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iEconomy: This Is How Apple Distorts The Market

Tyler Durden's picture


As rumors of the imminent iPad3 (and FoxConn hacking) spread across the web and a general sense of cult-like euphoria washes away the reality of a considerably weaker earnings picture (and outlook) than even downgraded expectations had prepared for, we present two charts, via JPMorgan, of just how grossly distorted the picture of US economic health (implicitly via US corporate earnings) has become, thanks to Apple. While ignoring Apple as a provider of 'wealth' is akin to Monty Python's "What Have The Romans Ever Done For Us?" comment, we worry that so much 'expectations' burden should fall on the shoulders of a company that relies on constant 'successful' innovation and constant low cost wages (no growth) to merely maintain current growth and earnings while facing constant and massive competitive threats from every side of its business (especially with austerity/recession/credit-constrained Europe as the largest sequential growth driver in the last surprising quarter). While 'Let Them Eat PSI' is the clear message for the Greeks, it would appear the US investor is truly satisfied by its extra large helping of iPad meals, even as 'explicit' job creation in the US via this main driver of US earnings remains de minimus (recognizing of course the peripheral impact of developers into this infrastructure that however do not amount to too much in terms of earnings as is painfully obvious from these charts). As goes AAPL, so goes the US?




Source: JP Morgan


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Thu, 02/09/2012 - 11:53 | 2141856 Badabing
Badabing's picture

i love fake numbers

Thu, 02/09/2012 - 12:11 | 2141954 Village Smithy
Village Smithy's picture

Hey! How'd you do that?

Thu, 02/09/2012 - 12:17 | 2141987 Badabing
Badabing's picture

JPM let me borrow a algorithm.

Thu, 02/09/2012 - 12:55 | 2142241 chrispycrunch
chrispycrunch's picture

It's pretty cool how your avatar makes it look like all your posts are a + but with Apple one must be skeptical. If it's too good to be true, the mantra goes, it probably is. Apple understandably created a single unified friendly device that people will buy. There are quiet rumblings that people who cannot afford it, can. It is this consumer base that is worrisome.


I've seen people with iPads typing away with their two fingers. I don't understand why they show no frustration. They must be the most patient people in the world! iPhone. They break more than other devices (by my own observation only). Form over function. Apple understandably caters to these "clumsy" users. These users line up at the stores. The stores are busy. People see the busy stores. People buy the devices on this perceived mis-information.

So long as the illusion self-perpetuates, Apple will be a heavy-weight. But like all things big, like all things centrally-controlled, something's gotta give. Someone's going to wake up. Someone's going to write about it. Maybe then, the tide will turn.

Thu, 02/09/2012 - 15:17 | 2143040 smiler03
smiler03's picture

I think you over estimate the intelligence of the consumer.

Thu, 02/09/2012 - 11:55 | 2141865 GeneMarchbanks
GeneMarchbanks's picture

'As goes AAPL, so goes the US?'

Upon reading this, I threw my six year old iPod to the floor and stomped it OfficeSpace style. It's possible that I over-reacted but 'twas liberating.

Thu, 02/09/2012 - 11:58 | 2141893 Mr Lennon Hendrix
Mr Lennon Hendrix's picture


Thu, 02/09/2012 - 12:06 | 2141929 augie
augie's picture

genius. Now the purchase of a *new Ipod is justifable. I'm begining to understand the consumerist model goes well beyond planned obselesence. 

Thu, 02/09/2012 - 12:13 | 2141963 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Back when I was studying economics I went in to see my Prof to lay out my thesis of where the economy was headed and why.  She met me there carrying a new mac.  Her colleague walked in and she picked the mac above her head and said while smiling manically, "I'm doing my best to help the economy!"

Keynesians are more than idiots.  I can't even put into words how I feel about them.

Thu, 02/09/2012 - 12:37 | 2142113 augie
augie's picture

know the feeling...FUBAR

Thu, 02/09/2012 - 12:06 | 2141931 Manthong
Manthong's picture

"You'll never get fired for buying an Apple."    ???

