F.T.W.S.I.J.D.G.I.G.T.

(For Those Who Say I Just Don’t Get It…Get This)

From my note “Perspective” only a few days ago. To wit:

To all those that have argued with me that I “…just don’t get it!” when it comes to the capital markets and what they’ve become. All I’ll ask of you is this:

Tesla™ today became the largest, repeat, the largest automaker per market cap in the world. Its share priced rocketed (once again, pun intended) to $1,130.00 per share giving it a market cap of $210BILLION surpassing the former #1 known as Toyota™ at around $202billion.

Tesla is for all intents and purposes a boutique car manufacturer with a global market share of just 0.5%. And yes, that’s one half of one percent and is not a typo.

Please explain. It’s OK, I’ll listen. But I can’t promise you I won’t laugh. Just to be clear.

Welcome to today’s “picture” for laughter… (NOTE: I have added an updated chart at the bottom to show the close of today’s session. It speaks for itself)

(Chart Source)

And for those that may be a bit math challenged, let me put it this way…

The entire globe is in a car maker, market, for both new and used market – collapse. 50 million people in the U.S. alone are now unemployed. China is even in worse shape in regards to car sales.

And Tesla™ market cap has increased over the past few days by some $65 BILLION. e.g, as of this writing to $275,890,000,000.00 (BILLION.)

Makes perfect sense, that is, if you have a PhD and teach “business” in one of today’s Ivy League.

It would be laugh down hysterical if it wasn’t such a tragedy that will end far worse than badly for many.

Updated chart, to wit:

(Chart Source)

More perspective: Tesla is now larger than Ford™, GM™, BMW™, Diamler™ and Volkswagen™.

And just to clarify: Not bigger than any of them, but rather, bigger than all of them combined.

© 2020 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. 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.

F.T.T.W.T.K. Update

(For Those That Want To Know)

This is just the latest in my ongoing commentary, but is really an update to the same chart I put up last Thursday under the title “Not a good look.”

It would appear the “markets” on Monday drew an eighth card and it was (wait for it…) yes another Ace back to back to once again beat the odds of .000000000000000001% chances of it happening, clearing away those dreams of yachting, Lambo’s in every color and more.

Just like it’s done every time before. I mean, really: What are the odds?

Yet, once again, it doesn’t matter, right? Stocks only go up, right? Why even try to complicate things with thinking, let alone analyzing anything to the contrary, right? Right?!

Fair point. However…

As I like to use the blackjack table analogy, I also use another people seem to grasp, that is: The high diving board. i.e., It’s one thing to dive off the five meter platform, it’s quite another to be goaded to climb up to the 10 meter and then look down. I say again: Right?

That is, once again, precisely where we are as evidenced by the following. To wit:

(Chart Source)

The above is of the S&P 500™ as of the close today. I have made a few adjustments and added a few notations that are self explanatory. It is the same as the prior and the implications are also the same, just the difference of flopping from a 10 meter height, rather than a five.

Will it? Won’t it? No one knows. Maybe it’s “Triple Lindy” time? Either way, this is something to watch for.

As always, we shall see.

© 2020 Mark St.Cyr

Just A Thought

I was asked for my thoughts on the current state of markets and economic forecasting. Here was my answer…

“It has become obvious to me that the role of Ivy League based business forecasting and insight today is to make fundamental business decisions based via astrological signalling look respectable in comparison.”

Here’s something else I know…

They’ll never print the above.

© 2020 Mark St.Cyr

A Day Like No Other

To those those that celebrate this day with reverence, Happy 4th! To think both this day and document would ever become a bone of contention in the country it founded should prove, without a doubt, the warning said by one of its architects, Benjamin Franklin when he was asked what type of government they delivered: A republic, or a monarchy? His response was “A republic, if you can keep it.” Never in many’s wildest thoughts did they ever feel the need to contemplate Mr. Franklin’s warning in real time. Yet, here we are.

