Maybe It's Time To Dispense With the Trope of "Market Fundamentals".

Jim Paulsen, market expert with the Leuthold Group LLC, believes the turbulence in the market isn't over by a long shot (WSJ, 'Business & Finance', 2/11). Those starting to breathe easier after last week's volatility had better buckle themselves in for more - and also reconsider the somber reality that this market is supported by "fundamentals" - an  ambiguous catchall term designed to baffle with bullshit.

Charlie Farrell – CEO of Northstar Investment Advisors LLC – put the current stock market behavior and its basis in perspective in his recent Denver Post Business column (p. 1K, Feb. 11):

“What makes bull markets so dangerous is they are not supported by fundamental growth, they are supported primarily by investor enthusiasm. When something causes this enthusiasm to wane, as it did last week, markets decline. The important point is that they eventually decline to the fundamental valuation supported by earnings”

And so, in the biggest bull market ever -  lasting from 1980 through 1999 - we saw “70 percent of the price gains from investor enthusiasm”. This set the stage for fifty percent of those gain to be given up in the ensuing bear market. That the current market is overvalued beyond its alleged fundamentals is well known which is why Farrell delivers this advice (ibid.):

“If you need funds any time in the next five years, consider keeping those funds out of the stock market . You can instead do something simple like a savings account, a CD or high quality bonds.”

That advice is not intended to help you get rich but to ensure you don't end up a relative pauper, i.e. dumpster diving after half your disposable income is left in the crapper or having to work 10- 15 more years – eating sardines and fried dandelions each day - to reach a nominal retirement.

A popular trope about the stock market peddled by assorted finance pundits- such as CBS'  favorites Melanie Hobson and Jill Schlesinger – is that you can remain in the market with confidence, 'cause the “fundamentals” are still at work. Don't believe it for a nanosecond. The only “fundamentals” at work in the current Bull (or what I call “bull shit”) market are: ridiculous leverage, and flash trading to game ordinary investors. In the right conditions both have contributed to the volatility we've seen in the past week.

In another Sunday D. Post piece, 'Robots Have Hijacked The Market', p. 1D), Steven Pearlstein informs us:

“Pay no attention to the volatility these financial wizards assure us. It's just a little technical correction. The fundamentals of our otherwise sound economy will soon reassert themselves. The truth is that the market is as irrational and divorced from fundamentals on the way up as it is on the way down. More so today as a result of the high frequency trading strategies of the Wall Street wise guys. What we've watched this week is “herd” behavior on steroids.”

Pearlstein goes on to point out that only “10 percent of trades are made by real live humans”, with 40 percent originating out of index funds or exchange traded funds (ETFs) and the remainder – 50 percent flash trades.

In such a “robot to robot” environment of “circular logic”, he argues, “fundamentals are as irrelevant as the volumes are enormous”. Worse, the multiple trades – often in the millions and lasting microseconds each take only minutes – and are done with borrowed money. This is where the leverage aspect enters.

This is as a result of the Fed's cheap money, low interest policy - which means the same flash trade investors (mainly hedge funds) are emboldened to borrow most of what they need to buy shares. According to Pearlstein:

“the low interest rates allow hedge funds to borrow $4 or $5 for every one they put at their own risk.”

He goes on:

“When prices start to fall rapidly the funds are forced to sell their positions to pay back the banks and brokerage houses, driving down the price even further. Selling begets yet more selling. Investors rushing to cover short positions, or to sell underwater options before they expire run into a similar dynamic.”

Worse, what happens in one asset class can affect all others, as I warned about in an earlier post (Feb. 6th), e.g. with asset classes moving in lockstep setting the stage for a multiplier effect.

Another aspect of flash trading that bears scrutiny concerns the tiny time advantage- called a “latency” - enjoyed by the flash traders. In this latency (see e.g. WSJ:   'CME Defect Aids Speedy Traders', Feb. 13^th, p. B1) a firm receives private confirmation of its trade before it is reported over the public feed. This applies to the CME Group Inc. for which a system defect is “yielding rich profits for ultrafast firms at the expense of ordinary investors.."

Though a CME spokeswoman claimed (ibid.)  it had “dramatically decreased the latency” she also admitted that “private confirmations were still arriving first in some cases”

This ought to be disturbing for anyone plowing money into Maul Street, especially after author Michael Lewis' book “Flash Boys”,  where he exposed the workings of flash trades and how they benefit the flash traders.

