Month: April 2014

And Banks Wonder Why People Distrust Them

If it wasn’t for the sheer magnitude of the idiocy associated with what happens behind the scenes at most major banks one would just laugh. However, one can’t help but look at just the latest story to grace the headlines referencing Bank Of America™ and its now uncovered “oopsy” accounting and wonder should you laugh or be scared.

Suddenly it’s been revealed that all the “extra” money they had to bolster their balance sheets which allowed them to offer dividends, buy backs, et al actually wasn’t there. So much so that the Federal Reserve (supposedly the overseers that are responsible that such things don’t/can’t happen) has now rescinded the “all clear go ahead and pay out” to “Holy crap what?”

It would seem the earlier mandated stress tests were just a little too stressful for the accounting team, and it appears they “mistakenly” said they had X in reserves when in reality they had Y.(aka squat!) Which in turn now means there’s no Y to cover paying out Z. I guess many are now scratching their collective tinted shades thinking, “No Y? Why?!”

Maybe they can blame the accounting error on a glitch in their old Microsoft XP™ software. (Look for this to be used as “the weather” is used as a pre-made excuse elsewhere.) Because we all know after all: it can’t be their fault. They’re a bank for heaven’s sake, and we all know banks are: accounting experts, bastions of integrity, and have the needs of widows and orphans welfare first and foremost over monetary concerns. Right?

However, that’s a sample of the big issues, let’s go onto the smaller ones. Ones you and I have had first hand dealings with. (I have stories from personal experience that leave a room a gasp in disbelief, but that’s for another column) These issues are both systemic and institutionally practiced group think of accepted bad behavior with no comprehension of just how stupid the group think within the hallowed vaults can be. There are too many to list so here’s one that if it wasn’t so obviously idiotic and insightful, it could be laughable.

Just yesterday I went to my local branch of one of the large big bank (no I’m not naming names because it basically applies to all of them so take your pick) where I get a roll of quarters to keep in my car for parking meters, vacuums, and such. What I’ve noticed of late is I’ve been getting Canadian quarters mixed in. Not many but 1 a roll or so.

I brought this up to the teller as he gave me my newest roll and I asked: “I have about four of five from previous rolls. Can you exchange them for me?” His response? “Ohhhh, yeahhhh, ummmmm, we can’t take those. That’s foreign currency. Ahhhmmmm, sorry about that. Matter of fact as soon as we get them in here we just send them back out.”

I was stunned! I replied, “Yeah, no kidding – I’m proof positive of that, so now what do I do, try to spend them?” The response again was right in line with what one would expect. A shrug of the shoulders followed with, “I guess you could do that.”

When I replied, “Well how can I make sure from here on out I’m not the recipient of this fine albeit useless coinage in the United States vending system?” His response was again near useless. “Well, I can open the roll and we can check them before you leave.”

Sure like we all have time for that, me, and the line of 10 people behind me waiting for this one teller. Of course I said, “I’ll take my chances thanks.” Then went about my day.

Now it wasn’t this tellers fault. After all he looked like he was just out of school and this was probably his first job. However, the answers and the responses are not ones that are made up on the fly.

You’ll know if you listen carefully (and I do) when people are reciting inner office dictum’s or answering policy procedures per instructed by department managers, HR, executive boards, all the way up and down the corporate food chain. Problem is this food chain has less in common with substance and more with empty calories. All stuff that looks good, sounds good, but supplies no lasting customer satisfaction or benefit.

It amazes me now to think back when I used to have feelings of incompetence when I couldn’t balance my checkbook. When in reality, I was unknowingly preparing myself for a career in banking. For it looks like balancing the books at a bank: isn’t a requisite. After all, it’s not like it’s their money in the bank, it’s ours.

Wait…what?

© 2014 Mark St.Cyr

Why Intellectual Leadership Can Get One Killed

One can’t help when watching the latest news stories and shake one’s head in both amazement, as well as disgust. Whether it’s the latest political blunder or snafu, all the way through to some of the worlds largest corporations. One thing becomes crystal clear: Most “Intellectuals” can only remain looking smart if the world is calm, or a current business cycle is booming.

For once the tide turns and decisive action is needed during the turbulence: the dumbest choice of people to deal with an evolving crisis are “intellectuals.”

The problem with these people in key positions of power (both politically as well as business) is they know how to navigate internal office politics, they understand the how, when, and where of backstabbing. They can turn the hard work of others into their own as to curry favor as well as promotions. But what they can’t do is the actual thing needed most: the actual doing.

Let’s not mince words or thoughts here, what I’m directly speaking to is the difference between someone who can both be and/or act ruthless vs one that “believes” they are the same.

The intellectual prowess of the so-called “smart crowd” can not only be dwarfed by the truly ruthless leader, but can put both themselves as well as their company or followers in grave peril. For intellectuals think out processes far too much. Then do nothing.

They’ll over think why someone would do X, Y, or Z. They put themselves into shoes that don’t fit, then spend more time contemplating if their opponents should be wearing leather vs rubber soles. All the while their opponent laughs running circles around them barefoot.

The fallacy of their though processes remains hidden most of the time only by the veil of normalized cycles. But when those cycles have more in common with hurricane season, they’re the first to stare doe eyed at the flashing warning signs about what to do next.

