when markets collapse that investors look at the long term value of a business.
Friday 17 July 2020
Study of Over 1 Million People Finds Intriguing Link Between Iron Levels And Lifespan - Science Alert.
On Twitter: The Damage Report @TheDamageReport: ' “A lot of people don’t know that farmers have to buy seeds every year. They have to buy seeds every year from these corporations. These corporations essentially pit farmers up against each other." - @DDayen, Executive editor for @TheProspect. Buy here: https://buff.ly/3hdYtma' video.
On Twitter: Lisa Abramowicz @lisaabramowicz1: "Foreigner holdings of the U.S. debt dropped to 34%, the smallest amount since 2002: latest Treasury data, via @richwesgoodman": chart ....
.... Lyn Alden @LynAldenContact: "This is common in strong dollar environments. When the dollar becomes strong (blue line), the foreign sector share of Treasury ownership decreases (green line), historically speaking." chart.
Gold Telegraph @GoldTelegraph_: "The Federal Reserve balance sheet = more than 32% of the United States GDP
European Central Bank balance sheet = more than 52% of the EU's GDP
Bank of Japan's balance sheet = more than 115% of Japans GDP
ONLY SOLUTION TO ECONOMIC PROBLEMS ACCORDING TO CENTRAL BANKS: PRINT!"
This increases poverty, which requires more debt and more money printing. What is needed is to report the actual inflation rate, and then to increase interest rates to suppress the asset bubbles. It was always and remains the only solution.
On eve of bankruptcy, U.S. firms shower execs with bonuses - Reuters.
US Advance Retail Sales relative to M2 money in circulation has not recovered. It has declined since 2000 as consumers are impoverished by the money being printed. It also did not recover after the 2009 Great Recession. The Nasdaq bubble occurred in 2000, and the housing bubble in 2008. This suggests that asset bubbles should be suppressed, otherwise workers will pay for it for decades afterwards. The recent increase in money supply is not matched by production, and must lead to inflation in the future.
US Average Hourly Earnings of Employees relative to M2 money in circulation. No matter what people think the inflation rate is, when the money in circulation increases 3x your wages, that is not a good sign.
Employee Wage and Salary Disbursement in $ Billions as ratio of M2 money in circulation has fallen from 1.0 in 2000 to 0.49 now. Most of the recent extra money created was apparently not paid as wages, as can be seen from the drop at the end.
Thursday 16 July 2020
The Rich Just Keep On Getting Richer - Vice.
Netflix (NFLX) results Q2 revenue +25%, EPS +109% to $1.59, P/E = $527.39/~4x$1.59 = 83, price/sales = $343.16/~4x$13.54 = 6.3. On their balance sheet content assets is $25,155M, content liabilities $7873M, and debt $15,794M which increased $3200M. The net profit of 4x $720.2M = $2881 equals the increase in debt. Is the content viewed for more than a year?
On Twitter: bparker @bp_macro: "Replying to @HedgeyeDDale: "No mention of vitamin D deficiencies relating to Covid deaths? A bit surprising, seems to be the hidden variable nobody sees..." chart, chart, chart. Also explains why sunny countries have lower death rate.
Valerie Harper's Four Emmys Withdrawn from Auction After TV Academy Lawsuit (Exclusive) - Hollywood Reporter.
Google to overhaul Gmail in bid to get ahead of Microsoft - TechCentral. If this is going to be another Yahoo, users should start looking for another email service.
Window Swap Lets You Enjoy the View From Other People's Windows Around the World - Travel + Leisure.
On Twitter: Holger Zschaepitz @Schuldensuehner: "Just to put things into perspective: #China data suggest rebound is mainly a result of govt-led interventions, w/industrial production growth running at +4.8% YoY in Jun. By contrast, retail sales growth remained neg at -1.8% YoY. Households seem to remain cautious (MakroMarkets)": chart. This should be compared to the growth in money supply, which was +11.1% in June: Trading Economics. Countries cannot create an economy by printing money.
There is big disconnect between stock market speculators who ignore fundamentals, and the reality of an economy that has already entered a depression.
Wednesday 15 July 2020
Las Vegas casino company Boyd Gaming laying off 6,075 workers in 10 states - USA Today.
