The Market Ticker
Commentary on The Capital Markets- Category [Consumer]
2017-05-12 09:22 by Karl Denninger
in Consumer , 205 references
[Comments enabled]  

This is utterly ridiculous.

Cramer is once again, along with the rest of the CNBS lie machine, trying to both slam retailers (who are clearly getting hammered) while also pumping Spamazon.

What he's saying is that Amazon is growing sales while all the "department stores" are losing sales.

Here's the problem -- he's using the data from the MARTS report out this morning, otherwise known as "retail sales" but using the "adjusted numbers" -- which is clearly bogus because the same month is in question in both cases.

Take a look at the highlighted numbers.  These are unadjusted, and thus not gamed -- but they're subject to whatever seasonality is in fact occurring.

The point is that the same seasonality is in play for both categories; ergo, you compare unadjusted figures when comparing like-for-like in a given month.

And what do they show?

98.2% of March's sales in April for department stores.

92.85% of March's sales in April for Internet retailers.

In other words Amazon saw a larger decline in March -> April sales than department stores did -- by a lot.

Yes, seasonality matters but here's the problem with the so-called "seasonal adjustments" -- they're clearly wrong.  Why?  Because adjusted they show that non-store retailers (Amazon) increased sales in April by 1.4% while department stores increased by 0.2%.

Since it's the same month in question perhaps you can explain why the so-called "seasonal adjustment" added to Amazon's sales but subtracted from JC Penny's, Macy's and Nordstrom's in the same month.

Good luck with that.  It's clear, however that you sure are buying it this morning if the modest spike that Cramer's dissembling produced in the stock price of Amazon at the open is any indication and this is just the latest example of the demonstrated idiocy of the common "trader" in that you do listen to people in the media who are selling you trivially-disproved claims.  How about the other day with Tesla and his "solar roof" brouhaha where Bloomberg cited the firm's numbers using a cash price for the roof but a 30-year energy production "value" that also made ever-escalating (annual, in other words exponential) electricity price assumptions. Never mind the fact that Tesla's figures also including consumable components that have a life of far less than the roof yet did not account for their replacement expense which will be required several times in the 30 year period cited (batteries in the Power Wall.)

The cited "analysis" by the company was trivially disprovable as having any chance at being accurate because the time value of money is never zero and if financed at today's extremely low interest rates once you include the cost of financing the roof it doesn't "make money"; installing one of these roofs on their "pro-forma" figures costs you $20,000 due to the financing expense of the roof, never mind the consumables issue.

You have to be out of your ****ing mind to contemplate installing one of these "solar roof" things given the obvious omission of financing and consumable costs in the "comparison" that Tesla published and the fact that when even ridiculously conservative (that is, in favor of Tesla) assumptions are used for those two items even with the tax credits, which amount to stealing from the taxpayer, you still lose at least $20,000 (plus the consumable expense, whatever it ends up being) putting one of these roofs on your house!

Oh by the way, it's not just consumables either.  It's also in the increased insurance expense; one good lightning strike and all those nice electronics will be rendered smoke-less.  Yes, your homeowner's insurance will cover that.  No, that additional risk presented by said electronics is not free to cover and the 30 years of increased insurance premiums and the time value of that money are not part of their "comparison" either!

Being a finance publication Bloomberg either knew or deliberately ignored the obvious dissembling in the "comparison" they mindlessly parroted without a single critical word aimed at the means by which the so-called "calculations" were presented or the company presenting them.  It is exactly this sort of intentional refusal to do their job that has led to the myriad blowups over time in the markets -- in the 1990s, in 2008, and more-recently with firms like Theranos and, I predict, in the future with companies such as Tesla.

This clown-car exhibition can be yours on Cable TV and in the so-called "mainstream" media each and every day.

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