The Market Ticker
Commentary on The Capital Markets- Category [Editorial]
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.

2019-05-10 07:00 by Karl Denninger
in Editorial , 159 references
[Comments enabled]  

Section 230 was being debated while I was running my ISP.

I said at the time it was both unnecessary and going to be abused.

I was right.

Exceptions were made, spaces created for tech and social media companies to grow unencumbered via the Section 230 exemption inside the 1996 Telecommunications Act. Allowed to play by different rules under the now absurd illusion that they’re not publishers or telecommunications companies, the Facebooks and Googles, Twitters and Amazons of the world have avoided a great deal of oversight and regulation.

Now as they’ve grown into the behemoths and monopolies they are today, they still insist they are anything but publishers and telecommunications companies as they create original content, curate and make editorial decisions and deploy broadband networks. 

This of course is a tap-dance around the reality of it.

Early on in this saga the way we did "discussion groups" was through a system called Usenet.  It was a true distributed system; you posted something, the site you posted it on sent to its connections, they sent it on and so on.  It started on dial-up links and then transitioned onto leased lines.  I ran such a node from very early on when ihnp4 (run by Bell Labs!) was one of the major distribution locations for the greater Chicago area.

As binary images (read: mostly porn and stolen software) started to take root a bifurcation took place.  See, text messages are both pretty small and easily compressed to be even smaller, especially during transport.  Binaries are neither.   A system capable of holding two weeks of the entire set of textual discussions that took place across thousands of topics could not even hold one day's worth of the smut and stolen software.  Those "few" groups were literally 10x or more that of the entire textual area, and thus required 10x as much storage, CPU power and data transport.

Literally nobody who ran one of these servers didn't know exactly where that data consumption was coming from.  It was instantly and insanely obvious in that it became crazy expensive to carry the "entire" feed, including that material.  Nearly none of that material was legally-sourced; while there was a smattering of individually-produced and legal adult porn virtually all of it was either stolen (e.g. scans from men's magazines) or blatantly illegal -- including child pornography.  Worse a good part of it was correctly labeled too -- "****" is pretty-descriptive.

ISPs argued that carrying the "entire" feed should be akin to a civil right and in fact we had a huge number of would-be customers who would directly ask our representatives whether we had the "entire" feed -- and sometimes they asked for groups by name.  We didn't carry them -- both out of reasonable concern that it was ridiculously illegal but also for the simple reason that I refused to support kiddie porn producers and distributors whether by direct or indirect means, and spending 10x as much money on a server to handle that data was outrageously beyond that threshold in any rational analysis.  This refusal got me into more than a few spats with the ACLU in Chicago and even prompted death threats aimed at me, none of which any of the authorities gave a wet crap about.  (Incidentally for that reason if I am ever on a jury related to such a threat against someone else, especially a politician or other prominent person, I vote "not guilty!" because those **********s wouldn't even investigate or arrest -- even when I could point to exactly who had made said threat.)

That concern -- that ISPs might be prosecuted -- was a big part of the CDA and Section 230.

Yeah, the so-called "mavens" got put into the law a specific exemption holding them harmless for storing and distributing child pornography.

From this environment Facesucker, Twatter and the rest spawned.

The real problem is that viewpoint based discrimination isn't limited to social media.  With PayPal and Patreon having gotten away with it now MasterCard is getting into it.  In 2017 they said no to such viewpoint censorship, drawing the line at illegal activity -- which anyone should be free to prohibit.

Not any more.

Empowered by several banks who have refused to deal with legal manufacturers of firearms and accessories we're now seeing that extend to other viewpoints that "certain people" find unacceptable.  The goal is to cut such people off from all services in the modern economy.

This is either stopped -- viewed as an unlawful act as it's taken in concert via pressure groups and thus constitutes a felony under long-standing anti-trust law and is prosecuted as same in every single instance, whether it's Facebook, Twitter, PayPal, Patreon, Citibank or some other firm -- or it will lead to a literal shooting civil war in which the first casualties will be the executives and the families of these firms, shortly followed by politicians and their families who thought that creating concentration camps via a back-door method was a good idea rather than something to be stomped on as an unacceptable attempt to bring fascism to American soil.

Why do I say this?

Simple -- as long as people are talking, even if they're doing so in highly-disagreeable terms -- they're not shooting.

As soon as you forcibly shut people up you've denied them the soapbox.

