Month: September 2017

The Blog’s Milestone Marker 0f: 1,000 – 1,000,000

This is a post I never thought I’d write when I first began this blog in 2009. And yet – here we are. What the numbers in the title represent are the two milestones of: 1000 published posts, consisting of over 1,000,000 words. (actually, it’s closer to 1,250,000+)

There are some of you reading right now that will shrug and think, “So what.” And that’s perfectly fine.

However, to those that have not actually tried expressing their thoughts or opinions to be put into the public arena, especially by one who is not experienced, or considered having any of the traits needed to be a “writer?” And thinks it’s easy? All I’ll say is this: try writing a basic business book. That’s about 18,000 to 30,000 words on average. How long, and about how many do you think you can do if you start today? Most may give a reply, but in reality, most will never even try.

I say the above not to be braggadocios, or anything else of that sort. Why I say it is for two distinct reasons, and they are these:

  1. Most of the reasoning you give yourself as to “why” you can’t do X, Y, or Z, regardless of what that may be, more often than not, are nothing more than self-imposed excuses you use as a defensive mechanism to cover up the true reasoning as to not begin. i.e., You might fail, so why try. Or better yet, you will fail (insert excuse reasoning here) so why try.
  2. See above, and re-read.

Why this is important is for another reason: It doesn’t pertain to just “writing.” It’s directly relevant to just about anything.

If you doubt me on this fact, just insert your own “goal” that you often think about, but never seem to get around to pursuing in earnest in replacement of “writing.” e.g., Start a business, et cetera. It all fits into the same criteria for not starting that I referenced above. It’s not that you can’t, it’s probably more inline with: you won’t. (Insert self-imposed reasoning here.)

When I first began expressing my thoughts about business I did it for one reason, and one reason only, and it was this:

During both the initial, as well as the ensuing fallout that developed as what is now deemed the “Great Financial Crisis” I ascertained that nearly all (and I mean just that all!) of the so-called “experts” when it came to not only Wall Street, but finance, economics, business and more were clueless of what was happening, and what to maybe do about it.

I argued they were not only clueless, but were blowing smoke so thick as to try to cover that fact, I deemed it was not only disingenuous, but dangerous to those who may just follow based upon their former credentials. i.e., I was one of the few openly stating in 2009 that Jim Cramer of CNBC™ fame was one of the most dangerous elements to 401K holders portfolio bar none, and still feel the same today. I’ll explain and give an example as to why later.

Many expressed to me during the early days that this was “all going to be for not”, or “it would never go anywhere.” And those are the polite ones. But, I decided to keep on. And here we are 1000 posts later, consistently read around globe, appearing on some of the foremost media venues and more.

Again, for it needs to be repeated, “All from someone who has a hard time spelling cat without using spell checker.” Every single “writer” (and most people in general) I’ve ever talked to about my idea of writing in the early days had told me “You’re crazy”, “It won’t work”, “No one will ever read it”, _____________(fill in the blank.) And for a while that was true, but I didn’t listen, and as Seth Godin has said many times “I did the work even when no one was looking.”

As a matter of fact, I took that statement to heart and raised it too 11, as in: the more no one looked – the more I wrote. The exact opposite of everyone else.

Is it any wonder that so many blogs or sites or “writers” abandoned their sites after only a year or so? The web is littered with them. And not just by aspiring writers, but by many well-known, recognized names. Again – the web is littered with them. That’s why the 1000 – 1,000,000 milestone is quite the “brass-ring” achievement for me. Remember: I’m not supposed to be here – and yet – here I am.

I hear a lot about (and from) business people with books. I hear accolades (usually self-professed) to their writing “a book” that took them only 2 years to write, then a year to finalize and edit, then another 6 to 9 months to get into print, then another 3 months to get onto a shelf and so forth.

When the conversation inevitably turns toward me, and the question arrises to the tune of “How many books have you written?” I say, “Just one, and it was back in 2012 and was only a collection of 26 articles I had written prior.”

I can then feel the superiority for condescension beginning to fill their lungs in a “can’t wait to tell me X” type manner.

At one time it might have bothered me, but that was oh so long ago. Why? Fair point, and it is this:

To put the 1000 – 1,000,000 into context I use the following example. To wit:

I have written over the last 8 years the equivalent of 42 hardcover books (e.g. 1,250,000 / 30,000.) That’s the equivalent of publishing over 5 books consistently every year for 8 years. Again, all published, read, most around the globe, and many across some of the most visible media and news sites. Again, around or across the globe. Here’s what that looks like using the “a picture’s worth a thousand words” example. Again, to wit:

That stack of books represents the equivalent of those 1000 posts. Again, most business books (I used the hardcover biography of David Ogilvy out front as example for equivalent size comparisons.) fall into the 18,000 to 30,000 word category. There are those of the 50,000 variety but those tend to be of the academic versions rather than the general. (Hint: Think the difference between say a Jim Collins “Good To Great” and a Seth Godin “Icarus Deception” as examples.) The stack pictured represent using the 30K variety. e.g. 42 books.

That’s what’s contained on this blog. No exaggeration, no made up numbers, no spin, it’s all there in the archives. 1000 posts averaging 1250 words each. But here’s the best part. All published, and all read. Even if the first few were only by my mother. (Thanks Ma!)

Some may be snickering “It’s a million words too many!” and that’s perfectly fine. However, I can now say I’ve not only done it, but I’ve fared pretty well with the results of all the work, while surpassing all of my own once lofty expectations. And compared to most “writers?” I’ll stack it up against theirs any day of the week. Literally, and figuratively.

Another few points that needs to be stated and are germane: All of those posts contain pragmatic applications to be used in business  or personal life. There are very few (I think there are less than 5) repeats or reposts. And none are about what I had for dinner, or if I decided to bathe that day or not, like most others.

Where we go from here? All I know is this: It’s onward. That’s all I know.

Yet, with that said I feel I’m not going to lack for any material to parse over as to extrapolate the utter nonsense which emanates via the so-called “smart crowd.” And once again, it’s CNBC and in-particular (once again) its marquis player Jim Cramer that fits this example. To wit:

“Cramer: Rocket-Ship Stocks Look Better When They Return to Earth”

Premise? When it comes to the “FANG” family of stocks – By The F’n Dips. Don’t question why, your job is to Buy, Buy, BUY!

What has the above “genius” of stock investing, and insight netted CNBC over the same period that I’ve been writing and growing? Fair question. To wit:

“CNBC Viewership Drops To 22 Year Low”

For those counting – the above is about 1300 words. I guess we can start anew from here.

© 2017 Mark St.Cyr

Silicon Valley Snake Oil: It’s Passed Its Sell By Date

“It’s different this time!” One of the greatest examples of Silicon Valley “snake oil” ever devised, embraced, and consumed en masse.

The problem with “snake oil?” It’s never different. And today’s newest and improved version has passed its expiration date – and is beginning to turn rancid.

Remember when “unicorns” were the thing? I know, they still are in a sense. But they are far from the once mythical enablers of turning $Millions into $Billions via IPO’s. As a matter of fact, that process has become so tainted, the only way to keep attention focused that a company may still be worth what investors declare? Is to keep it under the cloak-of-darkness, also known as “private.”

One has to marvel at how rapidly ineffectual the “It’s different this time” elixir argument is becoming with every passing day.

Why? Ask yourself this: Why is it, not only have the most highly valued unicorns yet gone public, but also, at the same time, the stock “market” is at never before seen in human history highs?

Yet, that isn’t even the main issue, there’s another even more telling one. And it is this: There’s not even been a set date or road show scheduled, (except vague innuendo) when basically this same condition has applied for months, if not years!

What, market conditions at “all time highs” aren’t suitable? No money to be made in “tech?”

Well, there is money to be made in tech, but only if your sticker symbol has the right marking such as the coveted “bulls-eye” of the central banks. (Hint: FAANG)

If you’ve any misgivings about that. Just pull up a chart of any “disruptor” IPO darling of choice from 2015 onward. If you were one of the so-called “lucky ones” to get in on opening day? I’ll garner you no longer need, or look, at any of those charts. And, you have my condolences. (Hint: try TWLO, SNAP, or APRN for clues.)

The issue for Silicon Valley today is this: It’s going to get worse, much worse. And the only ones not getting it is the entire tech complex.

Sorry, but, once again, hint: It’s over. As in dot-com mania over.

The only thing left to happen is the inevitable crash. But make no mistake – it’s a matter of when, not if. And “when” is soon. Soon as in months, maybe a few earnings cycles, not years. For the seismic, tectonic shift, once known as Fed. largesse that has enabled all of it, has now not only been halted, but reversed, as in money from the Fed. will be withdrawn, and destroyed.

That’s what “balance sheet normalization” truly means. And the first to feel “the burn” as they say will be what was once the hottest, of hot sectors. i.e., Tech, especially, no earnings to sub-par earnings tech. Hello unicorns, and ads-for-eyeballs disruptor models aka known as social-media.

