Tag Archives: Apple

There’s Lies, Statistics And Apple Corporation

Apple announced earlier this week that its “initial quantities” of the new iPhone 7+ had already sold out.  Of course, it also announced a new policy in which it would not would disclose the first weekend sales volume of the new iPhone.  Nothing like using opacity to boost the use of propaganda.

On the news that the new phone had “sold out,” Apple’s stock went parabolic, running up 13.5% in four trading sessions.  Coincidentally, or not coincidentally, AAPL’s price surge this week helped the Fed prop up the S&P 500 and Dow.  By the way, AAPL’s revenues are now declining every quarter.

But it appears that the iPhone’s first day in stores is a complete dud.  Perhaps the most entertaining anecdote was the post on Zerohedge with several twitter posts showing no lines whatsoever outside of several mobile phone shops around New York City:  Sold Out?  USA Today wrote an article which contrasts the move in AAPL with the apparent lack of demand for the new product:  Apple Shares On Fire; iPhone Lined Decidedly Chill.

A colleague of mine told me this morning that he received an email from Apple informing him that if he trades in his old iPhone he can buy  a new IPhone 7 for $249.   The retail list price $699.

Companies do not sell a product with a list-price of $700 for $250 if there is high demand for that product or if that product is sold-out. 

Apple has transformed from the country’s most respected corporation into the same bag of lies, propaganda and fraud that has enveloped the entire financial, political and economic system.

Sure, Tim (Apple CEO), your new iPhone is sold-out just like Hillary Clinton is perfectly fit to run for President…

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The S&P 500 Is Set Up To Crash

Let me preface this commentary with the proviso that none of us has any idea the extent to which the Fed and the Working Group On Financial Markets, which has its offices in the same building as the NY Fed, has the ability to prevent a stock market accident.

Having said that, a large portion of the stock market has been in a tail-spin. The Dow Jones Transports Index is down over 18% from its peak last November; the SPDR retail ETF, XRT, is down 15% from mid-July this year; the iShares Biotech ETF, IBB, is down 18% since its high close in mid-July – perhaps ironically one day after XRT closed at its high; AAPL is down 20.3% from its February 23, 2015 all-time high – technically AAPL is now in a bear market; Dow Jones homebuilder/construction index, DJUSHB, is down over 10% from its high close (not even close to all-time high) in August – notwithstanding all the other fundamental headwinds starting blow at housing with full force, hiking interest rates will act like a roadside bomb on the housing market.

The point here is that many sub-sectors of the NYSE, sectors which had been extraordinarily hot as Untitled1stock trades, are now reflecting the truth about the deteriorating condition of the U.S. economy. (click on image to enlarge).

We can dissect the debate over the reasons why the Fed has decided to start “normalizing” – whatever that means – interest rates now. The fact of the matter is that it is impossible to know for sure why the Fed decided to nudge the Fed funds rate up by one-quarter of one percent. What we know based on reams of empirical evidence is that the U.S. economy is now collapsing at the rate it was collapsing in 2008/2009. Unless the FOMC is completely brain-dead – a consideration I would not fully dismiss – the Fed must have had some ulterior for setting a posture of tighter monetary policy.

With the high yield, and now investment grade, bond sectors imploding (I suggested over 2 weeks ago that the virus infecting the junk bond market would spread to investment grade), the next part of the capital structure that will be attacked is the equity “layer.” Many of you might have missed this news release yesterday:  Fed Votes To Limit Bailouts. The Fed is now restricted legally in the scope of its ability to prop up crashing banks.  There has to be a reason this legal restraint was allowed to be executed, because certainly the big banks and the Fed had the ability to derail it.  Perhaps it’s just putting window dressing on impending market developments that the Fed is now powerless to prevent anyway.

I have suggested for quite some time that eventually the natural forces of the market could not be prevented from seizing the S&P 500 and pulling it down to a level that reflects the true underlying economic and fundamental conditions from which markets derive their intrinsic over long periods of time.  History has already shown us many times that market interventions never work indefinitely.  Just ask OPEC.

Again, it’s impossible to time the markets perfectly, but the probability of a big downside event in the stock market is now highly skewed in the favor of those who set up their market bets to take advantage of the coming downside action.  My SHORT SELLER’S JOURNAL is a weekly subscription service, delivered to your email on Sunday night or Monday morning, is a market briefing with two ideas for shorting the market.  I also include some market comments not covered in this blog.

This week I will be featuring a financial stock and some interesting information on the housing market that you won’t see anywhere – at least not at this point.  You can subscribe to this service by clicking here:   SHORT SELLER’S JOURNAL.  If you subscribe by Sunday afternoon, you’ll get last week’s report plus this upcoming report.

