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2018-01-11 10:00 by Karl Denninger
in Editorial , 408 references Ignore this thread
There Is Only One Business: SCAM
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You either steal, rob, lie, launder money and otherwise rip people off or you go out of business.

The only exception?  If you're small enough not to attract any of the so-called "great businesses" attention.  You can run a bar.  You can run a small restaurant (as long as it doesn't compete with any of those large firms.) You might be able to run a small consulting outfit.

Otherwise, forget it.

You can't emulate their game because you will get prosecuted.  They will not.

Investors will not care and thus the so-called "efficient market" will not punish the firm either because there is a now couple-decade long history that says the government will never indict, prosecute or meaningfully punish any large firm that breaks the law.

Amazon is known to have gamed the USPS -- probably with the explicit help of Congress (who they lobby all the time) to get below cost package delivery.  You pay for this every time you send a letter or package to someone, and they literally rob you.  In addition the firm engages in the very definition of anti-trust punishable behavior by cost-shifting their loss-making sales onto AWS customers, some of whom are various state, local and federal governments and thus there's no push-back available to private industry there either.  All of this should have been met with a bone-crushing response years ago, but it hasn't and won't be.

Intel just got caught with its pants down in that they cheated on the rules of actual data security in basically every chip they've made since the 1990s.  They issued a mealy-mouthed claim that their chips were "operating as designed" which implies they knew -- whether factually or by either ignorance or negligence -- that they could be penetrated in this fashion.  In other words, they are insecure.  Yet they never disclosed that.  Forcing them to recall all those chips and refunding the customer's money would bankrupt the company, by the way.  Further, the CEO sold all but his board-required minimum amount of stock after this was disclosed to the company but before it was made public.  The reaction from the SEC, from the FBI and from investors has been nearly zero.

Facebook has been caught, multiple times, overstating how many impressions their ads get.  They charge people for all of their claimed impressions of course.  This is blatant fraud, especially when you claim more reach then there are people.  Not only has there been zero enforcement action taken against them there has been zero investor reaction.

Netflix was caught during the original Net Neutrality debacle intentionally putting traffic down slower channels, explicitly barring the providers from upgrading that channel and then blaming the slowdowns on ISPs.  They used this as a means to bludgeon the Obama FCC through public opinion to pass Net Neutrality. The current FCC head, who rolled that piece of fraudulent idiocy back, has been facing death threats and in fact canceled an appearance at CES as a result.  Zero enforcement has been taken and again, investors do not care.

Wells Fargo has been caught repeatedly screwing customers since the housing meltdown.  Never mind that scam with liar loans and similar they then pulled many more scams, including "new accounts" never ordered, charging people for products the customer never asked for, fraudulently force-placed and unnecessary (and thus worthless insurance to captive companies (from whom they probably received kickbacks!) for both house and car loans and more.  In total these scams amount to billions of dollars stolen.  Some of it has been "given back" but never with any penalties or interest attached and nobody has gone to prison.

The entire health industry operates on a model that violates 100+ year old federal law.  In doing so it has gone from 4% of GDP to nearly 20%, a five-fold increase.  This threatens the very survival of the nation's finances along with state, local and private pensions.  NOT ONE SENATOR OR REPRESENTATIVES, NOR ONE FEDERAL LAW ENFORCEMENT AGENCY, NOR ONE MAJOR MEDIA OUTLET, WILL POINT OUT THE FACT THAT REFUSING TO QUOTE A PRICE OR HONOR A QUOTED PRICE IS THE VERY DEFINITION OF UNFAIR AND DECEPTIVE TRADE PRACTICES WHICH IS ALSO A CRIME BOTH AT A STATE AND FEDERAL LEVEL.  WHEN DIRECTLY CHALLENGED ON THIS (I HAVE) CONGRESSIONAL REPRESENTATIVES WILL LIE TO A ROOM FULL OF PEOPLE IN RESPONSE AND WHEN THEIR LIES ARE POINTED OUT COMPLETE WITH CASE LAW CITES FROM THE SUPREME COURT THEY NOT ONLY REFUSE TO CORRECT THE RECORD AND APOLOGIZE BUT INSTEAD REPEAT THE LIE AGAIN!  Again there has not been one firm that has faced any enforcement actions, not one person has gone to prison and damn few have faced any sort of investor pushback either.

Why does the market go up, up and away?

Because everyone is stealing and THEFT, when there are no cops, has no check and balance on the amount or frequency of the thefts.  In addition anyone who has the temerity to challenge any of these enterprises with competition can be stomped on and will be, whether here or through the theft of their intellectual property (here or in China) and again nobody will do a damn thing about it.

