Category: Uncategorized

‘Panic At The Disco’: The Fed’s Freestyle Reemerges

For the first time in what seems like an eternity the “markets” experienced a hiccup. And with it came a brief, yet far from terminal sell off. Declines of around 1 or 2% used to be viewed as average, routine, no-big-deal, and such. But that was then, and this is now. For today in a market that is viewed only as having one possible routine i.e., little to no volatility, buyers for every ask, fortified with an end-of-day ramp just to make sure if things have gone wrong, everybody gets healed by the close of the session. It’s been good to be a BTFD’er.

Then again, that was then, and this is now, And buying-the-f’n-dip every time from here on in just might be the worst learned, habituated, internalized, and institutionalized market strategy ever adopted. For the real pain of this “genius” trade will become self-evident when all those BTFD skills not only work against one, but fail spectacularly during real moments of panic selling when BTFD “genius” turns in “Catching falling knives” tragedy.

Remember: For all intents and purposes short sellers have been all but extinguished from this “market” for years. In other words: There’s no one who needs to buy to close out their position during panicky sell-offs which exacerbates turmoil. i.e., A “market” full of longs needing to sell to capture all that envisioned profit – and not a buyer needing, let alone wanting, too buy among them.

But wait – there’s more! as they say on late-night TV. And this “bargain” is something most have never thought through.

If, and when, short sellers (even at the margins) decide to re-enter these “markets” in earnest. i.e., They believe the Fed. or other central banks have lost control? Let’s just say the “dancers” become dear-in-the-headlights quicker than they can Foxtrot off. And the first taste of the “panic selling” has finally reappeared. And with it, for those paying attention, came a sight not seen in quite some time.

What was that you ask? Good question. But rather it was not “what”, but who? i.e., None other than a “panicked”, free-styling Fed. president to assure everyone to just keep-on-dancing. And just like that BTFD was once again in full swing. You could hear the music, popping of corks, and clinking of glasses everywhere.

I am arguing: Rather than “partying” at the reemergence of this form of BTFD exuberance. One should instead be cognizant of the underlying problem contained within. In other words: That a Fed. president felt the need to publicly contradict everything the Fed. is currently stating as its reasoning, and foundation metrics for raising in order to reassure the “markets” to keep-on-dancing. And the “markets” only hiccupped ~2% from all-time highs!

Again, for this point can’t be made more forcefully: A move of, a pull back from, a retracement of, however you want to phrase it, of ~2% from highs never before seen in the history of mankind warranted a Fed. president to break with the concerted, self aligning cadre of “Hawks are U.S.” to state publicly not only contradictory messaging, but rather, seeming more like “off the reservation” espousals that the Fed. itself, and its conclusions, may in-fact not only be wrong, but rather than tightening should be more inline with proposing more QE. Got that?

Mr. Bullard was doing some impressive “free-styling” and the “markets” took their cue and once again BTFD horns-over-hooves right back to those very highs, hence illuminating these two very big issues. First…

Although the act of St. Louis Fed. president James Bullard coming to the rescue and saving the “markets” whenever there’s been peril is nothing new. (see “Bullard Bottom” for clues) This time it’s less the “act” that one should consider, but rather, focus on the timing and its circumstance. This is where the real underlying issues present themselves. And this latest round is troubling not just for its implications to where the “market” now stands. But rather, to the reasoning why it stands there to begin with. e.g., Pure, unadulterated, hopium.

Since the election of Donald Trump the “markets” rocketed near vertical to the heights they are now poised. That accent constitutes some 400 points for the S&P 500™ alone, or said differently: Using simple math (e.g., 400 ÷ 2400= .1666) nearly 17% of the entire S&P™ market (as well as the Dow™and NDX™ respectively) has been generated in just under the last 8 months.

The only thing fueling that move? Hopium. i.e., All in the “hope” the economics of the nation will turn and “Make America Great Again” via tax cuts, policy changes, and more. For the economic fundamentals that are supposed to support markets have long since vanished or resemble anything prior used for assumptions of good too great. Actually, just the opposite has happened where more hard data goes from bad too worse which fuels that other form of “hopium” that central banks will once again begin the IV of QE. e.g., Enter Mr. Bullard.

One can’t help but marvel how “markets” have not just shrugged-off things which only a few years ago would cause, at the least, reasons for caution. Yet, today? It seems to laugh and BTFD horns-over-hooves at every possible cautionary signal such as: Brexit, Italian political fallout; Greece, Brazil, Venezuela turmoil; China threats, Russian threats, Turkish threats, N. Korea threats; escalation in Syria, Iraq, Yemen, just to name a few; market rigging bank scandals (see LIBOR and more), saber-rattling, missile deployments, missile launches, nuclear threats, aircraft carrier deployment, reinforcing aircraft carrier deployments, more missile launches.

I’ll stop there, for that’s only within the last few weeks or months. Nothing has phased the hopium trade of reflation. Until now, and it’s just one word but the implications are legend. That word?


This word may be cheered by many of the President’s political foes. However: It should (and seems to have done just that) strike terror into the hearts of anyone believing this “market” has ever been based on anything resembling fundamentals. That said, I believe the first ones to finally realize the terrifying situation awaiting them once this idea truly becomes understood and resonates within those very markets – are the ones who were up until a month or so ago cocksure they knew everything there was to know about how to control them. e.g., The Federal Reserve. (“idea” meaning “impeachment” talk signals all legislation DOA)

This is the reason why I believe Mr. Bullard made his subsequent remarks. Personally, I do not believe Mr. Bullard expressed his opinions out of vacuum. Yes, this is all conjecture on my part, however, with that said, I believe the Fed. used this expression as some form of trial balloon as to see if its efficacy was still as prevalent (and reliable) when employed during any form of correction as previously noted.

I also believe this latest result or “trail balloon” will be not only misjudged, but also misused, resulting in just the opposite effects going forward.

Some are thinking right now, “Yeah, but the Fed. has raised twice so far and look – nothing’s happened!” Which is precisely my point. But that’s about to change, and I believe the Fed not only knows it, but when the “I” word hit the main stream press, it did what Paul Tudor Jones implied they should. e.g., “Be terrified.” Because “I” all but guarantees the idea of any reflation trade legislation passing, then signing into law in 2017 is DOA. Period.