Currently we have a crisis that is rapidly changing day-to-day in the Ukraine. Vladimir Putin is showing the world exactly what he is, what he wants, and what he will do to bring it about. The rest of the world’s reaction? Endless blither and blather on why he shouldn’t.

The problem for the intellectuals is they believe because Putin is reported to hold some $40 Billion dollars in assets that appealing to his 1%’er side should be sufficient to entice him from acting badly. They believe since they themselves are of the same 1% that they share commonalities.

They’ll intellectualize why they know what a 1%’er thinks, wants, believes. Again they mistakenly believe they should because after all – only they know best how to talk or treat another 1%’er.

Here’s an alert for the intellectual set. Vladimir Putin is a 1%’er. Just not yours. Putin has more in common with the other 1% crowd collectively known as outlaw motorcycle gangs. (Yes I mean all those you see sporting patches on their backs)

The trouble for the 1% “smart-crowd” is they have no idea or frame of reference this other group works or plays in, let alone any understanding of what motivates or causes them to rethink conquest.

However, the outlaw 1% know exactly how to frighten, extort, and run roughshod over the intellectual. All while laughing and enjoying the process.

Let’s just put one of the latest arguments splattered across the media to make a point. The argument goes something like this: “If Putin cares what’s best for his people and doesn’t want them to feel the effects sanctions will bear: he should rethink his position.”

Well, that sounds really threatening, but here’s what’s wrong with that whole premise: If Putin or any other communist leader cared about what happened to his people – they wouldn’t be living under his thumb in a dictatorial environment where people routinely go without proper food, medicine, clothing, rule of law, etc.

One of the most feckless postures any leader can do is make threats (no matter how large or small) then not follow through. Real tough guy’s feed on this type of false bravado, regardless if you may have the storehouse of weapons to decimate them or not.

You can threaten to lock up their bank accounts, throw them in jail, what ever, but the problem is they’ll willingly and laughingly, burn your house down, break your legs, pee on your shoes, and more before you blink.

Words and threats are meaningless to this crowd. Actually, the more one threatens them, the more embolden they become. Why? They actually like the idea of the fight.

Intellectuals are looking for ways as to not be left with egg on their faces. Real tough guy’s don’t mind breaking eggs to accomplish their goals. All one has to do for evidence is look back at another famous tough guy: Mao Zedong.

Mao famously stated when millions of his own people were dying: “Well you have to break a few eggs to make an omelet.” Getting egg on his face, shoes, or anywhere else was just a part of the process in his eyes. Putin is cut from this type of cloth. And he wears his own colors proudly as any 1%’er would.

But don’t worry, they’ve got a broken egg diplomacy mindset on their side – we’ve got #hashtags to be served on ours.

© 2014 Mark St.Cyr

 

 

The Scarlet Absence Of A Letter Of Credit

If there’s one thing we all know about banks and bankers: they love to tell tales in public of how much they value their customers. However, what you’ll never hear them profess in private: is how much they trust them. Although one may think that’s unseemly, believe it or not there is another entity banks hold at an even lower tier. Other banks.

One of the known facts people remember about the melt down in 2008 (as opposed to general public) was when the banks no longer trusted each other, and what they earlier claimed was “collateral” wasn’t actually worth what it was stated to be.

Credit default spreads (CDS) were supposedly the insurance to negate valuation concerns. But when the banks felt CDS weren’t worth the paper they were written on, not only did they operate in a fashion reminiscent of cutting their noses off to spite their faces, but rather they began cutting visible ties (and/or appendages) to other banks.

The blinding issue with all that took place during that period is the speed in which it all took place. Once it seemed one bank (regardless of size) was not going to be able to make good on a promise of clearing, near overnight the banks regarded any and all collateral at a discount. This fed on itself to where even once valued pristine collateral such as hard materials let alone paper began to be not only discounted, but prices slashed at such discounts that would make a blue light special at K-Mart™ blush.

So when I read the following article on Zero Hedge™: How China’s Commodity-Financing Bubble Becomes Globally Contagious.  My blood ran cold. The implications of this development and the consequences it portends just might make it the proverbial “canary in a coal mine.”

The underlying issue that makes this far more dangerous or different from times past is three-fold. First: The idea of the need to send a perishable product overseas to another country that operates in a differing court system without the only document that gives one a chance of a “guarantee of payment” is not something to be taken lightly. As a matter of fact, it should be looked upon as a move of desperation.

Second: If that commodity is both a readily needed or used product, the immediate resale by the receiving party (especially if they themselves are in trouble) may sell it off at a steep discount. And yes, I’m implying less than what they are being billed for.

For if the receiving party needs cash, and you don’t have anything backing payment, i.e., Letter of credit (LOC.) Than it’s free money to do with as they please until you can get them into court – if you can at all.

Why would one pay full price (or even think they should) when pennies on the dollar will now be the opening settlement offer in any negotiations?

Third: The commodity itself is well-known, and has been publicly reported as being used as a collateral for cash strapped real estate developers in China. This last point is probably the most troubling of them all, and where the real issues might come about.

Here’s a scenario many are missing yet, is highly plausible. If bankers once again (for any reason) don’t believe they’ll get paid, while also concluding what they have on their books once again as collateral (since housing is a sunk line item now) can possibly deteriorate in value faster than a foreclosed building in Detroit. All bets are off.

