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5 Things To Ponder: Hookers, Bubbles & Memorial Day

Tyler Durden's picture




 

Submitted by Lance Roberts of STA Wealth Management,

Well, it is Friday and that means it is time to gather my reading list for this weekend.  This is particularly the case since it is a long Memorial Day weekend. 

Before I jump into this weekend's hodge podge of things to think about, I do want to urge you to remember that Memorial Day is more than just a day to break out the beer, have a backyard cookout and enjoy your families.  It is also a day to remember those that have fought and died for the freedoms that we have so willing discarded in recent years in the name of National Security such as our right to privacy and freedoms of speech and religion. 

Maybe this is even more the case now as we watch the issues surrounding the V.A. hospitals unfolding. As an American, we should all be somewhat ashamed of the way that our veterans have been treated, they deserved better. So, remember to take a moment this weekend and remember those that have fallen in the name of freedom, liberty and the pursuit of happiness.

"Words are even more feeble on this Memorial Day, for the sight before us is that of a strong and good nation that stands in silence and remembers those were loved and who, in return, loved their countrymen enough to die for them."

Ronald Reagan

1) Creating Systemic Poverty by Jeffrey Snider via Alhambra Partners

"Regardless, the idea of growth in the number of households has taken root with very good reason. The dynamic nature of humanity should at some point revisit this most basic piece of economic growth. Yet, there are negating factors to consider. After all, there is an equally powerful reason that household creation has lagged so severely since this “cycle” began (annual formation was about 1.2 million per year between 1960 and 2006; dropping to only 550k during this “recovery”). By that, I mean systemic impoverishment.

 

There is a world of difference as to why economic activity takes place. Artificial, credit-stained activity will never be more than a fleeting substitute for fundamental demand. And when the artificiality inevitably subsides, what is left is far worse than not having entertained it at the start. That too is a testament against the illicit concept of neutrality. We may all be dead in the long run, but it used to be nice to enjoy the fruits of free economic expansion whilst awaiting the unavoidable."

2) Hookers And Blow To Boost GDP via Zero Hedge

There is the bizarre, the absolutely unbelievable and the fantastical.  Then there are things you just can't make up.  This is one of them.

"A year ago it was the US which first "boosted" America's GDP by $500 billion - literally out of thin air - when it arbitrarily decided to include 'intangibles' to the components that 'make up' GDP (in the process cutting over 5% from the US Debt/GDP ratio). Then Spain joined the fray. Then Greece. Then the UK. Then Nigeria, which showed those developed Keynesian basket cases how it is really done, when it doubled the size of its GDP overnight when it decided to change the base year of its GDP calculations. Now it is Italy's turn, and like everything else Italy does, this latest "revision" of the definition of GDP easily wins in the style points category. As Bloomberg reports, "Italy will include prostitution and illegal drug sales in the gross domestic product calculation this year." Yup: blow and hookers. And that, ladies and gents, how it's done."

 

3) A Look At Record Profit Margins by Larry Swedroe via ETF.com

"You’re probably thinking that record profit margins are a good thing. The companies within the S&P 500 Index reported operating margins of 9.5 percent for the quarter ending June 2013. That was just short of the 20-year high of 9.6 percent reached in the third quarter of 2006. Today the figure is at about 10 percent.

 

The problem is that profit margins in the past have exhibited a strong historical tendency to “revert to the mean”—above-average margins have tended to fall and below-average margins have tended to rise. According to U.S. Commerce data, the average profit margin since 1952 is about 6 percent.

 

Clearly, if profit margins reverted to their mean, even if the process took several years, unless sales growth increased rapidly and/or price-to-earnings ratios rose to offset the drop in margins, the stock market could take a sharp hit.

And that begs the question, Should you be worried?"

Also Read:  Corporate Profits And Market Crashes by Cris Sheridan via Financial Sense

4) The Stock Market Isn't Where You Get Rich by Cullen Roche via Pragmatic Capitalism

"On average, the stock market generates a real, real return (that’s the after taxes, fees and inflation return, i.e., the 'in your actual pocket' return) of about 6.75% over the long-term. So, if you’re a young aspiring “investor” who allocates, say, $10,000 to the S&P 500 at the age of 25 you can expect to have a whopping $70,000 or so after 30 years (assuming no further contributions of course). Not exactly the “get rich” plan you thought, eh?

