iBankCoin
I've been doing this a long time.
Joined Oct 7, 2015
70 Blog Posts

Investing in China? Why would you do such a thing?

The Big News in my feed this morning is the story on the obscure Beijing bureaucrats who have caused a 2% drop in Apple shares by banning the sale of ancient iPhones in the old city, phones that Apple is currently phasing-out of their sales channel.

I am a long-term holder of shares in AAPL, otherwise I would be buying on this dip, but I try to adhere to strict Principles of Allocation in my portfolio. I am Most Comfortable as my cost basis in AAPL is a mere fraction of it’s current “depressed” asking price.

I have already written of my aversion to investing in things Indian so let’s move further Eastward into this morass that is Asian Finance. Or at least my limited experience with it. Years ago, while it was still fashionable and in a Moment of Weakness, I “invested” in a coal-mining company in fucking Inner Mongolia. The Maven is not proud of this but it was long ago and illegal substances as well as copious amounts of legal alcohol could possibly have been involved. Things were going smoothly for awhile, quarterly reports came in with steadily increasing earnings, astute acquisitions were made, the coal industry was booming, and goddammit I was going to do pick up the White Man’s Burden and help the fine people of Inner Mongolia obtain cheap fuel and electricity.

And then it all vanished, literally overnight, in a frenzy of financial chicanery not seen since the days of the river boat gamblers fleecing rubes on the Mississippi. The CEO was accused of Crimes Against the State and apparently whisked into the gulag never to be seen again until properly reprogrammed.

Your Maven shound have been risk-averse to anything remotely Chinese at that point – and I was, for years. Yet I watched, forlornly, as company after company debuted with IPO’s worth tens of billions of dollars. Billionaires created by the hundreds with many, many hopeful speculators not far behind. I had to get back in the game, as Cramerica is always exhorted on that CNBC thing.

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As you can see by the chart, the Chinese have been pouring money into their exchanges, mostly money flowing into IPO’s. Yet the average investor there will pull his money out just as quickly as he threw it in, as evidenced by the dramatic swings we have seen over the past 18 months. And the communists have been Most Helpful as they have made investing in IPO’s dramatically more efficient:

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Yet the results for many enthusiastic speculators has been less than stellar. I am being kind:

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And the communists hold a tight rein on your Dreams of Early Retirement when you might least expect it:

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“Get back in the game”. So I did. I researched and I researched and I decided on Trina Solar (Ticker Symbol TSL). I waited for a drop, and drop it did, from dizzying heights all the way down to the teens and then into single digits. Yet the fundamentals were strong, there was growth with little debt, analysts were falling all over themselves. So I jumped in. But this time I traded it rather than treating it as a long-term play. And it worked, for the better part of a year I made good money buying dips and selling a short time later for decent, sometimes even great, returns.

Perhaps the burn from my coal debacle tempered my enthusiasm, as I am lucky that I never bought a large number of shares at one time nor held them for long periods. Yet my final buy and sell left such a taste of bullshit in my mouth that I swore off anything Chinese, forever. Read on…

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You see just as it seemed TSL would rocket higher, the CEO, Jifan Gao, formed a cabal to take the company private via ADS in December 2015. Long-time holders, and there were many, who had bought at much higher prices over a few years, got rat-slapped as the price to acquire was set at about $11.60 – far below what most analysts at the time regarded as the fair price of company shares. I believe the Consensus at the time was about $18-$21/share, although Chinese co’s do tend to have depressed pricing (I wonder why). Now at the time, I was holding shares that I had bought in the range of $7-$8 so I could not complain too loudly. But the sheer timing of the announcement pretty much destroyed the capital of those bagholders who believed (rightly, according to the data) that they would not only recoup their losses but would be handsomely rewarded for their unwavering support of this leader in the solar panel industry.

And TSL was, and is, a leader in the industry as they also embarked on an ambitious and quite successful expansion into becoming not only a manufacturer but also an installer, and sometime operator, of large solar-power projects all over the globe. They also steadily announced dramatic gains in panel efficiency as well as impressive cost-cutting to maintain margins as selling prices continued to drop. They even won awards for environmental improvements in what is a pretty green-unfriendly manufacturing process.

