Verbose Free Business Advice and Insight

I was asked the other day for my perspective on the current Facebook™/social-media complex in general, and what I felt it all portended, both the short, as well as long-term. Here’s my reply:

To understand the severity for precisely where Facebook currently finds itself has precedent using the following real examples for comparing.

First: Does Facebook’s current PR (public relations) gambit align with the Tylenol® scandal of the 1980’s? Or, does it align with the “Big Tobacco” scandal that erupted during the late 1990’s?

The first (e.g., Tylenol) is now a text-book example of what a company should do when it finds itself in the middle of a crisis, where management, at all levels, are aligned with its customers values, as well as safety or trust in its product. The bottom-line per se, is considered second in relation to the first.

The latter (e.g., Tobacco) example is when management, at all levels, are aligned solely on preserving the bottom-line equation, and subjects its customers to the latter, or secondary position, to the first.

It would take mental gymnastics that would make a circus contortionist blush to enter Facebook’s current management responses, in any kind, to the first example. Yet, it’s as if they are reading, as well as using the exact playbook employed by “Big Tobacco” during the fiasco.

Management’s (e.g., FB) from the CEO on down has given one PR disaster statement after another, both in tone and delivery. Not to mention as well the current leaking of “whistleblower” type revelations contradicting almost every response.

Therefore the conclusion that’s easy to see morphing in the very near future is that, much like was handed down during the “Big Tobacco” era, i.e., Regulation, fines, and more. FB and the entirety of the social-media complex in general, is over as it was once known. Doesn’t mean they’re going away anytime soon, but just take a look at how smoking in general is perceived (and treated) today vs just a decade ago. Hence, lies the most obvious conclusion of possible outcomes.

© 2018 Mark St.Cyr

Just To Make A Point

From my Sunday article. To wit:

And the biggest excuse that matters in all of this, is what I alluded to in the headline. i.e., This latest excuse coming from Zuck & Crew, about their handling of data, is just the excuse many an advertiser needed to stop spending precious ad dollars on FB, if not the entire social media model in general. Why?

Because if it was working as sold? Advertisers wouldn’t be so forth coming, stating they’re now pulling ads away. i.e., If those ad dollars were producing results in-line with their expenditure? Businesses would be very hush-hush, in a much more wait and see mode of operation on what to do next, if anything. That’s a very big tell-tale sign, or clue that should not be overlooked, in my humble opinion.

The only reason a business (generalization, of course) cancels any type of advertising that is working, with great fan-fare, or decry of public outrage, is that in doing so, it is seen as a greater sales tool – than keeping the original ad budget expense.

Or said differently: This is the perfect excuse to soothe jittery boardrooms or executives to no longer spend precious ad dollars on social, and possibly try other avenues or venues. The reasoning is simple:

If there are going to be less content providers via FB’s own censorship, along with a full-blown user revolt? Then, much like IBM found itself in-the-blink-of-a-cursor back in the final go-go days of the dot-com era. People began getting fired for not seeking IBM alternatives rather than just going with the assumed “competitive brand leader.”

And the point? Fair question: From the Wall Street Journal™ this morning, again, to wit:

“Playboy Deactivates Its Facebook Account”

“The recent news about Facebook’s alleged mismanagement of users’ data has solidified our decision to suspend our activity on the platform at this time,” the privately held company said Wednesday.

Playboy said it would deactivate the various Facebook pages it manages. More than 25 million Facebook users have engaged with these accounts, the company said.

A Playboy spokesman said the company has no plans to return to the platform. Facebook Inc. didn’t immediately respond to a request for comment.

To clarify:

“Playboy said it would deactivate the various Facebook pages it manages. More than 25 million Facebook users have engaged with these accounts…”

Neither a company, nor an advertiser would dare jettison any working interaction between “25 million” users – if – there was any beneficial gain in having them. Let alone, any material gain such as a sale that is meaningful to its bottom line.

Playboy™, whether you agree with their business or not, is a business desperate for paying customers as much as, if not more so, than those still reading its content (you know, “for the articles”) looking for whatever. Playboy is the ultimate “eyeballs” purveyor, as well as consumer – and they are willing to jettison 25 million users overnight. Think about that very carefully. For if there was value in those “millions” – do you think Playboy, for all intents and purposes, would just willy-nilly throw them all to the wayside?

The only reason they’d do that is because of one thing, and that is this: “25 million” means jack-squawt if it’s not producing meaningful net profits to the bottom line. Period. Full stop.

And that’s now a very big problem for Facebook’s (and many of the others) bottom line, user growth, user engagement, and on, and on. Not to mention all the next-in-rotation fund-managers, social-media gurus, et al. that sold told you your business had to be there, or was nowhere.

Hint: Their value is the only thing falling quicker than the entire market cap of the social-media space. But there is some consolation.

They’ll have plenty of company. i.e., The room is getting awfully crowded with the ever burgeoning group of discredited: Unicorn gurus, IPO gurus, Cryptocurrency retirement gurus, Automated Investment Service Gurus, Real Estate advice gurus, and on, and on.

Funny how all that “expertise” suddenly vanishes in line with the Federal Reserves Balance Sheet, is it not?

© 2018 Mark St.Cyr

Facebook’s Latest Excuse, Is Just The Excuse, Advertisers Have Been Waiting For – To Leave

“Gee, golly, whiz” has been the go-to excuse meme rolled out via Zuck & Crew any time there has been some form of scandalous controversy.

And so far it’s worked flawlessly, up until now. For this time, it’s different.

There’s a reason why businesses always remained at arm’s length (at least publicly) from the political strata. e.g., You have to pick a side. And once you do invariably begins the digging for the inevitable and unavoidable resulting pitfall.

The reason is simple: Any wrong move or action deemed offensive to the so-called “favored,” results into instantaneous pariah status, for any violation of the subsequently favored amounts to absolute betrayal, and immediate damnation, with no recourse for apology.

This is why businesses have always averted it. And is why Facebook’s (FB) problems – have only just begun.

The issue now facing FB are manifold, but they main driver will emanate from a place going forward, which many thought was near unassailable in recent years. i.e., It’s entire ads-for-eyeballs business model based on Wall Street’s assumed projections. Hint: Those “eyeballs” just received a “sharp stick.”

I have made the case over the years that FB was no different, in many respects, and would one day find itself at a precipice of what could result in a death spiral of similar fashion as the juggernaut that came before it. e.g., AOL™. I have also stated that moment will manifest and become clearly visible the instant its ads-for-eyeballs model gets dinged. Because just like AOL before it: The stock was priced for perfection, and the moment ad revenue projections were missed? It was over.

I believe that same precipice and set up has been reached for FB, and here’s why:

Regardless of what one thinks or feels about a certain political view, the fact of the matter is FB makes its money based on people using its platform to engage with those users of either side, or anywhere in-between, whether they’re content providers or consumers. i.e., It sells those eyeballs to advertisers.

