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  • The Online Ad-Fraud Game is Ending

    You’ll have to look to find it, and the articles are behind paywalls.
    They’re not being trumpeted all over financial media — but they should be.
    What article? That Unilever is threatening to pull online ad campaigns stating that they believe half or more of the “clicks” are fraud. It was in the UK media — quietly — this weekend.
    In other words, robots click them — not humans, who actually watch the ads.
    This story ought to be front-page news. It’s not, and the financial media will not cover it the way it should.
    Here’s why it should be:
    1. This is not new. These issues have been known and talked about for more than a year. It was news last year, and then it quietly “went away.” Gee, you don’t think Zuckerpig laid into the financial media, do you? Naw, nobody would ever to do that when if their little ad game blew up in their face the stock price of Facepig would be zero. Consider that if half of the online advertising revenue is false then the actual value of said platforms is nil since their cost of operation exceeds the true human-generated revenue. That makes all of these so-called “businesses” worthless.
    2. Nobody has an incentive on a platform like Facebook, where posters do not get a cut of the revenue, to stick an army of robots out there and click the ads, except for Facebook itself. This is decidedly not true for Google’s “Adsense” platform of course, or Youtubes, or whoever else where publishers get a piece of pie. There, if your traffic is high enough, there’s an economic incentive to cheat. For someone like me it’s not because the amount of money involved is too small, but for someone with a site that’s garnering tens or hundreds of thousands a month in payouts you can easily cover the cost of a robot or three (hundred) to generate some false traffic.

    This post was published at Market-Ticker on 2017-06-26.

  • Understanding The Cryptocurrency Boom

    I recently came across a December 1996 San Jose Mercury News article on tech pioneers’ attempts to carry the pre-browser Internet’s bulletin board community vibe over to the new-fangled World Wide Web.
    In effect, the article is talking about social media a decade before MySpace and Facebook and 15 years before the maturation of social media.
    (Apple was $25 per share in December 1996. Adjusted for splits, that’s about the cost of a cup of coffee.)
    So what’s the point of digging up this ancient tech history?
    Technology changes in ways that are difficult to predict, even to visionaries who understand present-day technologies. The sources of great future fortunes are only visible in a rearview mirror. Many of the tech and biotech companies listed in the financial pages of December 1996 no longer exist. Their industries changed, and they vanished or were bought up, often for pennies on the dollar of their heyday valuations.

    This post was published at PeakProsperity on Friday, June 23, 2017.

  • Gold and Silver Are “Asymmetric” Trades

    An asymmetric trade is a situation where investing a relatively small amount of money holds the potential of yielding a profit many times the amount of the original sum at risk. In other words, where the risk to reward is skewed massively in the direction of reward.
    This took place recently with Bitcoin (BTC). Is this conceptually different from bets made years ago on Microsoft, Cisco, Amazon, or Facebook, which yielded hundreds of percent profit to intrepid investors? Does it have relevance to the possible returns during the next few years for those who hold physical gold and silver?
    I would answer “yes” and “yes.”
    The current “mania” in the cryptocurrency space – most notably BTC and Ethereum (ETH), along with a few other “app coins” – offers an in-future lesson for a similar setup in the precious metals. (For more on the above topic, see “The Blockchain: A Gold and Silver Launchpad?”
    First: This may be the first time ever that an investment “story” has had the ear and investment dollars of a global audience on a simultaneous basis. Individual investors, hedge funds, businesses, and even countries, are sending a torrent of funds, with the effect, to paraphrase Doug Casey’s famous remark, of “trying to push the power of the Hoover Dam through a garden hose.”

    This post was published at GoldSeek on Friday, 23 June 2017.

