Are The Market’s About To Get Shanghai’d Again?

As we sit here on Wednesday the “markets” appear to be recovering from yesterday’s rout in both the U.S., as well as Europe. e.g., Italy and its contagion fears. Many across the mainstream business/financial media landscape are now waving their “all clear” pom-poms.

Whether this is true, in regards to Europe, is an open question at best. Yet, for the record, I think it’s anything but solved. Only contained, for the moment. But that’s for another article.

What I believe one should be focused on is not Europe – But China, and Shanghai in-particular. Here’s why:

Currently no matter how bad the circumstances may be in Italy at the moment, the ECB led by Mario Draghi are still in “Whatever it takes” mode.

Although the situation could go from bad-to-worse, at any moment. Until you get some immediate, catastrophic announcement such as a major bank failure (think Deutsche Bank™ as an example) sovereign styled risks (i.e., bonds et cetera) are immediately accessable for the ECB to “step in” as they say and shore-up a market. Of course, there’s always the caveat: “It works like a charm every-time it’s tried – until it doesn’t.”

Where that “doesn’t” time is, is anyones guess at the moment.

However, with the above said there is another market one should be paying close attention to. That market is the Shanghai Composite Index™. (SCI)

The SCI is one of those bellwether type indexes to watch when trying to gauge anything China market related. And what it is showing seems of little interest to most mainstream financial/business media pundits. Either that, or they have no real clue. I’ll go with the latter, but that’s just me.

So here’s something I feel one should pay the utmost attention to over the following days and weeks. The reasoning is quite simple: What happens in China will effect everything in the U.S. and world with near immediacy. Need I remind you of that morning in August, 2015 where the U.S. woke to its major markets in “Limit down” status?

Remember where it all started? Hint: China and in-particular the SCI. To wit:


The above is a chart of the SCI and the candles/bars represent daily intervals.

As of this morning (or last night) the SCI has been sending signals that something is not quite right. The behavior via a technical eye seems to show it’s at the cusp of going into free-fall status. The 3000 level in this index is a very large psychological level much like our own Dow 20K, for an example.

If this level is lost and suddenly begins to fall precipitously, as well as with speed? 2015 type “market” fears, once again, may jolt “markets” globally.

The caution in such an issue, or “jolt” happening today, is for this reason: “It’s different this time” i.e., The Fed is currently in QT mode (quantitative tightening) mode and raising rates. So there’s even less in the “markets” as far as liquidity to help cushion any initial sell-off as what happened in 2015 – and – the Fed. coming to the rescue this time, may or may not, solve the underlying rout, only slow it down, for the moment.

Again, for anyone trying to pay attention as to what may be on the ever-changing horizon, I can only say this…

Italy may send the markets roiling, but Shanghai could close them. If you think that’s hyperbole? Then you, much like most of the business/financial media, have forgotten 2015.

© 2018 Mark St.Cyr

The Coming Drought In Corporate Charitable Giving

Corporate charitable donations are about to get a whole lot leaner, at best – and simply jettisoned all together, at worst.

Most believe charity should be done in private, out of the eye of anyone else. i.e., It’s a personal act involving you and the charity involved. No one needs to know, for you’re not looking for any praise. The act is its own reward.

Then of course there’s the public type. This one takes many forms such as the naming of a building for a large donation. (Think, hospital wing et al.)

Then there is the corporate variety. This is where either a small business or global enterprise will donate to certain events or organizations within ones community in some form of fund drive, or other such events. (Think, cancer runs, or other awareness type events.)

Then there is the true, large business centric styled donations. This is where companies make donations to a specific charity or organization they feel is aligned with either its own values, or its customers.

Usually these larger and repeating types are quintessential to many of these charities to survive. These are the funds “counted on” as to make sure the rent gets paid, phones are kept on, and even pay the staff. All this so the charity itself has the tools to go forth and further raise the funds it needs to be effective for its chosen endeavor.

You as customer may, or may not, agree with their choices as to which they support or don’t. But in most cases, the majority of patrons don’t have an opinion either way and see it only as the place of business that they’re shopping with is doing something charitable.

The bulk or vast majority of patrons to most businesses fall into this category. The only reason why they may know is that the company itself may tout it in their advertising, or other such avenues. Yet, if they didn’t, most, if not the vast majority, wouldn’t bat-an-eyelash.

Some of these same companies contribute to certain organizations because they feel it may mean something deeper to a customer. Or, they want to be seen in the community as giving to something that the entire community seems to support. (Think, “rights” type of groups, whether its marriage, immigration, speech, constitutional, et cetera,)

Many of these donations, again, whether one agrees with them or not, are made from a business type decision process. In other words the reason for the giving is, “Is it good for business?” The companies themselves, much like many of their patrons may, or may not, have a real connection for giving other than what it may, or may not do, insofar as what it may, or may not do, for business. Yes, a lot of may, or may not’s. But that’s just business.

To some this may sound cold, but then again, we’re talking about business – not about the charity itself per se.

And it is here, in this larger corporate context, where I believe the most change will come forth. And the reason for it:

The mass “die-in” staged to protest the NRA® at a Publix™ grocery store.

Again, the issue here is not whether you agree, or disagree, with either the company, the protesters, or their donation recipients. No, the real issue is that in today’s world of social-media, where instant protest mobs can be created almost on a whim, regardless for validity of argument, businesses are being shown via these very protests that the best thing to do – is to do nothing.

Whatever “goodwill” has been generated via donations from Publix will now be held up against what possible damage may be had to either brand, customer loyalties, business disruptions, negative press, or lost sales. Hint: the protest at Publix, even though small in size, will now be used as a gargantuan obstacle to be argued against for continuing any donations – to any cause.

The only safety a company now has, at the least, to shelter itself from any public discourse – is to divorce itself from any and all public donations.

