• Tim Knight from...
    09/16/2014 - 21:37
    What if it had gone differently? What if, six years ago, in the throes of the financial crisis, the political leaders in D.C. had decided that enough was enough, and they were going to seize the...
  • williambanzai7
    09/16/2014 - 12:16
    I have tons of good stuff to post, but this morning I'm feeling something like this...

GAAP

Tyler Durden's picture

How Financial Bubbles Fester And Burst - Even As The Fed Says Not To Worry





The starting point in comprehending the dynamics of modern "markets' is to recognize that once they gain a head of steam, financial bubbles tend to envelope virtually every nook and cranny of the economy, creating terrible distortions and destructive excesses as they rumble forward. In this instance, Wolf Richter explains how Silicon Valley has once again (like 1999-2000) been transformed into a rollicking capital “burn rate” machine that has spawned a whole economy based on striving for bigger losses, not better profits. Even the leading venture capitalists now recognize that the insanity of the dotcom era has re-emerged. One of these days, even the monetary politburo may notice. But by then it will be too late. Again.

 
Tyler Durden's picture

Behold The Magic Of Accounting In First Half Earnings





Now that we can compile the first half data using the first two quarter data for both 2013 and 2014, we can conclusively state that if it weren't for the accounting magic behind non-GAAP, which includes such addbacks as tens of billions in litigation costs for the TBTBF utilities, pardon banks, pension addbacks, and not to mention hundreds of billions in restructuring addbacks resulting from the mass termination of hundreds of thousands of workers who miraculously fail to trickle through to the BLS' own "survey" data, things would hardly be as rosy as portrayed by the sellside. In fact, EPS growth in the first half was either 6.5%... or 0.2%. Depending on whether or not one believes in accounting magic.

 
Tyler Durden's picture

The G-20's Solution To Systemically Unstable, "Too Big To Fail" Banks: More Debt





Another day, another brilliant scheme from the think-tank that is the G-20: prevent systemic collapse from TBTF banks loaded up with record amounts of debt by forcing them to... issue more debt.

 
Tyler Durden's picture

Guest Post: If Not Trusting This Market Makes Me An Idiot, Then Call Me Crazy!





I was left slack-jawed as I listened to an interview on financial media between the host and guest. I have always enjoyed as well as respected the host even though many times I may totally disagree. However, as for the guest being interviewed, not only did I disagree: I lost quite a bit of respect for. During the interview the questions were posed as to why people (investors et al) harbor these feelings of angst as to whether or not they should get in, get out, etc,, etc. The guest then went on to use data points, math, trend references, and any other metric available within a snake oil sales bag as to prove his point: Where people not believing in this market rally along with those who’ve not participated are, (and I quote) “Idiots.” I have only one answer to that statement: What you’ve just demonstrated is exactly why people with more than half a brain aren’t buying your message: You are insulting their/our intelligence.

 
Tyler Durden's picture

As "Housing Recovery" Fizzles A New Scheme Emerges: Boost FICO Scores By Changing The Definition





Now that the the fourth dead cat bounce in US housing since the Lehman crisis is rapidly fading, and laundered Chinese "hot money" transfers into US luxury real estate no longer provides a firm base to the ultra-luxury segment, the US government is scrambling to find ways to boost that all important - and missing - aspect of any US recovery: the housing market. This is further amplified by the recent admission by the Fed that it is in fact encouraging asset bubbles, not only in stocks but certainly in all assets, such as houses. Well, the government may have just stumbled on the solution to kick the can yet again and force yet another credit-driven housing bubble, a solution so simple we are shocked some bureaucrat didn't think of it earlier: changing the definition of the all important FICO score, the most important number at the base of every mortgage application.

 
Tyler Durden's picture

Tesla's Non-GAAP Quarter In Three Gigacharts (Added Free Option: GAAP Charts)





Yes, yes, we know: soon everyone will be driving a Tesla, and, perhaps, sooner Tesla will build its much-hyped, and so critical for its business model Gigafactory (although shouldn't it be non-GIGA to go with non-GAAP... about which it had this to say: "In June, we broke ground just outside Reno, Nevada on a site that could potentially be the location for the Gigafactory. Consistent with our strategy to identify and break ground on multiple sites, we continue to evaluate other locations in Arizona, California, New Mexico and Texas."). In the meantime, and just as the biggest wealth effect-creating (for the 0.1%) stock market of all time appears to be ending, here is Tesla's quarter, and last few years, in three gigacharts.