  • Democratic Election Commissioner Demands Probe Of Russian Links To Facebook, Drudge, HuffPo; “Faith In Democracy” Shaken

    In what she has called an “all-hands-on-deck moment for our democracy,” Federal Election Commissioner Ellen Weintraub has inserted herself into the fading ‘Russia-did-it’ narrative demanding the federal government’s probe into alleged Russian influence is widened to foreign companies and internet sites that take political ads, like Facebook or the Drudge Report.

    This post was published at Zero Hedge on Jun 22, 2017.

  • Off the Deep End

    I just looked at the charts here at 6am Pacific time. I shouldn’t be surpised… Here, have a cup of coffee. I sure needed one.
    I thought you might have friends or relatives who could use a bit of perspective–from reasonable ground that can bear scrutiny. And for this blog, I suspect this is another sermon for the choir, for most.
    In late October of 2016, I foolishly posted my reasons for voting for Trump on Facebook for all my friends & family to read. They did. And they proceeded to beat the hell out of me, or stand by and watch. No doubt most thought, ‘Don’t know what’s wrong with that boy.’ ‘He’s gone off the deep end’
    Private conversations with a few have smoothed over some differences. Others have been silent, showing civility and restraint, but still perhaps wondering what went wrong with me. ‘Civility’ of course is simply not telling others what you really think about them, choosing instead to focus on shared interests, like the weather. But going off the deep end can certainly lead the wrong direction – drowning in a dark pool of the unknown where things lurk, and long tentacles rise to wrap around your ankle and quickly pull you under. So I read the objections of my friends and relatives as a well-intentioned effort to help me back to rationality.
    Most lakes have a slope down to the deep end – and this is one of them.
    I was thirty-two years old when I started back to college in 1990 after 12 years in the electrical trade, with union membership, a solid democrat perspective on politics, and a union-inspired socialistic preference for economics. Liberal progressivism had not developed to today’s level by the time I graduated for the 3rd time ten years later. I had earned a PhD and changed careers to become a college teacher. Repulsed by the Clinton scandals and opposing the drain of our government budgets by social programs (as championed by democrats), I started voting for republicans. My socialistic views softened, giving way to a rational capitalism, although I still favor taking care of folks in a bind through job training and employment assistance. I landed a position teaching in college, earning tenure, advancing toward full professorship, beginning to publish articles in our discipline’s top journals.
    Then 2008 happenend.

    This post was published at TF Metals Report on Wednesday, June 21, 2017.

  • FANG Falters As Best-Performing Tech Fund Manager Warns “When Things Are This Elevated, It’s Best To Be Cautious”

    Joshua K. Spencer has managed his T. Rowe Price Global Technology Fund to become the best-performing mutual fund in the past five years with big bets on Amazon and Tesla is now selling some big winners… and it’s sending FANTASY stocks lower…
    FANG stocks are rolling over…
    And FANTASIA (Facebook, Amazon, Netflix, Tesla, Alphabet, SalesForce, Intel, and Apple) stocks are falling back from their 50% retracement…

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

  • Tech Stocks Slammed Last Week: How Scary Is This Market?

    Mark this date on your calendar: Friday, June 9, 2017. That’s the date that the big downward move in the largest tech stocks began. The day also saw a rotation into big bank stocks (which is like swapping a land mine for a hand grenade – there’s going to be an explosion, it’s just a matter of degree).
    The selloff on Friday was triggered by a research report from Robert Boroujerdi of Goldman Sachs. The report compared today’s FAAMG tech stocks (Facebook, Apple, Amazon, Microsoft and Google-parent Alphabet) to the highfliers in the tech bubble that crashed in 2000: Microsoft, Cisco, Intel, Oracle and Lucent.
    Boroujerdi used a lexicon that the market did not want to hear: ‘death,’ ‘extremes,’ and ‘difficult to decipher risk narratives.’ The exact sentence went like this:
    ‘This outperformance, driven by secular growth and the death of the reflation narrative, has created positioning extremes, factor crowding and difficult-to-decipher risk narratives (e.g. FAAMG’s realized volatility is now below that of Staples and Utilities).