Thu, 02/09/2012 - 12:02 | 2141907 tarsubil
tarsubil's picture

No clip?

Thu, 02/09/2012 - 12:17 | 2141990 Everybodys All ...
Everybodys All American's picture

sizable component of the NASDAQ, NDX100, etc.

Thu, 02/09/2012 - 15:42 | 2143143 resurger
resurger's picture

I should do the same, but i can not since it's a gift from my wife Zzzzzzzzzz

Thu, 02/09/2012 - 11:54 | 2141867 HedgeFun
HedgeFun's picture

73.8% of all statistics are indeed fake.

Thu, 02/09/2012 - 12:19 | 2141998 Dr. Engali
Dr. Engali's picture

I think you're making that up.

Thu, 02/09/2012 - 12:21 | 2142009 Hman
Hman's picture

How Ironic that you refer to statistics to proof you argument that 73% of all statistics are fake!

Thu, 02/09/2012 - 15:16 | 2143038 ceilidh_trail
ceilidh_trail's picture

Be accurate when you throw statistics around! EVERYBODY (or at least 93.289% of us) KNOWS that the number is actually 73.78795%! If you are gonna use stats, use them correctly!!!!!

Thu, 02/09/2012 - 11:56 | 2141876 TimmyM
TimmyM's picture

"As goes AAPL, so goes China"

Fixed it!

Thu, 02/09/2012 - 12:02 | 2141906 GeneMarchbanks
GeneMarchbanks's picture

Chimerica, you can't tell where one begins and the other ends.

Thu, 02/09/2012 - 11:56 | 2141877 CvlDobd
CvlDobd's picture

iPad3? That's why AAPL is up today? I could have told you iPad 3 was coming the day 2 was released. Ah fuck this!

Thu, 02/09/2012 - 11:57 | 2141887 scatterbrains
scatterbrains's picture

Looks like the algos have figured out how many ipods the 2k per person foreclosure settlement buys this morning.

Thu, 02/09/2012 - 12:00 | 2141888 williambanzai7
williambanzai7's picture

I don't think Apple does anything to the market. The "market", if that is what we chose to call it, does it to itself. 

Thu, 02/09/2012 - 12:11 | 2141940 Mercury
Mercury's picture

Maybe, but anyone who thinks that Apple without Steve Jobs is going to be anything like Apple with Steve Jobs is fooling themselves.

Thu, 02/09/2012 - 12:28 | 2142049 X86BSD
X86BSD's picture

I disagree. As an owner of AAPL things will not be the same. But they won't be marginally different either. Tim cook has been groomed for years into taking Apple into the future by Steve himself. Johnny Ive has been given free range to innovate in the lab without interference from anyone at Apple. Steve saw to that personally. They have setup an internal university to ensure that upper management was taught the "Apple Way" of things. Steve undertook many projects internally to ensure the creativity, innovation and ideas that made Apple great was part of their backbone and ingrained into everyone working there. It's their culture, its indoctrinated into everyone there. So I don't feel like Apple is in any danger of straying from their kick ass, innovative, design oriented way. If I did I would dump the stock. Apple is going to be just fine without Steve. And for those that think otherwise you will be proven wrong like all the other pundits that thought the ipod was going to be a flop, or that the iphone was an over priced piece of shit, and that android would dominate the iphone, or that the ipad would never take off, or that the iTMS would be a flop since no one was paying for music, etc.. etc.. etc..
The amount of people who simply are incapable of understanding Apple, its philosophy and its motives lay by the wayside like the body county after Hiroshima. This is nothing new and will not change. I however will continue to reap the rewards by betting with Apple. Enjoy your dirt sandwich.

Sat, 02/11/2012 - 15:08 | 2149537 Death and Gravity
Death and Gravity's picture

And much as you have a major, true point, you're also conflating engineering excellence with brand-name consumer herd mentality as the chief cause of Apples business success.

What's APPLs P/E again?

