Of all the moronic excuses I’ve heard in a 26-year Wall Street career –
including seven as a sell-side equity analyst – this morning’s” management
comments” from one the most hideous “hot IPOs” of today’s historic tech
bubble, King.com, takes the cake. King, which produces free, mindless online
games like “Candy Crush” blamed a variety of miscellaneous issues for the
fact that its 15 minutes of fame are over – from foreign exchange losses
(Really? Are they honestly trying to portray themselves as a multi-national
firm?); to a lack of new product releases (quite the ugly admission from a
company that went public last summer); to – get this – expected “seasonally
softer” sales in the “mid-year period.”
For a second, let’s forget that if King.com truly has a “seasonally soft”
period, it should have disclosed it to investors when it went public – a
measly 12 months ago. To wit, when I worked on IPOs as an oilfield service
equity analyst at Salomon Smith Barney – creating earnings models and
invariably bullish “initiation reports” (our investment bankers wouldn’t
“allow” anything else, and potential clients wouldn’t hire us if said bankers
didn’t “promise” buy ratings), my research team grilled management about
every aspect of their business. Of course, compared to the halcyon days of
the late 1990s and early 2000s – when Wall Street fraud was generally limited
to the relatively benign sphere of conflict of interest (think Jack Grubman),
today’s “research” efforts are far sloppier, with far less attention to
rules, no matter how flimsy such rules might be.
After all, Wall Street has commandeered the government; and care of the
PPT, no matter what lipstick-covered pigs they take public, they typically do
well. That is, until their seedy underbellies starts to show – be it
parasitic brain cell destroyers like Twitter; boiler room, pump-and-dump scams like “The Grilled Cheese Truck“; dying, bottom of the barrel fast
food chains like “El Pollo Loco“; or highly commoditized, zero
value-added societal drains like King.com. Anyhow, the fact that King’s management actually
published such drivel in its earnings report shows just how close to Satan’s
Lair Wall Street has descended; in KING’s case, as advised by underwriters”
such as…drum roll please…JP Morgan and Bank of America.
Why did I start today’s article – written, by the way, after Friday’s
market close? To show you that nearly everything Wall Street says is, if not
an outright lie, heavily biased toward their own, selfish interests. As are
essentially all emissions of the other two legs of the “evil tripod” – of
Wall Street, Washington, and the Mainstream Media. The first of these
“triplets of terror” will do anything to be elected, while the second
would sell their mother’s souls for profit. As for the latter, they
care not a whit about truth – but instead, ratings. Hence, the first
part of today’s tripartite title – lies.
Putting these three satanic forces together, let’s consider this week’s
across-the-board, horrific economic data releases, as well as the “spin” put
on them – while on the topic of putting lipstick on pigs. For example,
consider yesterday’s miserable April retail sales growth, which came in at a
big fat ZERO; which sadly, means the heavily propagandized “pent up demand”
due to cold winter weather never materialized. More accurately, there never
was any such demand. Moreover, if such a “seasonal component” to retail sales
actually existed, it would have been picked up by the government’s myriad,
overly optimistic”seasonal adjustments.” To wit, in today’s horrific world of
Central bank fostered “peak debt; falling real wages; rising inflation; and
the worst economy in generations, it doesn’t matter what “the weather” is;
how much the Fed lowers rates; and how much the PPT gooses the stock market.
People simply aren’t spending – in strip malls, online, or otherwise. Which
is probably why 2014 witnessed the weakest holiday spending season since 2008;
and why retail sales haven’t fallen this rapidly since…yep, you guessed
it…2008.
Worse yet, not only is consumer spending plunging – which according to
Wall Street, constitutes two-thirds of the U.S. economy; but like the BLS’
fraudulent “employment” numbers; the NAHB’s equally fraudulent “housing”
statistics; and “Markit’s” upwardly biased, statistically insignificant
“diffusion indices”; said numbers are inevitably revised lower. The March NFP
headline is a perfect example – last week, revised from +126,000 to +85,000;
which by the way, pales in comparison to the BLS’ annual “benchmark
revisions” – which over the years, have erased hundreds of thousands of
supposed “jobs”; or, for that matter, the equally large “downward revisions”
ADP unveiled roughly three years ago. As for retail sales, even I was
taken aback by this chart, demonstrating how an
incredible 20% of initially reported retail sales over the past five years
have been subsequently revised away. In other words, as I postulated last
year, “all economic data are lies“; overstated at the
least, and fraudulent at worst.
And then there’s “inflation” – right up there with “employment” at the top
of the fraudulent data list; in this case, serially understated for myriad
reasons, ranging from cheating senior citizens out of appropriate cost of living
adjustments; enabling misleadingly low “discount rates” in corporate,
municipal, and Federal cash flow projections; and of course, masking the
virulent price inflation unfettered money printing relentlessly poisons the
economy with. To that end, I’m still incredulous at how the BLS
actually applied a negative deflator to its 1Q GDP report, enabling it
(before upcoming, potentially significantly negative revisions) to be
reported at +0.2%. Aside from the bottom of the 2008 crisis, the last time a
negative deflator was used was 66 years ago; and as we all know, the cost of
living – notwithstanding a brief, already reversing gasoline price decline –
has never risen faster. To wit, essentially the entire Denver area was hit
this week with 15%-35% property tax increases – irrespective of actual home
price trends.
Anyhow, it was just yesterday when I said the following;
regarding the utterly comical Producer Price Index released Wednesday –
purporting consumer prices plunging by 0.4% in April.