And FB has made a mockery of business ethics and practices as to explain why advertisers who may indeed want to advertise to any specialized audience (i.e. pay the ad freight) that their ad campaigns are reaching their intended audiences.

Think of it this way: You may not like cat videos. But advertisers that want to reach those people who do have an expectation that the metrics they’re being charged for, to do just that – are being delivered – as was sold. It’s that simple.

And make no mistake, this simple point is the only metric that matters to advertisers. For this is how advertisers base why, or if, they’ll spend money at all. i.e., If you state I’m to reach X amount of eyeballs, then X is what needs to be delivered. Anything less and there’s hell-to-pay, or worse, refunds to be issued.

And FB has shown time and time again, that what they say in response to anything which questions their metrics – is not to be believed. For it changes faster than a Kardashian profile pic. Case in point:

Remember when FB was first accused of censoring conservative voices or viewpoints? Remember the response? Hint: It began with a meeting of Zuck & Crew and a few of the more prominent content providers resulting in nothing more than a spectacle of:

“Gee, golly, whiz, how could this happen? We don’t do that, it must be a blip in the algorithm. After all, no humans are in the mix. It’s all machines and algos, so that must be the issue, blah, blah, blah…” Only to be met a short time later with: “Oh, gee, golly, whiz, we’re sorry. There are people who are actively doing that, we’ll put a stop to that immediately!” To be met once again in just as short a time period: “Oh, gee, golly, whiz, it appears outside forces (i.e., our critics that we care more about that you) want us to do even more of that suppression. So, gee, golly, whiz, we’re going to suppress you even more, but take comfort in the idea that at least we’re now telling you we are, instead of lying about it as before.” And on, and on.

To reiterate, whether or not you agree or just peruse their content, is meaningless to this discussion. What the main point is, is that there are (all conjecture of course, but reasonable assumptions) advertisers that paid for the access to have their ads presented to this audience. And, were sold that privilege based on algorithmic methodology.

And that is where the dirty little issue resides. Why? Because, by FB’s own words and actions, they admitted, they were actively suppressing content. This was another reason why I stated the Steven Crowder lawsuit was so fascinating and a key issue to watch. Again, the reasoning is simple:

If a company is charging for one metric, but simultaneously engaged in adulterating that metric via its own actions negatively, and not supplying addendums or up to date price adjustments? Not only do you have credibility issues with advertisers – you’re going to have lawsuit issues as far as the ads-for-eyeballs model can see.

The real issue at hand is this: All the above is just for context, and is small potatoes, in comparison to what is now at hand. i.e., Zuck & Crew’s latest fake apology debacle. Or said differently: This time – it’s different. And that’s a very, very, very, (did I say very?) big problem for FB from here on out. Here’s why…

Advertisers have been leaving FB in very public ways over the last year or so. Next-in-rotation fund-managers across the mainstream business/financial media will point to their earnings reports and decry “See, see!!! They’re wrong, FB is unassailable.”

That is a fair point, but the dirty little secret I’ve argued ad nauseam, is that FB has more-or-less been the recipient of “last man standing” rewards, more than anything else. For if their ads were working as described, then why are the worlds largest advertisers scaling back?

The other issue that has worked to FB’s benefit has been something akin to the old mantra of, “No one ever got fired for buying IBM™” of the late 80’s.

This was when computers and software were new ideas, and purchasing departments were scared to death of being brought up before their respected boards and asked to explain why all those “great benefits and ease of use” not only never materialized, but have since gone on to become a sinkhole where money is just shoveled into, with no end in sight.

Computers and systems were notorious for crashing back then, bringing entire systems and companies down with them. IBM (as flawed and stoic as they were back then) was seen as “the gold standard,” even if it was inherently no better than a competitors.

But if the system crashed and was an IBM? It was shrugged off as, “Well, nothing we can do about it, I guess,” If it was on something else? Usually the next response – was a pink slip. Hence why IBM’s dominance lasted longer than it should have.

It was when people began getting fired for not replacing IBM with better systems that IBM never recovered. I’ll contend FB, much like AOL, much like IBM before them, is now facing this same Pandora’s box. And it is Zuck & Crew in their latest data scandal that has opened it.

Suddenly FB’s core user base is outraged. It was one thing to sell their data to those whose political views they agreed with, but to openly allow another to do with it the same? Heresy! And what’s worse? FB allowed for all their friends data to also be vacuumed up and used via third-party apps and others. A violation in todays world of mobile that’s viewed as the equivalent of some form of criminal offense.

It is this point where FB has stepped too far and the backlash is just beginning. For it’s one thing to take advantage of access to what one thinks or believes they are surrendering for the privilege of “free” usage. It’s quite another when they feel their privacy has been invaded without their consent.

Mobile devices are so personal to today’s users, that going anywhere within, without their expressed, understood consent – is akin to entering someone’s home or apartment via using the key they leave under the mat. Even if you went in, touched nothing except to look around and left a $20 bill on the counter for the “privilege?” There would be outrage, and with good reason.

To make clear: If you, or any company thought that because a person signed off and gave you the “right” to do something similar and would fly, because in some 2000 paged “terms of service” disclaimer one could point to and say, “You gave us the permission to do just that. See, right here on page 1875, paragraph 8, subsection 1.3a it clearly states…” I have some ocean front property in KY I’d love to sell you, cheap.

Think I’m off base? I made the same argument when the furor erupted at Apple™ when they planted U2’s newest release, for free, into people’s iTunes™ library. The reason for the backlash was easily seen, that is, for everyone except Apple, at the time.

These are now digital identities, as well as homes in the ether, for many. “Keys left under the mat” for access are believed to be understood much the same way that a landlord or family member may know it’s there. i.e., I know you may enter, but you had better have a damn good reason for it. Period.

The backlash against FB’s access to “keys” has now morphed into a movement complete with hashtags (which I just find rich!) calling for users to delete their FB accounts entirely. And it’s picking up steam.

Everywhere you turn there is now another celebrity, or former business associate of FB (WhatsApp™ founder is just the latest) calling for FB’s demise. “Don’t use FB!” “Get your kids off FB!” “FB’s data betrayal proves they can’t be trusted!” and on, and on. As I stated in an earlier article, FB’s “Messenger Kids” was their Joe Camel® moment. It’s now just steamrolling, in much the same way.

And the biggest excuse that matters in all of this, is what I alluded to in the headline. i.e., This latest excuse coming from Zuck & Crew, about their handling of data, is just the excuse many an advertiser needed to stop spending precious ad dollars on FB, if not the entire social media model in general. Why?

Because if it was working as sold? Advertisers wouldn’t be so forth coming, stating they’re now pulling ads away. i.e., If those ad dollars were producing results in-line with their expenditure? Businesses would be very hush-hush, in a much more wait and see mode of operation on what to do next, if anything. That’s a very big tell-tale sign, or clue that should not be overlooked, in my humble opinion.

