Year End Announcements

There are a few things I would like to say to close out 2018, for it truly has been one for the books.

First things first: The MYTR broadcast will resume its regular programing on Wednesday January 2. Updates, changes and further announcements will be made then, so there’s no need to panic for those awaiting the upcoming subscriber only wall. We’ll only make that change when its applicable so that no one gets confused or locked out. Again, we’ll have more details on Wednesday “so stay tuned” as they say.

Second: 2018 has been a phenomenal year for this site. It’s hard to think it now turns 10 years old as we flip the calendar. And to that point I want to say thank you, to all of you, and believe the next ten to be even better.

Third: To all the websites, news sites, media outlets and more around the globe that have either quoted me directly, referenced my work partially or in its entirety because, for what ever the reasons, you believed that your readers may find the content either useful or just an argument for an opposing view, to all of you, I also say thank you.

And last but by no means least: To those brave soles known as “editors” that for whatever their reasoning decided they would take up the challenge and grammatically correct or correctly punctuate my articles. To you I both salute you for your bravery, as well as recommend you for bonuses and hazard pay, along with a sincere thank you.

Once again to all of you thank you for a great 2018 and cheers looking forward to 2019.

Mark

2018: The Year That Laid The Experts Bare

To say 2018 has been one for the record books would truly fit the description for understatement. As a matter of fact, depending on when you decided to look for confirmation via the so-called “experts” of the day one of two results were possible. The first?

Many a so-called “expert” was paraded across the mainstream business/financial media touting all the reasons known to exist in their heads as to why they were so smart. Where the host would then confirm and inform you why this was true. Even if it was self-evident they were full-of-it.

One network (coughBloombergcough) even stated the reason why people should listen was because of their particular political affiliation.

Or…

It was something akin both guests and hosts trying desperately to cover their derrières with convoluted logic and constructs. And if that didn’t work? They just simply vilified those that dared question it with insults and snark as to protest why their presumptive super-genius powers were being thwarted by some unknown, unknowable dark force. Hint: See CNBC™ for clues.

Of course there have been others (i.e., incidents and networks), but there isn’t enough digital ink to list them all.

Basically, unless one was touting the “bull” case it appeared there wasn’t all that much air-time available for any cogent opposing viewpoint to be expressed. i.e., “Wow, I wish we had more time for you to rebut that 20 minute ‘bull’ diatribe, but it appears we’re out of time for this segment. Maybe we’ll have you back on again? Remember, if your phone doesn’t ring – you’ll know it’s our producer calling. Ta ta!”

In early January we were told by this same crowd that everything was just awesome for 2018. Earnings were going to be great, the economy was poised to further accelerate. Interest rate hikes and balance sheet reduction scheduling was “baked in” as in known knowables’. Trade war? Real War? Nothing-to-see-here war – it’s all good, just buy, buy, buy!

Then in February the “market” got its first real confirmation that the only thing I said the market cared about was actually being implemented as planned. e.g., QT (quantitative tightening)

This was the catalyst (my conjecture) for what we now know as the “February Scare.” This sent the entire “smart-crowd” scrambling looking for as much bullsh#t as they could muster to reassert why BTFD (buying the f’n dip) was not only still the best play – but the only one.

Nowhere was this phenom expressed more than that of what is now in the history books as the mania of manias’: Bitcoin™. Yes, surpassing the “Tulip Mania” of 1636 and the “South Sea Bubble” of the early 1700’s.

Depending on which day and which expert any of the assorted networks decided to parade out rested on what astronomical price the cryptocurrency was assuredly going to finish the year at. All had “tens of thousands” if not “hundreds of thousands” in their estimates. The result?

Let’s just say those terms have more in-line with what many lost as they waited for these “expert” opinions to come to fruition. (on a side note, I went on record in Feb. proposing Bitcoin at $4K year end. But then again, what do I know, for I’m no expert.)

In 2018 we had another record broken. e.g., The hyperinflation of Germany’s Weimar Republic was eclipsed by that transpiring in the socialist utopia known as Venezuela. Here too all the so-called “experts” with Ivy League’d credentials, Nobel Laureates and more (e.g., Krugman, Stiglitz et al.) have been shown all they have prophesied is a total complete and utter sham, along with scam. Period, full stop.

If you think that’s a bit harsh, all I’ll say is just wait till you get your next student loan bill for clues, then see how you feel. Just don’t forget (as they’ll always profess) one of the main tenants as to why things like that could never happen here is because we can print our own currency. Oh wait, so could they. Maybe they just forgot, yes? After all they teach now, it’s not like they actually need to learn anything, right?

