The Market Ticker
Commentary on The Capital Markets
Logging in or registering will improve your experience here
Main Navigation
Full-Text Search & Archives

Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.


The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be sent unmodified to lawmakers via print or electronic means or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media, to republish full articles, or for any commercial use (which includes any site where advertising is displayed.)

Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.

Considering sending spam? Read this first.

2019-07-18 14:49 by Karl Denninger
in POTD , 35 references


View this entry with comments (opens new window)

It showed up in your mailbox, on your TeeVee, in your political ads.

It was cute.  It looked a bit like a rodent, a viper or a dragon.

But it was cute and cuddly.  It had forlorn eyes that gazed at you oh-so-lovingly.

It snuggled with you at night.

It just wanted a bit of food, a bit of warmth, a bit of comfort.

You couldn't leave it outside to freeze to death and die in the wintertime, or to be eaten by a hawk in the summer.

So you took it in.

You nurtured it.

You fed it.

You kept it warm at night.

You even let it sleep with you.

It will be ok, you assured yourself.

But it was indeed a monster, and it did what all monsters do.

It grew.

It got bigger, and stronger.

At first the little bite off your plate was no big deal.  But a while later you realized it was consuming a decent amount of your food.  Your budget increased to support it.  After all, it was cute and cuddly, and you liked it.

It was hot when you were cold, and cold when you were hot.  More was spent on A/C or heat which you didn't want or need, but it did.  After all, it was cute and cuddly, and you liked it.

Eventually it got big enough that those formerly-forlorn eyes looked menacing.  You didn't dare kick it out of your bed, or your home.  Now you were afraid; if you did throw it out, it could get back in by force.  It might be able to kill you in your sleep.

More months and years went by.  Now it's consuming enough food and other resource that it's no longer cute at all.  You're foregoing your own nutrition.  You're only showering once a week because it's using so much water you can barely afford the bill.  Your power bill is crippling you.  Your homeowners insurance company, knowing you have a dangerous creature on your property, has made your insurance costs skyrocket.  It bites you one day, "it's an accident" you tell yourself, and the doctor hits you for $20 large to pay for stitches, rabies and other shots.  You don't have it, but you have to spend that or you might die.

It's no longer simply about the risk of killing you in your sleep.  Now it can kill you any time it wants.  It has razor-sharp teeth and demands more and more food.  When it's hungry and you have no money to buy it food, it eats your couch.  Oh, and it ****s everywhere too -- all over your carpet, your nice wood floors and even in your bed.

Welcome to your own self-imposed hell.

What is this monster's genus and species?

It's debt.

Netflix is getting hammered on this.  They have an insane amount of debt that they took on which generates a forward and irrevocable obligation to pay in the form of interest for "original content."  But their subscriber growth rate, which made people think this was reasonable, was a chimera; it was a forward projection of exponential growth forever into the future, which is mathematically impossible: There are only so many humans on the planet.

Now it's caught up with them.  The monster is taking nips out of their feet while they sleep.  Soon it will consume their head.

How'd they get a $400 stock price, now just over $300?  On bullcrap you believed -- willingly, knowingly, while prodded by CNBS and others.  But let's not kid ourselves -- you hit the "buy" button, didn't you?

The same is true nationally.  It's true for the entire stock market.  Buybacks, funded with debt, are a noose around your neck you cannot get rid of.  The shares are repurchased, you bought them at a fixed price but when they're worth less on the open market you have a loss you cannot get rid of and, much worse, you have a forward obligation to pay that interest forever on your loss-making transaction!  There's only one thing worse than a loss-making transaction and that's one that never, ever stops costing you more and more money!

EPS goes up when you do this as long as earnings are increasing.  But when you have a loss the loss per share goes up by exactly the same amount.  This garbage may well double the stock market originally when the earnings are improving (and it did) but it inevitably will crash the market by twice as much when earnings turn bad since the negative number will be twice the size it would have been otherwise.  Instead of a 40% loss it'll be 80% -- or even 100% when the firms involved all go bankrupt because they simply can't pay.

The same is true for government deficit spending on things that are just flat-out gone; that is, anything that is consumed.  Like food stamps, health care and similar.  The interest expense is there forevermore unless you pay down the debt which you cannot do until and unless you stop deficit spending entirely.  That now amounts to a trillion dollars a year, or roughly one quarter of all government spending.  Do you think the government will stop feeding the monster even after it has chewed off an entire foot and half a leg?

Everyone knew this when that crap started -- both at the government and individual company level.

They knew it and did it anyway.

They lied to you.

On purpose.