This Could Trigger The Start Of A Stock Market Avalanche

As reported in Zerohedge today, JP Morgan has cut its estimates for Apple’s iPhone sales for Q1  2016 by 10%.   JPM also believes that its Q1 estimates may be too high:

November sales signal signs of early weakness of Phone 6S cycle…1Q16 bears potential downside risks, while 2Q16 Street estimates seem unrealistic: Although the Street has lowered its expectations on the Apple supply chain, we still see downside risk to 1Q16 consensus numbers of 50-55mn units. TSMC saw 10% order cuts in November, which we believe is from Apple business with the impact during the end of 1Q16 or early 2Q.  – JPM analyst comments sourced from Zerohedge 

Recently several Wall Street banks have been reporting a considerable decline in orders received by AAPL suppliers.  This clearly translates into Apple’s expectation for a slow-down in end-user iPhone sales.   It was bound to happen eventually.   “Eventually” is now.

The Apple iPhone story has been one of the key sources of the helium that has inflated the stock market bubble.  Keep in mind that it doesn’t take a big brain to figure out that iPhone sales are slowing.  It’s the Law of Diminishing Returns engulfing the iPhone fad.  It is also likely that the JP Morgan analyst is taking the lead in lowering the bar for Apple in order to facilitate an earnings “beat,” albeit on lower revenues and earnings.

However, any meaningful slowdown or decline in Apple’s unit sales, revenues and margins will trigger heavy selling by the hedge fund universe.  AAPL is one of the primary non-FANG stocks being used by the Fed to manipulate the stock market.  Evidence of this is the large position in Apple taken by the Swiss National Bank, likely at the Fed’s encouragement.

The stock market grows more fertile by the day with opportunities to make money as the bubble pops and irrationally overvalued stocks begin to plummet.  My SHORT SELLER’S JOURNAL is a monthly subscription service that will be delivered to your email weekly.  Each issue will contain a brief market summary from my viewpoint and offer at least one short-sell idea plus some trading suggestions.  Click HERE on the link just above to subscribe to my unique newsletter which will help you make money as the stock craters.

“AAPL Is Crashing – It May Be Over”

We’re dying to see Icahn’s next filing on Apple. The fact that Carl has not Tweeted anything on Apple since June 24 is interesting. – The King Report, M. Ramsey Securities, Aug 4, 2015

AAPL has been by far the biggest contributor to the run-up in the stock market since the Fed began printing trillions of dollars to save the big banks and reinflate every paper-fueled financial bubble that has infected our economic system since the mid-1990’s. While everyone points to Bernanke as being the “king of the printing press,” the Maestro himself, Alan Greenspan, worked his “maestro-ism” by pressing down hard on the money-printing accelerator in order to “fix” every big financial collapse since the 1987 stock market plunge.

Now one-by-one the bubbles are popping. EU sovereign debt and the Chinese financial system are clearly the most visible for the time being.  It also looks like the pancreatic financial cancer that took down Greece has now invaded Spain.

But the bubble-popping pin is also starting to invade the U.S. economy. One has to wonder if the Obama Government will invoke the “national security clause” of the Patriot Act and try to incarcerate the bubble-popping-pin without a judicial hearing at Guantanamo (the Guantanamo that Obama promised to close after he was elected in 2008). Maybe Wesley Clark will suggest putting the bubble-pin in an internment camp…

The poster-child for the U.S. financial system bubble has been AAPL.  Aside from Carl Icahn pimping his big position in the stock for a few years, Wall Street money slaves have tripped over themselves to drool over the Company’s overpriced cellphones and computers.  Not only is the price of AAPL stock a bubble, but it is a bubble in marketing, shameless promotion and the amount of unused tech gadget computer power for which the AAPL cult adherents happily pay – often with credit.

While no one knows which coming event will ultimately crash the U.S. financial system, the economy is clearly receding deeper into recession.  The GDP bounce reported for Q2 is nothing more than statistical smoke and mirrors fabricated by Government statisticians and Orwellian propaganda.  Every private-sector economic metric is now showing declines further into negative territory.  Today, for instance, factory orders plunged for the 8th month in a row, down 6.2% for June vs. June 2014.

Along with the deteriorating economy, the dislocation between the fiction of stock market valuations and the reality of Main Street continues to widen.  This will not have a happy ending.  The law of “regression to the mean” will at some point assert itself in brutal fashion and the multiple paper-fueled financial bubbles blown by the Fed will pop and decimate our entire system.

I doubt AAPL will be the trigger, but anyone blindly bullish on the stock market has to take notice of the 15% plunge in AAPL’s stock since its recent all time high:

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With Carl Icahn likely selling furiously, if not out of his position entirely, and every large hedge fund over-weighted in AAPL, who will catch the falling knife?  If the Fed or the Swiss National Bank does not insert a safety-net – and it appears as if the SNB is already filled on AAPL paper – AAPL has a long way to fall before it reaches a fundamental price that makes any sense.  Of course, the same can be said for the entire stock market…

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