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  • Former Soros Analyst Warns on Growing Risks

    Despite last Friday’s pullback, nearly all markets have been heading higher with no end in sight.
    Market strategist John Roque at Key Square Capital Management recently spoke with Financial Sense Newshour to discuss his outlook and a number of risks building under the surface.
    For related podcast and slides, see Interview With Key Square’s John Roque.
    Tech Market Concentration
    The former strategist for Soros Fund Management said even though bears have been wrong for years and it’s pretty hard to fight the upward trend, we do see high levels of concentration that are concerning.
    For example, if you look at Apple, Amazon, Facebook, Google, and Microsoft, they now make up almost 15% of the S&P 500. At the 2000 peak, Cisco, Intel, Microsoft, and Oracle made up 15.4%.

    This post was published at FinancialSense on 12/07/2017.


  • Goodbye, Net Neutrality. Hello, Liberty.

    The New York Times has published a screed with this title: The Internet Is Dying. Repealing Net Neutrality Hastens That Death.
    Let me remind you of the basic rule of titling breathless articles: begin with the phrase “the death of” or “the end of.” When you read such a phrase, you can be sure that whatever it is, it is not dying. Whatever it has been in the past, it is likely to be in the future. It is not facing the end.
    Here is the logic of the screed.
    The internet is dying. Sure, technically, the internet still works. Pull up Facebook on your phone and you will still see your second cousin’s baby pictures. But that isn’t really the internet. It’s not the open, anyone-can-build-it network of the 1990s and early 2000s, the product of technologies created over decades through government funding and academic research, the network that helped undo Microsoft’s stranglehold on the tech business and gave us upstarts like Amazon, Google, Facebook and Netflix.
    Nope, that freewheeling internet has been dying a slow death – and a vote next month by the Federal Communications Commission to undo net neutrality would be the final pillow in its face.
    Net neutrality is intended to prevent companies that provide internet service from offering preferential treatment to certain content over their lines. The rules prevent, for instance, AT&T from charging a fee to companies that want to stream high-definition videos to people.
    The phrase “preferential treatment” is easy to define: high bid wins. It is the organizational principle of the auction.
    The mainstream media are Keynesian to the core. The fundamental principle of the free market is this: high monetary bid wins. It is the principle of the auction. Liberals hate most auctions. Yes, they like auctions of incredibly overpriced and incomparably ugly art. They don’t get upset when somebody pays $150 million to buy a piece of tripe painted by Picasso. That’s their kind of stupidity. They like it. But they don’t want the common people to have access to open markets. Open markets are only for the elite, in the view of America’s Left.

    This post was published at Gary North on November 30, 2017.


  • Did Janet Yellen Just Recommend Buying Bitcoin

    Janet Yellen’s last semi-annual testimony before Congress as Fed Chair has just concluded, and as usual it was filled with long-winded platitudes, which were enough to make the blood of anyone actually listening to her slow-motion drawl, come to a boil.
    For one, Yellen’s hypocrisy hit bitcoinian levels when she had the temerity to say that she is ‘very disturbed’ about the trend toward rising inequality, noting that the central bank only has a ‘blunt tool’ that can’t be used to target certain groups. She’s right: the “blunt tool”, also known as a money printer, is can – and has – been repeatedly used to target a certain group: the ultra wealthy, i.e., the 0.1%, those who as Credit Suisse showed two weeks ago, have never been wealthier.
    And just to make sure all your blood has boiled over, Yellen added that the Fed is very focused on ‘very disturbing long-term trends’ in inequality adding that “our own focus”’ is on taking those trends and studying them… and making them bigger than ever she should have also added.
    Demonstrating her extensive skills of pointing out the obvious, Yellen also said that ‘we’re suffering from slow productivity growth,’ and there should be a focus on how that can be improved. It appears that the Fed is unaware that most employees spend several hours a day on Facebook, LinkedIn and SnapChat; it also appears that the Fed is unaware that most employers are aware of this, and is why there has been so little wage growth to “reward” this collapse in productivity.

    This post was published at Zero Hedge on 29, 2017.