They're still lying.

Kudlow, Cramer, President Trump, Nancy Pelosi, all of them.

That meets the classic definition of fraud and should be justification to hang them all except for one problem: You cheered it on, welcomed and in fact in the political sphere both parties were equal participants and there has not been one revolt, organized or not, by anyone in this nation demanding it stop "or else."  Quite to the contrary; everyone is demanding that the monster be fed even more and get ever larger -- forever!

So get up, stand in front of the mirror and then **** yourself because you're looking at the responsible party.

View this entry with comments (opens new window)

2019-07-18 11:10 by Karl Denninger
in Technology , 99 references
[Comments enabled]  

This story should not surprise:

Permissions on Android apps are intended to be gatekeepers for how much data your device gives up. If you don't want a flashlight app to be able to read through your call logs, you should be able to deny that access. But even when you say no, many apps find a way around: Researchers discovered more than 1,000 apps that skirted restrictions, allowing them to gather precise geolocation data and phone identifiers behind your back.

Let's be clear: Google has never given a wet crap about permissions.  They've been dragged kicking and screaming into the world of "granular" permissions, and even now they play cute and claim "well, in the next release.  Maybe."

Back in the earlier days of Android you were presented with permissions an app wanted when you installed it.  It was take it or leave it.  If your favored music app wanted location permission you either took that or didn't get the app, even though knowing where you were had nothing to do with playing music.

There has never been an "Internet" permission you can see, for example.  Why not?  Because if you can shut that off (say, for a music app that plays music on your local SD card) then the app can't serve ads.  Which Google sells.  Duh.  Oh by the way, yes, Internet permission does exist.  You have to declare it in the manifest.  The user is just forbidden the ability to change it's setting.

Here is the manifest section for HomeDaemon-MCP's Android app:

<uses-permission android:name="android.permission.INTERNET" />
<uses-permission android:name="android.permission.ACCESS_NETWORK_STATE" />
<uses-permission android:name="android.permission.ACCESS_WIFI_STATE" />
<uses-permission android:name="android.permission.ACCESS_FINE_LOCATION" />
<uses-permission android:name="android.permission.ACCESS_COARSE_LOCATION" />
<uses-permission android:name="android.permission.VIBRATE" />
<uses-permission android:name="android.permission.REQUEST_IGNORE_BATTERY_OPTIMIZATIONS" />
<uses-permission android:name="android.permission.FOREGROUND_SERVICE" />
<uses-permission android:name="android.permission.RECEIVE_BOOT_COMPLETED" />
<uses-permission android:name="android.permission.WAKE_LOCK" />
<uses-permission android:name="android.permission.WRITE_EXTERNAL_STORAGE" />
<uses-permission android:name="android.permission.NFC" />

Note that it indeed has an Internet permission declared.  Most of the others make sense as they stand, but with the exception of location, ignoring battery optimization and external storage there's no user prompt for any of them, nor any way to shut them off as a user.  Never mind that there are two forms of location and you as a user cannot choose; it's either on or off, but you can't allow network location but deny access to the GPS chip for example.  "Receive_boot_completed" is the one that allows any app to be started when the phone is booted -- but there's no way for you, as a user, to shut that off.  For my app it's exposed in the settings and optional, but for  most apps if that's in there you can't disable it.  Ditto for NFC; what if you want to revoke an app's ability to access the NFC hardware?  You can't; it's not exposed.  Just as is true for Internet access.

Four of those permissions, incidentally, are there specifically so the software can run in the background and notify you of things without Google's "optimization" interfering with it (or stopping it entirely.)  WiFi and location are there only so the software can know if you're at home (and can be denied in the permission screen.)  And write external storage is only necessary if you wish to save video clips; if you turn that off and everything else works normally, but attempting to "grab" an AV clip from a security camera will fail (you can still watch it in real time, just not save it to your device.)

A number of years ago coders found that there was in fact a hidden system screen to revoke app permissions in Android V4 -- at least the ones users "see" -- after installation.  Quickly a handful of apps showed up that could get to it easily, since it was just an intent call into the software already present on the phone.  Google banned those apps from the store, then removed the hidden page in the next Android update.

Marshmallow (Android V6) finally allowed you to choose which permissions an app had and change them after installation.  Google claimed that this was because "some apps would crash if they couldn't get what they wanted", but so what?  Back in 4.0 you could get to it if you knew how, and if an app developer had his software blow up when he tried to get something and got an error back that's on him!  After it was discovered that Google had left this out there they intentionally removed it in the next release, so if you had or have an Android V5 phone (Lollipop) you got the lollipop all right -- up your chute.