And with that so too goes the cover for the Fed. and its reasoning for hiking. For it will become self-evident if the reflation trade does, in-fact, fall apart here that all their tough talking, and rate raising, has been a colossal misjudgment for policy error. Because for all that “data” of a so-called “data dependent” Fed. is not, and has not been there. (See Fed. president James Bullard’s own take on the economy and data rather than taking mine.)

Should the weekend effects of this latest BTFD induced “The doves are back in town” subside and the realization once again reassert itself that the reflation-hopium-trade is indeed DOA? You have some 400 points respectively of S&P, 3000 of the same for the DOW, and some 1000 for the NDX just sitting there levitating, and purchased solely, on the premise of one singe idea: That the subsequent legislation Trump promised would overcome, and cure-all sins, including – the raising of rates faster than anytime since before the financial crisis, (well over a decade ago) along with no QE, and a reduction of its balance sheet.

I believe the Fed. (much like the “market”) didn’t understand just how precarious of a position it found itself till the “I” word was bandied across the main stream press, closed-door meetings, cocktail parties, conferences, and symposiums they attend.

Up, and until that moment I don’t believe they truly comprehended just how fast what they took as a “teflon market” could turn into a “panic at the disco” fiasco.

When warning signs appear smart people don’t just keep “dancing” – they begin moving towards the exits before the rest of the crowd even comprehends what may or may not happen next. I believe we witnessed that first move. Where we go from here? Who knows. But all I’ll say to that is this…

Mr. Bullard’s freestyle should not be taken as a cue to hit the “dance floor” once again. (e.g., Another manna-from-heaven BTFD opportunity.) No, it should be taken for what it may portend: A reason to be in full-view and close proximity of any and all exits should the need arise. For if time should have taught everyone by now – Hope is not a strategy. And you have some 17% of the entirety of the main indexes levitating on just that. Not counting the 100’s of $TRILLION’s at risk via derivatives.

But not too worry we’re told. For if you listen to any Fed. official, communique, Ph.D economist, next-in-rotation fund manager, et al…

“They’ve got this!”

© 2017 Mark St.Cyr

June: The Trifecta For Policy Error?

In about 30 days the Federal Reserve will hold its scheduled June (13-14) meeting of the FOMC to either give a thumbs-up, or thumbs-down to increasing interest rates in earnest once again. The odds that the Fed. will indeed raise again now stands at about 99%. In other words – it’s all but a near certainty.

With that said, one can’t help but marvel at not only the “markets” sheer abandonment on volatility with such a near certainty on its doorstep. But rather, the only thing to rival it is the sheer arrogance being displayed by the Fed. itself that such another increase is warranted as every data point to a self-professed “data dependent” consortium is not just flashing, but screaming danger with every passing day. e.g., B.E.A. Q1 GDP 0.7%, Atlanta Fed. GDP Now™ 0.2%, JPM Cuts Q1 GDP to Just 0.3%, and more.

In days of yore (i.e., Ancient history circa 2016) whenever the odds of hiking approached anything like the levels they do now, the Fed. would take to the media in any manner possible and try to supplant soothing tones of, “Hush now little ones and not too worry…” as to make it evidently clear the Fed. had no such intentions going into their next meeting. After all, as history has shown time, and time again, just the “idea” that a rate hike could be imminent sent the markets reeling needing for an ever incessant response of one Fed. official after another to shout, “Don’t worry! We’re here with ever more potent QE should the need arise!” i.e., This is why we now have such a thing being worthy of its own moniker. e.g., “Bullard Bottom.”

Today, the exact opposite is the case. Not only are there not any soothing tones, but rather, there are tones emanating from what can only be described as an outwardly defiant, all seeing, ever proficient collection of “Hawks Are U.S.” for any and all questioning.

As an example: In what can only be taken at first glance as a “Wait, what?” moment. The New York Fed. has concluded that the more than $500 TRILLION dollars (and rising – again!) of O.T.C. derivatives outstanding remain (wait for it…) “an important asset class.”

For those of you having that “Wait…what?” moment as you’re reading this and just can’t remember why your brain just froze from the absurdity of such a statement? That’s because “derivatives” was that phrase you recalled as the center for every reason which caused the great financial crash. (For those of you wanting more on this topic, I highly recommend this succinct breakdown by Wolf Richter of Wolf Street™.)

So why is the above important other than it’s “ticking time bomb” factor? (As if that isn’t enough.) No, the reason why it stands out for me is how it’s viewed by members of the Fed. itself. i.e., “Don’t worry, we got this!” And here’s the reasoning…

If it’s now on the books (see above) openly stating its acknowledgment with its size and scope, along with, that the Fed. itself sees it as an “important asset class?” That makes the case (or allows for it) that the Fed. itself not only allowed, but rather, with eyes-wide-open helped facilitate its further ballooning. Hence: If (or when) it “pops” the Fed. has no one else to blame but itself (along with the potential hordes carrying “torches and pitchforks”) for they have now openly stated (again, and inserted it into their report) they not only knew of it, but rather, considered it as an “asset class.” e.g., Giving it their blessing and endorsement.

Remember how that other all important “derivative” class of assets backed securities worked to facilitate the “Great Financial Crash?” Hint: CDO, MBS, CDS, just to name a few? That too was another “We got this asset category.” Feel better?

The real issue that sits squarely in-front of the “markets” is the realization that the entire “reflation” trade may in fact be D.O.A. much like the legislation that was supposed to foster its existence to begin with. Let me put it this way since we’re talking about “derivatives” and their potential for highly correlated monetary wealth destruction vehicles.

The “reflation” trade that is now omnipresent in the “markets” which has facilitated the non-stop rocket-ship ride since the election of Donald Trump is nothing more than a “derivative” vehicle (or expression) of the underlying legislation that was to be its foundation or “backing asset.” e.g. Signed into law legislation.