Not A Good Look

For those that came to the site last night and looked at my musings only to look at the opening hours of the day session here in the U.S. and mused, “Once again, wrong! Stocks only go up, and the Fed’s got my back!!” (and you know who you are) I offer you another “picture” to clarify yesterday’s. To wit:

As I have stated many times, and I went over again today on the show, how there are times when what you think is the resolution of one pattern, it turns out to be false signalling that wasn’t a nullification of the process, but just a moment too early in that process.

Today is a text book, live example, of precisely that.

Today’s “market” action not only didn’t nullify my interpretations from yesterday, but rather – solidified them in a larger process. And for those that don’t fully comprehend what I’m saying, or think I’m being a little coy, let me say it this way…

The above puts a larger stamp on the idea the “markets” are weakening – not strengthening.

Everything I suggested yesterday now not only stands, but stands on far surer footing. Doesn’t mean I’m right, but in the context where I’ve used the analogy of you’re sitting at a blackjack table holding a king and a 10, and the dealer is sitting on 19 made up from pulling six cards and needs to pull one more, where nine times out of the last 10 they’ve pulled a two of clubs to ruin your yachting dreams. This time – they’ve just drew an Ace and have to draw one more.

That’s where we are.

As always, we have to wait and see what comes next.

I’ll just reiterate, the above is not a good look for what one would want to see if they thought yesterday’s possible implications were nullified at the open. Especially going into a holiday weekend, when all other markets globally remain open.

© 2020 Mark St.Cyr

Perspective

I’m just going to say one thing, then I’ll let a “picture” speak for itself.

The first…

To all those that have argued with me that I “…just don’t get it!” when it comes to the capital markets and what they’ve become. All I’ll ask of you is this:

Tesla™ today became the largest, repeat, the largest automaker per market cap in the world. Its share priced rocketed (once again, pun intended) to $1,130.00 per share giving it a market cap of $210BILLION surpassing the former #1 known as Toyota™ at around $202billion.

Tesla is for all intents and purposes a boutique car manufacturer with a global market share of just 0.5%. And yes, that’s one half of one percent and is not a typo.

Please explain. It’s OK, I’ll listen. But I can’t promise you I won’t laugh. Just to be clear.

Toyota manufactures millions of cars per year, operates manufacturing plants around the globe and does so in what many still regard as a quality control operation second to none. All done under the auspices of making and delivering profitable returns. Tesla on the other hand makes its cars not under any auspices, but in actuality under a circus tent in California. Its quality control is all but non-existent as shown by reports and customer complaints. Oh yeah – and they basically don’t make money. i.e., they are a notorious cash-burn enterprise.

However, if you’d rather hear how all of this makes perfect “business” sense – all you need to do is plop down about $75K a year to hear it form one of the “cool kids” teaching business and marketing at your Ivy League comedy club school of choice. Or watch any of them when they’re on any mainstream business/financial shows. It’s all the same f’n joke insight.

Now for the second…

I just want to put a “picture” to what I was talking about on today’s show, in regards to, what I was watching as to illustrate in more detail when I said: the “markets” moves as I’m watching currently are not doing anything that I wouldn’t expect it to be doing from a technical perspective. i.e., I made the reference there was probably going to be a gap fill and that would probably (again, it’s a probable not definitive) peter out at about the levels that it did.

So here’s that chart with a few notations that speak for themselves. Think of it as just being the latest addition to my ongoing commentary. To wit:

(Chart Source)

I find it a bit surreal with Tesla making a complete and utter mockery out of what was once known as “the bastion of capital markets,” concomitantly as the NASDAQ™ does the same making new, never before seen in human history highs as we await to hear tomorrow whether it’ll be 20, 25, 30 or more millions of people remaining unemployed, while we get even more calls for another round of lock-downs.

Something’s gonna give.

When? No one knows. Yet, if you look at the chart I posted above?

It may have just begun.

As always, we shall see.

© Mark St.Cyr

F.T.T.W.T.K. Update

(For Those That Want To Know)

I thought an update to my ongoing commentary was necessary after a discussion I had with a colleague today. That discussion revolved around the idea that “This market sure is strong, are you still of the same view?” to which I responded: “By ‘strong’ you mean what? Because from my view it is anything but.” To which I then proceeded to explain what I was watching and can be expressed by using a chart of today’s “market” including today’s price action.