The only reason a business (generalization, of course) cancels any type of advertising that is working, with great fan-fare, or decry of public outrage, is that in doing so, it is seen as a greater sales tool – than keeping the original ad budget expense.

Or said differently: This is the perfect excuse to soothe jittery boardrooms or executives to no longer spend precious ad dollars on social, and possibly try other avenues or venues. The reasoning is simple:

If there are going to be less content providers via FB’s own censorship, along with a full-blown user revolt? Then, much like IBM found itself in-the-blink-of-a-cursor back in the final go-go days of the dot-com era. People began getting fired for not seeking IBM alternatives rather than just going with the assumed “competitive brand leader.”

FB is in this double whammy situation in my view. For like I’ve also argued: The moment Wall Street’s current ads-for-eyeballs model or projections are seen to be in jeopardy against the backdrop of a stock, that’s for all intents and purposes, “priced for perfection?”

It’s over.

Just – like – AOL.

© 2018 Mark St.Cyr

Two Points

As has become the norm, the moment these “markets” begin hiccuping in any fashion other than upwards – my phone and email box begin ringing and pinging from inquiring colleagues. The same basic premise holds true for the exact opposite. i.e., If the “markets” are vaulting ever higher? When my phone isn’t ringing or email isn’t pinging – I know it’s them.

So, with that said, here’s the gist of the response that I gave. Basically, it’s short and unchanged. Hence, the “two points” headline. To wit:

Question: “So what’s your view on the “markets” currently? Any thoughts?”

My response: “Same as it was when you asked last time, nothings change. Just look at what I stated last time and pretend I’m stating it for the first time today.

If those areas I noted get breached as I outlined, everything I stated (or hypothesized) is on the table. The latest rise since I first made those points is basically what is known as “noise.” The main point was that, if I was wrong – the levels should have never been touched in the first place. Once that happened, all of what is currently taking place was/is to be expected, with a weighting now of let’s say 75/25, that breaching that key level, and following through, is far more probable. We now just have to wait and see what happens next. But if I’m correct in my argument, we should know before the month’s end.”

And that is basically it. Nothing I’ve stated prior has changed, nor my gut feeling on where or why the “markets” are behaving as they currently are.

For those who may be reading for the first time, here’s two “pictures” as they say in “The Valley” that pretty much sums it all up. I’ll post a link to the original article for those who may want to look back for more context. Again, to wit:

Original call:

What transpired…

What I was concerned about if further follow through resulted…


Here’s the latest link in that progression, it has back-links within each one, if one wants to go back through the progression

Other than that? As always…

We shall see.

© 2018 Mark St.Cyr


If College Students Want Socialism? Give It To Them, Immediately, In Toto

Before we start, let’s clarify a few things first, shall we?

First: This is not a political rant about which side of the political aisle one is on, or straddles. This is my opinion, and is in response to what should be an obvious rebuttal to much that is coming from colleges everywhere. And how this newly crystallizing of attitude will affect businesses of all types in the coming future, more so than it is currently. i.e., Yes, it’s going to get worse, much worse, if business leaders don’t hit this thing head on. After all, this is the workforce of the future and business leaders are going to have to deal with this issue in one form or another in an ever greater manner as time marches forward. At least, that’s how I see it.

Business leaders of every stripe (especially those that are parents) from boardrooms to kitchen tables, are currently scared-to-death to even mention the current situation, let alone, try to address it. Arguments about economics, trade, business, capitalism, fair practices, and more get conflated in some Rube Goldberg inspired mental construct of discussion as to allow the idea that socialistic and communistic utopian arguments have merit. Hint: They don’t.

This utter lunacy has moved from the once “lunatic fringe” of business ideas, directly into the business politics of the day.

And it’s all our fault – not the kids. Period, full stop.

Business leaders, again, of all stripes, need to combat this head on, not shy away from it as most have. This also means parents that may run or own a business, of any size, need to take this topic on not only at the kitchen table level, but directly to the so-called “institutes of higher learning” that cash their checks and allow for their children to be indebted, into near servitude, for decades to come.

Let me be clear: The issue at hand is not these students – the issue is all of us that allow this indoctrination for gainful indebtedness into servitude via the college elites to not only remain, but grow larger with every passing graduation, demanding you (as well as your kids) pay, ever-the-more, for that “privilege.”

Remaining silent, or for some, paralyzed with the fear of being criticized and just hoping, wishing, praying that it will at some point stop and go away, is not an option. Need a clue? Hint: Have you talked to a college student lately?

So with that said, here’s what I believe should be the framework for rebuttal to every specious altercation now being put forth by college students everywhere, that are calling for some form of “justice” when it comes to employment, business, debt, wages, and more.

Again, to be clear: This is not about who is currently in office, or any other such feud. For if you allow the discussion to be about a politician, any politician? Then the argument is lost before it began. What has to be argued squarely and directly into any of these “ideals” now emanating from the “collective campus of socialistic thought” is this:

To every statement a rebuttal to the effect of, “OK, let’s say you’re right. So what that would now mean or entail would be this…” Then elaborate using honest examples of what that would now entail for them. To repeat: “for them.” Not some ephemeral construct, but rather, “for them.”

Don’t argue fallacious points. Most of you instinctively know the rational arguments that are factual. Stop remaining silent.

Use the facts you know are true and tell them. e.g., “That’s fine, but here’s what that means if you get it…” Then let them think it through.

Give the argument the only resource that can stand up to their questioning. i.e., Their own arrival to the conclusion via their own questioning – of themselves.

Below I’ll illustrate using one current argument heard across the media given by students. Then I’ll outline (or argue) nothing more than the actual facts pertaining to it, from a pure socialist/communist (S/C) utopian viewpoint of those results they’d have to conform to, as to fulfill their demands.

Here’s what I mean. To wit:

Student: “The government should forgive all our student debt! This is totally unfair!!”

Response: You’re right, you do know the government owns and allows for all your debt, right? So, I guess that’s a fair point. You do know, however, that it’s these very socialistic principles you espouse that allowed for you to be in debt, right? i.e., The government basically guarantees the colleges get paid no matter what, and upfront, after you sign on the dotted line. So it’s only fitting your ire should be at the colleges, not the tax payers.

In other words: Concerns for your wellbeing, as it pertained to student debt, was no longer their (the college) concern once you signed on the line. i.e., They immediately received the money you signed for. Now paying it back is your problem, not theirs. And the more they raised the price of tuition – the more the government paid them. Remember that point, it’s important. After all, it’s your signature that made it all possible.

So, with that said, here’s probably the best thing to do:

Stop allowing the colleges to get-off-scott-free and start demanding the government to nationalize them. Let’s work through a couple of ideas, shall we? All from your viewpoint of demands and see how it might be done…

What the government should do to fulfill your demands is immediately nationalize all the colleges. i.e., Take them over in their entirety. That’s the S/C way. Then: immediately make them all free to attend. Sounds great right? Fair enough, so let’s move on.

