Month: April 2011

Reality vs Bizarro World…or Down the Rabbit Hole

I once thought that people in positions of power, and influence were there because they just might be smart. Boy was I ever wrong. (Please forward all emails to the Easter Bunny if I offend anyone in my analysis. This article is for thinking adults only.)

Many of you that have followed my commentary on the stock market know that I have been calling for what seems like ages dire warnings that have not materialized. Some have scoffed at my clarion calls, and that’s fine. But like I’ve said over, and over again, you can’t find fault in my thesis. My timing is all that seems to be incorrect. The longer this charade goes on, the harder the fall into the rabbits hole will be. Let’s look a little deeper into this shall we?

As I stated back in 2009, and have repeated many times, all you need to know is, “Dollar down…Market up.” As of today the Dow Jones Industrial Average hit its highest level in over 3 years since the calamity in 2008. Guess what? The US Dollar just hit its lowest level in the same 3 years. Who’da thunk it? If your counter point is “but look at earnings?” Sure, however they are based on a corollary of the US Dollar weakness in world export markets, and productivity gains. In simple terms, cheap prices for our goods  compared to other countries, and getting rid of as many human workers as possible. And how is this all being accomplished? Your friendly Government, and Central Bank.

Back in August of last year I was warning that if you looked objectively into the data that companies were in serious trouble. All the programs that were enacted through various Government agencies were at a point of causing more harm than good if they continued in their present forms. e.g.: TALF, TARP, QE1, and so forth. One could make the case for their implementation, and I grant that arguments validity. What I don’t waiver on is the damage that could result from keeping these rogue market forces in place. And this my friends is being proved everyday, and is now clearly quantifiable.

In May thru August of 2010 the markets had begun to show just how vulnerable they were. As the talking heads on TV were touting that a market correction was well within reason because of the meteoric rise from the recent lows caused by the near Great Depression fall we experienced. It seemed however the powers that be didn’t agree with the so-called “Smart Crowd.” So scared, and feeling like he must have been looking into the gullet of a fire-breathing monster, the now famed “Helicopter Ben” (Fed.Chairman Ben Bernake) pulled from his scabbard not a sword, but a fire extinguishing water cannon costing $600 BILLION. Since that moment also commonly referred to as “The Jackson Hole Speech” it has been another rocket ship ride to where we are now. For the US Dollar? Well let’s just say from Benny’s helicopter the dollar wasn’t given any parachutes. It was just shown the door with the words emblazoned above, “Jump…or Else” Some would call that a double negative. But I guess we should be happy we were given a choice, right? Sure….Let’s move on shall we?

Yesterday the President announced he’s forming a commission to look into whether or not the oil markets are being manipulated. ( Warning save the emails or forward them to the Easter Bunny, this is about reality, not political sides. I don’t care who has the job.) This is just about as laughable as the statement ” We’re losing money, but we’re making it up on volume!” I mean, is there no longer reality based thinking on the planet Earth? Let’s hit a few bullet points shall we, just for chuckles.

  • Close down oil drilling in US Gulf.
  • Issue no new Oil drilling permits for months.
  • Increase regulatory requirements so punitive US companies detract from drilling or new exploration.
  • Middle East uprising topples 2 of the longest standing regimes in oil-producing countries, and threatens to spread to worlds largest.
  • US enters into its 3rd ongoing armed conflict in middle east.
  • China declares its pulling any and all oil exports from world market, and will be 100% importer only, as to satisfy its increasing needs.
  • OPEC announces not only will they not produce more, but they are cutting production.
  • Oil is traded in US Dollars globally. The more the dollar falls, the more dollars it takes to buy a barrel.
  • How much further do you want me to go? This is just scratching the surface.

Mr. Bernake since August has poured $600 Billion dollars onto the markets that has the leverage power at minimum of 10 to 1. There are numbers floated that some of the dealers that are privy to this free money are leveraging at 20 times, and higher. Just to give you an idea of the money we’re talking, that’s anywhere from 6 to 12 TRILLION DOLLARS! Remember, leverage is a bad thing we were told in all the hearings, but I guess it’s “Good News” if privy players are doing it. They’re wicked smart you know. Even though they’re the same crowd that leveraged everything up the last time. I’ll bet they’re really cautious now seeing its your tax dollars, and not their money, I mean c’mon, they must have learned something, right?

