Three rings full.
More stupid column inches on narcissistic media crap than you can shake a remote at. We see yet-another proof of our contention that – like the auto industry in the last Depression – the media industry has the same excess capacity and utilization overbuild problem today.
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In the first ring we have Bill O’Reilly’s bounce from Fox. As a long-time journo, one of the best techniques out there is to ask an open-ended question and then STFU and wait for the whole answer. I’m not sure I ever heard O’Whatzit do that.
Otherwise, the newser is a moron spouting a viewpoint and using guests as a tool.
I can’t stand people who interrupt. To my way of thinking the Boston Globe get’s it exactly right with the headline “ The O’Reilly factor that mattered? Hypocrisy.” (Go Boston Globe!)
And in the third ring? I expect we will see a lot of under 50’s maneuvering for he job…likely a female, I’d say. Not on journo skills perhaps, but on data testing.
We don’t know for sure WHO will be in this third ring, but take Tomi Lahren’s latest run-in with The Blaze. The Daily Caller story here gets me to thinking that maybe Lahren wants a new show…You hear there’s an opening at Fox?
Another third-ring entrant – with more seniority – might be Ann Coulter, who is vowing to speak anyway even though she’s been uninvited from the Berkeley campus.
No telling who else is out in the wings that could draw the attention of Foxecutives, but the whole kettle of fish won’t matter.
(Please good, no more British accented foreigners!!! Buy American you pin-heads!)
Why won’t it matter?
Because today’s up and coming young have increasingly moved back with mommy and/or daddy and judging by the mental acuity and Social addition of Generation Brat, you could put anyone who’s gook looking in front of ‘em and they’d follow as told. Mommy and Daddy want real news, not whatever the crap today is…
Social control over the young is soooo easy nowadays. And corporate media are a pretty crooked group if you read some of the data out there.
Take for example the Media Research Center’s NewsBusters report offering a quite readable breakdown here of the “Honeymoon from Hell: The Liberal Media vs. President Trump.”
Real news or fake?
Neither: Data, And the libs hate data worse than anything. Make’s ’em great cherry-pickers, though.
Long Knives and Train Wrecks
NY Post piece on how the Hillary camp is scrambling to find the insider who leaked the gory details of her loss to a couple of authors is amusing.
So Back to Making Money
The uselessness of politics aside, the markets Wednesday were busy whacking IBM.
When an outfit like Forbes runs with “2 Big Reasons To Sell IBM Stock” you know it will be an uphill fight.
As we see it, IBM’s business model is aging badly.
Most of their big mainframe computers (what we’uns call heavy iron) has been sold on lease-purchase arrangements. Nice, because there’s lease income that levels off the revenue bumps.
Except, thanks to the high art of load-balancing, stacks of servers and the whole art of distributed processing used by the SETI groups, the days of “big iron” look to us to be fading.
If you haven’t been following, check out what the smart kids do at Berkeley.edu – not the demonstrators – the other ones. The big brained ones who run the SETI (search for extraterrestrial intelligence) project.
IBM was run through the meat grinder Wednesday down just under 5% to c lose at 161.69. This despite beating on earnings.
Absent a $5,000 dollar quantum computer, pass the load balancers.
Business Model Roulette, II
IBM isn’t the only outfit with business model problems ahead. We will explore some additional models in trouble in an upcoming www.peoplenomics.com report for subscribers.
But in the meantime, I hope you caught the recent IMF on global financial stability. The executive summary in English is available from this page.
As always, there is good news and bad:
Financial stability has continued to improve since the October 2016 Global Financial Stability Report (GFSR). Economic activity has gained momentum, as outlined in the April 2017 World Economic Outlook (WEO), amid broadly accommodative monetary and financial conditions, spurring hopes for reflation. Longer-term interest rates have risen, helping to boost earnings of banks and insurance companies.
But on the other side – and this is something we have covered before – there is the high risk exposure for companies that have not restructured theirs long-term debt into the super low rates over the past couple of years:
Policy proposals under discussion by the new U.S. administration in the areas of tax reform and deregulation could have a significant impact on the corporate sector. Healthy corporate balance sheets are a prerequisite for these policy proposals to gain traction and stimulate economic risk taking. Many nonfinancial firms do have the balance sheet capacity to expand investment, and reductions in corporate tax burdens could have a positive impact on their cash flow. But reforms could also spur increased financial risk taking and, in some sectors, could raise leverage from already-elevated levels. The sectors that have invested the most have the highest leverage, and financing additional investment with debt will increase their vulnerabilities. Under a scenario of rising global risk premiums, higher leverage could have negative stability consequences. In such a scenario, the assets of firms with particularly low debt service capacity could rise to nearly $4 trillion, or almost a quarter of corporate assets considered.
And that is exactly the kind of nightmare that comes with periodic longwave economic depressions. While not here yet, when one does arrive, the bottom falls out, government needs to “make up” more money to make ends meet…and that pushes corporate borrowing costs high which results in businesses collapsing.
Just wonderful prospects, huh? This is why in the longer span of history long wave bottoms are followed by depressions which and they followed by wars which kill people and break enough things to recycle into another upswing.
Sounds like Rube Goldberg’s finest.
Philly Fed Business Outlook will have to serves:
“Results from the April Manufacturing Business Outlook Survey suggest that regional manufacturing activity continued to expand, but at a slower pace than last month. The diffusion indexes for general activity, new orders, and shipments remained positive but fell from their readings in March. The current employment index, however, improved slightly and continues to suggest expanding employment in the manufacturing sector. The survey’s future indicators continued to reflect general optimism but retreated from their high readings in the first three months of the year.
The index for current manufacturing activity in the region decreased from a reading of 32.8 in March to 22.0 this month. The index has been positive for nine consecutive months and remains at a relatively high reading but has moved down the past two months (see Chart 1). Thirty-seven percent of the firms indicated increases in activity in April, while 15 percent reported decreases. The current new orders and shipments indexes remained at high readings but declined 11 points and 10 points, respectively. Both the delivery times and unfilled orders indexes were positive for the sixth consecutive month, suggesting longer delivery times and increases in unfilled orders.
Other than this, the market could have an “inside day” ahead: Not going lower than yesterday, nor higher than the Wednesday highs. But we shall see.
Not really much (except news flows and earnings) to drive until late next week when we suffer through GDP, international trade, and consumer sentiment for the month, though Housing Tuesday (Case-Shiller) might be interesting.
Check Your Clocks
In the meantime, use the WaPo article “U.S. defense officials may have spoken too soon, but Trump’s missing ‘armada’ finally heading to Korea” to reset your “time to war” clock.
(I was up all night studying for my blood tests today…off to the vampire’s place..).