In other words – If the legislation (i.e., tax cuts, Obamacare repeal, et cetera) don’t become signed into law legislation amounting to precisely what the “value” of those cuts and more represented (i.e. $1 TRILLION in infrastructure, Obamacare total repeal equivalents, massive corporate tax restructuring et cetera) the entire run up from Nov 2016 to today becomes de facto null and void. e.g., The “derivatives” (as in the profits made) based on “the trade” become? Hint: It’s not good.

The only thing that could (or will) make matters worse was if the Fed. had raised interest rates in anticipation. Again, hint: Not only have they raised, they’ve raised twice, and looking to raise for a third. All into further deteriorating economic data.

To re-emphasize just how precarious the “market” now sits, below is a chart I feel puts it into perspective. To wit:


As one can see, that red rectangle represents the turmoil the “markets” had portrayed once the QE “IV tube” for all monetary woes was removed. Again, not only did the “market” suddenly halt its ever-ascending journey, but it suddenly produced ever-increasing bouts of near-death experiences needing ever the more dovish tones from the revolving cast of Fed. speakers hitting the media in ways that would make a Kardashian envious.

Again, for I can’t mention this enough, right before the election in October 2016 the economy was on such shaky footing (and as the “markets” were rolling over once again) the Chair of the Federal Reserve gave what I call her most contradictory speech when juxtaposed to today’s raising into weakness stating (paraphrasing): Running a “high pressure” monetary policy may be the only way to heal the damage still residing within the economy via the crisis. An “ultra-dovish” insinuation if ever there was one.

And yet, as the above shows, just 30 days later with the victory results of Donald Trump now into the books the Fed. morphed into “Hawks Are U.S.” and have been ever since.

I made note of this and was subsequently mocked via the mainstream business/financial media as something that “Ain’t gonna happen” using the prior 2 years as evidence. i.e., Directly after the meeting most analysis was, “They’ll probably not raise again till mid year, if then.” Then, all the jawboning for more began in earnest via one Fed. official after another including “balance sheet reduction.” Then March happened, and now June is about too. Here’s what I wrote in Dec. of that week. To wit:

“I implore you not to solely take my word, but to watch the presser for yourself and draw your own conclusions. I believe it’s one of the most forceful expressions made, or conveyed by The Federal Reserve that it may in fact act aggressively via monetary policy should it decide – It (“It” being the Fed.) seems fit. i.e., The implications seemingly being sent are that they’ll decide what a “good” economy is – fiscal implications be damned.

Now is where “fiscal implications be damned” might be far more relevant than the Fed. (as well as “markets”) ever imagined prior. The reasoning?

All that “fiscal” seems to now be damned to not seeing the light of day as far as 2017 may be concerned. And that’s something I feel the Fed. hadn’t calculated into their conclusions. (never-mind the “markets”) After all, with both the House, Senate, topped with a president all controlled by the same political party; how would legislation not be passed swiftly? (Although many others wonder that exact same thing, but I digress.)

However, with that said, the economy was/is in no shape (just using the “data” we’re all told influences a supposed “data dependent” Fed.) for incessant hawkish jawboning followed up by raising twice within 90 days. Again: All while arguing (and allowing the inclinations to be held via the futures fund) that indeed the Fed. is “hell-bent” on raising once again – in June!

That would be 3 raises in all but 6 months with balance sheet reduction arguments still front and center in Fed. communications when speaking in open forums. Are you beginning to see the implications for “policy error” more clearly?

I’m sorry to keep repeating, but it’s something which can not be repeated or stressed enough: With further deteriorating GDP and other metrics, along with no fiscal stimulus possibly seeing the light of day (meaning actually signed into law) for the rest of 2017, along with a potential government shutdown and more. June is now to be considered (as via the Fed. not saying or refuting anything to the contrary) a done deal? And a prudent one at that?

Oh, and for those who may want even further examples for contemplation? Here’s just one of the items that can be classified under “and more.” Hint: China.

But not too worry, for if you listen to current Fed. officials and their assessment of global economic conditions, you know, where the “reflation” trade is the “derivative” of the underlying asset of passed legislation (which has gone from “passed” to all but DOA) that the entire recent run up is based on?

“They’ve got this!” Just like they’ve got those other “derivatives” under their watchful eye. So June is now a shoe-in.

Feel better?

© 2017 Mark St.Cyr

A F.W.I.W. Moment

I won’t go into much detail here, for as the old saying goes, “A picture’s worth a thousand words.” To wit.


As of this writing there’s another saying which helps put the above (as they like to say in “The Valley”) “picture” in context. That saying is, “If misery likes company, fear not, for you are not alone.”

The above is, of course, a chart showing Snap™ (aka Snapchat™)  abutted by Twilio™ current share prices. Currently, if you invested 1 dime in either of these companies at their IPO launch, that dime is worth less. Far less. And for those who bought when the shares were higher? All I’ll say is “You have my condolences.”

And for those who believed all the recent analyst recommendations that Snap and all the others were a “screaming buy!” Not to mention all the recent tech press still using the “Snap is up 30% from its IPO pricing.” You’re now finding out “It’s different this time” as I’ve tried warning too many times to mention: is now, indeed, just that.

And for those who were told they were “lucky” to get in at $17? They’re now seeing that “up 30%” is now closing in on being 100% gone.

All in about 90 days.

© 2017 Mark St.Cyr

Why You Need To Pay Attention In May

Whether or not the old adage of “Sell in May and go away” means anything for traders over the decades is one thing. What it may portend for business owners and others looking over the past decade might be quite another.

It’s hard to turn on any business/financial media outlet as to try to make sense of what is currently taking place in the economy and try to match up its implications as represented in the “markets.” It’s now a fool’s errand. For the markets no longer represent anything of what was looked upon as “a gauge of business health” as they were only a decade ago.

All you’ll hear currently is nothing more than cheerleading i.e., “New all time highs!” is once again the daily clarion call. When it comes to why? The analysis more often than not is nothing more than further cheerleading via some next-in-rotation fund manager trying desperately to argue why “Stocks are not expensive compared to blah, blah, blah.”

It’s now far past annoying and borders on deranged in my book.

However, with the above said business people must somehow extrapolate what their gut tells them, then try to filter it the best they can with what they consider the best information possible. Even if that information isn’t what they might deem as the most reliable.