Here’s something I wrote back when this craziness all started. I feel it’s more relevant today that ever…

“Markets right themselves with pain… That’s Capitalism.

Back room manipulation to avoid pain only increases the severity of the pain to be felt down the road.”

I feel this bunny has dug himself one heck of a rabbit hole.

Mark

© 2011 Mark St.Cyr   All Rights Reserved

Fine Print, Bold Print, seems Nobody Reads Either

It seems you can’t look at an ad on TV or some advertisement anywhere without the proverbial “fine print.” But honestly, does anyone really care? No matter what you write, no matter how detailed you structure the information, people don’t care. You the company might care. You that hired the legal team to make sure you crossed every t, and dotted every i might care. But as far as your customer, the consumer of your goods. Forgetaboutit! It’s going to be sue first, maybe read it later. That’s what the lawyers are there for, regardless of how seemingly explicit you were in your cautioning.

If you’ve watched television of late, you can’t go 5 minutes without some drug company commercial telling you the wonderful benefits of their so-called miracle cure, followed by just as much time dedicated to listing all the hazards. If you listen they basically state, you can DIE, Grow Arms on the bottom of your feet, or something akin to contracting 22 other ailments by curing the one you’ve got! All this while butterflies, and smiling faces of happy people abound on the screen. Is that really all it takes these days to distract the American public? Maybe we really are in trouble.

Years back you were always warned “Beware of the fine print!” But that seems to no longer matter for any transaction. Is it because we’ve become desensitized to the warnings, the labels, the statements? Or is it because we don’t care, and assume we now have the equivalent of a lottery ticket? No matter what the labeling, if something goes wrong, we’re getting the lawyer. If we spill something hot on ourselves it’s because I wasn’t warned hot means HOT! If we decide we don’t want the cautions to apply to us, then we will just ignore them. But if our self-induced ignorance results in the injuring of ourselves then we’ll claim “Where was the warning saying, not to ignore the warning?” Sounds crazy right? Think about it a  little more is all I can say.

Oh, by the way…“The views expressed by the author, are possibly not the actual authors unless they deem to have merit. If the have no merit, and fail to show any true thought process, than the views were from someone else that we may or may not know. If reading this copy results in making you look good, or look bad. Only contact us if you want to send a check. Not responsible for any strange growths, thoughts, or anything else that can be attributed on the planet Earth. All interstellar warnings also apply. See store for details. One per customer. Other conditions, and rules may apply. See Enclosed disclaimers!

Mark

© 2011 Mark St.Cyr  All Rights Reserved

Getting Nickel and Dimed to Death for Free!

Free is the word of the day. Free is what everyone seems to expect. “I would like that yes, however, only if it’s free!” or, “I have to pay for that? That should be free!” And on, and on it goes picking up steam in every transaction, every inquiry, and yes, every sales ploy. Personally, the more I hear the word “free” the more convinced I’ve become many businesses no longer have a real value proposition to offer. But wait…There’s more!

Now that customers have seemingly bludgeoned retailers, or any other enterprise with the expectations of “free.” A new, and wonderful old tactic is coming back with fervor. No problem, you wanted all those things for free? Great! Now be prepared to get nickel, and dimed to death! Ah, that’s the ticket right? I don’t think so…

Let’s be honest, free as a real promotional tool can be useful. But it has to be used when free is really an extra, a cherry on the sundae, a way of giving something of true value because of special pricing, or whatever the reason. A deal that only you can provide because others are not be able to. Something that makes a real differentiation in your offering. Not the tired, worn out, “Buy 3 tires, get the 4th Free!” ( yes, pun intended.) But now you’ll charge me $5.95 per tire stem cap to make up for any so-called discount received in the “free.”