“The U.S. government is so desperate to slow the “interest rate train”
down, it actually reported – get this – an April PPI depicting the biggest
monthly collapse in five years. Yes, even with average U.S. gasoline prices
having risen by 4% during April – and by the way, another 4% in May; the BLS
– already infamous for publishing the monthly NFP employment report –
actually reported American’s cost of living declined by 0.4%, compared to
expectations of a 0.2% rise.”
Well, it appears my math was a bit off – as I was simply looking at the
unofficial “Gas Buddy” website; as opposed to the BLS’ official energy
inflation algorithm, which depicted an average U.S. gasoline price increase
in April of not 4%, but 7.9%. Yes, actual Americans, on average, paid
7.9% more for gasoline in April than March; again, according to the BLS’s own
calculations. And yet, the number it used to calculate the April PPI was minus 4.7%! As I wrote in this week’s “final round of finance’s most momentous
heavyweight battle,” the government will lie about anything and
everything to preserve a dying status quo based on hyper-inflating fiat
currency. That said, their “footprints” – like the gold Cartel’s – are as large
as the Sasquatch. And thus, if you simply seek the truth – which
fortunately, is always on display at the Miles Franklin Blog – you
should have no trouble understanding the tragic direction the world is going;
and consequently, how to protect yourself from it.
For that matter, let’s move on to today’s “trifecta” of hideous economic
reports – including an “unexpected” decline in Industrial Production; a “less
than expected” Empire State Manufacturing Index, depicting the lowest
corporate spending outlook in 15 months; and last but not least, an utterly
catastrophic plunge in consumer sentiment. Regarding the latter, the report
revealed further evidence of what we have purported all along – including, in
great detail on yesterday’s Audioblog, how plunging “weekly jobless claims”
is the most misleading of all the government’s “island of lies” statistics. To wit, this incredibly damning chart; which,
just as the weekly jobless claims plunge has eerily correlated with the
collapsing labor participation rate, has also plunged with a nearly perfect
negative correlation to the “worried about losing one’s job” subcategory. Which,
you’re probably not surprised to hear, surged in April – “good weather”
notwithstanding – to its highest level since…drum roll please…late 2008.
Of course, such “lies” and “collapse” are becoming standard practice worldwide
– as are the manipulation of financial markets on a 24/7 basis, entirely with
freshly printed money fiat toilet paper. I mean, the fact that Japan – where
the Yen has collapsed, and consumer inflation is exploding – still uses a
negative GDP deflator should tell you all you need to know. Or, for that
matter, that it is now estimated that fraudulent accounting regulations allow
trillions of non-performing Chinese corporate and municipal bonds to
be held “off balance sheet”; which is probably why the PBOC last month issued
a “trial balloon” regarding a soon-to-be launched monetization scheme, akin
to the off balance sheet “swap agreements” the Fed still holds with countless
insolvent European banks – enabling the Fed to print money without reporting
it, by terming such transactions “swaps” instead of “loans.” And still, per
my earlier comment regarding “Sasquatch-ian sized” footprints, the Fed’s
balance sheet continues to surge to unprecedented levels. As do all
the world’s hyper-inflating Central banks – such as the ECB, which promised so much today.
That said, “markets” are starting to do strange things. Sure, global PPT
initiatives are hyper-inflating stocks to unprecedented valuations – whilst
underlying economic activity implodes beneath them (what could possibly go wrong?).
Not to mention, unprecedented attempts to paint every imaginable market in a
manner favorable to the terminally cancerous status quo – including a handful
of politically-sensitive physical markets, like gold, silver, copper,
and oil (which inevitably, will be steamrolled by
the “unstoppable tsunami of reality.”) Moreover,
the past two weeks’ “tectonic market shifts” indisputably portend
disaster – as surging rates are causing Central banks, both overtly and
covertly, to step up QE to unprecedented levels. Meanwhile, violently
volatile currency markets – i.e., the “single most Precious Metal bullish factor
imaginable” – are destroying global trade as powerfully as the massive
supply/demand “deformation” caused by four decades of
unfettered money printing. And not just in mining, manufacturing, industrial
production, and infrastructure – but agriculture, where plunging
prices of key foodstuffs like rice, corn, oats, soybeans, and wheat; acute water shortages in drought-riddled areas like
California and Brazil; and the first farmland price declines in three
decades, portend a “farming emergency” in the very near-term.
That said, despite the most violent, blatant Cartel activity I have
witnessed in my 13 years in the sector (I’m celebrating my “anniversary” this
week), gold and silver prices have significantly reversed to the upside. Oh,
the “Sunday Night Sentiment“; “Cartel Herald“; and “2:15
AM EST” algorithms are as pervasive, and relentless, as ever. However,
amidst soaring global PM demand – everywhere but the still-brainwashed U.S.,
that is; plunging inventories; the bleakest production
outlook in decades; and oh yeah, explosive money printing, set to go
parabolic in the coming months and years, the massive bottom formations
created by years of suppression are starting to lift. As the aforementioned,
terrifying economic and financial trends accelerate in the coming months –
particularly in the United States of “Recovery,” which ultimately will yield
the long-awaited “Yellen Reversal” – Precious Metals’ historic
monetary power will return to the fore, just as they have with the collapse
of every collapsed fiat currency. Let alone, today’s unprecedented
catastrophe of all currencies having zero backing. Clearly, the tides
are turning – and as the dying fiat regime moves through its death throes,
the “Return of Precious Metals” will have the same impact on the status quo
as the “Return of the Jedi” did on the political structure a long time ago,
in a galaxy far, far away.