 

But that’s the idea that is continually pounded into our heads through various media sources – this myth that the stock market is somewhere where you get rich. The reality is exactly backwards. Most of the time what you’re buying when you buy stocks on a secondary exchange is a claim on assets that made SOMEONE ELSE rich."

On average, the stock market generates a real, real return (that’s the after taxes, fees and inflation return, ie, the “in your actual pocket” return) of about 6.75% over the long-term.  So, if you’re a young aspiring “investor” who allocates, say, $10,000 to the S&P 500 at the age of 25 you can expect to have a whopping $70,000 or so after 30 years (assuming no further contributions of course).  Not exactly the “get rich” plan you thought, eh?  But that’s the idea that is continually pounded into our heads through various media sources – this myth that the stock market is somewhere where you get rich.  The reality is exactly backwards.  Most of the time what you’re buying when you buy stocks on a secondary exchange is a claim on assets that made SOMEONE ELSE rich.
Read more at http://pragcap.com/the-stock-market-isnt-where-you-get-rich#RBTRPUPf4CpmCcr1.99
On average, the stock market generates a real, real return (that’s the after taxes, fees and inflation return, ie, the “in your actual pocket” return) of about 6.75% over the long-term.  So, if you’re a young aspiring “investor” who allocates, say, $10,000 to the S&P 500 at the age of 25 you can expect to have a whopping $70,000 or so after 30 years (assuming no further contributions of course).  Not exactly the “get rich” plan you thought, eh?  But that’s the idea that is continually pounded into our heads through various media sources – this myth that the stock market is somewhere where you get rich.  The reality is exactly backwards.  Most of the time what you’re buying when you buy stocks on a secondary exchange is a claim on assets that made SOMEONE ELSE rich.
Read more at http://pragcap.com/the-stock-market-isnt-where-you-get-rich#RBTRPUPf4CpmCcr1.99
On average, the stock market generates a real, real return (that’s the after taxes, fees and inflation return, ie, the “in your actual pocket” return) of about 6.75% over the long-term.  So, if you’re a young aspiring “investor” who allocates, say, $10,000 to the S&P 500 at the age of 25 you can expect to have a whopping $70,000 or so after 30 years (assuming no further contributions of course).  Not exactly the “get rich” plan you thought, eh?  But that’s the idea that is continually pounded into our heads through various media sources – this myth that the stock market is somewhere where you get rich.  The reality is exactly backwards.  Most of the time what you’re buying when you buy stocks on a secondary exchange is a claim on assets that made SOMEONE ELSE rich.
Read more at http://pragcap.com/the-stock-market-isnt-where-you-get-rich#RBTRPUPf4CpmCcr1.99

 5) Signs Of A Bubble? Retail Investors Jump In by Michael Regan via Bloomberg

"Despite talk of flagging investor confidence and increased scrutiny of market participants, data from retail brokers show that the retail crowd is more engaged than ever,” Avramovic wrote in a report last week.

 

Combined daily average revenue trades at E*Trade Financial Corp., Charles Schwab Corp. and TD Ameritrade Holding Corp. rose 24 percent in the first quarter from the previous year and reached the highest level ever, according to Raymond James Financial Inc. analyst Patrick O’Shaughnessy.

 

All of this could conjure up the old Wall Street trope that retail investors are always late to the bull-market party and their exuberance is a sign that the keg is almost kicked. Not to mention that U.S. equity mutual funds are winning net inflows for a second year after six years of withdrawals."

Also Read: Penny Stocks Fuel Big Dollar Dreams via WSJ

Chart Of The Day: Bubble Watch

Yesterday, I got to visit with the portfolio manager of a major global equity income fund. As he was making his case as to why Europe still had "legs" from an investment standpoint. It was at this point that he directed my attention to the recovery in M&A activity as support for his point.

Merger-Activity-052314

With margin debt just off record levels and complacency near historic highs, I was more concerned about the surge in domestic M&A activity. Such activity is generally focused near the ends of economic cycles as other investment opportunities wane.  The last time the U.S. was at these levels was in 2006.  Of course, this time could be different.

 

 

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Fri, 05/23/2014 - 16:32 | 4789698 bam
bam's picture

haha love that TED clip. is it just me or does TED sounds like peter griffen from family guy

Fri, 05/23/2014 - 16:36 | 4789710 RaiZH
RaiZH's picture

Yup, they both have the same voice actor (Seth MacFarlane).