28 Million More Americans Could Wind Up Homeless Due To The COVID-19 Pandemic - Zero Hedge.
Will Moderna Beat Oxford To Produce The First Covid-19 Vaccine? - Forbes. "Some worrying news: at the 100-microgram dose, all 15 patients experienced side effects, such as fatigue, chills, headache, muscle pain, and pain at the site of injection — which are considered mild."
COVID-19 Vaccine Front-Runner to Enter Final Stage as Positive Results Get Published - Science Alert.
Clorox: Setting Up For A Decade Of Negative Returns - Seeking Alpha.
Ireland welcomes annulling of EU Apple tax order - Reuters.
Ireland government debt to GDP is down to 59% from a peak of 120% in 2013: Trading Economics.
It's Lies All The Way Down - Talk Markets. How much of the debt he defaulted on was used to build golf courses?
On Twitter: Dan Murtaugh @danmurtaugh: "China helped build the renewable energy world to what it is today with generous subsidy offers. Then it stopped paying them. Now wind and solar companies are stuck waiting for $42 billion in past due payments, and the number is growing every year https://bloomberg.com/news/articles/2020-07-14/china-has-a-42-billion-clean-energy-debt-and-it-s-getting-worse?sref=UXGbB6iF"
On Twitter: Jonathan Tepper @jtepper2: "Overpaying for quality. In 2000, Walmart traded at 40x PE and market cap was $250 billion. Over the next decade, Walmart continued to grow, earnings went up, dividends went up, and everything went well for the company. But stock didn’t pass 2000 peak for another 13 years." chart. When consumers are forced to lower their standard of living, to pay for overspending using debt, they will cut down on the optional spending, after paying for the home loan, medical, etc.
Some people get very excited about new electric cars coming on the market at $35,000 to $70,000. That is still twice the price of the cheapest fuel car (The Cheapest New Cars of 2020). You have to drive a lot to save enough on fuel, and possibly pay for your own solar charger to get cheaper electricity.
US Exports of Goods tumbled in April and is slightly lower in May. This is without considering the value of the dollar in terms of money supply.
US Exports of Goods divided by the M2 money supply. From the 15.5 peak in July 2008 it has fallen to 5.0 in May 2020. If the extra money is used to buy (and sell) goods, it doesn't show yet. Trump has tried to restrict imports, which also limits exports.
Tuesday 14 July 2020
Central Banks have Become Irrelevant - The Market NZZ. The big rise in asset prices, like housing, is left out of the official inflation rate. The population is divided into two: (1) the wealthy who's assets grow at a high rate, but who spends little and (2) the poor who owns few assets, does most of the spending, but wage growth is low, and so are the price of the products they make. The official inflation rate measures the rate for poor people. Money printing (true inflation) makes the poor poorer, and the wealthy wealthier.
The Wealthy Are Leaving Cities For Good - Forbes.
It’s time for investors to stop buying stocks that are ‘stunningly decoupled’ from reality, economist warns - Market Watch.
It Starts: Mortgage Delinquencies Suddenly Soar at Record Pace - Wolf Street.
Delta’s Passenger Revenue -94%. How it Plans to Stay Alive till “Demand Returns.” Confirms United’s Warning About Newly Waning Demand - Wolf Street.
Meatpacking, auto and health care workers take action to protect lives as pandemic surges in US - WSWS.
JPMorgan Chase (JPM), banks, revenue +14.5%, EPS -51%: website. With the increase in the money supply (M3 +18% in April), money flow through banks should increase. M3 increased +75% over 10 years. JP Morgan revenue grew +15% over 10 years. Their share of the money in circulation is declining. Profits grew 92% from 2010 to 2019. Profit margin increased from 15.3% to 30%, a sign of limited competition.
On Twitter: James Todaro, MD @JamesTodaroMD: "If you are wondering who is funding The Lancet with paid advertising, the answer is hiding in plain sight... Wherever there is an anti-HCQ article, Gilead is sure to be nearby." image.
Converting female mosquitoes to non-biting males with implications for mosquito control - Phys.org.
Never fall again thanks to backpack-like wearable robot - TechExplore.
After colleges sue, ICE backs down from student visa rule change - TechExplore.
There is a mostly promotional video streaming service called Amazon Live.
Monday 13 July 2020
Why we are not worried about elevated profit margins - GMO. Increasing profit margins is another sign of incompetent government that does not respond to the creation of monopolies. The S&P 500 profit margin declined in Q1 (revenue -1.4%, earnings -12.6%) and a bigger decline is expected in Q2 (earnings -43%).