That's the entirety of the market's rise post-2009 folks.  All of it.  The market turned literally on the day that the Obama Congress decided to let banks knowingly lie about their asset values and LITERALLY forced FASB to accept those lies in their accounting standards.  I reported on this at the time and the pushback from the public has been, over the last nearly ten years now, zero.

As the market came to realize that this open, official sanction of lies and fraud was not limited to a handful of large banks but in fact extended to all large firms listed on public exchanges and many that were not the stock market went ape-**** and continues to do so today.  You get screwed out of thousands of dollars a year -- each and every single person in this nation -- as a consequence and yet you won't do anything about it either.

In fact to a large degree you cheer it on!

That's the beginning and end of it and it will not stop until (1) they run out of money to steal, at which point everyone else (that's you) is broke or (2) the rule of law shows up again somewhere.

The latter won't happen here in America because you don't give a **** even if the hospital kills your kid, your mother, your father or your friends after stealing everything they have -- and that's just for starters.

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User Info There Is Only One Business: SCAM in forum [Market-Ticker]
Village-idjit
Posts: 598
Incept: 2010-06-09

B'ham WA
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Yep, Karl, completely correct.

I have never bought anything from Amazon.
I have never have used Netflix or any streaming media.
I have never banked with Wells Fargo.
I pay full price for postage thru the USPS.
I have never been a member of Facebook.
I pay for 100% of my health care premiums, no subsidy from others.

But so what? I think I am tilting at windmills. The fraud, lies, and scams are so pervasive that they have permeated our culture and way of life. The biggest elephant in the room is the gross violations of law by the Medical Industry. Look at the Main Stream Media with all the fake news and lies. Look at the upper echelons of law enforcement - FBI DOJ knowingly and repeatedly ignoring huge violations of the "law." Look at the lower levels of law enforcement with these SWAT raids killing innocent people, with no consequences. Look at the "MeToo" movement where mere accusations or innuendo in the sexual abuse area is as good as a conviction. Look at The Fed (and Congress) making a steady 2% Inflation equal to "stable prices." And these examples are just the tip of the iceberg!

I guess I will keep to my sole proprietorship business. For the reasons you have expounded upon in many a Ticker, I will never expand. I will be very careful to behave in the most proper manner in any casual or business situation involving a woman. I will buy Made in America unless there is no other option. I will deal with local small business and give them my financial support. I will keep my profit levels below certain thresholds so as to legally pay no income taxes. With society the way it is now, all I can control is what I do directly. So, to the best of my ability, I will be honest in life, caring of others, loving to my wife and immediate family, and will mind my own business. I will get out and enjoy road trips and the beauty of nature, enjoy sports and hobbies, and be grateful that I have some good friends to share life with.
Nomullet
Posts: 7750
Incept: 2007-11-11

SW
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Just purchased some headphones on ebay from seller 'no_sales_tax' and with free shipping was about 1/3 less than amazon price shipped. Sure enough, showed up in amazon box.

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A bad day of programming is better than a good day of management.
Bodhi
Posts: 185
Incept: 2008-02-23

Georgia
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Quote:
Just purchased some headphones on ebay from seller 'no_sales_tax' and with free shipping was about 1/3 less than amazon price shipped. Sure enough, showed up in amazon box.


The pervasiveness of Amazon and their "independent sellers" makes them hard to avoid. I've also bought things on eBay only to have it show up in an Amazon box with an Amazon receipt inside. More than once a package has been delivered on Sunday. "Sunday Delivery" was actually printed on the label. I guess that's included in Amazon's special rate with the USPS.
Tickerguy
Posts: 151190
Incept: 2007-06-26
A True American Patriot!
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This is where the scam really gets going with them too -- since those "independent sellers" do not collect or pay sales taxes.

The Quill decision is correct, BUT how payment is made matters. If you are paying a fee to list something and a commission that doesn't necessarily implicate someone as not actually independent but as soon as you funnel the money through that entity then you have, and this is where enforcement should rest. That's where agency rests as well since the customer's relationship is not with some independent entity BUT RATHER WITH THE LISTING SITE. That is sufficient to demonstrate Nexus.

Ditto if you're *required* to use a captive or affiliated/integrated payment stream (e.g. eBAY and PayPal) -- or if you DO whether required or not.

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Winding it down.

Johnnyb
Posts: 46
Incept: 2014-10-21

Tulsa, OK
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"The market turned literally on the day that the Obama Congress decided to let banks knowingly lie about their asset values and LITERALLY forced FASB to accept those lies in their accounting standards."

