The Market Ticker
Commentary on The Capital Markets- Category [Corruption]
2017-07-23 09:04 by Karl Denninger
in Corruption , 93 references
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This is what happens folks.

It's why I keep telling people who think they're going to "flee" America for some land of milk and honey to stay away from the mess here that they're just jumping from the frying pan into the fire -- and while the protections here are few, there they don't exist at all.

The scene at the swim-up bar at the Mexican resort where Abbey Conner was pulled listless from the pool in January was full of young tourists last month when an attorney hired by Conner’s family showed up.

It wasn’t surprising. It was a typical scene at an all-inclusive five-star resort where foreigners from both sides of the equator flock to escape their cold winters.

But as he watched, the attorney noticed something disturbing.

“They serve alcoholic drinks with alcohol of bad quality and in great amounts, mixing different types of drinks,” he wrote in his native Spanish.

So basically the allegation here is that the booze is being tainted, either deliberately (by bartenders in cahoots with thugs who then rob the target or worse) or as a means of cost-cutting, damn the consequences.

I tend to believe it's not the latter, by the way.  But the statistics are sobering: 

A 2015 report from Mexico’s Tax Administration Service found that 43% of all the alcohol consumed in the nation is illegal, produced under unregulated circumstances resulting in potentially dangerous concoctions.

What?  More than 40%?!  Yet you want to go to this country and party?

I had no idea -- my daughter and I were there on a cruise over the Christmas holidays.  That's flat-out nuts.

No, I will not be back.  No, I don't want to find out the hard way that I'm an extortion target -- or just a victim of a corrupt government and business environment that cares so little about anything but money that they'll adulterate the booze they sell.  As if the money isn't good enough just selling honest liquor, right?

Folks, this is what a degenerating society looks like.  It's here too, in the United States.  You can find it in your local doctor's office or hospital -- the same sort of extortion racket.  Oh sure, it's a bit "softer" in that it doesn't feature (most of the time anyway) adulterated drugs.  It doesn't have to -- instead they prescribe worthless medications such a Statins that have a list of known side effects that screw your health up -- and of course they then charge you to fix what they broke.

No thank you.

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2017-07-17 07:00 by Karl Denninger
in Corruption , 331 references
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This makes me vomit -- literally.

A breakthrough cancer therapy that can wipe out leukemia in some deathly ill children and young adults comes with an expensive, long-lasting side effect.

The blood cancer treatment, called CAR-T, is made by Novartis AG and is on the brink of approval after a panel of advisers to the U.S. Food and Drug Administration backed it Wednesday in a 10-0 vote. It’s highly effective: In a clinical trial of patients who’d mostly run out of treatment options, 83 percent of patients who took it saw their disease go into remission.

breakthrough?  It sure is -- for Novartis.

You see, it works by killing off the B cells that, in their deranged state, cause the leukemia.  No deranged cells, no leukemia.  A win, right?

Not really.  Those same cells are responsible for the majority of the immune system's ability to respond, which means that killing them also destroys most of the body's immune system capacity at the same time and, what's worse, in order for the cancer to remain in remission the damage has to remain too -- that is, it's permanent.

The fix for that is a custom-designed therapy for each person so-affected that can cost $10,000 per dose.  Oh, and since the condition the "therapy" caused is permanent you need that custom-designed therapy for the rest of your life, meaning that the lifetime cost is going to easily be in the hundreds of thousands of dollars and may reach well into the millions.

This "breakthrough" has all the markers for a massive extraction racket.  Kids are cute, and kids with cancer are unassailable lest you be called a monster.  The therapy does appear to work, but it works by destroying an essential part of the body's immune system which then has to be replaced or the person dies of some other disease that would not be serious for a not-compromised person at all.   In other words a cold or the flu would kill such a person without said continuing lifetime treatment.

Folks, just because we can do a thing does not mean we should do it.  "Conquering" leukemia by killing off the part of the body's immune system that has gone insane and caused the disease in the first place is only sane as a treatment modality if what you kill off via the treatment isn't necessary.

Sadly the part of the body's systems you kill off in this instance is necessary, and while we can attempt to "replace" it via technology the cost of doing so is hideous and impossible to consider as a matter of routine.  Yet here we are, with the FDA likely to "approve" this "therapy" and in doing so it will set in motion a monstrous extraction machine that will force the people of this country to pay for every single sick kid that gets this therapy for the rest of their life.

