28 January 2014

Balloon, Meet Pin

Watching Keith Olbermann voice-over sports clips is to see an utter waste. I had no concept of Olbermann before is MSNBC stint, but I do catch bits of him whilst waiting for the local weather to come on. And thus I discovered "bye, Felicia". Who the hell is she? Near as I can tell it's a young-uns expurgated version of 'perform a non-procreative auto-intercourse'. Or thereabouts.

Apple reported earnings after Mr. Market went home yesterday (he didn't really go until 8:00 pm, but ...), and the share dropped to $500 betwixt 4 and 8. As I type it's a tad over $500 in pre-market. The pundits have already spewed much typing (to which I am adding, alas) over the meaning of it all. Tally ho!!!

This endeavor exists in multiple versions, some with a preamble of quotations appropriate to the version. This missive will appear in all, but the quote I need is this:

As mass production has to be accompanied by mass consumption; mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery.
-- Marriner Eccles

Eccles was an advisor to FDR, so the time of the quote was during the Great Depression. Recent times have delivered more than few "bye, Felicia" moments, all tied, one way or another, to Eccle's observation.

- Perkins' assertion that Progressives are Nazis.

- Data that 85 individuals hold as much wealth as the lower half the planet's population.

- Chris Christie and The Bridge.

- Revelation that all that manufacturing growth is at burger flipping wages.

- Boeing, among others, carving out subsidies orders of magnitude greater than the per capita cost of jobs "saved".

- Papa John bemoaning that ACA will make him poor.

- Evisceration of SNAP/Food stamps.

- The realization that John McCain is a liberal.

- The continued burgeoning of corporate cash piles.

- All that QE money, yet total employed hasn't moved.

In terms of Apple, and all those companies focusing on the top X% of the population, eventually there's no more growth to be had, simply because the headcount of your X% of income/wealth is stagnant, at best. Some times, and some places, concentration leads to smaller market opportunity.

In Apple's case, when we (if there is a we in the future) look back, the iTrashCan (aka, new Mac Pro) will be the inflection point; and not a good one. Apple, perhaps in a "bye, Felicia" moment of great irony, introduced the Mac with the "1984" commercial. What has gone largely unnoticed over the years is that, as a device purveyor, Apple is completely fascist in its relationship to its users: Jobs/Ive/whoever tell the user what they should do, how they should do it, and provide no way to alter the device. Contrast with the PC clone world, where customization is standard; oxymoron though that may be.

With the iTrashCan, Apple has told its diminishing professional/prosumer clients that a computer is really just a toaster, "no user serviceable parts inside".

So, tonight is the State of the Union, which will bring a multi-hundred point drop in Mr. Market. Mr. Market doesn't like to hear anything which contradicts his "I am the Job Creator" self-image. The "let them eat cake" crowd never gets that capital is worthless without consumers. They just never get it. The frog and the scorpion. The corporations, and the 85, are clearly at the limit of their tolerance. They've accumulated all that moolah, but just can't seem to find ways to get 10% per annum in free money. Consumers, damn them, just don't have the demand for goods and services they used to. There just doesn't seem to be any guaranteed source of unearned income anymore. Ingrates!!!

Balloon, meet pin. With all that moolah sitting with the 85, deflation is the only sure way to make that moolah more valuable. Unearned income on steroids. They're going to give us a Depression such that we'll never, ever, again get so uppity.

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