This all begins in earnest this coming October, just a week or so from now. And with it everything changes, especially, any and all past assumptions of “It’s different this time” accolades or defenses from traditional business metrics. i.e., making a net profit.

The reason? It’s going to be precisely that: different, this time.

Let’s use today’s deca-corns (yes, that’s an actual term because “uni” is just so blasé) for a little context shall we?

I posited back in April that Uber™ was in far greater trouble than anyone (especially the mainstream business/financial media) not only dared say, but rather, was able to intellectually extrapolate. I also contended, that this had major implications for “The Valley” at large.

Not only has that premise further crystalized. It’s crumbling even faster by the day. To wit:

Market Watch™: “Uber stripped of right to operate in London in latest blow to ride-sharing app”

Can you say: “Uh Oh?”

So let’s see: From a claimed $68Billion, to an assumed $40’ish (or less) on rumored buy outs, and now London says “…not fit and proper to hold” a license in the city. You know, a city that’s basically a mecca for taxi cabs and service.

What’s the valuation assumptions from here? Half of $40? Or, even less? Why? Easy…because who’s next? New York? Chicago? It’s an open question, just like its valuation. For nothing is yet truly settled.

Oh, but wait, there’s AirBnB™ that’ll save the apocalypse from venturing any further I’m told. Well, in my opinion, that’s a maybe, to a flat out no. “Why,” you ask? Again, fair question, and it is this:

Just like Uber – the longer it remains private – the more time is allotted for any, and all lawsuits either resting, or being drawn, to ferment ever further.

Uber has its driver issues and such. AirBnB has its own regulatory hurdles to still fight. And those fights just may get hit with an accelerant if the latest proposals being bandied about for increasing its presence draw it closer into the spotlight. Case in point:

A new start-up called Loftium™ has been launched to help prospective home buyers with up to $50K for a down-payment, but there’s a catch: You have to list a bedroom for three years on AirBnB and share the revenue.

Sounds great right? Here’s how I view it…

Much like Uber, this will have (and encourage) lawsuits, and more because of this one factor: Much like the “independent contractor” issue has yet to be fully resolved for Uber (let alone all the other suits.) AirBnB rentals in many cases break the social contract of not only knowing who is your neighbor, or tenant. But also: what business is allowed to openly operate within a residential neighborhood.

Say what you want about, “Renting out a room in my house is no different that letting a friend or family member stay the same period.” I’ll respond with, “Au contraire mon ami, it sure is.”

It is also very different in the eyes of both business law, as well as zoning. And this latest example of “disruption” is going to bring all of that, and more, to the forefront for AirBnB, in my estimation.

Hint: You think the hotel associations and such alone are going to just stand by and allow (as well as pay) all the taxes and restrictions for code enforcement while a neighborhood of homes around it gets to do it all without zoning, OSHA, mandated handicap access and egress, fire and safety requirements, and more?

Tack all of the above onto where now, there is a vocal, and concerted push (with incentives and more) by AirBnB to make “business traveler deals” available. If you believe the industry alone (let alone people in neighborhoods just sitting back as transients come too-and-fro into their neighborhood where their children are), I have some wonderful oceanfront property in Kentucky you can lease out, on the cheap. “Trust me.”

I used the unicorns above for examples because these are/were used as the touchstones against any, and all calls of criticism against the “It’s different this time” mantra. And now? (In my opinion) They are well past their sell by date, especially since now the Federal Reserve has indeed made it official and declared “”normalization” will begin in October.

And if you still believe in: “this time it’s different?” Here’s something to remind you, that it is – exactly that. To wit:

“Spiking Silicon Valley Unemployment Dragging down California’s Economy”

Just as a reminder of how fast the whole “It’s different this time” meme can go awry. Here’s what I said back in October of 2015. to ridicule from many of the Valley’s aficionado set and business media cheerleaders.. To wit:

“However, you know what changes everything? When the meme of “Gonna stay here till I cash-in and then I’ll buy me a McMansion!” turns into the underlying realization that quite possibly – you’re going to end up living in a shipping container! Possibly forever if things don’t change.”

But it’s different this time. right? Or, maybe, it’s not. Better check that “bottle” for an expiration date. I think it may be well passed.

© 2017 Mark St.Cyr

Janet Has Spoken, So Now What?

The Federal Reserve concluded at its latest conclave that it would indeed begin reducing its massive multi-$Trillion balance sheet within weeks. e.g., October, to the tune of $10Billion per month to start, ratcheting up that amount as time progresses.

I stated in a prior article that I believed there was indeed a chance for another rate hike. The consensus, this time, proved correct and they punted until December. I gave it a 70/30 probability for this reason: I believed holding off on the reduction of balance sheet (i.e., kicking “that particular” proverbial can) was far more relevant to the “markets” than a hike. And they needed to do something from a “credibility” standpoint. My thinking was, a “hike” was the lesser of two evils, allowing for maybe, a little, much-needed shock value to once again enter into the fray.

Yes, I’m fully aware that raising rates when the “markets” put odds of it at near zero was an outlier call. I get that. However, as myself and a few others have been pounding the proverbial table (or very-real keyboards) “It’s the balance sheet, stupid!” as to where the real impactful “market” realizations for repositioning will manifest.

And with yesterday’s announcement that indeed the Fed. will begin just that – so too has the “market” repositioning begun. i.e., It appears someone overheard a whispered, “Sell!” order. But no need to panic, at least just yet.

Whether or not there is any follow-through today, I believe is not the point. What I am of the opinion, and believe the real issue to be, is that there will be follow through on a consistent basis – for long periods to come. All to the down side. For as I’ve implied recently, I believe the markets path is already been cast, and it is down – not up.

These latest surges, or inconsequential pops higher to allow one more headline of “All time record highs!” is just the now regularly witnessed phenom from the bots (aka HFT parasites) running their hunt-and-seek stop-order, algorithmic programs.

Or said differently: We’re just poking our heads out of the water, just a little higher every once and awhile as we tread-water. The issue to remember is we’re currently only treading, and we don’t know just how deep the water is. And the “markets” are beginning to show exhaustion.

Yet, that doesn’t mean that the financial media bull-parade has lost any of its zeal for clamoring on about its resilience. Case in point was an interview I watched the other day between David Stockman and Stuart Varney on his show Varney & Co.

Mr. Varney is the consummate bull, or market cheerleader. And there’s nothing wrong with that, (and I mean just that) for that is what the job entails and demands. Yet, with that said, what strikes me is when these hosts, or interviewers demand answers (which he did of Mr. Stockman) for warnings, like (paraphrasing) “It’s time to get out of the casino!” As if the premise has no merit.

As Mr. Stockman gave his reasoning he (Mr. Varney) rebutted those warnings with arguments such as (again, paraphrasing) “Look at this market. You’ve been calling this for quite sometime and have been wrong. Had I listened to you I would have missed out on all this move.”

Hence lies the problem.

Whether or not you agree with Mr. Stockman (and for the record, I do) or not based solely on this “markets” current price would be to miss the underlying craziness of precisely what the central banks have done to not just the markets, but also to any intellectual debate, or honesty, in regards to not only the markets: but capital formation, as well as free market capitalism in general. i.e, If results are the only point? Then why stop here? Let the Fed. print $20Trillion, $100Trillion. Or, let’s all just jump on the Krugman crazy-train and mint $Trillion coins! And don’t stop at one or two – let’s hammer out thousands! Crisis solved.

Here’s why I’m making this case, and why I believe it’s all very germane.

As Mr. Varney demanded ever-the-more answers, what he invariably never realized was that he himself never gave a coherent (let alone substantive) argument as to why these “markets” were at this zenith to begin with!

Was it for improving GDP? Great earnings? Vastly improved, as well as ever improving macro data? __________ ?( fill in the blank.) No, it’s all a result of central bank largess, and a last bout of “hopium” inflation that the Trump agenda was to be enacted into law, this year.

There is no other reason for these “markets” to be here. End of story. Period. Full stop.

Another issue I heard professed across the media landscape was this, in regards to the Fed’s intention for balance sheet reduction: “This is the most televised move out of the Fed, so the markets are basically prepared for it. And, will be more akin to a non-event.”

Here’s (once again) where I mused, Really? Most expected? Ready for it?

I’m sorry, but I don’t agree. And I’ll use both some observation made by very well paid “Fed watchers” along with members of the Fed. itself, as opined via Zero Hedge™ back in August of just last year. To wit:

“…Credit Suisse’s Zoltan Pozsar wrote a note titled “What Excess Reserves”, in which the former NY Fed analyst made a very clear case for why the Fed’s balance sheet will never shrink again (particularly in the context of the broken Fed Funds market). Some of the note’s highlights:

Instead of asking when the Fed will shrink its balance sheet, it’s about time the market gets used to the idea that we are witnessing a structural shift in the amount of reserves the U.S. banks will be required to hold, where reserves replace bonds as the primary source of banks’ liquidity. And that this shift will underwrite demand for a large Fed balance sheet.”