Then of course how could one forget the road-to-riches real estate genius being touted across the continents of the U.S. and Canada in places like Toronto, Chicago, San Francisco and others. Then again, maybe if you were suddenly motivated to go out and buy in said areas as a consequence of these seminars you would rather forget.

The only problem I would imagine is that you can’t for the ever increasing tax bills and accompanying carry costs mounting up as these areas now tout double-digit sales declines.

However, not to worry, for I have a sinking suspicion this same cast of “experts” will be along in the not-so-distant future offering another seminar touting something along the lines of “Bankruptcy advice.” Maybe they’ll give discounts to previous seminar ticket buyers. You know, because they’ll need it. Both the discount, along with the advice.

Yet, no discussion would be complete concerning this year that did not contain the complete nonsensical arguments made as the “markets” hit never before seen in human history heights.

If you’ll remember I opened this article giving an example of two possible outcomes one was most assuredly going to encounter when perusing most of the media business/financial networks. To paraphrase:

If we were going up it was because of ___________(fill in meaningless dribble of choice here.) Or…
If we were going down it was because of _____________(fill in meaningless dribble of choice here.)

In other words: it was all meaningless dribble.

Much like the entire crypto case I argued right at the beginning of the year that once the “markets” had to conclude that the balance sheet normalization process was not only being implemented, but was going to be allowed to run via its announced schedule, that the “markets” would react violently. And they did.

The “February Scare” marked that prediction. For that was the “markets” first concrete look via the resulting lag effect in reporting.

The “markets” languished and even threatened on more than one occasion to break those lows until in-and-around May there was chatter via Fed officials, along with its gaggle of Fed watchers expressing how IOER (interest on excess reserves) was going to contain the normalization process. i.e., slow, minimize or halt it all together. Using the then latest Fed communiqué as its Rosetta Stone. (“expressing” as in running over their own mothers as to get in front of a camera, microphone or keyboard.)

Then the bull-run resumed and we were, once again, off to those never before seen highs. That is till October where the “markets” were, once again, faced with a quandary: The balance sheet normalization process was shown to be not only running on schedule, but no Fed. official was touting anything other than not only “steady as she goes” but steady and into light speed she will go.

And here’s the key – not by a consensus vote, but rather – unanimous.

Since that moment the “market” has been in an utter tail spin. But it was only dwarfed by what may go down (again, my conjecture) as the most ill-timed, tone-deaf decree made by a CEO of the most valuable company in the world by market cap and first to hit a $Trillion than that made by Apple’s Tim Cook when he declared Apple™ would no longer report its sales via units sold of its iPhone®.

The result has been nothing less than historic.

Apple’s share price along with the entire “market” (because of its sheer size in relation) has plummeted wiping out $Trillions in mere weeks. The longest Bull market in history, along with its highest valuation ever, has been reduced to Bear Market status in mere weeks. Think about that.

Apple alone has lost over $300 Billion in market cap (depending on what day you look) while Mr. Cook’s nearly $300 billion in share buy-backs and dividends seems to have gone up in just as much smoke.

Mr. Cook has gone from Celebrity CEO to a CEO withing spitting distance of whether or not he’ll still have a job in 2019 should the shares fall any further.

Again, ponder that point alone for some further context of just where we are. Can you say “it’s different this time?”

IPO’s such as those being discussed by the likes of Uber™, Airbnb™ and others will be lucky to survive in 2019 let alone ever get to IPO nirvana should this rout continue. (as I’ve said since they started)

The last of the IPO venture capital saviors (i.e., SoftBank™, Tencent™, Sovereign Wealth Funds et al.) themselves are watching their own share prices getting pummeled. It may not be long when they themselves will need to raise capital by selling any and all “future bets” just to survive.

Then there’s Amazon™. How much more losses in market cap will Wall Street endure before calls of “break it up to unlock share holder value” is the call of the day, as opposed to what company they were going to buy next? Hint: Down $700 per share is not something Wall Street tends to accept lightly. Actually, accept at all.

Then there’s the entire social media space where “boy geniuses” has been reduced to just boys with about half their “manhood” (as in share prices) missing. And the indignity may just be getting started. Hint: See Facebook or for that matter, Snap™ for further clues. Though I warn you – they’re X-Rated from an investment viewpoint.

However, if there is ever such a thing as history may not repeat, but it sure does rhyme, then the poster-child award for such goes to the one and only Jim Cramer of CNBC fame where just this past Thursday he stated…

“I need the Fed to shut up. I don’t trust the Fed at all. I don’t trust Jay Powell at all. Jay said everything that caused a tremendous selloff. You have got to start recognizing how powerful his words are.”