However, before I do, let’s use both a prior and latest I used a few weeks back for some context, first. To wit:

(Chart Source)

The above depicts where I first thought something would resolve only to nullify that presumption, then resolve precisely in the same manner only from a larger and higher point. Remember the “Diving board” analogy I used? So it begs the question: Where are we now? So to answer that, let’s do another “picture” shall we? Again, to wit:

(Chart Source)

The above is the same as the prior only notated, including today’s close. The issue here is, to address my colleagues assumption of “This market appears strong.” I would say, from a purely technical view – it looks anything but.

As a matter of fact, as one an clearly see, we are a lot closer to that first “Your Spidey senses should be going off!” than we were over a month ago when I first pointed it out. That area is noted above as “This is the area…” for those that haven’t been following along since I started this running commentary.

So there you have it. Will it, wont it? No one knows. But what I do know is this…

It’s getting far closer to where I said it would – then someone who said “We’re never going to see it again.” should be feeling comfortable.

As always, we shall see. Although that may be a lot closer than far too many ever dreamed possible.

© 2020 Mark St.Cyr

As I Was Saying

When past becomes prologue.

Below are two excerpts from two different articles I wrote back in 2018 that are as relevant and prescient today as I wrote back then. The first deals with the topic of when it comes to advertisers. The second as it pertains to stock valuations and their impact on the broader zeitgeist.

First: Advertisers and their sudden calls for leaving social March, 2018. To wit:

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.

“Facebook’s Latest Excuse Is Just The Excuse Advertisers Have Been Waiting For To Leave”

Here’s the other from September, 2018 in respect to the implications to “markets” in general, again, to wit:

Could we see a replay of 2008, but instead of Bear Stearns then Lehman type of events, we something similar in-kind with FB, then Twitter™ or, vice versa? What happens, for whatever the reason, investors (or algos) begin dumping, reminiscent of the dot-com era?

What happens then, when the central banks of other countries find their once profitable investments which were  perceived as once “no-brainers” to sure-up their own national finances begin dumping? Hint: here’s just one for your consideration aka Swiss National Bank.

Social media along with search (e.g., Google™ the “G” in the “FAANG” family) has been the benefactor of another great idiom that was once unassailable to the BTFD crowd along with their “it’s different this time” brethren-in-arms. e.g., The “ads for eyeballs” metric.

But that metric is now in a serious, as well as precarious moment of fate and fortune or, infamy for possibly draining then dwindling many a fortune once made by it.

Again, the reasoning is both simple and should be self-evident: With social media platforms and others uniformly purging content providers, inevitably leading one to reasonably conclude that the followers of those purged providers would in-turn purge their social accounts. Where does the value for growth in these companies come from to sustain already exorbitant perceived levels? Let alone – for ever higher.

Insiders such as “Zuck and Crew” themselves have already purged $Billions of their own shares. And insiders across the entire “market” have used this incessant “buy back” via company funded debt to sell their own shares again – at record levels!

Should a sudden collapse in the shares of Facebook or Twitter happen in an out-of-the-blue type moment, similar in type as we in any of the last episodic scenarios witnessed in ’08 or the dot-com era, what does a central bank such as the Federal Reserve or others do?

It may not be the banks that are the initial impetus for a scare – it may come from any of these high flyers of the FAANG family.

Does a sudden run have a knock-on effect for the Swiss and its currency? Does that begin a rout elsewhere? And who steps in this time? The Fed? The EU? Can anyone? And where do you apply the “tourniquets?”

The Fed. may have authority to sure -up the banks in a crisis, but will it need to sure-up corporates in a rout? And how will it do that without backlash? Does it even know how? And more importantly would it work at all?

“”Will Facebook and Twitter Signal The Next Bear Stearns, Lehman Moment?”

The reason for the above is this…

At the time of those writings the entirety of the mainstream business/financial media was certain nothing could truly hurt the valuations of not just these two tech giants – but social itself. Then, the entire complex collapsed (along with everything else) and was only saved via the Federal Reserve and other central banks for which the Swiss National Bank itself, for all intents and purposes – doubled down, printed more, and bought more.