For those of us with a bad memory or who were paying attention (or, in my case, both), can you spell out what specifically you are referring to here?
Aztrader
Posts: 7913
Incept: 2007-09-10

Scottsdale, AZ
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Those of us that sell online and have to pay full cost postage have realized how much this is killing our business. I hope that Trump's comments about the USPS gain some traction, but have little faith due to the swamp keeping the status quo going for the big guys like Amazon.
Earnings will start shortly again and the lies and fraud will persist. How many of the retailers will include returns in their "announced" numbers? Most will use their non-GAAP accounting tricks to bury any losses they incur due to returns.
On the healthcare side, I found that my lovely $5,000 deductible renewed and my therapy was no longer covered. They wanted $80.00 minimum per session, so it's time to go it alone. Paying $800 a month for the BS insurance is costly enough.
Just think if the accident happened in late November or December.

Tickerguy
Posts: 151190
Incept: 2007-06-26
A True American Patriot!
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@Johnnyb Congress, in early 2009, hauled FASB into a hearing and essentially TOLD THEM that they were either going to allow banks to mark their "assets" (loans) to a model the bank itself was able to create (rather than what they could sell them for, which is what the MARKET said they're worth at that time) or Congress would force same.

I wrote on this at the time because it is identical to telling an accountant that the box of dog**** on the company CEO's desk is worth $1 billion and that's an actual asset of the company, upon which the firm can then borrow!

The market bottomed almost-literally on that day; Congress STATED that outright accounting fraud was not only allowed IT WAS MANDATORY.

That policy, by the way, remains to this day.

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Winding it down.
Bodhi
Posts: 185
Incept: 2008-02-23

Georgia
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The lack of sales tax from these sellers was not lost on me. If the sellers get their merchandise from Amazon it makes me wonder how the sellers avoid paying sales tax? If the sellers are claiming exemption because they have a resale license, they are inviting a world of hurt when they get caught.

I do some selling on eBay and they make it almost impossible to do business without a Paypal account, unless you have a merchant account. I don't do enough volume to justify a merchant account as the fees wouldn't be any better than Paypal.
Dji
Posts: 1305
Incept: 2009-04-21

Ponzi world 3rd rock from the sun
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Ticker is spot on SCAMERICA
thanks for reminding me to check my list of graves to******on.
This ****er is high up on it, Paul Kanjorski 81 yrs old.

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Don't be a bag holder-Me

What goes up Must come Down- Alan Parsons Project
Nevertoolate
Posts: 1451
Incept: 2007-08-26
A True American Patriot!
San Antonio de Bexar de runover with illegals, Texas
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My guess is that Amazon has set up entities in every jurisdiction that do not have nexus with that particular taxing authority. They merely route the transaction through the one closest to the purchaser that is not required to collect sales tax. FU Jeff

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Democracy is a conversation between 2 wolves & a sheep discussing what's for dinner. A Constitutional Republic is found when the sheep pulls out a gun & makes clear that his 2nd Amendment Right will be exercised should the wolves attempt to hold such a "vote."-KD 9-29-15
Tickerguy
Posts: 151190
Incept: 2007-06-26
A True American Patriot!
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Quote:
My guess is that Amazon has set up entities in every jurisdiction that do not have nexus with that particular taxing authority. They merely route the transaction through the one closest to the purchaser that is not required to collect sales tax. FU Jeff

@Nevertoolate That's felony tax evasion and Bezos needs to go to prison.

I explored all of the avenues in this regard back in the 1990s and there were NONE that my corporate counsel was willing to opine on that did not end in some version of "go to prison", "get sued out of existence" or both.

The only reason Spamazon is doing this is because NOBODY GOES TO ****ING JAIL anymore if you're a big company whether what you're doing is illegal or not.

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Winding it down.
Andyk
Posts: 36
Incept: 2008-09-21

Indiana
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I'll bet that Bernie Ebbers, of WorldCom infamy, sits in his jail cell thinking to himself "If I had only held out until 2009 I could have gotten away with it".

Am I right in thinking that Enron, WorldCom, Arthur Anderson, Bear Stearns & Lehman Brothers would all still be in business under the current joke of a financial system?
Tickerguy
Posts: 151190
Incept: 2007-06-26
A True American Patriot!
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@Andyk Yep.

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Winding it down.
Aztrader
Posts: 7913
Incept: 2007-09-10

Scottsdale, AZ
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Just came out. Absolutely shocking with the retailers climbing every day...

http://www.businessinsider.com/walmart-s....
Tickerguy
Posts: 151190
Incept: 2007-06-26
A True American Patriot!
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Not really. Sams stopped being interesting to me years ago. It WAS very interesting when I ran MCSNet; we were able to buy printer paper and envelopes (two items we went through at an utterly ridiculous rate) at CONSIDERABLY less than we could get them anywhere else. Like HALF the price.

Of course we had to go get it, but that was ok. Many an SUV-load was delivered right at the loading dock....

