The Fed’s Netflix Economy
Someone who lies and someone who tells the truth are playing on opposite sides, so to speak, in the same game. Each responds to the facts as he understands them, although the response of the one is guided by the authority of the truth, while the response of the other defies that authority and refuses to meet its demands. The bullshitter ignores these demands altogether. He does not reject the authority of the truth, as the liar does, and oppose himself to it. He pays no attention to it at all. By virtue of this, bullshit is a greater enemy of the truth than lies are.
– Harry G. Frankfurt, On Bullshit (2005)
Stocks are rallying today on Netflix’s (Nasdaq: NFLX) “pricing power.” It turns out bumping up prices on all your streaming plans is a good way to get a 7% bounce for your stock.
So, the tech-heavy Nasdaq Composite is up 1.63% today. The broad-based S&P 500 Index is up about 1%, the iconic Dow Jones Industrial Average 0.5%.
But here’s the thing: It’s just a great, big empty.
Remember, stocks imploded in the aftermath of another recent announcement by a different 21st century darling, Apple (Nasdaq: AAPL), not two weeks ago.
Back on September 4, 2018, Apple’s market cap hit an all-time record of $1.1 trillion. Today, it’s down around $725 billion, up from $676 billion the morning of January 3.Read More