Archive - Nov 18, 2013

Back in August, we joked that in the Tesla press-release the one most often used word was Non-GAAP (43 times). Conveniently, we provided a word cloud of the company's Q2 release for the visual learners to grasp just this. That TESLA's earnings were an epic non-GAAP adjustment joke was only further cemented by the fact that the company itself provided a bridge between its GAAP and Non-GAAP earnings.  Now, the euphoria is over and  the story is different, as not only has the company's self-reported and erroneous record of making the safest car in the world gone up in flames, but the momentum appears terminally broken and following today's most recent 11% drop, TSLA stock could soon be headed for double digit territory again. More importantly, however, the end of the momentum story means that those who care about such anachronisms as fundamentals can once again look beneath the hood of TSLA to get the true story of what is really going. There, with the help of Bloomberg's forensic accounting sleuth Jonathan Weil one uncovers nothing but cockroaches.

Carl Icahn, who is currently speaking at the Reuters Global Investment Outlook Summit, just poured cold water over the Fed's 16,000 DJIA EOD price target.

ICAHN: ‘VERY CAUTIOUS ON EQUITIES, MARKET COULD EASILY HAVE BIG DROP'
ICAHN SAYS MANY COS. EARNINGS ARE A ‘MIRAGE,’ REUTERS SAYS
ICAHN: DOESN’T WANT FIGHT WITH APPLE,NO PLANS TO WALK AWAY

But... but.. two POMOs... Still, not too late for K-Fed and his merry unlimited balance sheet trading men to pull a record third POMO today and keep the "wealth effect" illusion going. Was it just a month ago that we warned "Carl Icahn's nightmare" was about to occur? - as the credit market became saturated...

It’s almost never openly admitted in public, but the reality is that few if any investors actually beat the market in the long-term. The reason for this is that most of the investment strategies employed by investors (professional or amateur) simply do not make money.

"Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies" is the title of today's Senate hearing (from Homeland Security) on th eperils of Bitcoin. We are sure the exaggeration and exasperation will run high as Government offers up its Financial Crimes (and missing and exploited children) directors, and the de-centralized unregulated crypto-currency faces them down...

As H.L. Mencken opined, 'The most dangerous man to any government is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, and intolerable.' It is no wonder that, according to a Gallup Poll conducted in early October, a record-low 14% of Americans thought that the country was headed in the right direction, down from 30% in September. That's the biggest single-month drop in the poll since the shutdown of 1990. Some 78% think the country is on the wrong track. Simply put, Faber explains, it is most unlikely that US economic growth will surprise on the upside in the next few years. It is more likely there will be negative surprises.

600 is a Bitcoin Bubble and Dow 16000 is Efficient Markets at work?

Today, with the traditional one year delay (we assume they had to give it the benefit of the doubt), the mainstream media once again catches up to what Zero Hedge readers knew over a year ago, and blasts the outright failure that is Abenomics, but not only in the US (with the domestic honor falling to the WSJ), but also domestically, in a truly damning op-ed in the Japan Times. We will let readers peruse the WSJ's "Japan's Banks Find It Hard to Lend Easy Money: Dearth of Borrowers Illustrates Difficulty in Japan's Program to Increase Money Supply" on their own. It summarizes one aspect of what we have been warning about - namely the blocked monetary pipeline, something the US has been fighting with for the past five years, and will continue fighting as long as QE continues simply because the "solution" to the problem, i.e., even more QE, just makes the problem worse. We will however, show the one chart summary which captures all the major failures of the BOJ quite succinctly.

This is dog...

It may appear to be safe for everyone to be on the same side of the boat, but the gunwale is awfully close to the water.

Germany has neither a minimum wage nor a government. Someday it might have both.

Well you buy what's working, right? Don't fight the Fed? Oh wait...

Somehow, Fed head Bill Dudley has managed to encompass the entire "we must keep the foot to the floor" premise of the Fed in one mind-bending sentence:

• *DUDLEY SEES 'POSSIBILITY OF SOME UNFORESEEN SHOCK'

So - based on an "unforeseen" shock - which he "sees", and while there are "nascent signs the economy may be doing better", the Fed should remain as exceptionally easy just in case... (asteroid? alien invasion? West Coast quake?)

The CFTC has won a consent order against MF Global requiring it to pay $1.212 billion in restitution to customers and a further $100 million civil penalty:

• *MF GLOBAL TO PAY $1.2 BLN RESTITUTION, $100M PENALTY
• *CFTC:PENALTY TO BE PAID AFTER MF FULLY PAYS CUSTOMERS/CREDITORS
• *CFTC:LITIGATION CONTINUES VS CORZINE,O'BRIEN,MF GLOBAL HOLDINGS
• *CFTC: MF GLOBAL ADMITS TO ALLEGATIONS OF LIABILITY IN ORDER

The big question is - of course - where is the money coming from?

It it walks like a duck, quacks like a duck and looks like a duck... Is it really a platypus? After all, this time is different... Right?

As Silk Road emerged from the "dark-web", other sites have appeared offering services that are frowned upon by most. As Forbes reports, perhaps the most-disturbing is "The Assassination Market" run by a pseudnymous Kuwabatake Sanjuro. The site, remarkably, a crowdfunding service that lets anyone anonymously contribute bitcoins towards a bounty on the head of any government official–a kind of Kickstarter for political assassinations. As Forbes reports, NSA Director Alexander and President Obama have a BTC40 bounty (~$24,000) but the highest bounty - perhaps not entirely surprising - is BTC 124.14 (~$75,000) for none other than Ben Bernanke. Sanjuro's raison d'etre is chilling, "as a few politicians gets offed and they realize they’ve lost the war on privacy, the killings can stop and we can transition to a phase of peace, privacy and laissez-faire."