By Bryan Wiener, Benzinga: It was one of the craziest days for a single stock in quite a while. After the release of its earnings report late Monday, Netflix raged to its highest level ever in after-hours trading, hitting upwards of $396. Then, in an enormous reversal on Tuesday, NFLX hit its all-time intra-day high of $389.16 and tanked.
Selling airline tickets to our increasingly pauperized consumers is an art. And hiding price increases is an even greater art. While there are people who don’t worry about the price as they luxuriate in first class, others aren’t so lucky. For them, the industry has a special treat: squeezing their hips.
By John Mauldin, Mauldin Economics: Sheraz Mian, Director of Research for Zacks Investment Research, gives us an overview of corporate earnings trends for the past several quarters and consensus expectations going forward, and asks, “How realistic are these expectations?” Not very, he says.
What Will It Take To Blow Up The Entire Japanese Banking System? (Not Much, According To The Bank of Japan)
Buried in the Bank of Japan’s Financial System Report is a gorgeous whitewash doozie: if interest rates rise by 1 percentage point, it would cause ¥8 trillion ($82 billion) in losses across the banking system. Banks would be able to digest it. The system is safe. But then the report tallied up the losses of a 3 percentage point rise.
By Analysts of Oil & Energy Insider: The Ukraine controls the transit of 90% of Russia’s natural gas to Europe and dependents on Russia for 60% of its own gas consumption. Russia is using its gas stranglehold on the Ukraine to gain control of its transit system. The EU is involved too. An epic struggle. But now, a deal with Turkey might usurp it.
The euro, its dexterous management, the “whatever-it-takes” guarantees by ECB President Draghi, the trillions being shifted around to prop up banks and governments – all these efforts to keep the Eurozone duct-taped together have hit countries differently. Including France and Germany. They’re shooting at each other now, and hitting the ECB.
By Michael Lombardi, MBA for Profit Confidential: Optimism is increasing each day. The US stock market “seems” to be a safe place, and it’s common to hear stock advisors suggesting it’s going higher. Recently, we heard the “Godfather of Charts,” Ralph Acampora, turn bullish. In August, he’d still seen a 20% decline of the DOW.
By Dennis Miller: We all share a common goal: to grow our nest eggs and make sure they last over the long haul. Our generation was taught to live off the interest and never touch the principal, but interest rates for CDs and Treasuries no longer allow for that. They don’t even keep up with inflation, so we have to invest our money elsewhere if we want it to last.
Stocks balloon, we’re incessantly told, because revenues are rising due to great products, ingenious strategies, or brilliant marketing; and because earnings are rising due to, well, if not rising revenues, then cost cutting, moving production overseas, squeezing suppliers.... But what if revenues sag and earnings plunge, not for a bad-hair quarter, but for years, and the stock still balloons?
By Rory Johnston, of OilPrice.com: Early Saturday morning, a 134-car freight train carrying crude oil and liquefied petroleum gas derailed and exploded outside of Gainford, Alberta. The third such CN derailment in the past month. And three months ago, the tragic Lac-Mégantic disaster claimed 47 lives and incinerated the center of the town.
Trade is one of the critical elements in Abenomics. Devaluing the yen would boost exports and cut imports. The resulting trade surplus would goose the economy. But the opposite is happening. And it isn't happening in small increments, with ups and downs, but rapidly and relentlessly. It’s not energy imports. They actually dropped! It’s a fundamental shift.
By Chriss Street: China’s Dagong credit rating agency cut the US to A- and maintained its negative outlook on solvency, warning: “The fundamental situation that the debt growth rate significantly outpaces that of fiscal income and gross domestic product remains unchanged.” But China’s need to dethrone the dollar as reserve currency goes deeper.
Earnings estimates for Q3 have been crashing for a year. On October 1, 2012, our brilliant Wall Street analysts estimated that they’d leap 15.9%. As of Friday, these brilliant analysts have chopped their forecasts for the same brilliant quarter down to a measly growth of 2.1%. Stagnation! Now they’re hyping how companies are beating these crummy forecasts!
By johnnygeneric: In a human life, 47 years isn’t all that long. So this is a personal data point of how the Fed has managed, or rather mismanaged, or rather utterly and willfully destroyed, the dollar since his mom sold their trailer in 1966 – and what that would mean in gold today.
The Wall Street machinery was back in business thanks to the Fed’s policies, David Stockman writes. When Extended Stay America exited bankruptcy, its new owner was, well, Blackstone – which had done the LBO. To underscore that speculators had returned to the scene of the strangulation, as it were, its partner in the deal was John Paulson’s hedge fund.
By Don Quijones: Four months ago, Miguel Blesa, ex-CEO of failed Caja Madrid and senior member of the governing Popular Party, was in jail. Accused of felonies ranging from irregularities in Caja Madrid’s purchase of City National Bank of Florida to wrongful “appropriation of funds,” Blesa was not even granted bail by the judge. But now he is free, and the judge is in trouble.
China’s economy grew barely above the government-decreed minimum of 7.5%. Deep frustrations simmer beneath the surface and can explode at any time. To maintain social stability, the government douses the land with money. Growth at any cost. But the results are majestic property and construction bubbles – and they can’t be inflated forever.
By Lacy H. Hunt, Ph.D., Economist: The Fed's capabilities to engineer changes in economic growth and inflation are asymmetric. Its tools are well suited to fight rampant inflation. But in an excessively over-indebted economy, when it tries to spur growth by cutting interest rates to zero and buying assets, its tools turn out to be powerless.
I’m not picking on IBM. I’m almost sure they have some decent products. So they had a crummy quarter – the sixth quarter in a row of sales declines. And their hardware sales in China have collapsed since Snowden’s revelations about the NSA and its collaboration with American tech companies. But in one area, IBM excels: its hocus-pocus machine.
By Dennis Miller: My grandfather was a common man. He was an army sergeant in WW II. When the war was over, he ran the family farm. I doubt he ever heard of Keynesian or Austrian economics. His advice and opinions were more of the commonsense variety: Spend less than you make, save the difference, and don't depend on the government.