In the case of the CME Group latency defect, the typical delays to its public data feed are “measured in microseconds or millionths of a second ….much smaller than they were five years ago” But still (WSJ, ibid.): “the flaw can yield hundreds of millions of dollars in profit a year in profit to flash traders.” This according to Quantlab Financial LLC, an electronic trading firm.

The WSJ piece goes on (p. B2) to note there are various ways to exploit this latency flaw. One concerns so-called “canary orders”, which are small buy or sell orders- say for one or two contracts. In other words not large at all in scale but which nonetheless can be used to detect large trade that can move the market. (Think of the "canary in the coal mine" - when it croaks you know methane gas is around.)

How would this advantage work in practice? The WSJ piece gives this example (ibid.):

“If oil futures can be bought for $60.01 and sold for $60, a trader could place a small order to buy at $60 which would join a queue of similar buy orders at CME. If the trader gets a message saying his or her buy order was filled, that could signal that a large seller is at work and the price is about to tick down to $59.99. The trader could then quickly sell at $60 to take advantage of the expected move.”

So let's get our perspective straight: Here you are faithfully putting money into your 401(k) each month,  expecting to earn a bit for your retirement security, and just microseconds before your fund or funds tank the flash traders learn about it and get to dump the component stocks before you can get to a phone. Fair? No, but that's the only fundamental now at work in this overvalued, over leveraged market.  As WSJ columnist James Mackintosh (Business & Finance) poses the quandary for all investors ('A Historical Tie Breaks, But Trouble Still Lurks', p. B1, Feb. 10):

"The question facing investors is whether they should dismiss the 10 percent drop in the S&P from its  high hit in January, or whether it's indicative of deeper troubles ahead?"

Perhaps the more germane question to ask is: If you are an ordinary, e..g. little guy investor, do you believe the possible trouble ahead is tied to flash traders in large hedge funds betting on volatility, or simply the downstream risk of potential inflation?

My best advice? If you plan to remain in this volatile market and buy "on the dips" like the gurus advise,  just be sure you have enough disposable income to sustain deep losses over time, especially in case of a crash.  Bear in mind that a mutual fund that drops in share price from $20 to $10 has suffered a 50% loss. But for that $10 stock or fund share price to return to $20 it must gain 100%, or double. This may take not just two or three years, but more than TWENTY! 

Baby Dotard Barks "Treason!" As Stocks Dive - What You Should Know About This Market Volatility

"WAAAAAH! Those Dems Is Treasonous For Not Clapping At My Speech!"

Even as the overgrown thug baby occupying the White House pissed his Depends at a speech at a company in Cincinnati (Sheffer Corporation)  yesterday he continued to bluster and bawl about the Democrats committing "treason". This because they refused to clap at the pathetic excuse for a State of the Union speech last Tuesday - when he barely managed to sound sane for an hour and twenty minutes.    At the Ohio company the fat con man and snake oil salesman yelped:

“Can we call that treason?  Why not? I mean, they certainly didn’t seem to love our country very much.”

Confusing love of country with ass kissing  this sleazy real estate criminal and Russian -backed stooge.. Of course, this fat turd is mad because one can't be guilty of treason for merely failing to applaud a farrago of lies.

But the interesting thing is that while this blubbering buttbrain was going on  about Dem "treason" the stock market plummeted by more than 1,000 points.  Even more interesting, as Diaper Donnie ranted, TV networks broadcast a jarring split screen. As Dotard  boasted of companies bringing billions of dollars back to America, the Dow Jones industrial average was shedding billions more. At one point, the rout became so drastic that CNN and MSNBC switched from the speech to report exclusively on the market gyrations.

Trump's delirious spiel about "treason" and inflating his effect on national economics coincided with the largest one day point drop in history.

This is where we get very serious and try to note the underlying reasons for what's going on. Higher wages threatening inflation and higher interest rates from the Fed has been one reason, and it is legit. While fatter paychecks are a welcome sight to workers (wages climbed 2.9 percent last month) they usually signal inflation for stock investors That in turn signals to them a Federal Reserve move to increase interest rates, meaning an end to the cheap money that's been fueling the stock bubble.

Right now the market is floating on trillions ($4 trillion to be exact)  of cheap money thanks to the generous Federal Reserve quantitative easing program. But the underpinning of this is really massive debt which hasn't been helped by the GOP tax cuts. These are projected to add nearly $1.5 trillion in deficits.