This crap has to stop.  It is part and parcel of why our medical system is destroying the country and that pharmaceutical companies are searching for and testing so-called "therapies" that come with universally hideous and outrageously-expensive "side effects" which then inures back to the benefit of said pharmaceutical companies is an outrage that must not be allowed to stand -- cute kids notwithstanding.

Go ahead and call me a monster -- I'm used to it.  I take the moniker with full knowledge that by being said monster I prevent the destruction of the entire nation's finances, and thus on balance it's worth the name-calling that I'm sure will ensue.

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2017-07-14 08:00 by Karl Denninger
in Corruption , 313 references
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The latest Senate attempt to pass Obamacare Lite is now out.

It contains a number of provisions that are interesting but exactly zero of them address cost.

Notably, it does not include my one-sentence bill that would instantly destroy health insurance extortion rackets which are destroying the middle class and, if ended, would immediately force down costs for everyone in the system.

Nor does it include any of the other provisions that I have in my larger model legislative proposal that would force price transparency and end collusion -- the very essence of which violates 100+ year old law.

It's not like these provisions aren't known to the Senate.  They are.  They're also known to the House.  And they're known to Trump too, who has run a company for decades and is well-aware of the rank lawless nature of a "business" that refuses to quote you a price and charges people 5, 10 or 100x as much money based on whether or not you bought a "preferred" service from someone else.

Yet there is not one word about any of that -- which would bring down cost, and solve the problem.

Nope -- instead we have..... billions to "fight" opiod addiction.

A problem that, it appears, is at least in part the responsibility of a company that just got fined.

(Reuters) - Mallinckrodt Plc, one of the largest manufacturers of the generic opioid painkiller oxycodone, will pay $35 million to resolve allegations that it failed to report suspicious drug orders, the U.S. Justice Department said on Tuesday.

The deal, in which Mallinckrodt did not admit wrongdoing, marked a record settlement of claims that a drugmaker failed to properly notify the U.S. Drug Enforcement Administration of suspicious orders for drugs such as oxycodone, the Justice Department said.

Of course they didn't admit wrongdoing -- they never do.

But it appears they weren't reporting "suspicious" orders for their pills -- that is, orders which they knew or had good reason to know were going to pill mills and others who were dispensing them inappropriately -- meaning for profit and to boost addiction rather than for therapeutic use.

Instead of shutting down this company and jailing their executives for drug running (which I remind you we're all to happy to do if it's some ordinary person who similarly is selling drugs for an illicit purpose) they instead "paid a fine" and "didn't admit wrongdoing."

Oh, yeah, and they're still able to sell their drugs too.

The Senate is complicit in both the opiod epidemic and a direct enabler of the lawless nature of our entire "health care" system in the United States.  We must put a stop to this -- all of it -- or it will destroy our nation.  We do not have the money and cannot raise it to keep expanding health care expenses at multiples of the size of the economy and every bit of it is happening not because people are getting older but because providers collude both among themselves and with other parties to fix prices and restrain trade -- practices that were declared illegal more than 100 years ago and which in many cases carry felony criminal penalties.

Yet utterly nobody -- at either the State or Federal level -- will enforce existing law, instead putting forth the sort of twaddle that the Senate has now released.

Minnesota will sue CenturyLink (a DSL and telephone provider) for failing to honestly disclose prices so why won't they sue every single damned hospital and doctor's office that fails to do the same?

Solve this problem now, America, or our way of life dies as do both State and Federal budgets.  This is not going to happen at some well-off time in the the future; it has already crippled GDP and productivity growth and at present rates of expansion will have inflicted critical and perhaps unrecoverable damage before the next Presidential election.


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2017-07-09 09:30 by Karl Denninger
in Corruption , 259 references
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I mean, really?

Like whether a sleeveless dress is "proper attire" for a woman?  (It's not; that's evening wear perhaps, but certainly not business-appropriate.  Coat, long-sleeved shirt and tie for men, incidentally -- and closed-toe shoes.)

Or whether Trump Jr and Kushner met with a Russian lawyer?  If there's any scandal there it's arguably over the subject of the discussion, which incidentally appears to have been related to the ban on Russian children being adopted -- a ban that Putin put in place after one of his detractors died under suspicious circumstances and the US passed a law in response.