Next: what the government should do is forgive all prior student debt. All of it. But there would be a cost to that right? So how does one pay for it? Here’s a thought:

Since the colleges would now be wards-of-the-government, and all their financing would be guaranteed. What the government should do immediately after is impound all outstanding endowment funds. Harvard University has near $40 BILLION alone. You roll Princeton, Duke, Yale, et al. and you’re going to have quite the “kitty” to dole out all that debt abstention you call for.

And the best part? It wouldn’t cost the tax payers a dime, or at least, much less than one. And they’re (the colleges) the ones that benefited on, “Your back” correct? Only fair, right? I’ll bet they’re just dying to hear such a revelation coming from their students. Don’t you agree?

I also would not allow, for any of them, to try to stifle you on this point. After all, these colleges would no longer need that money since they would be supported by the government. So, one would have to imagine these colleges, with their students well-being foremost in their minds, in good faith, should be more than happy to turn over all those accounts to pay off all your debt. And if not, why not?

Then again, it wouldn’t matter what they thought or felt anyway. That’s what would be ordered, not asked, in a S/C utopia. You should bring that point up to your college administrators and see how they react. I’ll bet they’ll just jump at the chance to turn it all over.

Now when it comes to all this “free” we both now there’s some price that needs to be paid, even if it’s a paltry sum.

This could/would be solved by the government in a win/win, everyone benefits manner, as they say. Here’s probably what would, and probably should, happen next. You know – for the good of the many, working your demands out to their logical conclusions, that is.

All the students that had their debt forgiven should be required immediately, after graduation of course, to work in designated areas that the government deems “at risk” as to help stabilize, or pull-up some area out of poverty. Or, at least bring them services that they could not afford without the governments help.

Any and all medical students for example, of any discipline, whether it’s doctors, nurses, dentists, psychologists, and so forth, should be immediately transported after graduation ceremonies directly into government subsidized housing within the inner cities of our most troubled cities or areas. Think: Detroit, Baltimore, Appalachia, et cetera.

There they can work off their forgiven debt, at let’s say: one and one half years of service – to every year of forgiven debt.

Forget any dollar amounts, fair is fair, right? And besides, that’s a far better “deal” than what one could hope to pay off in what you call that “dirty capitalist type world.” Correct?

But it can’t just be about medial students per se. It would have to involve everybody. So, accountants, lawyers, artists, political studies, et cetera, again, everyone would be given a task (or job) to fulfill. And if there would be too many of, let’s use lawyers for this example? No problem! They would just need to fill whatever role the government deemed needed at that time. But the same “benefit” or time scale for debt forgiveness applies. After all, fair is fair, right?

In a S/C world they will still need street-sweepers, and ditch-diggers. So that would be more than fair, would it not? I mean, imagine paying off a law school debt via the work of a street-sweeper and pay scale? Wouldn’t that be great!

And as for all those professors and administrators telling you how bad all this capitalism is? Not to fear, because fair is fair: They’ll be there right along with you. Because if the government takes over the colleges, in toto? Then there would be no need to pay them those salaries that are incentivized via some form of capitalism infused reward system, correct? And the government could/should order them null and void. Just like your debt.

What should be done immediately, in unison, with all graduates would be to rotate 25% (you could use a lottery system to choose) of existing tenured professors and administrators to move directly into those government housing projects – right along with you, to be there to help answer any questions or give guidance should you need it during your tenure.

It’s the only way to make sure you continued to get the proper guidance after leaving school. I’ll garner those professors and administrators would love nothing more than to help guide you through that process, in those areas.

And that 25% should be on a rotating basis, as in every one and half years they rotate out for the next 25%, and so on, and so forth.. This way everybody gets a chance to live the life. Fair’s fair, right?

Again, don’t concern yourself with the need as to worry about making any money during all this. Everything needed would be supplied by the government. i.e., Housing, food, clothing, etc., etc. That goes for you, as well as the professors and administrators that would be joining you. You’d all be “in it together.” All for the common good. And just think about all the good you’ll be doing in a community like Baltimore, Ferguson, Detroit, Chicago, East L.A., Compton, and on, and on. Living right there, in the government supplied housing projects, making a difference. Sounds like Utopia, does it not?

I’ll also wager these inner city neighborhoods will do nothing but “clap their hands in excitement” with your arrival “to help.” I’m just sure of it. And don’t worry about violence in these neighborhoods, after all, most, if not all are declared “No gun” areas. But if you’re a medical student? Let’s just say “on the job training” is going to have a bit more resonance than it would to most others. But hey: Free education, free room and board, free meals, and free on the job training, and free of school debt? I mean, what’s not to like, right? Right?

I’ll bet your professors and administrators are just waiting for you to bring this up and begin demanding it. Why don’t you try it, and see how well your received? After all, it you think about your “cause” more deeply: You seem to be arguing at the wrong players. i.e., Your demands should be made directly to the colleges, professors and administrators. And they should be in complete solidarity with you, demanding in protests, right alongside you that the government need immediately to just: “Take them over, and now!” To begin this process in earnest.

Think about it: Might as well go directly to the source (i.e., the colleges themselves) and cut out the middle-man, right? You’re on campus, why go off? Complain, march, demand directly to the ones that can bring about all the change you want faster than anyone else. i.e., The colleges, professors and administrators themselves.

Surely they’ll be sympathetic to your view. Again, they’re the ones telling you about all this stuff to begin with, correct? Appears self-evident where your biggest bang-for-the-buck, as far as demonstrations or protests would reap its biggest reward, does it not?

And aren’t you just ready to “do the right thing” and get out from under that pile of debt, and go to work where you feel a difference can be made? And not some time in the future, but today, as in right now?

Oh yeah, and don’t worry about what the business climate for jobs would be after your “stint” is through. After all, the only people who you’ll have to go apply for a job after will be held more or less by people who never went to college, and just went directly into business for themselves.

And how much of an impediment can that be too you. Again, after-all, you’ll be the one holding the parchment from a university. All they’ll have is an education from the school-of-hard-knocks.

I’m sure that diploma will mean something to them when they’re interviewing people to come work for their companies. That is, as long as the rest of the country hasn’t adopted your college demands. For if they do? You can skip the part about “after your stint.” The reason for that is simple…

That stint will never end. That’s the Utopia your calling for. Better hope you don’t ever reach your goal, for it may not be everything you thought, or worse: Were taught.

Don’t take my word for it. Go back to your room (or dorm) and think about it for yourself. I’ll be here to answer anything further if you so desire. But first – go think about it on your own and draw your own conclusions of if you would like to live by the above standards,

The only thing you can’t do is makeup your own facts for dissension, for the socialist/communist model has its facts written in stone across the global landscape. And that’s not a figure of speech. For the words and stones of those who dissented has a name:

They’re called headstones.

