Eye Of The Financial Hurricane – Again!

One could start-off much the same as is if trying to channel Dickens’ historical opening “It was the best of times, it was the worst of times.” from “A Tale of Two Cities.” For depending on where you reside in the world of investing, things are either fantastic – or down-right earth shattering.

The latest example of this would be Uber™. i.e., Fantastic if you were a VC and got out at the IPO – earth shattering if it now resides in the “growth” side of your retirement fund. You know, “To stay ahead of inflation.” But I digress.

When it comes to the dichotomy of perceptions in regards to the “markets.” I have used the analogy regarding a hurricane so many times over the last decade, I’ve lost count.

The trouble with such analogies is much like the real phenom they represent, they can change or morph regarding their severity, for a plethora of reasons.

However, although there are many different aspects in trying to calculate both the “if” factor, along with the “where.” There is a very critical distinction that makes a very big difference when you know: you’re not quantifying or qualifying an event that may or may not occur. You’re trying to quantify or qualify the possibilities of the remaining storm you are currently in. Hence, the “hurricane” reference in the title.

For this is not about “what’s over the horizon.” This is now all about where we are in the already unfolding storm. i.e., it’s not coming – it’s already here.

So, in regards to where we might be, as in, position. I’m of the opinion, we are about 3/4’s through the “eye” of the “Autopilot” hurricane that made landfall in the latter half of 2018. Meaning: the most severe portion for unleashing financial mayhem is quickly approaching. i.e., it’s not a matter of if – but when. That’s the distinction with a difference.

With that said, there is another qualifier that needs to be pointed out: The second half of any hurricane can be both the most disruptive, as well as destructive, for a host of differing reasons. i.e., situational and/or psychological.

The reasoning?

Everyone thinks or believes the storm has passed. Hint: It hasn’t, just the leading edge.

I am of the opinion the latter part of 2018 was merely the leading edge of a much larger storm than any of the so-called cadre of “experts” paraded across the mainstream business/financial media ever understood, let alone, anticipated. Yet, they’re always on TV, so everyone assumes they must really be smart? Right? Right?! Sorry, again I digress.

I’ve used the analogy of a credit card to try and explain just what has been transpiring since Mr. Powell took the bag over as Chair in Jan of 2018. The process of QT (quantitative tightening) or “normalization” (e.g., reducing its balance sheet) as the Fed defines it, has more in common with the perilous condition known to many a consumer as “credit line reduction” than the so-called “smart crowd” understands.

Here’s a thumbnail sketch of this phenom using very generalized, rounded-off for example only metrics, for ease of demonstration…

Maxed out credit-line $10K. Min. payment due $1K, interest rate 0%. Let’s add that was an “introductory” rate to keep the example even more relevant.

If you make the $1K minimum payment, your balance is reduced to $9K (remember, no interest charge, so all of your payment goes against total balance) so, in-turn, you can theoretically go out and once again charge up to your credit-line. e.g., you can buy another $1K of what ever you like.

But here’s where everything changes…

If I begin a process of credit-line-reduction or QT for example, and reduce your credit-line from $10K to, oh let’s say, $9K – you have a very, very, very (did I say very?) big dilemma on your hands, especially if you wanted, or worse, needed to buy something on that card.

Why? Easy…

If you only have the $1K to make the minimum payment. Once you pay your card – you have no money and no credit available. e.g., Remember, you’re now at a $9K limit so your payment leaves you without money and buying power. But this is just the beginning, and far from the end.

You either have to do one of two things: Sell something (i.e., like a stock) you have a profit on to unlock that capital. Or, borrow elsewhere – if you can. Hint: you can’t, so go back to the former.

So, after you sell, let’s say you now have $2K in hand. What do you do?

Well, here’s what QT has been doing.

No longer do you have a $9K credit line, because now, just a month later, it’s $8K – and – that 0% “introductory” rate has ended. So, not only do you have a carry charge, but rather, all that “interest free” balance is now subject to your new and applied interest rate, dating back since it was acquired.

So now your new minimum payment is $1500. “But wait..there’s more!” as they say on late-night TV.

Not only do you not have that presumed $2K from your sale, it’s now more like $500 with your new adjusted payment. And what’s worse? Next month your carry cost (interest rate) will double again (think .5% to 1%) – and – your credit-line gets reduced not by $1K, but rather, on “autopilot” of $2K per month. i.e., Credit-line of just $6K with a minimum payment of $1500 going to $1750 and your credit line will probably be less than $3K in a few months time.

Do you see the issue? Hint: The Fed didn’t. And that’s why they’ve been in crisis mode ever since Janet Yellen proclaimed there wouldn’t be another financial crisis “in our lifetime.” Hint: It’s been Crises-R-Us ever since.

This is the equivalent of what’s been transpiring across the “markets.” And the Fed’s most recent “pause” and “cut” has been nothing more than the equivalent of another analogy. e.g., applying a band-aid when a tourniquet and transfusion was called for.

To prove my thesis, may I remind you that the Fed, once again, not only pushed back the timetable for its “autopilot” surety of conviction that QT would be the equivalent “of watching paint dry.” But ended it with immediacy two months prior to its already castrated schedule.

But the damage to the “bull” has already been done. And without a complete and utter reversal of policy, re-implementing QE (quantitative easing) quickly – and in size – it’s over. Period.