For those that don’t remember: Facebook (from 218 to 123) and Twitter (from 47 to 20) valuations were all but cut in half.

What happens if it doesn’t work out the same way, this time?

© 2020 Mark St.Cyr

Every Picture Tells A Story

As the great Rod Stewart belted out “Every picture tells a story, don’t it?” I would like to propose one for your consideration that not only speaks a thousand words, but does so in volumes that makes every empty shelf worthy of holding a large encyclopedia collection envious. To wit:

(Chart Source)

The above is a chart of Apple™ as of the close of the U.S. “markets” today, represented via one week candles/bars. I have noted the chart and they speak for themselves. The reason for this is very, very simple…

Apple is currently not a “nosebleed” levels, but on a sheer out of this universe trajectory. What I have done is place a couple of boxes with arrows to highlight points in time over the past, near 20 months, to highlight what was thought or said – and what has transpired. They are not exact moments, but close enough for horseshoes and hand-grenades type analogies to make a point.

And that point is this…

The first box highlighted with the caption starting as “Two ideas were…” represents a point that both Apple and the Fed thought they were both in control of their relative narratives. Both were made aware very swiftly that neither would be even close.

For Apple – they have yet to produce the revenue and sales numbers matching that first area some 20 months ago. The Fed would find the need to reverse all prior statements, then to finally embark on a QE funding program the like the world has never seen or even dreamed possible. And, just so it’s not lost here – Tim Cook has increased buying back Apple-the-stock and increasing its payout of dividends basically matching the Fed in time and voracity move for move.

And yet I’m the supposed one that “just doesn’t get it.”

The issue here is – what happens when everyone else suddenly does?

As always, we shall see.

© 2020 Mark St.Cyr

Why Joe Rogan’s Tap Out Didn’t End The Fight – But Intensified It.

Back in April of this year I wrote an article outlining what I thought might be forthcoming in regards to Joe Rogan and his extremely popular podcast “The Joe Rogan Experience.” Here’s the opening paragraph. To wit:

“For those that may not be aware Joe Rogan of the popular podcast “The Joe Rogan Experience” may have just entered a political octagon for a fight he is truly unprepared for. The issue at hand here is this: Although Mr. Rogan is a trained MMA fighter and has probably met many an adversary or two with a tendency to not just bend rules, but break them when no one is looking (i.e., think cheap shot). His assumption that he himself can bend or break the rules of the political arena shows just how unprepared he truly is to this blood-sport known as politics.”

“Radar Alert: Watch For The Joe Rogan Political Tap Out” April 5, 2020

Although I was correct in the premise of there would be a “tap out.” What I did not expect was it would be Mr. Rogan tapping out of Google™. He showed rather than heel to the Silicon Valley overlords as to what he was going to discuss. He was willing to put his money where his mouth was and completely jettison one “broadcaster” for another. e.g., from YouTube™ to Spotify™. This was an extraordinarily unexpected move worthy for comparison with anything seen in the octagon by a Brazilian Jujitsu master. i.e., they never expected it.

However, here is where things begin to get interesting from a spectators point of view. The reason why is: when it comes to the octagon a tap out ends the fight and the winner is declared. Done. This fight? Let’s just say – not even close.

What we have here is the opponent (i.e. Google et.al.) believed there was no alternative for Mr. Rogan and he would conclude it himself soon enough, and just tap out. i.e., Acquiesce to either a neutering of his positions and/or demand a “hostage tape” style reversal be made.

Yet, the jujitsu move was made and Mr. Rogan signed a reported $100MM dollar deal with Spotify, taking most of his content with him. Both a daringly strategic and tactfully executed maneuver in my view. But it’s now fraught with danger for both Spotify, as well as Mr. Rogan. Let me explain…

As I iterated prior – this fight is far from over. And as a matter of fact it may be only intensifying.

This past Saturday began with a ringing-of-the-bell for “round two” across the Twitter™ universe where the demands that Mr. Rogan’s podcast be (wait for it…) cancelled. I know, right? Who knew?!