I find it quite amusing to once again see Mr. Cramer trying to wiggle his way around the fact that what is happening has been precisely what he has argued throughout the entire year was a non issue. After all. All of this, repeat: all – of – this has been known and was decreed to happen as laid out via the then Chair, Janet Yellen.

There is nothing new here. Mr. Powell is doing everything, to the letter, that was laid out at the beginning of the year.

The only difference is that no one believed they would actually do it.

The issue is now that they did – the consequences are playing out just as people like myself said they would. Not yesterday, but way back in February where people like Mr. Cramer and others were discounting views such as mine as “these people know nothing!”

But then again, I’m not on TV for history to judge like this blast from the past: Jon Stewart to Cramer

So now with 2018 closing in the rear view mirror there is one last historical item that has also been thoroughly laid bare. “What’s that” you may ask? Good question and it is this:

Any remaining credibility or value implied in watching, listening or reading anything from these so-called “experts.”

©2018 Mark St.Cyr

For Those Wondering Update

Earlier today I posted the following chart showing what I was watching. To wit:

Here’s what transpired later and then finished the day. Again, to wit:

So, do you think that “tripwire” level meant anything to the machines, hmmmm? And – yes, that’s near just as much of a rally, in a bit more than an hour, than what took all day yesterday to develop. The reason behind it though is probably pretty much the same. i.e., very large year end pension type rebalancing orders in a very thin “market.”

As I was perusing many of the so-called “mainstream financial/business media outlets” I couldn’t help but laugh at how many differing ways I heard either a guest, or a host try to hedge every word they could as to try and cover their derrières for any potential backsliding as they all sheepishly implied “This is the start of the next bull run!” It was more comedic than watching a comedy channel.

Does it mean they’re wrong? No one knows, but it is in that light I would like you to view the next chart as to remember where we currently are, in relation to what is currently happening, for a bit of perspective. Again, to wit:

(Source)

There’s a lot of here-to-there that would need to be made up by tomorrow just to get back to where we were only weeks ago. You remember where that was, don’t you? For those that don’t remember I’ll just remind you with the following…

That would be way up there marked as “you were here” and was the last time the so-called “smart-crowd” was telling everyone the same thing. i.e., “This bull run has plenty of room to run into year end!”

Maybe they’re right this time? As always, we shall see. However, as far as what I’m still focusing on? The levels I highlighted originally, they are all still valid and still in-play. Even after this week.

© 2018 Mark St.Cyr

For Those Wondering

In light of yesterday’s historic one day point gain I felt it only appropriate for those wanting to know what I’m watching. To wit:

(Source)

Above is the S&P 500™ as of before noon ET. It’s quite possible the “markets” could rocket ever higher, but I’m currently more fixated if they can’t hold the gains of yesterday and what it may portend.

As always, we shall see.

© 2018 Mark St.Cyr

Once The QE Cloak Was Removed Silicon Valley Seems To Have A Lot Of Naked Emperors Parading Around

If there has been one meme that defines much of 2018 I would have to say it’s been the emergence of what I call the “Celebrity CEO.” And nowhere has this phenom been taken to 11 than what we’ve experienced from Silicon Valley.

However, what takes it up another notch is just how overarching and politically driven this group decided they were to become via anointing themselves by decree, using their platforms and products as a cudgel against any and all that did not adhere to their viewpoints of right and wrong. Regardless if it would pass the standards of business law and ethics.

Once again Silicon Valley seemed to take to the viewpoint that they decide, no one else.

Well, that’s a big maybe when it comes to selectively enforced business practices that have the potential to harm. De-platforming, shadow banning and more is something I believe will work its way to the Supreme Court in the coming years and the emperors-of-the-Valley may find they don’t have as much legal rights to do what they’ve done as they portend.

Can you say perpetual class action suits? Or said differently…

“Think you were shadow-banned, de-platformed unfairly, or had your feelings hurt? Dial Dewey, Cheatem and Howe for a free consultation and get your claim of the $Billions that may be possible. Dial now!” I propose this will rival Mesothelioma commercials for frequency in the coming future.

Remember: There are laws against the selective enforcement of anything when it comes to business. Again, the key word there: selective.

Politics at its very core embodies the selective. i.e., once a political position is stated you have to account that you are now on the opposite side of 50% of all current, as well as potential customers. Sometimes the numbers can be higher. But that’s the rule-of-thumb. That’s why it used to be the absolute last thing any CEO worth-their-salt would argue publicly, let alone place its business and customers directly into any political fray.