On Twitter: Joshua Steiner @HedgeyeFIG: "New York Statewide Local Sales Tax Collections - by Month (Y/Y). March: -3%, April: -24%, May: -32% ...": chart. If the federal government creates inflation by printing the currency, is it obliged to also print money for state taxes?
On Twitter: Liz Ann Sonders @LizAnnSonders: "Younger households have barely seen any growth in net worth over past 20 years, while some older age groups have seen considerable growth @SoberLook @FT @uscensusbureau #ACS": chart.
China Announces Retaliatory Sanctions On Marco Rubio, Ted Cruz And Other Top US Senators - Zero Hedge. Just think of the US and China as Johnny Depp and Amber Heard (Johnny Depp Says Amber Heard Hit Him With "Haymaker" Punch - Hollywood Reporter).
The Fed Is Trapped In QE As Interest Rates Can’t Rise Ever Again - Talk Markets.
PepsiCo (PEP), soft drinks, second quarter: results. No revenue growth for 9 years shrinking relative to inflation, dividend yield $4.09/$134.46 = 3.0% below inflation.
Chipmaker Analog Devices Agrees To Buy Rival Maxim Integrated In Biggest Deal Of The Year - Zero Hedge. More monopolies leading to higher prices.
On Twitter: Sven Henrich @NorthmanTrader: "Average P/E for $SPY: 30.53 - https://wsj.com/market-data/quotes/etf/SPY". The average is deceptive, since most companies are not growing. The small percentage that are growing, are trading at extreme valuations.
It looks like there is a short squeeze going on in the Tesla share price. Vertical moves are not sustainbable, and likely to reverse at some stage in the future. From 5 Feb: Tesla Gigafactory production target was 500,000 vehicles for 2020 (Tesla). The Chinese production of 250,000 gives a total around 750,000. The production capacity of the Gigafactory 4 in Germany is 750,000 at the third phase. So, years from now maximum production is 1.5M. The market cap of $286B (today) is $191,000 per future car. If they make 5% net profit on a $35,000 car, then it will take 109 years to recoup the capital invested. The market for expensive electric vehicles seems limited.
On the FRED chart below, New Zealand's economic output relative to money in circulation declined for at least 31 years (the velocity of money flow). If the money that has been printed only created inflation then this chart represents the real economic output (assumes money supply growth = inflation including asset appreciation, velocity = real economic output). Data is only available up to 2018 because the country has been written off.
Sunday 12 July 2020
On Twitter: David Zanca @DavidZanca: Replying to @LawrenceLepard and @GeorgeSelgin All is well": value of gold in 2020 and 1933.
On Twitter: Not Jim Cramer @Not_Jim_Cramer: "Sunday Comic Strip": chart. The relationship between the Nasdaq index and Federal Reserwe loans could well be linked. The extra money will either be spent or parked somewhere. Asset appreciation like in the stock market means wealth has been created without economic output, which adds to inflation. Governments ommit asset inflation from their measurement of inflation.
S&P 500 earnings set to plunge as the coronavirus batters all sectors — with Wall Street counting on a bounce that may not come - Market Watch.
Get ready for an awful earnings season - CNN.
Saturday 11 July 2020
The Magnificent Six Stocks That Are Gobbling Up Market Share - Linkedin.
Friday 10 July 2020
On Twitter: Mitt Romney @MittRomney: "Unprecedented, historic corruption: an American president commutes the sentence of a person convicted by a jury of lying to shield that very president".
YouTube Removes Video Of Popular EV Owner Explaining Why He Traded His Tesla For A Gas-Powered Car - Zero Hedge. Global BEV & PHEV Sales for 2019 - EV-volumes: "Global plug-in vehicle deliveries 2019 reached 2264 400 units, 9 % higher than for 2018." That was only 2.5% of all vehicle sales - Oica. All sales have declined for a few years a sign of a weakening economy before the Wuhan virus.
Investors See The Writing On The Wall - app.hedgeye.
Chinese stocks are on an incredible run. But going too high, too fast is risky - CNN. Unlike US stock markets, the Shanghai Composite Index has mostly traded sideways, and is back to 2007 levels.