As yesterday's WSJ 'Business and Finance' headline blurted: Investors Fear Broader Asset Fall. Therein noting that over the past year stocks, emerging market currencies, commodities (like copper and gold) and high yield bond prices, have all risen in lock step.  However, this flashes red warning signs to global investors who (ibid.):

"had grown uneasy about various assets moving in lockstep -  especially because trading in many of these market isn't typically tied to share prices Such closely correlated movements are often associated with turning points in the markets."

Further, and most important:

"A sharp rise in asset prices can lead to an increase in leverage, or the use of borrowed money,before a turn in sentiment prompts a decline in prices that spurs forced selling as borrowers scramble to repay debt obligations..   That has some investors worried that even if some sort of market correction is inevitable, the number of markets that are moving in tandem raises the prospect of a more severe selloff than what the still positive fundamentals would warrant."

In other words, the lockstep asset prices could lead to a "mulltiplier" sell-off effect that would overshadow a normal correction, So if 10 percent is a normal correction and the DOW was initially at 25,000 or so, that would mean a loss (total) of 2500 points.  If this is a multiplier effect at work, we could instead be looking at a  20 percent correction, or a 5000 point drop  Do the math and you will infer the selloff isn't over, not by a long shot.  That doesn't mean it will dive today (though the DOW Futures indicates that) but we can expect weeks of gyration leading up to the debt ceiling increase. (Or what should be a debt ceiling increase!)

Let us note that debt:  municipal, corporate or (federal) governmental, is financed via bonds.  Investors purchase bonds at a certain rate and then see their yield increase or decrease. Generally, bond yields have now increased which explains why many foreign investors are bailing out of our stock market to buy bonds instead. They feel bonds are a safer bet and they're probably correct.

Just so you know, companies comprising the Standard & Poor's 500 index got 43 percent of all their sales from outside the country in 2016 - the last full year for which the S&P DOW Jones Indices has statistics. Indeed, the biggest U.S. company - Apple - got 63 percent of its investment sales from abroad in the most recent year for which stats were available.

As can be seen, our stock market stability is currently built upon the purchase power and holdings of foreign investors. If these investors bail, as in sell - then flee to bonds and sell them too - that means a "multipleir"sell off must ensue and that's what we're seeing now- as in yesterday's nearly 1200 point drop of the DOW.  The Financial Times, by the way, is already referring to what we've been in as a "bond bear market", meaning crashing prices, rising yields.

As per an article appearing in the Sunday Denver Post (p. 11A):

"The stock market finally got spooked by an ongoing sell-off in bonds.  As bond prices fall their yields go up, a sigaal of rising interest rates. Low interest rates have been an underpinning of the current bull market in stocks now for the ninth year."

Now, go to the WSJ headline on Feb. 2nd ('Deficits Shake Up Treasury Bond  Issuance'), in which article we learned the Trumptard- GOP tax cuts boosted borrowing needs at a time of shifting demand for debt. Just as regular bond yields are rising, we learn that Treasury bond yields are as well. (The yield on the 10-year Treasury climbed to 2.84 per cent Friday  from 2.79 percent Thursday.  That may not sound like much difference, but over a 1-day  interval it's colossal.

 This is not a good thing because  "investors think the supply of government bonds hitting financial markets is rising as budget deficits grow as a result of the Trump administration's recent $1.5 trillion tax cut."

As a result, the Treasury Borrowing Advisory Committee (TABC) has estimated the Treasury will need to borrow a net $955 billion for the fiscal year that ends Sept. 30th.  For reference, this is up from $519 b the previous year and discloses a radical increase in debt (and deficits) traced to the recent tax cuts. Worse, the TBAC has estimated borrowing costs will be even greater in subsequent years, e.g. $1. 083 trillion in 2019,  and $1.128 trillion in 2020.  This marks the first sustained acceleration in Treasury borrowing since the 2007-09 recession and also comes within weeks of the looming debt ceiling increase.

A warning heard from Eric Winograd, senior  U.S. economist at AllianceBernstein, ought to send chills down the spine of every equity investor, e.g.(D. Post, ibid.)

"We are rapidly approaching the point at which low rates will no longer provide support to the equity market."

