“Too Warm In March To Spend Money On Amazon.com?”

Quote courtesy of Zerohedge.   Retail sales bounced in March thanks to a spike in auto sales fueled by the huge jump in non-revolving credit in per the latest Fed report.   Retail sales gained .9% in March but missed expectations for the fourth month in a row.   Electronics dropped, as did grocery store sales.   Online sales declined .1%.

Wasn’t Easter and Passover a bit early this year?  Shouldn’t holiday sales at the end of March help to boost March retail sales?

It’s just amazing to me to that the media continues to repetitiously insist that the weather is having an affect on the economy.   This absurdity symbolizes just how Orwellian our system has become.

This reminds me of a story a colleague told me about how Wall Street analysts feed business reporters their storylines.   At the time this colleague was an analyst in the junk department of the bank where I traded junk bonds.  He had just fielded his first call from a reporter.   After he got off, he went the head of the research area and asked her how to handle media inquiries about why the bond market is moving.

This was her answer:  Go over to the Bloomberg terminal and pull up “headlines.”  Take the top three headlines – regardless of their content – and give those as the reasons for the reasons the market is moving.  Then hang up.

That’s it folks.  Whoever decided to use the “bad weather” attribution for poor economic reports starting in November 2013 started a trend that has become virile.  I wonder what the excuse will be in July when the consumer is in the intensive care ward:  “people are staying home to watch baseball.”

So retail sales are estimated to have had a dead-cat bounce in March after 3 consecutive months of declines, including a decline in the biggest retail sales month of year (December).   I would suggest that the March number will be revised significantly lower next month.  This serves two purposes:  1)  it covers up what would have been a bad headline number for March;  2)  with a lower comparison number used for March, it makes the April headline number look better or less worse on percentage gain/loss basis.

Either way, this stock market is setting up for a colossal fall.   I would suggest that, given online sales dropped in March.   Amazon.com reports its Q1 at the end of this month (April 29).   It has already forecast a deeply negative operating income number.   Although I’m sure AMZN will use a full array of GAAP accounting gimmicks to stretch its reported net income (which will be a loss) into a “beat” of expectations, the stock will likely get hammered.

If you want to make money off of this event, you need to be positioned ahead of the event.  I am short AMZN and adding to my position via various options strategies.   My AMZN report explains how the Company uses highly misleading accounting to make its numbers look better than the actual economic rent (cash flow) being generated by the Company.   My report also explains how to use options to play a downside move if you don’t want to short the stock outright (I recommend a combination):   AMAZON dot CON

This can only be described as the look of a man (Jeff Bezos) who knows he’s pulling off a scam that makes the Madoff Ponzi scheme look like a small scale drug dealer selling oregano to high school kids (ironically, Bezos started out his Ponzi finance career at Bankers Trust – the same crooked bank at which my colleague and I toiled):


8 thoughts on ““Too Warm In March To Spend Money On Amazon.com?”

  1. The answer to this is to have Janet Yellen make some macroprudential accomodation for Mssrs Snow Miser and Heat Miser:

  2. Do you really want to know who does all the consultant
    work for mass media and the government ?
    Well here is your answer in this short two minute video.

    1. An academic study? ROFLMAO. The biggest flaw in any argument in support of that idea is that
      ALL economic series are STATISTICALLY ADJUSTED FOR SEASONAL AFFECTS. SAAR – Seasonally Adjusted Annualized Rate.


  3. Profits or no profits that doesn´t seems to matter for AMZN stock.

    It´s almost like an invisible hand under the stockprice preventing it from going down.

    Maybee Bezos have a lot of friends in the Plunge Protection Team.

    Maybee he has thretened them with his evil laugh.

  4. Timely analysis Dave, when all the real indicators and data are pointing to epic convergences in markets, just as economic dichotomies reach outer limits of dislocation, imbalances, rehypothecation, leveraging, etc.
    While global warming (now climate change) and seasonal variations are thrown around casually for expedience, few consider what was said, few even care, as long as the markets show the President’s Working Group on Financial Markets is in 24/7 session, and it’s partners the Counterparty Risk Management Group and the Exchange Stabilization Fund.
    From: Credit Manager’s Index http://web.nacm.org/CMI/PDF/CMIcurrent.pdf
    National Association of Credit Management | Report for March 2015 | Issued March 31, 2015
    “We now know that the readings of last month were not a fluke or some temporary abberation that could be marked off as something related to the weather. There is quite obviously some serious financial stress manifesting in the data and this does not bode well for the growth of the economy going forward. These readings are as low as they have been since the recession started and to see everything start to get back on track would take a substantial reversal at this stage. The data from the CMI is not the only place where this stress is showing up, but thus far it may be the most profound… ”

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