So the whole thing just stinks to high heaven from the perspective of western traders accustomed to at least some semblance of rules and fairness. There is just too much uncertainty surrounding the idea of throwing greenbacks at a bunch of unsavory communists. The word unscrupulous, resurrected from an old Charlie Chan flick, should be added to any sane investor’s lexicon.

We note that Alibaba is once again mired in various allegations of flim-flammery and Shenanigans. We tend to notice these things. Have a wonderful weekend.

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The Eye of Kaplan turns towards Texas banksters

imageDallas Fed’s Kaplan swings his gaze to the local banksters. The vaunted “Texas Premium” is being stripped naked and exposed.

 

Banks in Texas and parts of Louisiana and New Mexico are setting aside more money to guard against loan losses as the energy companies they serve struggle amid still-low oil prices, the Dallas Federal Reserve Bank said in a report Thursday.
Banks in the district supervised by the Dallas Fed are also getting additional scrutiny for their commercial real estate loans, the regional Fed bank’s president, Robert Kaplan, said in the report, which characterized commercial real estate as an “emerging area of concern.”

Source: Texas banks face increasing risks from low oil prices: Dallas Fed By R

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India is a hell-hole. Let’s invest there.

The pundits on the internets tell me that China is fucked. They see India as the Next Great Growth Engine. They cite major investment by Apple and others.

I am wary. I have my reasons. Let’s start with the Caste System, shall we?

Things have not changed very much for the poor slobs who are born into the lower castes. The poverty in the country is apalling, basic sanitation is nonexistent. Ancient hatreds between Muslims and Hindus fester. The Authorities appear completely ok with this and have shown a willingness to lie about things such as the prevalence of gang rape – there are many documented cases where gang rapes have been denied because the victims are from lower castes. The Untouchables are real.image

Toilets are only for the upper castes, apparently. And the response of the Authorities, rather than upgrading infrastructure, is to foster an environment where antibiotics are prescribed for just about anything from the common cold to a small scratch on the arm. India is now one giant Petri dish of drug-resistant bacteria, threatening the entire planet as hospitals everywhere grapple with pathogens that laugh at penicillin, ciproflaxin and other drugs that have protected us from dying horrible deaths for the past century.

Now, every Indian, Bangladeshi, and others from the area that I have met here in the States and in the UK are wonderful people. Smart, hard-working and trustworthy folk. And they have that wonderful cuisine. I can only assume this is due to the fact that they have escaped hell and are very happy about it.

At the same time, as one who has spent my life in Information Technology, I have nothing but loathing for that overly-friendly yet clueless person on the other end of the phone who I am forced to deal with on a tech support call. I miss the olde days, when the person on the other end of the line could actually be understood and did not need to read from a prepared script in a lame attempt to fix my problem.

Call this a rant, I suppose. I just do not feel comfortable investing money with the threat of instability and social upheaval on the table.

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Valeant takes another dive, Crude oil holds $50

VRX – I’ll leave that one for The Fly.

WTI Crude Oil trades at 50.10, early this morning, with Brent pushing 51. Now we will await the is week’s API scam numbers to show us the way forward.

You will excuse me for the scam comment, Dear Reader, as the API numbers have been wildly diverging from the “Official” EIA numbers due Wednesday, even though they both use the same data.

I will instead lean on my Powers of Observation to predict the short-term trend based on the time I sat in NY Metro-area traffic so hideous that it alone should have affected the amount of gasoline in storage on the East Coast. Rebels blowing up the entire infrastructure of the Nigerian oil industry does not hurt the trend, either.

It is time for WTI to hover above 50, at least for a little while. The markets are swarming with speculators eager to ride the next wave of this bullshit bull move up – on mildly bearish comments from Grandma Yellin. The Dow Jones “Industrial” Average has a symbiotic relationship with the price of crude lately and I don’t see that changing any time soon.