And here’s the Fed. itself, again, to wit:

“Central banking is in a brave new world,” Atlanta Fed President Dennis Lockhart said in an interview on the sidelines of the conference.

While policymakers have maintained the Fed should eventually reduce its bond holdings, Lockhart said some officials were closer to accepting that they needed to learn to live with them.  “I suspect there are colleagues who are contemplating at least maybe a statically large balance sheet is just going to be a fact of life and be central to the toolkit,” he said.

So why is the above relevant? Fair point, so one more quote, again, from the aforementioned article. Ready?

“You are seeing an exploration of how are we going to operate in a quite different world than before the crisis,” Lockhart said.

And the relevancy for the above is? Da, da, da, daahhh…..: The election had yet to happen. (of course, in my humble opinion)

The above was the working assumption inferred, and perpetuated by Fed. watchers, as well as the Fed. itself all the way and up until the election results on November 8th. Need I remind you about Ms. Yellen herself in mid October stating what the economy may need is for the Fed. to run what is termed a “high pressure” policy?

For those who’ve forgotten, here’s the money quote. To wit:

The Federal Reserve may need to run a “high-pressure economy” to reverse damage from the 2008-2009 crisis that depressed output, sidelined workers, and risks becoming a permanent scar, Fed Chair Janet Yellen said on Friday in a broad review of where the recovery may still fall short.

Now, it’s a concerted gaggle of “Hawks’ Are Us” with 4 rate hikes, balance sheet reduction to proceed, and another hike signaled for December. Remember: It’s no longer a question of if, but now – it’s when, with dates, and amounts. And that’s what truly matters. Why? Fair point, and it is this:

(chart source)

The section above that’s highlighted via the box represents both the timing, as well as the results when the Fed. was still holding the “markets” wallet via their reinvestment, and holdings. e.g. The balance sheet, and reinvestment roll-overs.

Once QE ended at the end of 2014 the “markets” gyrate wildly with near death experiences needing the requisite “on-duty life-guard” of the day St. Louis Fed. president James Bullard to dive into the “water” and save it. Hence why the “Bullard Bottom” moniker was born.

What I expect from here on in is a gradual realization (along with repositioning) that the highs have been made, now it’s time to move any and all profits aside, and out of danger, as much as possible. Because, until any part of the Trump agenda gets passed – there’s nothing under this market. And you can still hear the daily hissing-of-hopium deflating. But you have to listen.

I also believe much like Mike Shedlock has expressed that we’re going to get a significant sell-down, maybe of the 40 -50% variety, but not in a “one shot” type event. It’ll happen in a hypothetical scenario like 10% here, a spike back up, but not a full recovery, then maybe another 15% sell down, then the same type of bounce, then another, and another, till all of a sudden people realize the “markets” are down some 40-50% from the high. i.e., Much like Japan’s markets.

On the same token, I am also of the opinion (much like David Stockman) that the “markets” are primed for existential type event. And all it would take is just one exogenous event (e.g., a Yuan shock or similar) and the entire market complex would be sent roiling in ways that would make the 2008 crisis look tame in comparison. The reasoning being, as noted above, the only reason why we’re up here is Fed. largess, and Trump hopium.

And now Ms. Yellen has stated – they’re out. And the Trump agenda (so far) is still nothing more than a “past its expiration date” hopium dream. Remember – this (e.g., Trump agenda) was all to take place (as in signed into law or at least in its final ratification processes) this year, not anything such as “You just wait, next year is the year!”

The question that show hosts should be asking themselves, rather than their guests is this. Forget about examples of those who might have “missed out” on the rally because of caution. A better question would be:

Give the reason why the markets can remain resilient and stay at these levels? That’s the question that needs to be asked and answered. Just don’t ask Janet.

And as far as that “treading water” example I gave earlier? Think of it this way…

From the November election till now can be considered treading water in a “swimming pool.” Where every once and awhile if you tire from “treading” you can sink, but then bounce yourself off the bottom. But that’s when the Fed. held up that bottom via balce sheet roll over largess. But, beware, for now, that no longer lies below. But what does?

Is the giant sucking sound known as the “drain” aka balance sheet reduction – which leads to the “bottomless sea.”

© 2017 Mark St.Cyr

Is Cook Fulfilling Jobs Vision Of “Thermonuclear War?”

I know, the theme regarding “nuke” seems to be playing out everywhere, from military channels to cooking shows. I get it, for I’ve also used it.

The reason why (using a defensive argument, pun intended): It is a little bit hard to push back from the front-of-mind the whole idea of “nuke” when we have a rogue nation threatening just that, while detonating and testing H-Bombs. All while simultaneously launching missiles over the heads of Japan and menacing, “The U.S. is next!”

The only ones paying absolutely no heed are the “markets.” But that’s for another column.

However, this time the “thermonuclear” moniker is relevant, because it was the actual term used by the late Steve Jobs when he declared he would use all of Apple™ resources to wage it against Google™, in-particular Android®.

Here are a few quotes from his biography as to demonstrate recounted by Walter Isaacson. To wit:

“I’m willing to go thermonuclear war on this…”

“Our lawsuit is saying, ‘Google you f***ing ripped off the iPhone, wholesale ripped us off…”

“I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong. I’m going to destroy Android, because it’s a stolen product.”

“…outside of Search, Google’s products—Android, Google Docs—are shit.”

So with the above for context this is the reason why I’m going to both ask, as well as state, that maybe, just maybe, Tim Cook is following up on one of Jobs last wishes. Whether intentional, or not.

The reasoning for this becomes self-evident when one looks at the newest release coming from Apple. Hint: It’s not the iPhone® that caught my attention. Rather, it’s the new OS named High Sierra® and a few newer built-in functions. Although seemingly inconsequential at first glance, they may have a very, very, very (did I say very?) big effect on the aforementioned company aka Google. Here’s why:

(Let me state first, although I am an admitted Apple-fanboy. I also have been critical (and still am) when it comes to much of what Apple has been doing over the years. This is commentary based on how I view this scenario via the business prism, and/or its potential consequences. This is not an endorsement, or hit job, of any of the offerings, of any company.)

In light of what has been transpiring over the last few months there is one thing that seems to be consistent: People are now, more than ever: cognizant, worried, and willing to take actions, even if inconvenient at first, to either protect their identity, or stop the inexhaustible, relentless tracking of their viewing or search habits, across all platforms.

That is a tectonic shift in attitude from just a few years ago. Hint: and it’s moving faster, and showing ever-the-more seismographic warnings.

The latest Equifax™ debacle, although different in terms as in: illegal. Is just another shudder in the ever-growing rifts between “I don’t care who sees my browsing history, or buys my data.” To, “I don’t want anyone, or any platform looking over my screens, and more – any more! And I’m willing to change my habits if need be, to do just that.”

That is an amazing transformation in public opinion. Although the above is not via some scientific study. (yet) This was the responses in-kind that I received from my own personal questioning of friends and colleagues.

Let me add this qualifier, for it is relevant since I infused the word “scientific” into the discussion): This is from people with money to spend, and lose. And personal data and credit worthiness that matter. Not 13-year-olds, or people still living in mom-and-dad’s basement.

I also believe they are not outliers, and this will only grow as more and more people realize just what they are giving away on these “free” platforms that make their $Billions based on them as “the product.”

Here’s what the new operating system coming out later this month from Apple does that may be a game changer for the likes of Google in ways that are truly meaningful:

One: ICloud Drive® may in-fact challenge Google Docs® in ways never before meaningful for a very simple reason: Privacy.

If “Drive” lives up to being a seamless way to transfer files across all devices and allows easy sharing, across other platforms or devices? Google is in the direct crosshairs for an advertising hit to its bottom line. Why?

Because Google not only collects all your data, it does a little bit more. Like sell it. After all, that’s what their in business for, correct?

Remember: You’re the product when the service is “free.” This (e.g. search) is the quintessential ads-for-eyeballs model. And Google Docs® and more helps solidify further data collection.

Second: The browser Safari® will automatically “stop auto-play videos.” Why is this important? Hint: Auto play is recorded as a hit an advertiser must now pay for enabling Google to collect a fee. No auto-play? No fee.

Third: Tracking prevention. A pet-peeve of mine, and a plague of the web. Here’s how Apple itself summed it up. To wit:

“Remember when you looked at that green mountain bike online? And then saw annoying green mountain bike ads everywhere you browsed? Safari now uses machine learning to identify advertisers and others who track your online behavior, and removes the cross‑site tracking data they leave behind. So your browsing stays your business.”

Am I the only one who thought “That’s gonna peel off some Chrome® users alone, I’m sure.” But they took it one step further, and it is here where you can see the “cross-hairs” come into full view in this fourth point, once again, to wit:

Fourth: Private browsing, as in possibly: truly private.