What could go very wrong and send the current correction into a crash? Failure to raise the debt ceiling whereby we (as a nation) signal to creditors we don't plan to pay off what we already owe. U.S. debt is considered the safest of safe assets, which is why lots of other financial products are benchmarked to U.S. Treasury yields. If our creditors doubt they’ll receive full and timely payments, Treasury yields will rise, setting off a chain reaction of chaos and panic in markets throughout the world.

Note that technically  we  reached our borrowing limit in early December. Since then, the Treasury has been resorting to “extraordinary measures” to prevent default. This essentially means moving money around so we can meet our obligations without issuing new debt. At some point, though, those measures will get exhausted. And that some point is coming sooner than previously expected. In November, the Congressional Budget Office projected that Treasury would run through those extraordinary measures around late March or early April. But then Republicans passed their absurd tax bill.

The potentially most dire aspect is that the debt ceiling won't be increased.   If not, well ...look for lots of roiling market upheaval and volatility and a possible further correction or even crash. (Though I don't foresee the big one until October)..  Re: volatility, it should be noted that the Vix volatility index, Wall Street's  "fear gauge", shot to its highest level yesterday since the Chinese currency devaluation in 2015.

FT columnist Gillian Tett also has referenced other serious issues, including: too low interest rates have "fostered financial engineering", i.e. structuring ETNs (exchange traded notes) to make bets on volatility  - similar to how credit default swaps were used prior to the credit crisis in 2008. Also, Tett warns "regulators are finding it hard to keep track of the risks" because they are now so fragmented.

Among her other depressing observations: "the global debt to gross domestic product is now 40 percent higher than it was ten years ago."  In addition, "leverage has crept unnoticed into the corporate world".   How many corporations are now surviving on billions of borrowed money, risky loans, we have no idea. But when these debts come due the party could well end in a thudding crash.

While finance pundits - like Melanie Hobson on CBS this morning - talk soothingly of the "fundamentals" being fine and to "stay the course", they avoid mention of the enormous debt and leverage this market is based upon.   Also unmentioned amidst all the tax cut cheerleading is how previous cuts have spawned stock market crashes. See e.g.

http://brane-space.blogspot.com/2017/11/has-stock-market-dodged-bullet-in.html

 All this is unfolding as Americans, flush with their  growing 401(k) balances,  are increasingly tapping them - whether for dream vacations or home remodeling projects. (Denver Post,  Business, p. 1K, Feb. 4th).   This is despite the money being taxed or even being hit with a 50 percent early withdrawal penalty. Quoting one of these irrationally exuberant folks in the piece:

"It is a hard decision but I think I will make more money in the stock market."

Of course, that is assuming no crash, which event  - if she's near retirement - would ensure her having to work 10 or 15 more years to make up the losses. No stock market rise goes on forever, all end in crashes and that's when the hoi polloi who can least afford it are parted with their cash  - with the richest investors (or those using flash trading) picking up the pieces.

The best advice one can offer in a volatile market environment is to not even think of withdrawing any 401(k) money no matter how "rich" you might feel. Remember it's only phantom money - on paper - until shares actually are redeemed.

"Why Trump Won" - Absolute Claptrap From Trumpkin Jon Caldara

Jon Caldara's accompaniment to his byline insists he is president of the Independence Institute , which has generally professed to be a non-partisan source of opinion, information. But from his latest piece ('And That's Why Trump Won',  Dec. 24) in The Denver Post, it's clear he's merely another pro-Trump PR moron trying to sell people baloney at cheapo rates.

Without reciting too much of his codswallop, he basically has the chutzpah to compare the crazy Right's indignation at Obama's election with the Left's reaction to Trump, with the dazzling distinction that

"I swear to God, no one I know of broke down in tears when Obama won"

Well, maybe because deep in their fake news heart of hearts they knew- when all was said and done- Obama was a rational, sane man, not a psychotic serial pussy grabber, two -bit chiseling, faux business weasel, racist xenophobe and authoritarian Hitler-esque narcissist.  For all the false claims (e.g. "socialist") the Right tried to lay on Obama, he was in the end a steady, no drama Neoliberal, and former constitutional lawyer. Oh, and a bible-believing Christian to boot.