I tend to do my oil trading in equities rather than futures, so I have been quietly accumulating MRO for the couple of weeks. Exodus has just flagged MRO as overbought, so I tread lightly and have put in a stop loss which has been steadily adjusted upwards. However, MRO is up another 3% in premarket this morning.
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The recent numbers coming from the automobile industry lend support to my recent bullish stance on oil as Idiot Americans who until recently were buying every fucking Prius they could get their hands on are now buying every F-150 that Ford can produce. Car sales are down and light truck/SUV sales are soaring.

 

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Lufthansa Says Venezuela Owes It More Than $100 Million

CARACAS, VENEZUELA: Venezuelan President Hugo Chavez (L) hugs Saudi Arabian Crown Prince Abdullah Ibn Abdul Aziz Al-Saud during the official photo session at the end of the OPEC II Summit of oil producing countries in Caracaas 28 September, 2000. AFP PHOTO OMAR TORRES (Photo credit should read OMAR TORRES/AFP/Getty Images)
CARACAS, VENEZUELA: Venezuelan President Hugo Chavez (L) hugs Saudi Arabian Crown Prince Abdullah Ibn Abdul Aziz Al-Saud during the official photo session at the end of the OPEC II Summit of oil producing countries in Caracaas 28 September, 2000. AFP PHOTO OMAR TORRES (Photo credit should read OMAR TORRES/AFP/Getty Images)

Your Socialist Utopia goes awry when your good pals the Saudis fuck you by flooding the market with cheap, light Arabian Goodness. But don’t let that stop you from praising the guy who took the country towards dictatorship via intimidation and silencing of political opposition. Writes Communist blogger Glen Ford:

In assessing Chavez’s “legacy,” the global bourgeois media cite the “divisions” that plague Venezuelan society and, in the words of Business Week, an economy in “shambles.” But, Chavez and his comrades would have been abject failures – and been tossed from office – had they not drawn lines between the oppressed majority and the privileged exploiters. Division is good and necessary. Consequently, the economy has succeeded in reducing the proportion of households in poverty from 44 percent in 1998 to 27 percent in 2011. Chavez has served the people.

Source: http://www.issuesandalibis.org/030813.html

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“What we want is to keep the place connected. Venezuela’s economic difficulties will only get worse if they are isolated even more and unable to participate in trade because airlines aren’t flying there any more,” IATA Director General Tony Tyler said on Monday.

Source: Lufthansa Says Venezuela Owes It More Than $100 Million

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Twitter is doomed to fail

One of the perks of writing a blog for iBankCoin.com is that they are savvy Internet Marketers who understand the power of social media in driving traffic to this website. When I post, two tweets from two separate accounts are instantly generated, along with a Facebook mention and link-back if I so desire.

That is the power of search engines and, by extension, the power of Twitter. It works out well for me, it works out well for this website. But I fail to see how Twitter benefits from this since Twitter is the only thing that derives no benefit from the exercise. Twitter does not make a fucking dime when I post on iBankCoin.com. I am at a loss as to how this company can ever make money unless they can somehow come up with a way to inject serious advertising into the mix. And there’s the rub…you dump forced advertising into the act of tweeting and you could easily blow up the entire business model.

I have had a Twitter account for a few years. Until I started blogging here, I did not give two fucks about Twitter and never used it much at all. I have since gained some Followers, however, which gives me a tiny ounce of satisfaction even though I comprehend that blogging for this site gives me a degree of legitimacy that I would never, ever achieve on my own.

Which brings me to this guy:

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This right here. This is TJ, who for lack of a better term, is a Professional Twit. You obtain this dubious honor by essentially living your life posting and responding to short messages filled with hashtags that refer to other short messages filled with hashtags. Hundreds, if not thousands of them daily. If you need to know, his Twitter Handle is @amazingatheist. The Maven is not here solely to belittle this worthless fucktard. I have things to do today, important things. I cannot spend all day on the Interwebs jabbering with nerds on Twitter.

The Twitter Profile reads Brutally Provocative YouTuber, writer of books,  ranter, podcaster, excessive blatherer of unsolicited opinions, greatest human ever, etc.

Impressive résumé. And the motorcycle (scooter?) jacket with the upturned collar is very Andrew Dice Clay. Nice touch. The guy apparently also has a problem with feminists, and I would imagine it has been one helluva long time since he got laid without money changing hands.

