• Marc To Market
    08/29/2015 - 10:18
    Dollar recovered from the exaggerated panic at the start of last week.  Outlook is still constructive.  Here is an overview of the technical condition of currencies, bonds, oil , and S&...

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4 Out Of 5 Valuation Methodologies Agree: The "Market" Is Overvalued

Ignoring the ongoing onslaught of one-off items that plague earnings reports and make apples to apples comparisons practically impossible, the fact of the matter as the following chart from Goldman so decisively points out, despite the ever-present hope that it's different this time, recurring margins (long-believed to be the great white hope that earnings multiples will grow into), have collapsed to their lowest in 3 years. Combine that with slumping sales, record high leverage (providing little room for moar financial engineering), record high margin debt (no room for error), and a growing sentiment shift to 'knowing' that it's all artificial and BTFATH seems like a stretch to us. It would appear Goldman agrees as 4 out of the 5 valuation approaches they use signal stocks are expensive.



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ObamacAIR?

Is it really so different from this?



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The Distinction Between Human And Algo-Trading

The markets do not act like they once did. The trading in certain stocks is operating on time-scales so small that they cannot be in response to human thought. Not only are certain individuals able to access key information before others and so respond to news releases faster than the speed of light, but certain entities have free range to post and cancel orders on a microsecond basis, and queue-jump by shaving off (or adding on) tiny fractions of a penny from their orders. Stocks traded by humans tend to make significant moves on a timescale of minutes to days. Even when there is a news event that radically changes the apparent value of a company, if there are only humans in the market, the move takes time to occur. Below we a couple of charts



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Obamacare's Website Debacles Migrate To Paper, Pen And Phone

The rollout of Obamacare to date has been, as many predicted, the case study of everything that is wrong with a mandatory government-conceived, supervised and enforced program. Ignoring for a minute the daily embarrassment the Obama administration has to face with the well-documented failings of the HealthCare.gov website which on second glance should win Obama the Nobel Price for coding in Fortran (or  Cobol), and which seems set for a full-blown overhaul that would force a delay of the mandate whether Obama wants it or not, the several million "glitchy" lines of code have become the greatest gift the GOP could have asked for. A gift, which as the saying goes, keeps on giving. Because one of Obama's suggested loopholes has been to advise people who can't or won't sign up online, to do so using old-fashioned means: by paper, pen or phone. Unfortunately, that's where the rabbit hole just goes deeper, because as Politico reports, the glitches that started on line have rapidly shifted to the world of phone and mail, as virtually every pathway of enrolling into the enforced healthcare program is now hopelessly bottlenecked, if not entirely shut.



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To Boldly Go Where No Socialist Has Gone Before: Venezuela Creates Ministry Of Supreme Happiness

If one (such as everyone at the Federal Reserve) thought that the world's greatest artificial "wealth effect" would also generate the world's happiest people, one would be dead wrong.

Take Venezuela - Hugo Chavez' socialist paradise, which was recently inherited by Nicolas Maduro, when he proceeded to not only completely devalue the local currency but to engineer, through such exquisite central-planning that even the Politburo at the Marriner Eccles building is green with envy, the highest returning stock market on earth in 2013. Alas, either the locals are not quite as impressed with the Caracas' "stock market" YTD return of over 300% (which doesn't quite cover the loss in purchasing power for what things one can actually purchase in Venezuela), or the chronic toilet paper shortages remind them that the phrase socialist utopia is the world's greatest oxymoron. As a result, president Maduro has decided to boldly go where no socialist has gone before and has unveiled a new Vice Ministry of Supreme Social Happiness, whose primary purposes will be to enforce "happiness." In other words,  something along the lines of the beatings will continue until happiness returns...

 



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Feds Confiscate Record $29 Million BitCoin Booty From Dread Pirate's Hard Drive

When three weeks ago, the FBI arrested Ross William Ulbricht - the creator of the now shutdown Bitcoin-only "alternative" marketplace Silk Road also known as Dread Pirate Roberts, some were surprised that the Feds only confiscated about $3.6 million worth in Bitcoins from Ulbrecht. Proving all doubters wrong, and that creating the first "libertarian" marketplace not subject to any rules and regulations, not to mention fiat monetary constraints, actually does pay quite well, moments ago it was revealed that Federal prosecutors had found an additional $29 million, or 144,336 BitCoins, belonging to the Dread Pirate. According to Reuters, the booty was discovered on "computer hardware" belonging to Ulbricht. The repossessed electronic money, whose encryption technologies seem to leave a bit to be desired, has now been impounded and will likely remain on the FBI's hard disks indefinitely.



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The New Normal?