The problem is that what I used to see in there were a scad load of people who were NOT buying for small business use. There's little or no argument for doing so anymore there.

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Winding it down.
Aztrader
Posts: 7913
Incept: 2007-09-10

Scottsdale, AZ
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They have some pelican like cases by Membermark 20x20 and were liquidating them at $19.95 including full foam. I can't ship the thing for that.
Aztrader
Posts: 7913
Incept: 2007-09-10

Scottsdale, AZ
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Keenan
Posts: 267
Incept: 2013-01-11

Western PA
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The cancer has metastasized widely since Taibbi wrote in 2011:

Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

"Everything's ****ed up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."

I put down my notebook. "Just that?"

"That's right," he said, signaling to the waitress for the check. "Everything's ****ed up, and nobody goes to jail. You can end the piece right there."

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.....

https://www.rollingstone.com/politics/ne....

Seven years of increasing scams in more arenas of business.

Aztrader
Posts: 7913
Incept: 2007-09-10

Scottsdale, AZ
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I know what is happening in retail and am watching in amazement the stocks keep climbing. The cancer of fraud is so obvious that now we will see these companies close stores and downsize so that they can meet their inflated numbers. I am betting that once we see Non-GAAP numbers exceed the real GAAP numbers by 50%, the crap will hit the fan. The unwind will be nasty...........
Hilandstrata
Posts: 262
Incept: 2008-10-19

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It's because US,inc is controlled by mafia gangsters. Just drill down into where the puppets come from and you will see the bloodlines. All these secret societies are just fronts for the real power. JFK knew. As long as this fraudulent market keeps goin' up the masses will not do a dang thing. The PTB know this so the corps can get away with bloody murder. What the sheep don't realize is that they sold out their kids and grand kids.

I don't believe amazon, facebook, or google were grassroots startups. Evidently, the patents for facebook code were prolly stolen. Google was funded by DARPA from what I have read. Nonetheless, the ethnicity of the CEO's is quite telling.

They will start any war whenever they want because the sheep will look the other way as long as it doesn't affect them personally. As long as the market keeps goin' up the hell with the neighbor. How long has US,inc been at war? For as long as it's existed? This "country" is truly messed up. SAD. Go down the rabbit hole if you dare and you will see. The lies go all the way back to the cradle. Problem is the masses are addicted to the illusion.

Nevertoolate
Posts: 1451
Incept: 2007-08-26
A True American Patriot!
San Antonio de Bexar de runover with illegals, Texas
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I use to go to Sam's once a month in the middle 90's I was at their store in South Austin. Most of my stuff was taxable, but copier paper was not (under the current law because it was used in a component that was later taxed). So I had a resale certificate and would save my non taxable stuff for the end of checkout.

I was checking out and was ready to write a check and they said, I needed to wait. I asked why? They said it was something from the accounting office. My resale certificate renewed several months later and I always brought the new one for them to have on file. So that wasn't it.

I waited about 10 minutes and some idiot said that I had been "randomly" chosen for a Sam's Club "internal" sales tax audit. I asked him what for and he said that's the way we do business. I told the cashier to charge me tax on everything and then could they hand me the pair of scissors next to the cash register. I cut my Sam's card into two pieces and said, "That's the way I do business!" and never bought a damn thing ever again at Sam's. I will be glad when they close them all.

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Democracy is a conversation between 2 wolves & a sheep discussing what's for dinner. A Constitutional Republic is found when the sheep pulls out a gun & makes clear that his 2nd Amendment Right will be exercised should the wolves attempt to hold such a "vote."-KD 9-29-15
Rollformer
Posts: 191
Incept: 2013-02-13

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At my last job, the admin who stocked the office would always order supplies for the office from Amazon, because "it's not taxable". I brought this up with both the controller and the CFO, and I said, "You are obligated to declare and pay use tax." Fell on deaf ears. And office supplies for a 50 person office aren't exactly going to break the state's bank. But the intent, especially with the issue having been brought to the attention of management, is, well, "not good". Especially in the eyes of the law.
Goforbroke
Posts: 7205
Incept: 2007-11-30
A True American Patriot!
Time to feed the chickens.
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Today ...

Quote:
Trump expects his physical to go well Friday, or 'the stock market will not be happy'


Gee ... wonder what his priorities are ...

https://www.cnbc.com/2018/01/11/trump-ex....

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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
Dennisglover
Posts: 954
Incept: 2012-12-05

Huntsville, AL
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Tonight I had to read and acknowledge several policy documents my Company requires every year:
  • Organizational Conflict of Interest
  • Travel
  • Timecard
  • Proprietary Information/Non-Public Information
  • Business Ethics
  • Export Control

That got me a couple more hours of billable time. Okay.

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TANSTAAFL
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