It seems Mr. Rogan was, once again, saying something that will not only be intolerable, but will unequivocally raise demands by the “cancel mob” that he be forthrightly cancelled. His sin?

Let’s just say it was the worst of the worst…

First: He dared say he would not only not vote for Mr. Biden – but would actually vote for Mr. Trump. A sin that is only eclipsed in Hades by those that drive too slow in the fast lane. I mean we’re talking sins that call for “special room status” here, if you catch my drift.

The second: This one could be categorized as a “two-fer.” On the same episode he dared not only state a word (warning: if you are susceptible to triggers, be forewarned here) but gave a possible rationale for using it. That word? “Men.” The offensive quote? “Because that’s what men do, we make fun of things. Anything. Anything that seems like you’re not taking chances. And that’s what the mask is.”

I know, if you need a moment it’s OK, I’ll wait. After all, he’s also questioning authority and efficacy in one fell swoop. Maybe someone has a few kittens they can spare and pass them around to the others. I mean, we’re talking scorched earth type rhetoric here, right?

Now Rogan is not someone who takes the virus lightly. He regularly has himself, as well as guest tested. The reason why the above should not be glossed over is where and why he said it. i.e., He was directly pushing back on his guest’s assertion (Bill Burr) of, “I just love how wearing a mask became like this soft thing that you’re doing — like being courteous.”

It is precisely that type of statement or premise which raises alarm bells to so many today, for it alludes to a possible bigger problem, with longer lasting effects, than what the virus itself may actually do. Or, said differently: So regardless of what the science may or may not show – you’re wearing it not because you think it’s effective – you’re only wearing it to conform.

I believe Rogan was right to push back, even if it was in his trademark style. However, with that said, this (all my opinion) will not be allowed to stand.

The issue now directly facing Mr. Rogan is whether or not the people at Spotify will, or will not, fold like the cheap suits many across Silicon Valley have demand most C-suites to do and cancel Mr. Rogan before he even gets started.

Don’t think for a moment this is not a possibility.

Spotify is (again, my conjecture) nothing more than another creation of what I call “The Silicon Valley model,” which basically means: regardless of what revenues (if any) it makes – it’s basic model is its stock value. i.e., nothing matters other than how any metric can be spun to keep Wall Street invested. Remember: Spotify has only been profitable a hand full of times in its now 13 year existence. Think about that.

So, why is that important?” you ask. Let me put it this way…

What happens to the decision making process for business going forward at the C-suite and/or Board of Spotify if suddenly their once considered brethren of all that is Silicon Valley let them know through the “pipelines” that all ad revenues that comes via one, if not the largest ad buyer or placement service (aka Google) decided to “shadow ban” or out right nullify any ads for Mr. Rogan’s show?

How about if Twitter does the same? Then what about Facebook™? Think it can’t, or better yet, won’t? Au contraire mon ami…

In the politically charged environment we are now in Silicon Valley’s tech overlords have shown they fear no one. Period. Even in the face of a possible change to their protected status via the courts and legislature they show they could care less and are willing to openly antagonize even the President.

Again, doesn’t matter if you like him or not. The act to actually warn a sitting president that his speech is not considered “free” to be posted is shockingly brazen. Again, whether one agrees with that view or not is irrelevant. It’s a defiant act with ramifications to all that no one truly understands, let alone estimate.

This ideological difference coming from big-tech is not just a preference – but is currently a position they have decided to bet everything as to win the complete overthrow of the political, becoming the ruling arbiters of all they deem worthy. This is for control – and any fight for control means: total and utter destruction by any means (person, place or thing) that does not comply, let alone agree.

I now believe the thing to watch for clues is whether or not Mr. Rogan has successfully countered the initial move with a move of his own worthy of the record books. Or, did he quite possibly get himself into a position that may turn into something far worse?

Or said differently…

Did he deliver a move that seemingly countered an all encompassing choke hold, only to find that move places him directly into that same adversary’s cross-hairs for an even more efficient way to be taken out?

© 2020 Mark St.Cyr