Think this is an over statement? Fair point, so let’s use the initial, knee-jerk reaction of Publix, which was to immediately suspend – all political donations – as they rethink their contribution disbursements.

Think the above is only a one-off, or isolated incident? Again, fair point, so let’s see if it’s happening in other areas such as the “hospital wing” variety, shall we? To wit:

New York Times™: “California Today: San Francisco Nurses Protest the Zuckerberg Hospital’s Name”

“After a record-setting $75 million gift from Mr. Zuckerberg and his wife, the pediatrician Priscilla Chan, in 2015, the general hospital was renamed Priscilla Chan and Mark Zuckerberg San Francisco General Hospital and Trauma Center.

Now, in light of Facebook’s recent controversies, a group of nurses are saying the name makes patients wary. And they have renewed their efforts to have it removed.

“We are in charge of keeping our most vulnerable people private and protected,” said Heather Ali, who works at the hospital in nursing administration. “Now people wonder, ‘How much is my privacy protected at a hospital with that name on it?’”

Megan Brizzolara, a nurse at the hospital, said the Zuckerberg name “scares” patients.”

It’s interesting the above isn’t via outside forces, but rather, from the hospital’s own staff. Yet, the results are the same: Bad press, where Mr. Zuckerberg may get pressured in the future (if not already) for some way to remove his name from prominence and make it more “private.” You know, “to help ease tensions of any perceived negativity, for the good of the community and hospital.”

I would bet dollars-to-doughnuts the above, in one fashion or another, is already being discussed and contemplated by that hospital’s board. I’ll would also conclude Mark himself is already thinking about it, as in, “If they dare ask me to change it, I’m just going to demand my money back as in I also changed my mind.”

And don’t believe for a moment this isn’t being watched very, very, very (did I say very?) carefully via the people with that type of wealth to donate. Doing donations of this type before they pass away, rather than after, may just go out-of-vogue, and back to the way it used to be conducted. e.g., posthumous.

Here’s what I believe you’re going to start to hear a lot if you’re one whose job it is to fund raise via the corporate or mega donor variety.

First, for the corporate type: “In light of the protests that took place at Publix the Board has decided we’re no longer making any donations to any outside charities for the time being. In today’s environment the risks are far too high, regardless of the cause. And, the only way we can do this fairly: is to say no too all at this present time. But, check back with us next year, maybe things will have changed.

Second, from the mega-door variety: “In light of what took place with the Zuckerberg’s donation to S.F. General Hospital we’re wondering if giving before one passes, that has been in-vogue these last few years, hasn’t now returned to being gauche, as it used to be. We were never really fans of this style of charity and have decided it would be in our best interests to follow this more classic-style of donation, which we have always preferred in the first place. Thanks for your kind offer, but at this moment, I’m sorry, we still have away to go before that time comes. Ta-ta.”

Or said differently: When the return calls or donation checks no longer ring, or are found in the in-box…

You’ll know it’s them.

© 2018 Mark St.Cyr

On This Memorial Day

As we get ready for summer we begin with the kick off celebration of Memorial Day.

In our race to ready the grill, chill the libations, and hit the water, let’s not forget the reason for this celebratory kick off to summer. It’s made possible for us because brave men and women on our behalf stand in harm’s way so that we can relax in peace.

Let us never forget. Ever.

I rarely talk about private matters. However, I think it’s only fitting no matter how old we get to still reflect on loved ones or friends who’ve gone past like ships in the night.

Marine Lance Corporal – James A. St.Cyr E/3 Born 2/08/47
KIA – Quang Nam 3/26/66
Vietnam Memorial Wall – Panel 06E – Line 052
(My Uncle aka Uncle Jimmy. To this day still missed terribly by all.)

As long as we’re alive – we should never forget. Whether it’s someone you know personally, of your own family, or even someone you’ve never met. We must always remember what it is to be an American regardless or race, creed, gender, immigrant, or nation born, because: someone – somewhere – stands ready to give their life – so we may continue with ours.

Thank you to all that have served, or continue to serve. This American wishes all of you the best.


The NFL And ESPN’s Ratings Are About To Get A Whole Lot Worse

National Football League commissioner, Roger Goodell announced on Wednesday protests (aka “taking a knee”) during the national anthem, in concert with the flag ceremony, will no longer be allowed. It’s now league policy and will be incorporated into the “Game Operation Manuals.”

Here’s my first thoughts or impression: Too little, too late, and its about to get bigger, and in ways, that’ll bring both the NFL™, along with its now socially active cheering squad known as ESPN™, to their own knees. For if these entities truly believe the ratings collapse will now be abated, I have a feeling the worst is far from behind them. This policy may in-effect exasperate the issue and here’s why…

When it comes to the issue about why players were, or were not, engaging in the “kneeling” dilemma is not what I’m speaking to here. That is for you to discern. What I’m addressing here is the business aspect of it all. And what it may, or may not do to the brands, viewership, and more. Along with exacerbating the very survival of these franchises. Because, whether one agrees, or not with what is the genesis of it all, one thing is certain: Tick-off enough customers – and you’ll have no business to worry about in the future.

And that “tick-off” may have just begun.

The issues at hand are numerous. The first, and most troubling, is the fact in which the NFL and its commissioner had the power (as well as right) to stop political protests in the beginning. This should have been the initial reaction and put into place by games end, that day, after Mr Kaepernick’s protest. Period, full stop. Here’s the reasoning…

Colin Kaepernick, whether one agrees with his views or not, made it immediately and absolutely clear: the reason for his “kneel” was for political reasons. In other words, what he was protesting had nothing to do with his work environment, employers, or any other such facet.