You then may be wondering, Dear Reader, why I am publicly shaming the Amazing Atheist. It is only one fool on Twitter, Maven. Move on. Well then we have come full circle, back to the headline. I will begin with the tweet that started it all:


TJ @amazingatheist – I let out some massive farts just now. It’s too bad the #whiteguysfartinginmyfacematters guy wasn’t here. He’d have been blown away.


After wondering why I had followed this guy in the first place, I quickly dashed off a response on the order of “Get out of my Feed, you fat clown”. A response quickly followed, calling me a “faggott” (sic) and other unseemly things too delicate for your eyes, Dear Reader. Trust me, I have been called much worse by much better men than you, son.

Then the shitstorm hit. Suddenly my Twitter feed was filling up with Notifications. People I do not know began slandering my Good Name with vicious smears. My favorite was “Go pick up your fuckboy bible that you left on the doorstep”. I do not know what that means, but it did make me curious, so I went to the page of the Amazing Atheist. 83,400 Followers! The twisted remnants of the Andrew Dice Clay Fan Club have apparently found a new home, and tweets containing  “@amazingatheist” and “@thomasjeffrson” (my handle) began escalating wildly. I quickly learned how to block someone –  the Amazing One becomes my first Blocked Twit – and the shitstorm ceased immediately.

This is probably getting boring, so I will finish with this:

Imagine trying to use Twitter as a business tool, and one of your employees does something stupid (as I did), and offends the gentle sensibilities and ego of a Professional Twit. The resulting damage could literally fuck you up. You would have to hire a full-time employe just to monitor things, and he/she would have to be on the clock 24×7. There is no legitimate reason to even bother with this. Put the budgeted social media money into Facebook instead. Twitter is worthless nonsense that will never turn a profit. Short the stock until it dies. And Amazing Atheist, for fuck’s sake, get a job.

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Report: Apple ramps iPhone7 numbers, suppliers soar

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It’s like deja vu, all over again

Reports out of Taiwan contradict the gloom and doom coming from the media. Shuli Ren at Barron’s writes:

Taiwan’s Apple (AAPL) supply chain manufacturers soared, with the TAIEX Index closing 2.6% higher after media reports that Apple is asking its suppliers to prepare for much higher-than-expected iPhone 7 production for 2016.

Taiwan’s Economic Daily said Apple had asked its suppliers to produce 72 to 78 million new iPhones by the end of the year, the highest production target in about two years. The street had expected only 65 million iPhone 7s to be produced this year.

According to the Taiwan newspaper, Hon Hai Precision Technology (2317.Taiwan) will remain the key assembler for iPhone 7 and Pegatron Corp. (4938.Taiwan) will be involved in the assembly process too. Both companies will get more market share this year, as they participate in dual camera, glass casing components production in addition to being assemblers.

Pegatron soared 10% today, Catcher Technology (2474.Taiwan) jumped 9.9%, Hon Hai Precision gained 4.7%, Taiwan Semiconductor Manufacturing Corp. (2330.Taiwan/TSM) rose 3.8%, Largan Precision (3008.Taiwan) was up 2.6%. Year-to-date, the iShares MSCI Taiwan ETF (EWT) has dropped 1%.


As I stated yesterday, before heading out to have the roots of my molars planed by a vicious periodontist, I have heard the stories before. I still expect less than the usual stellar results this quarter, though pleasant surprises are never out of the question with this company. AAPL now at $98 after-hours. Dividend increases on the way. You will be throwing rose petals at my feet in 2017.

 

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The reports of Apple’s death are greatly exaggerated

MarkTwain

“The game of billiards has destroyed my naturally sweet disposition.”

My apologies to Mark Twain for the headline. I have been long Apple for a very long time. About a decade. In that time frame I have read thousands, perhaps tens of thousands, of articles claiming the demise of Apple as a viable investment.

