With the Fed meeting today, we are looking at the larger picture and asking…the same old question. Where’s the value?
We think social media is beginning to crack up and as we laid out their business models as far back as 2013, we could see trouble coming. But, it’s not social media that’s gone bad.
When today’s latest (and sick) attempt at “making up money” as a new crypto currency arrived in my email overnight, it screamed: “This could be your last chance of turning 100 dollars into a fortune. You do not want to miss this opportunity...” You can almost smell “the turn” in the air.
This “turn” is one of awareness: Where a large chunk of the world wakes up one morning and suddenly a terrible number of relative truths are accepted:
- Mueller hasn’t still got Trump. And the election results are still in place. How much time can we waste on this?
- Facebook and social media is a largely ego-driven waste of time.
- Cryptos are doing like the government – making up money – even more so than dollars. And they don’t have an army or navy to back ’em up.
- Oil prices may drop shortly due to autonomous drilling. Not killing the oil patch – already slammed. But here again, “The Robots are Coming! The Robots are Coming! Everyone hold your jobs! The Robots are Coming!”
- The US dollar is worth less than 4-cents of purchasing power compared with 1913 when another crooked congress abdicated money and tossed the gold and silver notion…
- Gender-bending is a business model. D’uh. The mis-named “educators” are programming it into the junior ape units as we speak.
- Hysterical news media evidences a collision between business models. Trump’s hated by the media because he had the balls to “go Consumer-Direct” on Twitter and cut out the old business model – the corporate press…
- There’s no Planet X about to wipe us out, ditto no global subsidence…three-fingered aliens? Maybe.
- The sun really is at 100 year low output levels so kiss off global warming and Al Gore’s climate tax scheming. Give me $300-million in grant money and I will prove anything you want. Peer-reviewed, at that.
This may see a bit harsh, but the signs are there that something’s amiss and people are picking up on it.
Early this morning (4 AM Central) it was amusing to watch the morning’s full-court press to arb the markets up at the open. Starting with a story in the Wall St. Journal “Stocks Regain Footing but Tech Woes Continue to Weigh,” we have been following one hype story after another.
Likely: Deep State/Plunge Protection Team doesn’t want to “let ‘er rip” just yet. But, it’s a dangerous balancing act…once the markets get past a certain point, it’s too big to control. Remember the problems of Siegfried & Roy? The market’s like Montecore (the tiger) and when it turns….
The early US futures – showing -75 on the Dow early – have had plenty of time for KoolAid in lieu of coffee. Orderly open – just what the PTB like to engineer.
But. the big question remains on the table; What will the Federal Reserve – whose meeting starts this morning and results in a rate announcement tomorrow – do behind closed doors?
A lot depends on whether you consider the Fed part of the Deep State. And the second-level dependency: What does the Deep State want done with Donald Trump?
The most graceful answer would be a surprise 1/2 percent rate hike tomorrow. That would scare the hell out of the market and would cause an overnight change in the hyperbubble. It would burst (right on our timeline).
It would take the “Trump Bump” narrative away from the hapless (or is that witless) GOP’ers in the fall congressional campaign. Even better: It would show the public who’s really in charge. (The people with the control of money, silly.)
Or, it could go the other way: A surprise hold – maybe even a drop of rates. “OMG they see it’s too sucky and economy to raise now…they must know something…” And down it would come.
My deflationist pal has been expecting bonds to rally one more time (inferring a rate drop) because we have not-yet wrung malinvestment out of the financial system to any appreciable extent. Like the nanny-state operates the “continuous do-overs” in schools, the perps of financial holdups at the mega level all get rich and the public pays.
Part of the deflation argument is buoyed because a) raising rates will make the accumulated Federal Debt – already over 100% of GDP – even more unsupportable. Plus, for many companies with rising share prices, the Quality of Earnings has been declining.
QoE doesn’t get much respect: It’s worth a moment of your attention.