On Twitter: Stare Decisis @MsResJudicata: 'Netherlands, Austria, Sweden & Denmark want Brussels’ proposal to be amended so that "only loans", which eventually have to be paid back, are distributed to crisis-hit economies and "not grants". (France wants free money "grants" from others, and not loans.) ....
.... Netherlands demands that recipient countries carry out sweeping economic reforms to their labour, tax & pension systems. Cash released when govts fulfil their reform promises & the ability to withhold money in case of non-compliance.'
France uncovers 'massive fraud' of coronavirus wage payouts - The Local. Heads must roll.
COVID-19 has increased ‘Broken Heart Syndrome’, study says - Popular Mechanics SA.
UN chief: ‘Coal has no place in COVID-19 recovery plans’ - Electrek. It is replaced by gas, which is a lot more expensive in countries that have coal but no gas. The gas produces no smoke which is required to seed the clouds and cool the planet. The UN should be closed down. It legitimizes dictatorships.
UK Commits "Highway Robbery" Of Venezuelan Gold, Says Academic - Zero Hedge.
On Twitter: CNN Breaking News @cnnbrk: "Michigan Gov. Whitmer orders that face coverings be worn in all indoor public spaces, and orders businesses to refuse service or entry to anyone not wearing a mask https://cnn.it/2W6oFH6": photo. Did she not wear a mask when she made the announcement?
13 YouTube Channels We Geek Out Over - Wired.
Thursday 9 July 2020
Monetary and Fiscal Policy Won’t Help - Daily Reckoning.
COVID-19 Cases Are Rising, So Why Are Deaths Flatlining? - The Atlantic.
Walmart is about to give Amazon Prime a serious run for its money - CNN.
Record Foreign Demand For Spectacular 30Y Treasury Auction - Zero Hedge. It doesn't make sense given the growth rate of money supply. The nominal dollar value of foreign debt in blue has levelled off since 2013, and has dropped relative to money supply in red. These countries are losing money in order to protect their currencies from capital flight.
Walgreen Boots Alliance (WBA) results.
Joe Biden proposes a $700 billion-plus ‘Buy American’ campaign - CNBC. The US has been limiting imports for decades, which has strengthened the dollar, and made exports uncompetitive. Buying expensive local products instead of trading US exports for cheap imports lowers the standard of living.
On Twitter: Peter Schiff @PeterSchiff: "Not only will @JoeBiden tax capital gains as ordinary income at 39.6%, but he also supports subjecting capital gains to the Social Security tax and eliminating the cap. That would raise the rate from 23.8% to 54.9%, a 130% increase. Huge incentive to sell stocks before year end."
The market cap of Amazon, Apple, Facebook, Google, and Netflix is $5.16 trillion, which is 24% of US gross domestic product of $21.540 trillion.
On Twitter: Lisa Abramowicz @lisaabramowicz1: "More than 60% of small businesses said they needed spending to return to normal by yearend to stay open: AmEx data. But more than 40% of people who spent money on movies, event tickets or at bars pre-Covid now plan to spend less on those activities: survey" Trouble ahead.
ViacomCBS: Value In Plain Sight - Seeking Alpha.
Record Low Mortgage Rates; Highest Purchases Since 2009 - Talk Markets. Perhaps they are hoping the government will take over the mortgages, and then they can stop paying.
On Twitter: Liz Ann Sonders @LizAnnSonders: "Sobering reality that #pandemic has created much deeper crisis for poorest 20% of Americans ... richest 20% have still felt labor market pain, but gap in unemployment is quite wide @FT @SoberLook @ADP": chart. This is why inflation runs away. The majority of voters become poorer due to the inflation government creates, and then they have to print more money. Also tax brackets are not adjusted for the actual inflation. More workers are discouraged by the redistribution from productive people to unproductive living on government benefits.
The American Economy In Four Words: Neofeudal Extortion, Decline, Collapse - Talk Markets.
US Budget Deficit Hits A Record $863 Billion In June, A 100X Increase - Zero Hedge.
China Securities Regulatory Commission warns investors about illegally financed margin trading amid run-up in markets - SCMP.
Wednesday 8 July 2020
Costco Wholesale Co (COST) 5 week sales to 5 July +11.5%: website. Sadly the growth is now below the increase in the money supply.