Here’s Apple’s description once again:

“When you use Private Browsing, Safari doesn’t remember the pages you visit, your search history, or your AutoFill information. You can also use DuckDuckGo, a built-in search engine that doesn’t track you, to make your web searches private, too.”

Fairly innocuous at first glance, but that’s where the true intention shows itself from my perspective.

First: If your “search” truly is private? That’s going to effect Google’s data collection model because people will (I know I will) use Safari when ever possible if the claims pan out. I’ve already shifted to Bing® some months back just to get out from under the whole “Google” thing. And I’m in the process of closing everything else affiliated with me such as Gmail® and more.

But Apple followed up with this, and it was here that I found it quite interesting. As it states above: “You can also use DuckDuckGo, a built-in search engine that doesn’t track you, to make your web searches private, too.”

Really? A search engine built into Safari that easily, and quickly enables me to enter a search query free of the “Don’t Be Evil” empire? Hmmmm…

So who (or what) is DuckDuckGo?

Personally, I’ve only heard of them from people like Seth Godin and others that use them. But for myself, never. And that can be said for most people I know. That is, until as of late.

I was asked the other day if I seen that new “search thingy” Apple is putting in Safari? So, as usual, I started digging to find out what they were talking about and I what I found was interesting in a few ways. And they are these:

  • They now can appear as an “add-on extension” if you enable it right next to your search bar in Safari. The ease to click on, and use is basically frictionless.
  • Although far from as “deep” as Google appears to be, it does seem to give (at least for myself anyways) enough results for that “quick hit” when needed. Google of late (again, my opinion) has been near pitiful in comparison to what it was just a few years ago. If it isn’t a “recommended” its “we’ve cut your inquiries from 500,000 pages to just the 3 we think are most relevant.” Then when you try bypassing it (because page 146,429 might be the page I’m willing to scroll through to get what I need.) All you get is the same thing over, and over, and over again till you jettison the query altogether in frustration.
  • And don’t get me started on how you can be “alerted” should you want to know if your name or a specific issue makes the news or web. It has devolved into something beyond useless and more into pathetic territory.

But here is where things get truly interesting which I found when looking into their traffic history. To wit:

(screenshot source)

What the above chart shows is relevant for this reason: As one can see there are the letters A,B,C, et cetera. Those represent news stories relevant to the traffic patters. (much like Google does) The letter of note is “B.” Why? Because that is when Google announced its first real policy change basically stating they were combining and consuming all your data. And there was no way for you to “opt out” unless you opted out of Google entirely.

It’s here that traffic begins the much touted “hockey stick” effect and has gone nearly straight up ever since. The other letters on the above graph are significant for two reasons. One: They relate to privacy concerns. And Second: D, E represents when they were first added to other browsers such as earlier Safari releases, then Mozilla™.

That’s a near 300% increase in search queries per day in just 2 years, but a near 6-fold increase since the Google revelation just 5 years ago when basically, all this privacy thinking was looked upon as “So what?” territory.

Now? It’s all front-of-mind, and people are ready to make changes. Using myself as the example – I already have. And I can tell you this: I’ve cut my own usage of Google services such as: Search. Gmail, and such by at the least 75%. All proactively, as in, I made myself do it even though at first it was a bit irritating breaking my prior habits.

Trust me, if I’m doing it, you can rest assured others are too. And that’s a very big problem for Google. Why?

If there’s just a 5% shift in negative ad revenue for Google – it would probably take the equivalent of far, far greater miss in iPhone sales to hurt Apple in the same manner. Apple can have diminishing numbers when it comes to its hardware, including he iPhone. Especially if it can show (better yet, prove) that its ecosystem is growing ever stronger.

Google can not afford the same. Because just the slightest downdraft in ads-for-eyeballs income will signal Wall Street it’s time to start taking their profits elsewhere.

If I’m correct, the next thing to go “ballistic” just might be the aforementioned line on the graph above.

© 2017 Mark St.Cyr

MYTR™ (Not N. Korea!) Is In Its Final Stages For Launch

I’ve wanted to do this post for quite a while, but needed to wait until a few further items fell into place as to where I felt comfortable with their implications. And they just have.

So with that I’m here to make two announcements, which I believe, are very out-of-the-usual when it comes to business in today’s interconnected world, and its so-called internet-of-things business models.

With that said – here they are…

First: MYTR™ i.e., the new initiative that I’ve been developing, is within 90 days of full launch. Maybe even sooner. (albeit “developing” has been more like starting, stopping, changing, tinkering, trashing, reinventing, jettisoning, rearranging, destroying, rebuilding, destroying again, etc., etc. But I digress.)

It will be unlike anything I have ever done, as well as unlike anything else on the web today, bar none. Both in content, delivery, as well as its direction and business model.

As I’ve instructed others over the years: “When 80% ready or so – launch. The remaining 20% can, or should be done on the fly.” We’ve come within spitting distance of the 80 mark, so that means we’re at least close enough to announce which by itself helps cement follow through. (The rest is basically legal tidying ups, but we all know how that can go.)

As it grows, we’ll add additional items to its inventory such as specialized, pragmatic business content, whether video or audio, and more. As always – more details to follow when applicable.

So, to be clear, it will be the “MYTR Broadcast” that will launch first. And the rest, as it develops, as we go along. I’ll roll out some further “sample” content I’m sure in the not-so-distant future. I believe, and it is my intention, to deliver a product in a manner and form unlike what is available on the web today. Again – bar none.

I know, that’s a pretty big claim. But at least you know what I’m striving towards. So “stay tuned” as they say.

Before I move onto the second point, or points. I need to state the following:

To Be Clear: I’m not speaking about MarkStCyr(.)com.

In other words: MarkStCyr(.)com will remain exactly the same as it is today, with free access to my articles or anything else I deem appropriate. Here is where I allow sharing for readers, and allow news sites, blogs, and other media sites to reprint, quote, or reference my material in matters they see fit. Again – that is not changing. MYTR will have its own website, as well as address. It’s a stand alone offering.

I wanted/needed to make sure the above was written, highlighted, with explicit wording, for today’s skim-over viewing habits as to leave no doubt.

“So, what does that all mean precisely?” you may be asking? Or, “Big deal, so what?” And those are fair questions. So here’s, as they say, “the money quote.” To wit:

All my other intellectual property, and by that I mean just that – all of it. Will no-longer be found anywhere else on the web except for my own-owned websites. And I mean just that. Anywhere. I am removing and closing all accounts or venues such as on-line retailers, et cetera.

Again – all of them. And for those looking for me to be a little more specific (as in thinking I might intentionally be trying to be a little coy): That includes the likes such as, iTunes™, Amazon™, Barnes and Noble™, Libsyn™ and more. And – that process has already begun whether it be in audio form, book form, video, etc., etc.

Once again (sorry to keep repeating, but I believe it’s that important): Anything, and I mean just that – anything, and everything – I make available for purchase or subscription will only be available exclusively on my own-owned web addresses.

This is anathema to anything believed, told, or sold when it comes to business in today’s world of the internet. Which is precisely why this is such a daring endeavor to embark on, as I am. But, just like late night television: “But wait…there’s more!”

There’ll also be: No social media links, no social sharing buttons, no Youtube™, no Vimeo™, no podcast, no __________(fill in the blank), no nothing, anywhere else. Period.

So the other pressing question, I imagine, you must be asking is, “Why?” Again, fair point, and it is this…

I believe there’s a coming revolution about to take place within the small business world. i.e., A resurgence unlike one seen in decades. And let’s be clear here, because far too many (even business people) think “small business” means small.

Small business (the backbone of America still, although tired and hurting under current circumstances and direst) begins at the solo-practitioner (i.e., a single person whether it be a self-employed janitor, or Dr.) to a company that employs around 500 with revenues in the $Millions. These make up about 95+ percent of all the businesses in the U.S.

That’s right, nearly all, but you wouldn’t know it when listening to the financial/business media. A damn disgrace on its own. But I digress.

I fervently believe fundamental business practices such as creating value that generates net profits to the bottom line will once again be paramount, as they should be. Things such as: Likes, hits, eyeballs-for-ads models, etc., etc., I believe are already in the death throes of business models. The only ones not aware are those still thriving on central banks largess. But that’s all about to change, and change soon, in my opinion.

And with that (again my opinion, but held with high conviction) will come the greatest opportunity small business has had in decades. Yes, even in this day of “Amazaurus-Rex” If – they’re brave enough to embrace it. But that’s what business is all about it, isn’t it? More details on that later.

I believe subscription models, along with word-of-mouth, peer-to-peer advertising/recommendation will be the model for the future. And what I’m speaking directly to is direct recommendation, not some form of “A.I. recommended” ad model.

I believe we’re going back to basics for the future-models of commerce. Only this time (as opposed to the late 90’s) with far better tools that are actually far more useful and user-friendly. (i.e., remember when it used to cost $10’s if not $100’s of thousands, and a crew of 19 year olds who couldn’t care less about your business goals, just to have a crappy web site with any form of e-commerce capability? Even one that worked 10% of the time!)