No, what Colin (I’m using the familiar only for ease) did was to hijack both his employers venue, along with thrusting not only his employers, but his team-mates et al. into the political spotlight on a mass scale, with even brighter lights! Where customers (aka fans) may, or may not, have opposing views, which in-turn, could or would denigrate its brand, ticketing or viewership potential, along with advertising revenue or metrics, in a negative fashion. Or even worse, all at the same time and with immediacy.

The latter is precisely what happened. And it kept getting worse, much worse. And guess who appeared oblivious too it all? Hint: The “Commish”

I wrote an article in 2015, nearly one year to the day, before the initial  “kneeling” took place. My article was directed squarely at the current meme of the day circulating across Wall Street that ESPN™ was losing subscribers mainly due to the “cutting the cord” effect.

What I proposed back then was that ESPN was losing numbers in direct proportion to how much politics it was now inserting into its broadcast, and was turning off subscribers in droves.

At that time this was met with the usual “just doesn’t understand” type refutals by many a next-in-rotation fund-manager across the mainstream business/financial media. Here’s a bit from that article to show my reasoning. To wit:

“Why wouldn’t ESPN™ (or Disney™ its parent company) go to great efforts to include or push the narrative that “cord cutting” doesn’t necessarily mean “all” that cut have tuned off? In other words: why aren’t numbers from alternative viewing sources highlighted as to show they might not be viewing there – but they are over here? Unless – they aren’t.”

“ESPN (like a few notable others such as NBC™) has seemingly transformed at near hyper-speed from sports reporting – to political sports reporting. The political edge now rampant throughout the shows, games, interviews, et al is overbearing, overburdening, and overdone.”

Then, one year later, Colin Kaepernick turned the playing field into a ESPN programming venue for everything political.

Was it any stretch to think this was not inevitable from a business perspective? Did the NFL not look at ESPN’s dwindling view-ship numbers and conclude what was going on, and the reasons for it? The only thing worse was that they did, and decided to wait to forge a response after the fact.

That is/was a failure of leadership and rests firmly at the doorstep of Mr. Goodell. For if one looks squarely at not only his public responses (or lack of), but his actual initiatives to deal with these current political dilemmas – he was the root problem – and he should have been fired the moment he did not squelch all this strongly and vociferously, from day one. And I said so.

Yet, what did the owners of the NFL do? They extended his contract and paid him even more!

That decision is going to cost the NFL dearly. For what they did with resigning him was to now enshrine the political into the venue, and the reasoning is simple: Mr. Goodell seems to have made it his quest, or prerogative, to involve more political organizations into the venue, first rather, than deal with any issues from a business perspective, first.

How’s that all working out? Tanking ratings, more disgruntled fans, embarrassingly so empty stadiums, et cetera, et cetera. All this while the “play calling” across ESPN is solely about how this, or that, fits into a “political game” of X’s and O’s.

It’s now not uncommon for many to question if the pundits are even watching the actual games. Yes, it’s now that in-your-face.

This new ruling will not make the situation any better in my estimation, in fact, I believe it will exacerbate the issue even more all around, for this reason:

Once you allow for the political – it’s like the proverbial “camel’s nose under the tent.” And these new rules just alter the way the “political game” will now be played on the field, which will be even more in-your-face, or lack of them. And if one believes a “solving” of this measure is by allowing players to stay in “the locker room during the anthem.” I have news for you…

ESPN will take that “locker room” time and turn it into “prime time political football” so fast it will make the wide receivers jealous.

However, with all the above said, there has been one issue resolved in all this, which makes any further disintegration from here-on-in of either brand, or franchise abundantly clear.

All blame can now be laid directly, and solely at the owners feet. For they had the opportunity, on more than one occasion, to end all this from a business perspective from the beginning.

And they punted.

© 2018 Mark St.Cyr

Website Changes Coming…

Hello all!

Please be aware we will be making changes to Mark’s website to both feature and allow for new content at the end of week continuing over the Holiday weekend. Everything should be in place by Tuesday if all goes as planned.

You may notice or experience some glitches during this upgrade and updating behind the scenes. If so please bear with us as we make these improvements. Clearing your browser’s cache on your devices or computers should alleviate most snags if you experience any at all. Or, just check back a little later-on during that day should you receive a “404” error type message.

We are getting ready setting place holders for the new “MYTR” subscriber only content. Mark’s regular blog posts will not be effected although the front page will appear different.

In further optimizing for mobile we may need to move some of the content around but it should still be intuitive to access.

Current subscribers or visitors to the site needn’t do anything as this will not limit or hinder any access to Mark’s blog posts. Email notifications, RSS feeds and such will be unaffected. There may be an erroneous email notification or two during the set up. If there is please just disregard as we work out any gremlins..

Thanks in advance for your patience.

V.V. -StreetCry Media

For Those Wondering…

As I type this the “markets” have been open for approximately 15 minutes or so. (e.g., U.S.) It appears that the news of some form of trade war reprieve has been reached for the time being. The “market” has since gapped up quite forcefully.

However, with that said, there has been one index I’ve been monitoring quite closely because of its reflection to smaller, more U.S. centric businesses. e.g., Russell 2000™ (RUT).

In particular the RUT has been the only index to hit new lifetime highs as the other indexes, despite “fantastic” earnings and more, can’t. The RUT is very, very, very (did I say very?) $Dollar sensitive in the exact opposite way one thinks when imagining global concerns. i.e., The stronger the $Dollar the better for businesses that focus on business inside the U.S., as opposed to those that have to worry about $Dollar strength hindering business abroad.

So it was when the “market” opened that I spotted a very clear technical pattern that deserves watching, for the implications are onerous if it plays out in the ways it’s known for.

It doesn’t matter if you’re not some technically inclined chart reader or really don’t understand the whole “charts” thing. I do, and I can hold my own with the very best in the business. All one needs to do is watch for if what I’ve noted on the following chart comes to bear. If it does? All I’ll say again is – concern for any sudden upheavals should be paramount in ones planning.