Spain Just Closed 47% Of Its Coal Power Plants, & Will Be 73% Soon - CleanTechnica. "In 2018 we reported that Spain was considering a target of 70% renewable electricity in 2030 and 100% by 2030". Where does Spain's electricity come from? According to Evwind.es: 23.3% nuclear, 20.3% wind, 17% combined cycle (probably gas), 16.4% hydroelectricity, 10.7% cogeneration (unknown), etc. Nuclear is not renewable. Wind is only available 25% of the time, which requires a second source the other 75% of the time, at twice the capital cost.
Bed Bath & Beyond (BBBY) reports a -49% drop in sales: website.
Monetary Economics: The Three Heresies - Talk Markets.
On Twitter: Andy @evebitdap: "Only a matter of time before @elonmusk starts pretending Tesla has been working on hydrogen fuel cells. @nikolatrevor and @nikolamotor
is the most dangerous thing to Tesla because it can steal the hype. Hydrogen is better, BEVs will be viewed as a stepping stone". Vehicles with batteries can store energy on downhills or when braking, which hydrogen cannot do. Batteries store solar power repeatedly at very low cost. Hydrogen is used once, and must be transported at high cost. Wikipedia: "As of 2020, the majority of hydrogen (~95%) is produced from fossil fuels by steam reforming of natural gas, partial oxidation of methane, and coal gasification."
On Twitter: Peter Schiff @PeterSchiff: "Gold breaks above $1,800. It's not really gold going up, but the dollar going down. The Fed can't print trillions of new dollars without existing dollars losing purchasing power. Therefore, more dollars are needed to buy #gold. Soon more dollars will be needed to buy everything."
On Twitter: Stare Decisis @MsResJudicata: "Construction": chart.
On Twitter: Liz Ann Sonders @LizAnnSonders: "Evolution of largest stock in S&P 500 over time ... Apple has dominated in post-GFC era & has accounted for substantial portion of overall market’s gains (especially in recent rally) @biancoresearch @SPDJIndices @business" chart.
How to plan a road trip and five of the best places to visit as lockdown restrictions ease off - SCMP.
FRED has discontinued a US dollar index that shows a long term decline, shown up to Dec 2019 below. Commentators like to give the impression that the dollar is a strong currency. Also, when world stock markets fall, the currencies of developing countries tumble as investors withdraw money. Long term neither is accurate.
Tuesday 7 July 2020
Diversify? Almost half of Warren Buffett’s Berkshire Hathaway portfolio comprises a single stock - Market Watch. "Berkshire now owns more than $91 billion worth of Apple’s stock, which comprises 43% of the total conglomerate’s portfolio". It usually is the big funds that push large companies up to extreme valuations. Who will they sell it to? Going down with the ship.
On Twitter: Otavio (Tavi) Costa @TaviCosta: "Crazy. Corporate bond yields now at record lows even though debt levels have soared to new highs. The Fed has created its own monster. It can't stop buying assets otherwise the whole system will collapse." chart.
From 18 Jan 2020: How To Cope In A World Of Idiots. Jessi Campbell - Full Special - Youtube.
How high can Amazon stock go? 4 reasons it keeps rising during COVID - Fast Company.
Home Depot: A Concerning Trend In Buybacks - Seeking Alpha.
On Twitter: Nathanel Serebrenik @SerebrenikN: "Replying to @MsResJudicata. I think my generation will be the first not to benefit from compounding interests in the last 5,000 years. A world without pensions but government handouts".
.... Stare Decisis @MsResJudicata: "Yes we are in the same boat. I should say we are forced into that boat as Fed is using our money to bail out the corporate debtors. They knowningly lowered our standard of living for+10 years. I want my money back. Let’s protest that."
Johnny Depp Takes Stand in U.K. Libel Trial, Claims Amber Heard Hit Him - Hollywood Reporter. More entertaining than television. They should be paid.
Tesla (TSLA) has not made a profit for 10 years, and trades on a price/sales ratio of $1372/$139. It seems unlikely that they will ever be very profitable given the factories in expensive developed countries.
These Foster Kittens and Pups Went to See Tigers and Hippos at the Zoo — and the Pictures Are Adorable - Travel + Leisure.
Dear Johnny Depp, Fire Your Lawyers - The Hollywood Reporter.
Monday 6 July 2020
The stock market is poised for a 40% drop, warns economist who says the current climate feels a lot like 1929 - Market watch.
