Thursday, September 24, 2015

Mass layoffs the key to prosperity

2015 has been a banner year for mass layoffs as the Fed gets ready to hike rates to slow down the global economic boom. There is so much demand for waiters, bartenders, and part time workers that we are lucky large corporations are grudgingly freeing up so much labor. Let's take a quick tally for this year, so far:

HP: 55,000
Oil field services: 51,000
Barclay's: 30,000 by 2017
Caterpillar: 10,000 jobs by 2018
Microsoft: 7,800
JP Morgan: 5,000

My only concern is that the layoffs will not come fast enough with the pain spread out until 2018. We need MORE BARISTAS NOW, damnit! Right now, someone is standing in line at Starbucks longer than they should, probably making them late to a big layoff meeting.

Wednesday, September 23, 2015

How do those lies taste?

Rex Nutting wrote a personal anecdote about the VW emissions scandal today.
I’ve been covering the world of business for 20 years, so I’m not shocked when a major multinational corporation is caught cutting corners, lying, cheating and defrauding the very customers who’ve built their brand. Corporations aren’t warm and fuzzy creatures that need our love and forgiveness.

Still, this lie hurts. It always does when it’s your life and your money that have been stolen from you.

As a once-proud VW owner, what do I do? Get rid of the car? And buy what? If I can’t trust VW, can I trust Ford? Or Nissan? Or Tesla? Can I trust the Environmental Protection Agency to uncover the companies’ lies on the cars I’d choose between?
It hurts when your life and your money have been stolen from you??? HAHAHAHAHA!!! Oh, so rich. How old are you again? Have you not been paying attention to the weekly global banking scandals, the rigging of every market, the quantitative ex nihilo credit creation, Chinese economic data, Enron, BP, Catholic priest predators, LIBOR, et al? We live in a Linda Green world where lies and deceit are the coin of the realm. P.T. Barnum runs the financial system, the government, and crony corporations. Honesty and straight dealing are as rare as rhinos. Everything in life is caveat emptor, every transaction, every "vote", every earnings report, and everything you read.

Do I sound a little jaded? I prefer the term streetwise. It's OK, Rex. So you've gone from proud VW owner to dirty polluter. The world will survive. Just wake up and smell the diesel.

Wednesday, September 16, 2015

How to make money from the Fed’s interest-rate decision

Marketwatch is back with more sure thing investment advice. I noticed they left off the "Opinion" part of the title in the fluffy headline at the top of the home page. The gist is right in the first paragraph...
Making money from the Fed’s interest-rate meeting this week should be easy: Just do the opposite of what most investors do immediately after the decision is announced.
Genius! Who would ever have thought of that? Wait, someone else probably already thought of that, especially now that it is the top story on the home page of Marketwatch.

Wall Street: All right. Where is the poison? The battle of wits has begun. It ends when you decide and we both drink, and find out who is right... and who is dead.

Investor: But it's so simple. All I have to do is divine from what I know of you: are you the sort of man who would put the poison into his own goblet or his enemy's? Now, a clever man would put the poison into his own goblet, because he would know that only a great fool would reach for what he was given. I am not a great fool, so I can clearly not choose the wine in front of you. But you must have known I was not a great fool, you would have counted on it, so I can clearly not choose the wine in front of me.

Wall Street: You've made your decision then?

Investor: Not remotely. Because iocane comes from Australia, as everyone knows, and Australia is entirely peopled with criminals, and criminals are used to having people not trust them, as you are not trusted by me, so I can clearly not choose the wine in front of you.

Wall Street: Truly, you have a dizzying intellect.

Investor: Wait till I get going! Now, where was I?

Wall Street: Australia.

Investor: Yes, Australia. And you must have suspected I would have known the powder's origin, so I can clearly not choose the wine in front of me.
Wall Street: You're just stalling now.

Investor: You'd like to think that, wouldn't you? You've beaten my giant, which means you're exceptionally strong, so you could've put the poison in your own goblet, trusting on your strength to save you, so I can clearly not choose the wine in front of you. But, you've also bested my Spaniard, which means you must have studied, and in studying you must have learned that man is mortal, so you would have put the poison as far from yourself as possible, so I can clearly not choose the wine in front of me.

Wall Street: You're trying to trick me into giving away something. It won't work.


Wall Street: Then make your choice.

Investor: I will, and I choose - What in the world can that be?

Wall Street: [Investor gestures up and away from the table. Wall Street looks. Investor swaps the goblets]
Wall Street: What? Where? I don't see anything.

Investor: Well, I - I could have sworn I saw something. No matter. First, let's drink. Me from my glass, and you from yours.

Wall Street, Investor: [Investor and the Wall Street drink]
Wall Street: You guessed wrong.