Thu, 02/09/2012 - 12:31 | 2142072 williambanzai7
williambanzai7's picture

You are going to see a company increasingly focused on executing design features targeting wealthy Asian consumers. The high end sweet spot going forward.

Thu, 02/09/2012 - 15:55 | 2143200 tarsubil
tarsubil's picture

Exactly. The market needs to stop it or it is going to go blind.

Thu, 02/09/2012 - 16:21 | 2143334 Hugh_Jorgan
Hugh_Jorgan's picture
  • Superior marketing (the quintessential cult of personality for the early 21st century... high tech, but approachable)
  • A ponzi economy where 70% of GDP is based on consumer spending.
  • A population that medicates itself by spending on the latest electronic doo-dads.


What are the dependencies that could derail this phenomenon... Hmm.


Thu, 02/09/2012 - 11:57 | 2141889 hedgeless_horseman
hedgeless_horseman's picture



Anyone remember a company called Microsoft?

Thu, 02/09/2012 - 12:53 | 2142212 ZeroPower
ZeroPower's picture

Nasdaq at multi-year highs. All you need to know.

Thu, 02/09/2012 - 15:22 | 2143062 smiler03
smiler03's picture

Microsoft??? Are they the weird new kids on the block who pay dividends?

Thu, 02/09/2012 - 11:58 | 2141892 SeverinSlade
SeverinSlade's picture

Is it just me that sees AAPL suffering a fall similar (albiet much less exaggerated) to NFLX, GMCR, etc?  Yes, AAPL has massive cash levels.  Yes, they have an extremely loyal customer base.  But given the amount of the economy that's currently being driven by maxing out credit cards, how much longer can AAPL continue to blow out earnings? 

At some point (perhaps when Europe implodes?) AAPL's slightly upgraded devices won't be enough to fuel continued growth.  It perplexes me that Americans continually go out and spend hundreds (if not thousands) of dollars buying a SLIGHT upgrade of a device they ALREADY OWN.  Yes, because the slightly faster iPad2 is definitely worth the money.  ZH, as well as others, have also continually pointed out that AAPL is basically a "grown up" version of Hasbro.  The iPad is nothing but a cool toy.

At this point I think AAPL's only hope is to use their cash to basically try and monopolize it's business.  Relying solely on consumer electronics isn't going to cut it forever.

Thu, 02/09/2012 - 12:00 | 2141901 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Gens X, Y, and Z will go in debt, not pay loans, and steal for Apple products.

Thu, 02/09/2012 - 12:03 | 2141915 SeverinSlade
SeverinSlade's picture

Guess those tin-foil hat enthusiasts may be onto something when pointing to Apple (and it's logo) being the "forbidden fruit." 

Thu, 02/09/2012 - 12:15 | 2141977 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The elite circle jerk to the fact that everyone and their grandma spend their wages buying toys called "apples".  The Illuminatti get their mojo from us inviting them in, and asking them for our lashes. 

Thu, 02/09/2012 - 12:03 | 2141917 defn8Dog
defn8Dog's picture

WSJ says Americans are foregoing the cost of regular health checkups in order to buy iThings.

Thu, 02/09/2012 - 12:19 | 2142000 Bam_Man
Bam_Man's picture

Most Americans don't need a health check up. They can look in the mirror and see that they are fat and diabetic.

Thu, 02/09/2012 - 12:09 | 2141944 SilverIsKing
SilverIsKing's picture

Gens X, Y, and Z will go in debt, not pay loans, and kill for Apple products.

Thu, 02/09/2012 - 14:44 | 2142869 piceridu
piceridu's picture

Remember when thugs would mug someone for their shoes (Jordans)? No doubt...having an iPhone and being able to show your friends and talk about it is the swap for not having been loved by your parents.