On Twitter: Gregory Daco @GregDaco: "Not paying rent... via @TheEconomist @SoberLook": chart.
On Twitter: David Sirota @davidsirota: "Here is "Three Amigos" explaining our economy: Steve Martin and Martin Short are the workers, Chevy Chase is the billionaires" video.
On Twitter: Dr. Dena Grayson @DrDenaGrayson: "I want a #science-based president who puts our interests first and works to lead ALL Americans. Is that too much to ask?" Yes. The whole idea of one person leading a population of 330 million people is absurd.
Explaining the 2020 Stock Market - A Wealth of Common Sense. The top 10 has a net profit margin of 20%, a sign of limited competition.
On Twitter: Jesse Felder @jessefelder: "It's been a long time since we've seen the Nasdaq outperform the NYSE to such a degree": chart. The final blow-off has arrived. It typically falls a lot faster than it rises.
Analysts expect soaring stock market despite slashed earnings forecasts - Axios. Analysts give an opinion that is a continuation of the trend, and comes after the event.
"Grossly Oversupplied": Used Class-8 Sales Volumes Plunge 12% M/M, Stung By Low Prices And High Inventories - Zero Hedge.
On Twitter: Liz Ann Sonders @LizAnnSonders: "Quite a climb in number of adults living with parent or grandparent" chart. Are the homes they moved out of standing vacant?
On Twitter: Christophe Barraud @C_Barraud: "#GERMANY MAY FACTORY ORDERS M/M: 10.4% V 15.4%E; Y/Y: -29.3% V -24.0%E
- Prior MoM revised lower from -25.8% to -26.2%
- Prior YoY revised lower from -36.6% to -36.9%": chart.
With the US dollar money supply increasing at 24%, the Nasdaq 100 index must be measured relative to inflation, like for any other country. The last few years the Nasdaq 100 has not gone up, but inflation has. Consumers are being impoverished.
The FRED chart below shows relative to inflation the Wilshire 5000 index has not grown since 1996 in blue. This corresponds to a decline in the standard of living for the last few decades. Relative to debt, the economy is producing less than in 1971 in red.
Sunday 5 July 2020
On Twitter: Joe Biden @JoeBiden: "We're going to beat Donald Trump. And when we do, we won't just rebuild this nation — we'll transform it." The usual we will fix everything, but once elected will achieve nothing.
On Twitter: David Janny @DavidJannyMS: "The purpose of a bear market is to rid excesses and create cheap valuations in equities; the 30 day bear market created a lot more debt and excess and increased expectations and valuations. Stay tuned: the real bear market hasn't yet arrived."
On Twitter: Prof. Steve Hanke @steve_hanke: "The claim that negative interest rates can stimulate the #US economy is rubbish. Negative rates would throw a monkey wrench into the credit markets & cripple interbank lending. Negative rates didn't work for #Sweden in 2015 and won't work for the U.S. now.": Negative Interest Rates Will Damage an Already Crippled Economy - Reason.
REITs In June: Losing The Battle Again - Seeking Alpha.
On Twitter: Apollo @blue_bnd: In Von Braun's book 'MARS PROJECT' the #Mars leader was titled "ELON"! "The Martian govt was directed by 10 Men, the leader of whom was elected . . . for 5 years and entitled 'Elon.' Two houses of Parliament enacted the laws to be administered by the Elon and his cabinet". image, image. Elon Musk @elonmusk: "Yeah, it’s pretty weird".
Apple's (AAPL) last revenue growth was 0.5% (operating margin is declining), and the dividend yield 0.82%. The remaining profit is enough to buy back 2.4% of the shares. The total return is well below actual inflation. Apple has reduced its outstanding shares by -28% over 10 years (Morningstar). Share buybacks do not increase the market capitalization. If the reduction in outstanding shares cause the price/earnings to rise, then shareholders should sell some of their shares to keep valuation constant if there is no growth. The book value per share of $21.71 is lower than in 2015. There is no net asset growth.
How the wealthy are preparing for the next pandemic, from investing in private travel and superyachts to building underground bunkers - Business Insider.
Op Twitter: Louis Krauss @louiskraussnews: "Protesters just took down the Christopher Columbus statue in Baltimore’s Little Italy." video. So these protestors wish the Americas were never discovered, or don't like Eastern spices?