Who's phone was (and is) it anyway -- yours or Google's?

Today we're on "Pie" if you have a modern enough phone (V9) of Android.  You still have to go through hoops to tell an app that it cannot run when it's not in the foreground -- that is, when you're not looking at it.  Many apps severely misbehave if you don't do this; Twatter is one of them, as are a number of "news" apps.  Maybe they're just being aggressive about "downloading" data, even though they've been told not to on their settings pages.  Or maybe they're spying and sending data to "Momma".  Who knows -- but what I do know is that a lot of them chew power like crazy in the background which serves exactly no VALID purpose if I've told them not to refresh automatically on a timed basis.

You still cannot tell an app by any means that it can't access the Internet when you're not looking at it.  And supposedly, "Q" (next release) will let you revoke location access when not in the foreground -- but allow it if you are, although it won't allow revoking Internet access in the background or at all.  And yes, that is a declared permission.

To be fair Google has tightened certain things up.  Among others you can't request access to the phone and SMS logs and data stream anymore unless your app is the primary handler.  For example you can write an SMS application, but it can't ask for the SMS permission unless it is set as the handler by the user.  In addition Google requires you never transmit the contents of anything you gain from those permissions off-device for any purpose including advertising.  Is that honored?  Who knows.  This has bitten some developers with legitimate needs, however -- for example, if you have an app that does something for the user differently if he's on the phone it may want to read the current phone state.  That, however, can expose the IMEI, which is forbidden, so..... unless you're a primary phone app, no dice.

The apps that are cheating today are being sneaky about it.  For example one of them scrapes position data from photographs; it has to have storage access to run, so there's no way to stop it because it has to have permission to access the SD card in order to save and manipulate pictures.  Others grab WiFi data if allowed to "see" the WiFi state; if you have a WiFi network's BSSI (it's station ID) then you can often figure out exactly where it is.  They're not only using this data for internal purposes in the app (possibly legitimate) they're sending it home to Momma too, who is doing "whatever they want" with it.

One of the more-egregious examples of this were "Remote control" apps; they have no reason to know where you are; "in my living room" isn't necessary to talk to my TV.  But due to them having access to the WiFi network to control the device they were able to get the router's MAC address and sending it.  There is utterly no legitimate reason for them to do that.

Google was apparently told about this abuse in September, nearly a year ago.  Did they ban the companies and publicly announce who they were?  Nope.

Why not?

Does not the customer own the phone and the data on it?  Is not intentionally circumventing a permission a direct violation of the agreement that you enter into as an Android Developer when you publish apps on the Play Store?

You would think so.

But apparently Google does not.

It gets even worse.  You might expect some third party to do this through sneaky means in order to sell your data and make money off it.  How about a phone OEM?

Samsung was tagged by this in their Health and Browser apps, which is especially egregious due to the size of their installed base (over 500 million devices) and that they include these apps in their base software load.  In some cases you can disable base loaded apps but you can't remove them since they're part of the ROM the phone is loaded with at the factory.

This all comes back to the reality of it -- who owns your device?

Did you buy it or did you lease it on undisclosed (and therefore illegal, under US law and FTC regulation) terms?

Were you fairly told that Samsung devices would scrape data from you without permission?  Did you buy that phone knowing this, and do you still know it today?  Was there a fair disclosure, negotiation and then decision to buy and, had to known they were going to do that, would you have still given them your money?

All good questions..... but no answers, and, of course, no revocation of access via the Play Store, as an OEM, or for that matter, jail.

Still love that Samsung phone, do you?

View this entry with comments (opens new window)

2019-07-17 13:00 by Karl Denninger
in POTD , 59 references


View this entry with comments (opens new window)

2019-07-17 08:28 by Karl Denninger
in Editorial , 476 references
[Comments enabled]  

It's utterly amazing to listen to people try to defend counting non-citizens for apportionment in the US House.

I've written several articles on this and the "backlash" is amusing.  Among the claims is that non-citizens are entitled to representation.  No they're not.  They're entitled to human rights (because no government gives you those) but not representation in the halls of Congress.

The premise that a non-citizen has a voice in the Halls of Congress and has any right to influence said policy is outrageous.  In fact it's beyond outrageous, especially in the context of the 14th Amendment, which was clearly passed to deal with the situation of newly-freed slaves.

See, slaves that were alive in the late 1800s were nearly all born from non-citizen parents; that is, other slaves brought into the United States from some other nation.  Those people were never naturalized as they were considered property and thus couldn't make such an application.  So you free the slaves with the 13th Amendment but, with very, very few exceptions they can't vote in federal elections!