Thu, 02/09/2012 - 12:04 | 2141918 lotsoffun
lotsoffun's picture

and they have a huge following of people not paying mortgage and spending whatever money they have on this junk.  and they also just got a 2,000 dollar boost from obama


Thu, 02/09/2012 - 12:07 | 2141935 SeverinSlade
SeverinSlade's picture

I have a friend that buys every new Apple product and always ridicules me for sticking to PCs.  He's in massive amounts of debt.  I'm debt free.  He constantly tells me how much greater his devices are than mine.  My response?  "With the money I didn't waste buying Apple products, I've used to buy physical gold and silver."

His purchases will essentially be worthless in a few Apple upgrade cycles.  Mine?  Well, I'm sure all ZHers know where PMs are ultimately headed.

Thu, 02/09/2012 - 12:26 | 2142038 Chump
Chump's picture

Your friend seems like the sort of person I would avoid telling about my metals.  Just sayin'.

Thu, 02/09/2012 - 12:26 | 2142041 Ahwooga
Ahwooga's picture

Apple users are like door to door religious types, always trying to push their ideas onto everyone around them. "What do you mean you don't like apple? You must get on board, no viruses you know!" The £700 price difference pays for a lot of years of mcafee subscriptions and more I tell them...

Its a fanaticism, and sadly I have to say I dont know when it will wear off. It would take a brave type to short AAPL.

Thu, 02/09/2012 - 12:06 | 2141927 Xkwisetly Paneful
Xkwisetly Paneful's picture

and someday Bayer will make the majority of their earnings from something other than aspirin,

or so the bloggers have been saying for 100yrs.

Thu, 02/09/2012 - 12:10 | 2141945 SeverinSlade
SeverinSlade's picture

I think that's a pretty simplistic statement.  Bayer also makes highly profitable prescription drugs (which it lobbies the government for favorable legislation).  So unless Apple begins lobbying for the Feds to give a tax incentive for buying iProducts or for legislation to put MSFT out of business, I fail to see the comparison.

Apple's entire business model relies on constant innovation and its customers continually paying top dollar for slight product upgrades. 

Thu, 02/09/2012 - 12:31 | 2142017 Xkwisetly Paneful
Xkwisetly Paneful's picture

Not simplistic at all, the majority of the Bayer's earnings still come from aspirin.

The simplistic thing is ignoring that Ipads are taking over offices and replacing desk top computers.

The simplistic thing is iIgnoring that APPL is huge in education brainwashing to their brand name at age 5yo.

The simplistic thing is ignoring Americans rushing out to buy the next great gadget fuels the great gadgets for the rest of the world.

The simplistic thing was calling an IPAD the next Walkman and looked what happened to Sony trying to protect their product.

Putting Hasbro in the same sentence as a leading edge tech company, which is where  organic ecnomic growth comes from-don't grow an economy by adding toll takers and mini mart register operators is beyond simplistic.

It is OK though, I get a huge kick out of people paying premium prices for largely like product with German cars, Swiss watches and French wines too.

Thu, 02/09/2012 - 12:38 | 2142123 X86BSD
X86BSD's picture

Also remember that in most of the markets they are in, they only control a small fraction of the market. Like PC's. They only have what? 10%? market share but earn the vast majority of profits. They have huge growth potential in the desktop PC market. The same goes for most of their markets. They have small market share but the majority of profits from those markets. Apple is not going to use their cash to do insane things like try and and "monopolize" its business. The only thing Apple is going to do with its mountain! of cash is to use it to buy up large swaths of components like flash memory each year choking out the other guys and creating delays for their products, and to make strategic buyouts of companies that will directly benefit them. They don't just buy out competition. Or they would own adobe, and google. You just dont understand Apple. And neither does ZH if they think Apple is an adult hasbro.

Thu, 02/09/2012 - 11:59 | 2141895 defn8Dog
defn8Dog's picture

whoops, up goes the market.  ZH having profound effect.  Self-loathing to follow.

Thu, 02/09/2012 - 12:02 | 2141909 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Please get back to us when you learn how to corralate PM to equity in nominal and real terms. 

Please, get back to us.