Fri, 05/23/2014 - 16:45 | 4789733 knukles
knukles's picture

I just opened a fortune cookie I got with my Chinese lunch.  The fortune said "Soon some stranger will be coming into your life to beat you into agreeing with him" so I flipped it over and my lucky number for the day was "Fuck all nothing, mate"

Fri, 05/23/2014 - 18:01 | 4789895 duo
duo's picture

I had an HR guy tell me about how their company was about to be bought by someone for a billion dollars.  I asked him if he remembered Nortel, Lucent, Corning, or Worldcom.  They were making billion-dollar all-stock deals back in 1999.  Just substitute FB, GOOG, and APPL.  It's the same game of musical chairs as in 1999.  The difference is that the Fed and Treasury want the music to go on forever.

Sat, 05/24/2014 - 23:40 | 4792579 mickeyman
mickeyman's picture

The game of making up GDP numbers started at least as early as the '70s.

http://www.worldcomplex.blogspot.ca/2011/09/rise-of-virtual-economy.html

Fri, 05/23/2014 - 16:39 | 4789712 Rusty Shorts
Rusty Shorts's picture

 

 

 

6) Ponder this -

 

http://fukushimaemergencywhatcanwedo.blogspot.com/2011/07/japanese-compa...

 

7) Cosmos fire, look closely at 3:45, is that Unit 1 Daiichi???  

 

https://www.youtube.com/watch?v=JIry2jB9WE4

Fri, 05/23/2014 - 16:38 | 4789718 Oh regional Indian
Oh regional Indian's picture

If everyone can just re-member themselves, that is memorial enough.

The world will instantly be a better place for it.

Memorialize your self...

 

Fri, 05/23/2014 - 16:42 | 4789728 bania
bania's picture

Kind of like John Bobbitt, eh?

Fri, 05/23/2014 - 16:47 | 4789739 Oh regional Indian
Oh regional Indian's picture

Did he achieve a hard one?

Or was it a limp mockery of justice?

Fri, 05/23/2014 - 18:56 | 4789995 tarsubil
tarsubil's picture

You're alright.

Fri, 05/23/2014 - 16:47 | 4789740 knukles
Fri, 05/23/2014 - 16:53 | 4789751 john39
john39's picture

this guy captures my sentiment on the topic of 'memorial day':

http://www.veteranstoday.com/2014/05/22/the-sacrilege-of-war/

Fri, 05/23/2014 - 19:14 | 4790027 Sheppy
Sheppy's picture

Only the dead have seen the end of war...unfortunately.

Fri, 05/23/2014 - 16:41 | 4789725 buzzsaw99
buzzsaw99's picture

the stock market could take a sharp hit

funny stuff!

Fri, 05/23/2014 - 18:10 | 4789913 TheRideNeverEnds
TheRideNeverEnds's picture

It is true, we may have at least one day where the S&P goes down a good 1% between now and DEC when we break through 2000. 

Fri, 05/23/2014 - 16:47 | 4789738 kevinearick
kevinearick's picture

Human Engineering & Occupation

Don’t get me wrong; I like lots of people, who do lots of really stupid things, but I write for young people, who want to be productive. And before this demographic collapse is recorded, more humanity will be prematurely destroyed than in all the wars of History.

History repeats because the majority always chooses knowledge, as if humanity were the integral and not the derivative. Keep trying to subdue the planet, into bondage, and expect a different result. Individual learning is always changing the axes, if you care to look, beyond the public eye.

Empires assume planetary exploitation, as an asset against which credit is extended, in a positive feedback control mechanism, the momentum of which leads them to issue debt as income, expecting producers to provide whatever technology is required to feed the hoard of consumers, in what can only be a demographic ponzi, paying interest on interest, and the planet mows them down, every time.

They never see a bubble because they assume debt slavery of labor, breeding the economic transmission mechanism, debt slaves chasing stock rotation, will automatically reboot the system for them with sufficient pressure. Media is an advertisement, all of it, and the salesmen quickly learn to believe their own lies, extrapolating yesterday’s data in a self-absorbing filter to plan the future, to maintain the status quo.

The sad fact is that those in the majority do not care to bear responsibility for themselves, let alone others, preferring to believe that it takes a community to raise a child, that experts know best, increasing their debt as income as their society devolves accordingly. The more they pay experts to do their thinking, the faster they devolve into income inequality, as if who collects debt faster is the issue, and are surprised at the outcome every time.