The Fed’s pause and reversal on rates has been nothing more than supplying “happy talk” and and implying “the worst is behind us” declarations.

To re-emphasize: All they’ve done is mislead people that should be fortifying their homes or, moving to higher or safer ground, the false illusion that there’s no need to be concerned.

After all, as the “happy talk” that’s been recirculating expresses, “Just look at that clear sky above!” You know, just like they said when the “markets” were back at record highs.

Yet, a little thing has happened since then, and it is this:

The first indications that the rear eye-wall was near made its presence known – and 3% was knocked out the “markets” before any “weatherman” could get out from under their screens and trample over their mother to get to the nearest microphone, camera or keyboard and profess: “Nothing to see here! Just another buy, buy, buy moment of opportunity.”

Yes, it has been the perfect opportunity to buy, buy, buy these last few months. The issue is, not in the “markets.” But rather…

In the stores and real marketplaces that sell such items as hammers, nails, screws, plywood, batteries and provisions.

For the worst is probably far from behind us, but rather –

It’s right in front of us.

© 2019 Mark St.Cyr

Not To Scare The Children, But…

I received a call from a colleague asking my thoughts on the nascent moves in the “markets.” Here’s the gist of what I said, for those that may want to know.

As you know I’ve been on record, I believe the entirety of the so-called “Trump bump” will probably be erased sometime this year. Everyone thought I was crazy when I first put that forward last year, then approx. 75% of it wiped clean in a matter of weeks until the “extraordinary measures” posture returned.

As I keep saying, the damage has already been done, and all that’s been happening is people, the “markets” what ever, have been hoping, praying and more that this “band aid” approach will work. I have remained, and still do, that it wouldn’t. And now it appears to be expressing itself.

From a technical view, what I find intriguing is when you view the S&P 500™ through a weekly chart, the trend-lines that are textbook type watch patterns line up eerily precise with the full 100% expression of wiping out the entirety of it (e.g., “Trump Bump”) to the level, day and year end time-frame.

It’s an amazing coincidence of congruence. Nevertheless, the patters are what they are, and when paired against the current back drop of political circumstances, as well as basic psychological behavior. I stand with my original call more than ever.

Below is a chart showing the above in visual form. To wit:

(Chart Source)

As always, we shall see.

© 2019 Mark St.Cyr

In Case You Haven’t Heard

You ever wonder why you don’t hear any follow-up on those “just a fantastic business model” of disruptive tech well after their IPO’s? You remember them don’t you? The ones that were the “hottest news” of the mainstream business/financial media’s investment advice.

Don’t worry, for if you don’t, here’s just two representatives. One is a bit over a year old, the other is a bit more recent.

Now before I show you their most recent “pictures.” What you need to remember is that these two representatives were all released and resided as public companies during a period where the “markets” have never been higher.

So with that said, let’s see how they’re aging, shall we?

First Dropbox™. To wit:

(Chart Source)

Last, but certainly not least, is the one IPO that was supposed to be “the” representative of all that was “disruptive tech” aka Uber™. Again, to wit:

(Chart Source)

Funny how these are no longer even considered “news worthy” via that same press, yes?

But what do I know.

© 2019 Mark St.Cyr

What Happens When The Buy-Back Music Stops?

“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”

Chuck Prince, Citigroup™ CEO, 2007 interview with FT™ in Japan.

Would any next-in-rotation fund-manager care to explain what happened next? “Bueller?”

Let me continue with even more of what can only be described as, fall-down, laugh-out-loud material, that I’ve been watching professed across much of the mainstream business/financial media over the past few weeks.

It’s been so outrageously laughable – it’s down right scary.

Here’s a sample using a composite view of the myriad of next-in-rotation fund-mangers paraded across the mainstream business/financial media of late. For if I heard the following once, I heard it a thousand times. To wit:

Everyone was worried about earnings and that has been put to rest with __%(fill in percentage metric of choice or, just go bold as some did, stating “all”) beating expectations.

So all this worry about trade and more is just the wrong-again Bears, once again, trying to put fear into the marketplace.

They are wrong now, they were wrong in the past, and we think they’re wrong about the future.

We see this as another buying opportunity, with even higher highs going into the end of year, based on what we heard from earnings calls, along with the Fed now cutting rates.

There’s plenty of cash still on the sidelines. And the market reaction to buying this latest sell-off shows there’s still an appetite for equities. Not to mention, where else are they going to go? i.e., T.I.N.A. there is no alternative.

Here’s the dirty little secret to the above:

All that “buying” has been nothing more than all these companies beating EPS metrics (many on lower guided metrics) by borrowing and spending precious resources once used for such archaic ideas as R&D and more, only to buy back their shares to the tune of $100’s of Billions per quarter. Yes, per quarter.

2018 set a record at over $223 Billion in Q4 alone making 2018 a record year, shattering a prior record of a what now seems paltry in comparison of $589.1 Billion. But here’s the kicker…

In what year was that prior record set? Hint: See opening quote above.

Apple™ alone spent $74.2 Billion in 2018. It spent some $20+ Billion including dividends just this last quarter alone.

But wait…there’s more! As in, much more: In May they announced an additional, yes, that’s on top of all other allocations, an additional $100 Billion buy back allocation – and – increase its dividend by 16%.

So, I ask you dear reader: With out it, where would Apple-the-stock be trading, currently?