© 2018 Mark St.Cyr

Beware Complacency After The Ides Of March

We all know the saying, “History doesn’t repeat, but it often rhymes.” Yet, there’s that other, which is a bit older and bit less remembered, “Beware the Ides of March.” For those not familiar, it is the day Julius Caesar was assassinated. (e.g., March 15, 44BC)

The “Ides” basically refers to the mid-point of what were deemed “the long months” via the Roman Calendar, hence the 15th for March. But it’s in a play by Shakespeare where one sees the real cautionary tale that is applicable today, just as it has been for over two millennia. Here’s a brief description, for those not familiar:

Caesar is warned one day by a soothsayer to, “Beware the Ides of March.” When the day arrives Caesar happens upon this person again and mocks, “Well, the Ides of March have come and nothing’s happened.” (Implying that her call for caution was now throughly debunked.)  And it’s here, in her reply, which clarifies the salient point, “Yes, the day has arrived, but is not over.”

The rest, they say, is history. For we all now know how that day ended for Caesar.

So here we are some two thousand years later and what can we deem from the above? In my assessment: Plenty.

We are now barreling through a month of March like no other in recent memory. The “markets” are (once again) within spitting-distance of their never-before-seen-in-human-history highs. The February scare that pummeled many a volatility trader into near extinction has since been jettisoned from all memory, along with all the profits they acquired.

If you watch. read, or listen to most mainstream business/financial pundits (which I can no longer do) last February appears to not just be fading in-the-rearview-mirror, but, now viewed as ancient history, never to repeat, never to again see the light of day, a one-off. i.e., Volatility? Smuckatility! Just: Buy The F’n dip! (BTFD) Don’t over think it, you’ll just miss out. Rinse, repeat.

Works like a charm every-time, all-the-time. Sure does, that is – until it doesn’t. Just ask all those prior “genius” short volatility traders what a difference a day makes like that back in February to all those years of “Winning!” Hint: Rhymes with insolvency.

So what is so different about this March as opposed to others, one may be asking? Fair question, so let’s look at a few, shall we?

This current March is now following a month that also saw history made: The largest ever point decline, in a single day, in the history of the markets.

This day just so happened to align in near lockstep with two things: 1) The Fed’s balance sheet actually began to decline in earnest. 2) Right as the door swung after Janet Yellen left the Eccles Building. Coincidence? That’s up for you to decide. But ponder the causation vs correlation implications thoroughly and carefully would be my recommendation.

What followed that historic event? Why what else than what history has shown us year, after year, after year: BTFD! And if it’s a historic one? Back up the truck, semi-trailer, coal-cars, containership, earth-movers, and any other vessel that will hold an equity and hit the “Buy, Buy, Buy” button till your fingers bleed.

And yet, if one looks at the underlying buying, one sees the only ones that seem to be doing all that “buying” are corporations buying back their own shares. The public? They bolted, as in, S-O-L-D all those falling ( previously “winning!”) shares. As I iterated above, all this BTFD fury this time, has a much darker undertone. i.e., Whose buying this dip and why? Which brings us back to “The March” tale.

We are now in what’s known as an OPEX week. For those not familiar, what it denotes is that this is a week when options expire. (i.e., Think where bets were made and payouts, or pay-ups are due depending on what print the day ends at.)

These weeks are notorious for wild price swings that can, or will use any event (even if it’s meaningless) to move markets in one way or another as to close positions in their favor. The most common is probably the “short squeeze.” And this recent “bounce” has all the tell-tale signs of being just that, exacerbated via corporate repurchase incentives. Yet, that’s not the only possible driver.

At the end of the month we also have another impending reason to be watchful of these “markets.” March is the Quarter end for option expiry. Think of taking the above and turning it up to “11.” The movements sometimes are far more pronounced, as well as coming from out-of-the-blue. However, just like a late-night TV infomercial, “But wait…there’s more!”

Smack dab in the middle of these two is the Federal Reserve’s March FOMC (3/20-3/21) meeting with its new Chair, Jerome Powell.

To say this new Chair is going to be under a microscope is truly an understatement. Try more like an electron-microscope. And that’s just for his pre-written remarks. For his presser I would tend to think Wall Street has purchased something from DARPA on the grey (maybe black) market and will slice, dice, and extrapolate every possible twitch, syllable, or passing glance that suggests something (anything!) which can be fed into the algo’s HFT severs and front-run.

Yes, dear reader, the back half of this March is indeed – like no other in recent memory. For as treacherous as the above sounds, it pales in comparison to what maybe coming along with it.

The Fed. is supposedly not only going to continue its tightening process, but is also about to accelerate it as the year goes forth. And, the Fed. is not only expected to raise rates at this meeting, but has been sending out signals that maybe more hikes, and at a faster pace may be forthcoming.

Wall Street expects a hike of 1/4% or 25 basis points. It’s quite possible that Mr. Powell could set the tone for a-new-sherriff-in-town and convince the others that staying on the path of three is more appropriate, but let’s make the first one 1/2% (e.g., 50 basis points) and see how the “markets” handle the shock, using the balance of the year to asses and evaluate. For they can always pause after a surprise 1/2%, right?

I’m not saying it’s going to happen. But what I am saying is this: If you aren’t weighing the chances of, and have a plan on how you might react in the wake of it? You aren’t thinking. Period.

Remember, just because one doesn’t “trade stocks” doesn’t mean you can disregard the “markets” if you’re in business. For you can’t – what happens there can impact you or your business far greater (think credit freeze) and quickly (think banking freeze) than any time prior. And that’s just two of a myriad of possible disruptions.

No matter what rosy-picture the so-called “smart set” wants to try to paint about this up and coming meeting, one thing needs to be remembered. An unknown quantity (yes, unknown as in, they’re now the Chair or Boss) has been elevated into the most important position in regards to the “markets.” (I’ll content, the entire economy) And this hopefully “ready for prime-time moment” is happening directly before a Quarter end, and directly after a historic downdraft that happened to coincide with the prior Chair exiting.

Here’s, what I feel, one should takeaway from the above…

Let’s just say, rather than remembering all the, “Buy, Buy, Buy!” recommendations you’ve heard shouted incessantly since February – the remainder of the month might leave you reflecting on all that wisdom by the next-in-rotation fund manager cabal with the words that were last said by Caesar that fateful day.

For if there is any fall-out this cabal will appear across the financial/business media landscape (as sure as day will follow night) and one-by-one change their tune using contortions that would make a chiropractor wince, to show how they always said “this would end badly.” Hence, should hold no blame for making any prior recommendations.

Those words?

“Et tu, Brutus?”