 
Tyler Durden's picture

Yellen Capital Humiliated After First Facebook And Now Twitter Surge Higher: TWTR's Quarter In Charts





Moments ago TWTR reported Q2 earnings which beat EPS expectations of a 1 cent loss, posting non-GAAP EPS of $0.02 (let's ignore that the GAAP EPS was actually -$0.24 and that GAAP Net Loss was $144.6 million, much worse than the $42.2 million a year ago, all driven by stock-based compensation expense, because clearly retaining employees is never a factor when calculating earnings). And yet, the stock has exploded by 30% after hours on what appears to be a super squeeze after hours, as the company also reported revenue of $312 million up from $139.3 million a year ago and some $54MM in EBITDA, up 461% Y/Y. This is just a little awkward for the Federal Reserve which some 2 weeks ago was warning about a bubble in social networking stocks, just before first Facebook and now Twitter have exploded higher on what can best be described as yet another massive short squeeze of those who decided to not fight the Fed on this one.

 
Tyler Durden's picture

Here's What Wall Street Bulls Were Saying In December 2007





The attached Barron’s article appeared in December 2007 as an outlook for the year ahead, and Wall Street strategists were waxing bullish. Notwithstanding the advanced state of disarray in the housing and mortgage markets, soaring global oil prices and a domestic economic expansion cycle that was faltering and getting long in the tooth, Wall Street strategists were still hitting the “buy” key. In fact, the Great Recession had already started but they didn’t have a clue: "Against this troubling backdrop, it’s no wonder investors are worried that the bull market might end in 2008. But Wall Street’s top equity strategists are quick to dismiss such fears."

 

 
Tyler Durden's picture

Earnings Recovery? Europe Would Love Some Of That





As the following just released chart from Goldman shows that while non-GAAP EPS in the US have stabilized (and Japan is clearly the upside suprise even as its economy is once again teetering on the edge of recession), and Asia ex Japan is slowly rolling over once more, it is Europe that is the big shocker: as of July, European 2014 EPS forecasts are now the lowest they have been for the entire year, and are down 8% from where they were at the beginning of the year!

 
testosteronepit's picture

But Wait, There Are A Few Differences Between Amazon and the US Postal Service





Amazon is Exhibit A of how the Fed’s free money for Wall Street and corporate mastodons is destructive to the rest of the economy.

 
Tyler Durden's picture

JPM Earnings Slide 8% On Drop In Trading Volume, Mortgage Production Offset By $1.5 Billion Stock Buyback





While JPM stock is trading modestly higher in the pre-market following its earnings report which beat expectations on the top and the bottom line, it doesn't hide a troubling trend seen across all the banks that have reported so far, one we forecast would take place in an environment of plunging trading volumes and near-record low mortgage production: slumping earnings. J.P. Morgan Chase JPM +0.88% & Co. said second-quarter earnings sank 7.9% as the bank continued to grapple with weak trading revenue. Indeed, as WSJ summarized, "J.P. Morgan Chase & Co. said second-quarter earnings sank 7.9% as the bank continued to grapple with weak trading revenue."

 
Tyler Durden's picture

David Stockman Sees "Signs Of The Bubble's Last Days"





The central banks of the world are massively and insouciantly pursuing financial instability. That’s the inherent result of the 68 straight months of zero money market rates that have been forced into the global financial system by the Fed and its confederates at the BOJ, ECB and BOE. ZIRP fuels endless carry trades and the harvesting of every manner of profit spread between negligible “funding” costs and positive yields and returns on a wide spectrum of risk assets. Stated differently, ZIRP systematically dismantles the market’s natural stability mechanisms.

 
tedbits's picture

Weekly Wrap - July 11, 2014





This week was interesting to say the least and it is ending with a bang.  We are covering a number of brief subjects this week.  I hope you enjoy them.

 
Syndicate content
Do NOT follow this link or you will be banned from the site!