Sometimes you just need to understand that you may be feeling a certain way because there are legitimate reasons for it. Although, at the time, you just can’t seem to put a finger on exactly why, but you know instinctively – that it’s there.

So you search. Even though (you know) that search can at times lead to nowhere – search you must. It’s part of being a business person. It comes with the territory, and most will never understand it. That’s what sets a business owner/person apart from most. They can’t just sit back – ever. They need to either know – or die trying.

The reason why I state the above is the result from a call I had with a colleague, where the conversation was more like the two of us trying to figure out a Rorschach test, rather than anything else.

So after we were through I started doing a little investigating for the conversation weighed on me well after. This is what the conversation revolved around…

The old saying of “Sell in May and go away.” came up as we were discussing a few points, but it was more in jest than anything else, for we were joking “This ‘market’ will probably go even higher if WWIII breaks out in earnest!”

But the argument of “May” kept revolving around the conversation when we were talking about how, just last month, the Fed. was declaring how it wasn’t “terrified” when rebutting arguments that it should to the contrary. I made the point then “Yeah, that’s because it’s only April!” and the full effects of the rate hikes have yet to be factored in.

So, as I iterated, when the conversation ended I decided to take a look, below is what I found. To wit:


As you can see I made a few notations on the above chart. If one looks closely the month of “May” has been a very important month over the last decade. The only time “May” wasn’t a factor was when QE3 was announced and the Fed’s intentions were leaked for Wall Street’s understanding (the leaking of such admitted to and causing the resignation of a Fed. president.)

Maybe “Sell in May and go away” when the Fed was not involved was one thing. However, today?

May has been the month where the “markets” began to roll over in earnest ceasing only once the Fed. launched another iteration of QE.

And the reason why some are feeling a little apprehensive? Hint: You are here = May.

So, for what it’s worth, you’re not crazy. You’re a normal thinking person, congratulate yourself for being such. For what happens next is still anyone’s guess. But a least take solace in the fact – It’s not you. There’s a real reason why your gut is giving you that check. Feel grateful it’s working as it should.

© 2017 Mark St.Cyr

Is N. Korea The Excuse China Needs To Launch Monetary Armageddon?

If one were only to get their “news” via the main-stream media outlets, it wouldn’t be wrong to assume when it came to the understanding of what is really going on across the globe, along with the consequences, most haven’t a clue. This point is made manifest with no greater example than the elections currently taking place in France.

I’m sorry, but the French election doesn’t trump, too all but exclusion, the potential for the breakout of WWIII. That is – unless you’re the main stream media. Yes, one has the potential for near immediate electoral upheaval (i.e., A potential Frexit, and possible finality for the E.U. experiment.) However, the other has the potential for a near immediate global war. That, of course, is the current standoff with N.Korea. And the reaction via the main-stream media? (Insert most recent Kardashian escapade here.)

Not to belittle the French elections and their possible consequences should the results go awry for the entrenched bureaucrats (not to mention the financial markets.) There is another standoff which may bring even more immediate consequences than the other.

Currently the Korean peninsula is in play much the same way Cuba was during the Kennedy administration known as “The Cuban Missile Crisis.” The overall situation and its possible consequences for missteps are eerily similar.

Missiles have been moved onto the peninsula in what can only be described as “outrage” via not only N. Korea, but also China. Whether or not one agrees with the move (along with the stationing of war ships off the Korean coast) as to send a message to Pyongyang to cease all provocation via its nuclear ambitions is irrelevant.

The real player (and the one to pay attention too) in this standoff is China. And how they go about resolving this issue at its doorstep. Both internally, as well as externally.

Make no mistake: China is not just juggling one possible conflict, it is also currently fighting another within its own borders. For China is simultaneously on the precipice of an another possible disaster. i.e., An outright monetary disaster of its own making which needs to be resolved with the same immediacy as this external one.

I’m of the opinion this kerfuffle with N. Korea may be the catalyst which drives China to either embark on an outright kinetic posture against the West to resolve. (e.g., If no one backs down or worse) Or – will be the inflection point as to allow the monetary fallout within its financial markets to begin in earnest. Crippling the entire global economy in ways not fully understood (or envisioned) by many, especially “The West”, in what may be akin to a “First Strike” monetary (rather than kinetic) action.

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

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

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

There are far too many factors to list as to what might be the catalyst. Yet, what is clear (and the only thing that matters currently) is that this manifestation has subsequently given China some form of “borrowed time” when it comes to the Yuan. For if the $Dollar had strengthened as it has during such cycles? The Yuan would be in a world of depreciating hurt.

Back in October I penned the following, “Why All The Yawning Over The Yuan?” And in it I made the following point. To wit:

“Now some will think “Maybe there’s no concern because the politburo has it under control?” It’s a fair response, but there’s a problem inherent with the answer, or answers.

First: If the Chinese are doing it in a “controlled” type manner, it reeks of “currency manipulation” tactics for others (think U.S. presidential politics as of today) to latch onto and build support, as well as strengthen a case for retaliation. i.e., placing tariffs, etc, etc.

If you think about it from the Chinese perspective: that would mean you were openly, and intentionally goading as to fuel some version of a trade, or currency war. When you come at it using that thought process; it just doesn’t make sense. Both from a tactical standpoint, as well as political. Hence lies what maybe even a more troubling scenario. e.g., They’ve lost control.

The only other reason more troubling than the first – is the second. For it is here where things become quite precarious, as I’ve stated many times: “The currency markets are where you must keep your eyes and ears affixed. It’s where the real games are played and won.” And losing control of one’s currency has implications for all others, both warranted, as well as unintended. And it seems this latter scenario might be more on point than the former.”

Where does the relationship between the Yuan and the $Dollar now stand? One would think with such a sell off currently taking place within the $Dollar market that the cross-rate should be in a much more manageable area for the politburo than before all things being equal, correct? Hint: It’s not. Again, to wit:


As one can see by the chart above we are currently hovering at the 6.900 range. That’s important not just for its “spitting distance” away from the all important psychological 7.000 level, but rather, how (and why) it’s there at all.