© 2018 Mark St.Cyr

Forget Russia: What’s Coming Next Will Be – From China with Love

I know the media is still mired in its latest installment of, “As The Narrative Turns” when it comes to the current administration. “Russia-gate”, “West Wing Shuffle,” and on, and on. There’ isn’t enough digital ink to cover all the conspiracy theories, or the lame narrative building used to appear as if, and that is an important point, again, “to appear as if” they understand the issues at hand, along with how those situations (if there is one to begin with) may impact those consuming the drivel. And yes, I see it as just that: drivel.

Yet, in the midst of all this “Russia! Russia! Russia!” hysteria, there is another player that is quietly moving in a direction that has all the tell-tale signs of “dotting all the i’s – and crossing every t,” before they unveil their newest business plan.

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

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

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

“Crazy talk!” many will argue (especially the Ph.D’d set, along with their sycophant cabal of next-in-rotation talking-heads and fund-managers)  I understand the knee-jerk reaction some may have, Yet, here’s my reasoning…

I have argued ad nauseam that China dodged-a-bullet when the $Dollar suddenly began tanking at the close of 2016. Up and until that point China was at the precipice of an all-consuming, currency death-spiral.

I know its ancient history to many, but it was only August of 2015 that the “markets” received their first taste of what a Yuan currency debacle would mean to HFT (high frequency trading) liquidity providers everywhere. Hint: “The Week That Laid The Experts Bare”

Over the next 18 months China was on a “termination watch” for signs of when their intervention policies (aka the politburo’s Yuan price fix) to bolster the Yuan would finally prove unsustainable. And then, out of nowhere, the $Dollar began tumbling, alleviating the Yuan’s (along with the politburo’s) perilous course of breaking over the ultimate line-in-the-sand for outright monetary mayhem. (e.g., rising above 7.00 via the USD/CNH cross-rate.)

What caused that “out of nowhere” sudden plunge, you may be asking? Hint: The presidential election results. Conjecture of course, but far too coincidental to not allow for a significant weighting, in my opinion.

Since this period (e.g., the U.S. presidential election) the “markets” have roared higher, and yet, the $Dollar has continued its decline. So much so that the current cross-rate of the $Dollar-Yuan now sits precariously aligned with where it sat when all heck broke loose causing China’s “Black Monday.” Here’s a chart showing what I mean. To wit:


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

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

I, am not of that viewpoint.

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

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

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

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

Everyone across the mainstream media, which includes the business/financial, like too argue and hypothesize China’s business structure as some form, or slightly different approach (i.e., only around the edges) of capitalism.

China, for those that have forgotten (i.e., most financial/business pundits) is a Communist nation. And, I’ll assert, is not opening itself up further into having a more westernized economy for financial, business, and political ideals. Proof?

That “proof” was made manifest with the recent declaration that its leader, Xi Jinping has just scrapped term limits clearing the way for him to be, in Mao fashion, “Dictator for life.” The timing for this “power grab” can not be made forceful enough. If, one truly looks at the proverbial “tea leaves.” Here’s why:

  • If the $dollar continues lower – that’s bad for China. Why? U.S. exports get cheaper as it also makes the Yuan stronger and their exports less competitive. A double whammy.
  • If the U.S. imposes tariffs on any major industry such as steel and more in China – that’s another double whammy. For these are the massive industries that China uses to hide (or make up) GDP results and employ many of its workers which causes near immediate political unrest.

And I haven’t even listed the financial ramification within its own amalgamation of shadow banking that would make Frankenstein wince.

Those are just a few, of the many. But their implications are ginormous, or said differently, “Bigly.”

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

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

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

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

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

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

Just like Mao.

© 2018 Mark St.Cyr


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

Let’s just say the (speakers) results speak for themselves: literally, factually, and any other “lly” one would like to add to their own descriptor of choice.

Over the years I have taken quite a bit of heat when I’ve (dared!) criticized others in my field. (Let’s just say “advice and/or motivation” field for context.) And none more so than when I gave my opinion on the recent reinvention platform Tony Robbins has embarked on into the financial advice arena (again, literally!) with books and speeches. Or, with the sudden re-appearance of “America’s Financial Expert and Advisor” Suze Orman onto this same stage. (Yep, again, literally!)

Back in March of last year I wrote the following article titled: “They’re Baaack! And Why You Should Be Worried – Very Worried”

In it I made my points as to the Why’s, and more importantly, How’s, this might all end up. To wit:

So, let me make this statement right-off-the-bat: This isn’t a hit piece about either Tony, Suze, or The Expo. What I’m strictly relating my argument too is the phenom and psychology that reemerges with a vengeance during what is known as “the topping process.” aka “The late stages of a bubble mentality.”

This is the moment in time where generic, over simplified advice, that sounds so good (and too good) shouted too an adoring crowd  – should be taken as the siren, and clarion call to those who are diligent in preserving their wealth to buckle up, buckle down, and prepare in earnest. For once this show is over? “Over” is going to be something many of those attending these types of seminars are going to pray for – as in “Please make it stop!”

Let’s see I stacked up against all that “financial insight” and “brand power” to those, that more than likely, went directly out into the real world and employed all that new-found skill with zeal, shall we? Again, to wit:

“Home Prices Sink, Sales Plunge in Toronto”

“Home sales in the Greater Toronto Area, Canada’s largest housing market, plunged 35% in February compared to a year ago, to 5,175 homes. The plunge in volume was spread across all types of homes. Even the previously white-hot condo sector froze over:

Detached houses -41.2%
Semi-detached houses -28.7%
Townhouses -26.8%
Condos -30.8%.”

Or, you can get a different viewpoint for the ongoing disintegration of that market this way. Again, from the article…

“The average price for the Greater Toronto Area (GTA) plunged 12.4% overall to C$767,818. This represents a drop of about C$110,000 in the average home price over the 12-month period.

It split up this way:

City of Toronto: -6.1% to C$806,494.
Rest of the GTA without Toronto: -16.1% to C$743,196.
The movements of average prices showed a large disparity by home type, between condos, whose prices still rose despite a 30% plunge in sales volume, and the rest of the market:

Detached houses -17.2% to C$1,000,736
Semi-detached houses -8.6% to C$756,894
Townhouses -2.9% to C$638,691
Condos +10.1% to C$529,782”

If you think the above is a sad commentary of the “value” the attendees received (and if you are one, my condolences) there is some levity. The problem is, it shows just how sad (as well as deplorable, in my opinion) this entire thing really is. Once again, from Mr. Richter’s article. To wit:

“Given these dynamics that are now playing out in Toronto’s housing market, the TREB tries to put a positive spin on them, understandably. A year ago, the Toronto housing bubble went totally nuts, peaking in April with a 30% year-over-year spike in the average home price to C$920,800! By this measure, over the 10 months, the average home price has plunged 17%, or C$153,000. That’s a big chunk of money for those folks who bought in April.