Recently my wife and I enjoyed a wonderful weekend at a hotel/casino complex. This is where “Free” is the word of currency. Free this, free that is all you’ll hear. But when we were in our rooms, use the telephone for a local call, better get out the safe deposit box, this is gonna cost you. Wi-fi in the room? Free at Starbucks, an arm, and a leg here. Oh wait, you have 2 devices? No problem. It’s just double the price. When I inquired on why I had to pay again for another device even though we are in the same room ( we each had an iTouch, but needed to pay twice for both to work at the same time! ) the reply was, “Sorry Sir, but that’s the way our system works.” Quite a system I said to myself. Sounds more like forced retribution if you ask me. I thought the slots were the bandits. Holy Moly!

This is occurring everywhere you look nowadays. And I don’t think it’s helping either business nor consumer in the end. It’s become a shuck, and jive way of giving perceived value with no value. It doesn’t work. But it seems to be picking up steam. It used to be nickles, and dimes or even at times free to have someone get your luggage. Now if you want to take a piece of luggage, haul, and load it yourself, just so you might have a clean pair of socks. ( because that’s what you do when you travel.) It’s now $50 buckaroo’s, and It looks increasingly like you may need to check that carry-on also. It appears 2 inches too large per the newest criteria change. Oh so sorry you weren’t aware they changed the size last week. It was posted on their “Free” website. You should always check there to make sure you don’t run into a new 2nd bag fee. OUCH!

Well we can at least enjoy the free peanuts I guess. Oh wait, what’s that gonna cost me?

Mark

© 2011 Mark St.Cyr  All Rights Reserved

American Exceptionalism…It’s the Cure not the Disease

Sorry folks, I’m getting a little tired of all the bashing, hand wringing, or the self loathing I keep hearing surrounding the American Exceptionalism argument. Hopefully many of you haven’t bought into all this trite the so-called “Ivy leaguers” like to espouse. For me, I’ll take a little more talk, and action from people wearing cowboy boots than the wing tips. Have most people in this country forgot that it wasn’t the suits, and ties that forged into the unknown with nothing more than a horse, a wagon, and yes a gun. If that bothers anyone, save the emails, I could care less. The schoolboy crowd could have never taken root in this new unknown until the people who had the courage to go out and do It…Did It! Only after these pioneers settled themselves in, and actually built the infrastructure that would allow this “genius crowd” to actually attend a school could they then look down their noses at them.

The term “Cowboy” was once revered in the lexicon of American culture, and I would argue throughout the world. As of late it seems more, and more that any pain being suffered by the “book smart” elite is instantly shoveled onto the vapid argument that it’s because American Excepionalism never really existed. The problem to me is, it doesn’t exist for them. This “thing” of  A.E. is not about studying, It’s about doing! You don’t look for the “How to build a better world 1.0 manual” you go out and build it. When you need to chart a new course, and there hasn’t been any maps created yet, you venture out into the unknown and make one. You also don’t wait for permission from any self-appointed know it all to give you some made up hog wash that they have sanctified your endeavor.

I would venture to say that the real crisis facing this nation, and our economy is that we who hold dear the underlying principles that created the Greatest Nation this little planet known as Earth has ever seen, is in trouble because the wing tips have somehow snookered the boot wearing crowd with drivel that we need to consult their approval first. Nothing could be further from reality, and I give here an example that fills this chin rubbing set with a fear scarier than not getting their Tee time at 9.

It’s more than likely if you have an MBA, Ph.D, BS, or any other host of so-called wonderful acronyms after your name, even if it’s held from one of the those “greatest institutes of learning” you will likely be presenting yourself to be hired by some company which was founded by a dropout. Sorry to be the one to inform you, but yes, more than likely that latest and greatest company will be because of a “Cowboy.”

I don’t know about you, but I take great pride donning my cowboy boots. And they have points that can be so useful when the wing tip wearer who just tried displaying his superiority bends over to tie his undone laces.

Hi Ho Silver!

Mark

 

© 2011 Mark St.Cyr All Rights Reserved