A vicious cycle begins something akin to this… (Yes this example is an oversimplification, but the implications are not.)

The commodity producer is leveraged up and is either fully, or has over expanded needing to produce X at a rate consistent with structures and costs. The banks (markets, etc.) base their loans for operating expenses on sales, and value of on hand inventory. All rudimentary stuff.

If the collateral backing the loans for operating expenses are mostly the refined product itself, and that product is a commodity, then both the product along with its value are at the mercy of a perishable overhang. e.g., The product can spoil, or the price can plummet via oversupply, etc. But the one thing it can’t do that’s possibly worse: is sit on a producers site, books, or more, indefinitely.

The only way to turn that product into useable cash is to sell it. And here is where things get a little tricky. For what a sale “is” as to open or allow funds to be allocated to the producer for operating expenses, can sometimes have more in common with that other famous distinction of what exactly, “is” – is.

If you’re a company and producing X where LOC’s are the requisite detail of paperwork that can not be overlooked or forgone, and is standard operating procedure for the industry, and you deviate from these expected practices: it sends signals that not only something may be wrong, but quite possibly something far worse. i.e., An act of desperation.

Imagine yourself as if you owned the commodity and it were beginning to either pile up in excess inventory. Or, you had tentative sales yet, they were unable to come to fruition for lack of a LOC. What would you do?

Well, if you hold onto the product and let it sit it begins to lose value via market forces. Second, your lender values you product as collateral less and less via those same market forces squeezing you even more. So do you sit idle and let the chips fall where they may? Or, do you send it off in hopes of getting paid?

If you send it off it’s entirely plausible on your own books it will still remain as a “sale” and it keeps the demand narrative intact, reduces inventory, and helps in keeping production quotas all in check – for the time being. Keeping the spigots of operating revenues flowing. (Hopefully giving breathing room so fallacy can turn back into reality)

However, at issue is also the recipient of the product, For either A:  They didn’t want or need it. Or B: (which is far worse) Need it, but can’t pay for it.

If that customer is honorable, they might just receive the product as an early shipment, store it, and state never do it again or they’ll drop you. Yet, they’ll penalize you by paying for it only when they actually would have ordered it to begin with. Regardless of when that date may fall. That’s the most wishful (and probably unicorn/rainbow treatment) of an outcome one could hope for.  Yet things usually don’t happen that way do they?

Let’s use the guise that’s turned a blind eye by the so-called “smart crowd” across the financial media, and look at the recipient of that product as someone being squeezed by their centralized government in an effort to dampen a real estate bubble. Couple this with the tenacity as to not give into outside pressures as to “inject liquidity” at others promptings.

If the product is received by someone desperate of needing cash, than the first thing they’ll do with that product is whatever it takes to turn it into just that. And just like a drug sick shoplifter will sell any highly valuable stolen product for 50 cents on the dollar, so to will a credit induced financial addict with the overwhelming overhang of needing to supply a “credit fix” to their portfolio.

As devastating as the above scenario can play out there’s another just as plausible and actually more probable. This is where the ruthless play. And these players make banker on banker squabbles look like a kinder-garden recess.

To them: You shipped it without a LOC? Shame on you. Let’s start the bidding of you possibly ever see payment at a 50% discount today. If you don’t answer by the close of business today, it goes down even more.

Think they’re not serious or want to call their bluff? No problem, they begin by informing you that you can easily reload it onto your boat if you want. But, just to let you know, it’s no longer stored where it was off loaded. It’s now at X, or Y, or Z, or had been sold immediately on arrival. Oh and by the way, they were just informed the people they sold it to, don’t seem to have any money now either. Credit crunch is taking its toll your informed. (what a coincidental shame, who’da thunk it?)

Oh and by the way, it seems they’ve just instituted a new 90 day (or longer) advanced scheduling process, along with other “added expenses” that will need to be paid before you can get your product back.

They’d love to put you at the front of the line however, you’re notified there’s a lot of corruption taking place on the docks and even they can’t jump in line without paying.

By the looks of it, the farther one tries to work this out, it seems it just might cost you more to get it back than it was to ship it. Huh, funny how that happens. Well call back later they’ll say, and see what progress can be made as to rectify this for you. Click.

If you think things like this don’t happen, I have some ocean front property in Kentucky I would love to sell you.

Now take into account where the back half of the storm shows its presence throughout the commodity complex itself. (all hypothetical of course)

Suddenly the market becomes aware that company X is dumping your commodity onto the open market for say a 20% discount. That in turn spurs other producers or holders to begin offering their own discounts. As they do, the bastardized market (because without a LOC they’re in essence dumping) they begin dumping even more – for less.

That in turn pushes market forces in a downward spiral, which in turn reduces the value of everyone’s inventory leading into a black hole of who can discount faster. Which in turn begins in alerting “the lenders” to begin questioning any and all “sales” on clients books, and what they truly represents. Only to then find those “sales” were nothing but wishes and hopes. For without a LOC, what are they?

One doesn’t have to look all that far back in time to see just how fast the impact of any cuts, or implosion of credit lines by the banks can decimated businesses. Yes the 2008 crisis showed when they no longer trusted each other. However, “The Savings and Loan Crisis” of the 1980’s should remind every one of just how fast this can take place along with its consequences for Main Street.