So it’s not fair to compare this year to the final paroxysm of the bubble last year, says the TREB. Better to compare home prices to two years ago. And by the two-year comparison, home prices are actually up:

However, putting aside the price spike reported in the first quarter of 2017, it is important to note that February’s average price remained 12% higher than the average reported for February 2016, which represents an annualized increase well above the rate of inflation for the past two years.
This kind of thinking that is now creeping into the reports to brush off what is happening on the ground is a sign of just how worried the real estate industry in Toronto is about the new dynamics in the housing market.”

You just can’t make that type of stuff up, for it’s so egregious and specious it makes Snake Oil purveyors look down right trustworthy.

The only thing worse, in my opinion, is this “road show” is planning an encore next month back in (wait for it…) Toronto.

Funny thing is, this time? Tony and Suze seem to not be appearing.

Scheduling conflicts, I’m sure.

© 2018 Mark St.Cyr


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

We’re Not Starting A ‘Trade War’ – We’re Revoking Prior Agreements Of Preordained Surrender

When it comes to business there’s one group that believes they, above all else, know how business should be conducted at all levels. The problem is most, if not all, have never run a business in their careers. If they have, it’s quite common that it never rose beyond the equivalent of a lemonade stand.

And yet, it is this very same group that will/have imposed regulations so egregious, that even that simple lemonade stand, that fixture of years past, enabling many a kid their first brush with business – to be nearly regulated out of existence. You know – for the safety of the children and public at large.

Lord knows how many unsuspecting patrons consumed lemonade over the years and fell dead, or were hospitalized needing to undergo tests as to find out what contaminants may have been present, because there were no warning labels, or listed ingredients affixed to the plastic cups. And to top it off: No license!

What other possible offense could these business malcontents be involved in that would demand political intervention? Brace yourselves: They actually dealt in an all-cash business model. Obviously those 6 year-olds were just posing as neighborhood children, raising money for a local cause or charity.

No, what was obvious (via the political eye) was they must be underworld kingpins, extorting unsuspecting passer-byes of their hard-earned money to funnel back into their ill-gotten coffers. Need I say it again? They. Only. Accepted. Cash. (or pocket change) Obviously they must be criminals. So, therefore, they must be stopped! And sadly, for many, they have.

And who gets the credit for all this “brilliance?” Hint: Politicians, of all stripes.

The reason for the above is this: That’s about the level of business understanding that many, if not most, of today’s politicians have that negotiated the multi-national, multi-$Trillions of trade deals we are now, supposedly, bound by.

I know it’s seems over-the-top, however, let me assure you – it is not. For if you think I’m off base? Need I remind you of the most egregious statement made directly to business people which demonstrated today’s political leaders understanding of business; its fundamental relevance to a nation, its economy, as well as its working public. e.g, “You didn’t build that.”

Sorry, that’s not a capitalist infused statement of argument. That’s a defensive communist infused statement. Period. If you take offense to my statement? I’ll assume you are not, nor have ever, built a business. And you should probably stop reading here. Consider that your, “trigger alert.”

Over the last few decades politicians of all stripes (e.g., Left, Right, and everyone in-between) have entered the U.S. and its business sovereignty into trade deals that have done more damage to the U.S. and its middle class than anything before it.

“Free-Trade,” as it is bandied about, is great in theory. However, most “Free-Trade” agreements prior were nothing more than simple documents with general outlines that set a framework that was easily understandable, as well as administered. (i.e., Trade agreements used to be some 20 or 50 pages long. Now, their 2000 to near infinitum. And that’s just for, “Lemonade!”)

If you look at the results of all the trade agreements over the last few years, one thing is glaringly obvious: The U.S. rarely breaks even.

In most cases (Hint: See China for one) the counter-party to all U.S. trade agreements usually not only gets the oversized proportions of the deal, but are seemingly inoculated from any violations they commit. i.e., Dumping products into U.S. markets? Complain all you want. Just don’t “rock the boat.” Or should I say, “shipping container ship?”

Again, one (as in the U.S.) can complain all they want. Does anything ever come of it?

No. All you’ll hear is some form of “Well, we brought this up to the ___________(insert political body of you choice) and the needed recommendations are a process and will take time, and blah, blah, blah. But we’ll keep up the good fight to get those jobs back, just remember to donate to __________” (fill in part affiliation here.)

Remember – To a politician: “Talking business, is doing business.” To a business person: “Talking is one thing – bona fide sales, are quite another.”

Regardless how one feels politically about the current stance being initiated by the administration, what is abundantly clear is the following:

This is what business looks like when you’re trying to turn around, or right past mistakes, in the midst of a “turn around operation.”

For those unfamiliar with the term, “turn around operation.” This is what is used to describe the process that a failing business adopts when there’s only two options: (1) Go out-of-business, now. (2) Try to save it.

Being a former successful “turnaround specialist.” This is precisely (i.e., what everyone is currently mislabeled a “trade-war”) what you do (and need to do) when you’re engaged in the latter. (I’ve expressed a similar point before in an article titled “The media is perplexed because this is what business looks like and they don’t get it.”)

All prior negotiations are simply either curtailed, rewritten, or thrown into the scrap-heap. Nothing is sacred. Repeat: Nothing.

Again, we are currently engaged in the latter. And the ones that have benefited in prior agreements, at the expense of the U.S. and its industrial backbone, are naturally going to wail like spoiled children.

“Free Trade” agreements were meant to be reciprocal, honest, sharing of markets. Otherwise, there is no “Free” anything.

What’s been taking place for decades is nothing more than a business bloodletting, being forced via a legion of leeches that have done nothing more than negotiate away a nations most fundamental asset. i.e., Its business and industrial might. It’s been a deplorable, disgusting display of nothing more than the equivalent of a bastion of rentier’s greed. This has not been about capitalism, business principles, or ideals at all.

It’s been nothing more than pure “Wall Street” incentivized greed. The greatest bastion for capital formation is now, nothing more, than a shell game. Literally.

Most, if not all, of the past agreements have been nothing more than structures of one form or another to fuel the insatiable thirst of what “Wall Street” has now become. i.e., It’s no longer the greatest capital formation vehicle the world has ever known. No, now it’s nothing more than a front running, parasitical infested, algorithmic, headline reading, High-Frequency-Trading, casino. My apologies to casinos everywhere.

Do not get me wrong, I’m not making any argument in favor of any administration, or politician. That is not what I’m discussing here.

What I am making clear is this: There’s a difference between opening up a “Trade War” and – just ending prior egregious trade agreements.

That’s not “War.” That’s called defending oneself. And just as in life at the schoolyard level – The bully doesn’t like when they suddenly find their “bullying” not only unheeded, but rather, they now find the once “bullied” has decided to fight back.

Again, all we are now engaging is – defending ourselves. That’s a distinction with a mighty big difference. And most of the mainstream business/financial media hasn’t the slightest clue of the differences.