Isn't it weird how people easily recognize that money printing in other countries lead to high inflation, but live in denial when it comes to their own country. Before politicians started to falsify inflation measurements the last few decades, interest rates in blue below had to rise to match the rate of money creation (inflation) in red. From 1987 to 1996 interest rates (blue) actually exceeded inflation (red). Since 2000 savers have lost money at about 6% per year. Normally interest rates would now have to rise above 20%.
Saturday 4 July 2020
On Twitter: Akki @akkitwts: "A deer entered a Colorado store. The store owner gave him some chocolate chip cookies. The deer left the store and returned after half an hour with all his family member": photo, photo, photo.
Amber Heard Can Be in Court for Johnny Depp Testimony in Libel Trial, U.K. Judge Says - Hollywood Reporter.
Friday 3 July 2020
City Of Sydney Goes 100% Renewable - CleanTechnica. They want to power street lights from solar panels at night, using moonlight?
10 Things You Didn't know About GroundhogDay - Youtube.
House approves $100 billion in broadband funding for rural areas - Engadget. People will pay for it either through lower net income after tax, or lower real income due to inflation if the money is printed. Some one must pay for it.
On Twitter: Daniel Lacalle @dlacalle_IA: "Insane: The ECB balance sheet is now 52.8% of GDP!!! 6.2 trillion euro. It started the year at 39.4%, 4.6 trillion. Fed is 32.6% of GDP." chart, chart.
On Twitter: Dr. Zev Zelenko @zev_dr: "Yesterday, the Michigan study showed *late* use of HCQ + Azithromycin cut COVID deaths by 50%. Today, our study shows *early* use of Zinc + HCQ + Azithromycin cut COVID deaths by 80%. How much longer can our leaders ignore the science? Hydroxychloroquine works." table.
COVID-19 Outpatients – Early Risk-Stratified Treatment with Zinc Plus Low Dose Hydroxychloroquine and Azithromycin: A Retrospective Case Series Study - Preprints.
General Mills: People Still Need To Eat - Seeking Alpha. Revenue growth to May 2020 of +4.5% and a dividend yield of 3.1% give a total return of 7.7%. It has kept up with inflation as indicated by money supply growth. Now with money supply growth of 24%, the share price needs to fall to increase the yield.
More UK retailers should ban coconut products from monkey labour: PM's fiancée - Reuters.
On Twitter: Daniel Lacalle @dlacalle_IA: "Almost 40 million workers in Europe are under a subsidized jobless scheme": chart. More politicians handing out money without considering who will be paying for it.
Goldman Sachs says oil demand won't rebound to pre-coronavirus crisis levels until at least 2022 - Business Insider SA. The speculators who pushed Tesla's share price up don't think it will ever recover to previous levels.
On Twitter: Charlie Bilello @charliebilello:
"Revenue over last year...
GM + Ford + Fiat Chrysler + Honda + Daimler + Ferrari = $731 billion
Tesla: $26 billion
GM + Ford + Fiat Chrysler + Honda + Daimler + Ferrari = $212 billion
Tesla: $224 billion"
On the FRED chart below the growth rate of US M2 money supply is shown up to 22 June in blue, the Euro in red and UK in green up to April. This is likely to affect the value of the US stock market to foreigners.
Not only is the US dollar in trouble, the chart below shows the annual increase in total US debt in billions of dollars. It is now increasing by almost $5 trillion per year. Debt needs to grow ever faster to grow the bubble further. Investors all rush in to where money is flowing, in this case a debt frenzy. The party doesn't last. The carnival is over - The Seekers - Youtube.
U.S. job growth roars back, but COVID-19 resurgence threatens recovery - Reuters. The chart below shows total US debt per worker, which in the first quarter was just over $500,000. Maybe if they work a little harder they can pay for it. The median annual salary was $49,764 in the first quarter (The Balance Careers).
On Twitter: Charlie Bilello @charliebilello: "The 15-year Mortgage Rate in the US moved down to 2.56% this week, tying the record low from May 2013": chart.
The US average house price has gone up to $384,800. When interest rates (red) are low, people can afford to pay more for a house, and so house prices go up (blue). When interest rates rise, they can no longer afford the expensive homes.
Thursday 2 July 2020
On Twitter: Ali Spagnola @alispagnola: "I saved all my Amazon boxes from quarantine... Then, obviously I needed to build them into a giant symbol of America.": video.