This normality contrasts to the deranged egoism and pure ineptitude of a nincompoop who tweets policy positions and economic opinions at will. Often to the extent that CEOs of major corporations (after his GM tweet yesterday- sending shares briefly plummeting ) are treating his Twitter offal in much the same way as a hazardous waste spill or a health scare, in other words as "crisis management". This according to CBS finance commentator Melanie Hobson this morning, who pointed out how corporate heads are sick at the thought of this loon, "alone in a room with his phone", just popping off at anything that comes to mind. This is the effing asshole Caldara and his Trumpy dregs voted into power.  Hobson then detailed how companies are strategy planning to respond to the next random attacks from this Twitter troll.

Then there have been Trump's lies which continue to undermine the very intelligence agencies that will be protecting his sorry ass - not to mention the nation he is supposed to defend.  The latest was the lie that spat out again from his twitter:

"The 'intelligence' briefing on so-called 'Russian hacking' was delayed until Friday, perhaps more time needed to build a case"

Which was totally shot down by the intel community noting the Friday briefing had always been planned for that day. There was no "delay". Is this something Caldara and his cronies can really live with the next 4 years (IF we're lucky)? A lying ass punk who can't tell the truth to save his sorry ass..

If ANY person isn't disturbed by these sort of responses and cavalier attitudes they need to get themselves checked out by a therapist because they aren't in contact with reality. I would nominate Jon Caldara to be first up for serious psychological evaluation before he writes his next column full of BS.

And don't get me started on all his business entanglements which as a recent Newsweek article ('Tangled Up In Orange'. Dec. 23rd, p. 26) put it:

"Already there is a situation where the President of the United States could be blackmailed by a foreign power"

Referencing Turkish President Recep Tayyip Erdogan's earlier divulged plan (to associates) that he "intended to impede America's use of a critical Air Force base in Turkey"  should Trump win the presidency. Then there are Trump's other foreign entanglements, including with the Duterte government in the Philippines. As author Kurt Eichenwald noted:

"The Trump family's dealings in the Philippines will set off a constitutional crisis on the first day of Trump's presidency if anyone in the federal government decides to abide by the law."

Referencing the emoluments clause of the Constitution.

So, let's get this straight: between Trump's rejection of critical intelligence briefings and conclusions, and his foreign entanglements not to mention the total lack of impulse control, we're all supposed to fucking sleep easy at night? Gimme a break! Also, give me the bland, "no drama" Obama any day of the week and twice on Sunday.

The emphasis on Obama's sheer boring normality as a former Illinois state Senator and Democratic Senator is crucial to emphasize here to contrast with the unhinged insanity of Trump. And this needs to be done repeatedly, because I fear too many in the coming weeks - especially in the media- may fall down on the job and not hold a severe enough spotlight on Trump. Opting to choose the easy path of "normalization" that his follower yahoos (like Caldara) already have.

 This is also essential in order to appreciate Caldara's next bit for the balderdash it is, referencing the Right's response to Obama's election - compared to the Left's justifiable angst at Trump's ascension thanks to hacks - including of voting machines in key states.:

"Celebrities didn't post videos of their panicked hissy fits. Teachers didn't scare little grade school kids with doomsday prophecies."

Well, they didn't have to because they instinctively recognized Obama's inherently sober temperament, control of impulses and sensible disposition ("Mr. Spock" persona) . Hence, such reactions weren't needed by any person grounded in reality, i.e. sane.. So Caldara's verbal excrement is merely the screeching of a deranged banshee knowingly agitated by the fact he has supported a psychologically unstable, autocratic buffoon who promises to wreck this nation.

But the biggest bunch of bollocks may be this:

"Watching this meltdown it's clear the anti-Trumpies aren't just poor losers. They just don't get that Trump won because in great part, they had been such poor winners. The hard-edged progressive left just couldn't help doing a dance in the public policy end zone. The Trump victory was the ref's flag for 'excessive celebration'."

Huh?  WHAT excessive celebration? You mean putting together a stimulus package without which this nation would likely have fallen not only into recession but depression? (And for which the Repukes only gave minimal lip service). OR - are you referring to getting the ACA through without any GOP votes - despite the fact that 20 million now depend on it - more than two thirds of them TRUMP voters!   Seems you missed the memo that a good part of your white- worker industrial base actually WANTED THIS PUBLIC POLICY DANCE, as you call it.