Jerry Brown’s crew approves the latest and greatest technology only to immediately find it not feasible, and blames the world for climate variability, while rolling out the prototype from San Francisco globally. All the while Yellen assures the world that labor slack will contain inflation, while promising full employment, on declining participation. Those most responsible for producing war always claim to abhor it.

When those who can get credit don’t want it, and those who need it can’t get it, who remains?

That’s it; keep installing robots at Amazon, to buy time for Wal-Mart and Sears, for the lower middle class to compete with, to support the upper middle class, to pay for Hillarycare, hoping Abenomics does not trigger WWIII, and build an artificial island at the doorstep for the navy, expecting to win, be last to lose, either way. How fast and with what moron technology the self-absorbed kill themselves matters why?

An economy is not like a car, speeding from red light to red light, in a straight line. It’s much more like a ship, navigating tide, current and wind, but, then again, what else do you expect from the hypocrites in Virginia? Didn’t the taxpayer, with debt as income to leverage more debt, just bail GM out? Now, Toyota is building junk; who’d a thunk?

Legacy is going to profit on the destruction of the middle class, and there is nothing you can do about it, except to stop collecting and eating crap, to feed the doctors, so they can breed more automatons for public education. Expect the doctors to turn off the machines as a form of extortion, and blame the government they bred, while they search for you, first with carrots and then with sticks.

War is negligible relative to the cost of the feast and famine cycles preceding it. The point is not just to survive, but to prosper. War is a function of willful ignorance, knowledge as artificial intelligence. You are the tip of the spear, for better or for worse.

Family Law, a contract, made to be broken, is the snake. Everything and everyone else downstream in that process is a derivative. Don’t waste your time. Be on your way and don’t look back. Before the critters plan their future, they lock themselves in the past, on their way to oblivion.

"It's not about the money, it's not about the money, it's not about the money..."

"Money is a derivative, money is a derivative, money is a derivative..."

Fri, 05/23/2014 - 16:49 | 4789743 knukles
knukles's picture

Damn, Kevin.  Yo momma oughta fetch you a whump up side the heaid wit' dat attitude, son.

Fri, 05/23/2014 - 17:00 | 4789765 Duc888
Duc888's picture

 

 

I'd like to motorboat the one on the right.

Fri, 05/23/2014 - 17:01 | 4789768 semperfi
semperfi's picture

you motorboatin' sonofabitch !

Fri, 05/23/2014 - 17:17 | 4789797 cossack55
cossack55's picture

"fought and died for our freedoms".  How nostalgic.  

Fri, 05/23/2014 - 17:22 | 4789805 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

Freedom = stawk buying

Fri, 05/23/2014 - 17:42 | 4789849 TheSecondLaw
TheSecondLaw's picture

Dear Lance Roberts,

To "beg the question" does not mean "To pose the question".  It means to assume a point proven that has yet to be proven.

 

Fri, 05/23/2014 - 17:48 | 4789867 kchrisc
kchrisc's picture

Time to remember all those that have died for previous and ongoing "rackets."

Fri, 05/23/2014 - 18:13 | 4789921 Son of Captain Nemo
Son of Captain Nemo's picture

"Time to remember all those that have died for previous and ongoing "rackets."

kc

You took the words right out of my mouth!  Especially the ones we knowingly murdered based on lies...

Fast forward just shy of the 3:00 minute mark on this video.  What this "Winter soldier" said if true makes him and everyone else he served with that knew it an accomplice to that lie that sent them there!  He is no better or worse than John Kerry in 1971 who spoke about the "raising of villages" in Vietnam and the atrocities he admitted to while serving his Country dishonorably, only to commit treason again 40 years later in Syria and now Ukraine.

Shame and disgrace doesn't even cover it.

All I can say to those heading to Eastern Europe post "memorial day" -Think about it! 

Because your ass is about ready to be handed to you by some Russian boys that will just love to make your acquaintance!!!

 

 

Fri, 05/23/2014 - 18:32 | 4789950 Son of Captain Nemo
Son of Captain Nemo's picture

Another footnote that we don't hear alot about since we raped, looted, murdered and burned them (not once but twice) based on narratives that our men and women knew weren't the truth!

So if we're doing so damn well with the cash register in this Country, why is it again we want to attempt WWIII with that other oil giant that has as many nuclear warheads as we do?

http://rinf.com/alt-news/breaking-news/iraq-biggest-petroleum-heist-hist...