  • 26/11/17: FAANGS+ Brewing up another markets storm

    One of the key signals of a systemic mispricing of financial assets is concentration risk. I wrote about this in a number of posts on the blog, so no need repeating the obvious. Here is the latest fragment of evidence suggesting that we – the global financial markets and their investors – are at or near the top of froth when it comes to ‘irrational exuberance’: So what should investors do? Some lessons from the GFC that can help are summarized here: And some additional warning signs of the bubble are summarized here: Quote: “…our new Delirious Dozen consists of the FAANGs (Facebook, Apple, Amazon, Netflix and Google) plus seven additional high flyers (Tesla, NVIDIA, Salesforce, Alibaba, UnitedHealth, Home Depot and Broadcom).”

    This post was published at True Economics on Sunday, November 26, 2017.


  • ThanksFRAUD Day

    I often write on the plethora of US-based frauds and scams, both political and business-oriented.
    Fraud is the most-profitable business model today, and has been for close to two decades. It is why I’m out of the business world and will not re-enter it. It is why despite having what I believe is a ground-breaking home automation, security and control application that runs on $35 computers (which means there’s a hell of an opportunity to bundle the software with those and sell ’em hella-cheap, undercutting all the other guys plus having a nice installation business to go with it) I am only willing to do so on a “buy it all and you do it” basis.
    Companies like Amazon exist with the sort of “valuation” they have only because of these schemes and scams. Cost-shifting (otherwise known as cross-subsidization) for the purpose of destroying competitors is a felony and has been for over 100 years (15 USC Chapter 1) whether you succeed or not. That is, the very attempt is a criminal act. Yet despite continual evidence in the form of quarterly filings that document the company does not make money (on an all-cost-in basis) on their product sales along with near-daily professions of the “next” company being “Amazoned” (that is, put out of business or severely harmed by this practice) in the major business media on television and in print, along with open cheering on of such conduct by same not one single indictment has ever issued.
    Facebook, it appears from my work, to be deliberately detecting the use of ad blockers and then gaming their software so as to just meet the so-called “deliverable” standard for ads to people who have blocked them. That is, since I have a blocker on my desktop I would not normally generate any revenue for Facebook from advertisers. But I have observed, in a 100% repeatable manner, that a “display” ad will remain visible until the minimum pixel count and time is met (1 second, etc) and then disappear and a video ad will do so for 2 seconds with 100% pixels — and then likewise disappear. In other words the company is billing the advertisers for content they know damn well I blocked and never see. What do you call billing someone for something they don’t get on purpose, because that’s what it looks like to me. Oh, and how many billions have been taken from advertisers this way? Nobody but Zuckerpig knows but I bet it’s not a small number.

    This post was published at Market-Ticker on 2017-11-22.


  • The Global Domination of Big Tech

    The big four – Apple, Amazon, Facebook, and Google – have literally changed the face of the world economy, and are collectively responsible for creating a combined market capitalization equivalent to the GDP of India with a population the size of the Lower East Side of Manhattan.
    This, according to Scott Galloway, professor of marketing at NYU Stern, founder of L2 Inc. and author of The Four: The Hidden DNA of Apple, Amazon, Facebook, and Google, means we need to watch these four – and other potential disruptors – very closely, as they point the way toward understanding the economy as a whole and where innovation will lead us.
    How Dominant Are They?
    It’s easy to compare these companies to industrial powerhouses that existed at the turn of the Twentieth Century. But, if we look at them from the perspective of market share, the picture turns out a bit different.
    Except for Google, which now controls 90 percent of the market for internet searches – now a larger market by dollar volume than the advertising market of any nation with the exception of the United States – Facebook, Amazon, and Apple don’t enjoy excessive market share, Galloway noted. Amazon, for example, captures around 4 percent of retail, and Apple only has 15 percent share of the phone market.

    This post was published at FinancialSense on 11/21/2017.