In May of 2014 I made the following observation that caused many a TV, next-in-rotation fund manager, to argue I had no idea of what I was talking about. To wit:

The call of the day: And with the potential move to buy Beats, Apple  could very well take the final step in its (d)evolution into Microsoft. That’s pretty much how Mark St. Cyr sees it. Of course, he’s not the only one piling on such a purchase. Music critic Bob Lefsetz calls Tim Cook a clueless operations guy. But St. Cyr takes it a step forward by comparing Apple to the lumbering software giant. In a “complete and utter cave-in to Wall Street,” Apple’s latest report wasn’t consumer-products based; rather, it was designed to play Wall Street’s game, he says.

“Dividends, debt, splits, and more,” he said. “I don’t think the iPhone has added as many new features at once as the new features released in Apple the stock.” That’s how Microsoft does it, said St. Cyr as he waxed on about the Apple you knew is no longer. “I hope I’m wrong, but the actions are beginning to not only speak for themselves — they’re screaming.”

Shawn Langlois, MarketWatch™ May 13, 2014

So let’s use the same media outlet, so those same “analysts” can’t accuse me (though they will anyway) of “cherry-picking” my numbers or sources, and see how that’s all working out, shall we? Again, to wit:

Apple’s evolution mirrors Microsoft’s in many ways. While many investors worry that Apple is losing its grip on innovation and growth, they are missing the broader story of this tech stock becoming a more mature company that may not move as fast but still has plenty left to offer.

Jeff Reeves, MarketWatch™ “Opinion: Apple is the new Microsoft…” June 4, 2018

So, some of you may be saying, “Yeah, so what?! Just look at these markets since!!” And that would be a fair point. But all I’ll say or do, once again, is to point out that was exactly the overwhelming premise of thought when Mr. Prince made his now infamous remark. i.e., just before it all went quiet.

Buy backs for 2018 came in at just under ($804) a $TRILLION Dollars. 2019 is already on pace to shatter that $Trillion Dollar threshold with 2019 comparable already up 18%.

However, let’s remember, this was all before China decided to unleash the “Currency Kraken.” Now, currencies are coming into play, and make no mistake about it: Tariff tit-for-tats are like playing with BB guns – currency wars are where the heavy artillery hang out, where unintended casualties and friendly fire mishaps happen on global scales, where no one is immune.

I’ll get back to the currency problem in a moment, but first this point needs to be emphasized: When you, a company, a market, a ______(fill in the blank) rely solely on the largess of what some central bank authority decides as some crutch to keep your “stock” value or bonus aloft. All you’ve done is sold your company’s prospects for continued success down the river. Period.

Think I’m off base? Fair point – than think about it this way…

It was only back in December when you would read or heard things like the following. To wit:

Boeing’s board voted Monday to raise its quarterly dividend 20 percent to $2.05 per share in 2019. Additionally, the Dow component’s board approved a $20 billion stock buyback plan, replacing its prior authorization.

CNBC: “Boeing raises its dividend 20%, boosts buyback plan to $20 billion, reaffirming its bullish outlook”

Then, to be polite, “when things hit the fan.” Suddenly all that great use of cash going into buy-backs rather, than R&D or safety research, training, et cetera, et cetera, suddenly doesn’t seem as such a smart call by the C-suite any longer. For just four months hence, as in April, that same company calling for even more spending on bonus compensation buy-backs, suspended them.

Now, one has to wonder, which thing is going to be the “thing” Boeing focuses on keeping aloft first: Boeing-the-stock? Or Boeing aircraft?

I’m sorry, and I know that seems crass. However, is it really when compared to how much Boeing has been spending on everything other (e.g., buy-backs) than its core product? Especially now in retrospect.

For is it not fair to say, at the least, to point out there appears to have been just a tad too much focus and willingness to allocate precious resources on its stock performance rather, than the core product? Again, I know how it sounds, but the questions of prudence still remain, regardless.

“Now what does this all have to do with currency?” you may be asking, as always, great questions, and it’s this…

Should for whatever reasons a true currency war erupt in earnest as is already appearing to be emanating from China, whether the politburo is outright responsible for it, or not, other nations central banks’ will need to sell anything and everything they can to help fund possible gyrations within their own currencies to help, or at least try, to stabilize their own.

To be clear: I am of the view they (China) are hopelessly lost in reaction mode, as in, it’s already out of their control.

That one situation alone portends a possible panic selling, at the worst time, for all those central banks which purchased equities solely with their “print buttons” prior. Why?

Because when you need money, fast – you sell what’s profitable first. And currency markets make equity markets look like child’s play.

“Any precedent?” you ask. Again, great questions. Let me try with this one…

Hint: Swiss National Bank, 2018 Market Rout. To wit:

(Source: ZeroHedge™: SNB unexpectedly sold US stocks in Q3, dumping over 1 million Apple shares)

“Why does the above matter?” you may be asking. Another, great question, and it is this…

The SNB is now one, if not the, largest sovereign hedge funds the world has ever known. And when the world of currencies panic? They panic run to the Swiss Franc. Which then can cause the Swiss to panic needing to sell anything and everything to help stabilize their currency which is no longer pegged. Not to mention try and “lock-in” any prior profits.

So now I’ll just end with me asking: What could possibly go wrong?