 

Sat, 05/24/2014 - 00:44 | 4790640 OldPhart
OldPhart's picture

Not to be a spelling nazi (because I'm guilty too)..."raising of villages" is the exact opposite of "razing villages".  Kind of fucks up the whole point you're trying to make.

Fri, 05/23/2014 - 17:49 | 4789870 Spungo
Spungo's picture

Can you imagine walking in a field naked then an eagle comes down and grabs your dick with its feet? That would suck.

Fri, 05/23/2014 - 19:18 | 4790040 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Here is something else to ponder.

http://www.clarionproject.org/analysis/national-intel-misled-congress-ab...

National Intel Misled Congress About Brotherhood Contacts An exclusive report based on newly declassified documents obtained by the Clarion Project

The story of the deception began when the Director of National Intelligence James Clapper testified to Congress on February 10, 2011 saying that the Muslim Brotherhood is “a very heterogeneous group, largely secular, which has eschewed violence and has described Al-Qaeda as a perversion of Islam.”

In the same hearing, Clapper was asked by Rep. Jeff Miller (R-FL) about the administration’s relationship with the Muslim Brotherhood. He answered, “There have been outreaches to the Muslim community in general, but I guess we’re not aware of any direct outreach to these particular organizations. That is, if you’re speaking domestically.”

...

 

In 2007, the Justice Department listed ISNA as a U.S. Muslim Brotherhood entity and designated them as an unindicted co-conspirator in the largest terrorism-financing trial of the history of the U.S. In that trial, the Holy Land Foundation, a Muslim Brotherhood front, was found guilty of funding Hamas.

Yet in 2012, the president of ISNA, Imam Mohamed Magid, was invited to meet with the Director of National Intelligence. Unable to attend, he sent a substitute in his place.

...

 

The Office of the Director of National Intelligence’s denial of any government engagement with U.S. Muslim Brotherhood entities is even more shocking considering the history of internal emails sent around the ODNI.

Declassified emails obtained by the Clarion Project show that staff inside the ODNI expressed concern about ISNA, even suggesting interagency intelligence-gathering on the organization. The author(s) of the internal emails also wanted intelligence gathering on the Council on American-Islamic Relations, another group labeled by the Justice Department as an unindicted co-conspirator in the Holy Land Foundation trial. Like ISNA, the Justice Department listed CAIR as a U.S. Muslim Brotherhood entity.

...

 

The heavily redacted ODNI emails, written sometime between January 2009 and August 2012, read: 

“I’m also interested if our team could work with the FBI and DHS on any Muslim Brotherhood collection and analysis opportunities such as looking at the Council on American-Islamic Relations (CAIR) and the Islamic Society of North America (ISNA) ongoing relationships with MB int’l leadership and enterprises.”

...

On June 10, 2010 an email was written by someone within the ODNI’s National Counter-Terrorism Center referencing internal discussions about engagement with Muslim Brotherhood-linked groups. It reads, “We have a large MB [Muslim Brotherhood] presence on the West Coast, and there has been some discussion here about engagement—both state and federal—with folks who are also MB members.”

...

 

Further, by the time ISNA was invited to a “discussion” with Clapper at the National Intelligence headquarters, ISNA’s history was a Muslim Brotherhood entity was well known to everyone.

Two years after the Holy Land trial, in 2009, Federal Judge Jorge A.Solis upheld the designation of ISNA as an unindicted co-conspirator, citing “ample” evidence linking it to the Brotherhood network assisting Hamas. ... Declassified FBI memos and internal Muslim Brotherhood documents identify ISNA as a Brotherhood entity. A 1991 U.S. Brotherhood explanatory memorandum lists ISNA as the first of 29 of “our organizations and the organizations of our friends.” ...
Fri, 05/23/2014 - 20:14 | 4790135 Sokhmate
Sokhmate's picture

I thought, of the 5 things to ponder, were 3 hookers.

Sat, 05/24/2014 - 08:02 | 4790987 AdvancingTime
AdvancingTime's picture

My two thoghts the first is that war is a sad way to settle disputes;

         http://brucewilds.blogspot.com/2014/05/war-and-what-is-it-good-for.html

The other thought,even though I'm working through the weekend the markets are close so no worry today.

            http://brucewilds.blogspot.com/2013/12/dangerous-world-no-worry-have-som...

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