Manhattan apartment sales worst on record, biggest plunge in 30 years - CNBC.
Walmart to make 160 store parking lots into drive-in theaters - The Hill.
What's My Line? Colonel Sanders - Youtube.
On Twitter: Gold Telegraph @GoldTelegraph_: "BREAKING NEWS: A British judge has refused to give Venezuela's Nicolás Maduro control of nearly $2 billion in gold sitting in a Bank of England vault because Britain does not recognize the socialist leader as president of Venezuela."
Brie Larson Launches YouTube Channel as She Recalls Making Movies in Her Garage - Hollywood Reporter.
On Twitter: St. Louis Fed @stlouisfed: "Retail sales of alcohol jumped when U.S. cities and states enacted stay-at-home measures in response to COVID-19. The FRED Blog looks at the data, which suggest retailers didn’t raise their alcohol prices all that much http://ow.ly/qIra50Alb1v": chart. If the inflation data comes from government it is worthless. There is no way money supply can increase, and not cause inflation.
On Twitter: Peter Schiff @PeterSchiff: "The U.S. trade deficit swelled 9.7% in May to $54.6 billion, as exports tumbled 4.4% to $144.5 billion, the lowest since November 2009, while goods exports plunged 5.8% to $90.0 billion, the lowest since August 2009. @realDonaldTrump's manufacturing renaissance is total fiction."
Tesla’s ‘jaw-dropping’ quarter sends shares surging - TechCentral. “A 90k delivery number in this Covid lockdown environment is a jaw dropper, ...” The factories were closed for a period, so were did the vehicles come from?
On Twitter: Trading Nation @TradingNation: "Check out Tesla surging to a new all-time after blowing out Q2 delivery expectations $TSLA": chart. It is not sustainable. How long will it before everybody reports on the collapse in the share price?
The Productivity That Didn't Happen - Talk Markets. When real wages fall due to inflation, workers appear to be more productive.
Wednesday 1 July 2020
Looking into a deep red light could improve declining eyesight - Popular Science.
On Twitter: Lisa Abramowicz @lisaabramowicz1: "Prices are rising more than official data show when adjusting for Covid trends, like people buying more groceries & traveling less, especially among poorer households. @economics found the average US household is seeing inflation of 1.1%, vs 0.1% shown by the official data in May". Inflation around 1% makes no sense when money supply increases 24%. Just like the extreme examples of Venezuela and Zimbabwe, no government reports the actual inflation it causes, but it is obvious from the exchange rates.
Live Event with Astronaut Kate Rubins at 4 p.m. ET - Youtube.
Pizza Hut and Wendy’s Operator NPC Files for Bankruptcy - Bloomberg.
Facebook frustrates advertisers as boycott over hate speech kicks off - Reuters. FB Rises On Zuckerberg's Promise To Address Hate Speech - TalkMarkets. A lot of media, such as financial TV channels, do not give an independent view because they are dependent on advertising.
On Twitter: Charlie Bilello @charliebilello: 'ISM Manufacturing moves up to 52.6 from 43.1 last month. 52.6 is highest reading since April 2019. +9.5 monthly increase is largest since August 1980". chart. The chart looks random.
Daimler-backed Momenta says its robotaxis will be fully driverless and profitable in 2024 - Techcrunch.
On Twitter: zerohedge @zerohedge: "ADP is now a total joke: May revised from -2.76MM to+3.065MM. This from the service that "does not" use estimation".
On Twitter: Eva Fox Fox face @EvaFoxU: "@elonmusk it looks amazing Double exclamation mark !!! Market Cap is $200B. #Tesla $TSLA" table. Tesla's share price could be pricing in 10 years worth of growth, if other manufacturers don't compete.
On Twitter: Stare Decisis @MsResJudicata: "He forgot to add single women with children. Federal Reserve also wrote women are discriminated against in employment beginning at age 35 in another report." Everybody is discriminated against after age 35.
On Twitter: Christophe Barraud @C_Barraud: "The short interest in the SPDR #ETF, tracking companies in the S&P 500 #Technology Index, was the lowest since the end of 2007 - Bloomberg": chart. The buying back by short sellers probably contributed to the rise in the index.
FedEx Crushes Q4 Earnings Estimates, Stock Up 10% - Market Realist. Revenue is not growing, whilst money supply (inflation) is. Why invest in a business that is shrinking?
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