Jim’s Mailbox

Posted at 1:12 AM (CST) by & filed under Jim's Mailbox.

Beginning to look scary, sliding into the abyss.

Jim

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Jim/Bill,

Markets are hitting new all time highs today. But let’s look under the hood. It’s eerie!

Apple -Down

Amazon -Down

Netflix -Down

Google -Down

Twitter -Down

Snapchat -Down

Microsoft -Down

AS of noon today, Dow up 100 points!

In 20 minutes, the price drops are: (with the Dow still up 98)

Now at 1:20 pm….

Now at 2:00 pm….

Now at 2:50 pm….

Apple -Down 1.22 – 2.21 -4.45 -5.29 -7.60

Amazon -Down 8.70 -14.22 -18.50 -29.00 -33.50

Netflix -Down 1.60 – 3.68 -5.75 -8.15 -10.15

Google -Down 5.67 -14.50 -21.00 -32.00 -37.00

Twitter -Down .24 – .39 -.51 -.72 -.93

Snapchat -Down .93 – .89 -.81 -78 -.83

Microsoft -Down .74 – 1.21 -1.78 -2.22 -3.02

Facebook -Down .80 – 1.94 -3.40 -4.86 -6.40

Tesla -Down 2.50 – 7.50 -8.50 -9.11 -13.00

Has the bloom fallen from the rose?

Oh well…..there’s still Tesla.

CIGA Wolfgang Rech

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Jim/Bill,

Most investors of the “Jive 5” (remember the Nifty Fifty in our day?) believe nothing can stop their stocks from going up forever (Facebook, Amazon, Apple, Netflix, Google).

Just remember, there’s always a Black Swan lurking in the shadows. It’s almost impossible to spot in advance. But once it slowly approaches the light of day, the nimble will spot it and begin reacting. Then, and only then, can you ride their coattails.

My feelings are simple……technology will never leave us. It’s here to stay. However, that can’t be said for the consumer!

I believe, as the article below insinuates, that the elimination of the Middle Class will leave Amazon without the consumers to keep its momentum going.

For Facebook, I believe its “eyeballs” will be leaving in droves as the populace becomes aware of their addiction and Facebook ‘s propagation of such a business plan.

As for Apple, its transformation from a software innovator to a hardware company will take its toll. Many respond that Apple is capitalizing on the services side of the equation, like I-music. But as seen in Amazon, it is highly dependent on the welfare of the consumer.

Nonetheless, it’s never the company itself that breeds success. It is management. And the era of Steve Jobs and his visions has long passed.

Netflix will succumb to competitive forces such as Disney, ESPN, carriers, cable companies, Apple and Google (the Jive 5 will begin feeding off each other).

Google will become a victim of legal entanglements and restrictions regarding its invasion of privacy. Advertisers still appear to be its lifeblood, if I’m not mistaken.

These are only the obvious pitfalls. The biggest pitfall will be the old standby……no more incremental buyers of their stock. In fact, as Amazon will be plagued by a lack of middle class consumers, so the same thing will prey on all the above.

I’m middle class and can tell you that $350 a month for Verizon phones family plan and $350 per month for cable, are eating away at my standard of living. I’m sure I’m not alone.

As far as social networking is concerned, I’ve opted out of Facebook as it has become too childish and too much of a distraction in daily life. And it’s not just me. I’ve seen employees in many companies sit in their cubicles texting and roaming the net. That will not last long.

Perhaps I’m just an old fart that’s being dragged kicking and screaming into the 21st Century. However I do have a long, deep, rich past that provides continual reminders and warnings of what was and what will be. Something Millennials have yet to acquire.

Sitting on my back porch with a good book and Johnnie Walker Black, I remain enthralled with my “Golden” years.

A loyal Comrade In Golden Arms…..

CIGA Wolfgang Rech

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Jim/Bill,

Italy faces borrowing shock when ECB removes support, warns Pimco — It is an absolute mystery to me how Italy has been able to survive so far with more NPL than Greece has debt — there is only one answer: Draghi!

CIGA GG

Italy Faces Borrowing Shock When ECB Removes Support, Warns Pimco
June 4, 2017

ITALY faces a “horror” scenario when the European Central Bank winds down its bond buying programme in a move that risks sparking a surge in the country’s borrowing costs, according to one of the world’s largest bond managers.

The Pacific Investment Management Company (Pimco) said the ECB’s €60bn (£53bn)-a-month quantitative easing (QE) programme was “very supportive” for countries such as Italy and Portugal and had helped to limit volatility in these countries.

Andrew Balls, chief investment officer for global fixed income, said removing that support was likely to push up bond yields in a country that has struggled to implement reforms and reduce its massive debt pile amid weak growth.

More…

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Compliments of CIGA GG

Jim

The EMP threat put in context: It may not be the top threat we face, but it’s still a threat – Part 2
June 6, 2017

Recently we reported that the threat of an electromagnetic pulse (EMP) event, via nuclear attack or a massive solar storm, has long been considered a threat to the nation’s power grid and all of the infrastructure it supports. But, our report noted, because there still isn’t a consensus among experts about how best to protect the grid, or how to pay for that protective upgrade, the issue is not at the top of concerns for the federal government. There are, after all, only limited funds and resources to dole out each year, and while EMP testing and research has been ongoing since the 1950s, there is still no universal protective system in place, government analysts and experts say.

But as we also noted, the federal government’s and the power industry’s lack of action on technology to protect the grid should not imply that there is no threat at all posed by an EMP incident. And while some question the 90-percent casualty rate estimate from earlier this year regarding the number of Americans who are likely to perish following EMP incident, most reasonable people agree that there will be a large number of casualties.

More…