So here’s what I’m talking about. To wit:


The above is the RUT as of about 9:45am EST. The Bars/candles represent 15 minute intervals. If the “market” were to fall and closing prices appear within the box (or levels per se) I tinted above within the next few days or so (today would really cause concern) these “markets” could be gearing up for another move very similar to what happened just last February.

You remember last Feb. don’t you? If you don’t let me jog your memory for a moment.

In January as the “markets” vaulted ever higher to once again lifetime prints the mainstream business/financial media et al declared: It’s all upside from here. Except yours truly. It was during that period that I made the same type of warning as I am now – followed by the derision of many in that same media.

Then February happened: It consisted of two events. The first was setting the #2 largest single day point loss in the “markets” history. The second?

It then set the largest, as in #1.

As always, we shall see.

© 2018 Mark St.Cyr





Over-Leverage Over-Tightens – Then It Snaps

Leverage can be used in spectacular ways, whether it be to gain mechanical advantage such as the fulcrum and lever variety, all the way to the personal interactive type like that used in child rearing. i.e., No finished homework, no______ (fill in the blank.) Then, of course, there’s the more sinister versions or type as in blackmail, where I don’t think I need any “fill in the blank” examples to further the point. Everyone gets that one, at least I would hope.

Over-leverage, by contrast, is just more of the same only with far more intensity of strength. Yet, it is here, that all that good can reduce once unfathomable tasks or results from the promise for spectacular benefit, or results (i.e., building cathedrals, et cetera) – to an even more spectacular pile of rubble and despair. i.e., modern-day construction calamities.

As is always the case when using, or pushing anything to its extreme potential: All it takes is but a feather more weight, slightest gust of wind, or $1 dollar additional of blackmail – and it snaps – releasing a chain of events that makes Chaos Theory appear as unvarying science in comparison.

We all partake, as well as apply differing variations of it in our own daily lives, whether one is a race-engine mechanic that mistakenly over-tightens a connecting rod bolt (you want to talk about chaos?) to someone who is entirely maxed out in their budget and available credit-line, affording only minimum payments with not a $1 extra to spare, to then suddenly receive an unexpected bill (like a car repair) or increase in their rates. The ensuing results can make race-engine mechanics wince.

Bending to the point right before breaking is where most try to live. We do it in our personal lives in relationships with friends and family. We do it in our professional lives whether its to make money or other advancements. (think workaholic type behavior) We also do it in building projects, or retail items as a way to cut costs and such. i.e., Overbuilt vs planned obsolescence.

However, pushing limits to their breaking point has consequences. But none more so then when leverage per se is allowed to run amuck in what we perceive to understand as the banking sector. Where it is our your resources (i.e., your deposits and such) which provides the “fulcrum” for banks to place their “lever” turning what many presume as providing a necessary function of modern society. i.e., Deposit holding, loan originating, and/or payment transactional utility type resource.

That would be, as they say, naive thinking, at best.

No, today what we have is a sector of the economy known as “banking” which has been able to not only move your “fulcrum” closer to the point where the greatest stress may occur, but also has lever’d up that fulcrum in financial shenanigans that would make a street hustler envious purchasing ever-the-longer “levers.”

The true issue here is when that over-leveraged moment of singularity takes place, where the “lever” suddenly snaps, the banks don’t just replace your fulcrum (i.e., money) and start again with smaller levers. No, they’ll just take your fulcrum entirely and use it (think – give) to pay off whatever entities were employed to create the levers to begin with. Then, adding insult to injury, will ask (more like demand via the taxpayers) that you provide the necessary funds to provide new fulcrum, along with purchasing new levers.

And – If you think, or believe, the banking sector of the world is on much more “solid footing,” along with “learned its lesson about leverage” resulting from the Great Financial Crisis of ’08? I’ve got a deal on a bridge in Brooklyn for you, cheap.

Let me pose a simple question or construct for you to ponder. Ready?

What’s the difference and resulting consequences between: A) a totally maxed out personal debtor experiencing minimum payment inflation? Or, B) an emerging market debtor experiencing the very same via a stronger U.S. dollar?  Hint: Size and scale. Nothing more.

Currently there is a lot, and by that I mean just that, a lot of focus via banks of all types (Goldman Sachs™ for one) getting into the subprime area of financing. Although there have always been a sector of banking (think “buy here pay here,” et cetera) which deals primarily in this area of customers (i.e., FICO scores beginning with “5” and lower) The lure of riches in exorbitant (if not outright extortion) interest rates seems to be too much for these entities to eschew any longer.

What seems oddly coincidental is that this encroachment into the once “private” sector of risk banking is coming directly in unison with the current upheaval barreling throughout their most coveted subprime customers for decades. e.g., Emerging Markets.

Hows that all working out currently?

As of today what is collectively known as “the emerging market” is under extreme stresses. Currencies are getting hammered. (see the Mexican $Peso or Brazilian R$Real for clues) Then there’s place like Italy making waves, and the list is growing, and fast.

The reason for the above is to make very clear the implications, and what to watch, for clues going forward. The reason is very simple.

Over the last decade as the Federal Reserve (along with other central banks) allowed the conditions for the emerging market sector to leverage up in ways that would make the original housing fiasco look tame in comparisons. (i.e., enabling banks to sell their debt)

Yet, what many underestimate when trying to compare subprime analogies with emerging market crises is the doubling, if not tripling of the Knock-On effect. i.e., Think negative feedback-loops that spiral across all sectors, all nations, all credit facilities and more, causing a rush for perceived safety into the $US dollar, which accelerates and intensifies those loops exponentially so.

This is where I believe the focus should be as of today for anyone trying to pay attention, as well as anyone trying to anticipate any disruptions that may affect their business or personal well-being. For if there is one place “over-leverage” has been applied – in spades – its in the emerging markets of the last decade. Bar none. Have I mentioned China yet?