We've already had the ballot box effectively denied.  Witness the fact that neither Democrat or Republican will do one single thing about a three trillion dollar a year ripoff -- robbery that factually costs every man, woman and child $25 per day in this country.

There is no longer a jury box to hold people accountable with either since no "large company" is ever criminally prosecuted for anything.  Wells ****You anyone?

There are only four boxes that guarantee freedom -- of thought, expression and action.

The last one is the cartridge box and if you remove the common man's access to the other three that's the one you are risking he will reach for and use since it's the only one that remains available and it is in fact every single American that has and continues to allow the other three to be destroyed.

View this entry with comments (opens new window)

2019-05-07 10:42 by Karl Denninger
in Editorial , 287 references
[Comments enabled]  

So there's no trade deal eh?

Why should there be a trade deal unless China stops stealing?

But, of course, boobus Americanus doesn't care about the real issue, which is the fake "recovery" since 2008.  Obama got credit for that and now Trump is taking credit for it.

None of it is real.


This is the story of the real economy and GDP.  There has been zero real growth of materiality since the 1990s.


It does not matter who has been President.

It does not matter who controlled Congress.

Both parties have participated in a gigantic, intentional lie, pumping asset prices up through debt.

It has crashed twice thus far -- in 2000 and again in 2008.

Neither time did the American people demand that the guilty parties, including all 535 members of Congress and the USSC, along with the President and Attorney General, stop that crap.

Instead they screamed for more, and got it -- good and hard.

Once again stawk prices have soared.

Once again real economic output has been negative.

Once again "the general public" has made themselves feel good by buying things they can't pay for and going into debt.

Once again there has been no savings on a net basis and thus no capital formation.

Once again all the "new businesses" that have come to the forefront have all been extraction rackets like Uber, Facesucker, Twatter and similar.  I challenge you to name one that is not.

Once again you have ratcheted health spending up, doubling it again, and now the "rallying cry" is "Medicare for all."

Once again it is all a lie.

How's your actual cost of living?

Oh by the way stawk prices look great on a piece of paper.  When everyone wants to sell them you find out exactly what the real price is -- and it's a lot lower.  Remember 2008 again?  What changed other than lots of people wanting to sell them instead of buy them?  If you're the only one who wishes to sell it's likely to work out ok for you.  What happens when you're not -- like all the other times when you weren't?

Incidentally the so-called "exponential growth" much-touted for stock investing is also a lie.  Why?  Because nobody buys and sells them that way and you can't control the crashes, which means you cannot duration-match to your needs in advance and make sure you don't wind up having to sell when the market is in the tank.

Further, adjusted for inflation huge percentage of people who bought houses in the 1990s are underwater 20+ years later.  In fact this is true for the vast majority of the United States.  There has been no capital appreciation of any sort over that period of time and you got rammed both on the mortgage, paying for the house three times over plus the property taxes, maintenance, upkeep and similar!  If you looked at a house as "a place to live that deteriorates with time" then it might be an ok transaction, all-in but most people didn't and don't today and both the media and Realtor cartels lie in this regard; they all portray a house as an investment that will increase in value in real terms over intermediate and longer periods of time.  It most certainly did not over the last 20+ years and I can state with near-certainty that over the next 30 years it will not because it cannot given all the Ponzi finance engaged in by state and local governments and thus the ever-increasing demand for property taxes to rise.  Short of literally shooting all those politicians and their beneficiaries so as to dramatically drop property tax levies (read: by half or more, right now and forevermore into the future) there will never be another "good time" to buy residential real estate as a means of capital appreciation in the general sense.  This doesn't mean you can't find singular deals as an investor -- you can -- but it does mean that your odds of it working out that way as an average person approach zero.

A very viable option was to save with a known and clean, safe rate of return.  That can be counted on.  This is also the basis of capital formation which is where the foundation comes from to truly innovate and move society forward on a technological basis -- the common name for that is productivity.

The government intentionally destroyed that option starting in 2000 and made that destruction permanent in 2008.  They know this and did it on purpose to force you into a bet that you are more likely to lose than win.  You've heard two decades of Fed Chairs along with all 535 members of Congress and all Presidents from both parties since explicitly endorse and back that intentional destruction of your financial security and rather than force them to cut that crap out you cheer when it appears to be going your way -- which it always does, for a little while, right up until you get inside the "shower" and the door slams shut behind you.

Is this -- today -- the start of the inevitable crash once again?

Hell if I know.