After all, isn’t this just another buying opportunity as all the talking-heads across the business/financial media are telling us?

“Bueller?” Anyone?

© 2019 Mark St.Cyr

The Ever-Growing Illumination On The Farce That Is Disruptive Tech

Do you remember the trope-of-the-day thrown at you if you dared question the business model for “disruptive tech?” You remember don’t you? Hint: sounds like: You just don’t get tech!

Well, actually, it was precisely that.

This and more gave us the birth of that fantastical, mystical creature of fabled fame known as the “unicorn.” And if you didn’t want to hang in the stalls with the little ones? You went back to the coloring books investor prospectus – made up more sh#t to state 1+1= whatever you want – then hit the business/financial media talk show circuit dispensing more horsesh#t than found on a working stable ranch – and wha-la! You now get the legal ability, aka IPO, to trade your bags of you-know-what into real bags of cash, from the risk oblivious suckers investor public. Rinse, repeat.

“But wait – there’s more!” as they like to say on TV.

If you are one of the truly daring (and why would you not, when you can make sh#t up on demand and people will throw money at you) you don’t tout you’re just some lame-arse unicorn. No, that won’t even get one of them a ticket into your swank party.

You tout metrics and possibilities that are so batsh#t crazy it makes real bats happy their blind so they can’t see your “big picture” slide deck.

Hint: Did you know the taxi business was worth over $100 Billion? Who knew?!

Yes, that’s correct. At the last PR cycle right before going public the “whisper” on the street was that Uber was probably worth $120 Billion.

Hint: It ain’t, and worse, it hasn’t even been able to stay above its already lowered lackluster IPO price of $45. As a matter of fact, since it’s been a public company, it has barely made it there. It has opened and closed above it – only – once.

What a bargain, yes? Seems to be always on sale. Who knew!!

But if you thought we were done here? Hint: Nope, for it really gets better, that is, if you can take pleasure watching this disaster unfold as one who rationalized it would.

However, if you are one of those that did buy in? Especially if you suddenly found yourself unknowingly in this great “growth” investment via your “investment manager?” You do have my condolences, and I really do mean that.

Uber reported its numbers after the close yesterday. I could use the word “earnings” but that would be more of a joke than the entirety of this farce. Here’s all you need to know…

In the first quarter it reported as a public company (you know, just after the “bag” hand-off in the form of “investing public” to the VC scammers “Private investors”) it reported about an $878 million dollar loss. I guess the reason behind this was to put a “good face showing” in the first report. Because now that that is over, and no more need to worry about all that “good looks?” Well hell-yeah! to wit:

Uber Q2: $5.2 BILLION dollar loss on (wait for it…) $3.2 Billion on revenue.

This makes the old joke “We’re able to sell $Dollar Bills at a discount, because we make up it up on volume” look down right business savvy in comparison.

I watched CNBC™ during last-night’s Asia reporting, where they had an early “investor” on talking about selling out his position. What I heard him describe after, in the reasoning why Uber was a possible growing entity for the future, made me look more than once at my remote to make sure I wasn’t watching the comedy channel. It was absolutely stunning the rational.

This guy would have a decent chance at selling snake-oil to a snake-oil salesman. Why? He truly sounded like he believed what he was saying. It was both laughable and scary to view.

Wolf Richter over at WolfStreet™ has a great breakdown if you want more detail into the absurdity that is Uber.

Again, this is all my opinion, of course. But think of it this way…

Imagine telling someone just a decade or so ago, that you owned a company with revenue in the $Billions. And, after reporting your numbers: you didn’t even have enough left over to afford using your own service just to get home a few blocks away.

What a farce.

© 2019 Mark St.Cyr

About That Perceived Overnight Yuan “Control”

As I was watching the Asia morning commentary last evening (remember, Wed. night U.S. is Thursday morning Asia) much of it was based upon the idea that China was showing its resolve in controlling their currency. The ideas being professed bordered somewhere along the lines of “China is sending a signal that it too has a way to battle tariffs. And with this current fix point of just above $7 USD/CNH shows they are showing great restraint in its willingness to use it as a weapon.”

I am not of that opinion, actually, I believe they are desperate to keep appearing that they have control. Because should it suddenly “get away” from the control of the politburo? Most, if not all, of China’s ambitions to be the world’s global economic power – evaporate. Regardless of what Ray Dalio thinks to the contrary.

Here’s a sample of how I’ve been addressing the moves in the Yuan. Below is from nearly one year ago, to the day. To wit:

China’s main goal for world trade domination and influence hinges on making the Yuan the reserve currency of global affairs. It has worked diligently, at every turn possible, to do just that. Getting its currency to be included into the basket of currencies known as the SDR was of a paramount pursuit. And on October 1, 2016 it finally attained it.

Then, just one month later – the world of changed.

At first it appeared, again, for that moment, that China would be able to just sit back and allow the political infighting within the U.S., along with what appeared to be the globe’s reluctance for further faith (as well as use) in the $Dollar to play out its own demise. And then: tax reform passed, and interest rate hikes began in earnest, and QT became manifest, and more. And suddenly trade was not only on the table, but all prior trade deals were straight-armed right into the dust bin.

And what China had previously taken for granted over the past 18 months has been nearly completely eviscerated (currency wise) in all of about 90 days. Along with any and all counter measures in dealing with trade issues previously assumed.