  • Tencent Overtakes Facebook As Hong Kong Stocks Flash-Smash Overnight

    Hang Seng futures exploded over 5% higher as after hours trading began last night, then crashed back to unchanged as the underlying cash index hit its highest since Nov 2007 on the heels of a surge to new record highs for Chinese tech giant Tencent – which is now larger than Facebook by market cap.
    Contracts for November delivery rose to 31,341 at 5:15pm for a 5.1% premium over the underlying gauge…
    Hong Kong’s benchmark equity measure advanced 1.9% on Tuesday to its highest close since November 2007, as WSJ reports, one day after its market capitalization surpassed $500 billion, the company behind messaging app WeChat rallied by another 2.4% on Tuesday, lifting its market value to $523 billion.

    This post was published at Zero Hedge on Nov 21, 2017.


  • The Approaching Silicon Valley Meltdown

    To say that we are living through precarious times seems to be an understatement. Whether one lives in the so moniker’d ‘developed world, emerging, or frontier’ there seems to be one constant currently: No one seems to be able to accurately ponder what tomorrow may bring, whether its political, economical, social, or combination there of.
    The only thing constant right now is one of two things: Either, further instability is on the horizon. Or, complete and utter chaos is already knocking on the door. (See Kim Jong-un or Robert Mugabe for clues.)
    Stability, the once deemed word for progress throughout civilized society now seems, to have devolved to mean, at what point of the instability around them they’re currently coping with. i.e., If you’re currently muddling through economically while dodging being a statistic, as the term goes, that currently means you, or your situation, is currently ‘stable.’
    This now applies to not only people, but business, as well as politics worldwide. If you think I’m exaggerating? Hint: Hollywood. Need I say more?
    However, there has been one outlier, for the most part, which seemed to skirt around all the current chaos, relatively unscathed. That would be Silicon Valley and all its ancillary provinces aka ‘Disruptive Tech.’
    So far the coveted group known collectively as ‘FAANG’ (e.g., Facebook™, Apple™, Amazon™, Netflix™, Google™) seems to have held the ‘barbarians at the gates’ known as investors relatively at bay, or ‘stable’ in their positions, if you will. What has been, anything but, is their cohort of IPO brethren that were supposed to have joined them.

    This post was published at Zero Hedge on Nov 20, 2017.


  • How A Half-Educated Tech Elite Delivered Us Into This Chaos

    If our supersmart tech leaders knew a bit more about history or philosophy we wouldn’t be in the mess we’re in now…
    One of the biggest puzzles about our current predicament with fake news and the weaponisation of social media is why the folks who built this technology are so taken aback by what has happened. Exhibit A is the founder of Facebook, Mark Zuckerberg, whose political education I recently chronicled. But he’s not alone. In fact I’d say he is quite representative of many of the biggest movers and shakers in the tech world. We have a burgeoning genre of ‘OMG, what have we done?’ angst coming from former Facebook and Google employees who have begun to realise that the cool stuff they worked on might have had, well, antisocial consequences.
    Put simply, what Google and Facebook have built is a pair of amazingly sophisticated, computer-driven engines for extracting users’ personal information and data trails, refining them for sale to advertisers in high-speed data-trading auctions that are entirely unregulated and opaque to everyone except the companies themselves.
    The purpose of this infrastructure was to enable companies to target people with carefully customised commercial messages and, as far as we know, they are pretty good at that. (Though some advertisers are beginning to wonder if these systems are quite as good as Google and Facebook claim.) And in doing this, Zuckerberg, Google co-founders Larry Page and Sergey Brin and co wrote themselves licences to print money and build insanely profitable companies.
    It never seems to have occurred to them that their advertising engines could also be used to deliver precisely targeted ideological and political messages to voters.

    This post was published at Zero Hedge on Nov 19, 2017.


  • Russia-Gate Spreads To Europe

    Ever since the U. S. government dangled $160 million last December to combat Russian propaganda and disinformation, obscure academics and eager think tanks have been lining up for a shot at the loot, an unseemly rush to profit that is spreading the Russia-gate hysteria beyond the United States to Europe…
    ***
    Now, it seems that every development, which is unwelcomed by the Establishment – from Brexit to the Catalonia independence referendum – gets blamed on Russia! Russia! Russia!
    The methodology of these ‘studies’ is to find some Twitter accounts or Facebook pages somehow ‘linked’ to Russia (although it’s never exactly clear how that is determined) and complain about the ‘Russian-linked’ comments on political developments in the West. The assumption is that the gullible people of the United States, United Kingdom and Catalonia were either waiting for some secret Kremlin guidance to decide how to vote or were easily duped.