It would seem many of these CEO’s forgot they were in the business of business – not the business of politics. And I have a sinking suspicion the price they are going to pay both in reputation, as well as share holder condemnation will be legend.

As I sit here typing this just the current devastation in market capitalization of the once coveted FAANG group of Silicon Valley darlings is jaw-dropping.

Apple™ alone has lost over $300 Billion dollars in just a matter of weeks. Facebook™ is within spitting distance of using the term “Half its size.” Same goes for Netflix™. Alphabet™(aka Google®) no longer has a price needing a comma.

Amazon™has shed a third of its market cap since September (e.g., nearly $700 per share, yes $700!) and the holiday season sales aren’t even unboxed yet, let alone calculated.

Once the Federal Reserve made clear with no room for doubt that the balance sheet normalization process (aka QT quantitative tightening) was going into hyper-speed (e.g., $50 Billion per month and on “autopilot”) suddenly every CEO of the Valley had a problem. i.e., Politics shmol-atics – what’s your business plan and it better be good?

Hint: most don’t look very good.

Apple’s Tim Cook will probably go down as being the poster child of what not to do when you’re a CEO of a public company. As much as I used to be a fan and user of Apple products, that is no more. The Apple Tax has moved into the realm of extortion and I’m done waiting for upgrades. (see Mac Pro® or upgrading any RAM or Storage for clues.)

However, what was probably the most tone-deaf and still believing the new digs was recirculating rarefied air Mr. Cook decided that was precisely the right time to declare to what was clearly a nervous market they would no longer breakdown product sales on the only product Wall Street cared about: the iPhone®.

Wall Street immediately responded on exactly who gets to set those reporting parameters. The share price has been in free-fall ever since. “But wait! There’s more!!” as they say on TV.

To go along with a near wiping out of some $300 Billion dollars worth of shareholder value. Mr. Cook spent nearly $300 Billion of Apple’s once fortress cash reserves in buybacks and dividends.

Now all that too is, as they say – history. Think about that very carefully, don’t let that point just blow past.

And what does Apple have to show for all that spending? Is it any wonder when I say those tremors in California may not have anything to do with Mother Nature and everything to do with Jobs spinning.

Oh wait – we got the iWatch® with a Hermes® band. Wait, was that the ground shaking again?

Yet, it’s not just Apple.

Facebook’s Zuckerberg has gone from “boy genius” to just “boy.” And the once “motherly” C-suite inclusion of Ms. Sandberg has her looking like she’s on a “Lean Out” tour in sharp contrast to what she used to be touted for across a gleaming press just months ago.

I’m beginning to look at milk cartons with more regularity. Just saying.

Google executives are finding out their own people are a little fed up with their political views and now are releasing company docs along with video that may make for some interesting evidence should those “law suits” I alluded to prior manifest.

Twitter™ is, once again, in free-fall. And the part-time CEO thinks its just swell to send updates of his comfy vacation in Burma, a country accused for human rights abuses against minorities (such as actual genocide) as he kicks people off his own platform for things he originally stated he didn’t do. i.e., political viewpoint.

New York and Virginia gave Amazon massive tax breaks and sweetheart deals to build their new digs in their area. Good thing, for if their stock crashes any further they may need those breaks more than one thinks. That is, if they even get built to begin with. Think about it.

The problem has been many of these CEO’s have acted as if they were the newest incarnation of the Rockefeller’s, Carnegie’s, and more. Yet, it would be unfair to say that they haven’t climbed what many will call a respectable mountain top for industry and scale. They have.

However, with that said, it would also appear that all of the so-called implied genius for share value and market cap was nothing more than being the beneficiary of the moment as central banks the world over thrust the greatest experiment in monetary policy ever upon the populous.

And now since they stopped its not only the rug that’s been pulled. But also…

The special clothing.

© 2018 Mark St.Cyr

Maybe It’s Because I’m Not On TV

On February 16, 2018 I published the following article titled, “Not To Scare The Children, But…” with the following chart. To wit:

It was during this time, then heavily endorsed further, that the following prognostications were bandied about, along with reasoning for exactly why the “February Scare” was a one-off event and the following year-end predictions were stated as if written in stone. Again, to wit:

Let’s see how things are shaping up shall we? Again, to wit:

(Source)

The only difference between my forecast and all the others is that I have not changed mine throughout the year, even in the face of what everyone seemed to imply as “a bull market that has room to run for years.”

Or maybe there is another difference. It would appear the only one proven correct is the one not selling fairytales on TV.

Or maybe the following sums it up best. Once again, to wit:

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

Upton Sinclair

But what do I know.

© 2018 Mark St.Cyr