Yet, make no mistake. I also believe that future is now! Not tomorrow. Why? That’s another good question, and it’s for this reason…

I have been one of the very few both long ago, as well as consistently since, who has warned entrepreneurs, business owners, and executives that building a business based on the models offered upon, or heavily reliant of Facebook, Google, Amazon, and more – was a potential disaster waiting to happen.

That warning coming true is now self-evident. Just ask the businesses or sites that are suddenly (not counting those prior) finding themselves at the mercy of these platforms where overnight their revenue streams and more have not just been cut. But all their content suddenly “no longer available.” Even to themselves!

Not because they’ve done anything wrong, but because these platforms have deemed it so. Rightly, or wrongly. (Long time readers will remember my own encounter with YouTube and the utter frustration in dealing with a frivolous, baseless, DMCA takedown notice, which compelled me to jettison the platform altogether years ago.)

So it’s off into the wild-blue-yonder as they say, with only a compass. Whether my new endeavor is met with great rewards, or fails miserably – so be it. But that’s what “playing” on the horizons edge is all about, correct?

That’s why that other old maxim is still with us and relevant. And too many like to forget about it, and only complain when things get tough. e.g., “If it were easy – everybody would be doing it.” (and trust me, mine is not some 99¢ per year type model. Let’s just say it’s very similar in price to what a new iPhoneX® is suggested to cost. Again, more details later.)

Some people right now are thinking, “You are out of your mind freakin’ mind!” And that may be. But let me address that assertion with the following…

When it comes to the “written” word. Most (if not all) within the craft first looked upon someone like myself as a punctuation, grammatical abomination, against all that they hold sacred. (and some still do!) After all, I publicly admit I have a hard time spelling cat without a spell checker.

And don’t use an editor?! That alone infuriated many of my detractors. (I have a distinct feeling many of them were unemployed, unread, unpublished, former editors themselves, But that’s just a guess.)

The financial and academic crowd considered someone of my rank (e.g., a high school drop out) to be someone not worth the breath to even acknowledge existed, let alone, have to answer to any of my assertions. And yet, it has been more than hilarious at times (making up for some of the more than frustrating ones) to watch, listen, or read this very same ilk either refer to, or directly answer some of my direct assertions (even better when I’ve heard my headline used!) on television, radio, as well as print. And yes, on some of the major networks or outlets.

My first book (which itself was deemed a punctuation, grammatical offense to all that is “holy” in the business of books) went global and was continually being downloaded in more than 40 countries within days of its launch. And that’s all before it went live on any commercial sites such as Amazon and others.

On an aside, (because I believe it needs mentioning) as I said in that book: I left it with all its flaws within to show, if successful, the argument that most use as “not ready” or fail to “ship” as Seth Godin says, would now be shown de facto most, if not all, of their protests for not moving forward, faster were probably based on invalid reasoning.

I proved that point, again, using myself, not someone else as the example, as so many of today’s “business gurus” do. (I guess one could chalk this latest into that category also.)

I have made news stories across the globe. Been quoted on all media such as television, print, web, and more. And, by the largest media and reputable sources or sites, again, around the globe.

I’ve been quoted and featured in some of the most groundbreaking financial stories of the past decade. I’ve also been quoted, while appearing, in the same news stories featuring the likes of Warren Buffett, and others. Had my articles published routinely appearing to an audience of 10’s (yes, that’s tens) of millions monthly – for years. Had my articles run along side some of the biggest names in finance, sales, business, and more.

And that’s just off the top of my head. All without any social media accounts which you are told/sold – you must have to do even 1/10th of what I’ve alleged. (Again, on an aside: I’ve documented and publicly backed up all these assertions over the years as long time readers know.)

Oh yeah, and to those who say you can’t remove yourself from all those platforms. After all, “You’ll need to offer such things as an app and such, because without an app – “You’ll be seen as not getting it. And not having a book available on Amazon? What are you nuts?!” My answer?

“Been there, done that.”

Just one example, such as, when it comes to an app. I was one of the very first to have one way back in 2010. A time, by the way (which I argued and called correctly) that “apps” were seen as a joke and openly mocked across the business/financial landscape stating they would fall by the wayside, much sooner than later.

My app (which by the way still runs flawlessly – although no longer supported – on my devices to this day) was actively being downloaded for years till it was removed from the store a few years back when we no longer offered support or upgrades. An amazing feat when it’s been reported and documented that nearly all apps (and has been this way for a while) never, repeat, never get downloaded once.

So when I’ve argued or said “I believe most don’t need one.” It’s not as if I haven’t thought it through.

What I’ll also add too that is, “Actually, it maybe the very last thing you need to do in today’s business world.”

But you won’t hear things like that anywhere else coupled with the reasoning behind and pragmatic applications of it. Which is precisely my point. (If you just heard a loud “thud” it’s probably a social media “guru” or app designer reading this elsewhere in close proximity. Just have a brown-bag, and glass of water at the ready – just in case, I believe they’re going to need it.)

So with that for a backdrop. Yes – I’m ready to see where this all goes next, I hope you’ll feel the same. And if anything?

It’s going to be a wild, and interesting ride. That’s for sure.

© 2017 Mark St.Cyr

Explaining The Unexplainable

While having an impromptu meeting with a few colleagues over coffee this morning the inevitable question of, “Why is it the stock market keeps going up, no matter what?” arose. That’s when all heads turned to me as if I had just insulted someone’s mother.

Here’s how I replied, once again, because, it truly is the only way to explain it. I opined similar back in December, I’ve updated it for today’s events.

So with that said, here is what I gave, via what I named “The equation that it explains it all.” To wit:

“If you were just woken from some form of suspended animation from let’s say 2010 (ancient economic history in today’s terms) then informed of the current state of global political affairs with its: geo-political upheavals, eminent threats of nuclear war, U.S. un-employment (as in 95+million not,) global currency gyrations, interest rate tightening into deplorable data, etc., etc. You would be right to at first be concerned.

Yet today, things like that no longer matter. As a matter of fact, here’s even a few more, ready?

Broken-promised tax relief, along with the same for: healthcare, regulatory reform, and more that was supposedly a “Done Deal” as a result of a national election which empowered a single-side of the political aisle, giving them complete control of all three branches of the government, which they campaigned on, and won on. And it all went from done-deal, to DOA, almost immediately from the start.

Not only could they not agree on anything, but they could not get one (again, not one!) item of that agenda passed nearly a year later, continuing in gridlock, finger-pointing, backbiting, and more. And just in case one forgot? They control all three branches, and we still need to use the term “gridlock” to explain it all. Pathetic is too kind of a term to describe it.

Oh, and the debt ceiling debacle is now even worse, and the total debt has now officially jumped to $20 Trillion aka $20,000,000,000,000.00.

And it doesn’t stop there…

Increased threats from further escalating wars. Threats of major (or further) confrontational skirmishes. Adding of troops (aka Iraq) where troops were supposed to be reduced. GDP of the major global economies not only contracting, but below statistical stagnant. The EU experiment falling apart more by the day with a Brexit already voted and approved, with Italy, and Spain looking to do the same – and soon. Did I mention Greece? I know, that’s all so 2014.

Governments, as well as central banks continue to “balloon” their balance sheets with debt now calculated in $TRILLIONS, some in the 10’s of. And they keep declaring they not only want to do more, but rather “need to do” much, much, more. (think ECB Draghi, BoJ Kuroda, not to mention the Swiss)

And it’s against this backdrop which the Fed. is now openly stating, with dates and amounts, how it is going begin selling their $Trillions back. Oh yeah, and they’re only about a week away from possibly doing that, and raising rates once again. And the #2 at the Fed. just up and resigned out-of-the-blue.

All of the above, once again, “and more”, is concurrently being thrown into-the-teeth of what can only be called further financial uncertainty, (i.e., _________ insert hurricane name and ongoing devastation of choice here.)

I’d list more, but there isn’t enough time, or digital ink to list them all.

Yet, I think I’ve covered 2017. But there’s still 3+ months or so more, and we all know how that can go, right?

So, with that for a backdrop. Nobody would be surprised if your first reaction based on your prior acumen (the ancient history of 7 years ago whether it be in stocks, business, or both) would to become immediately concerned (if not outright panic-stricken) that whatever portfolio, or wealth you may have had in the markets, may be worth far less today than when you were first put to sleep, along with probably becoming ever-the-smaller as you thought about what you might need to do next in order to preserve any that may be left.

That is, till someone explained to you the markets you went to sleep knowing of – are no longer – and the reality of the markets today you could never have dreamed up. Even if they let you sleep another decade or longer.

Today, the markets you once knew of are better described as the “markets.”

To clear up any confusion as to how, or why, the “markets” can now be at “never before seen in the history of mankind highs.” Below is the calculation that explains it all.

