613 Stock Market

613 S&P

Someone challenged today about the number 613 (mystical, holy number of commandments in the Torah).

They said, “I would argue that you can pick any 3 digit number and get the same results.”

They went on asking that it be “No variations in sequence, no breaks between numbers, no mathematics.”

So here is perhaps an answer from Heaven–check out the closing change down in the S&P 500 today: Exactly 6.13!

You’re turn. 😉

(Source Photo: Andy Blumenthal with attribution to CNBC)

Advertisements

Market Watch 2016

Sale.jpeg

I took this photo in the mall on New Years Day–yes, the stores were actually open on the holiday.


And Macy’s was having a blowout sale with racks and racks of “80% Off Original Price[s].”


We were laughing saying what’s next–99% Off and then even 100% off! 


So you think the economy is healthy with fire sales like these on the very first day of the new calendar year–when we still have another 364 days to make our year end sales quotas…


With turbulence around the globe brewing from Iran, Syria, Russia, North Korea, Yemen, Sudan, Nigeria, ISIS, and more…anyone care to say (pending) crisis.


How about commodities–my bet–that are in the toilet (and have been for years now)–do you really think no one needs iron, aluminum, nickel, lead, cooper, potash, oil, gas, coal, diamonds, and gold anymore? 


Then the Wall Street Journal warned again today about the overall investment marketplace, asking “How do you invest when everything is expensive? [at 25 times cyclically adjusted earnings–now that’s a fancy term]?


We’ve been down this road before in the bubble bursts and recessions of 2001 and 2008.


Is now really the time for the Federal Reserve to be raising interest rates (and what a nifty ripple effect that will have in both slowing our economy down and raising our interest payments on our already ballooning $18 trillion national debt)?


Oh, technology to the rescue again and again…it’s possible with everything from virtual reality to robotics and artificial intelligence on the cusp…or maybe not this time around. 😉


(Source Photo: Andy Blumenthal)

Where’s The Value?

Binary

So I don’t know how I feel about this or maybe I do. 


The Wall Street Journal reports today that from the 10 largest companies by market capitalization:


1) The top 3 are technology companies


Apple $679B

Alphabet (Google’s Parent) $489B

Microsoft $422B


2) Moreover, a full 5 (half) of the top 10 are technology companies


That includes the 3 above and the other 2 below:


Facebook $288B

Amazon $280B


As a technology person, I am thrilled at the impact that IT has on our society. 


We are no longer the same thanks to our Apple iPhones, Google Search, Microsoft’s business tools like Outlook, Office and SharePoint, Facebook’s social networking, and Amazon’s online shopping. 


But to think that these information capabilities outweigh by value everything else in society that we need as people is somewhat astounding.


For example, the other 5 of the top 10 companies are:


Exxon Mobil (Oil and Gas) $346B 

Berkshire Hathaway (Insurance, Utilities, Clothing, Building Products, Retail, Flight Services) $340B

General Electric (Power and Water, Oil and Gas, Energy Management, Aviation, Healthcare, Transportation) $298B

Wells Fargo (World’s Largest Bank) $280B

Johnson and Johnson (Pharmaceuticals) $278B


So when you add these behemoths up–this is what we have:


The 5 top technology companies are worth $2.158T


Vs.


The top 5 traditional companies from all the other industries combined are worth only $1.542T


Net it out:


The largest representative IT companies are worth $616B or 40% more than the other major companies combined.


(In fact, just the top 3 IT companies at $1.56T are worth more than the top 5 other companies at $1.542T.) 


Sure IT growth has been on a tear for the last couple of decades and we love everything futuristic it brings us. 


But isn’t it a little scary to think that the companies that meet all our other needs from food, clothing, shelter, medicine, transportation, energy, finance, retail, etc. isn’t worth more to us than just the IT alone. 


Perhaps adding it up from a value perspective just doesn’t add up in a real life perspective. 


I love technology and want more and more of it, but man does not live by technology alone. 😉


(Source Photo: Andy Blumenthal)

The Unbelievable Stupidity Of Raising Interest Rates

Bull

Interest rates have been near zero since the recession of 2008.


That supposedly to stimulate the economy. 


However, aside from a stock market bubble again, not sure we have a much stimulated economy.


We have a false low on the unemployment rate, while the the true percentage of the labor force working is the lowest in almost 40 years!


Moreover, manufacturing is down almost 40% from the 1979 peak with a loss of over 7.2M jobs


Commodities are at firesale prices as demand is sluggish and there is short-term oversupply. 


And innovation is facing a global slowdown


So people are out of work, we’re not making things, demand is depressing prices, and even ideas are few and far between–not too rosy a picture, regardless of what some politicians may have you believe. 


Let’s not forget that we have an over $18 trillion federal debt, and this is projected to grow ever greater as we borrow to fund social entitlements such as social security, medicare, etc. 


In this scenario, why would the Federal Reserve ever want to raise interest rates?


Well, if they don’t raise rates, then they can’t lower them later again when the economy really stalls out and goes into deep recession. 


Hence, this is seen as a tool for their financial toolkit–and if there are no tools with which to manipulate the economy, then there is no need for a (neutered) Federal Reserve. 


But think for a second what happens when the Fed raises rates, it’s going to slow the economy even further than the chug chug chug economy that we are already dealing with. 


Maybe even more important, it will raise the amount of interest payments we must folk over on the trillions of dollars of debt we owe.  


Simply put, when we raise interest rates, we pay more interest on our already astronomically high national debt, and this pushes our national deficit up even higher as we borrow more to pay the interest on the previous debt. 