Thu, 02/09/2012 - 12:07 | 2141937 whstlblwr
whstlblwr's picture

Article misses the point. Apple is alternative to GLD. Countries buying appl, out of EUR

Thu, 02/09/2012 - 12:16 | 2141983 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yet buying gold is an alternative to buying AAPL.  Investing in gold is a direct investment in all technology.

Thu, 02/09/2012 - 12:17 | 2141984 Dr. Engali
Dr. Engali's picture

Market? What's that? We haven't had a market in years. Now it's simply a polisy tool. Expect us to be pushing 14,000 around election time.

Thu, 02/09/2012 - 11:59 | 2141899 spartan117
spartan117's picture

Steve Jobs is like a Jedi.  You kill him and he becomes even more powerful. 

Thu, 02/09/2012 - 12:04 | 2141920 A Lunatic
A Lunatic's picture

Just like Osama Bin Laden.

Thu, 02/09/2012 - 12:15 | 2141972 Dr. Engali
Dr. Engali's picture

Yeah but you can only kill a Jedi once. Osama is on his fourth or fifth death.

Thu, 02/09/2012 - 12:28 | 2142052 Ahwooga
Ahwooga's picture

So is the greek "deal". Or should that be 100th death...

Thu, 02/09/2012 - 12:00 | 2141902 Miss Expectations
Miss Expectations's picture
Monty Python members to reunite for new movie

The Python members - who gained fame on the British TV series "Monty Python's Flying Circus" - will voice a group of aliens who give an earthling the power to do "absolutely anything" to see what a mess he makes, according to Variety.

Thu, 02/09/2012 - 13:04 | 2142299 Absinthe Minded
Absinthe Minded's picture

Who's got the lead role, The Bernank? He'd be a natural.

Thu, 02/09/2012 - 12:02 | 2141908 SeverinSlade
SeverinSlade's picture

Did anyone catch CNBS talking about AAPL possibly expanding it's business into LED/LCD TVs?  Yeah, because TVs are HIGHLY profitible at the moment.  I'd be interested to see how many Americans would be willing to shell out $5000-10000 for a 40"+ iTV.  "But honey, the iTV can sync with our iPad2, iPhone, and iPod!  It's definitely worth the money!"

Thu, 02/09/2012 - 12:40 | 2142135 X86BSD
X86BSD's picture

Haha I am filing this for claim chowder! Classic.

Thu, 02/09/2012 - 13:48 | 2142590 ffart
ffart's picture

I'm interested for no other reason than Jobs hated TV's and want to know what the hell was going on in the minds of his R&D time for this TV based product.

Thu, 02/09/2012 - 12:03 | 2141912 sojourner_man
sojourner_man's picture

Talk about Eve being tempted to take a bite outta the Apple...

Thu, 02/09/2012 - 12:04 | 2141913 Manthong
Manthong's picture

What does that do to the old "Apple a Day" saw?


Thu, 02/09/2012 - 12:06 | 2141921 BLOTTO
BLOTTO's picture

I dont even see people's faces hardly anymore...

Just go to your local mall - and all you'll see is just people walking around - not looking at anyone - but completely focused with they're heads angled toward the ground texting/surfing/jerking off at they're gadgets...


All APPLE has to do next is create an electronic cock and pussy on the next iPAD - and the sheep will be set for life.


Thu, 02/09/2012 - 12:12 | 2141961 SeverinSlade
SeverinSlade's picture

I agree, it's pretty sad.  Instead of seeing kids playing at the park, hanging out at the mall, etc. we now see a group of friends sitting on a bench together, all staring into their iPhones or iPads.

Thu, 02/09/2012 - 12:28 | 2142050 Badabing
Badabing's picture

Try Facetime /sarc

Thu, 02/09/2012 - 12:27 | 2142045 rosiescenario
rosiescenario's picture

.....The Living Dead pops to mind.....I have found that when driving you need to watch out for these texting zombies just as you would for a dog off leash....they are oblivious to their surroundings.


If religion used to be the opiate of the masses, then texting and facebooking have replaced it....