But I do know it will collapse, and since the bubble is bigger this time than last, just like it was bigger in 2008 than in 1999, the crash will be bigger than 2008 and do more damage.  That is a certainty.

Of course Boobus Americanus won't go on a general strike and demand that this crap all stop.  No more deficit spending.  And, by the way, that could be accomplished by dismantling just one of the scams -- Health Care -- without killing a single person or screwing one person out of care they actually need.  Doing so would immediately and permanently reverse the deficits and cause your purchasing power to go up and your cost of living to go down, even if you never got a raise or found a better job again.

But no!

Instead Cory Booker is threatening to start a civil war with his professed intention to force gun owner registration, which is not only blatantly unconstitutional but has a decent crack at leading to an immediate revolt.  The only thing that will prevent it is that he has a zero chance of actually being elected, especially given his history in Newark where he oversaw a 30% increase in violent crime and the greatest number of shootings since the 1990s -- and in response to that crime wave he fired cops!

Cory Booker can be best described as a black man who wants to empower criminal black gangs by disarming those who said gangs would target.  Good luck with that working out as he intends.

The rest of the loonies aren't much better; Kamala Harris is another example.

Is America ever going to wake up?

I bet not -- at least not before it all goes straight to Hell and 2024 is not that far away, which I remind you has a high probability -- 90% or better -- of being an impenetrable fiscal barrier.

View this entry with comments (opens new window)

2019-05-05 07:00 by Karl Denninger
in Editorial , 131 references
[Comments enabled]  


The brainchild of two Stanford University design students, Juul launched in 2015 and quickly leapfrogged over its competitors to become the top-selling e-cigarette in the U.S. Today, the privately held company controls nearly three-quarters of the $3.7 billion-dollar retail market for e-cigarettes, spawning dozens of copycat brands along the way.

With Juul’s rise came an explosion of underage vaping, alarming public health officials and lawmakers. Last year, 1 in 5 U.S. high school students reported vaping in the previous month, according to a government survey.

Here's what I didn't know (never having used any sort of tobacco "vape" device) -- what Juul managed to do was change the formulation for the nicotine in the "juice."

The problem with most of these "vapes" is that the nicotine is a nasty substance and tastes like crap.  It really nails your throat in higher concentrations.  This is a big part of the reason that cigarettes -- for the novice smoker -- make you hack.

But Juul found a way to use the salt form, which is non-irritating.  That allows them to run very high nicotine levels, much more than you can get in a cigarette in a single puff.

This is arguably very good if you're a smoker and want substitute that is safer.  Not safe, mind you -- nicotine is directly harmful to the heart, for example -- but safer, as the combustion products from burning tobacco aren't there.

As a result if you're a heavy smoker and are trying to reduce harm one hit off the Juul may be as much as you need to satisfy your craving, where you'd otherwise potentially smoke a whole cigarette.

But for a teenager it's the other way around.  The ability to take the big dose means you actually get high on the nicotine.

I've occasionally enjoyed a cigar with a glass of cognac in the past.  I smoke them very rarely -- perhaps one every few years.  Anyone who tells you that tobacco -- nicotine, specifically -- is not psychoactive is full of crap.  It most-certainly is and it most-certainly does produce a certain "stoned" quality.  Yeah, it doesn't impair your driving and such (at least not that I can detect) but it most-certainly produce a "high."

I suspect if you smoke on a regular basis that fades.  But for the teen it's there, especially with a nicotine vape pen that is much stronger than the "others" that temper their strength to avoid the "hack attack."

I say put these behind the counter of a pharmacy, or in states that legalize marijuana, let them be sold there.  Put people with skin in the game on the selling end -- no pharmacist is going to risk his nice job over selling to minors, and neither will a dispensary risk having their license yanked.

View this entry with comments (opens new window)

2019-05-03 07:59 by Karl Denninger
in Editorial , 469 references
[Comments enabled]  

Well that escalated quickly and foolishly.

First, Pelosi.  Accusing Barr of criminal conduct is an instant "we're done" in terms of cooperation.  Do that with someone when you want to question them under oath and all you get from there is "I take the 5th".  And that's not limited to Barr either; since Pelosi has thrown that out there nobody in the Administration -- or previously in it -- should do anything other than give name and take the 5th.  Show up, erect the middle finger in the form of the 5th Amendment and then shut up.  Any subpoena for a "thing" issued you fight.   Voluntarily comply with nothing.