If you did this with your credit cards, you’d probably be looking at the equivalent of debtor’s prison sooner or later. 


Rather than feed the Fed’s toolbox with interest rate bumps and drops, why not keep rates low as long as they can stay low, reducing our interest payments, and curtailing our national deficit and debt. 


What about the stock bubble…that’s a lesson investors will be learning about in their own good time–it’s the stock market, stupid. 😉


(Source Photo: Andy Blumenthal)

2014 The Bad News Goes On

Bad News

What a 2014 it’s been as the world continues it’s descent into madness.  


If Ebola, the War with Hamas in Gaza, the shoot down of Malaysian Airlines Flight MH17 killing 298 including 80 children and 15 crew, the intransigence of Iran on Nuclear Weapons, employment still near a 30-year low, the National Debt hitting over $18 trillion (and growing $2.43 billion a day!) and the suicide of comedian, Robin Williams wasn’t enough…


– Criminal Records: 1 in 3 adult Americans (i.e. 80 million people) now have a criminal record…hmm, if the average family has around 2.5 people then just about 1 person per household has a criminal record. Are you starting to look around you now?


– Economy: Uber, yes, it’s a online “ride-sharing” (i.e. taxi) service, but after it’s recent IPO, Uber is worth over $41 billion dollars (more than Delta, Charles Schwab, Salesforce.com, and Kraft Foods). Someone’s getting taken for a ride. Is this even surprising considering the S&P is priced over 27 times average 10-year earnings (while the historical average is only 16), the result of pumping the economy with short term easy money policies.  


– Cyber Attacks: After a blithering cyber attack by North Korea, Sony withdraws the release of the movie, The Interview, surrendering to cyber terror, and putting us all at greater risk in the future because cyber crime does pay!


– Islamic Terrorism: While ISIS advances in Syria and Iraq, 132 school children (mostly ages 6-18) plus 9 adults massacred by the Taliban this week in Peshawar, many shot in the head and others lit on fire with gasoline and burnt to death so they are unrecognizable. This only 9 months after the April kidnapping by Boko Haram of more than 280 schoolgirls in Nigeria, which was repeated this week with the kidnapping of another 185 woman and children.


– Russian Militarism: The Great Bear is back with a vengeance as Putin continues driving Russian nationalism and buildup of advanced weapons, including WMD (e.g. nukes), aircraft, submarines, and ICBMs to counter alleged “Western Aggression.” And despite, the rubbles’ massive decline, Putin promises an economic comeback within 2 years–he’ll wait out the West and hold Crimea hostage and spoil it for everything it’s worth


So where are we going next–more hell on Earth or at some point a turnaround towards heaven again?   


(Source Photo: Andy Blumenthal)

The Games Organizations Play

split
So HP, under Meg Whitman, is breaking up into a PC/printing
company and an enterprise products and services firm.

Um…well of course it’s the right thing to do to focus each and release the
great value of these two companies.
Only, just a few years ago, under Carly Fiorina, HP a
printer and enterprise products company combined with Compaq, a PC company, in
order to gain the size and clout to succeed in the ever-competitive technology
marketplace.
The B.S. of corporate America—everything and the opposite–to
try and do something, almost anything, to try and raise the share prices of those
strategically stalled companies.
From Meg Whitman, CEO of HP:
– October 2011–“Together we are stronger!”
– Then today, 3 years later–“Being nimble is the only path
to winning.”
Yeah, whatever.
Merge, split—wash, rinse, repeat…fool the fools.
HP is still HP—especially compared to Apple, Amazon, Google,
and even now Lenovo. 😉
 
(Source Photo: here with attribution to Angie Harms)

Care To Be Curious?

Care To Be Curious?

Here’s three topics for the curious of mind today:

Are we technologically safer? As we attempt to beef up IT security, we continue to be technologically insecure. Just this last week, BBC reported how a fridge was part of 100,000 devices used to send out 750,000 pieces of spam. Yes, a fridge, and there was also a television involved–sounds like the beginning of a bad joke, right? But this is our reality these days…Proofpoint, a cloud computing and security company said “Many of these devices are poorly protected at best, and consumers have virtually no way to detect or fix infections when they do occur.”

Is our economy healing or hurting? As unemployment fell from 7% to 6.7% last week–an impressive reduction–the overall labor force participation rate didn’t rise, but rather sank to 62.8%–its lowest level in 35 years! And while, the Wall Street Journal explains that U.S. employment is simply not keeping up with population growth, the S&P 500 hit a new record high just last Wednesday. Meanwhile, the Fed continues to pour money into the economy, although at a slowing rate (expected to go down next week to only $65B a month), speculation is building whether we have another real bubble brewing, and this one of our own making, perhaps.

Is this the lead up to peace or war with Iran? As we continue to seek a long-term deal with Iran on their dangerous nuclear weapons foray, we read from Bret Stephens that Iranian President Rouhani said during his presidential campaign, “Saying ‘Death to America” is easy…We need to express ‘Death to America’ with action.” If we are getting a good deal that can truly lead to WMD disarmament of Iran, why did Rouhani tweet, “In #Geneva agreement world powers surrendered to Iranian nation’s will.” Curious, whether this is for political consumption in Iran or whether he sees the deal as just a stalling tactic leading to a breakout capability in nuclear weapons as well as a way to get some goodies in terms of sanctions relief for his country in the meantime.

What does little kitty cat say about these? 😉

(Source Photo: Andy Blumenthal)