No, We’re Not Giving up That Easily

Posted On Sep 15, 2016 By Dave Gonigam

  • Apple and wireless charging: Were we wrong or just early?
  • Why Ray Blanco isn’t giving up, and indeed is doubling down
  • Guess the common theme among today’s slew of economic numbers
  • Congress does the right thing for once… but it could set off an economic earthquake
  • Golden throne: Museum makes solid-gold toilet available to patrons
  • Speed and power for the 1%… more fantasizing about U.S. withdrawal from the IMF… an urgent message from Jim Rogers… and more!

The hostile emails began rolling in shortly after Apple CEO Tim Cook introduced the iPhone 7 last week.

“Appears that your tech wonder boy Blanco has struck out a second time on this announcement of Apple and wireless charging,” said a representative entry.

Said another: “I get it, you guys make such a big deal about this new ‘wireless’ charging and when it doesn’t happen, the whole lot go extremely quiet. Now, I know that there are no guarantees in share trading, but to go overboard about a probable, it would be great if someone expressed something after a phizz.”

Ray Blanco addressed the matter here last Friday. But that didn’t quiet the peanut gallery. Or some folks missed it.

“Fool me once, shame on you. Fool me twice, shame on me! What in ‘Thee Wide World of Stocks’ is Blanco smokin’?!? After the first fiasco, I went the smart (IMHO) route and bought me some put options. Thank you me, and no thanks to Mr. Blanco.”

For what it’s worth, the gentleman said he’s still a reader of The 5, and we’re grateful for that.

Contrary to what you might expect, Ray is not turning tail and running. In fact, he’s doubling down, even as he concedes the story will take longer to play out than he first anticipated.

“Wireless, at-a-distance charging will be a revolutionary technology,” he said here on Friday. “For the first time, our devices will truly be able to go untethered. Billions of smart devices are expected to go online over the next five years, and they too will be able to take advantage of wireless power.”

And even though wireless charging won’t be a feature of the iPhone 7, hints of what’s to come are already emerging.

To no one’s surprise, the new model ditches the traditional headphone jack. That’s a characteristic Apple move — aggressively pushing users away from outmoded technology like the floppy drive and the Ethernet port.

But not everyone thinks it’s warranted this time. “I see zero evidence that the 3.5 mm audio jack is being used less or has hit a wall,” writes the veteran technology columnist Walt Mossberg at The Verge. “It’s happily transmitting music, podcasts and phone calls to many millions of people from many millions of devices as you read this sentence. Apple says it needed replacing to make more room for bigger batteries and other components.”

Hmmm… Hold that thought about “other components.”

As we pointed out recently, the demise of the headphone jack amounts to a step back in user-friendliness.

The standard white earbuds that come with the iPhone now have a Lightning plug at the end. Result? “You can no longer charge your phone while making long phone calls or listening to music without a bulky adapter or dock,” Mr. Mossberg goes on. “I label that worse, not better.”

Apple is marketing wireless earbuds — at $159 a pair — that amount to yet another device you have to keep charged up. And they offer only five hours of music-listening time. “I’m sure the wireless earbud and headphone revolution is upon us now, and that, in a few years, the battery life will double or triple,” Mossberg avers. “For now, though, this Apple change of a standard component adds a hassle to your phone use, whether you are wired or wireless.”

[Pointless but interesting aside: If Mossberg’s name sounds familiar, it’s because he acquired a rabid following as The Wall Street Journal’s personal technology columnist, in time becoming the paper’s highest-paid reporter. In 2013, he struck out on his own, thinking he’d become a brand unto himself. He wasn’t; after less than 18 months, he sold out his venture to Vox Media, which is where he draws a paycheck now. The Journal is still trucking along without him.]

So has Apple made a colossal blunder… or is there method to its madness?

For whatever it’s worth, T-Mobile says its iPhone 7 pre-orders have already set a record. Apple says the jet-black model — a color that hasn’t been available in several years — is sold out. Maybe ergonomics matter less than tech columnists think.

But the answer to our question comes back to those “other components” that might lie within the iPhone 7’s case.

We don’t know what those other components are. But as happens with every launch of a hot new tech device, geeky types will start “tearing down” the iPhone 7 as soon as it goes on sale tomorrow and posting their findings online.

A select few investors will ignore the buzz about colors… and instead follow what those geeks discover. “Investors who take the time to see where the real story, and the real opportunity, is,” says Ray, “will be focusing on what’s inside those gadgets.”

Ray believes what they find will still benefit the tiny company that’s in the lead with technology that can charge a device with no wires from a distance of up to 15 feet. Maybe not right away, but eventually.

Judging from the action of the share price, Ray’s clearly onto something — the big “fizzle” last week notwithstanding. Throughout this process, he’s been very careful about protecting the downside. As we write this morning, the share price is 70% higher than it was when Ray first started talking up this technology here in The 5 four months ago. Heck, you could have bought in as recently as the end of August and still be at breakeven.

Not bad for something that still has 79,000% growth potential, no? And to maximize that potential, you’d want to own shares when the geeks begin the teardowns tomorrow.

We urge you to give Ray’s updated research a look before then. Here’s where to go.