This artificial prosperity plan for Wall Street has the added benefit of allowing the captured politicians in Washington D.C. to continue their $1 trillion per year deficit spending with no consequences for their squandering of future generations’ wealth. Bernanke and Yellen will never taper, because they can’t. The Fed balance sheet will continue to grow by at least $1 trillion per year until they crash the financial system again. Except this time, there will be no money printing solution. We are all trapped like rats in this monetary experiment being conducted by evil mad scientists. No one will get out alive. Welcome to the new normal. Now eat your cheese.



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An Open Letter To Russell Brand

Russell Brand's excited exchange with stoic Brit Jeremy Paxman this week is a must-see "exchange of new ideas vs old." Among Brand's clearer moments were "stop voting, stop pretending, wake up. Be in reality now, time to be in reality now. Why vote, we know it's not going to make any difference, we know that already." The excellent discourse has prompted this open letter supporting the comedian.. concluding so legitimately nowadays, with Upton Sinclair's infamous quote "It is difficult to get a man to understand something, when his salary depends upon his not understanding it."



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Guest Post: The Fed Can Only Fail

The basic predicament we are in is that the current crop of leaders in the halls of monetary and political power do not appear to understand the dimensions of our situation. The mind-boggling part about all this is that it's not really all that hard to grasp. Our collective predicament is simply this: Nothing can grow forever. Sooner or later everything must cease growing or it will exhaust its environs and thereby destroy itself.  The Fed is busy doing everything in its considerable power to get credit (that is, debt) growing again so that we can get back to what they consider to be "normal." But the problem is -- or the predicament I should more accurately say -- is that the recent past was not normal.



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Sugar: Sweet With A Bitter "Economic" Aftertaste

Sugar may be sweet, but excess consumption leaves a bitter aftertaste: millions of people worldwide are affected by type II diabetes or obesity, costing the global healthcare system billions of dollars every year. As the Credit Suisse Research Institute's 2013 study "Sugar: Consumption at a Crossroad" found, close to 90% of general practitioners in the US, Europe and Asia believe excess sugar consumption is linked to the sharp growth in these health problems.



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Crime Is Getting Worse: Violent Crime In America Increased By 15% Last Year

If your neighborhood is not as safe as it used to be, then you have something in common with the rest of the country.  All over America, crime is on the rise.  According to a government survey that was just released, violent crime in the United States increased by 15 percent last year, and property crime was up by 12 percent.  If violent crime keeps increasing at this rate, it will approximately double in just six years.  But as we wrote about the other day, when the next major economic downturn strikes it will probably greatly accelerate the growth of the crime rate in this country.  Desperate people do desperate things, and as you will read about below, there are people out there that are already stealing entire truckloads of food. 



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Guest Post: Is Obama Through?

Is Obama through? That is, have his lies and incompetence finally caught up with him and emasculated what remains of his effectiveness. Has he taken the concept of “lame duck” to new levels? Dan Henninger describes Obama’s credibility problem: "Bluntly, Mr. Obama’s partners are concluding that they cannot do business with him. They don’t trust him." Henninger’s observation does not bode well for US – International relations. Nor is it likely to provide support for new domestic initiatives. The International ramifications are especially dangerous.



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Ron Paul's New Monetary System "Get The Government Out Of The Way"

As part of Mike Maloney's recent documentary, Ron Paul was interviewed to discuss the monetary system that he proposes. He begins... "Just get the government out-of-the-way, you know, and let the markets decide and apply the rules of  ’no counterfeiting’  to the people and to the government..." as he goes on to discuss everything from The Founding Fathers to how a gold standard could work...



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60% Of 401(k) Participants Accumulated More Debt Than Retirement Savings

The average 401(k) and other defined contribution (DC) plan participant now defers over 8% of their annual income toward retirement savings through their plan and social security taxes, making it one of the largest expenses for households. However, as HelloWallet found, retirement readiness remains stubbornly low: the typical worker near retirement only has about 2 years of replacement income saved, or about 15 years short of the median lifespan post-retirement. One explanation for the stubbornly low retirement readiness of workers may be an increase in household debt. With more household income going to pay off debt, households may have less money to save and face higher costs of living in retirement. In fact, over 60% of workers accumulated more debt than they contributed to retirement savings between 2010 and 2011.



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Thomas Sowell Fears "Race Hustling" Consequences

You don't hear about racial "leaders" like Al Sharpton and Jesse Jackson among Asians or Asian-Americans. Here and there you may see some irresponsible academics peddling that line in the classroom -- some of whom are of Asian ancestry, since no race of human beings is completely lacking in fools. But they do not get the same attention, or draw the same following, as race hustlers operating in black or Hispanic communities. By and large, Asian youngsters rise and fly. No one can claim that there was no anti-Semitism in America, any more than they can claim that there was never any anti-Asian discrimination. There was plenty of both. But that is very different from following "leaders" whose message would only keep them grounded, after the skies were open to them as never before.



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