All things being equal as the $Dollar had strengthened it put pressure on the Yuan. That pressure was/is wreaking havoc within China exacerbating the already near unmanageable capital flight taking place which shows no sign of letting up as evidenced by the chart above. For the higher the cross-rate ascends – the greater the issues weigh on the Chinese politburo via capital flight and more. And which lies-the-rub…

For if the index is rising as the $Dollar is weakening? (as it is currently) That means the Yuan is losing value far faster than it was only months ago. And that’s a very, very, very (did I say very?) big problem for the current monetary status quo. Not to mention the global economy in general.

The current financial underpinnings within the Chinese economy are once again under pressure in ways very few understand. With that said all one needs to watch as to perceive significant clues into the health of its underpinnings is the price stability in commodities. For much of China’s internal, and interwoven financial constructs for collateral are based on them. And one of the main players of that is iron ore. And guess what? Hint: Prices are/have collapsed at a precarious pace.

The easiest way to categorize the relationship of commodity prices and the financial underpinnings within China is this: Commodities are the collateral and pricing foundation to much of China’s financial obligations – as real estate values are to MBS and all their counterparts. Yes, much of China’s financial problems are now with real estate, but what all that real estate was built and financed on was? Hint: Commodity collateralization. (Think CDS/MBS times a factor of 1000, if not more.)

Now you have some idea of just how massive this problem is.

Just remember what a sudden (like in 2007/08) real estate value collapse can do (or did) to an economy, and you have the same scenario in earnest via commodity prices currently happening in China, where the full effects (let alone realizations) of such have yet to even be calculated, never-mind felt.

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

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

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

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

No matter what happens in France or N.Korea.

© 2017 Mark St.Cyr

It’s Turning Into A Very Interesting Week

Back in days of yore (circa January 2017) I dared make the assertion that all that was “unicorn infatuation” in the Valley was much more akin to “the old gray mare ain’t what it used to be.”

In the article “Is 2017 The Year Silicon Valley Experiences The Dark Side Of ‘It’s Different This Time?'” I posed the following. To wit:

“Here’s the equation I believe will not only send shock waves, but will bring down many a valuation edifice within “The Valley” in 2017. And here it is:

“First: The Fed. And Second: Rate hikes.

Two very short sentences containing nothing more than two words each but their implications could have exponentially explosive results. For what they portend is that “It’s different this time” may indeed be exactly that.

What I hoped you may have noticed during this discussion is the one thing myself and very few others pointed out would happen if the hypothesis we’ve been articulating over the last few years was correct. That hypothesis has always been “Without the Fed. pumping in unlimited funds via the QE programs, and a “death-grip” to the zero bound (aka ZIRP) the first ones to show how much of a facade these “markets” where would be seen directly in the “tech” space.”

So what has happened today that should draw attention to those still believing in the “It’s different” meme?

Here’s how different. Remember the IPO last year that was supposed to save the IPO world? Hint: Twillio™.

This is what investors are waking to today. Again, to wit:


Twilio, as of this writing, if you had invested on any day other (as in you bought any of the dips) you are now underwater. For some, you are under by “fathoms” which as of just a few days ago, to even consider such a position – appeared unfathomable.

The reason for such a move (some 25% via the opening bell) is in a way hilarious to my eye. Why? (although I do offer my condolences for those caught in this debacle)

It was reported that Twilio reported an earnings report that was “strong.” But there were two issues. First:

Revenues guided lower. (e.g., $356 -$362 Million vs $364-$372 Million projected earlier)

Can I just make a point here? Why are the revenues for a company that is supposed to be at the forefront of the tech space revolution (e.g., the Cloud space), along with the title and much heralded panache of the “IPO to save the IPO world” is showing anything such as “revenue guiding lower?” Never-minding that a “beat” means losing less money than before therefore “it’s totally worth it!” Welcome to “The Valley” world of metrics is all I’ll say there.

But what caught my attention more than the revenue miss and guide lower is who the CEO is blaming for the results. Are you ready?

Uber™. (not a typo)

From CNBC™. To wit:

“Twilio CEO blames Uber for disappointing financial results”

“Lawson said on Tuesday that he expects Uber’s “contribution to decline” because the ride-hailing company is “changing the way they do messaging.” He added that Uber is now “optimizing by use case and by geography” and “plans to move communications for some use cases in-app.””

So, an over valued (all in my opinion) unicorn that made it out of the IPO stables (making it as the article below states “Mightiest”) which was supposed to set the stage for the likes of all the awaiting unicorns, has suddenly been speared by the horn of the largest, and most valuable unicorn ever to be, and is still in those very stables.

I’m sorry, but if you can’t see the humor in that whole scenario I would have to imagine that you’re an investor in them. And if so, as I said earlier, “you have my condolences.” Because, after all, you were also told (and sold) to believe it was different this time.


The issue is, as I’ve warned too many times to list.

It is precisely that.

© 2017 Mark St.Cyr

The ESPN Debacle: What Was At First Unimaginable In Now Business Fact

Back in 2015 I wrote an article titled “ESPN: Cutting The Cord Or Political Turn Off?”

At the time of that article not only did the business/financial media take my assertions to task, but so too did many in the sports media. The idea that ESPN™ (or any sports channel with such marquee talent and coverage) could be the recipient of any sort of backlash, especially via the political persuasion, was called on air by many as “Just ludicrous.”

Many even argued that any “political” view inserted into the discussion was actually seen as “good” or “helpful insight” into the player’s mindset at-large making them more personal with fans, rather than being simply superstars that can only be viewed from afar.

It all sounded so rational, so well thought out at the time. Problem was – it was all poppycock. And, we now have proof that the arguments I made back in 2015 when everyone from media analyst to next-in-rotation fund manager proclaimed such assertions as just “ludicrous” now appears to be business fact. And the resulting backlash has now forced the network to jettison some 100 employees including many of its own marquee on-air talent.

In my article (remembering this was in 2015 when even the idea of anything wrong at ESPN was seen as “not getting it” and came from all sides of the business and sports spectrum) I made the following point. To wit:

“However, is “cutting the cord” really the reason for ESPN’s loss of millions viewers? Or, is that the easiest crutch of an excuse for what might really be happening? After all, media is, and always will be, the king of “inflated” numbers. So much so I garner when a CEO of any media company reads a term like “double seasonally adjusted” they smirk and think – “Rookies.”