Anyone that ran a credit line based business during that period remembers all too well the many businesses that were shuttered were not for a lack of business, but by the head spinning quickness LOC’s or lines of credit for operations were both changed as well as cancelled. This one could do the same but have far more reaching implications.

Over the last few years since the financial melt down of 2008, we have seen what many have believed are precursors that may tip the hand of markets as to show just how unhealthy this levitating act fueled by free money has become.

And yes there are always false indicators, and we all know correlation doesn’t equal causation. And even more may shrug and think, “No letter of credit, so what.” However, if there were ever a canary in a coalmine worth noting this is one not to let one’s eyes to divert from.

The issue at hand is not just the foolishness of the absence contained in a one off LOC gamble some company would take. Far from it.

It’s the desperation that could be hidden that’s a precursor one has to watch for. For the amount of desperation, or the degree that might be hidden beneath the surface to which a commodity will be sent overseas to another country, a country for all intents and purposes is using that very product as a pseudo currency to back other financial obligations without the requisite document to be paid. Is mind numbingly dangerous in its implications in my view.

© 2014 Mark St.Cyr

Putting To Rest Any Rumor

Just to be clear in this day and age when every move is scrutinized, and every intention is analyzed as to expose ulterior motives. I feel it is my duty as a citizen to put any rumors (there aren’t but hey I’m being proactive) circulating to rest for the benefit of my readers. To Wit: (Ah hem…)

Let me make this clear, and incontrovertible.
The release of my book later this year is in no way, nor should it be construed as to be associated with a presidential campaign, or run for office by me in 2016. e.g., As is being done by every potential political figure currently breathing. (with breathing being optional)
To channel the most famous non acceptance speech in American history:
If I am drafted to run no matter the party: I will not run.
If elected by special ballot or write in campaign: I will not serve.
I do not seek, nor wish to run for the office of the president or any other.
However…. (as to channel leaving the door open as every politician in the history of the world is known for)
If the office of: Ambassador to the Intergalactic Nations of The Universe is ever created and offered. Then yes, I will gladly serve the Earth in this capacity.

For unlike most of today’s world change or disruptive agents. I not only own suits that have matching pants, I also have clean shirts, understated haberdashery, sensible shoes that are well-kept, and happy to wear them all. And yes, to be clear: all at the same time.

Add to this the ability to be seen with hair that’s actually been combed rather than that bed head look, along with the absence of any cartoon colorings just enhances my qualifications as to be taken seriously at first impression meetings. (I also promise not to be seen sporting any blinking blue appendage in my ear unless I’m instructed to by Lieutenant Uhura – personally.)

I believe it’s important for the world that the Intergalactic ambassadors from around the universe meet a representative that not only doesn’t appear to look like they just walked out from behind the curtain of a circus show, but can speak and articulate dialogue more than 5 minutes before resorting to profanity to make any points. Only in this capacity would I accept such a position.

Thank you for your time, and you can keep your wallets in your pocket. Seriously, I mean it. No donations accepted regardless of the amount.
That last sentence alone should put to rest I’m serious. After all…
What politician would ever say, “I don’t need your money?”

Respectfully,
Mark

From The Upcoming Book: The Busness Of I

A passage or quote from Mark’s upcoming book, The Business Of I. (available later this year)
Feel free to share, just please remember – don’t spam.
Thanks!
-V.V. StreetCry Media

 

“The more barriers removed, or easier a once implausible task becomes to execute: the harder it will become to do just that. Why?
Because, as ease of entry of a once perceived barrier is removed:
the barrier of fear begins to rise and take its place,
becoming even more of a hurdle then its imagined or real predecessors.

Moving through that final self imposed barrier requires you, moving past, you.
For many this is the greatest barrier of all: for it stops one from actually believing in themselves.
It is at this moment people begin the busy work of procrastination.
Appearing to be working and planning great things: Yet will accomplish nothing.
For they get busy blaming the world and point to all the reasons why.
Fooling everyone including themselves that they were busy working to overcome some other barrier,
instead of pushing through their own.”
– Mark St.Cyr

Will Facebook Like The New Reality?

Within days Facebook™ will announce their earnings report. However, since their last reporting a new reality has appeared and many of its investors may require a pair of those new virtual reality headsets to parse what Facebook believes is reality: and the reality Wall Street wants. i.e., Where’s the money?

Wall Street (or the markets in general) is notorious for turning once heralded “wonder boy’s” during the IPO process – into just plain “boy’s”

One thing is very different for Zuck and crew this earnings cycle than any previous reports. With the departure of Ben Bernanke and his steady hand at the bubblicious printing press, along with a market currently left confused on whether Janet Yellen will indeed ever turn back on the bubble machine. It’s quite possible many of today’s “disruptive agents” will have more gum on the soles of their shoes than they’ll find readily available via QE to repair bubbled market caps.

When earnings begin missing, or lose their former narrative against earlier business projections, all hell can break loose. Regardless if one can manufacture a “beat” via non GAAP or not.

When money tightens clarity of vision becomes acute. And it’s becomes quite apparent that a bubble has, or is about to burst when, “Hey that sounds great!” is incessantly followed with “But where’s my money?” In bubble times you only hear the former. When the bubble breaks: you can’t get away from the latter.