The moment one hears, reads, or sees a headline similar to “China suddenly devalues…. ” or, “________(fill in emerging market of choice) unable to meet payment….” or other in-kind, I believe that will be “that moment” all that “over-leverage” finally snaps.

And the preponderance of pressure being applied to these “levers” is coming from one area, and one area only: The increasing strength in the $US. Where that “magical” level is, no one knows. But what we do know is this: It’s heading in the correct direction where all the “bad things” rest.

If one wants another way to think about it, look at it using this analogy: “The central banks” used the wrenches in their monetary “tool boxes” to loosen the bolts of finance that allowed many of these nations “motors” to run unbridled on fueled debt. (I’ll leave U.S. comparisons for another column.)

Today, they’re not only tightening down the screws on those once loosened motors. They’re using wrenches fitted with long pipes (maybe literally!) to tighten it all back down. Problem is, just like many a person who’s busted a knuckle doing so at home can attest to: It all seems to be going so well, then…


© 2018 Mark St.Cyr

Are We About To Reach That ‘Margin Call’ Moment, Again?

Over this past weekend the movie “Margin Call” (2011, Lionsgate™) made its way back into the rotation on my cablebox.

For those who have never seen this movie, regardless if you are involved in stock trading, it is a must watch on so many levels, be it general business, corporate leadership, department interactions, skullduggery, familial, as well as personal backstabbing, the list goes on. It is absolutely loaded with a plethora of take-aways of the real-life-lesson variety. I say this because I have been involved around, in, as well as been at the receiving end of the proverbial “poisoned dagger.” Not on Wall Street, but within other fields.

I can tell you with point-blank certainty that many of the situations and scenarios contained, or played out in that film, are applicable (as well as happen in-kind everywhere) to getting a condensed lesson in what happens in real-life at the top of the game of business. i.e., When you’re playing for, “all the marbles” as they say.

Margin Call was nominated for an Oscar®, in my view, not only should they have won, but swept them. But that’s just me.

I’ve written about this movie before using one or two scene constructs, then applying what was addressed to today’s “markets” or business environment.

There are many scenes within this movie that people think (as well as believe) would never happen in real life. Yet, I’m here to tell you, not only do they, but many of those scenes I’ve witnessed, near script-like, in other situations during high dollar/value negotiations or situations.

The boardroom scene played out by Jeremy Irons (John Tuld) when he addresses one of his underlings as to tell him what is concerning him and to explain it in plain english, or as if he were (paraphrasing) “…speaking to a young child, or golden retriever” is just one. And is far more true-to-life than many may realize, let alone understand at first glance.

In other words: No jargon, no formulas, no big words, no bullsh#t. i.e., “Tell me so that even my dog would understand.” Trust me when I tell you, again, there’s far more real-life contained in that entire exchange than there is movie fiction. The entire movie is an allegorical lesson for life at the “high stakes” table. And those of us that have been around a bit, and played on those higher levels, agree. (via my own conversations with others)

The ruthlessness, along with the soul-dead responses portrayed and played out in other scenes, is far more true to life than fiction. Which brings me to the reason why I felt the need to elaborate on it today.

Over the last few weeks I have been barraged from friends and colleagues asking me for my interpretation of what is currently taking place in the “markets.” The questions have all had the same underlying theme, i.e., “With all this good (earnings, tax cuts, N.Korea, and more) why are the “markets” not higher?”

When I probe them a bit what I’ve found, almost to a person, is the reason for their consternation is they’re trying to wrap their heads around what the mainstream business/financial media is propounding and what the “market” is doing. Which for all intents-and-purposes – has been nothing. i.e., We’re now in May, and the best the “market” could do after all those “fantastic!” earnings was get back to break even for 2017.

When I repeat the same answer that I’ve been trying to in grain into their reasoning for years, many of them seem to still not want to hear it. And others just don’t. After-all, if it was purely the Fed. they muse, that would mean everything is a mirage. And they just don’t want to make that leap.

It’s understandable, it’s a very hard concept to understand if one doesn’t want to undertake the due diligence themselves to incorporate all the potentialities. But that doesn’t mean those potentialities are not there!

As of late my go-to response, as to back up my assertions, has been the following:

“What you need to realize is this – If I were wrong and they were right, then the “markets” should at the least, be at, or above the previous high water mark.

But what seems to be playing out is the exact opposite, in other words, I’m correct and they have been selling you smoke-and-mirrors. And what’s really concerning you, is there are cracks forming everywhere that you seem to be aware of, yet don’t want to consider. What you seem to be asking for is another mirror, or more smoke, as to just pretend it’s not happening.

Again, what you seem to not want to ask yourself is the fundamental question, which you should, and that is: Is it not funny how this all is happening – with near precision timing – now that the Fed. has reversed course?”

Which brings me back to the movie, because it is their response that is the most troubling. That response? “Well, that just means the Fed. will step back in as they’ve always done, right?”

The answer (and I’ve given) to that question is: Yes, no, maybe. And, at what level? And, will it work? And, if not, then what?

Many (as did I when I was younger) don’t entertain, let alone fully comprehend, just how separated and detached many view their positions when it comes to the human toll that can result via those very decisions. It happens in politics, business, and yes, even families. But right now I’m speaking directly to “markets” and we have a very real-life expression taking place as to show anyone who cares to look, just how detached the people “in charge” (e.g., Federal Reserve) are with any perceived “concern” for your money, investments, et cetera. To wit:

An “Audible Gasp” Was Heard When The Chicago Fed Unveiled Its “Solution” To The Pension Problem

“An audible gasp went out in the breakout room I was in at last month’s pension event cosponsored by The Civic Federation and the Federal Reserve Bank of Chicago. That was when a speaker from the Chicago Fed proposed levying, across the state and in addition to current property taxes, a special property assessment they estimate would be about 1% of actual property value each year for 30 years.”