For under the rules of: If A = B and B = C, then A = C, you now have the magical formula to understand with Einstein like surety today’s ‘markets.”

If you have any doubt to the soundness of this expression, consider the following:

If a crisis appears (A) The central banks will intervene (B)

If the central banks intervene (B) The “markets” go up (C)

Thus, we need more crisis or chaos (A) To make even more all time “market” highs (C)

That is what “the greatest expression of capital formation the world has ever seen” has devolved into.

I’ve now come to the conclusion that even the term “casino” may no long fit. For these “markets” are no longer working on anything based on statistical math or economic expressions. Or, anything else related to understandable business metrics such as: a company’s value is based on net profits or any such thing.

No, there’s only one word for it now as to explain just how beholden it is to adhering, and repeating the above calculus. And it just so has it, Einstein said it best:

“Insanity.”

And there you have it. It is, what it is, until it isn’t.

That’s about all there is to it.

No Ph.D required.

© 2017 Mark St.Cyr

My Annual Post On This Day 9/11: Lest We Never Forget

In remembrance of Peter Hashem…Flight 11,  Seat 20A…Struck the North Tower at 8:46:40 am EST.

This column is different for me, this one is a little more personal. Unlike my usual columns, this is to give perspective for not only myself, but maybe for you also.

The only thing I can say to start is: Life is precious. And when it ends, for what ever the reason, chances are you will not have any control of the timing, or circumstances. So live to the fullest everyday, regardless of where you are in life. Because the unexpected, and the horrific, can also happen too you, not just someone else.

When the tragedy on 9/11 happened, it changed many of us, if not all.

Like most, I remember exactly where I was. I also remember later standing in line at my local bank moments after it happened, and watching the televisions while waiting in line in total, utter disbelief, along with everyone else in the bank. For all of us – time had stopped.

The days and months that followed, with the heroism and the outpouring of help and support, is well documented elsewhere. Living in New England at the time, you either had gone to Ground Zero yourself to try to offer any help, or someone you knew had.

I owned a local Deli at the time. The owner of a company who supplied me with breads went back and forth to Ground Zero to pass out muffins and pastries to the rescue teams every night only to come back up to New Hampshire and then start his deliveries. No one complained, no one said how hard it was to do, no one was looking for credit. It was just done. It’s just the way it was.

On that day many of us changed. We viewed life a little bit different. It suddenly hit you with laser like focus that life is precious, and death can come at any moment, from anywhere.

No longer was this an esoteric exercise. This was life at its core, and it was playing out in front of our eyes leaving no gray area to ponder.

You either got it – or you didn’t.

In honor of that tragic event I myself set new rules, new guidelines how I was going to go forward in life. I decided I would live life my way, by my rules. And if I were to die today? So be it.

I could say that because I was going ensure I was living, regardless of economic conditions. Not just trying to exist, or simply get by, like so many other do. That was not why we’re given this life. It’s given to us to live!

Never let that ideal be taken from you – by anyone. Period.

September 11, 2001 changed my life forever. It’s now hard to comprehend it’s been 16 years since. But as I said, in honor of that tragic day I decided to use it as a reminder that while on this Earth, I will live. Live everyday, take nothing for granted, take no one for granted, and live today to chase the dreams of tomorrow. For if I do that one simple step, whether I reach those dreams or not…I will have lived.

For you see, Peter was not only someone who tragically died on that day. He was the younger brother of my close friends growing up. Life doesn’t just happen to someone else. It happens too us all.

We owe it not only to ourselves, but to them. To never forget.

© 2017 Mark St.Cyr

China Appears To Have Set The Launch Date For First Strike Into Monetary Armageddon

With all the happenings currently taking place in the U.S. as it pertains to the latest weather events, along with the devastation and still incalculable aftermath both in humanity, as well as monetary terms. It’s not lost on anyone trying to pay attention that keeping up with all of the other news and events breaking simultaneously, it’s easy to be overwhelmed.

Yet, for those of us lucky enough not to be one of the unfortunate (and our thoughts are with you) having to either hunker down or evacuate from one’s home and life. Paying attention to other developments and trying to construe what they also may portend for the immediate future, is a must. For they too can unleash a fury in-kind much like those of the natural variety, with similar devastating power and destruction.

Here, I’m speaking directly to that of the monetary type.

For if, or when, it hits? Sometimes, much like what is taking place in the gulf regions – there is no true shelter. Only degrees for relative financial safety. But make no mistake, the possibility for complete financial monetary mayhem has now formed on the horizon, can be seen, as well as tracked. And it too has name: The Yuan.

And it has the potential to unleash a destructive power much like these recent weather events. i.e., Of biblical proportions.

I’m not trying to be hyperbolic, or, as they say, “just trying to scare the children.” Because what triggers this possible catastrophe has its root in another of similar magnitude. e.g. N. Korea. A once thought as nothing more than a tiny, annoying little thunder-cloud, popping up every once and awhile threatening to rain on everyone’s parade.

Now, only months later, it appears to not only have the wherewithal, but the necessary means, (e.h., a hydrogen bomb enabled ICBM) to rain mushroom clouds on major U.S. cities, reducing them, and the millions inhabiting them, to ash. Or, sending that cloud into high orbit above the U.S. itself, sending it and all of its inhabitants back to the stone age with an electro-magnetic-pulse.

Again, that’s not hyperbole – that’s now undisputed fact. The issue here to remember is this: It has all transpired in merely a few months. That’s why paying attention to things as-a-whole, and on a-global-scale, with all its intricacies, possibilities, has become nearly impossible. But they are there nonetheless.

The issue now that is different from most other times is this: Resolving one might not resolve the other. And that “other” as I implied earlier – just might have as much devastating potential as the prior. Only in a different form. And this is the key to understand, as well as contemplate, in my opinion. Let me explain using the following…

Even if the nuclear Armageddon crisis is resolved. The North may have just allowed (as in given the reasoning and cover, it either wanted or needed) for China to unleash its own “First Strike” initiative of the monetary kind against, not just on the U.S. per se, but rather, against the $Dollar, and its hegemony status as the world’s reserve currency.

I’ve been warning for such a deliberate act to be forthcoming. And yes, I’m fully aware how it’s been regarded as “crying wolf” by many of the mainstream media, along with its gaggle of business/financial “think tanks”, and other academic outlets. However, that doesn’t mean the circumstances for such have not been lying-in-wait (as I’ve implied) for “just the right opportunity.”

I’m of the opinion that “opportunity” may have arrived.

In May of this year I opined on this topic and argued the following. To wit:

“Add to this the current enactment of steel tariffs placed only weeks ago by the U.S and you know what you also get? Hint: An even more ticked-off Beijing. Again: All this in conjunction as some U.S. steel warships hold fast off the Korean coast threatening to possibly launch a first strike upon its next door neighbor and so-called Sino-influenced “underling.”

If the politburo decides that there is no other way (and easier timing for a scapegoat) than now as to suddenly devalue the currency and put a world of financial hurt squarely on the West (and the U.S. in-particular) while simultaneously using all the turmoil as to hasten the pace (and possibly secure the position for more SDR influence) the table for such a move has probably never been set so neatly, so perfectly, and so probable as it is today.

Waiting to see if the $Dollar reverses and brings the hurt on in ways that are out of the politburo’s control or sphere of influence will not be seen as “prudent” by anyone within the Chinese authority. “Waiting” from their viewpoint might be the last thing they can consider, especially since “warships” and “missiles” are now needed to be factored into the immediacy for monetary decision-making.

They may decide to act, and act sooner, rather than later.”

And here we are, for it’s not that China has announced just another round of crack downs by not allowing money or assets to be off-shored, fleeing for safe havens elsewhere.(i.e., deeming it near illegal for companies or properties to be purchased abroad without prior politburo approval, along with crushing crypto-currencies and more, near daily etc., etc.)

But rather, in an extraordinary move, in conjunction (for this point can’t be made forceful enough) it has given the “green light” as they say, for currency speculators (aka the scourge of currency markets by politicians, central bankers, and governments everywhere) to short the Yuan.

Again, for this point is critical: The Chinese politburo has itself mounted a “bulls-eye” on its currency and all but shouted, “Step right up, and don’t be shy. Have at it, and maybe win a prize!”

Why would any nation do such a thing when the default position (as well as the maniacal screams that emanate via this same cohort of political leaders, or bankers) is to all but make short-selling illegal at near any opportunity?

I believe there’s a distinct reason for this, and it becomes much clearer when parsed through the Machiavelli prism. Let me go back to the afore-mentioned article where I also made the following observation. Again, to wit:

“Aside from the obvious “trigger” events that could arise as I stated in the above. (e.g., N. Korea) There are a few other events which when taken as a collection, rather, than just their stand alone value, portend for far further cracking in the facade that is China.

Since we’re in the middle of a possible armed standoff the analogy of “Did China dodge a bullet?” seems fitting when juxtaposed to the recent tightening into weakness launched in earnest via the Federal Reserve.