    This post was published at Wall Street On Parade on June 19, 2017.

  • What Happens When the Machines Start Selling?

    The death of fundamental analysis.
    The infamous FAANG stocks – Facebook, Apple, Amazon, Netflix, and Google’s parent Alphabet – along with other ‘tech’ stocks have been getting ‘hammered,’ to use a term that for now exaggerates their ‘plight.’ The FAANG stocks are down between 1.7% and 2.5% at the moment and between 5.5% and 11% since their peak on June 8. Given how far these stocks have soared over the past few years, this selloff is just a barely visible dip.
    But fundamental analysis has long been helpless in explaining the surge in stocks. The shares of Amazon now sport a Price-Earnings ratio of 180, when classic fundamental analyses might lose interest at a PE ratio of 18 for the profit-challenged growth company that has been around for over two decades. For them, the stock price might have to come down 90% before it makes sense.
    Or Netflix, with a PE ratio of 195. Or companies like Tesla. Forget a PE ratio. There are no earnings. The company might never make any money. Its sales are so minuscule in the overall US automotive market that they get lost as a rounding error. It bought Elon Musk’s failing solar-panel company as a way to bail it out. And the battery-cell technology Tesla uses comes from Panasonic. So what should a company like this be worth? Fundamental analysis has been completely irrelevant: Tesla’s current stock price gives it a market capitalization of $61 billion.

    This post was published at Wolf Street by Wolf Richter /Jun 15, 2017.

  • 1984 Was a Warning, Not an Instruction Manual

    A little bit of paranoia is always healthy.
    In the 1980s, the totalitarian fear was that some overenthusiastic government agent would go to the library and pull your library card to see if you were reading seditious texts.
    Seems a bit quaint now, doesn’t it?
    It didn’t at the time.
    Of course, the East German Stasi went to those lengths to spy on its citizens, but there was never any real danger of it happening in the US.
    Fast forward to today.
    Facebook knows who your friends, friends of friends, and acquaintances are. It knows what you look like, and what your friends and family look like. It knows what TV shows you watch, what music you listen to, and in all likelihood, your political activities.

    This post was published at Mauldin Economics on JUNE 15, 2017.

  • Goldman: “The Last Time The Market Acted Like This Was At The Tech Bubble Peak”

    Yesterday’s dramatic “rotational” divergence between tech stocks and the rest of the market, which as Sentiment Trader pointed out the only time in history when the Dow Jones closed at a new all time high while the Nasdaq dropped 2% was on April 14, 1999, stunned many and prompted Bloomberg to write that “a crack has finally formed in the foundation of the U. S. bull market. Now investors must decide if any structural damage has been done.”
    This year’s hottest stocks, companies from Facebook Inc. and Apple Inc. to Netflix Inc. and Nvidia Corp., buckled Friday, spurring losses that sent the Nasdaq 100 to its biggest drop relative to the Dow Jones Industrial Average since 2008. An alternative explanation is that the purge in tech stocks, responsible for half the market’s gains in 2017…

    This post was published at Zero Hedge on Jun 10, 2017.

