• GoldCore
    01/31/2015 - 05:00
    We are witnesses to an epic failure of planning, statecraft and social justice. Regardless of where your politics be, these elements are critical for a modern globally connected economy to function....

GAAP

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Frontrunning: June 25





  • Obama Administration Widens Export Potential for U.S. Oil (BBG)
  • WTI Pares Gains as U.S. Export Ruling Seen Limited (BBG)
  • Senator Cochran defeats Tea Party rival in Mississippi Republican runoff (Reuters)
  • Militants attack Iraq air base, U.S. assessment teams deploy (Reuters)
  • Maliki rules out national emergency govt (AFP)
  • Koch to Start EU Power Trading as It Plans LNG Expansion (BBG)
  • Obama Said to Ready Sanctions on Russian Industries (BBG)
  • Ghana Sends Plane With $3 Million to Calm World Cup Team (BBG)
  • Ghana’s First Hedge Fund Planned by Ex-Exchange Regulator (BBG)
  • SEC Is Gearing Up to Focus on Ratings Firms (WSJ)
  • Abe Declares Deflation End as Growth Plan Confronts Skeptics (BBG)
 
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The Keynesian Apotheosis Is Here; But Blame The Final Destruction Of Sound Money On The Bushes





The only thing that can be said about Janet Yellen’s simple-minded paint-by-the-numbers performance yesterday is that the Keynesian apotheosis is complete. American capitalism and all political life, too, is now ruled by a 12-member monetary politburo, which is essentially accountable to no one except its own misbegotten doctrine that prosperity flows from the end of a printing press.

 
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ISIS Stunner: Terrorist Organization's Annual Reports Unveiled; Reveal Full "Investment Highlights"





In a day and age in which corporations rule the world, the brutal Al-Qaeda spin off known as ISIS is learning from the best, and as part of its credentialising and image-building has done something only major corporations do at the end of every year: it has issued annual reports for the past 2 years (unaudited). That's right: as the FT reported earlier, "Since 2012 the Islamic State of Iraq and the Levant, (known as Isis) has issued annual reports, outlining in numerical and geographical detail its operations – the number of bombings, assassinations, checkpoints, suicide missions, cities taken over and even “apostates” converted to the Isis cause."

 
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Caught On Tape: Obama And Putin Are Talking Again





Rejoice: the second cold war appears to be over (after Russia skillfully annexed Crimea). How do we know? The following clip of Obama and Putin chatting has been released, by the official account of the French president no less. No blows were exchanged. Surely this in itself is enough to push the VIX to the upper (or middle, or lower) single digits and send the S&P to just about 20x 2014 GAAP P/E...

 
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Elizabeth Arden Earnings Stink, Blames Weather; Stock Tumbles 15%





Q1 2014 was the first negative EBITDA quarter for Elizabeth Arden since before Lehman (June 2008) and worst quarterly EBITDA loss for the company since Q3 2001... and the rest of the data was terrible:

*ELIZABETH ARDEN 3Q SALES $210.8M, EST. $255.7M; 3Q ADJ. LOSS/SHR 84C, EST. BREAK-EVEN

The reason... come on you can guess... "an unprecedented number of weather-related store closures in our North America business during the quarter."

 
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David Stockman Pulls The Plug On Janet Yellen’s Bathtub Economics





Some people are either born or nurtured into a time warp and never seem to escape. That’s Janet Yellen’s apparent problem with the “bathtub economics” of the 1960s neo-Keynesians. As has now been apparent for decades, the Great Inflation of the 1970s was a live fire drill that proved Keynesian activism doesn’t work. That particular historic trauma showed that “full employment” and “potential GDP” were imaginary figments from scribblers in Ivy League economics departments—not something that is targetable by the fiscal and monetary authorities or even measureable in a free market economy. Even more crucially, the double digit inflation, faltering growth and repetitive boom and bust macro-cycles of the 1970s and early 1980s proved in spades that interventionist manipulations designed to achieve so-called “full-employment” actually did the opposite—that is, they only amplified economic instability and underperformance as the decade wore on.

 
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Tesla, Which Has First Model S Sales Decline Since 2012, Explained In Three Charts





While Tesla's financial results will hardly be much discussed by either the bulls or bears who follow the company - because it is one of the last remaining "story" stocks - and most will instead focus on the fact that Tesla sold 6,457 Model S cars in the quarter, down 6% from the 6,892 sold in Q4 2013, and the first sequential sales decline since 2012 (Is Tesla about to be Twittered?), here are, for the purists, the only three charts that matter.