Remember when it was touted not that long ago (is 24 months too long? but I digress) that Facebook was the “only” place to be for users around the world? The domination for interactions amongst teens would not only build its user base, but solidify long-term loyalty to the platform for years to come. Until they didn’t.

It’s been widely reported teens (once a heralded metric of eyeballs to sell advertisers) were leaving Facebook in droves. So what’s a company to do? Well, buy the company they’re all leaving you for of course. Regardless if its profitable. For in an age of hot money seeking anything, and everything: profits be damned.

Much can be explained away with a growth narrative. Again: You buy the narrative and real profits be damned. Leave the pesky detail of making money to the spin doctors. (otherwise known as financial media.)

So with the user narrative seemingly in place (a metric for many that can make or break the story line) one just can’t help but wonder why during the most recent earnings call this metric wouldn’t be shouted from the rooftops. For as reported in the Washington Post: “Executives on the earnings call didn’t offer specifics about how young people are using the networks — in fact, the company said there was no new data to report.”

Really? I thought this was a growth company, not a legacy. I would expect that from the likes of Cisco™, Microsoft™, or wait…..AOL™? Maybe their new user “likes” are in the “mail?” Too soon for such comparisons? I don’t, but I do have a habit of being early.

Follow this with the stunning purchase price awarded to acquire WhatsApp™.

Remember that little gotta have company Zuck and crew shelled out some $16 BILLION dollars for in a near overnight decision and execution? I guess when you gotta have something, you gotta have it. Regardless if its making a profit to warrant such an acquisition, For again, we’re talking narrative here.

And in a world dominated by free money via the Federal Reserve: a virtual reality can trump true reality anytime, anywhere. No special headset required.

But they should have everything integrated, assessed, and running like a Swiss clock by now correct? I mean that was way back, we’re talking February of this year. That’s nearly 90 days. Well, at least they have the excuse of “the weather” for any missed expectations. Everyone else used it – why not them?

The funny thing is one would think there’s enough there alone to give any investor the jitters as to wonder, “What is going on in there?” But (and it’s a very big but) the hits just keep coming. Like a teenager that stole their parents credit cards, this buying spree I contend can make most Millennial hackers blush.

Forget WhatsApp and the exorbitant price tag paid. Forget Instagram™ and the need to fence in user abandonment. At least for good or ill the business narrative one could put into context. (even as far as one had to stretch their imagination to do so)

However, how in the world does the board along with Zuck himself conclude it’s a good idea before they get even one – just 1 – earnings report under their belt to help alleviate and answer concerns about the decision process of spending over $16 BILLION dollars on a company most investors outside of Silicon Valley knew even existed, to spend and acquire even more?

I’ll wager many investors didn’t respond with, “WhatsApp? What’s that?” It was probably much more in line with, “$16 BILLION?  WTF is up with that?!”

Then, just weeks later, Facebook announced it had purchased the maker of a virtual reality headset maker known as Oculus VR Inc. for a neat $2 BILLION.

What’s $2 billion anyways when you’re talking about the future of the next big thing for social as reported by The Guardian™,  “Mark Zuckerberg says Facebook is getting ready for the platforms of tomorrow – and that virtual reality will be the next social communications platform”

That’s fine I guess, unless you have yet to prove and answer why the $16 Billion you just spent on the social platform of today is working out and generating profits. Profits that can be dispersed as rewards to deserving investors. Or is this why a new reality appendage was really needed? i.e., For the conference call participants.

What just might be more troubling that puzzling is the near immediate purchase of yet another company seemingly unrelated to “social.” The purchase of a drone company named Titan Aerospace.

It’s reported this purchase was only $60 Million dollars. Mere chump change to today’s Silicon Valley hacker elite. (probably found between the cushions in the employee lounge)

It is said this technology is to be at the forefront of providing internet connectivity around the globe to places currently inaccessible. Call me crazy, but when I hear the word “drone” the first thing that comes to mind isn’t: people helping people. It’s more in lines with: people helping to paint bulls-eyes on people.

If I were on a conference call, and I heard the company I was analyzing state, “Oh and by the way – we now have drones.” My next thoughts just might be, “Do I really want to put this company into a Sell recommendation today? But that’s just me.

Then on April 1st, what do I see flash across the financial media? Facebook buying another seemingly unrelated, unprofitable company at a price tag that would shock even a Pentagon procurement agent? Nope.

Just 22 days prior to Facebook’s earnings report (you know, the one where they have to justify all the above for the first time ever!) none other that the COO of the company Sheryl Sandberg sold half, yes – half of her shares in the company she runs.

Not 10%, not 15%, no not even an amount usually used to quell naysayers or skittish investors followed with the much maligned anecdotal “for the sake of paying taxes.” Nope, half.

Now what does that say for a supposedly purported growth company where the upper management is selling? One would think the exponential growth opportunity all the other investors are urged to patiently wait for that they themselves would be waiting for also. You know like that old saying: “In for the long haul.” Well I guess 2 years is an eternity in today’s Silicon Valley elite.

I don’t know about you, but when I see the top brass seemingly implementing their exit strategies, I’m looking for mine. And anyone with any business acumen will tell you, when people within the management are selling – you had better be selling also.

For Ms. Sandberg to sell at such a time, and in such an amount, knowing full well the innuendo and the appearance something like this has along with all the trappings such a move would bring, (again, with the timing) one can’t help but think if the April fools joke is going to be on those left holding their investment.