  • Doug Noland: Crowded Longs, Shorts and a New Z1

    This is a syndicated repost courtesy of Credit Bubble Bulletin . To view original, click here. Reposted with permission.
    It was a week that saw Mario Draghi cling stubbornly to ultra-dovish monetary policy, the UK’s Brexit strategy thrown into even greater disarray after Prime Minister May’s failed election gambit, and the former Director of the FBI essentially testify that our President is a scoundrel. And then there’s the Middle East…
    In the midst of it all, after trading at a 24-year low 9.37 Friday morning, an abrupt reversal had the VIX ending the week at 10.70. Looking at the S&P500’s slight (0.3%) decline for the week, one might be tempted to think comfortably ‘boring.’ Market internals, though, were anything but boring or comforting. Friday’s session saw the Nasdaq 100 (NDX) swing wildly. After trading to an all-time high 5,898 in the first hour of U. S. trading, the index sank over 4.0% to 5,658 before closing the session down 2.44% at 5,742. Amazon traded in an intraday range of 1013 to 927. Looking at ‘FANG’ plus Microsoft and Apple, major market cap was evaporating in a hurry. By the end of Friday’s session, Facebook had declined 3.3%, Apple 3.9%, Amazon 3.2%, Microsoft 2.3%, Netflix 4.7% and Google 3.4%. The semiconductors (SOX) traded at a multi-year high 1,149 early in Friday’s session, then sank 7.0% before recovering somewhat to close the day down 4.3% at 1,090. Biotech (BTK) rose 1.5% in the morning to an all-time high and then closed the session slightly lower.

    This post was published at Wall Street Examiner by Doug Noland ‘ June 10, 2017.

  • FANG Stocks Slammed After Goldman Warns Of “Valuation Air-Pocket”

    Update: FANG Stocks are getting hammered today.
    The fascination with the influence of a handful of giant tech stocks on the overall markets continued overnight, when one day after Bank of America found that the tech sector is now the “most overweight it has ever been“, surpassing even the record clustering into tech during the dot com bubble, Goldman issued a report looking at the outsized influence of the five tech stocks in question which it dubs FAAMG – Facebook, Amazon, Apple, Microsoft and Alphabet, which have collectively added a total of $600 bn of market cap this year, “or the equivalent GDP of Hong Kong and South Africa combined.”
    This is also the group of names which we reported last month is what virtually every brand name hedge fund purchased in the first quarter based on 13F filings, as active managers abandoned “value” names and factors and rushed into “momentum” and “growth.”

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

  • Central Banks Now Own Stocks And Bonds Worth Trillions – And They Could Crash The Markets By Selling Them

    Have you ever wondered why stocks just seem to keep going up no matter what happens? For years, financial markets have been behaving in ways that seem to defy any rational explanation, but once you understand the role that central banks have been playing everything begins to make sense. In the aftermath of the great financial crisis of 2008, global central banks began to buy stocks, bonds and other financial assets in very large quantities and they haven’t stopped since. In fact, as you will see below, global central banks are on pace to buy 3.6 trillion dollars worth of stocks and bonds this year alone. At this point, the Swiss National Bank owns more publicly-traded shares of Facebook than Mark Zuckerberg does, and the Bank of Japan is now a top-five owner in 81 different large Japanese firms. These global central banks are shamelessly pumping up global stock markets, but because they now have such vast holdings they could also cause a devastating global stock market crash simply by starting to sell off their portfolios.
    Over the years I have often been asked about the ‘plunge protection team’, but the truth is that global central banks are the real ‘plunge protection team’. If stocks start surging higher on any particular day for seemingly no reason, it is probably the work of a central bank. Because they can inject billions of dollars into the markets whenever they want, that essentially allows them to ‘play god’ and move the markets in any direction that they please.
    But of course what they have done is essentially destroy the marketplace. A ‘free market’ for stocks basically no longer exists because of all this central bank manipulation. I really like how Bruce Wilds made this point…

    This post was published at The Economic Collapse Blog on June 7th, 2017.

  • Asian Metals Market Update: June-07-2017

    It seems all terror attacks in democratic nations happen before an election. I rarely find any terrorist attack after an election. I am confident that once UK and German elections are over, Europe will not see terror attacks for quite a long time. In Europe or the UK all terrorists were known to the law enforcement agencies and still they slept. It is very easy to radicalize anyone these days. Give a dissatisfied person/unemployed person a mobile phone with an internet connection and continuously send him links for radicalization. The person will get radicalized very quickly. Some get self-radicalized due to the content provided by facebook, twitter, whatsapp and other social networking platforms. This is a side effect of social networking. This is causing a big demographic change in the world. It is very easy to show all lies as truth in the virtual world. Islamic religious heads are doing the same along with NATO nations. This is also one key reason why gold has to rise in the long run and the US dollar/paper assets needs to be dumped.
    In India social networks (whatsapp, facebook etc) are changing the behavioral aspects of people, demand of any consumer product gets affected by social media. Social media is now a big cause for divorce in India and is growing. Productivity in offices gets reduced due to increased social media usage. However businesses are also lowering selling costs due to social media publicity. Demographic disruptions caused by social media will only increase the demand for physical gold in India.