Naw, let's not talk about, for example, why a bill to actually address health care price transparency can't find a sponsor in the Senate.  Or, if that doesn't outrage you enough, that bills to force school districts to actually check employees for sexual abuse convictions against minors has similarly disappeared in the Senate.

I mean, it's certainly more important to argue over proper attire for members of the Press while in the halls of Congress than over more than $2 trillion a year being stolen from you by the medical racket, which the Senate refuses to take up and debate or, if you prefer, your kid being raped in a public school.


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2017-06-26 09:39 by Karl Denninger
in Corruption , 492 references
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You'll have to look to find it, and the articles are behind paywalls.

They're not being trumpeted all over financial media -- but they should be.

What article?  That Unilever is threatening to pull online ad campaigns stating that they believe half or more of the "clicks" are fraud. It was in the UK media -- quietly -- this weekend.

In other words, robots click them -- not humans, who actually watch the ads.

This story ought to be front-page news.  It's not, and the financial media will not cover it the way it should.

Here's why it should be:

1. This is not new.  These issues have been known and talked about for more than a year.  It was news last year, and then it quietly "went away."  Gee, you don't think Zuckerpig laid into the financial media, do you?  Naw, nobody would ever to do that when if their little ad game blew up in their face the stock price of Facepig would be zero.  Consider that if half of the online advertising revenue is false then the actual value of said platforms is nil since their cost of operation exceeds the true human-generated revenue.  That makes all of these so-called "businesses" worthless.

2. Nobody has an incentive on a platform like Facebook, where posters do not get a cut of the revenue, to stick an army of robots out there and click the ads, except for Facebook itself.  This is decidedly not true for Google's "Adsense" platform of course, or Youtubes, or whoever else where publishers get a piece of pie.  There, if your traffic is high enough, there's an economic incentive to cheat.  For someone like me it's not because the amount of money involved is too small, but for someone with a site that's garnering tens or hundreds of thousands a month in payouts you can easily cover the cost of a robot or three (hundred) to generate some false traffic.

The problem of course is that there aren't that many people with a big enough take to be worth employing robots, other than those who deliberately set up sites to do this and have no organic traffic at all.  Those people ought to be easily identified and shut down within days, making such a strategy worthless since you won't get paid, if the sites in question cared to do so.

The problem is that all the incentives run the wrong way for the so-called "online advertising industry", unless they get caught and all of their businesses are destroyed.  Otherwise the incentive is to cheat or at least look the other way on purpose while others cheat especially if, as is being alleged and has been alleged for over a year the "cheats" are half or more of all of the clicks.

In that case the incentive to cheat is not just clear it's an imperative because without the "false" clicks none of these firms have a viable business at all, except for possibly Google, and even Google is selling at 3x any sort of rational valuation.

The others, if there's any truth to this, are literal zeros.


Ask your friends -- how many "real" ads do they view and click on any of these sites?  Can you find one person among your friends who actually does so and finds value in these ads?  Tell me folks -- isn't it true that essentially all of the ads you see are for things you already bought and thus don't need again?

"Machine learning" my ass.

You know what the truth is, but by God the "industry" and media will do their level damndest best to hide it, especially given the bubble valuations of everyone in this "business."

Before you say "oh, you can't be right about this; it would never go on that long" let me remind you about the late 1990s.  In 1997 multiple "DSL" providers were leasing "dry loops" from the telcos, putting in DSLAMs, and pulling backhauls from there to enable DSL to companies and homes.  Every single one of them wanted to "partner" with us, of course, with my company getting a cut of the revenue and providing the Internet service.  They all came in and made their pitches and I threw every one of them out after examining the numbers.  Why?  Because every single one of them had no prayer in Hell of ever making a profit and when they blew up it was going to blow back on my company since the customer would associate their loss of service with us, not them.  Every one of them, a few years later, blew up.  Every. Single. One.  It was instantly obvious on any sort of analysis of their businesses and cash flow that it was impossible for them to make a profit.  Yet not one was called out in the financial media or anywhere else and all were "strong buys" in the stock market.

And gee, look at the "online ad revenue based" stocks this morning -- all up, as is the market.  Isn't that fancy..... I wonder how they'd be doing this morning if CentralNevertruthBullCrap was to run a quick pencil-and-whiteboard analysis on the fact that if you cancel half the ad revenue all these so-called "ad revenue driven businesses" have negative operating cash flow and thus are zeros?

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