As strange as anything resembling “normal” monetary effects have been, e.g., Central banks buying equities. One of the latest has a few scratching their heads, and it’s this: As the Fed. hiked not just once, but twice in 90 days, and, is signaling even more along with a reduction of its balance sheet – the $Dollar has weakened.”

It’s that last point than needs to be understood. e.g., the $Dollar weakened. For it has been this one current monetary outlier in regards to the consensus of monetary theory as to the effects of Fed. tightening (dear academia, that’s why it’s called “theory” to begin with) that has allowed a momentary respite for China in regards to possibly losing control of their currency far sooner, causing outflows in ways even they may have not been able to control at that time.

But now, control they seem (or at least believe) to have. Yet, more importantly, is this: They now appear ready to de-value themselves. Or, at the least, allow for it to happen with their blessings. All while having the political argument against the slings-and-arrows of “currency manipulation” thwarted. Why?

Because politically – that argument is now moot. And it’s been the U.S. $Dollar itself that allowed for it.

Regardless of what one thinks or believes. When it comes to anything of the political. Facts don’t matter. It’s all about how the story can be spun as to give cover for one politician, nation, or even governing body to justify their rationale for how they voted.

In other words: If you’ve done everything correctly, but the “court of public opinion” wants you found guilty? All they need is a specious argument that sounds more tangible than not to give cover for their decision. Period. Regardless if it’s at the local level, national, world body, or kitchen table.

And currently China has the argument (whether true or not) to make the case for allowing the Yuan to devalue in ways most have no understanding for its destructive, let alone, deflationary effects. Especially the politicians.

If the globe (or even our President) wants to jump up and down, screaming “currency manipulator!” China can just sit back and imply, “When? Now? It has been your currency that has been tanking. All the while we’ve been doing everything a government should be doing with a currency that is considered to be stable currency for global trade and markets. We could have easy let our currency fall in unison with yours, but we have not. And you continue to scream? We only ask that others to look at today’s proof of any such charge and come to their own conclusions.”

See what I mean?

But make no mistake, China I believe is using this opportunity because it needs to make the play for it now, for it can no longer wait itself. Which is also why this all becomes quite un-nerving when put into proper context.

Forget about the current standoff with N. Korea as hard as that is for the moment.

China is also facing down another “standoff” where it too must decide which is the lesser of two evils. And those “evils” come directly via the Federal Reserve, and what they’ll do, or not do, at the next FOMC meeting the 19-20th of this month. Less than two weeks away.

What happens after the FOMC as it pertains to China is, as I said, the lesser of two evils.

First: If the Fed. raises and the $Dollar continues to slide? For China that’s not really a good outcome because it’ll be the final signal for markets everywhere that recession was upon us. And China would immediately need to deal with the adjunct trade adjustments and investment movements that would result.

On the flip side: if the Fed. raises or not, yet, the $Dollar reverses course and starts moving higher once again? China is right back as it was earlier in the year to throwing everything, including the kitchen sink, at trying to stave off capital flight out of the Yuan and not getting anything for it, other than more headaches within its own economy.

So with that in mind, if you were the Chinese politburo, and the answer that quells a lot of the above is a rapid and forceful devaluation of your currency making nearly the entire globe uncompetitive to your pricing power. Why would you wait to respond when it would appear, by all measures, you have the means, as well as “righteous argument” for defense to strike first?

Again, if the inevitable is just that “inevitable.” Why wait?

I believe they just answered that question.

Remember, the issue here is they seem to have the wink-and-nod in the form of the “righteous argument” to be used on the global stage against any, and all, calls of manipulation, especially from the U.S. After all – they’re not doing anything more-or-less than what any other globally traded currency does on the open market. And yes, now, they’ll even let “the shorts” short it.

See how the arguments can be formed?

What is also of significant importance to the politburo is not just what it all pertains to its economy in general terms. But rather, the ancillary reasons it will need to quell any inner uprising, or revolt (something China is keen to hammer down) should it find itself suddenly thrown into its own deep recession.

Again, China is not just going to sit idly by and let outside forces dictate what it will need, or do, as to deal with its citizenry. Communist regimes don’t work that way – regardless what’s taught in Ivory Towered academia.

For if the U.S. is indeed on the cusp of a recession (and many indicators show we already are) than the impending infectious results for China, and the emerging markets at large, are multiples of that.

And now, the only saving grace, along with face (which is sometimes even more important for China) which it has at its disposal would be: a massive devaluing of the Yuan. Making everything coming out of China so cheap – it would all but crush any and all other exporters in one single swoop.

Think about that very carefully, for the ramifications for doing, or not doing, are absolutely significant for China, if it truly believes – it’s worth the short-term price as to winning the long-game for economic dominance.

There also should be no irony lost that the date China has set for that “first strike” to be launched with regards to allowing short sellers to take aim is: September 11th.

© 2017 Mark St.Cyr

A FWIW On The Record Prediction

The media is awash today with their take for reasoning on the latest political fallout currently taking place for the supposed “deal” the President made with the Democrat party in reference to hurricane Harvey relief funds for Texas, while also pushing any debt discussion off until December, squashing fears of a government shutdown and more, for the time being.

Some are breathing a sigh of relief, others, from the political optics side, are furious because it seems their “team” was dissed. Then there are others wondering, weighing the intrigue and political maneuvering of what may or may not be at hand as to wonder would Machiavelli laugh, cry, or both. There isn’t enough digital ink to cover all the possible scenarios. Yet, that hasn’t, nor will it, stop most of the hot-air via the media in all its forms to parse what they believe is at hand.

For what it’s worth, here’s what I see, as well as predict, just might be the fallout from the above. I don’t know if I’m right, or will even be close. But as Bob Dylan wrote and sang those many moons ago: “You don’t need a weatherman to know which way the wind blows.” So in that light, here’s what I see…

All of the above is immaterial to anything in regards to the economy except for one thing, and one thing only, which is this:

As of today, my prediction that not only was the Trump agenda on the fast-track to becoming not just DOA, but dead and buried, is now pretty much fulfilled.

There will be (the de facto proof is the deal itself) nothing passed legislatively that the entire “Trump trade of hopium” was based on for the foreseeable future into at least next year.

2017 was supposed to have been (remember the 100 day promises from everyone?) the, as in The Year to pass meaningful parts of the Trump agenda through the congress and signed into law under the auspices of “No excuses.”

The result has been nothing more than excuse, after excuse to pass nothing.

I know many business leaders of both big, as well as small, that are mortified at this latest outcome. And it has nothing to do with a “Left-Right” argument.

It had everything to do with what they honestly believed (and were positioning for) that forthcoming was relief in the form of healthcare, taxes, and regulatory reform. And, it would be either passed into law, or working its way through final drafts ready to be voted then signed into it.

They now have concluded – it’s over. And waiting for another “maybe we’ll get X,Y, or Z” next year, when it was promised to be a “slam-dunk” this year, has left many of them actually bewildered. At least those that I’ve spoken with today. All I can say is this – I’d wager dollars-to-doughnuts their feelings represent most.

I believe this will also have the very same effect on the many who also had “faith” in the Trump agenda sailing through represented by the exuberance in the “markets” since the election.

I am of the opinion as business leaders begin to pull in their horns, so too will many of the current “hopium” trade-weighted bulls. And the “markets” are about to come under some pressure relatively soon. And by soon I mean: real soon. Here’s why…

As I’ve stated ad nauseam, once it has to be accepted by the “market” that the Trump agenda is now dead and buried. Not only would it have to deal with that premise, but (and it’s a very, very big but) it would also have to deal with the consequences of what the Fed. has already wrought with its prior raising of rates into further deteriorating data.

To be clear, I am of the opinion the “markets” will now take on a “holding pattern” type effect (aka boring) until the Fed. reconvenes for its next meeting in 8 trading days. (e.g., Sept. 19 – 20)

Whether or not the Fed. raises or not, discusses future time frames, or simply implements immediately balance sheet reduction is all secondary as to what happens next in the “markets.” In other words, what I’m saying is this: The mold is already cast. Just how fast it develops and sets is the only question. i.e., Is it a rational, controlled type sell-off adjusting to the new paradigm? Or – Is it all about to be thrown into an empty elevator shaft?

My guess is if the Fed. does nothing and “stays the course” there’s a chance at a controlled type of “hopium” release from the current bubble. If the Fed. decides it wants to “stick-a-fork-in-it” via way of raising rates, and balance sheet implementation? Then I believe it’s the latter of the two that’s in the cards.

We’re going to know soon enough, and watching the “markets” for clues for just how nervous, or panicked it might be, or become, is of the utmost importance in my view.

As I’ve stated many times, “There comes a time when safety, above all else, is paramount.” What “safety” may mean to you is for you to decide. But I believe we are at one of those times where one must not only pay attention, but rather, almost to a fault, is now here in regards to these “markets.”

