DESTROY EVERYTHING Bezos Touches (and not just Bezos)
The Market Ticker - Commentary on The Capital Markets
2017-11-29 12:00 by Karl Denninger
in Corruption , 208 references Ignore this thread
DESTROY EVERYTHING Bezos Touches (and not just Bezos)
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So here we are..... you know I've written on Bezos using The Washington Post as a "mouthpiece" to push a political agenda that he believes will benefit him, and which extracts value from you.

This is particularly evil.  Let me remind you that business exists to make a profit.  Lobbying is of course part and parcel of what businesses sometimes do; they make their opinions known to lawmakers, among others.  Free speech is a right, not a privilege.

But lying, on purpose, isn't free speech.  It's deception, it's fraud, it harms real people, that is, you, and when done through a perverse attack launched under the guise of "The Press" it must be met with an unrelenting response in which the person or organization that does it is DESTROYED in every possible and legal way, including all firms and interests said entity or person holds.

Why?

Because if you don't do that then the only other alternative will eventually be the very unlawful use of violence to stop the predation that said person and organizations have organized against you.

Recently I got into a "Twitter Debate" with Dennis Kneale.  You may remember him from the time when he was on CNBS, and he and I went back and forth a number of times, including on the air, which I found amusing.  We have pretty-significant differences of opinion but personally I like the guy.

The recent issue was one of monopolies.  His argument was that my piece of same, and Bezos/Amazon in particular, was well-reasoned, insightful (in other words he agreed with my analysis) and yet, in his opinion, wrong.  The reason he claimed it was "wrong" was that there was no evidence Amazon had caused prices for products they sell to go up, and therefore there was no monopoly problem.

Dennis' view is common, including among politicians and Attorneys General.

The problem is that it's both legally and ethically bankrupt.

Let me quote the entirety of 15 USC Chapter 1, Section 1 and 2:

Sec 1:

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.

Sec 2:

Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.

Do you see anything, anywhere, in that section that says prices must rise in order for there to be a violation?  Do you see anything that says you must succeed in driving out all of your competitors?

No.

The mere attempt -- any such contract, combination, conspiracy or similar to restrain trade or commerce is a felony.  It does not matter if you succeed and it does not matter if prices go up in the areas where you are attempting to destroy competition -- none of that matters.

Why did the drafters of this law write it this way?

The drafters knew that one of the most-pernicious ways to create a monopoly is to cost-shift.  That is, to give the perception that the consumer is getting a better deal through size and driving out competitors instead of a worse deal.  If you can take a business in which you hold a "first mover" advantage, or worse, in which you have excess capacity that would otherwise go to waste, sell it and use that unrelated service or product's profit to sell something else below cost the consumer thinks he's getting a great deal on said thing you sold below cost!

The problem of course is that someone is getting screwed; a competitive market will never allow this sort of cross-subsidization because the subsidizing service or product is also subject to competition, so without the monopoly effect cross-subsidization cannot work since you won't have any excess profits to use for this purpose.

Therefore the mere existence of such a cross-subsidy channel is evidence of monopoly power.

John Stossel says that there's nothing wrong with being a rich bastard so long as you don't collude with government to get special deals.  I agree.  The problem is that as soon as cross-subsidy shows up and especially when it shows up across periods of years you have proof of said collusion -- because without it there would be no excess money with which to do it.

In short there's a very simple reason that 15 USC Chapter 1 Sections 1 and 2 don't require prices to rise in the monopolized business as part of the predicate for those who try to do so to be guilty of a crime: It is almost always possible for those who monopolize to hide the negative impact that would otherwise show up directly in consumer price by forcing someone else to pay it, by extracting it from the government or by screwing someone, somewhere -- whether it be getting screwed out of a job, getting screwed by the taxpayer funding the subsidizing service or product or something else.

Indeed this morning's "announcement" on Amazon's "new businesses" with Disney and others for content storage and delivery on AWS is outrageously idiotic except to leverage Amazon's monopoly power.

The reason is simple -- it is ridiculously more-expensive to store bulk data on a "cloud" than on your own infrastructure.  Always.  Not a little more expensive, more-so by orders of magnitude.

Video content is the very definition of "bulk data"!

And now we have this which is exactly why those laws must be enforced right damn now!