Now those prior assumed effective countermeasures are being countered to a point of two, if not 10 to 1! i.e., immediate countermeasures to their counters. It’s now a very serious (as well as costly) game of tit-for-tat. Especially for China. The reasoning is simple:

They are now faced with using what may be the only (and last) effective retaliatory weapon for trade disputes in their arsenal, which is – a devaluing of their currency.

But the problem is this: If they do, it may be much like the “nuclear option” it’s always described to be. i.e., Holds great power, but may ensure it hurts the user just as much as on whom its used.

Should the Chinese authorities suddenly allow for a massive devaluation under the current global circumstances it’s very possible (if not probable) that it will wipe out, in its entirety, all the work and forbearance they have worked so diligently for these past two decades respectively. Meaning – say goodbye to the Yuan having any implied reserve status, for who knows how long.

In a communist controlled country, civil unrest will be met with far more brutality, if needed, via an administration that is now cemented into leader for life status. Should trade wars cause unrest within the populace, it will be unwanted, yet, China has shown not only does it have the tools to control unrest (just look to prior examples) but it’s also willing to use those tools as it sees fit.

Remember: Any resulting unrest from trade can also be blamed on outside forces through propaganda. i.e., It’s the U.S. causing all this pain!” et cetera, et cetera.

Yet, when it comes to its currency initiatives, along with its true long-range plans/goals of superseding any all prior? The propaganda story is not within China’s control.

A rout based in currency flight out of the Yuan and into the $Dollar, along with a global market rout that many may see as the causation being China’s lack of being able to control its currency is something, and I’ll wager just about the only thing, that is keeping the current politburo awake at night.

That’s a story China can not afford to take shape an any price, for if they lose any perceived stability in the Yuan at this juncture…

It may put all their fought for gains back, by decades, and many at that.

We’re now closing in on those levels that may decide it all, again, where all control is not only perceived as lost. But proven to be so.

Is the Yuan weakening via intent or loss of control?” Aug. 8, 2018

I believe any stabilization that has taken place in the Yuan since 2015’s out-of-the-blue Yuan moment, has been nothing more than trying to save “face value” for the Yuan since their inclusion into the SDR.

For as I’ve stated ad nauseum – that was the true, real, strategic prize in long term trade domination that needed to be solidified. 2015’s wake up “global monetary moment” almost squelched it.

But here’s an important quantifier: should any major market panic erupt, creating any real turmoil shortly after (“shortly” is a relative statement) the Yuan’s inclusion? It could create the conditions where any of the IMF’s hopeful emergency stabilization measures in a global rout appear suspect or, even look badly on the SDR – and – positive for the U.S. $dollar.

This is something China’s politburo has to avoid at all costs. Repeat – whatever the cost.

I believe they’ve already lost control, and any move now is only to spin the currency narrative favorably. For they’re not only losing the current trade war rather, they’ve already lost it.

Companies will not relocate back, nor will they stay after the politburo openly showed the world, once again, how communism does capitalism. i.e., It doesn’t, it only appear to show a friendly face to it.

Too many forget that “face” is a mask – and the mask is coming, if not already, off.

All my conjecture of course. But if you doubt my opinion, all I’ll say is: How’s Hong Kong doing these days?

Maybe Ray Dalio should do the same. I hear they’re reforming capitalism too – right back into communism.

Funny how that happens.

© 2019 Mark St.Cyr

F.T.W.S.I.J.D.G.I.G.T.

(For those who say I just don’t get it…get this)

When it comes to blame, trade and China. To wit:

Tariffs are precisely that when it comes to the “sport” of trade. But make no mistake: Trade – is a take no prisoners blood sport with real losers and winners, where economic survival is the prize. Sometimes – there is no second place finisher. Think about it.

What many don’t quite get (and I say this directly to most of the Ph.D’d economic professorial cabal and show hosts that paraded this set out to lecture us plebs how genius the Fed. has been, and how “smart” they are in naval-gazing analyzing the moves, but I digress again) is China may be in a far more inferior negotiating position than the U.S. i.e., If the “markets” fall apart directly after China announces – the blame becomes China’s.

“Must Watch Sunday TV…” – June 17, 2018

When it comes to blame, markets and the Fed. Again, to wit:

Mr. Powell was being elevated as a stalwart of Fed. integrity and prowess, inferring his openly displayed disdain for having anything to do with the President was if he was openly saying, “Meeting with the President? I don’t need no stinkin’ meeting!” To the sycophantic applause of this, again, so-called “smart crowd.”

Today, let’s just say: It’s different this time, shall we?

Sometimes it just takes awhile for the consequences to unfold in full view. But none of them saw it to even begin with, and are now being blindsided with the true consequences. i.e., The political finger of blame.

I would also recommend to Mr. Powell and the entirety of the Fed, one should not look for it to end anytime soon. If ever.

“There’s A Reason why ‘March’…” Aug. 1, 2019

Let’s jump to today, shall we?

(highlighted screenshots)
original source on Twitter™
(highlighted screenshot)
(highlighted screenshot)

Who’da thunk it.