It may become more clear that the virtual reality coming over the horizon, looks a whole lot more like true reality for anyone who dares to look.

Without the need of any special appendage.

© 2014 Mark St. Cyr

Audio Podcast from Mark’s “Prose Series”

The “Outside The Box” Concept

This podcast and more available in iTunes®

© 2012 Mark St.Cyr in association with StreetCry Media. All Rights Reserved

The quick hitting no holds barred series based on “Mr. Engineer, please hit the record button and let’s go!” Designed and delivered to be thought provoking and unique for its forget about edits and retakes format.

Can’t see the media player on your mobile device? Click here.

To Do Lists vs Not To Do Lists

It’s one thing to focus on priorities, or the proverbial “what needs to be done” however, it’s just as important (if not more so) to focus on tasks that need to be avoided. Then: Avoid them!

Understanding there are tasks that need to be avoided: then doing just that, allows one the ability to both remain or increase one’s focus in accomplishing the most important priorities at hand.

In today’s world of “productivity enhancers” one thing they seem to have more in common than ever before is the ability to distract attention away from what one should be doing with a feeling of pseudo accomplishment.

Busy work is just that, “busy.” Just because you’re checking your email or your social network status for the trillionth time before coffee accomplishes squat. Sitting still and taking time to think and plan mentally in that same time period many times is far, far, far, (did I say far?) more effective for productivity.

If you’ve had issues with getting tasks done, or even making a list then following it, try this and see if it yields tangible results you can actually benefit from.

Instead of writing 10 things you need to get done today or tomorrow, try writing down just ONE. That’s not a typo.

Write down “the” most important thing you need to get done where you will not end your day without accomplishing. Something that once accomplished or completed would give you satisfaction and help move you forward in what ever your quest. Then…

Write down ONE disrupting, time draining, distraction you do during the day.

Write it in bold letters in a place where it will remind you too not do it! e.g., Put a large note right next to your keyboard or a sticky on your phone as to curb impulsively checking emails, social networks, playing games, etc. Something you know you do that if you changed your habits: the world would not spin-off its axis. e.g., If someone “Likes” you in the morning, I’ll bet they’ll still like you by the PM. And if not, they really didn’t care to begin with so forget about them and get busy liking yourself getting things accomplished.

Emails can be checked on a scheduled time. i.e., Once in the morning, then noon, then mid afternoon. (Of course unless you’re on-call but again, you check “who” then if not a priority message, you don’t even open it till your designated time. And for some of the others, do I really need to even explain?

Start with this simple idea and premise first. Try it for at least 14 days. Go through the withdrawals, then reassess whether to expand or to adjust. You just might find you’ll get far more done by focusing on what not to do than trying to do everything in a substandard manner, all because you’ve been distracted with looking busy rather than actually accomplishing.

© 2014 Mark St.Cyr

Watching For The Goldman Ticket

In a world filled with innuendo, false flags, and more one thing remains constant: What is Goldman Sachs (GS) up to and more importantly – why?

No matter what one “thinks” about this firm one thing is incontrovertible: they didn’t get where they are because they’re stupid. Far from it.

There’s probably no other company on the world stage that has had more influence in financial matters than GS. Love them or hate them, it doesn’t matter. Yet, to ignore them or to take your eyes off as to discount even their smallest moves as “irrelevant” is at one’s own peril. For GS doesn’t make any move (even taking out the trash) without first considering all the ramifications or exploitations that can come of it first. Period.

Over the last few years to say things in the financial markets have changed would be an understatement. People, technology, regulations, and more have morphed for even the people who once were considered brilliant.

Even those amongst the financial media are now appearing to be scratching their heads more as the markets morph into something unrecognizable to a veteran market maven just 5 short years ago. And the one who seems to be quietly morphing and making moves uncharacteristically associated with Wall Street as one previously imagined is none other than GS itself.

Just the mere mention of GS conjures up conspiracy theories of puppet masters, influence peddling and more. It’s almost as if one is venturing down the path of an old-time parlor game of charades when trying to discuss or comprehend their financial implications or moves. However, the best way around all this is to employ a prism brought forward years ago by the late  Andrew Carnegie (I’m paraphrasing) : “The older I get the less I listen to what people say and the more I pay attention to what they do.” And GS is doing quite a few very interesting things that just leaves one thinking: Hmmmmmm.

When it comes to business, finance, or even politics one thing is certain: you need to look past the notion of impossible or improbable and contemplate that might be exactly why they’ll do.  For no one thinks they will – giving them the edge. And to forget GS is always in search of an edge is to do so at one’s own peril. (e.g., Genghis Kahn ordered his tribes to scale seemingly impossible mountains to attack his enemies precisely for those reasons – and he won)

What might seem as improbable or impossible at first blush just might be the determining factor for producing a profiting reality: no matter how far-reaching it seems. So with that in mind let’s hypothesize regardless how far-fetched or conspiratorial it may seem. And again, the why.

Over the past weeks HFT and all its effects were brought front and center via Michael Lewis’ book, Flash Boys (2014 W. W. Norton & Company). What it also brought attention to if one stepped back taking in a broader view, was the possibly of seeing the missing puzzle piece that helps explain GS’ moves over the past few years, possibly clarifying what too many looked more like a Rorschach test, rather than an unfinished puzzle it just might be.