    This post was published at GoldSeek on 7 June 2017.

  • Doug Noland: Liquidity Trade

    It’s not quite 1999 at this point, but it’s been moving in that direction. In about five months’ time, the Nasdaq 100 (NDX) has posted a gain of 20.5%. NDX stocks with greater than 50% y-t-d gains include Vertex Pharmaceuticals (74%), Activision (64%), Tesla (60%), JD.com (58%), Wynn Resorts (54%), CSX (53%), Autodesk (52%), Liberty Ventures (51%) and Lam Research (50%). Amazon’s 34% 2017 rise has increased market capitalization to $481bn (P/E 189). Apple’s 33% gain pushed its market cap to $806bn. Facebook has gained 33% y-t-d, Google 26%, and Netflix 32%.
    There’s an interesting similarity to the 1999 backdrop: A Federal Reserve (and global central bank community) way too timid in implementing a ‘tightening cycle’ despite bubbling asset markets. Fed funds began 1999 at 4.75%, after rates were slashed 75 bps late in 1998 in response to the Russia/LTCM financial crisis. Despite clearly overheated securities markets, rates ended 1999 at 5.5% – the same level they were for much of 1998. The Fed was content to let the speculative Bubble run, with memories of the previous year’s near financial meltdown clear in their minds. Moreover, Y2K uncertainties provided a convenient excuse to accommodate the raging Bubble.
    On the back of the People’s Bank of China’s forceful interventions, the renminbi traded this week to the strongest level since November. Speculative markets have come to welcome heavy-handed Chinese intervention. The assumption is that Chinese officials are absolutely determined to hold bursting Bubble dynamics at bay.

    This post was published at Credit Bubble Bulletin

  • Puerto Rico’s Population Drain Since 2013 Equivalent To US Losing 20 Million People

    Puerto Rico’s economic decline and, now bankruptcy, has triggered an astonishing exodus as thousands flee the commonwealth in search of economic opportunity in the Continental US, Bloomberg reported.
    The population has been declining rapidly. The island has lost 2 percent of its people in each of the past three years, a comparable departure in the 50 states would mean 18 million people moving out since 2013. About 400,000 fewer Puerto Ricans live on an island of 3.4 million today compared with a decade ago, when its economy began contracting, Bloomberg reports.
    ‘I had to choose for my family,” said Aledie Amariah Navas Nazario, 39, a pediatric pulmonologist, told Bloomberg. She left behind young asthma patients when she, her husband and two small daughters moved to Orlando, Florida.
    Reasons for leaving were compelling enough for Navas Nazario, who treated asthma on an island where it’s more prevalent than anywhere else in the U. S.
    Puerto Rico’s economy had taken yet another leg down, and she was worried about her future income because of uncertainty about health insurance.
    ‘I’m sad about not being able to take care of those kids anymore,” said Navas Nazario, who keeps in touch with former patients on Facebook. ‘You have to make a hard decision to leave relationships with friends and family just to get out, just because you need a better life.”

    This post was published at Zero Hedge on Jun 2, 2017.