Here’s what I opined in April of last year for the possibility of what was more than plausibly on the horizon. Again, to wit:

“Are 401K Holders About To Feel A Savers Pain?”

There’s an old truism people forget all too often. It has many variations and is attributed to even more, its core meaning goes something like this:

“If the government can give it to you, than it can also take it away.”
Some of you might be wondering if I’m talking about the current “tax” advantages that have made these vehicles so popular over the years. To that I’ll say no, not at this current time. But I feel that will be the least of worries coming down the pike in the not so distant future.

No, what I’m directly addressing is what is now emanating from the one and only non-government, privately held institution, directed by a consortium of non-elected, Ivory Towered, policy wonks: The Federal Reserve.

And those emanations are anything but 401K holder friendly.

If you combine the latest discussions emanating via Fed, officials, along with current gyrations within these “markets,” what you have is the resulting amalgamation of policy wonks channelling the Sorcerer’s apprentice, tinkering with spells and devices they have no true fundamental understandings with (e.g., all academics) all seated around a “monetary caldron” known as fiscal policy. And the resulting fiascos are beginning to show.

The real trouble with all of this?

People, far too many ordinary, as well as well-intentioned business leaders think or believe – they actually care about what happens to you, your family, or your business. Hint: They don’t.

Well, not from their position of power, that is.

The above scenario that played out in Chicago, just days ago, should be signal enough to drive that point home. For some it may be their first realization, and I get that. Yet, nevertheless, for those trying to pay attention, the clues are far too obvious and blatant to be ignored.

So I’ll end here with another scene from the movie Margin Call, which I believe sums up how one should interpret precisely how the Fed. views the possible collateral damage it may wreak amongst the populace via its monetary policy decisions.

In the beginning of the movie as the firm is getting ready for what will be unannounced, immediate purge of employees, Paul Bettany (Will Emerson) makes his way to Kevin Spacey’s (Sam Rogers) office to try to console him, where Roger’s is visibly holding back tears.

The initial reaction for thinking that this sudden jettisoning of personal, without any notice, must be troubling him too his core with what will obviously be a true gut-wrenching shock and ordeal of work, life and monetary upheaval to those being jettisoned. The obvious conclusion or assumption is that this must also be taking its toll on Spacey.

The twist comes when Bettany is told that the reason for the tears is not for the sudden human toll the company will now systematically doll-out across its employees. No, the reason for the tears are because he just got some truly bad news: His dog is dying.

Hint: Your 401K, your savings, your home, your business, your __________ (fill in the blank) are a lot of things, but one thing it is not, is this:

Anything they’ll (The Fed.) shed a tear for or over. And the proof of that statement will be made manifest in the “markets” as we continue the year. And if you want any further proof in that?

Just ask any savers, retirees, or others over the last decade how many tears the Fed. shed as interest rates were cut and held at the zero bound. Hint: 0

© 2018 Mark St.Cyr

Future-Hype Materializes Again Only To Find Reality’s Bite

For those wondering what the term “future-hype” represents, here’s a description I’ve used in prior articles. To wit:

“What this term means is what I describe as the now near comical press releases, CEO jawboning, or anything similar that takes place right before earnings (usually a week or so, give or take) either from “The Valley” or tech space in general.

Usually what you’ll read, see, or hear (and echoed jubilantly by some next-in-rotation fund manager) is some grandiose announcement of some super-duper, sounds really awesome, coming attraction that has the potential to not only change everything, but also, to fill investor coffers with riches beyond the imagination.

All one needs to do, as to engage and embrace in this vision, is to use their own imagination, then buy into the “dream” with real legal tender, literally. Because, without those investor dollars continuing to pour in? The “dream” as they say – will be lost. Along with any earlier proceeds. Rinse, repeat.”

Did we see any of the above before, during, or after this latest earnings reporting? Hint: Is water wet?

As has been the usual case, Tesla™ CEO, Elon Musk appears to set both the bar, as well as the precision timing of future aspirations than almost anyone else in recent memory.

To be clear, I’m a big fan of Mr. Musk in both his audacity for setting goals, as well as his tenacity in trying to make reach them. What I’m speaking directly to here is the actual reality for day-to-day operations in acquiring those visions in the real world, where real money (as in investors) is at stake.

Production schedules, quality concerns, and more need to be articulated clearly and truthfully. That’s a CEO’s primary responsibility in a public company where true market forces are at play. But by my eye, Mr. Musk seems to be still playing the game of QE charged grandeur.

Problem now is – future grander is falling on the deaf ears of reality. All the “market” seems to want to hear now is, “Where’s my money?”

This seemed to cause the aforementioned “future-hype” to be rolled out in spades the moment Mr. Musk seemed to grasp that maybe, just maybe, the stock price of Tesla wasn’t as bulletproof as he taken for granted in the past .

What was rolled out in near tandem with his sudden realization one may ask? Better production schedules? Better manufacturing techniques? You know – car related provisions, the part that Tesla is currently having many an issue with in fulfilling prior goals or commitments. Not to mention a now joint investigation via the NHTSA and NTSB into recent crashes causing fatalities announced just days prior. So what did?

Here’s what I deem as another clear example of future-hype in real-time. To wit:

Via Instagram™:

“First Boring Company tunnel under LA almost done! Pending final regulatory approvals, we will be offering free rides to the public in a few months.

Super huge thanks to everyone that helped with this project. Strong support from public, elected officials & regulators is critical to success.

As mentioned in prior posts, once fully operational (demo system rides will be free), the system will always give priority to pods for pedestrians & cyclists for less than the cost of a bus ticket”

As always, the devil’s in the details, if you look for them. Can you see what I’m alluding to? Hint: “almost” and “pending.”