It’s just the way it has, is, and will be played; and everyone understands it. None more so than those within the business itself, which is why a few things struck me.

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.

And if they’re not – why not? After all, there’s probably no other content infringement policing company for copyright and other applicable ownership rights than Disney and all its subsidiaries. You aren’t going to see it for free or on alternative platforms unless they want or allow for it. Period.”

Well, there’s no reason to take my word for it, or my assumptions, because as of Thursday of this past week none other than ESPN anchor Linda Cohn of SportsCenter™ agreed reiterating my summations. Again, to wit:

“ESPN’s sweeping staff cuts are not just the result of ambitious TV rights deals and an overburdened budget, popular “SportsCenter” anchor Linda Cohn suggested Thursday.

The network may be losing subscriber revenue not just because of cord-cutting, Cohn allowed, but because viewers are increasingly turned off by ESPN inserting politics into its sports coverage.

“That is definitely a percentage of it,” Cohn said Thursday on 77 WABC’s “Bernie and Sid” show when asked whether certain social or political stances contributed to the stupor that resulted in roughly 100 employees getting the ax this week. “I don’t know how big a percentage, but if anyone wants to ignore that fact, they’re blind.””

I couldn’t have said it any better myself. Oh wait…

I did in 2015.

© 2017 Mark St.Cyr


Earlier I released an article of the F.T.W.S… genre. However, I hadn’t hit the “publish” button when another item crossed my desk where at first I was not just surprised, but as I read (and tried to decipher its implications) I wanted to make sure I was interpreting correctly what I was reading. I’m sorry to say it seems like my earlier piece, I was.

In my Sunday article “Does The Reality…”  (yes the information seems to be coming faster and more furious than I can type) I made the following statement. To wit:

“As of right now the “hopium” trade that is a direct result of the Trump “reflation” trade is still self-propelling – but it’s quickly running out of fuel as evidenced by not only none of the campaign promises being passed (i.e., Obamacare repeal and others) but a 1 week resolution was needed as to not shut the government down.

And the “markets” closed where?

Hint: Right back to where they were before when I stated “You are here.” And things have not gotten better, as a matter of fact, they are worse – far worse. (e.g., Unless you are one of those who like to buy-the-potential-nuclear-war-dip that is. And if so, take solace in your decisions, because the President keeps suggesting the idea is closer by the day.)”

As of this morning (being Monday) what was thought to be a negotiating tactic (or at least that’s how many in the media were parsing it) of a 1 week budget resolution to avoid a shutdown before the Trump agenda, or what is commonly referred to as “The reflation trade” legislation metrics could begin to be argued in earnest. That “resolution” has now turned into another resolution very few thought possible. i.e., As of this moment: All the “meat and potatoes” that were to make the reflation trade possible are officially D.O.A. Period.

A resolution was passed that now funds the government through September until the next budget resolution is needed on October first. This means in effect (e.g., de facto) that all negotiations and hopes for tax reform, Obamacare, building a wall and more are gone. There is now no need (or reason) for any negotiations to even begin for another full 5 months.

Think I’m off base? Fair point, so square this circle for yourself. Ready?

How do you apply negotiating leverage to the opposing party when they have taken to the airwaves delighted with this now resolution? Hint: You don’t. And thinking anything otherwise is not only disingenuous – it’s delusional.

To reiterate a point I made back in March (which both the political, as well as business media pointed me out as being “off base” or “doesn’t understand the nature of this movement and its furor”) from my article, “When the Art of the Deal Meets The Empire Strikes Back”, again, to wit:

“The danger now shaping up is all that political relativism is going to meet a myriad of stone cold, fervent opposition from both sides of the political aisle, with establishment politicians (again from both sides of the aisle) whether by coincidence or concerted effort directly opposing the President and his agenda with the new-found argument “We can’t afford it.”

And that will be the go-to argument because the now growing chorus is that “debt matters.” When for 8 years “debt matters” was only relative term.

Are you beginning to see how the “legs” for any further Trump inspired legislation has been swiftly taken off at the “knees?” Or said differently: The “Empire” regains all control – once again. And the new administration will be left holding any and all “bags.” And the repercussions, once fully understood, will be swift if my assessment is anything close to being correct.”

As of right now – “You Are Here” means precisely what I implied over these last few months. e.g., It is no longer a matter of insinuation, speculation, or assumptions…

It’s now here.

© 2017 Mark St.Cyr


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

Back in March I wrote an article titled, “They’re baaack! And why you should be worried – very worried”

In that article I made the case for why not only prudent financial awareness was paramount, but also how the manifestation of blissful ignorance, or, a belief in oversimplified business/financial advise is not the “ticket” to fulfill one’s dreams of riches, but rather, can suddenly become the “ticket” to your worst nightmare. It would seem I was more prescient about those claims than even I thought at the time.

First, this headline came across my desk about a week and a half ago via Bloomberg™. To wit:

“Cracks Appear In Toronto’s Housing Market As Capital Drops”

Today, I received a few more from a few colleagues noting the cause for concern, again, to wit:

“Contagion Fears Rise In Aftermath Of Home Capital Group Collapse”

“Why Everyone Is Talking About This Tiny Canadian Lender’s Woes”

“Home Capital’s Next Hitch Is Keeping Cash Crunch Under Control”

The above three are all within the last 24 hours of this writing. You can expect they’ll be many more. And they won’t be viewed as “All press – is good press.” You can bank on that.

For those who may not be familiar with the above struggling home loan lender, or its implications. The best description for comparison that can be given is the above lender and scenario is the mirror image of the set up that happened here in the U.S. right before the financial crisis (aka Real Estate Collapse) took hold in earnest when the lender known as New Century™ collapsed. This has all the same hallmarks.