Thu, 02/09/2012 - 12:43 | 2142154 somaplease
somaplease's picture

Flashlight has released an ipads case with a pussy attachment.

Thu, 02/09/2012 - 23:25 | 2144587 Sokhmate
Sokhmate's picture

You mean fleshlight.. the iFleshlight

Thu, 02/09/2012 - 12:05 | 2141925 The Axe
The Axe's picture

Because AAPl trades at so a low pe  and funds own so much     its easy to push the market higher and higher.....the connection is prefect

Thu, 02/09/2012 - 12:06 | 2141932 kahunabear
kahunabear's picture

Gotta love how AAPL has become big brother. Oh, the irony.

Thu, 02/09/2012 - 12:14 | 2141941 falak pema
falak pema's picture

Well Apple has such an anaconda apetite its eating the rest up. What is iconic for Tech-Outsourcing industry model is a Facebook-Apple-Walmart economy. 

Now that is one hellva foot print for the future. All these companies will be sitting ducks in coming years as they have fewer tech barriers to entry than Exxon or IBM. Unless Apple moves lateral into TV, media and services sectors cum new technology for leisure plus information. Apple and google have interesting tech content profiles. 

The next generation of world companies will eat these American giants more easily; thats my point. As their product profile is horizontal, consumer oriented, and their production profile is foreign dependent. Even Facebook could lose its international market as its got nothing particular to offer the Chindians or Brazilians. ANy local company can do the same and tailor local criteria into a regional social network platforming.

I'm just trouble shooting, being contrarian, not necessarily saying it will happen. 


Thu, 02/09/2012 - 12:12 | 2141959 Waterfallsparkles
Waterfallsparkles's picture

They are using Aapl to hold the Market up.  So many watch Aapl for market direction.

With the way Aapl has been running it almost seems like 2000 all over again.

Thu, 02/09/2012 - 12:12 | 2141960 Benedict Farse
Benedict Farse's picture

How about the iPad Standard? We make iPads to back a paper currency, that creates jobs, which will buy more iPads, so we'll have to make more, which creates more jojo jojo jibber fuckity fuck FUUUUUUUUUUUUUUUUUUCK!!!

Thu, 02/09/2012 - 12:35 | 2142096 Badabing
Badabing's picture

The old Henry Ford trick!

Nothing new under the sun     


Thu, 02/09/2012 - 12:13 | 2141962 The Count
The Count's picture


Apple hasn't gotten any really interesting products to market in a long while now. Maybe with the demise of Jobs they have run out of their mojo. Case in point, iPhone 4S... got a Samsung Galaxy S2 many respects better that the iPhone.


Thu, 02/09/2012 - 12:48 | 2142185 koperniuk666
koperniuk666's picture

I wonder if Apple are already past their best. The G4 Powerbook I had (for 7 yrs) until recently was a fantastic piece of kit and head and shoulders above the crap that it replaced ( a Think pad)

But my new Macbook pro crashes and hangs regularly ( just like PC!). There are a few other issues on software and hardware and NO response from Apple support.

Hey they look nice though.

But I wouldn't buy another one - particularly at the price they are charging. 

There is ALWAYS a cycle and I think APPL are milking this one now.....


Thu, 02/09/2012 - 12:13 | 2141964 RobotTrader
RobotTrader's picture

Apple's next growth spurt is going to be in the commercial iPads used in the medical profession.


Every doctor will have one soon, it will be a required piece of equipment, just like a stethoscope.

Thu, 02/09/2012 - 12:18 | 2141994 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Soon we will have them graft into our chests so we can just look down and surf the web.

Thu, 02/09/2012 - 12:57 | 2142251 lotsoffun
lotsoffun's picture

if they grafted them into foreheads - one would have to look at somebody else and possibly interact with them.  that's funny.  

Thu, 02/09/2012 - 12:48 | 2142183 riphowardkatz
riphowardkatz's picture

and every kid in every school will have one also...Nope.