    This post was published at Zero Hedge on Nov 18, 2017.


  • The Demise of Dissent: Why the Web Is Becoming Homogenized

    In other words, we’ll be left with officially generated and sanctioned fake news and “approved” dissent.
    We’ve all heard that the problem with the web is fake news, i.e. unsubstantiated or erroneous content that’s designed to mislead or sow confusion.
    The problem isn’t just fake news–it’s the homogenization of the web, that is, the elimination or marginalization of independent voices of skepticism and dissent.
    There are four drivers of this homogenization:
    1. The suppression of dissent under the guise of ridding the web of propaganda and fake news–in other words, dissent is labeled fake news as a cover for silencing critics and skeptics.
    2. The sharp decline of advertising revenues flowing to web publishers, both major outlets and small independent publishers like Of Two Minds.
    3. The majority of advert revenues now flow into the coffers of the quasi-monopolies Facebook and Google.
    4. Publishers are increasingly dependent on these quasi-monopolies for readers and visibility: any publisher who runs afoul of Facebook and Google and is sent to Digital Siberia effectively vanishes.

    This post was published at Charles Hugh Smith on FRIDAY, NOVEMBER 17, 2017.


  • San Francisco housing market near bubble risk according to UBS report. Majority of Bay Area renters plan to leave.

    The San Francisco housing market is the most overvalued market in the United States. People over inflate the market because tech is sexy and cool and many are chasing the next Google, Amazon, or Facebook. Everyone wants to strike it rich with as little work as possible. And what better way to do that than in real estate? In San Francisco the typical crap shack will cost you $1.2 to $1.5 million. The response from many housing cheerleaders is the typical logic you see in manias – hey, someone paid for it! You also get similar stories from the tulip bubble, dotcom bubble, and other bubbles where the justification for higher prices is simply that some other sucker paid for it at that level. And there is now signs that we may be in a rental bubble in the Bay Area. 83 percent of renters surveyed in the Bay Area said they plan on leaving. Tie that in with the UBS Global Real Estate Index showing that San Francisco is dangerously close to bubble territory and you have indicators that something is rotten in SF.
    Riding the tech wave
    Some people understand the business cycle and the waves that ripple through our economy. The housing market and economy has been booming since 2009. People forget that recessions happen. And now that we have added millions of renter households with higher rents, what happens when that next correction hits? While you can sit in a home and let it flow into foreclosure like many did during the housing crisis, there is a smaller window for renters should cash flow issues occur.

    This post was published at Doctor Housing Bubble on November 16th, 2017.


  • NFL Boycott Intensifies On Veterans Day Weekend After Goodell Announces No Change To Anthem Policy

    The NFL announced Saturday that there isn’t going to be any change to its national anthem policy, despite an escalating boycott of games over Veterans Day weekend.
    The Facebook page ‘Boycott the NFL’ has asked all its followers to celebrate Veterans Day weekend by refusing to watch NFL games ‘in solidarity with veterans around the country,’ given that players are still engaging in national anthem protests and NFL policy remains the same, The Washington Times reports.

    This post was published at Zero Hedge on Nov 12, 2017.