Meanwhile, Denver Post letter writer Mike Pisaano had this to retort in last Sunday's paper to Caldara's codswallop:

"Trump did not win because of a Democratic meltdown caused by  “excessive celebration” of Obama’s public policy successes on gay marriage, health care, and environmental and energy changes. It’s because not enough Republican voters are disgusted by a candidate who brags about assaulting women or has regrets about not dating his own daughter. It’s because not enough Republican voters are outraged when Trump disparages John McCain for getting shot down over enemy territory and enduring five years of torture in captivity. It’s because not enough Republican voters are appalled when Trump calls Mexicans rapists and promises to exclude people who embrace Islam from entering the U.S."

Letter writer Ellen Haverl was no less severe and unforgiving in assessing Caldara's claptrap:

"Jon Caldara doesn’t remember anyone breaking down in tears when Barack Obama won because, despite one’s issues with him, his win did not mean the end of civilization as we know it. The reason there is such backlash against the Trump win is because the upcoming leader of the free world is a narcissistic, racist, sexist bully who will rule with a heavy fist. I’m proud to cry and march and sign any document I can to let everyone know that a Trump presidency is unacceptable to me and millions of Americans who genuinely fear for the future of our country. It’s called free speech, something Mr. Trump is not a fan of."

Ah yes, free speech. Something the Trump backers endlessly invoked after Obama was elected, depicting him in every disrespectful way imaginable including as a witch doctor with bone through his nose in their blogs. But now,  in their faux righteousness , they somehow expect all of us on the Left to shelve any animosity and just sing "Kumbaya" as we line up behind Trump.. Sorry, doesn't work like that!

This turkey Caldara then bellyaches about how we have accurately described his anti-global warming lot as "deniers" when they've rejected the consensus science of climate change. He writes:

"It's not that they imposed massive environmental and energy restrictions...it's that they insultingly label those who've come to a different conclusion on global warming as 'deniers':

WTF are you talking about? What "different conclusion"? You cannot have a solid, or sound conclusion unless you base it on real science and the D-E-N-I-E-R-S have NONE! Let me repeat that, none - NO science which stands up to even the most basic scrutiny of thermal physics or actual climate science. These birdbrains don't even accept that the glaciers are melting when they're doing it in from of their stupid faces, e.g.

https://www.youtube.com/watch?v=iRTInYTxLr4

So this is basic stuff. IF some semi-educated yahoo denies the sphericity of the Earth, then he IS a denier of the science of geodesy. If a similar yahoo denies  - despite all the evidence from ice cores - that more and more CO2 is warming the Earth then sorry, he IS a fucking denier! Case closed!

Or would Caldara rather we get into the realm of politically correct language and refer to his bunch as

"long term CO2 concentration serial disputators"

Or:

"climate science consensus equivocators"

Well, not going to happen. And just as his gaggle of climate DENIERS despise PC euphemisms, so do we. 

Caldara's op-ed babbling merely reaffirms again how badly divided this country is, and how much more divided it is going to become in the ensuing 4 years. The reason for an ever increasing gulf is simple: Those who treasure and abide by REALITY will never embrace bollocks, bullshit and fake news fantasy even from the likes of FAUX News' pundits, Trumpian pseudo-conspiracy creators and racist enablers. cheerleaders. And so long as enough people stand with the truth against recycled, misbegotten garbage and lies, this divide will remain. Oh, and as the garbage quotient grows so will the divide until two different nations will be effectively at war with each other.


See also: The Case For Beginning Trump's Impeachment NOW:

http://www.salon.com/2017/01/04/does-impeachment-begin-now-the-case-for-building-the-end-of-trumps-presidency-before-it-even-starts/

Pokemon 'GO' - Another Dumbass "Game" For Digital Zombies

I first became aware of the latest app craze, Pokemon GO, on a CBS evening news segment which showed obsessed people staring into tiny screens with moronic grins, and running into traffic, sign posts and other (self-directed) pedestrians on their way to real jobs, appointments etc. Some of them were shown, including a girl, with bruises in the aftermath. In the latter part of the segment one group of these digital zombies had been lured (by a specific feature of the app) into a park where their money and cell phones were taken.

It's bad enough we have the usual gang of texting idiots working their tiny screens as they march distractedly down sidewalks and often into street traffic and walls,  jeopardizing their safety and that of others. Now we behold a new league of Pokemon GO zombies, captivated by "augmented reality" (it isn't truly virtual)  ready to join them.