Just to refresh a few memories it was at about this time (as in right before everything fell apart) that then Chairman Bernanke was touting the following. To wit:

Ben Bernanke July 2007:

“The pace of home sales seems likely to remain sluggish for a time, partly as a result of some tightening in lending standards, and the recent increase in mortgage interest rates. Sales should ultimately be supported by growth in income and employment, as well as by mortgage rates that, despite the recent increase, remain fairly low relative to historical norms. However, even if demand stabilizes as we expect, the pace of construction will probably fall somewhat further, as builders work down the stocks of unsold new homes. Thus, declines in residential construction will likely continue to weigh on economic growth in coming quarters, although the magnitude of the drag on growth should diminish over time. The global economy continues to be strong, supported by solid economic growth abroad. U.S. exports should expand further in coming quarters. Overall, the U.S. economy seems likely to expand at a moderate pace over the second half of 2007, with growth then strengthening a bit in 2008 to a rate close to the economy’s underlying trend.”

Sound familiar?

Although this was here in the U.S., the scenario, attitudes, defending of the current meme “It’s different this time”, and more are once again on full display, and a tour de force as evidenced by its current manifestation The Real Estate Wealth Expo™.

Here’s what I stated in my original article back in March that bears repeating:

“Bubbles are easy to spot – pinpointing when they’ll pop – is quite another.

I coined that phrase a while back which is nothing more than adding my own spin combining two very old catch phrases used by seasoned traders and investors. I use the word “seasoned” for a reason. Why?

Because they’re the ones that have been around (and been burned themselves) yet lived to trade, or invest, another day. Those who remained wedded (usually the novice or one who’s never experienced true volatility) to the more prominent and specious claims of “you can’t tell when you’re in a bubble” followed with “you can always get out in time” for the most part are long gone. i.e.,The bubble popped into the ether – along with their money.

Nowhere was this phenom more apparent than the real-estate boom of the early 2000’s, which followed the prior phenom only 10 years prior (e.g., the dot-com crash) that should have seared into people’s memory for millennia just how “bubbles” take shape – and the resulting financial devastation that happens rapidly once they’ve popped.”

And then there was this…

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

Whether or not Home Capital™ becomes the catalyst for contagion fears across Canada’s banking sector is irrelevant to this discussion. The real issue is that for the 10’s of thousands (remembering there were 15K attendees at the Toronto Expo alone) who blindly followed the advice their so-called “ticket to riches” portended, rather than understand the need for caution for these are the manifestations indicative of the “bubble mentality” are now suddenly realizing all that shouting of “I own you!” isn’t coming from a stage – but now might be coming from the banks, real estate tax collectors, bill collectors, and more as they seek to collect the payments that were signed for on the dotted line to riches.

But what’s worse (far worse in my opinion) The “asset” used to make all those “Crushing It!” riches are now nothing more than overpriced boat anchors with a market that has gone from “Hot!” to “Frigid.” All in the span of  less than 90 days.

“Who’da thunk it?”

© 2017 Mark St.Cyr

(Addendum: There is a companion piece to this article released later that day which can be found here.)

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

Does The Reality Of ‘It’s Different This Time’ Get Tested This Week?

If you were one of the myriad analysts, next-in-rotation fund managers, tech commentators, et al paraded across the financial/business media over this past week – you had a good week. The narrative of “earnings beats” together with the so-called “relief rally” emanating via the French elections helped propel the argument.

However, if one (once again) peered passed the headlines of Non-GAAP reporting alchemy that would make Issac Newton envious one could clearly see that all was not “gold.”

Both Amazon™, and Alphabet™ (aka Google™) beat handily, and yet, a few questions emerged via my reasoning. First:

Has Google Ad revenue benefited from an increasing advertising pie? Or, are we seeing the first hints of rotation from platform to platform as advertisers dump one for another in a desperate attempt to obtain some form of return for their social or digital ad dollars?

It’s possible it could be the latter, and if so it spells “it’s different this time” just like it has before. i.e., circa early 2000.

The reasoning for this is simple: Twitter™.

As I have stated on more occasions than I can count, the one company to watch for clues into what is the entire “tech” or “Silicon Valley” health of the “ads for eyeballs” model is Twitter. And this once songbird of everything that was/is “The Valley” did something that is the anathema of what is presumed to be the “holy of holies” metric for the entire genre. To wit:

But not too worry, for this is reported as an earnings “Beat” when using Non-GAAP metrics. Yes, declining (again – declining!) ad revenue is reported as “Good News!” The only person I can see with more wonderment across his face than the ghost of Sir Issac is that of Bernie Madoff as he watches all this from a cell wondering “And I’m in here for what precisely?”

Then, of course, there’s Amazon.

After disappointing reports over the past two quarters Amazon (once again) rocketed to new heights as the headlines of “Beat”, “Smashed” and every other exclamation known-to-man was used to report it raced across the media. And yet, if you looked closely, again, there are a few issues contained within that should make those who are closing their eyes and hitting the “Buy” button horns-over-hooves concern.

  1. Guidance for operating income in Q2 is expected to be between $425 Million and $1.075 Billion compared with the $1.3 Billion in the same quarter last year.
  2. Amazon’s total operating income was $1 Billion for this Qtr. AWS (i.e., their web services) made up $890 Million of this. That means nearly all of Amazon’s operating income was generated via the division most people who use Amazon haven’t even a clue exists. (I’ll add to that most 401K holders also.)
  3. This puts their Current P/E ratio at near 190 times earnings (187.4 via Morningstar™ as of 4/27/17)

Moreover, as I posed the idea of “What if?” into the “ads for eyeballs” assumptions earlier; what does one takeaway when viewing the current rocket ship ride of Amazon? For if personal spending is supposedly DOA as was reported via the latest GDP report (e.g., worst since 2009) and GDP is now reported to be an abysmal 0.7% (not a typo) what’s fueling this?

Hint: It’s an outlier, or said differently: It’s nothing but what’s known as a “Momo Play.” To view it as anything representative, or as a “gauge” of current economic health (As I heard many a talking-head try) is as I’ve stated before – an abject lesson for wanting to be blissfully, ignorant. (Always remembering this is my opinion, for who knows where this “rocket ship” can travel.)

So with the above for context the issue at hand is: “Now what?”