Entous says:

“But we really haven’t addressed… Our reporting has not taken us to a place where I would be able to say with any confidence that the result of it is going to be the president being guilty of being in cahoots with the Russians. There’s no evidence of that that I’ve seen so far.

“We’ve seen a lot of flirtation, if you will, between them but nothing that, in my opinion, would rank as actual collusion. Now that doesn’t mean that it doesn’t exist, it just means we haven’t found it yet. Or maybe it doesn’t exist.”

Melissa McCullough, the Director of Newsroom Operations, expresses her bias against Trump, admitting “let’s just hope he doesn’t get re-elected in another three years.”

McCullough then backpedals and says, “I shouldn’t be saying these things because we don’t… We’re not supposed to really talk about that kind of stuff.”

You got this folks?  This is the Washington Post's National Security Reporter who is admitting they have exactly zero evidence of actual Trump-Russia collusion.  None.  They have been digging and digging since well before the election and haven't been able to find any evidence yet they "report" a knowing lie -- they claim said collusion exists in their "newspaper" and that such collusion occurred as a claimed fact.

Then you have the director of their news operations who openly wants to see a sitting President lose, and I think it's fair to assume wanted to see him lose in the first place and essentially admits this is reflected in the job she does.

It is because of precisely this sort of manipulation and the abuse of one's wealth to create monopolies and shift the cost onto you, the consumer in ways you cannot identify and may not even be tangible that the authors of 15 USC made sure that the law does not require prices to rise in the "attempted-to-be-monopolized" business for the conduct to be a felony.

IN OTHER WORDS IT IS PRECISELY SO THAT JEFF BEZOS CAN BE INDICTED RIGHT NOW, DO 10 YEARS IN PRISON ON EACH COUNT AND AMAZON CAN AND SHOULD BE DESTROYED UNDER 100+ YEAR OLD LAW THAT DOES APPLY TO HIM AND HIS COMPANIES, HAS NOT BEEN REPEALED AND DOES NOT REQUIRE THAT YOU SHOW CONSUMER PRICES IN THE PRODUCTS AMAZON SELLS HAVE RISEN.

YOU MERELY NEED TO SHOW THAT HE IS "AMAZONING" PEOPLE AND CROSS-SUBSDIZING TO DO SO.

The first is trivial; it's stated every single day in the media on CNBC and elsewhere.

In fact right now, as I post this, CNBC has another analyst from Canacord so-stating once again!

The latter is also trivial as it's clearly documented in an official document filed with the SEC every quarter.

And no, this isn't limited to Amazon and Bezos.  Minutes after this article posted AT&T's CEO showed up on CNBS again claiming the anti-trust argument raised by the government requires showing that prices to the consumer will rise.  He's lying, he knows it, and CNBull**** knows it too yet they refuse to challenge him on that point; the law requires no such thing as I proved by citing it in full up above.

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Aztrader
Posts: 7881
Incept: 2007-09-10

Scottsdale, AZ
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Completely agree with your synopsis and too many people simply don't get it because they love the convenience and ignore the damage they are doing to our economy.
When I first opened my store, we sold stun guns on Amazon. Since I was an importer, I had a price advantage over dealers that bought from distributors. After only 5 months, I was one of the top sellers of stun guns on their site.
I couldn't get the reviews that Amazon required to keep top status and after 250 sales, I had only 7 reviews which is typical of most Amazon customers. All it took was one bad review and they closed my store because I fell below their minimum rating scale due to that review.
In 2015, Amazon literally kicked off any dealer selling stun guns because they now were importing the guns themselves. Shortly thereafter, did the prices in those stun guns start to rise back to where they should have been before they were Amazoned when the prices were beaten down in 2012-15.
Amazon used their listing system to basically destroy the little guys and then took over once they got their own supply line going.
The pattern is very obvious and of course the idiots on wall street call that capitalism.
Goforbroke
Posts: 7153
Incept: 2007-11-30
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So ...

Amazon, under the auspices of being a sales channel and fulfillment center, finds out what third party products are doing well, diectly sources these products themselves, and then knocks the third party vendors out.

And companies like Expedia and Disney are giving up control of their databases/content to this company?

At some point it will implode.

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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

Tickerguy
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Quote:
Amazon, under the auspices of being a sales channel and fulfillment center, finds out what third party products are doing well, diectly sources these products themselves, and then knocks the third party vendors out.

