Wednesday, September 19, 2018

honey badger stock 1 of 2


HONEY BADGER STOCK
I think at times it can be a bit confusing just what the hell happened the last ten years.  We easily can get confused that, ultimately, no matter how bad things are, we escaped the worst of the economic collapse of 2008.  And Peak Oil.  And we are still insulated from the rest of the world.  We aren’t eating zoo animals or seeing hundreds of percent inflation yearly.  And I’ve kept telling you that all the “good enough” we are seeing could end suddenly.  I’ve mentioned the end of the PetroDollar ushering in hyperinflation here ( or, at a minimum, bare shelves of most everything-same difference, unaffordable or unavailable ).
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Charles Hugh Smith had an interesting article just out September 12th or 13th on linear verses non-linear ( his example was a linear movement of snow makes a path, a non-linear move creates an avalanche.  And BTW, try the sample chapters on his new fiction book.  I never cared for his non-fiction, too flowery and puffy, but he seems to have hit his stride in fiction.  I even bought the book ), and you all know what he is talking about.  Everything is connected now and a small event overseas can effect you here far more than you’d think.  You know, the butterfly effect.
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But I think all that is too abstract to really get most folks worried or moving.  I want to try something that, at least for me, is more pertinent.  Well, it USED to be pertinent.  I used to actually believe that the stock market was an economic indicator.  It is all just as much of a Potemkin Village as the rest of the economy, really.  Like colleges look good pretending to educate and hospitals look good at pretending to heal you.  And that is the scary part.  Companies just put on a puppet show pretending to have a business that sells a viable product or service.
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I’ve used Amazon as an example many times.  It makes actual profit in cloud services, then sells all its physical products at or below cost ( not that I’m complaining, you understand ), and at irregular intervals Bezos dips a few more billion out from cashing in his stock.  Netflix is the same, free riding on the Internet and yet still losing money, but enriching its masters through the stock market bubble.  Companies don’t care about profit as much as they do the stock market bubble which gives the illusion they are profitable.
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If this was JUST one or two companies it wouldn’t matter, but it is MOST public companies.  Watch a YouTube video on the chain Dollar General.  I used to work for them and it is amazing how much the company has changed for the worse.  I used to be able to shop at Sav-A-Lot for incredibly cheap groceries and then get almost everything else I needed at Dollar General.  They were much cheaper than Wal-Mart.  When they expended west ( previously they stopped about the 100th meridian ) I went into one of their stores and it was completely different.  No more selling to the working poor, now they were just a mini department store without the cheapest prices.
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It was a mini K-Mart, with just as much crap I’d never want to buy.  They used to be rather church-y and had for the longest time closed on Sundays and Christmas and such.  Now, they are selling booze and cigarettes ( I actually went to work for them after my second sting operation fining me for selling to a minor-I didn’t want there to be a third time, and they sold no vices ).  I found out they had sold out to a private equity firm, then after clearing out any old religious prudes taken it public again.  The whole business is looking sad and pathetic now.
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Why are you running fifteen thousand retail stores that are doing poorly?  I would imagine they are losing money, but someone is making a killing on the stock.  Whenever someone is losing money like Sam‘s Club, the business media always seems to hold up Family Dollar/Dollar Tree and Dollar General as the bright spots in retail ( “as ObammyCare rapes you in the ass, the discount stores see a 43% increase YOY” ).  That is always good to bring in the suckers to bid up your stock price ( has anyone seen many customers in Dollar General?  I never seem to, and this is over in more populated areas ).
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Wages can’t be much of a burden to these failing retailers.  I imagine they employ one or two people at a time.  Rent is probably kicking their ass, and I imagine from visiting them, so is inventory.  They don’t seem to build in Just In Time Inventory shortages like most do ( you have to wonder how far that goes towards ensuring popularity, being the only store in town not running out of crap all the time ).  So without enough turnover, those costs have got to be steadily draining the coffers.  Look at K-Mart.  Even a store going out of business lacks too many customers ( of course, you can’t sell Wal-Mart quality crap at +50% over Wal-Mart and expect much business.  Wal-Mart is high as it is, a long time removed from Low Price Leader )
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If Amazon is losing money, everything it does to sell MORE loses them more money, which is why I’d imagine you won’t see local drone delivery anytime soon.  If Dollar General is opening more stores and putting even more inventory in there, even as it loses customers, they are losing even more money.  Their stock mining has got to be worth it.  How many companies are run by Honey Badger ( “he don’t give a s**t” ) CEO’s and boards of directors?  Look at the appliance makers, throwing away a century of reputation over its quality for a few quarters of extra profit.  Look at Facebook trying to alienate most of its customers, cheat its advertisers, for a higher stock price.
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When everyone is making all their profits off of losing money from customers to cash in on a stock market bubble, what happens when that bubble pops?  No matter how dedicated to building retaining walls the central bank is, that avalanche eventually gets big enough to still take out the town.  Let’s talk about when the market implodes, and how it looks when that 70% of the economy ( consumer spending ) is decimated.  My guess is this is deliberate to expand the bankers profits by sucking in as much of that percentage as possible.  Obviously it isn’t sustainable, but the banks are probably as desperate as the Dollar General CEO is now.  They were propping up the retail sector to finance consumerism.  Now that this money is drying up, time to bankrupt and strip the copper from the walls.  Continued tomorrow.
( .Y. )
( today's related link https://amzn.to/2QyyfhA )
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note: highly recommended "Traveler"is still free https://amzn.to/2MBCZj8
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note: free books.  PA https://amzn.to/2NoCEpp .  Anthology with some PA https://amzn.to/2MQQLig .  
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note: sorry, keep forgetting to let you know about this guy.  Funny as hell but also a great commentator on politics and economics: https://wilderwealthywise.com/
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33 comments:

  1. Hey, Dollar General still makes Sunday concessions, if you want to buy alcohol on Sundays, it better be either rubbing alcohol or mouthwash.

    The main reason we remain insulated is because the petrol dollar is ours. The PTB keep it stable enough we don't have to eat the zoo animals for now.

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    1. I just wrote an article covering Jim Willie ( Golden Jackass ), who claims that the PetroDollar already collapsed. We papered it over with derivatives. A relief, but scary too.
      http://news.goldseek.com/GoldenJackass/1537099980.php
      This is a new development I'll need to noodle on more.

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    2. Once you get your head wrapped around it, give us the Clif notes. Everytime I try to understand economics it makes my head hurt. In the meantime, I will take a preemptive Goody's powder and read the article.

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    3. As I say in my article, this is probably THE most important article of his I have ever read. Do your best to wade through-it should scare the crap out of you.

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    4. It did rattle me, at least the parts I understood. I might get a six pack and try reading it again.

      I forwarded the article to my sister, she gets this stuff better than I and she most likely hasn't heard of this guy.

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    5. I'd be interested on her take of it. So far, all I've got is this just increased the amounts of leverage which increases risks of system failure, yet still an improvement over not doing anything.

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    6. Watch the foreign news networks like bbc, france 24, rt, etc. The imagery and reporting from on the ground in turd world countries are eye openers for those awake to reality. All the dire circumstances and conditions there, are and will come to your neighborhood. America that you used to know and love is over. No longer great, and you citizens lost it all and are no longer god's favorite children.

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    7. I couldn't get through their carbon copy of our total crap news style and substance.

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    8. It does explain why Amazon takes two months to pay. They are leveraging the money they owe you to make them money.

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    9. Whatever it takes you keep you guys afloat, B-Dawg. Except cutting my commission again. NOT cool.

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  2. American Greed is a t.v. program about scams and swindlers of various levels, enron, etc. These corporateer executives are highly schooled on massaging and stroking financial numbers whether legally kept books or off grid scamming of the company, vendors, government grants, community programs etc. They also are privaleged to run debt out on terms and lengths we citizens would never see. Profits after paying shareholders a token amount are plowed into stock buy backs that inflate share price way past the earnings to price ratios. Many companies unless privately held by a brown bag lunch billionaire and run efficiently old school like, are leveraged up the keister and flying by the seat of the pants. Once collapsing commences (for whatever reason) all retail, wharehousing, most industry, will be stripped clean like a dead carcass by the citizenry just as images of turd world adventures. It shall happen.

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    1. Never heard of the TV show. Sounds good. Good blood pressure anti-meds :) I think the corporations leverage will be 2008 bank levels, and today's banks are leveraged three times that. Kicking the can is only fun until it stops moving.

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    2. I worked in a food factory. What I paid for a 50ml bottle of vanilla essence they paid for a 500ml bottle. Kinda makes it hard to compete

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    3. And there is why Mom & Pops died off.