  • Lance Roberts: This Market Is Like A Tanker Of Gasoline

    Lance Roberts, chief investment strategist of Clarity Financial and chief editor of Real Investment Advice has authored a number of impressive recent reports identifying potential failure points in today’s financial markets.
    In this week’s podcast, Lance explains how the massive flood of investment capital into passively-managed ETFs, along with record amounts of margin debt, has the potential to set the markets afire:
    Fundamentally, there’s nothing different in today’s markets because, at the end of the day, they are about evaluations, earnings — those types of things. Technically, the market is very different today because of quantitative easing, computerized trading etc.
    What we see are two things happening, in particular, that people should be paying attention to. One is that investors are herding into passively-managed ETFs now, which is creating a dislocation between the underlying realities of individual stocks and their prices, because the piling into ETFs is requiring stocks like Facebook, Amazon, and Google to be bought in much greater volumes than they otherwise would. And people are making an assumption that there will always a buyer for every seller in the market.

    This post was published at PeakProsperity on Tuesday, May 30, 2017.

  • The First Crack Appears In The Second Tech Bubble

    By now everyone knows it: what is going on with a handful of tech stocks is remarkably similar to the irrationally exuberant events from the first tech bubble at the turn of the century.
    Four weeks ago, Goldman pointed out that in 2017, just 10 companies are responsible for half of the entire S&P’s rally YTD with the top five, AAPL, FB, AMZN, GOOGL, and MSFT – have accounted for nearly 40% of returns.
    Shortly thereafter, when looking at the latest set of 13F filings we found that virtually every prominent hedge fund has piled into the most prominent tech names: As Bloomberg noted, with an average gain of 26% , “it’s hard to overstate the influence of just six stocks on the U. S. stock market in the first quarter: Facebook Inc., Apple Inc., Amazon.com Inc., Microsoft Corp., Alphabet Inc. and Netflix Inc.”
    This was shown just days later by Bank of America which showed that annualized tech inflows are now the strongest this century, running at an unprecedented 25% of AUM, which BofA dubbed a “sign of renewed exuberance.”

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

  • These ‘High-Five’ Stocks Are Having a Massive Influence on the Market

    Apple (AAPL), Alphabet (GOOG), Microsoft (MSFT), Amazon.com (AMZN), and Facebook (FB) &mndash; these five companies are the five largest companies in the S&P 500 based on market capitalization. In aggregate, their market value is $2.93 trillion!
    Why are we bothering to point out their collective market capitalization? Because size matters greatly in a market-capitalization weighted index like the S&P 500 (and Nasdaq 100 for that matter).
    There is more to it than that, though, for individual investors to consider.
    Following Directions
    So, just how big are these five companies combined? Here are some eye-opening facts for perspective:

    This post was published at FinancialSense on 05/26/2017.

  • Free Money: Potential Presidential Candidate Mark Zuckerberg Suggests That All Americans Should Get A ‘Universal Basic Income’

    Should everyone in America receive a ‘basic income’ directly from the federal government? Considering the fact that we are already 20 trillion dollars in debt, such a concept may sound quite foolish to many of you, but this is an idea that is really starting to gain traction in leftist circles. In fact, Facebook CEO Mark Zuckerberg suggested that this was something that we should ‘explore’ during the commencement speech that he just delivered at Harvard. For quite a while it has been obvious that Zuckerberg is very strongly considering a run for the presidency in 2020, but up until just recently we haven’t had many clues about where he would stand on particular issues. If he is serious about proposing a universal basic income for all Americans, that would make Zuckerberg very appealing to the far left voters that flocked to the Bernie Sanders campaign.
    Yesterday, I discussed the fact that the number of Americans that are receiving money from the government each month has reached an all-time high, but Zuckerberg would take things much farther. According to Zuckerberg, society would be far better off if everyone got an income from the government…
    ‘Every generation expands its definition of equality. Now it’s time for our generation to define a new social contract,’ Zuckerberg said during his speech. ‘We should have a society that measures progress not by economic metrics like GDP but by how many of us have a role we find meaningful. We should explore ideas like universal basic income to make sure everyone has a cushion to try new ideas.’

    This post was published at The Economic Collapse Blog on May 25th, 2017.