If you read The Congressional Record this was the entire background behind the changes Amendment 14 made with regard to enumeration and citizenship.  It was simply never envisioned that this nation would permit lawless individuals to come here and poop out children suddenly claiming citizenship for them and the right to stay and access government services as their parents.

In fact such a series of actions has a long and sordid history in the world and America was one place where it was never tolerated.  The most-outrageous example of it was the Mongol Invasions and Genghis Khan, who single-handed fathered hundreds of children, most by rape.  He is in fact the most-prolific male "stud" in human history and it is estimated that one in two hundred people alive today can be traced to his lineage!

He didn't "ask"; he and his invading armies came, in most cases murdered all the men and then forcibly replaced themselves with the women already there, literally screwing themselves into whatever society and nation they took over.

Other nations do the right thing -- non-citizens attempting to influence any form of legislative process are not only immediately removed and barred from future entry in many cases they're subject to prosecution.  Mexico is one of those nations but hardly the only one; indeed, this is nearly a universal law among civilized nations and with good cause.  Only those who are citizens in a civilized nation have the right to influence politics and policy; all others are barred.  It is for this reason that the FEC requires that only citizens be able to make election contributions.  Clearly, non-citizen voices, when it comes to representation, do not count.

But it is exactly this sort of nonsense -- that non-citizens should and have a voice in the Halls of Congress -- that the Left embraces.  Diluting the voting rights of all who do not agree to participate in such is an act in furtherance of the forcible destruction of our representative system of government.   That is, those who do not permit illegal invaders to come into their areas who as their first act break the lawbe unlawfully employed making their second act breaking employment laws and in many cases stealing identities, an act of fraud against the person who has their identity stolen, and then as a reward for allowing that lawless behavior those regions, towns and House districts gain superior voting rights in that the divisor is smaller for each vote per-representative.

While in California as a whole about 15% of the population is non-citizen in some districts on a percentage basis it is much higher.  In those districts citizen votes have a much higher weight than do those of citizens anywhere else in the country; these citizens are effectively given superior voting power by virtue of destruction of our national security, national identity and borders.

This is blatantly unconstitutional and really is no different, in terms of "sanctuary" policies and similar, than Genghis Khan and his Mongols in terms of intent.

The intent is to render such criminal invasive conduct so normalized that eventually it results in overthrow of the enitre premise of citizenship; that one gains representation by virtue of citizenship through the election process.

Giving greater weight to votes as a direct consequence of and in proportion to non-citizen presence in a given district is in fact no different in outcome or intent than ****ing one's way to conquest.  It leads to exactly the same result and destroys the value of citizenship and the national identity of the country.

Further, if you think there is not bone-crushing, third-world level poverty in this nation I can show it to you right here and now.  I saw a pocket of it yesterday.  I'll be happy to drop you off in the middle of it and let you see how it works out for you.  Yes, it's in pockets here and there but that doesn't make it less real.  For the four insanity-riven nutjobs pushing this open-borders crap while we have that situation existing in our own nation, with our citizens, right ****ing now is an outrage.  It is such an outrage that these four deserve to be dropped right in the middle of it in their underwear so they can see what it's like living in conditions that are literally worse that the tin huts most of these "refugees" are coming from.

There are things worth going to war over.

This is one of them as it is not a matter of voting by representative process or amendment of the Constitution via its process.  It is in fact forced at gunpoint on those who will not permit unlawful invasion of their districts -- who insist on and adhere to the rule of law.  Those who adhere to the rule of law, at its logical conclusion, have their votes diminished to ineffectiveness at which point the entire Constitutional identity of the nation is lost.

We did not wait for the Japanese to land in California to go to war. Nor did we wait for them to land in Hawaii and take even that land from the United States.  No, the clear intent -- by blowing up ships and bombing both people and things -- was enough.

We must, as Americans, demand that this crap stop and be reversed now.  Nancy Pelosi is in fact from the state that is the largest beneficiary of this unlawful and unconstitutional scheme.  NO legislator has the right to promote or engage in the willful and intentional destruction of the principle found in our Constitution that one citizen gets one vote and that vote is of equal weight to all other votes.

The Democrat Party is The Party of Genghis Khan.  They're the racists in this "national conversation"; they hate white people with a white-hot passion.  They must either repent and those involved resign or be destroyed.  If they are not our nation will be destroyed as certainly as were those that Genghis Khan raped and murdered his way across both the Middle East and Asia.

View this entry with comments (opens new window)