Remember back in 2012 Reuters™ wrote an article: “Special report: Goldman’s promised land: Salt Lake City” (original article here)

Many were left thinking, “Yeah, OK big deal a new office closer to the west coast. So what?” However, it just struck me a little strange, Utah? As opposed to California, or anywhere else? Why would a company that has always been in the absolute middle of where people, business, and more move there?

Unless that’s exactly what they now want: to be away from the very aspects they once coveted, for those very aspects have shown they may now have possibly become threatening liabilities to both infrastructure as well as staff. Let me explain…

Back in 2009 GS was wooed into choosing Salt Lake City with special tax breaks and incentives to open additional operations there. Probably these decisions were more in line with coming operations under the new regulations and more since it had now become a bank after the 2008 financial crisis, rather than just the investment firm it was known as. But then something interesting happened: The Occupy Wall Street (OWS) movement.

Suddenly the once heralded upper echelon of world financiers were thrown into a media stew of  “destroyers of the universe” rather than the “masters” they once embraced.

Since then operations and hiring has picked up at a pace more resembling a growing thriving industry rather than the downsizing, melee currently taking place in New York. Another thing you have far fewer of in Salt Lake than in NY is the amount of people locally to protest your industry and commandeer valuable infrastructure and most of all – the people themselves.

Salt Lake City has a growing, thriving population, but it aint no NYC by any means. However, the make up of business culture, and the sheer fewer amount of people to organize into protesters can be quite enticing to an industry that watched thousands parade banners, effigies, and more outside one’s place of work. Let alone when it seemed there were a complicit press more preoccupied with covering the story of an occupy mob on a bankers lawn, rather than worrying about whether the occupants or children inside were safe or not.

Then in 2012 Hurricane Sandy hit the east coast sending the region into total disarray. One of the things we learned during this storm is just how intertwined HFT is to the markets and quite possibly now dictates whether or not the markets will open unless HFT approves – first. (If one remembers the markets were closed two days by what was reported as HFT influence over the exchanges.)

One thing GS doesn’t like being is #2 in anything, and HFT seemed to be making that more of a reality. In a game where the arms race is merely speed: All that money, time, and effort put into people or the obtaining of people in positions of power as to benefit from such cultivation, becomes nearly null and void when your competitor only needs a faster computer to front run your own organic “front running” infrastructure.

There is no other choice than to either – you yourself re-arm and redeploy, or – decide you no longer will fight or play on that battlefield. Hence, the implications of that decision with the following ZH article: Triple Whammy Shocker: Goldman Shutting Down Sigma X? (Link here)

Put this into the context of where it’s now widely reported that GS has become a client of the HFT debilitating exchange IEX Group Inc. headed by CEO Brad Katsuyama featured in Mr. Lewis’ book where GS now seems to be back on (at the least) a level playing field for order execution. And the advantage pendulum once again swings back to GS’.

Not only is their human capital once again returned to Mt. Olympus status, but they get to tear up that page of the ledger dedicated to infrastructure spending on HFT ancillary items. What’s that worth? Millions? Billions? I’ll bet its enough to effect an earnings report that would make a non-GAAP social darling blush.

Throw in the newest mayoral election that installed what many deem as an anti-Wall Street, tax everything that moves or stands still legislature, and you not only get people looking for greener pastures, you bring back to the front of mind that just maybe they no longer need to “look”: they can grow their own even in the desert next to a lake of salt.

Maybe proximity isn’t worth as much as it once was. And quite possibly getting away from that once coveted proximity could be the new edge for the new “Wall Street.”

Imagine you are renowned for hiring the best and brightest for they flock to your doors because they can earn money in amounts unfathomable to middle America. But the “price” for those people trying to earn is also unfathomable once they fully understand a million dollars really doesn’t get you much in NYC after taxes and expenses. And both of those are on the rise seemingly faster there than anywhere else in the country.

But half of that gets you a whole lot more in middle America does it not? I’ll bet it goes more than double that in NYC. And the best and brightest might want to beat an even greater path to GS’ new front door if they don’t have to live in NY or NJ. It’s not like they are moving there in droves, quite the opposite, the exodus has already begun.

Move to Florida, California, Texas, or somewhere else you say? At least you have scenery, cityscape, and all the other attributes at least similar (although not exactly) as NY. But you would be forgetting that first item I stated earlier: A large population base where an OWS inspired group could easily (easily is the operative word) form and wreak havoc.

In Utah? Sure, but I’ll bet dollars to doughnuts far fewer in numbers. Plus, the culture doesn’t seem to lend itself easily for that styled or formed outrage. I could be wrong, but it’s something I would fit into my decision process if safety in another financial calamity happened again. Especially if I thought it could be even worse next time.

A few years back I wrote an article: A “Flick of the Switch”…could this be the next Nightmare on Main St.? In it I posited:

“A flick of the switch means if I have a business in location X, I can just flick a switch and operate in location Y. In years past most companies needed some sort of brick and mortar facility to conduct meaningful trade. That is no longer the norm. As a matter of fact, most of the newer successful businesses of the last decade have been ones that can operate anywhere.”  Followed with:

“…all of Wall St, all Insurance Companies, all Banks, all Online Retailers, all Accounting Firms, all _________ ( you fill in the blank). All of these fall into the “flick of the switch”  type of businesses. They can relocate anywhere in the world in the equivalent of a New York minute. I’m just scratching the surface.”