That was the dumbest thing I've heard someone say who claims to be "respectable" and "honorable" in my years as an adult -- unless her intent was to provoke Trump into telling her -- and the rest of Congress -- to go to Hell.  She hasn't been the only one doing so of late either.

I wasn't surprised to see Trump do exactly that.  On the air -- not on Twitter.

So here's my nickel review: This is all clown show political nonsense.

But there's a problem with people like Pelosi and the others -- hubris.

They may think they can press this.  Really press it.  In other words take this from clown-show political garbage to real tyranny.  Swalwell, one of the idiots running for President, has issued a backhanded threat to nuke Americans -- on American soil!  When challenged on his "gun control" nonsense and asked if he was looking for a war he pointed out that the US Government has 6,000 nuclear weapons and quipped "it would be a short war."

I will note that in most states a credible threat to kill you is a criminal offense.  Worse, such a threat in combination with the ability to carry it out is legal justification for your preemptive use of force to neutralize that threat.  Eric seems to think "common people" are not entitled to the very same protections that would be applied against you were you to threaten to kill him.  Well it is true that today he can't drop a nuke on you.  Were he to win the Presidency (highly unlikely), however.... or were he to try to pass his predicate bill that would come before nuking Americans....

Remember, this sort of the law doesn't apply to me isn't exactly a new position for Congresscritters.  The Democrats appear to have illegally initiated the surveillance -- probably all the way up the line to Obama.  Further, it was developed and reported today by the NY Times that the FBI attempted to infiltrate the Trump campaign.  On what sort of basis?

There are so many likely felonies here that I literally have trouble listing them all.  Perjury before a Federal Judge is just the start of this, I suspect.  And while Barr has said he intends to run it all down.... will he?  Is that what the Democrats are freaking out about -- the prospect of a few dozen indictments?

Here's the problem.

The lone nuts don't really scare anyone.  They're nuts.  They're the sort that took potshots at Steve Scalise.  No thought of substance and nearly all could legitimately be considered insane.  A few will get off a few shots and do damage, some will get caught, none of them think what they're doing through.  They're rage-monsters, basically.  Then there are all those who claim to be "all that" (e.g. Antifa) but not only are nuts they're also fundamentally cowards.  And finally you have the real terrorists -- who's intent is to cause terror.  Witness the guy baited and caught the other day out west; he likely fit into both insane and terrorist.

But the ability to resist tyranny, and the expression of resistance by whatever means are necessary, is an inherent part of America's DNA.  It's been silent for a very long time, but it's not gone.  I'm sure of it.

At what point does hubris get pressed too far?  I don't know.

I just know you can.

And I know if that happens very ugly things are likely to happen.

There are 535 Congresscritters.  That's a VERY small number.

There are 330 million American citizens.  How many are (1) not insane, and (2) still have that DNA in them in a form and fashion that it can be activated by too much of that hubris? None of those people will be talking about anything in advance; not on Facebook, not in a blog, in a  bar, on Twitter -- nowhere. How many of those have either formal training, a cunning and practical mind along with a willingness to cash themselves if they have to in order to "make a difference" or worse both -- and decide to act in an effort to dissuade what they see -- quite arguably as legitimately so -- as credible threats to destroy the Constitution?

I don't know.

But this much I do know -- if the people in DC keep this crap up and go from Clownshow to real, credible threats we may all get to find out -- and wish we hadn't.

View this entry with comments (opens new window)

2019-04-30 10:30 by Karl Denninger
in Editorial , 162 references
[Comments enabled]  

Ok, that'll be enough.

Not one but two anti-Semitic "political cartoons" in three days, with the second after an alleged "apology"?

So this is an anti-Semitic paper.

It's now established.

Heh, guess what -- the First Amendment protects their right to be anti-Semitic.  That's one of the beauties of America; you have the right to speak, including if your speech is outrageous and repugnant.

But that same First Amendment also protects my right to call them *******s and to refuse to associate or do business with anyone who works there or for any of their vendors, distributors or advertisers.


And by the way, we need to organize a boycott of all financial institutions that have anything to do with the NY Times.  Who knows who their commercial banking and lending is done through?  Let's find out and hammer those jackasses as well, forcing them out of the commercial banking system.

After all such is perfectly good for gun manufacturers, right?

Go **** yourself Grey Lady.  It's time for all men and women of conscience to exercise our First Amendment rights.

View this entry with comments (opens new window)