Where have you heard that before? Oh right, anything Tesla, the car company, related.

The true issue here is not Elon’s posting of what could very well be a great achievement for the future. But what’s surprisingly tone-deaf is that this type of “future-hype” is for a game past its sell-by-date. And Elon seems to be the one having a hard time interpreting it.

This worked when there was ever the abundance of “free-money” provided via the Fed’s QE (quantitative easing.) However, in an environment where money is now being destroyed (as in the Fed’s now reversal known as QT, quantitative tightening) the image draws many an investors mind directly to the realization that maybe Mr. Musk has spread himself way too thin between projects. And, what can only be worse, is the immediate realization that their investment dollars are now drilling the proverbial “rat-hole” to shovel more and more of it into oblivion, possibly (maybe probably) never to be seen again.

Again, this worked like clockwork during QE. But now since we’ve entered QT? The reactive vault of pushing the stock price back into “black-sky” territory seems more arduous than launching another Space X™ rocket.

Tesla’s stock price has increasingly drifted back towards Earth falling some 25% respectively. And the reappearance of “future-hype” styled releases has done basically nothing more than get a few weak handed shorts to cover.

Tesla stock price is hovering back just above its 2015/16 highs after dipping below it, before this earnings report. Dipping back below those highs (for what ever the reason) is not where a company, supposedly, that should be hitting its stride should be.

Combined with the above one can clearly see how the “future-hype” game has changed much to the chagrin of many who still think it matters in a period of QT, as opposed to QE. Hint: It now has the little, to no effect, except for some knee-jerk reactions by headline reading HFT bots.

Tesla is not the only one, for there are others. Yet, none has been more obvious, in my opinion, than what currently took place in tandem within the crypto-currency space.

Over the last few weeks it’s been hard to peruse the web and not see some headline that Bitcoin™ is going to be worth gazzilions. However, the difference this time, is that this seems to now only be coming from a few of the most prominent players. e.g, John McAfee, Tim Draper, or Tom Lee.

What hasn’t re-materialized (at least as of yet by my experiences) is the torrent of “bitcoin retirement gurus,” or “millionaire in 30 days” type strategies that used to fill my feeds. Yet that’s not the only thing that’s changed…

In a previous article I made the following insinuation in respect to Bitcoin’s recent vault from a 6 handle back toward $10K. To wit:

Most are “bandwagon jumpers.” Although, the vast majority (yes, most) will argue fervently that they are not.

As many know one of my favorite dictum’s is, “Beware when everyone’s on the bandwagon – except the band.”

I posited the above, because in another, more recent article, I posed that the recent “pop” in pricing may be nothing more than another version of “future-hype,” only of the crypto-kind.

So what transpired after the venue I reasoned for the hype ended? Hint: Fell, once again, nearly 20% in mere days. e.g., from nearly $10K to nearly $8K.

Guess what also fell? Expectations for 2018. Let me show you how, “future-hype” changes in the face of hard reality.

Remember Mr. Lee’s fervent call across any media that would provide airtime? (am I the only one that’s noticed that “airtime” has been reduced dramatically to only if/when the price suddenly pops up?) for Bitcoin to reach 25K in 2018?

Well, now that it’s been trading back with an $8K handle (and looks to want to go lower, in my opinion) it seems there’s been a slight change in the “future-hype” target range. And here is when I just had to laugh-out-loud.

Maybe you’re thinking he scaled back a bit? Sorry, but no, because it was here that even Mr. Musk would surly concede, “Well done, well done.”

Via the INQUISITR™ May, 11, 2018: “Bitcoin Price Plunges As Fundstrat’s Tom Lee Sets $64,000 Price Target For 2019”

Meanwhile, Fundstrat co-founder Tom Lee has set a whopping $36,000 bitcoin price target for the end of 2019 and said it could clear $64,000 during the year.

“We believe the current path of hash power growth supports a BTC price of about $36,000 by 2019 year end, with a $20,000-$64,000 range,” Sam Doctor, head of data science research at Fundstrat, wrote in an internal report.

And just like that, when your initial call seems in jeopardy, disregard any scaling back of any prior proclamations which could appear susceptible to any negative press. Then: Just double, if not triple the original price call – along with doubling the time frame. Bam! Problem solved. Rinse, repeat.

In other words, don’t worry if $25K isn’t hit within the next 7 months – It’s going to be worth double that in ’19!

You can’t make this stuff up folks. That’s “future-hype” crypto-style.

The issue I still see facing all crypto’s as they are currently formed and priced, is the same as I stated previously, on multiple occasions, and it is this: Any hype, of any nature, that allows for a sudden “pop,” will more than likely than be seen, as well as taken, by early “investors” as an opportunity to turn those imaginative “bits” into hard, in your hand cash, at every opportunity. Not the other way around. i.e., late to the party bandwagoneers piling in.

Has there been any evidence of this to support my claim? I’ll let you be the judge. Again, to wit:

April 17, 2018 via ZeroHedge™: “Bitcoin Tumbles After Mystery “Whale” Dumps $50 Million In One Trade”

In a “market” now trying to come to grips with precisely what QT vs QE means for any future-hype type scenarios that will work in this new monetary environment, I’ll only suggest the following. The only announcement of future-anything that will get this “markets” attention where “investors” will immediately direct their coffers towards – is a future-hyped-reality of preordained, massive, stock repurchase or buyback programs. That’s about it.

Future-hype regarding future product line or innovation? Who cares! Just show us the buyback schedule, all else is just filler.

Is there any evidence to support that thesis you may be asking? Fair question, but as always, I’ll let you decide, yet you don’t need to look long or hard for clues.

Just see Apple™ and Facebook™ announcements, along with stock-price reaction – for clues.