That's illegal, incidentally -- both civilly (tortious interference) and probably criminally under the Sherman and Clayton acts.

They figure you CAN'T sue them however, as you don't have the million dollars for the lawyer.

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Winding it down.
Goforbroke
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I would think it would be a function of what kind of contract you signed with Amazon in order to be listed and/or use their fulfillment services. I wonder if someone with standing could file based on the terms inherent in that contract.

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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
Tickerguy
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Quote:
I would think it would be a function of what kind of contract you signed with Amazon in order to be listed and/or use their fulfillment services. I wonder if someone with standing could file based on the terms inherent in that contract.

Not really.

There's an implied duty of fair dealing and that would include not violating the Sherman Act, along with not interfering with your supplier relationships.

You don't need a specific contract clause for this; it's implied. If I agree to sell your stuff it's implied that I won't use my ability to get my hands on your gear to figure out where you got it from and then go after your suppliers, destroying your business.

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Winding it down.
Goforbroke
Posts: 7153
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But what if I commit to taking a given volume of stuff per period (month, quarter, year) ... wouldn't that permit me more favorable pricing and the ability to be a direct distributor rather than just a sales/fulfillment channel?

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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
Tickerguy
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Yes, EXCEPT that when you got involved with me as said sales/fulfillment channel you created an implied contract of fair dealing.

Using the information you gained for the purpose of putting me out of business violates that. Note that my sales volume (thus your incentive to do so, and knowledge of how much you can order and thus negotiate for) is part of that information.

I do NOT need to specifically negotiate for you not to do that, as doing so breaches the general duty to deal fairly with the people you contract with.

People think they can do this sort of **** on a routine basis but it just isn't true. Well, other than the fact that in SCAMERICA such conduct, which is pretty clearly a violation of 15 USC never mind being civilly actionable, isn't prosecuted any more and it's ****ing hard to pay a lawyer AFTER Amazon does this to you and your business is destroyed.

This sort of conduct should have gotten Amazon shut down years ago and Bezos and his pals tossed in prison. If I had tried to pull that **** when I ran MCSNet with any of our partners (we did have a few) my ass would have sued to the other side of Mars and I might have gotten indicted on top of it.

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Winding it down.

Goforbroke
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By virtue of using Amazon as a sales/fulfillment entity, you have inherently agreed to give Amazon access to all of the information (including buyer, address, credit card info) from every transaction.

The only way you could prove that Amazon scarfed your business would be to have access to their records, which you're never going to get.

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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
Tickerguy
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And by virtue of doing so you have an implied contract from them of fair dealing, which means (1) they won't use that data to find your suppliers, (2) they won't use it to determine how much can be sold (and thus how much to order) and (3) they won't use it to take your category, shut it down and steal it for themselves.

The test from a legal perspective is "if you knew they were going to do this with your information would have to entered into the contract anyway?"

The obvious answer in this case is "No."

The implied covenant of fair dealing is in ALL contracts; it does not need to be stated.

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Winding it down.

Goforbroke
Posts: 7153
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So ... let's just say that someone has the $1MM to sue Amazon.

Given that Amazon ... makes customers happy, makes credit card companies happy, makes manufacturers happy, makes delivery companies happy ... from a political perspective, you wouldn't have a groundswell of support. Chances are, the judge would find a reason to decide in Amazon's favor, as the only parties being screwed are the third party vendors. Yet again, the rule of law is thrown in the trash due to political expediency.

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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
Tickerguy
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Exactly which is why this bull**** MUST be stopped.

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Winding it down.
Tsherry
Posts: 961
Incept: 2008-12-09

Spokane WA
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>>Yet again, the rule of law is thrown in the trash due to political expediency.>>

I don't think we have a rule of law. Or even 'guidelines' (channeling Captain Barbossa there). We have fraud and theft as a successful and unprosecuted business model; 'civil asset forfeiture' which is used to pay bonuses for district attorneys and their staff; no law enforcement for those in the Feral Government who admittedly, openly, and happily break the law; we have corporations right, left, center, up and down that break all kinds of rules, laws, regulations and statutes and no one goes after them. We have a fraudulent credit system, a fraudulent economy, fraudulent projections of income, expenditure, investment and we depend on the fraud for our 'future.'

When the rest of the people figure this out it's Game On. If they don't figure it out, well, I guess they and we get what we deserve.