This mornings nonsense comes to you from the Hallowed Halls of Marketwatch, that godawful feed that eTrade seems to feel is necessary reading for everything in one’s portfolio. Marketwatch articles tend to be clickbait on the order of Seeking Alpha. That may be an unwarranted slight on Seeking Alpha since it is primarily written by amateurs like you and I rather than Professional Journalists.

“Hedge funds dumped Apple, and bought this stock instead”

For hedge funds, Apple Inc.’s stock went from gadget-making darling to pariah in the first quarter.

Apple shares were the most sought after by hedge-fund managers in the fourth quarter of 2015 but morphed into an asset that investors couldn’t sell fast enough in the first three months of 2016, according to a detailed review of holdings of the 50 largest hedge funds by FactSet. The review was based on recent public filings known as 13Fs.

Gadget-making darling“. I should have stopped reading right there, but since AAPL shares are crushing it the last few days, I feel inspired. At least we all now know about 13-F filings.

It is one of the Wonders of the Modern Investing World that professional journalists tend to speak of last quarter’s news in the present tense when it comes to buys and sales by large investors. The same hedge funds that bailed on AAPL in Q1 are the ones now buying it today. It is almost as if the stock had contacted the Zika virus, never to be touched again by any sane human except perhaps athletes at this year’s Summer Olympics in Brazil.

And what was the stock these sage hedge fund managers replaced it with? Facebook. Wanna bet those same people are selling FB and buying AAPL right now? Warren Buffett bought $1 Billion worth of AAPL while the hedges were bailing. (“Buy when others are fearful”, indeed). As I write this morning, AAPL is up 2% and FB is down -.7%. I am not convinced at all about the valuation of FB. I hate the interface that has morphed into something that contains massive amounts of adverts and assorted garbage that wreaks havoc on the memory capacity of my 4-year old iPad (Hmm…that could be bullish for sales of the iPad Pro). And that auto-refresh that it insists on doing when I scroll down to read my News Feed…don’t get me started on that. Facebook could be viewed as being one new competitor away from having issues. If there was ever a “gadget-making darling”, Facebook is it. It is not that long ago that FB took a massive hit after ad revenue did not meet expectations.

And in the news, Mark Zuckerberg has just had a friendly meeting with right-wing lunatic Brent “Bozo” Bozell of the ludicrous website Media Research Center to soothe the ruffled feathers of perpetual-paranoids with teabags on their tricorn hats. Other attendees included Donald Trump adviser Barry Bennett; Jim DeMint, a former Republican senator from South Carolina and now president of the Heritage Foundation; American Enterprise Institute President Arthur Brooks and Mitt Romney’s former digital director, Zac Moffatt. The group also included television host Glenn Beck and CNN commentator S.E. Cupp. Imagine the carnage if a coordinated boycott of Facebook by angry conservatives ever materialized.

tim-cook-jim-cramerNow Tim Cook is no Steve Jobs, at least on-stage or in the studio. But when it comes to running the company, never forget that Jobs hand-picked his successor.

From Cook’s Wikipedia listing –>  Cook was asked to join Apple by Jobs in 1998. In a commencement speech at Auburn University, Cook said he decided to join Apple after meeting Jobs for the first time:

“Any purely rational consideration of cost and benefits lined up in Compaq’s favor, and the people who knew me best advised me to stay at Compaq… On that day in early 1998 I listened to my intuition, not the left side of my brain or for that matter even the people who knew me best… no more than five minutes into my initial interview with Steve, I wanted to throw caution and logic to the wind and join Apple. My intuition already knew that joining Apple was a once in a lifetime opportunity to work for the creative genius, and to be on the executive team that could resurrect a great American company.”

718-mark-twain-6fa45e42400eea8cac3953cb267d66a33825a370-s6-c30I have to go see my Periodontist. probably explains my mood. I’ll continue this later…

 

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Why are the Summer Olympics held in countries deeply in debt?

imageA few years ago there was a great article by Mark Byrnes in The Atlantic who wrote about the aftermath of the $15 Billion (USD) spent by the bankrupt country of Greece on the Summer Games in Athens that took place on 2004. It featured some photographs of the abandoned structures used at the Games that cost the Greek citizens $15 billion dollars they did not even have.