© 2018 Mark St.Cyr

Why Your Hiring Efforts May Need To Be Fired

I was speaking on the topic of sales and its natural joinder of how companies need to attract (and keep) qualified sales professionals. As usual the tone and discussion revolved around something akin to issues being outside of their control. i.e., tight labor market, increased competition from X,Y, or Z, et cetera.

As is usually the case, after I took all the reasons given via the group. I basically stunned said group when I explained, in a very pointed retort, although many of their points may have some validity. I’d contend the number one issue (or true root cause) more than likely, had nothing to do with any of the reasons they given.

I articulated and asserted that many, if not all of the reasons given, could be resolved during the negotiation process with the candidates. Not in the attracting stage.

In other words, what they were using as a cause (e.g., excuse) for not getting qualified candidates, was actually a problem that was relevant to the actual hiring or retaining process, not with the “getting them to apply” dilemma.

The true problem that many seem absolutely blind too, is that usually, the real culprit as to why most can not get (or complain as such) qualified candidates in-the-door and into the negotiation steps is because – of their own in-house hiring practices. Which, more than likely, in-particular, can be laid directly at the threshold of their own chosen facilitator for both finding and hiring. e.g., Their in-house Human Resources department (HR) with its self-direct (as well as many self-created) policies and protocols.

Everyone is blaming not only an “outside” issue, but also, an issue that should be addressed only – after a candidate has all ready applied.

In other words, not only is this a cart-before-the-horse issue. But it’s in conjunction with a focusing-on-the-wrong-problem issue. Is it no wonder many are currently frustrated when, more likely than not, the reason for the consternation is internal, vis-a-vis in-house. And you don’t see it?

Sounds harsh, sure. But let’s understand what I’m truly proposing here: If you are the one responsible for a company, then you ultimately have the authority, as well as duty and obligation to change whatever is not working. And if something is not working – and someone can show you the most obvious detail as to why, and you don’t. Then maybe my perceived “harshness” wasn’t harsh enough.

(As is normally the case, this is when the person who invited me suddenly begins to sweat profusely. But I digress.)

Here’s what I explained in brief form. I also would like to contend: If you yourself are an owner of a small, medium, or large business, or, either run, or are in upper management of a global concern, the following pertains too all. For it is you that are responsible for acquiring not just sales talent, but all talent – not some HR department.

To repeat, for this point can’t be made forceful, or stated enough: If your HR department is the center for both finding, as well as attracting potential sales personnel? You now know why you’re having issues acquiring sales people. And quite possibly – all staff.

I’ll illustrate using just one example below expressing the gist of what I said at the aforementioned discussion. Many whom have been around me for a while, or heard me speak on this topic know this is a pet peeve of mine. But it’s with good reason. So here we go…


CEO to HR department head: “How are the candidates for our new sales position looking, anything promising?”

HR: “Well, the resulting responses coming into the inbox via the job boards we posted on have been rather sparse. We did have one person apply directly, well, apply may not be the correct word. This person came in directly, but we ascertained he was currently already employed at a competitor.

They stated they were ‘number one in total sales and new customer acquisitions for the last three years running.’ However, they didn’t apply using our recommended ‘job board postings.’ They just came in and asked if they could speak to the sales-manger directly.

Seeing that they obviously couldn’t ‘follow procedures’ that we clearly laid forth, we deemed they wouldn’t make a ‘good fit’ as a potential employee. So we didn’t have them fill out any paperwork or grant them any sort of ad hoc interview unannounced. But we’ll keep a sharp eye out for any potential candidates that come through the requisite channels. And just to reiterate, as I’m sure you’re well aware, it is a ‘tight labor market’ currently, it’s all over the news confirming just that. So finding that certain someone that’s the “right fit’ is probably going to take longer than expected. Yet, not too worry, that’s what you have HR for.”

The above is an abomination for hiring true talent in any job market. Tight, loose, whatever. And, happens far more often, in all instances, not just sales – than not.

If you need to hire remedial help (such as HR, for one) than by all means use some form of job board or listing service. Although I would implore you not too, regardless. For hiring is, should be, and needs to be, a sacrosanct process. The right person, the right fit, the right qualifications, the right ____________(fill in the blank) should be determined eye-to-eye, face-to-face, by the person or department head that needs the acquisition thereof. Hence, the department head needing a position filled should be the one actively recruiting candidates, then, after the decision to hire is made – introduce them to HR to fill out the proper paperwork and have protocols explained. Not too mention said “department heads” should have a Rolodex®, or other means full of potentials.

If it is HR that is doing the recruiting of candidates, not the department heads? That’s your true problem, not the other way around.

The reason os simple: A person with none of the original background needed might be the perfect candidate to fill a position if proper training is applied. That can only be measured and applied if the person needing the hire – is – instrumental in-or-for obtaining the hire. Period. i.e., How many times have you been in the presence of someone and thought, “This person would make a great ________(fill in the blank) at our company.” But was currently doing another job completely unrelated to your current vacancy? e.g., You need a warm, friendly, enthusiastic sounding call center supervisor, or such. And this person is currently a bagger at the local grocery store. And then – you do nothing. After all, that’s HR’s department – not yours.


A sales-manager (or CEO, et cetera) not actively seeking talent is not, repeat, is not doing their job correctly, along with not doing what’s right for the organization. This is where true competitive edges come from.

You want to make a real change that offers a competitive advantage that will strike fear into your competitors, which many (if not all) won’t figure out for years, if ever? Let alone do?

Change this one aspect and the rewards will transfer not only down the line, but top to bottom, as in. top line – to bottom line.

HR should be excluded from the hiring process other than making sure the necessary documentation to hire (or fire) is filled out properly, where corporate rules, regs, benefits and more are explained. That’s it.

That’s when I usually end with, “If there any further questions, I’ll be happy to answer or explore further.” And the person who brought me stops sweating, as I once again marvel how applause can act like AC for some.

© 2018 Mark St.Cyr