It takes 17 years for new medical evidence to be adpoted by the medical community. Does the IPAD help them bill more? No, then they dont care. Now if there is an app that they can run an MRI on you and charge Medicare/Medicaid/Insurance co's for then Apple would have something.

Thu, 02/09/2012 - 12:13 | 2141966 Eisenhorn
Eisenhorn's picture

Just one more step toward the new market.

In which "working class" investors will only be allowed to trade Apple, Netflix, Facebook and Google......for their own good of course.

Attempting to trade in oil, metals or other commodities will be deemed extremist and a threat to national security.

Let them eat Social Media!

Thu, 02/09/2012 - 12:14 | 2141969 Everybodys All ...
Everybodys All American's picture


Thu, 02/09/2012 - 12:16 | 2141978 yogibear
yogibear's picture

Those on food stamps are big users of I-phones. Also have to have those $200 Nike sneakers. People have their priorities. Apple products first, food, rent, mortagage payments lare less important. Your talking about Wall Street's media groomed consumers that will wait in line to pay anything Apple ask for the latest gadget.

Thu, 02/09/2012 - 12:57 | 2141985 Village Smithy
Village Smithy's picture

Some day Phd. Economists will study Apple as an example of what went wrong in America at the beginning of the 21st century. All those units sold, all that revenue and so few jobs. Having said that, how far can a fad take an economy? Wasn't North America settled and explored to feed the ever increasing demand for Beaver pelts to supply the hat industry in Europe.

Thu, 02/09/2012 - 12:16 | 2141986 Artful Dodger
Artful Dodger's picture

And AAPL's weighting is contributing to this relentless "we can't possibly let SPX sell off 4 points ever again".  Here we are again today, same story. Day starts negativish, whoosh it's gone. Who is SO enamored of this market that they can't let the market cool off a bit before BTFD? Over/under on SPY closing down 50c, close to close, once in the next two months?

Thu, 02/09/2012 - 12:34 | 2142094 Ahwooga
Ahwooga's picture

Yeah, and these pricks on MSM are talking about being bullish because of the overwhelming pessimism about stocks. I wouldnt make you a market on a 50tick down day right now if my life depended on it! It's still cheap for TPTB to put a floor in the indices and invoke seller fatigue. But given the relentless grind up and the absolute unwillingness to take ANY news as bad enough to turn the market negative, when that piece of news arrives, and one day arrive it will, there will not be a bid in sight. Of that we can be sure.

Just dont ask me to predict when that day will come.

Thu, 02/09/2012 - 12:58 | 2142261 Artful Dodger
Artful Dodger's picture

Seller's fatigue for sure. Selfishly that's where I'm at. I'm seeing every illiquid spread I watch closing toward the offer, regardless of the overall market action. I love these people who would rather buy expensive on a down day, because it's a "DOWN DAY" (now defined as SPX -2) than buy reasonably on an up day. As a "rational" observer of NAV I get left in the dust. Even though I know the narrative, I can't stop myself--vol comes in, I gradually exit (spreads) and can't buy back positions lower, until I own nothing--and the market grinds higher without me. On the other hand, this has usually been a contrary indicator in the past, as  the dumb money piles in at the offer. However, even I am thinking there is something "special" protecting this latest bull. It's greedier than ever.

SPY now positive as I write. LOL


Thu, 02/09/2012 - 13:12 | 2142346 Ahwooga
Ahwooga's picture

Dodge I couldn't agree more with you, I am in exactly the same position. I have the small luxury of exiting most of my capital back into AUD (where it gets 5.65% in what I hope are some fairly solid banks) but my exposure has now been cut to almost nothing and I watch it grind relentlessly higher and sit here day in, day out, thinking, "what if." There hasn't been a decent buying opportunity for a long time now and it feels like there will never be another. Your comment about something special protecting this bull also rings truer than I like, because the only way to make money now is to be long, however I can't reconcile the risk profile of big long positions because the price action, media commentary, and retail positioning all point to something severe to the downside. I just don't know what bad bit of news has to happen for it to eventuate.

