True Meaning of the S&P Downgrade

The fact is the US has always "deficit-spent."

The difference now? The Fed is de-valuing the dollar on-purpose to delay/forestay deflation.

With a falling dollar, foreign investors will not invest in US treasuries; therefore, the US cannot borrow effectively and will face the inevitable burden of debt with a relatively worthless currency.

So the credit worthiness is in fact negative at the present time. S&P is fully correct.

Now with continued adversity to the Fed plan, the US stock market could fall without the previous protection of threatened Fed ultra-drops in the dollar valuation.

Earnings are Terrible for Techs

If you've seen our favorite TV show, and if you can decifer the fog as we can, you can see revenues "appear" to be "OK" while earnings "kind-of" appear to be "OK" but just barely.

A Silicon Valley professional would point out that these firms keep a little stash of "revenue" in case they need it. But once you have to go to the "stash" then your earnings are kind of lousy.

But you just make up by saying the outlook is "OK."

Then maybe your stock stays up for a short time while you wait for someone else to say the sky is falling, and then you decide to say that it's in fact falling now that you look again!

Congratulations to Intel

Intel apparantly beat its GAAP earnings estimate with its non-GAAP earnings.

Also dropped its gross margin 'OK to be bad' all the way down to 58% - uggg.

We're not buying this one. Not even for the so-called "cloud" otherwise known as fog.