  • How Facebook & Google Threaten Public Health… And Democracy

    Authored by Roger McNamee, op-ed via The Guardian,
    The sad truth is that Facebook and Google have behaved irresponsibly in the pursuit of massive profits. And this has come at a cost to our health…
    In an interview this week with Axios, Facebook’s original president, Sean Parker, admitted that the company intentionally sought to addict users and expressed regret at the damage being inflicted on children.
    This admission, by one of the architects of Facebook, comes on the heels of last week’s hearings by Congressional committees about Russian interference in the 2016 election, where the general counsels of Facebook, Alphabet (parent of Google and YouTube), and Twitter attempted to deflect responsibility for manipulation of their platforms.
    The term ‘addiction’ is no exaggeration. The average consumer checks his or her smartphone 150 times a day, making more than 2,000 swipes and touches. The applications they use most frequently are owned by Facebook and Alphabet, and the usage of those products is still increasing.
    In terms of scale, Facebook and YouTube are similar to Christianity and Islam respectively. More than 2 billion people use Facebook every month, 1.3 billion check in every day. More than 1.5 billion people use YouTube. Other services owned by these companies also have user populations of 1 billion or more.
    Facebook and Alphabet are huge because users are willing to trade privacy and openness for ‘convenient and free.’

    This post was published at Zero Hedge on Nov 11, 2017.


  • Facebook Founder Warns “God Only Knows What It’s Doing To Kids’ Brains”

    38-year-old founding president of Facebook, Sean Parker, was uncharacteristically frank about his creation in an interview with Axios. So much so in fact that he concluded, Mark Zuckerberg will probably block his account after reading this.
    ***
    Confirming every ‘big brother’ conspiracy there is about the social media giant, Parker explained how social networks purposely hook users and potentially hurt our brains…
    “When Facebook was getting going, I had these people who would come up to me and they would say, ‘I’m not on social media.’ And I would say, ‘OK. You know, you will be.’ And then they would say, ‘No, no, no. I value my real-life interactions. I value the moment. I value presence. I value intimacy.’ And I would say, … ‘We’ll get you eventually.’”
    “I don’t know if I really understood the consequences of what I was saying, because [of] the unintended consequences of a network when it grows to a billion or 2 billion people and … it literally changes your relationship with society, with each other … It probably interferes with productivity in weird ways. God only knows what it’s doing to our children’s brains.”
    “The thought process that went into building these applications, Facebook being the first of them, … was all about: ‘How do we consume as much of your time and conscious attention as possible?’”

    This post was published at Zero Hedge on Nov 9, 2017.


  • How Snap Just Gave a Middle Finger to its Voteless Shareholders

    They don’t need to know, Snap says. Tencent rues the day it bought a 12% stake.
    Tuesday evening, Snap Inc., parent of Snapchat, reported a very ugly quarter, and its shares tanked in late trading. This morning, perhaps to stem the slide, it disclosed in a separate SEC filing that Chinese internet giant Tencent Holdings had acquired 145.78 million shares of SNAP, the crappy non-voting Class A common stock. This briefly boosted shares in early trading, until people started reading the fine print: The purchases were made in the past, and Snap didn’t notify its Class A shareholders because they were voteless and didn’t need to be notified.
    Shares are currently down 16%. Tencent joins those who’re ruing the day they bought these misbegotten shares.
    In its filings, Snap regularly lists Tencent as one of its competitors, along with Facebook, Apple, Google, Twitter, and others. Tencent is also a pre-IPO investor in Snap, dating to a 2013 fundraising round.
    Today’s disclosure said: ‘In November 2017, Tencent Holdings Limited notified us that it, together with its affiliates, acquired 145,778,246 shares of our non-voting Class A common stock via open market purchases.’

    This post was published at Wolf Street on Nov 8, 2017.