© 2018 Mark St.Cyr

Footnote: These “FTWSIJDGIGT” articles came into being when many of the topics I had opined on over the years were being openly criticized for “having no clue”. Yet, over the years, these insights came back around showing maybe I knew a little bit more than some were giving me credit for. It was my way of tongue-in-cheek as to not use the old “I told you so” analogy. I’m saying this purely for the benefit of those who may be new or reading here for the first time. I never wanted or want to seem like I’m doing the “Nah, nah, nah, nah, nah” type of response to my detractors. I’d rather let the chips fall – good or bad – and let readers decide the credibility of either side. Occasionally however, there are and have been times they do need to be pointed out, which is why these now have taken on a life of their own. (i.e., something of significance per se that may have a direct impact on one’s business etc., etc.) And readers, colleagues, and others have requested their continuance.

Why You Should Be Nervous – Very Nervous Indeed

Originally I was not going to post the following observation. Trust me when I say, I ruminated on it for quite a bit, because disparaging people, just for the sake of it, is not my style.

But then there are times when I feel too strongly that something needs to be said, and if I don’t, it’ll irk me, for far too long. Regardless if I may be proven right or wrong. i.e., Sometimes some things just have to be said, regardless of outcome.

This is all my opinion, of course, and your dealings may vary. But all I’ll say to that is: If they do? Consider yourself lucky, very lucky, so far. Because I have witnessed (and remember vividly) the damage caused by the recommendations this one dispenses.

So now, with that all said, when it comes to the host known as Jim Cramer and his “clown show” of investment “insight,” with all its banging of buzzers and rapid fire diatribes of nonsense. I consider him more dangerous to one’s portfolio than taking investment advice at a real circus, from car-full of real clowns.

But today I wasn’t sure if I should laugh or get mad. Here’s why…

I was just reading a piece on the Drudge Report™ via CNBC™ and contained within it is a video where he (Cramer) is giving his insights into the latest sell-off, and by my observation, can only conclude he believes this is nothing but another “BTFD” (buy the f’n dip) opportunity.

The irony of all this, is for the backdrop of the article it’s contained in. i.e., It’s one warning of a “Lehman-like” possibility developing.

The video embedded appears to be from yesterday evening or early A.M. today, I can’t tell. But it really doesn’t matter.

All I can tell or perceive, is that he appears uber-confident that this is all just an opportunity to wait a day or so – see some panic resetting of buy/sells recommendations from the rating analysts, then, once they lower – back up the trucks and buy, buy, buy!

It’s been quite a while since I’ve seen him this cavalier in both his stance during any real selling or, his recommendations right after one.

The reason why it’s been quite a while? Let me post a quick review of Mr. Cramer’s recommendations from a few years back when Mr. Cramer was looking similar in my view, delivered via Jon Stewart on his Daily Show® To wit:

Screenshot via the link to Comedy Central™ “In Cramer We Trust” You can click on image to view clip or click here

For those that don’t remember any financial “ancient” history. Bear Sterns collapsed less than a week after Mr. Cramer’s surety calls. The “Lehman-like” event happened just a few months later.

It appears, once again, the buzzer-banging guru believes such is no longer a concern, just a thing of the past. Because for those that do remember any call or observation he made for years hence, it was always prefaced with the disclaimer (paraphrasing) “Well, you know this will all probably end horribly.” regardless of the call or subject matter.

The reason? He wanted to try and inoculate himself from any possible “Jon Stewart” moments in the future. He said that qualifier so often – it became a parody unto itself.

Guess what? He’s no longer “qualifying” his remarks anymore.

And that alone should make one very, very, very (did I say very?) nervous about where these “markets” go from here.

As always, we shall see.

© 2019 Mark St.Cyr

‘From China With Love’ Has Arrived

Back in May of last year I hypothesized what I saw forthcoming and my reasoning behind it. It wasn’t the first or last time, but this article was a bit more encompassing, for it had more than one item for observation than the others as I would like to show.

Here’s the first pull quote. But now knowing what you know about trade, their falling GDP and more, add that to your prism as you read. To wit:

And I believe that plan to be: A first strike initiative via its currency (e.g., Yuan) that may cripple the world economy in the near term, but more importantly, possibly, if not probably, damage the U.S. economy beyond repair in the long-term. Setting itself up to be the undisputed power-player of the world economy, for decades to come. If not centuries. That “player,” is of course: China.

Here’s the important point of all this: Not some time in the distant future like all the so-called “smart crowd” paraded across the business/financial media like to drone on about. But rather: Now, as in, at any moment, imminent, looming, just over the horizon, __________(fill in your descriptor of choice here.)

To reiterate: What I believe to be transpiring, at this very moment, is that China is setting up the monetary equivalent of preparing for an all out economic war, equivalent in terms for economic damage or destruction to that conjured up when imagining something on the kinetic version and scale. No hyperbole intended.

“Forget Russia – What’s Coming Next Will Be – From China With Love” May 2018

Here’s another: But now think of all that has transpired over the last few week in regards to policy. Again, to wit:

Now here is where I’m going to make an assertion, which I believe, most miss. And, is why far too many also underestimate, or miss entirely the possible, if not probable impending ramifications. And it is this:

Most see the above and will reason that if we begin to go back around, or up, or down, or just scream sideways that China will respond in ways much the same as they did prior. i.e., There’s some form of positioning to counter within a “winning” manner, or at least, the ability to remain within a controllable equilibrium.

I, am not of that viewpoint.

I see the above, along with what is currently transpiring in regards to ongoing Fed. policy and political stances such as tariff policies and more. And see China in a, No-Win situation.