Of course, the corporate entities who crafted this  idiocy are jumping for joy. Melanie Hobson, CBS financial contributor, practically climaxed in one interview on Wednesday morning gushing about the "cash cow" the app will introduce, as "all the Pokemon GO characters go for sale on app stores and elsewhere".  Even as she spoke you could hear the underlying rhythms of 'ka-ching!' - the corporate capitalist's favorite sound.  She estimated sales will go into the "hundreds of millions"  rivaling the previous Pokemon character craze a generation earlier.

This take of Ms. Hobson clearly shows that, contrary to corporate propaganda, the benefit of this new mutation of Pokemon isn't to "get kids outside in fresh air to exercise" or  "encourage family togetherness", it's to make tons of money!  No corporate honcho ever passed up a new iteration of the money-making shtick, and certainly not on behalf of positive contributions to society. As one cynical CEO put it, "We give people what they want, not what they need."

Let's take the nonsense that this stupid game, which is what it is, "promotes health and exercise". Well, not when so many kids are so obsessed with following non-existent creatures on mini-screens that they shuffle into traffic, bang into walls, street signs and each other - not to mention thieves who might do more than snatch their precious phones from them.

As other critics of this latest consumer fad have pointed out, it's not exercise when most of those tracking the Pokemon entities are "moving at glacial speed". After all, they have to often stop, get their bearings and ensure they have the various characters  positions' (especially in what's called a 'lure') and they're in the right location before ambling on. By contrast, real exercise would be speed walking or jogging, or even playing a game of pick up softball or hard ball (like we used to do when 12, 13) in a sandlot or park.

In addition, no health bonus redounds to the benefit of anyone - no matter what the "exercise" (pseudo or real) - unless diet is a part of it. But I warrant that when these Pokemon GO zombies aren't following their imaginary critters they are in front of TVs at home,  wolfing down Fritos, cheese dogs, Ho-Hos, chips and cokes - and not the diet kind either.

Another trope being spread as a benefit, which I actually heard come out of the mouth of an Asian guy on the same CBS segment was "I am now discovering new areas of the town where I live! It's almost magical!"  Hey, Sherlock, you could have "discovered" those places, including museums, parks before if you hadn't had your nose buried in a laptop screen or cell phone mini-screen wasting time playing useless app games or surfing cliphunter.

As another Chicago blogger noted, this ridiculous app adds to the existing problem of too many teens and younger kids being glued to their phones. Is it better than eye-gorging on porno? Of course! But that's like saying amoebic dysentery is preferable to cholera. The problem is the digital obsession which is dumbing down these kids, teens (even too many adults) when they could be using their precious time on Earth to learn something.

Author Mark Bauerlein (The Dumbest Generation), originally pinpointed the problem and I did a post about it 6 years ago, e.g.

http://brane-space.blogspot.com/2010/04/are-we-enabling-generation-of-uber.html

Bauerlein  focused on the over use of social media, especially Facebook. He documented how the under-30 crowd were foregoing knowledge-based maturity to wallow in a self-confected, solipsistic, social mirror world of their own egos and selves. The fallout included their not even meeting basic standards of knowledge for employment.

To make his case, Bauerlein cited Northwestern University communications professor Esther Hargatti (op. cit., p. 135) who complained  students’ choices were all too predictable. As Bauerlein put it in terms of the attention of young people:

“At number one stood Facebook (78.1%) followed by MySpace (50.7%). Only 5% checked a blog or forum on politics, economics, law or policy”

As he added, the “acclaimed empowerment” of the Web has gone entirely to “social stuff”.

Well now, evidently, it's gone to  literally generating digital zombies obsessively tracking non-existent ("augmented reality")  entities.  It merely compounds the tiny screen scene where almost every human these days seems to be living his or her life in miniature domains as opposed to real life.

In a way this is understandable as the real world is a scary place, again reinforced with the scenes last night from the truck terror attack in Nice, France. But in the end, one cannot hide from the real world by chasing imaginary beings in an augmented reality app.

Further, it merely adds to the psychological weight of citizen distraction and compounds the false consciousness already well entrenched  -  a fact that must inspire the Neoliberal elites to new heights of undermining the social, civic space. After all, who's paying attention? They're all chasing imaginary creatures and risking life and limb in the process.

See also:

http://brane-space.blogspot.com/2015/10/newsflash-your-kids-are-digital-zombies.html

And:

https://www.washingtonpost.com/news/worldviews/wp/2016/07/15/all-around-the-world-authorities-are-worrying-about-pokemon-go/