Whether or not anything comes of it? Who knows. But regardless, I believe we are at one of those critical junctures that are different from most others where, much like an actual bull stampede, all it takes in one small incident to send the entire herd storming. The real problem begins when, or if, they decide to run, if it’s in the direction of cliffs. Again, for I can’t make this point more strongly: I feel we are at one of those moments.

If it all passes, and nothing happens except for political “sunshine, lollipops, and rainbows?” So be it. However, to put my own spin on that other maxim – you are far better to be prepared 2 weeks early – than 2 seconds late.

As always, we shall see. But that doesn’t mean we should avert our eyes from watching the horizon for further clues. It’s that important.

© 2017 Mark St.Cyr

 

Why AirBnB Maybe Teetering On Its Own “Uber” Moment

When it comes to the entire disruptor category there have been far-and-few that have raised investor dreams for IPO cash-out riches than Uber™and AirBnB™. These two were once thought to be the “Perfecta” or “Exacta” of Unicorn IPO racing using the parlance of horse-racing.

Uber, was thought, would be first. Then, right behind it, AirBnB.

Taking the bet (i.e., investing) had been seen as a “sure-thing” across the Silicon Valley landscape. In fact, not wagering if one had the means when “post time” (e.g., IPO hard date set) had still not yet been called has been looked upon with “not getting it” type scoff.

After all – why would you not invest a few $Million, to then have it said you’re now with $Billions, to then be worth multiples or $10’s of billions once these mythical equines cross the proverbial line in a photo finish for the post dot-com ages?

And then – Uber came up lame, had its #1 jockey suspended, and its backers are looking to sell out before the race even begins. The problem for AirBnB is – it needed a strong Uber to set the pace and keep the interest in this race front-of-mind. Now, AirBnB stands alone, with the weight of that “exacta” failure now clearly front-and-center.

And there’s no IPO race scheduled (only rumors) for even itself to prove its worth. But that’s not the worst of it.

Now, that once impeccable IPO track is in complete disarray, from being poorly maintained, awash with puddles, mud, and over grown weeds. Stocked with fewer and fewer of its once prized stable mates for potential IPO champions. And the once crowds that once filled the grandstands seem to have lost interest. For every race that’s been run since 2015 has left not “riches” but rather, nothing but road-apples as prize rewards. Leaving once glorified ticket holders feeling more and more like bag-holders.

I’m of the opinion, just as I was when I said it back in early 2015: it’s not only not going to get any better. But rather – worse, much worse. For here we are, and yes, it is worse, and it ain’t over.

The reason for all the above is to bring back-to-mind that when the “markets” were still receiving Federal Reserve largess via the spigot known as QE (quantitative easing) for all that speculative betting, combined with those “markets” being at record highs. The aforementioned (not to mention all the others that have since flamed out) were seen as the inevitable pair of IPO darlings, just awaiting their chance to show the world that “it’s different this time” really was just that.

Problem was/is – the race now seems over before it ever started. For once the speculating gambling spigot known as QE was turned off – the IPO racing circuit came to a screeching halt. Where now only the “jockeys” emblazoned with an approved central bank bullseye would now be supported. (i.e., Think FAANG stocks)

Just for a little more context: the NASDAQ 100™ closed (closed is important, as opposed to only have spiked) last month for all intents and purposes at a record 6000 points (actual 5988.6). The reason why this figure is important is for this: That puts the NDX some 20% higher than the highest monthly close of the entire dot-com bubble.

So now it begs this question: It’s not the right time to IPO today for any once deemed the “best of the best?” What, no money to be made in tech stocks?

And there lies the rub. Because no, unless there’s free money to buy all that “free lunch” it would seem that answers itself, does it not? Below is chart to show just where we currently are. To wit:

(Chart Source)

The reason why the above chart and more was important for context is this: the space between where QE ends, and where we are, has been the absolute equivalent of a glue-factory for most of the once IPO unicorn stabled darlings. All, as the tech stock “market” has rocketed higher, over some 20%, in less than a year.

So I ask again: What, it hasn’t been the “right time” to IPO because of market concerns, or money available?

Think through that question and your own answers too it thoroughly, for there’s a lot there when you do. So now I’ll go back to my original point…

Back in June I reiterated the following when making the argument about Uber facing a “Theranos Moment?” To wit:

“But once the term “law suits” and more get thrown across a unicorns saddle? Let’s just say – viewpoints, and valuation metrics begin to change, and change quickly.”

Did that happen? You bet – and in spades. Where the current valuation thinking now starts (again starts!) in and around $40 Billion. And even that is openly being questioned as possibly being too high, when only a few months back $68 Billion was still seen as “not yet fully valued.”

Now – It’s AirBnB’s turn in the lawsuit spotlight. And in my opinion, it shows just how vulnerable this “disruptor” model is in jeopardy of having its valuation metrics disrupted. Via CNBC™, again, to wit:

“These homeowners faced an Airbnb nightmare as renters left them facing huge fines and angry neighbors”

The above article is well worth the read for two reasons that jump out at anyone with any business acumen, here’s a just two:

“In Miami Beach — as in New York, San Diego and many other U.S. cities — short-term rentals of the kind facilitated by Airbnb, VRBO, Tripadvisor and others are strictly limited. Laws, fees and taxes vary regionally, but fines for violations are typically high. In Miami Beach, the fines run at $20,000 for a first violation and rise from there.

When the first notice arrived on Jan. 19, Grewal thought the city of Miami Beach must be mistaken. He hadn’t used Airbnb as a host in years. Then it dawned on him that his long-term tenants might be responsible, despite a clause in their lease barring them from using his place for transient occupancy.”

But here’s the kicker in my view…

“First, he had to figure out where the listing was, since Airbnb’s site doesn’t let users search by address to check whether properties they own might be listed illegally.”

The story goes on to report how it took some 11 days to even get some form of response, and that only entailed how they would “reach out” to the tenants that listed his property and inform them of their “obligations.” i.e., not help him, as in the owner of the property that is being listed on this site illegally, but will reach out to the offending tenants wit the listing not coming down nearly a week later!

I know business lawyers (I know mine would) who would be chomping-at-the-bit readying legal proceeding if this was one of their clients.

Again, what can’t be lost here is the seemingly intentional, obstructing nature as to not allow property owners to find out if their properties are being illegally listed on a site that makes money via that illegal activity. And again, because it really is germane to the point: seemingly showed little, to no regard, for the property owners plight.

In other words (and in my opinion) the lack of response, time, and resolution is far-below anything thought to be nearing even the minimal of ethical business standards or practices. And I’ll add – may well be proved out in a court as well. I’ll bet $20K in fines gets those questions to lawyer, and soon. After all: Wouldn’t it you?

To reiterate: Why was it so laborious, frustrating, as well as nearly impossible for this home owner to get his house removed from this site in any “reasonable” time frame? All while he is sitting with $10’s of thousands of dollars in fines and who knows what else for repairs. Here’s one possible answer, and I made it before only using Facebook as the prior example. To wit:

The ‘Real’ Question: What’s Facebook’s True Valuation Without “Fake”?

“Management from Mark Zuckerberg on down have been professing when it came to anything “fake” it wasn’t of their doing. And gee-whiz-by-golly they’re going to do whatever it takes to make sure anything “fake” never sees the “like” of day again.

Sounds great, in theory. But there’s a very real fact that must now be considered…

If “fake” news was so wide-spread, and so devoured on FB that it had the ability to not only influence, but rather, to overturn political norms and ruin the election of what everyone in media on down believed; that this election was merely a formality on paper because, it was clear to all of them, Mrs. Clinton would win not just walking away, but running?

That would mean FB now has to alienate (i.e., by now not delivering “news” these people wanted to see) millions, upon millions, upon millions of now current users. What does that imply to their now “real” (ooopsy, again!) metrics going forward?”

The possible answer? Here’s an inclination via a passage from an in-depth study done by John Lanchester titled, “You Are The Product”

“Facebook is in essence an advertising company which is indifferent to the content on its site except insofar as it helps to target and sell advertisements. A version of Gresham’s law is at work, in which fake news, which gets more clicks and is free to produce, drives out real news, which often tells people things they don’t want to hear, and is expensive to produce. In addition, Facebook uses an extensive set of tricks to increase its traffic and the revenue it makes from targeting ads, at the expense of the news-making institutions whose content it hosts. Its news feed directs traffic at you based not on your interests, but on how to make the maximum amount of advertising revenue from you.”

So with the above for context, the question almost asks itself…

Why was it so hard for this homeowner to get his legally owned property off of AirBnb’s website? Especially when he was amassing fines and other possible legal retribution for his property being hosted? All while these transactions were facilitated, as well as profits made by them and/or others? All without his consent.

If Uber is any clue, I believe the legal woes for this other unicorn IPO dreamer are just beginning. Why?

Well maybe because…

It’s different this time.

© 2017 Mark St.Cyr