Wednesday, July 13, 2011

Inflation Disguised Wednesday- Netflix Tries to Pull the Wool Over Our Eyes With 60% Price Increases, Fails; Mortgage Applications Plummet, Along With Everything Else Related to Housing; 33% of Seattle Homeless Live in Their Cars; Bumpy Ride Coming, So Says Billionaire Fund Manager; Greece's GDP Plummets as Bond Yields Skyrocket; Fukushima - Soil Samples Taken Near Tokyo Show Dangerous Levels of Radiation; Much More

As we keep a very close eye on the developing global hyperinflation, we begin to notice more and more subtle increases in everyday products. Years ago, manufacturers were caught red handed quietly increasing the price of products by decreasing the size of the products. FrankenManufactures like Unilever, Nestle and Coca-Cola subtly decreased the size of many products - from cat food to laundry detergent to tuna fish to canned soup to mustard - but kept the same price. After all, you notice the price first, not the size.

To those with an IQ above 9.2, this is clearly "inflation in drag." Of course, these manufacturers assumed most consumers were dumber than a pair of safety scissors in a paper shredder won't notice that a 39.0 oz can of whatever, is suddenly 30.9oz but sells for the same price. The price looks the same.

Along the same Putin "holligans" - yesterday, Netflix made waves when news broke (on their blog) that they would charge 60% more for some of their popular services (read: the service that 85% of their customer subscribe to).

Let's break this down, piece by peace. First, they desperately try (and fail) to soften the blow (of this inflation in drag) with what they consider "positive" changes for the consumers - which really turn out to be not so positive for the consumers (but positive for their profits... or so they think).

Second, they try to mask the price increases by separating their DVD/Unlimited streaming service into two products - and then combine them back into one service (another one of those laugh out loud moments). We won't even begin to explain what a total failure this is, on so many levels! Stop insulting our intelligence, Netflix. Anyone involved in this PR disaster should be fired and sent to Blockbuster.

Third, they try to offer some reasoning (read: lame kindergarten excuse) why this price inflation increase is necessary, saying they are now offering you more choice, when in reality (and after a little due diligence on our part) we discover their contracts with broadcasters and production studios are in negotiations or running out and they are about to get their you-know-what handed to them. Oops.

We are conducting another one of our famous non-scientific polls, and predict that there will be a mass exodus from NetFlix come September. Instead of making smaller, gradual price increase (like we would have done to mask the blow over time), they chose to blow up the pricing model which made them so popular.

Therefore, Netflix goes into the Hall of Shame for their complete and utter failure at herding the sheep passing on this inflation in drag to John Q. Consumer. How do you spell "Complete Public Relations Failure?" You spell it - N E T F L I X. Expect their stock to take a hit as well as their already comical 100x P/E ratios get blown up (right after Wall Street pillages and baits the retail investors, first). Happy investing, suckers.

We're 100% Bernanke certain this "real time inflation" won't show up on the fake and manipulated CPI, but it will show up in your wallet as your home value drops below the water table in your basement.

Speaking of housing, the latest bullish housing news from the Mortgage Banksters is out today, and it's as radioactive bullish as ever. The key highlights are:

- Mortgage applications decreased 5.1 percent from one week earlier.
- The Market Composite Index decreased 24.0 percent compared with the previous week.
- The Refinance Index decreased 6.2 percent from the previous week, and was 42.1 percent lower than a year ago.
- The Refinance Index has decreased the past four consecutive weeks, reaching its lowest level since April 29, 2011

Of course, if you were to ask any realtor/mortgage bankster/broker, "when is the best time to buy a house?" you know their answer would be, "right now!" Needless to say, spring is typically the best time of the year for housing. If these are the numbers coming out of housing now, we have only one thing to say for the fall season - "duck!" (Looking at the "stock markets" today, we see they are loving this news, along with Dr. Deficit's new plan to save the world - print more money!)

No wonder then, gold and silver are roaring today as gold made a new high today in Euros/Dollars/Pounds/Toilet Paper. As we like to say, gold never gets old when the whole world is
about to fold.

In other bull...ish news, 33% of the homeless in Seattle, WA are living in their cars and things are about to get much, much worse as housing values plummet and strategic defaults increase. Bumpy ride to total chaosin September here we come! Even billionaire fund managers are starting to see the light - TSHTF sooner than expected.

Speaking of expected, the IMF is just now admitting that Greece's GDP contraction for 2011 will be -3.8% versus the expected -3.0%. Of course, since their entire FY2011-2016 budgets were based on these comical expectations, they will never be able to meet any bailout requirements. Ever. We should point out, death spirals tend to be like quicksand and ponzi schemes and fiat money and debt. Bailouts always follow other bailouts in an endless cycle. Jean Claude Trichet has proven himself to be the funniest circus clown in the worst tent. EU = total failure.

Speaking of total failure, have you seen the latest PIIGS bond yields? Ireland just went to a level 6 on the GEES as their 10yr yields blew up to Greek levels. How do you spell inverted yield curve? Answer: PIIGS. Not that it matters any longer as their fate is sealed. Now, we just wait for the inevitable. Dr. Deficit's answer to everything of course is "print more money!" His plan will make every citizen of planet earth a homeless trillionaire by years end - and he's simultaneously 100% certain there is no inflation.

Finally, as Japan glows brighter and brighter from the healthy radiation doses being served up, we learn that concerned citizens are taking the matters into their own hands. One individual took a soil sample collected near Tokyo to a private lab to be tested - the results were incredible. We are truly again, at a loss for words. 50,000 Becquerels/kg (for reference 300 bq/kg is the safe limit) - right where children walk and play everyday. Disgusting.


  1. Another great and informative read. Suggestion: When you make a comment like "level 6 on the GEES", you should make it a link to the July 8th posting on the subject, so newcomers know what you're referring to (and because the GEES is a great idea worth promoting).

  2. @Umdesch- Thank you. Comments and suggestions are greatly appreciated. I made the change.

  3. Is GEES 7 possible for just one country or is it more widespread than that? It wasn't clear. Are you putting Greece at 6 or 7 (if poss)?