Pretty sure that we're all screwed.

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Omne mendacium est.
Ginnie
Posts: 33
Incept: 2017-04-03

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I just ordered and received two small items (under $20) from Amazon, using my college kid's Prime account. So here's the report from the front lines - Amazon is a disaster. Prime took from Saturday to Wednesday for delivery. One item was supposed to be Amazon delivery, the other UPS. Amazon delivery was a day late and neither met the terms of Prime as it used to work.

Last year Amazon so overwhelmed my local post office that delivery became erratic with packages marked delivered but they weren't. They'd arrive a day or two later - maybe. Our great mailman left my suburban, lots of packages route for a route that didn't kill him with Amazon. My neighbors are up in arms again this year because Amazon delivery is erratic and they take a photo of your package where they left it but fat lot of good that does when it's a photo that's not your porch. It's so bad that neighbors are exchanging ideas of alternate places to buy their previous Amazon purchases so there's hope.

Workers are diving out of the new local fulfillment center because they put them on mandatory 60-hour work weeks and it's too much for all but the most fit.

I check Amazon pricing from time to time on items and for one pet item they were 30% higher than a web store that charged a fair shipping price. And that's not counting the cost of a Prime membership so it's even worse.

I don't miss Amazon. I'm finding items this year through ordering free pickup from physical stores or actually buying the item in the store. I always did this as much as I could because if you don't buy from stores, there won't be any stores but even Wal-Mart made that hard for awhile because they quit carrying so many products. They seem to be turning that around.

Rule of law is dead in this country. There are enough laws to make almost anybody a criminal or suspect so you can have $10,000 cash seized just because you had it and a cop found it or you can rack up felony convictions and hardly spend a night in jail. It all depends on how the system in your area feels like doing things. The same as Amazon and all our other monopolies get to be monopolies - our politicians don't feel like doing anything about it.
Chuckstermd
Posts: 57
Incept: 2011-02-22

baltimore
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Was in Walmart yesterday buying an oil filter and oil. I didn't remember which oil filter I needed so I went on Amazon to see what part number they recommended. Amazon's price for a Mobil 1 filter was $14.99 with Prime delivery or $9.99 shelf price at Wally World. Needless to say I walked out of the store with a new filter and jug of oil.

I did not renew my prime membership back in September. Screw Amazon and Bozo Bezos.

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Change? Not until we change the people in Congress with people who understand how to run a government of the people, by the people and for the people.
Obseedian
Posts: 12387
Incept: 2007-07-26

BBRY Central
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Thanks to O'Keefe there is more than enough evidence for the FCC to go after the fake news peddlers. Time for someone to file a complaint.

https://www.fcc.gov/consumers/guides/com....

Quote:
What responsibilities do broadcasters have?

As public trustees, broadcasters may not intentionally distort the news. The FCC has stated publicly that "rigging or slanting the news is a most heinous act against the public interest." The FCC may act to protect the public interest when it has received documented evidence, such as testimony from persons who have direct personal knowledge of an intentional falsification of the news. Without such documented evidence, the FCC generally cannot intervene.


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Those who vote decide nothing. Those who count the vote decide everything. - Joseph Stalin
Tickerguy
Posts: 150706
Incept: 2007-06-26
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But they won't.

It's just another crime by the rich and powerful that's used to **** you up the ass, and for which you mewl in response "Please sir, just the tip this time."

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Winding it down.
Tsherry
Posts: 961
Incept: 2008-12-09

Spokane WA
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I have been known to buy a lot of stuff on line--quite a large percentage of that consists of car parts as I usually have a project or five underway at any given time.

Amazon once upon a time had some parts that were priced favorably over local vendors, chain stores other online sellers. That hasn't been the case for years.

Local outlets of national chain stores with an online presence are in a war right now and it's great for the consumer. I just bought about $300 in parts to complete a disc brake conversion for one of my projects, which was $600 less than one online seller, $350 less than another. Amazon couldn't compete at all.

Rock Auto, Carquest and O'Reilly's got my business. I won with either free in store pickup (O'Reilly's) or free delivery over $25 (Carquest) or free delivery (Rock Auto, with a checkout code).

Ginnie is right about the conditions there, 60+ hour weeks, missed deadlines, etc. I know way more about Amazon than I want to, due to my son's employment there.

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Omne mendacium est.
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