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And now we have Brazil, currently in the midst of full-blown economic and political crises of Epic Proportions, stepping up to the plate, complete with the requisite “mascots”, in this case a cat named Vinicius with arms that expand to great lengths (not sure of the significance)  and something named “Tom” that looks like it is wearing a banana tree on his head:

 

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Rio 2016 organizers say they hope Vinicius will help them raise 1 billion reals ($398 million) in merchandising.

Which is all well and good until you realize that so far Brazil has spent well in excess of $7 Billion (USD) that they also do not have. Much more will be spent.

86,000 soldiers and policemen will be deployed to cut down on the frequency of terrorist attacks on the huge crowds. And by now you should have seen the horrid, festering, refuse-filled waterways to be used as venues for the acquatic events. As bad as the preparations were for the Athens games, the President of the IOC has called these the “worst ever”.

This did not stop Moody’s giving the Games their blessing.

The cub reporters at Moody’s ignored not only the übervirus making the rounds in Brazil, but also the fact that the country of Brazil has no money, and is currently in danger of either defaulting on debt payments or if lucky, convincing some hapless bankers to postpone delivery of said funds. Yet helpfully, they give us a couple of stock tips, possibly the only companies (besides the building contractors) at the Games that could actually make some money. Bloomberg’s Jonathan Levin writes:

Without making a call about Zika, Moody’s analysts led by Barbara Mattos wrote that more retail activity and tourists spending with foreign currencies should benefit Cielo SA, Brazil’s largest card-payment processor. Localiza Rent a Car SA, the official car rental company of the Games, and Latam Airlines Group SA, official airline of International Olympic Committee members, also stand to gain.

More lasting benefits will accrue to the Rio de Janeiro metropolitan area, where the events will take place, Moody’s said. Not including sports facilities, the city has gotten about about 25 billion reais ($7.1 billion) in infrastructure investment — toll roads, ports, other projects — as a result of the Olympic preparations. <Editor’s Note: “has gotten”, I assume, means “spent by the State”> The Olympic legacy will also include a key subway expansion and a tramway project from domestic airport Santos Dumont, all of which could make the city a more efficient place to do business, Moody’s said.
Brazil is in the midst of a crushing recession and political upheaval that led to the removal of Dilma Rousseff from the presidency three months before the start of the Games. Moody’s said the Olympics are neutral for Brazil’s sovereign credit quality, and Brazil’s economy is still set to contract 3.7 percent this year.

What a bunch of horseshit. Brazil will be lucky if there is not full-blown social unrest after the Games end. This will not occur during the Festivities due to massive flag-waving and propaganda. The President is going on trial for lying about the size of the fiscal problems (it is estimated the trial will take 180 days). Backlash against possible social reforms proposed by interim government officials has already been seen. Reuters’ Brad Haynes reports:

One of Brazil’s biggest newspapers, O Estado de S. Paulo, reported on Friday, citing an interview with the minister, that the government had suspended housing program Minha Casa Minha Vida during a 40-day review.
“Under no conditions would we talk at this point of suspending the Minha Casa Minha Vida program,” Araujo said in a statement published by the ministry. “What we are doing is being cautious, evaluating what we can promise to avoid false hopes.”
Shares of MRV Engenharia SA (SA:MRVE3), the biggest homebuilder in the low-income housing program, dropped nearly 8 percent in early trading before paring losses to 1 percent as the minister waved away concerns.

The health minister also said the size of the public health system had to be reassessed, before retracting his comments.
His peer in the education ministry said he supported monthly fees for post-graduate courses at federal universities, but then guaranteed that all public universities would remain free.
Geddel Vieira Lima, the secretary of the government, acknowledged on Tuesday that some policy considerations “were being transmitted to society in the wrong way,” asking journalists for “patience” amid the transition.

I suppose they could get Sen. Bernie Sanders down there to straighten things out and keep everything free.

State-owned oil company Petrobras is reeling under it’s own scandals, amid the current woeful state of the petroleum industry. Ethanol production, once hailed as Brazil’s miracle, has helped decimate the sugar industry.