To the markets, where traders are chewing on a boatload of economic numbers.

The major U.S. indexes are recovering yesterday’s modest losses as we write, the Dow industrials at 18,091. Gold is losing ground, the bid retesting its late-August lows near $1,311.

About those economic numbers: See if you can discern a common theme among these figures for August…

  • Retail sales: Down 0.3%. The “expert consensus” was figuring on a flat number. Factor out autos and gasoline and the number is still negative, down 0.1%
  • Wholesale prices: Flat, compared with a consensus guess of a 0.1% increase
  • Industrial production: Down 0.4%, also worse than expected
  • Capacity utilization: 75.4% of the nation’s industrial capacity was in use during August — down a touch after rising much of the summer.

Before you answer, we also have two numbers that gauge how the economy’s doing so far in September:

  • Empire State survey: This Federal Reserve measure remains stuck below zero, indicating a shrinking factory sector in New York State
  • Philly Fed survey: This survey of mid-Atlantic manufacturing came in above zero… but the internals appear weak, including shipments and employment.

If your answer is something like, “None of these numbers point to a Fed rate increase next week,” you’re absolutely right. But we’ve been saying that for months, so we won’t offer a prize today. Thanks for your participation anyway…

The Great Saudi Double-Cross of 2016 draws ever closer.

Maybe you saw the news last week: The House passed a bill allowing 9/11 families and survivors to sue the government of Saudi Arabia. The Senate did so last spring. The president is promising to veto the bill. An override is a distinct possibility.

Evidence of complicity at the highest levels of the Saudi regime is circumstantial… but glaring. Over the summer, the feds released the redacted “28 pages” from the joint congressional inquiry into the Sept. 11 attacks. At the risk of oversimplifying, the report follows a fairly direct money trail from Prince Bandar — Saudi Arabia’s ambassador to the U.S. at that time — to the San Diego-based hijackers who flew American Airlines Flight 77 into the Pentagon.

With the prospect of Congress overriding the veto — both houses passed the bill on a unanimous voice vote — you can expect Saudi Arabia’s well-oiled lobbying machine to swing into action.

By one estimate we cited back on January, the Saudi regime spends nearly $7 million a year to wield influence in Washington. All it needs to do is peel off a little over one-third of representatives and senators to achieve its objectives.

But if it fails… if Congress overrides the veto and opens the door to a flood of litigation against America’s most trusted “ally” in the Arab world… what will the House of Saud do?

The answer is the “bloodbath” Jim Rickards has been anticipating all year — another betrayal by the regime in the form of a currency devaluation.

When the riyal is devalued, it will rock markets around the world. But if you’re positioned properly, the move could mean gains of 530%… 848%… even 2,196%. Check out Jims recommended strategy at this link.

Because many of our readers tend to be interested in anything gold related, we’re compelled to offer up the following…

Installed in one of the public restrooms at New York’s Guggenheim Museum, the 18-karat gold throne will be available to any admissions-paying visitor starting tomorrow.

The work is the brainchild of the Italian artist and sculptor Maurizio Cattelan, who’s titled it America. The Guggenheim describes the exhibit’s objective as “making available to the public an extravagant luxury product seemingly intended for the 1%.”

Incredibly (to us anyway), The New Yorker article informing us of this exhibit leaves us hanging on the most important question: How much gold did it take to make that thing? How many ounces? What’s the value of the bullion? If the old saw about all the gold in the world filling only two Olympic-size swimming pools is true, what percentage of it are we looking at here?

As for the work itself, we were going to say something snarky, but sometimes it’s better to say nothing at all. Too, the wife of Bubble Finance Trader editor David Stockman is president at the Guggenheim Foundation, and the couple has graciously welcomed this editor as a guest at their Manhattan penthouse — adorned with all manner of modern art. Heh…

“Interesting comment,” a reader weighs in on autonomous vehicles, “since this would pretty much make the enjoyment of driving a fast car (or, for that matter, motorcycle) a distant memory for all but the elite.

“Might this trend lead to a surge in the performance boat business? Adrenaline junkies will always find a way (and as far as I’ve found, there’s nothing like speed on the water — of course, living on the Great Lakes certainly makes it easier).”

“I get that a U.S. withdrawal from the International Monetary Fund is not in the cards,” writes a reader picking up a theme from our mailbag last week.

“I also get that the IMF is our show (mostly). But if memory serves me right, isn’t an SDR made of a basket of currencies?

“If we (the U.S.) are 60% of the basket, the IMF will be bailing us out with defunct currency anyway (or at least 60% so). That makes SDRs just another fiat currency. So why not pull out now and not provide the Chinese the opportunity to slowly nudge us out while they slide into the driver’s seat all nice and comfy?

“I already know the answer: The whole world is a stage and everyone is watching, and trashing the IMF is not a viable option.

“Still, we have almost become British in our staunchy ‘everyone salute and watch as the ship (dollar) sinks slowly.’

“Naaahhh… put a torpedo in it, and see if we can get a good fire going. And let’s make s’mores while we watch. (That’s the American spirit.)

“OK… I am being flippant now… never mind.”

The 5: Mmmm…. S’mores.

Best regards,

Dave Gonigam
The 5 Min. Forecast

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