Investor: You only think I guessed wrong! That's what's so funny! I switched glasses when your back was turned! Ha ha! You fool! You fell victim to one of the classic blunders - The most famous of which is "never get involved in a land war in Asia" - but only slightly less well-known is this: "Never go in against a Sicilian when death is on the line"! Ha ha ha ha ha ha ha! Ha ha ha ha ha ha ha! Ha ha ha...
Investor: [Investor stops suddenly, his smile frozen on his face and falls to the ground dead]

Buttercup: And to think, all that time it was your cup that was poisoned.
Wall Street: They were both poisoned. I spent the last few years building up an immunity to iocane powder.

Tuesday, August 25, 2015

You're crazy if you bought Apple stock today on this guy's advice!

Jeff Reeves from Marketwatch offered this tender nugget to all investors, regardless of their financial condition, wealth, age, gender, or religious affiliation:

If you don’t buy Apple’s stock today, you’re crazy

Well, if you took that advice at the open when there was monster rally, you would have bought it at $111.07 a share. A huge discount and once-in-a-lifetime opportunity to pick up Apple shares on the cheap. After all, since the Monday stock meltdown, Apple stock could only go up. If you thought otherwise, Jeff claimed you were crazy.

It closed at $103.74 and was down further in after hours trading. If I had taken Jeff's advice and sunk my life savings into Apple stock, because you be crazy not to, I would be down $7.33 a share, or 6.5% of my life savings. OUCH!!

Update: Well, all MarketWatch writers aren't drinking the same KoolAid.

No, Apple isn't a slam dunk

Monday, August 24, 2015

Timeless investing advice from finance web sites

With drama in the air over recent stock market drops, financial web sites are quick to help out those in distress with timeless advice. The market is not even in correction territory, much less a bear market, but investors need some salve for their 401Ks. Yahoo Finance chimes in with:
Here's how smart investors will react to today's market drama

Who doesn't want to be a smart investor? Their advice is to "just hang in there". That certainly is good advice for money managers who get their cut no matter what stocks do. So, if you lost money on stocks, you still get to pay management fees. That's smart.

Marketwatch offers:
Most top market timers are bullish on stocks

"...on average, the timers in the top quartile are recommending an equity exposure level that is 84 percentage points higher than among the bottom timers — who themselves, on average, are completely out of stocks."

See, the top quartile timers recommend an 84 percent higher equity exposure. What more do you need to know. Equity exposure for the win!

The Wall Street Journal notes:
Trading in Stocks, ETFs Was Halted More Than 1,200 Times Early Monday

Clearly a great sign for stock owners because if trading gets halted, no one else can sell a stock you own and make the price go down. There is a lot of safety built in to the very fabric of the market. What if you want to sell? Why would you ever want to sell? You would just force a stock to be halted. It's really better if no one ever sells.

Since I don't own any stocks, I was not really comforted by this priceless advice. However, if your nest egg is in stocks, you can sleep like a baby tonight.

Tuesday, July 28, 2015

Twitter Fritter v.7

Ah, another quarter rolls by and Twitter burns another $136,000,000 using generally accepted accounting principles.

Are you a Twitter shareholder, hanging on to those shares "worth" $36.54 each? The company issued a fresh $175,000,000 worth of shares this quarter to pay employees and executives. Who slurped up all those new electronic shares of a company that has never earned one penny in profit? Lucky Twitter shareholders. Smart move!!

If you want to hitch your wagon to a hot Dot Com 3.0 company, I have a digital start up called Here's the idea. Anyone can login to my server and post some text (limited to 160 characters), then everyone else can see their post. Meanwhile, the company will digitally projectile vomit roughly five million shares a quarter that lucky investors can buy. I only plan to issue $100,000,000 in shares each quarter to pay for my living and operating expenses and I promise I will lose less than $136,000,000 each quarter using GAAP. Note: This is not investment advice. Management makes no claims on forward looking vomit or projectile vomit.

See also: Twitter spends 35% of revenue on stock-based compensation

Monday, July 13, 2015

July 13, 2015 - Greek total surrender

After all the bluster and referendum, Greece gave in to total and utter surrender to their creditors. The details of the deal are horrific for Greece, supposedly mortgaging airplanes, airports, islands, and other assets to secure the third bailout. They will also be forced to pass specific legislation on a tight timeline. All humiliating, much like the loser of a bloody war.

The punchline is that the math of the deal will not work for long. The Greek debt will head up toward 400 billion euros, nearly double their GDP. Good luck squeezing more taxes out of an economy where the banks remain closed. The pain for the Greek people will be extreme and it would have been had they left the euro. The difference is that this crisis will be back again until and unless there is a large write down of the debt. There is no hope and no future in Greece. Only the grinding Euro boot on their face. Oh my.