Not all athletes are happy about the Games either, as anti-doping rules were strengthened after the revelations of doping on a massive scale at previous Games has been alleged. Banned participants let loose with this stunning press release:

For Immediate Release–

We, the 31 Olympians who tested positive for doping, completely agree that we should be banned from the 2016 Rio de Janeiro Games.

Prohibiting us from going to the country where the Zika virus is thriving will definitely teach us a lesson. We will absolutely consider this a punishment and not see it as a stroke of good fortune that could save our health and the health of our future children.

We also do not see doping as a godsend that will save us from rowing, sailing and swimming in the raw sewage that floats in the waters of Rio de Janeiro. Getting retroactively caught doping is certainly not what some of us are referring to as “the single luckiest thing that has ever happened to us, including inheriting athletic genes.”

Doping is a serious violation, and taking the Olympics away from us is a serious punishment. We have dedicated our lives to competing in the Olympics. We train hard all day, everyday. It is all we know.

But if banned from Rio, we’d have to stop training. All of a sudden, we would have to sleep late, not lift weights for 7 hours a day, and eat as much ice cream as we want without consulting a nutritionist. What a drastic change!

We wish we could turn back time and make better choices. We definitely do not see doping as the ticket to the only rest we have had since we were small children and a coach noticed our potential. Nope, it’s a punishment, for sure, for sure.

Our fate is in your hands, International Olympic Committee. Teach us a lesson by sparing us from the 2016 Rio de Janeiro Games.

Happy Saturday. Smoke ’em if you got’em.

 

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THROWING IN THE TOWEL ON GE

I’ve held GE for the better part of a decade. It has been, by far, the worst investing decision I have made in the last thirty years. I could place the blame on Jeff Immelt, but that is like blaming Barack Hussein Obama for the Iraq War.

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Please do not tell me that I have made a mistake. GE’s 52-week chart looks pretty darned good, in fact. But it is still far below what I paid for it and I do not believe it will fare well in a market correction – which is imminent in my opinion.

I blame Jack Welch, that crazy loon you often see on CNBC, usually spouting complete nonsense to the delight of the idiot talking heads on television’s worst financial news channel.

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Jack Welch, the Genius behind Six Sigma, the man who was once lauded as the most brilliant CEO of the 20th Century. This cover should have read “How Jack Welch Will Ruin GE”. Win at any cost, number one at any cost (especially employee job security), ill-advised diversification, you name it, Jack did it. Poorly. The effects of his reign really only became clear once he was gone to write books about his own brilliance.

In the eyes of many shareholders Immelt has not done much better, moving far too slowly for investors to take him seriously in divesting from the disaster that was GE Capital. Despite the S&P and DJIA regaining all that was lost in the crash of 2008, GE has not performed well at all, rat-slapped in comparison to the rest of the S&P.

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Immelt has been able to keep his job due to GE being TBTP (“Too Big To Proxy”). Unless your last name is Icahn, the chances of unseating any of today’s Rock Star CEO’s is highly unlikely. To his credit, GE Capital is now a fraction of what it was only two years ago, as GE attempts to “transform itself into a Technology Company” – going so far as to move it’s HQ to Silicon Valley East, aka Boston – leaving the poisonous corporate tax disaster that is my home state of Connecticut reeling in it’s wake.

I Sold my GE yesterday morning and I will take what is left of my original “investment” and use it to add to my growing stake in TLT, which will now reach the 25% level of my portfolio, as prescribed by my Primary Care Physician, Dr. Fly.

Herewith, a YTD comparison of TLT and GE prices, with GE being the crappy blue line, not the lovely yellow one:

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Industrials segment has been kicking it, but all other segments of GE have been performing miserably.

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This has all been written about before by far wiser folk than I. Jack Welch became the Model of what a modern American CEO should aspire to be. He almost single-handedly transformed what was a culture of Employer Paternalism into a culture of win-at-all-cost regardless of the effect on the workforce.

Carly Fiorina’s tenure at Hewlett-Packard is a perfect example of Jack Welch’s heartless brand of  Corporate Ethics. I highly recommend Thomas O’Boyle’s brilliant book to anyone interested in the subject:

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