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  3. Dollar general or most others are ghetto and barrio retailers that peel off customers from other outlets such as walmart, target, and legit grocers that have deli bakery butchers etc. Since the middle class has cratered and those that have fallen out and next generations can't advance into it there is a much larger pool of customers. Even folks in caliente, nevada like having a 99 cent store to shop as there is few well paid gov't, or mining employees. Most are pensioners, disabled, welfare (necessary to survive) citizens scratching dirt with the chickens to get by. New paradigm in Merika.

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    1. I always talk about the businesses we will have in the future are ghetto convenience store types, but your comment makes me think we are already there with DG and FD and DT ( with DG soon to be knocked off by its own incompetence ). Interesting. I need to mull that over a smidge.

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    2. Yes once cars are way too expensive and people aren't mobile and are no longer able to fake affluence like them orgasms they will all change habits. It will be ghetto all in one stores with dice games out back. Or bodegas shops run by habib or hopsing in the cities. Crap selections, lousy quality, inflated prices, gladly accepting your ebt card. The affluent coasts or yuppie enclaves that some how exist too near to poverty areas unmolested are the only profit or growth for retail. Every where else is triage and holding terrain from competitors.

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    3. I'm sure it won't be long we are looking back at wonderment how it all changed so quickly.

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  4. YouTube is run at a loss. That's why they don't have any competition and the SJW crazies that are running the platform can get away with their shenanigans.

    Twitter also runs at a loss having only ever made a profit one quarter.

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    1. And here I thought Google knew how to make money. Interesting. Thank you.

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    2. Google and youtube are one in the same Jim. Just as Amazon and IMDB are one in the same.

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    3. Right, I knew Google owned YouTube. I thought Google was profitable. So, no?

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    4. To be honest Jim, I had no idea whether they were or not. But I DuckDuckGo’ed them (😀) and it seemed to indicate that they are.

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    5. Right, because Google Search wouldn't lie, but just in case :)

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  5. Thanks for the link to "wilder..." only had a couple minutes to peruse his site, but I think I'm gonna like this guy. I'm sure his hair isnt nearly as glorious as yours though, so have no fear. Still a loyal minion!!

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    1. I was the same at first, a quick visit, and then it really grew on me and I'm anticipating the next one now. Funnier that I'd ever be in a month of Sunday's.

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  6. Once payroll and electricity and other expenses covered the business stays afloat. The owners and executives get compensated very well via expense accounts and stock options. No cash needs to really be in the drawer leftover as the cycle repeats as long as everything functions. Until it does not.

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  7. Someone I know recently did some research on Dollar General. I didn't do any research to double check his numbers, and I may not be recalling the numbers correctly, but supposedly DG has made a deal with the feds to put their stores in rural communities that are "underserved" with retail shopping opportunities. I think he said the feds pay DG $2.5 million to put the store into the rural community. If DG goes out of business, the feds pay them $10 million as a "thanks for trying" gift. The whole thing is rather offensive to me if it's true, but I don't feel like investing the time to do my own research on it.
    Peace out

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    1. You are correct, it isn't worth researching. However, I can see where this is banker welfare. The fed pays DG to open the store, gives them money, they further take out construction loans and inventory loans and the bank gets more interest payments ( they don't care if the corp goes bankrupt, and they will be first in line w/bankruptcy repayments w/that $10m as security for the loans ). DAMN! great job loaning Monopoly money if you can get it.

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    2. Pondering. What if all of these entities (corporates, gov't, media, others, and etc.) are intertwined in a loose but connected confederation. They need each other to cooperate for supporting the system against collapsing and survival. No secret handshakes just a matrix borg. We minions are their entertainment department. Sleep on that one tonight.

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    3. I just re-watched the movie The Good Shepard ( start of the CIA ). Free on Amazon Prime. I almost envision something like that. A tribe, but also policing their own. Sure, they had the Skull & Bones stuff in the movie, but it was more ceremonial than Smoke Filled Room Conspiratorial.

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    4. Shared interests make for some apparently strange bedfellows, there is no need for conspiracy if everyone wants the same (or nearly the same) thing. That's why it doesn't take a conspiracy for every fuel station in town to charge the same per gallon plus or minus a cent or two. They oil companies and owners want all the money they can get - and they know you wont drive across town to get two cents cheaper, but might for five.

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