Wall Street objectives (i.e., wringing every last cent, regardless of the human toll or national cost to its business sovereignty) have done nothing more than incentivize businesses to move operations offshore using the “wage gap,” “regulation gap,” and “environmental gap,” as an incentive to jettison any and all morals of capitalistic fundamentals, and replaced it with some form of grotesque hodgepodge of business maxims which are entirely specious when used improperly.

All hyperbole? Fair point. So, let’s use another example for comparisons, shall we?

This time let’s use the media’s go-to patriarch of U.S. business: “Ole Uncle Warren.” Far too many hold this man up as “The Face of what U.S. Business should look like.” Here’s a hint: Here’s what you get with that “face” and a trade deal such as NAFTA.

I made this point originally back in May of 2014 in the article, “Moving The US Economy Forward By Reversing Its Tax Policies”  when it originally took place. To wit:

“We hear many on the taxation issue regurgitate so-called “wisdom” or arguments for higher levels of taxes using opinions from academia such as the Krugman-ites, or axioms by none other than Uncle Warren (aka Warren Buffett) as to buttress their claims or stance why they’re unquestionably correct.

Remember when we were told ad nauseam Mr. Buffett believed in higher taxes? We heard: “Oh his secretary pays more in taxes than he does, blah, blah, blah.” And if Uncle Warren says it, well it must be so. After all, he throws great shareholder parties and plays the ukulele. He’s for the little guy. Yeah, right. Until you actually try to touch his money. For no matter what they say, one needs to watch what they do.

A little event took place last month that for all intents and purposes resembled a tree falling in the forest for today’s financial media. Fruit Of The Loom™ is closing its plant which employs some 600 U.S. workers in Kentucky and moving the operation to (wait for it….) Honduras. I guess those 600 U.S. workers were doing jobs that people paying lower wages, taxes, and more won’t do. Oh wait, they will. And now Honduras can claim family ties to Uncle Warren. I wonder if Mr. Buffett broke out into a rendition of Cinco de Mayo when he played his annual ukulele solo surrounded by the Fruit Of The Loom quartet?”

Sure, Mr. Buffet bought FOTL in the early 2000’s when it was in bankruptcy. Nothing wrong there. What’s wrong is his implied song and dance across the media in a willing to pay up, or call for higher taxes in some “good steward of business ” tone. i.e., “I don’t pay enough in taxes, blah, blah, blah.” or some other such drivel.

The fact of the matter is: If there’s a tax break or incentive that he or his businesses can take advantage of? They’re going to take it, regardless of the economical costs to the people he employed, or the community that was built around it.

Welcome to, “Uncle Wall Street” priorities, first, via the cover provided by prior trade deals negotiated by “lemonade stand” politicians. Great for them – not so good for the U.S.

Here’s a question: Do you think those 600 jobs would be gone today (and the devastation to the community that was built around it for years) had the prior “trade agreements” to incentivize such were not implemented? Imagine if “Ole Uncle Warren” didn’t have NAFTA as a useful argument to jettison all those U.S. jobs. Truly contemplate it, for this is just one example that demonstrates what has been taking place across the entire U.S.

Also contemplate: This was prior (e.g. 2014) to all the tax reversals, incentives, and more coming out today. Think KY would still lose to Honduras in 2018 vs 2014 tax policies, or recent NAFTA calls for renegotiating? Maybe, but then again, they’re already gone so why bother, right?

Is trying to make those once “Free Trade” incentives or conditions less favorable now entering some part of a “Trade War?” And if it is, why so? Is a country dumping products (Steel is just one) on a market subsidized by its government, flooding its trading “partner” and businesses with unsustainable pricing parameters, with no toleration (actually more like laughing in the face) for trying to protect oneself from such practices “Free Trade?”

As far as the Ivory-towered academia cabal is concerned that answer is: Yes, yes it is.

But if you’re an American citizen or business owner? I would garner to assume your view is a little bit different, is it not? (not to mention if you are one of those 600 that were jettisoned.)

So now – it’s China’s turn, along with a growing list of others. (E.U. springs to mind)

Will there be fallout? Economic upheavals? Financial chaos? Wall Street bedlam?

The answer is more than likely, Yes, too all, and then some.

But what’s the alternative? Here’s one:

Further bloodletting of U.S. industrial and business might – and a further – if not complete – obliteration of its workforce. All at the expense of remaining in prior “trade agreements” made by politicians that don’t possess even a “lemonade stand” understanding of business. Agreements that did nothing more than gut the U.S. of its once ingrained competitive advantages, enabling a cabal of international pols and business leaders to become rich beyond compare.

That’s not capitalism – that’s oligarchy. Pure and simple.

But there is an alternative, which is this:

Simply rip up all prior agreements – and start anew the best we can. Even if it means, yes, I’ll dare say it: Tariffs. Then, suffer through the healing process best we can as we rebuild.

That’s the two decisions at the core of any turn around plan. Hint:

Only the latter has a chance of working. It’s not easy, and at times feels utterly frightening, but that’s the cost. You either pay it now, or slowly bleed away into oblivion. And if that means we’re going to enter a trade war as most Ph.D’s argue? Then I say…

“Let’s Roll!”

© 2018 Mark St.Cyr


An Update To The Update

I decided to follow-up this mornings post with another, because I believe we may be at that very inflection point I’ve been warning about these last few weeks.

Let’s start with this mornings “picture.” To wit:

Here’s how it worked out after today’s market close. The “picture” is the exact same as above, untouched, un-photoshopped, unadulterated, un-everything except for what the “market” did as to fill in any blanks, again, to wit:

The reason why I’m bringing your attention to this, is for this reason: I have stated you need to watch the futures contract which trade through the night beginning at 6:00pm ET (which the above are) for its important to see how Asia reacts, especially China. This is where things can go awry in a heartbeat, where we wake up to find the “markets” are suddenly careening out of control. Hint: Remember this term, “Lock, Limit, Down?”

The simple fact of the matter is this: Take anything that has a general impact, whether causation, or correlated here in a: One = One type relationship. That same relationship will have a: One = an exponential equation there.

In other words, the stresses currently playing out within our own markets are going to have exponential repercussions in Asia, and especial China in-particular. No matter how “fantastic” these next-in-rotation fund-managers paraded across the business/financial media spectrum tell you China is. Hint: If the U.S. markets come down with a cold – China is usually put on pneumonia watch.

Currently, it’s beginning to look like the U.S. “markets” are coming down with not just a cold, but rather, the flu. That means China may be battling something far worse than even they dare contemplate as of today.

But make no mistake – today is the day (actually watching the overnight Asian markets now and going forward) to start paying very strict attention, as to try to take steps, or have previous steps in play as to inoculate your business from any potential “viruses” that may suddenly become rampant, the best one can.

Whether or not anything comes of this is immaterial. What matters now is that there’s a very high probability of, “Something wicked this way comes.”

Here’s where, as the old saw goes: “An ounce of prevention, is worth a pound of cure.” Or, more importantly…

Your business livelihood.

© 2018 Mark St.Cyr