 
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BofA "Finds" Capital Calculation Math Error, Halts Capital Action Plan, $4 Billion Buyback





Just weeks after the Fed signed off on CCAR and ackowledged how great the US banking system is, Bank of America (after being slapped with another $13bn RMBS suit demand) has ackowledged things are not quite as risy as they appeared.

BOFA HAD INCORRECT ADJUSTMENT ON TREATMENT OF SOME NOTES; BOFA SUSPENDS CAPITAL ACTION PLAN ON CHANGE IN CAPITAL RATIOS
BAC SEES REVISED CAPITAL ACTIONS LESS THAN PREVIOUSLY ANNOUNCED; BAC WILL ENGAGE THIRD PARTY TO REVIEW PROCESSES

So no buyback boost... no dividend boost... The question now is - how do we (or The Fed) trust any of the numbers?

 
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The Gap Betweeen GAAP And Non-GAAP In Two Charts





By the magic of pure accounting gimmickry, one-off tom-foolery, non-GAAP shenanigans, and the sterling work of its now-retiring CFO; Facebook has 'managed' to produce twice as much non-GAAP net income as GAAP net income in the last 2 years...

 
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Facebook Beats But CFO Leaving





  • Q1 revenue $2.5 billion, beats expectations of $2.36 billion
  • Q1 revenue from advertising $2.27 billion
  • Q1 EPS $0.34, beat expectations of $0.24
  • Free cash flow - Free cash flow for the first quarter of 2014 was $922 million.
  • Capital expenditures - Capital expenditures for the first quarter of 2014 were $363 million.
  • Cash and marketable securities - Cash and marketable securities were $12.63 billion at the end of the first quarter of 2014.
  • Monthly active users (MAUs) were 1.28 billion as of March 31, 2014, an increase of 15% year-over-year. Unclear how many of these are bots originating out of Egypt and India.
 
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JPM Misses Top And Bottom Line, Slammed By Collapse In Mortgage Origination, Slide In Fixed Income Trading





So much for the infallible Mr. Dimon.

Moments ago, JPM reported Q1 earnings which missed across the board, driven by the now traditional double whammy of collapsing mortgage revenues - the lifeblood of any old normal bank - and fixed income trading revenues  - the lifeblood of new normal banks. Specifically, JPM reported revenues of $23.9 billion, well below the expected $24.5 billion, matched by a reported earnings miss of $1.28, down from $1.59 a quarter ago (and down $0.02 from Q4, 2014), also missing consensus estimates of $1.38. The breakdown was as follows.

 
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David Stockman On Yellenomics And The Folly Of Free Money





The Fed and the other major central banks have been planting time bombs all over the global financial system for years, but especially since their post-crisis money printing spree incepted in the fall of 2008.  Now comes a new leader to the Eccles Building who is not only bubble-blind like her two predecessors, but is also apparently bubble-mute. Janet Yellen is pleased to speak of financial bubbles as a “misalignment of asset prices,” and professes not to espy any on the horizon. Actually, the Fed’s bubble blindness stems from even worse than servility. The problem is an irredeemably flawed monetary doctrine that tracks, targets and aims to goose Keynesian GDP flows using the crude tools of central banking. Not surprisingly, therefore, our monetary central planners are always, well, surprised, when financial fire storms break-out. Even now, after more than a half-dozen collapses since the Greenspan era of Bubble Finance incepted in 1987, they don’t recognize that it is they who are carrying what amounts to monetary gas cans.

 
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David Stockman Berates Bruce Berkowitz's Bogus Bombast





The Fed’s serial bubble machine has not only bestowed massive speculative windfalls on the 1%, but it has also fostered a noxious culture of plunder and entitlement in the gambling casinos of Wall Street. After each thundering sell-off during the bust phase, crony capitalist gamblers have been gifted with ill-gotten windfalls during the Fed’s subsequent maniacal money printing spree.  In this context comes Bruce Berkowitz “scolding” and firing “salvos” at Washington from the front page of the Wall Street Journal.

 
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Tesla: When Just GAAP Revenues Are Not Enough, Unleash The Non-GAAP





In summary: non-GAAP P/E of 259x, and GAAP P/E of Div/0, as GAAP Market Cap/Sales is a "conservative" 12.4x. Good luck with that growth. You are going to need it.

 
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