Every direction the $Dollar now takes hurts China. And what is worse? Every forthcoming move in the “markets” in response to Fed. policy will hurt it even more, and that’s not all.

Tariffs, of any sort, that are directed squarely at China does one thing that for now has been avoided, and it’s this…

What if the “pin to prick the financial bubble” is actually more like a “thorn” that is suddenly stepped on by the proverbial, “Bull in a china shop” that has until now been just lethargically meandering calmly up and down the aisles? Hint: The results would be the same, only where it begins differs.

And just one more: But now think of Hong Kong as you read…

This recent power-grab by Xi Jinping will allow him to do something which has not been seen since the days of Mao. i.e., Control the populous however he sees fit, by whatever controls he also, deems fit. In other words, if the populace must suffer to enable the vision – they will. i.e., Just like Mao.

If, for whatever the reasons, the “markets” or $Dollar make any sudden moves? China may not have the sure-footing everyone believes they have to deal with it. Especially, right now.

It’s quite possible if not more inline with probable that they (China) may be looking for the slightest reasoning as to covet, then release, whatever plans they may have been formulating behind the scenes.

But make no mistake about it: You don’t change what was deemed to be “a great moment in China’s global rise” by revoking what was thought to be the impetus for it. i.e., A more friendly, western political, and/or business version.

That is: Unless – you have a plan, and a mighty big one at that of your own in mind. Think about it.

The issue at hand is, “that plan” may be releasing the monetary equivalent of an all out economic war using the equivalent of a “thermonuclear” first strike devaluation. A “plan” they may now believe they can win, because control is now cemented in one mans hands. For Xi no longer needs to worry about re-election, or any other political fallout. He can/will dictate and decree how any dissension or political strife will be dealt with to reach his ultimate goals.

Just like Mao.

Now before you go, let me add just one more from something completely different that is also, oh so relevant, in my humble opinion. To wit:

(Chart Source)

The above is a side by side comparison of the Yuan in U.S.$’s as is Bitcoin™. Same time frame and both are using one hour candle/bars. The only reason for the gap is that this platform doesn’t provide the minutia detail of that period for those that aren’t that adept at charts. But it doesn’t matter, the result is the same.

So why do I bring this up? Let me answer that with the following and you draw your own conclusions. Once again, to wit:

I just want to add one last thing when it comes to much of the recent “mania” reigniting in Bitcoin…

Every time there is social upheaval, unrest or threats of clamping down on China’s currency routes to “Get the heck out of Dodge.” Bitcoin sees a surge. Soon as it appears to be tamped down? So too does the resulting gains many thought were all but “a sure bet.”

Have you seen the news in regards to Hong Kong lately? I’ll just leave it at that and let the above speak for itself.

“Addendum To “All In The Eyes…” August 3, 2019

Just one last thing: The reason for all of the above is that anything, in any of the above, was never even considered as possible, let alone contemplated across the entirety of the mainstream business/financial media.

And now – here we are.

© 2019 Mark St.Cyr

Some Thoughts Using ‘The Business Of I’ Paradigm

“Entrepreneurs are the elite special forces of the business world. They go where others fear to tread – without needing to be told, risking all.”

Opening statement from my “The Business of I” seminars

Whether you choose full blown entrepreneurship, or work in an employee/employer relationship embracing the entrepreneurial mindset. It is the decision to embrace such view that it is you, and only you, which is responsible for your career opportunities, wages and more, that will both insulate you from the fear of job loss, as well as inoculate you with true career freedom.

There truly is no other way.

All the other monikers associated with success or job security such as CEO, CFO, Senior VP of _________(fill in the blank), MBA, PhD, etc., etc., etc. more often than not, will be nothing more than some amassed monetary monikers you’ll gather or collect, like ribbons at a state fair.

Yes, they’ll look great on your wall, business card, or those letters you write home to your mom. However, they won’t do much else in difficult times when everyone from age 26 to 64 has either just as many, or worse – even more.

Think I’m kidding? Fair enough, let me put it this way…

When I was a teenager in the 1970’s, pumping gas as one of my first jobs, (yeah, I know) the running joke openly used by myself and others was not that I was some lowly station clerk, but rather, I was an “Octane Technician” within the Oil and Gas sector.

We all laughed at the absurdity.

Today? It wouldn’t be surprising to find some “college” offering courses and degrees for undergrad or graduate status containing some bloviated syllabus to explain, in minute detail, exactly what we did. All for the low financial aid price of $100K and up, of course.

Absurd? Maybe in the 70’s, but not today.

Don’t take my word for it, just look at some of the offerings for degrees and the amount of debt most are now coming out of the “higher learning” area of education. Then reconsider that “absurd” question, again.

“So why is this topic important today?” you may be asking, with unemployment at an all-time low. Great question, because no one else is even considering it. So let’s do just a bit of that here, now, while adding a possible set-up that is very real:

Suddenly the “markets” begin to gyrate reminiscent of 2008. Now what?

During the initial gyrations of the prior crisis (and truly is evident in all of them) one thing or, issue was at the forefront of most public companies: How to keep the stock price aloft?

The easiest and most “bang for the buck?” Begin shedding jobs.

One may not like that answer, but that’s what happens each and every time, whether warranted or not. It’s knee jerk, low hanging fruit. But again, like it or not – it’s reality.