Ask yourself this “Which stock has more value?” One that has bolstered its share price by buying-back its own shares or one that has a runaway smash-hit new product that people are lining up to buy?
Those Apple line days are long gone…which gets us to looking seriously at how much of stock prices is driven now by clever accountancy and how much by genuine value?
As We’ve Been Saying: Social Sucks
We have long held that social media has been based on a “crooked business model” from the get-go. Before there was social media, websites (like this one) and companies (perhaps like yours) actually had their own user and discussion groups.
Then along came Facebook (along with other social platforms) and companies were hyped into moving their customer base onto Facebook – free, of course – in order to “keep up with the times.” Sites like Urban, we encouraged to go social.
Not long after the period of freebies, and by memory after the IPO, Facebook began to demand ransom. It used to be Ure audience, but now you have to pay us to talk to ’em.
That’s when UrbanSurvival lost interest in social media. We offered some of our remarks there, but when the ransom demands started, Our posts were no longer delivered to all of our followers. Only a small fraction.
We were sold this: We could always buy post boosting…and all that takes is….uh….money, for example.
At the time I wrote this process up on Peoplenomics, we labeled it a time-circular business model. Offer the free stuff long enough (a few years) to get Corporate America hooked on the digital crack that social has become. And once the “peeps” are conditioned to salivated all their personal details, then it’s time hold up publishers of content for revenue.
Don’t get me wrong, it’s a stunningly profitable business-shuffle: You give something away FREE, and then demand the big money down the road. Facebook had only to provide an ego-appealing framework (servers and load-balancing) and all their content was obtained basically for FREE. And the Audience was told “See us on Facebook….”
Had Facebook revealed its plans to charge for access to a company’s own clients – of a website’s readers in advance, would anyone in their right mind have done it?
Morality and forthrightness aside, all that FREE content is now being monetized because the American people are attention-deficit suckers. And oh, yeah, who owns copyright on contributed material? No one seems to read “terms of service” except lawyers.
When we evolved this skeptical view, it was December 18, 2013. Our Peoplenomics report that date was “As we look ahead, we’re troubled by the increasing number of “time-circular” business plans emergent in social media.” We predicted social would run into trouble.
Early? Well, uh, yeah…
But, like much of what we do, we’d rather be more than four years early than had owned a pile of FB shares that lost 6-3/4% in Monday’s trading and may lose more today.
We’re still here, still hosting our own reader comments. And we expect in time, corporate America will WTFU and see social for the scam it is.
Diogenes wouldn’t get many “likes” either. People who do “right” are seldom popular when the herd is “under the influence.”
So, forget I said anything and go read about the Gush Over First Close-Ups Of Kanye West & Kim Kardashian’s Daughter Chicago West.
(Did they name the child after an office building, or what?)
Sick in Austin:
Another bomb has gone off, this time at a FedEx facility as the Austin Bomber case continues chasing down leads.
As an armchair detective, I would look at who Austin-area subscribers to Smithsonian Magazine were. Why? Well, they did a story last year “The 1927 Bombing That Remains America’s Deadliest School Massacre.”
Other ideas suggested by history rhyming?
Another bomb/school link historically:
The Bath School disaster, sometimes known as the Bath School massacre, was a series of violent attacks perpetrated by Andrew Kehoe on May 18, 1927, in Bath Township, Michigan, which killed 38 elementary schoolchildren and six adults and injured at least 58 other people.[Note 1] Kehoe killed his wife and firebombed his farm, then detonated an explosion in the Bath Consolidated School before committing suicide by detonating a final device in his truck.”
And if you live in Florida, try on “Mysterious Bombing at Bank of Oviedo
The village of Oviedo was rocked by a 1929 attack perpetrated by apparent burglars… or was there another motive?”
It will be interesting when the perp is found which of the historical markers, if any, repeat.
Off to work on Peoplenomics. Futures are back to flat and oil’s up a whole buck while cocoa futures are up one percent…lattes booming?