The real trouble, in my estimation, lies with precisely where we might be in regards to “the markets.” By all rational objective reasoning, backed with the lessons which should be held front-and-center from not just the dot-com crash, but also the financial crisis of ’08. One can’t shake the feeling that we’re precisely (once again) on that knife’s edge. And just the mere fact of the “markets” precariously balancing on that “edge” is beginning to draw blood. The tell-tale signs are everywhere. Below are only a few of the ever-growing list…

  • How does a GDP report of less than 1% allow any sane person to state, “Improving economy?” Trick question, it doesn’t unless you work on, or report on/for Wall Street.
  • How does the reflation trade transfer into a better economic outlook when all of the proposals so far have resulted in DOA status?
  • Explain the reasoning why U.S. “markets” rally off the news of a French primary, all the while its own Navy has sent an armada to the Korean peninsula threatening a nuclear standoff? “Bueller?”
  • What data (or better yet – logic) is the Federal Reserve using that warrants hiking rates twice in 90 days into an abysmal GDP report when its main reasoning for any/all monetary policy protocols are supposedly “data dependent?”
  • If one of the reasonings behind the Fed. hiking was to allow for the cutting if (or when) there was another emergency: How does that happen when the $Dollar is currently going in the exact opposite direction than it should as it hikes? Does that not imply the Fed. could by that very fact be the catalyst of a run n the $Dollar?
  • And if so? What then?

These are just a few of the very real questions that are now permeating the once “it’s different this time” argument for belief. The problem with it is – that’s what always gets said right before reality comes roaring back with a vengeance.

I can’t make this point enough: Only since the election of Donal Trump the “markets” have been on a rocket ride straight up. Before that moment (i.e., October) the Fed. Chair herself was musing the idea that the only way to heal the lasting effects still within the economy was to possibly run a “high pressure” policy stance. (i.e., uber-dovish)

That “ride” has (once again) allowed for the proclamation of the NASDAQ™ hitting never before seen in human history highs. (e.g., 6000+) All against a backdrop of declining GDP, along with declining revenue and more from many of its once star players. All while not accounting for (in my opinion) the effects of those 2 rate hikes. These have yet to be both factored, as well as felt, in the current “market.”

As of right now the “hopium” trade that is a direct result of the Trump “reflation” trade is still self-propelling – but it’s quickly running out of fuel as evidenced by not only none of the campaign promises being passed (i.e., Obamacare repeal and others) but a 1 week resolution was needed as to not shut the government down.

And the “markets” closed where?

Hint: Right back to where they were before when I stated “You are here.” And things have not gotten better, as a matter of fact, they are worse – far worse. (e.g., Unless you are one of those who like to buy-the-potential-nuclear-war-dip that is. And if so, take solace in your decisions, because the President keeps suggesting the idea is closer by the day.)

What the Fed. has unleashed into the “markets” via their ever evolving iterations of QE and its ever grateful HFT frontrunning brethren (see the now resigned Richmond Fed. president Lacker for clues) has been the only fuel as to power the markets where they now stand. What they’ve also done in unison is make everyone oblivious to the inherent dangers within.

Hedging and more has been a fool’s errand, and for many, an abject lesson in not only losing money, but status. (See the Hedge Fund industry for clues.) However, what might be even more indicative of that intervention is none other than the tech space, with all its unicorns, deca-corns, and even super-corns (yes, that’s now an actual term in “The Valley”) suddenly coming up lame in the unicorn stables of “Cha-ching!” Not to mention the IPO disasters and disappearance of those “Crushing it!” stock valuations. (See Snapchat™ for clues.)

This is where the beginning signs for caution are raised for anyone paying attention. And they are there – in spades. But there are also other areas to watch that help back up the hypothesis. And one of the first to show stress when things are not going as well as planned in “tech” land is: The Russell 2000™ e.g., the small business index.

The Russell is not only not showing the exuberance of the others, it’s beginning to show all the signs of rolling over. That is something to take notice in conjunction with the tech sector as it hits ever higher highs. How that dichotomy resolves is anyone’s guess at this moment. But trying to ascertain any clues is of a paramount importance in my opinion.

Another key earnings report that may give far more light than anyone estimates is coming up on Wednesday. That, of course, is Facebook™.

As of today all the estimates are that they’ll handily beat and some analysts are raising their targets. It’s very well they could, especially in today’s world of earnings reporting alchemy. However, one thing which caught my attention was the sudden touting a few weeks back that they had hit “5 Million advertisers.” Small businesses noted as the “key driver.”

“Sound great!” many are saying, and, in-truth, it is a worthy milestone. However, I see the timing as possibly a little suspect, here’s why… (I make this point for it has become near laughable how nearly all upcoming “tech” earnings reports now suddenly coincide with an ever-growing list of preceding announcements of grandiose ideas that are alluded to be right around the corner (like next week!) of flying cars, self driving trucks, rocket rides to space, virtual reality, just to name a few.)

Facebook as of late has been in the news with nothing but negative reports with a slew of horrendous acts being broadcast via their platform. e.g., Rape, kidnapping, beatings, and others. One of the concerns over all this (apart from the issue itself) was a possible backlash from potential advertisers. And who could blame them, and there lies the possible rub…

As I implied with the sudden “5 million” hoopla, what I’m asking is this: Is the addition of these stated 1 million plus new small business advertisers a replacing (therefore a diversion as to squash attention) for the potential of 1 or 2 (or more) large buyers who may have pulled ads?

In other words, if they’ve added so many “new” small business users – shouldn’t the ad revenue explode this report with all things being equal? I believe this is the metric to watch for.

How the numbers break down should be interesting. Google showed its own problem (via Youtube™) seemed to have been a one-off with no real impact. That said, I don’t think that comparison is the same for Facebook should the numbers show otherwise.

We shall see.

If there is a “hiccup” in Facebook’s reporting, coinciding with a realization that the reflation trade is all but DOA along with much of the legislation that was supposed to make it so. I believe we could be in for a very, very, interesting week ahead.

Then again, if a nuclear showdown does persist even more so than today?

I guess the “Buy The Nuclear Annihilation Dip” nonsense is back on.

© 2017 Mark St.Cyr