So now you’ll have the ever increasing situation of less jobs available, and more people than ever looking to fill them.

Juxtapose this with another reality realization: many will not only apply for, but rather, will take one at a pay scale far less compensated then most anyone else ever considered. Especially those that were previously holding or working within such professions.

Or said differently, the job you’re applying for that once paid you “X,” may now only be offered at not just a discount, but maybe 50% off, or worse, no longer even offered. (see the current banking or investment industry for clues)

This phenom is more prevalent to the possibility of happening than at any time prior. Today there are a great many (i.e., like those that have only been in the workforce for decade or so) that not only don’t, but won’t even consider the possibilities. This alone will bring about real crisis for this same many.

Many more will also find themselves inadequately prepared to deal with the coming changes. And let no one be disillusioned – these changes will come, and with breathtaking speed and regularity should these “markets” begin to falter.

But it gets worse in ways a vast majority do not fully comprehend i.e., Just as the “markets” are now dominated via algorithms and bots – so too is the hiring process. Or said differently, nobody’s reading those resumes, literally.

What’s worse? Most H.R. departments don’t even know how these so-called “readers” truly work. All they know it allows for them not too, and that’s good enough. Think about it, for it’s not as hyperbolic as you may first infer.

While the above will suddenly find themselves confused, bewildered, or caught like deer in the headlights looking at how or what they should do next in the dawn of this new age. As I iterated prior: It doesn’t mean all.

For some, it will (and can) be the opportunity of a lifetime that they’re positioning for. Yes, positioning, as opposed to just waiting, as I’ll explain.

We are now fully in the “self empowered” era. And it’s got way too many confused on its meaning.

Most are confused on where it begins and why. The idea of the “gig economy” has been ruined with people not understanding what business really is, and just propelled themselves down a rabbit hole with how cheap one will do a task for. i.e. a race to the bottom.

However, with that said, that doesn’t mean a proper and robust infrastructure to do it right isn’t there, for it is. It’s just been used poorly and improperly from my perspective.

There are more than enough web based tools at one’s disposal to fully function at most levels. Yes, even conducting business globally and with Fortune 100™ concerns.

You do not need anything to run your own business except the fortitude to start. And just to reiterate: being an employee doesn’t negate anything of what I’m stating. i.e., Whose name fills the “payer” designation does not alter what the mindset of the “payee” has or, is. That’s why I call it “The Business of I.”

In other words, you are the business from where you work and think, encompassing all aspects from that standpoint, which is of the entrepreneur. Everything else is just the situational, contractual relationship of your business at that time, nothing more.

Just one more point: this type of “mindset” that I describe strengthens and enriches the employer/employee type of interaction, not weakens it – as some willfully, misinformed managers (usually H.R.) and others have tried to tell me over the years. But I digress.

Once you grasp and fully incorporate the idea that the only way to free oneself from fear and anxiety is to take charge and command over one’s mindset of exactly who and what you are. Only then can you look upon any situation in regards to employment security, financial security and so forth with opportunistic eyes, regardless of circumstance. Rather, than only the fear of the unknown, for most have no other construct to filter by.

You need no degree, no permission, no nothing. All other titles can be taken away by someone else. What you can’t be fired from – is you. Unless you do it.

It’s the ultimate status for financial or economic reality and surety.

Again: If only you are in charge of you, than you can make or take advantage of any situation, regardless of the times as you see fit, based on your abilities to see reality as it is and apply your skills to compete. You need no permission – just fortitude.

Most don’t, but for those that do? This is, as they say, is when the world becomes you oyster. And it is available to you right now -regardless of circumstance. It’s a choice. But it needs to be made or else it’s all a meaningless thought experiment.

Here’s something else to consider. Ever wonder why so many people find once they get that title, that position, that gold star, that ______(fill in the blank) begin to wonder why they feel so apprehensive about their future rather, than feeling more secure?

The reason may be as simple as this: What they now feel subconsciously is that they now have nothing more than some identity granted to them by an outside authority, which at any time, can take said identity away, without their consent. i.e., They are their job title and they unknowingly have become only what someone else says they are.

Entrepreneurs, whether of legal classification, or of the” Mindset” viewpoint, shed all this entailed baggage for only one concept. e.g., Only I decide where I work and for whom. And I am responsible for where or if I do, regardless of economic conditions.

Their title? Business of I – Owner.

Entrepreneurship, or it’s accompanying mindset, is state of mind. A way of conducting one’s business in the world through one’s own set of clearly defined rules and/or principles that no one can take away.

It is the only freeing choice. Hence it becomes the only choice for those who decide to embrace it.

Should a sudden “market” shock begin unfolding, there are going to be a lot of very nervous people seemingly caught like the proverbial “deer in the headlights,” wondering what to do.

The entrepreneur or entrepreneurial mindset individual will not be looking for some “job.” But rather, will create their own to fill the ever increasing voids that will be needed either to hold or, increase the bottom line. Not by submitting resumes looking for employment. Rather, by just the opposite as in…

Recommending and demonstrating face-to-face why “hiring” or, working with them is not an expense – but rather – an asset.

Which just so happens to coincidentally be the only thing companies during such time will not only be willing to listen to, but want to hear.

No “resume reader” required.

© 2019 Mark St.Cyr