And I am not a happy bear, I am a realistic one, I am sick to death of being bearish and I eagerly anticipate the day I can get into some new, yielding, long positions where I am happy with the entry point and the risk profile and start enjoying the march up. But it has to be for the right reasons and these days we trade up for all the wrong reasons and down for none of the right.

Endlessly and tiringly frustrating because I know that I won't feel happy getting long again until we have a significant reset, and I can't see one on the horizon.

Thu, 02/09/2012 - 12:17 | 2141988 Waterfallsparkles
Waterfallsparkles's picture

I think this is a blow off top.

Check the chart it is SOOOO overbought.

Thu, 02/09/2012 - 12:19 | 2141999 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I would agree but I have been saying that for years and have no credibility when shorting AAPL.  I am lost in the sea of rainbows and unicorns!

Thu, 02/09/2012 - 12:20 | 2142002 DOT
DOT's picture

Got my supplies in;   igold, isilver, ifood, iwater,  don't need the real world at all .


There's an app for that.

Thu, 02/09/2012 - 12:26 | 2142039 Bunga Bunga
Bunga Bunga's picture

Since Apple revenue makes up 0.84% of the US GDP and they grow 75% yoy, their revenue will be bigger than US GDP in less then 10 years.

Thu, 02/09/2012 - 12:32 | 2142080 onebir
onebir's picture

What would the charts look like with Apple and Google stripped out? :s

Thu, 02/09/2012 - 12:32 | 2142084 LouisDega
LouisDega's picture

If loving my Mac is wrong, Then i dont want to right. Amen

Thu, 02/09/2012 - 12:35 | 2142099 Schmuck Raker
Schmuck Raker's picture

Speaking of China...


Seeking Alph - 9:56 AM One reason investors like to own General Motors (GM) shares is the Chinese upside, but the Chinese have lost some of their appetite for new vehicles. China's Association of Automobile Manufacturers reports January sales of cars and light vehicles dropped 23.8% Y/Y, and total 2011 sales rose only 5%.
"...don't mind the maggots."


Thu, 02/09/2012 - 12:36 | 2142110 Cancerous Keynesian
Cancerous Keynesian's picture

The higher it goes, more fragile it becomes.

Thu, 02/09/2012 - 13:09 | 2142323 firstdivision
firstdivision's picture

Funny how AAPL has become something they loathed, well according to their infamous Olympic commerical.

Thu, 02/09/2012 - 13:14 | 2142350 Wakanda
Wakanda's picture

You will force me to use windoze only when you pry OS X from my cold, dead hands.

Love 'em or hate 'em, Apple delivers value.

Thu, 02/09/2012 - 13:29 | 2142463 Shizzmoney
Shizzmoney's picture

So glad I have never bought an Apple product. 

Granted, we've all bought shit Made in China, but buying an iPad is today's equivalent of a textile owner from the North buying Cotton from the South in the 1780s.

Thu, 02/09/2012 - 16:14 | 2143304 yogibear
yogibear's picture

Since Apple revenue makes up 0.84% of the US GDP and they grow 75% yoy, their revenue will be bigger than US GDP in less then 10 years.

So the stars and stripes at the Whitehouse are replaced by the Apple flag. Either the Chinese leader or  Apple CEO takes over the Whitehouse.  Foxconn labor rules installed in the US. 

Thu, 02/09/2012 - 17:44 | 2143637 Zero Govt
Zero Govt's picture

"..we present two charts, via JPMorgan, of just how grossly distorted the picture of US economic health.. has become, thanks to Apple"

bit rich coming from a grossly distorted JP Morgan

...their balance sheet is a sham, they can't trade (profitably) without rigging the Silver market, Muni Bond issuance market, selling sugar coated turds (MBS's) and other fraudulent products (SLV, GLD, etc, etc, etc, etc), need bailouts because they're bankrupt, the list goes on ...

..and Jamie Dimon is Wall Streets 'Golden Boy' wonder Nanny Bernanke has had to roll out so many QE nappies 

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