CNBS - All The BS You Will Trade On
The Market Ticker - Commentary on The Capital Markets
2017-05-12 09:22 by Karl Denninger
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CNBS - All The BS You Will Trade On
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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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Elkad
Posts: 271
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Musk taking money from idiots is fine by me.
Anything to keep SpaceX afloat.

He's the only one making actual progress on bringing the price/lb to orbit down.

IMO, cheap space access is important to our future.
Goforbroke
Posts: 6951
Incept: 2007-11-30
A True American Patriot!
Drain the Swamp!
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Critical thinking skills and the ability to do simple math have gone the way of the dinosaur. Everywhere.

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Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our Light, and not our Darkness, that most frightens us. -- Marianne Williamson
Capcon
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Tulsa
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I read the Bloomberg article on Tesla Roofing a couple of times but still could not discern where the cost of the Roofing was based on an initial cash payment rather than financing through Tesla. Did you pick that up through the use of Tesla's cost calculation tool?
As always, the early adopters will most likely get royally screwed on both the price as well as the reliability of these systems, however I think the integration of a Powerwall battery storage with a useful life fast approaching 20 years goes a long way towards negating some of your argument against solar generation as a viable energy source for SOME applications in SOME areas of the country.
In my view, the taxpayer subsidization of Musk Inc is not unlike a private market version of the taxpayer funded Manhattan Project. I for one cannot deny the far reaching implications and public benefit of some of the technical achievements he has realized in a very short time. Not sure how those taxpayer funds could have been better invested in that particular R&D space.
Als
Posts: 507
Incept: 2010-03-12

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That Tesla Solar roof is a really bad deal from the onset. I priced it on my home and I can replace my roof for $6,000. The Tesla roof is $36,000-$39,000 before the wall battery pack at $7,000 and electrician $750 to hook everything up.

The website calculator said I would save on average around $5400 a year on electricity. Really?

My total cost for electricity last year was $705.76.
Base service just to be hooked up is $15 a month or $180 a year.
The electricity I used with taxes and fees came to $525.76 or $43.81 per month.

I can take probably $60-$75 off my yearly electric bill over the worst three months of the summer due to A/C use by increasing the insulation in my attic up to a R60 rating. Probably about the same amount or a little more of savings would come during the winter months with my gas bill. ROI for the improved insulation costs would definitely come back within four or five years.

For example, by installing a temperature activated attic fan ($375) six years ago I cut at least $250-$300 off my yearly A/C costs during the summer months of June, July, August and September. My worst two months, July and August last year were $80 and $112 while my first year in the house before installing the fan I saw July and August electric bills north of $200.

Solar might be OK if you live in an area of the U.S. that sees a higher than normal amount of sunlight but for the other 2/3rds of the country it is a really bad idea to replace your roof with this system.

No one is ever going to get a total ROI with a Tesla roof unless they live in the house for over twenty five years and the Government was subsidizing the cost by at least 50%. You'd be better off investing the money and spending the time and a few bucks making you home more energy efficient. Lots of really good ideas can be found with a little time spent on Youtube.

Like the old saying says "If it seems too good to be true it probably is."
Tickerguy
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Quote:
As always, the early adopters will most likely get royally screwed on both the price as well as the reliability of these systems, however I think the integration of a Powerwall battery storage with a useful life fast approaching 20 years goes a long way towards negating some of your argument against solar generation as a viable energy source for SOME applications in SOME areas of the country.

There is no lithium battery in existence with a 20 year useful life, nor one that will be developed in the next ever. Why? Physics and chemistry; lithium is an EXTREMELY active metal and the batteries start to degrade at the time of manufacture. They won't make five years without loss of enough capacity to be a problem, say much less 20.

Your tout crap has been noted and guess what you get for it?

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Ckaminski
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Mass-Hole!
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> with a useful life fast approaching 20 years

There is no battery yet invented that approaches that. Super-caps, maybe, but they are fractions of an Ampere.

Solar power is only economically viable due to MASSIVE government giveaways, cheap financing and outright non-solar rate-payer ass-raping.

I can't wait until the subsidies end, all the solar companies go bankrupt, and some random mega corp/bank (my money is on Berkshire Hathaway) owns a lien on every solar property in America.
Mjsmith
Posts: 149
Incept: 2011-12-08

United States
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Quote:
Not sure how those taxpayer funds could have been better invested


Oh, I don't know, not to go off the crazy extremist deep end or anything, but how about the idea of just leaving those funds in the taxpayers' pockets?


.
Irishblues
Posts: 722
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Wisconsin
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Quote:
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.

As policies are currently written? Yep, probably covered, unless the insurer has exclusions on solar panels. Would I bank on this being covered going forward? Nope, unless you're a moron. I would be shocked if insurers don't exclude it in some fashion or put fairly stringent limits on repair/replace (capping the amount payable at say whatever a traditional roof replacement would be) - leaving you (the sucker) on the hook for the balance.

If these new roofs are more of a lightning magnet than houses with normal roofs? They'll get excluded entirely - putting you on the hook for the entire amount to replace and repair.
Krzelune
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They only way this crap makes any sense is if the govt stuffs carbon taxes down our throats raising the cost of electricity to the point it is economical to mount that crap on your roof. PG&E has done this in many parts of CA.
Mannfm11
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DFW, Tx
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My electricity bill averages about $150 a month. I'm sure it would cost an extra $75 to $100 to insure that roof here. Hail storms have suddenly become popular around these parts. I'm going to take a good look at the Nasdaq 100, where the bubble stocks live. There have to be a couple dozen 2000 style zeros in the group. The next credit crunch will probably get TSLA. Musk and Bezos are clearly Wall Street blow buddies. Maybe ****erberg too.

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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
Spanktron9
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Mannfm11-

You can't use economic analysis decide on whether this product is the right choice or not. Its an ideological, and/or status driven decision. Just like people paying $150,000 for their electric car. They aren't looking at economics they want status. The realities don't matter.

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