If we sat down over coffee and I asked your opinion on what you would make of quite possibly the worlds most influential wheelhouse of both political and financial headquarters opening a secondary office in a place many see as the antithesis of NYC and its financial centers. Along with the near sudden shift not only to disengage from former revenue streams but rather jettison them for pennies on the dollar, just at the time when Wall Street is once again being cast in a light of “rigged.”

Adding to that the demonstrated proof that the Federal Reserve as of now is still holding tight to the roll down of QE, and the markets are seemingly showing signs of stress. While at the same time the very firm that quite possibly has an insider edge and view unrivaled amongst its peers is calling or signaling the need for great caution. What would you think?

I know what I’d be thinking…

Who’s in charge of booking executive travel for GS? And has the term Sigma X changed to “Golden ticket?” For just like in the movie 2012 (Centropolis Entertainment 2009) the protagonist was only saved when he knew the type and color of the top 1% tickets.

And Goldman’s I would presume, just like their parachutes – are golden.

© 2014 Mark St.Cyr

As I Warn To Watch Your Step, I Fall Down

Irony has its moments, and it’s never more ironic than when that moment happens to one’s self.

As many of you may be aware I’ve been an avid runner for nearly 30 years. On average I run the equivalent of a marathon weekly and continue to this day. (5 miles a day – 4 to 7 times weekly)

I have run all that time outdoors in all weather conditions, heat, cold, freezing temps, rain, and so forth. I’m not crazy, I just have bought the proper gear over the years to do it comfortably for if I only ran in good weather – I would still be waiting for the right day to start.

Since my latest move to Columbus I have yet found a comfortable running route where I wouldn’t either get clipped by people not paying attention as I cross a street or entry way (I’m not one of those I’m running so you stop, I give cars the right of way) but I have found for some reason here, it’s as if I have a sign taped on me with a bounty “Hit this guy and win a free prize.” It’s been a little disconcerting.

Since the bad weather started last fall I decided to do what I deplore: running on a treadmill. However, I decided just maybe it’s for the best and so far its worked out and I was beginning to get used to it, although I couldn’t wait for the weather to break and look for a better route outside.

Since I’m at the facility here on the property during office hours I routinely bring issues up that may require a maintenance check for I probably use the machines collectively more than any other resident. What I began to notice were the treadmills (there are 2) were showing signs that something was amiss. So, as usual, I told the staff and they called for maintenance. One machine’s plug was pulled for the issue was obvious yet the other stayed in operation for it seemed fine to everyone else: except me.

For those not familiar with real running on a treadmill, if the belt for any reason (usually from wear) sticks as in momentarily freezes or slows for any reason, it can be enough to stutter step your run and you can find yourself in free-fall. It can be almost insusceptible to someone watching, but for the runner it can be unsettling.

Since the other machine was on a service call I decided to call one of the staff members in to demonstrate exactly what I was talking about for everyone else thought it was just fine. (most people were using it to walk rather than run) I showed them what was happening and what to look for and why they might not be aware, but I expressed it was truly a dangerous issue and needed to be fixed.

I then went on giving an explanation why I was still able to use it, for I knew how to work with such an issue until it was repaired (Just ran a little more to one side) and that I knew what I was doing, but not to think just because I was running on it meant there were no issue. They understood, thanked me, and went about their business.

Just two days later as the sun is shining and I’m deciding whether or not this is the “right” day as to look for a new route I decide: Nah, I’ll finish the week on the treadmill. So off to the clubhouse I go.

About a half a mile into my run yours truly, “the guy who knows how to run on these as to have no issue” has an issue and the machine stutters at exactly the wrong time, for I have both hands next to my head as I’m adjusting my headphones and running at a 10 minute mile pace.

I lose my balance and crash one leg onto the spinning tread and the other crashes across the shin on the side of the railed platform which in turn throws my legs out from underneath me in a spinning motion.

I go to place my hand as to save my face from the nearing spinning track only to have my hand once it hits spin underneath me bending my fingers into an unnatural, ungodly, nature not intentioned posture whipping me into a spinning bulk of flesh slamming me sideways parallel to the ground lodging me between a wall, the machine, and its spinning track against my back singing…Wrrrrrrrrrrrrrrrr!

I was a little more than dazed and wondered just how foolish I looked till I then tried to rise only to find my fingers dislocated in as I said before, an unnatural looking grotesque way.

In the end I was able to relocate my finger on my own although my hand in general blew up like a balloon for many of the knuckles themselves were jammed and painfully so. (So much so as I type this it’s been a little difficult.) What I hadn’t noticed was I was so preoccupied with my hand not until the next day did I notice I did near an equivalent job on my shin for it too swelled like a balloon.

All in all I was thankful (although I got pretty well banged up) for it could have been far worse.

So the moral of this story and the life lesson I’ve taken away from this whole experience is this:

If it’s dangerous, and you know it. The moment you say or think:” Yeah, but I’ll be OK” is exactly when you should stay away from it. For it will be exactly in that moment you’ll find out just how stupid you can be when you think you’re “so smart.”

© 2014 Mark St.Cyr