  • 7/11/17: To Fine Gael or not: Employment Stats and Labour Force

    Recently, Fine Gael party PR machine promoted as a core economic policy achievement since 2011 election the dramatic reduction in Ireland’s unemployment rate. And in fact, they are correct to both, highlight the strong performance of the Irish economy in this area and take (some) credit for it. The FG-led governments of the recent years have been quite positive in terms of their policies supporting (or at least not hampering) jobs creation by the MNCs. Of course, they deserve no accolades for jobs creation by the SMEs (which were effectively turned into cash cows for local and central governments in the absence of any government power over taxing MNCs), nor do they deserve any credit for the significant help in creating MNCs’ jobs that Ireland got from abroad.
    Now, to briefly explain what I mean by it: several key external factors helped stimulate MNCs-led new jobs creation in Ireland. Let me name a few.
    ECB. By unleashing a massive QE campaign, Mario Draghi effectively underwritten solvency of the Irish State overnight. Which means that Dublin could continue avoiding collecting taxes due from the MNCs. And better, Mr Draghi’s policies also created a massive carry trade pipeline for MNCs converting earnings into corporate debt in Euro area markets. The combined effect of the QE has been a boom in ‘investment’ into Ireland, and with it, a boom of jobs. OECD. That’s right, by initiating the BEPS corporation tax reform process, the arch-nemesis of Irish tax optimisers turned out to be their arch blesser. OECD devised a system of taxation that at least partially, and at least in theory, assesses tax burdens due on individual corporations in relation physical tangible activities these corporations carry out in each OECD country. Tangible physical activity can involve physical capital investment (hence U. S. MNCs rapidly swallowing up new and old buildings in Ireland, that’s right – a new tax offset), an intangible Intellectual Property ‘capital’ (yep, all hail the Glorious Knowledge Development Box), and… err… employment (that is why Facebook et al are rushing to shift more young Spaniards and Portuguese, French and Dutch, Ukrainians and Italians, Poles and Swedes… into Dublin, despite the fact they have no where to live in the city).

    This post was published at True Economics on Tuesday, November 7, 2017.


  • Russian Content May Have Reached 126 Million Facebook Users, There Is Just One Catch

    One month ago, the media world and political punditry was in a furore after Facebook revealed that some 470 alleged Russian troll accounts had paid Facebook a whopping $100,000 to purchase 3,000 advertisements potentially influencing the outcome of the election (even though many of the ads “showed support for Clinton” and only half ran before the actual election). The furore did not last long: gradually the story fizzled, before becoming a watercooler joke that Russia had managed to buy the outcome of the US presidential election for a whopping 100 grand – which would make Vladimir Putin not only a propaganda genius of the highest order, but the best damn advertising mastermind to ever live, generating the highest ad IRR in history. One can only imagine what insidious, civilzation-ending thoughts he could implant in America’s fragile, feeble minds for $1 million, or gasp… 10 million dollars (about 1% of what Hillary spent).
    So, eager to keep the “Russia interfered in US elections” meme going (not to be confused with what the Washington Post one year ago titled “The long history of the U. S. interfering with elections elsewhere“), tomorrow Facebook’s general counsel, Colin Stretch , together with his peers from Google and Twitter, will will sit before the Senate judiciary subcommittee on crime and terrorism and try to fascinate the public with some far bigger numbers, while hopefully also pitching the vast reach Facebook and other social media have. To do that, Facebook will say that it estimates that a grand total of 126 million people may have seen content posted by Russian-backed accounts over more than two years that, as the WSJ puts it, “sought to disrupt American society”, according to a prepared copy of the remarks obtained by The Wall Street Journal.
    How is this number different from the far smaller number quoted previously when referring only to the Russian trolls’ alleged ad outreach? Because this time, Facebook will count virtually every post created by these alleged Russian troll farms as direct form of propaganda: as the WSJ explains, tomorrow’s definition of “reach” will include such content as “free posts and events listings.”

    This post was published at Zero Hedge on Oct 30, 2017.


  • Fragmenting Countries, Part 1: Catalonia Is Just The Beginning

    Picture a life where you do most of your shopping through Amazon.com and the local farmers’ market, most of your communicating through Facebook and Instagram, much of your travel via Uber, and much of your saving and transacting with bitcoin, gold and silver.
    Do you really need an immense, distant, and rapacious central government? Maybe not. Perhaps your region or ethnic group would be better off forming its own independent country.
    This question is being asked – and answered – in a growing number of places where distinct cultures and ethnic groups within larger nations now see their government as more burden than benefit. The result: Secession movements are moving from the fringe to mainstream.

    This post was published at DollarCollapse on OCTOBER 30, 2017.


  • Why Cities All Across America Are Suddenly Buying Up Trailer Parks

    Much like the historic run that nearly resulted in the collapse of the global financial system in 2009, home prices in the U. S. are once again looking more like an Amazon or Facebook stock price chart than a stable store of value that should probably grow roughly inline with overall inflation.

    This post was published at Zero Hedge on Oct 29, 2017.