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Sehen wir drei Jahre lang kein Allzeithoch mehr? - Inside Paradeplatz

– Nach Brexit brauchten die Märkte 3 Tage um sich zu erholen.

– Nach der Trump-Wahl brauchte es 3 Stunden, bis ein Gegentrend einsetzte.

– Nach dem Italien-Referendum war nach drei Minuten alles in Ordnung.
What? Me worry?'s insight:
– Nach Brexit brauchten die Märkte 3 Tage um sich zu erholen.

– Nach der Trump-Wahl brauchte es 3 Stunden, bis ein Gegentrend einsetzte.

– Nach dem Italien-Referendum war nach drei Minuten alles in Ordnung.
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Draghi 'Put' Steadies Stocks As Italian Banking System Collapses | Zero Hedge

Draghi 'Put' Steadies Stocks As Italian Banking System Collapses | Zero Hedge | Financial Markets, Economy | Scoop.it
The Plunge Protection Team was very evident at the Europea
What? Me worry?'s insight:
The Plunge Protection Team was VERY evident at the European open...

who needs conspiracy theories when you see things like stock market changing its direction from one moment to another like this...
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These Were The Best And Worst Performing Assets In November And YTD | Zero Hedge

These Were The Best And Worst Performing Assets In November And YTD | Zero Hedge | Financial Markets, Economy | Scoop.it
Leading news site for global finance, economics, market, and political analysis.
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Hussman Funds - Weekly Market Comment: More Blowoff than Breakout - November 28, 2016

Hussman Funds - Weekly Market Comment: More Blowoff than Breakout - November 28, 2016 | Financial Markets, Economy | Scoop.it
What? Me worry?'s insight:
The stock market has reestablished an extreme overvalued, overbought, overbullish syndrome of conditions that - unlike much of half-cycle advance from 2009 to mid-2014 - lacks internal uniformity, particularly among interest-sensitive and globally-sensitive sectors. For that reason, the recent marginal highs are more consistent with a “blowoff” than a “breakout.”

the recent post-election advance appears much like the post-Brexit rally in global markets, where nearly all of the gains were compressed in the first 12 trading days, after which the enthusiasm flamed out.

All of the most reliable equity market valuation measures we track (as measured by their relationship with actual subsequent market returns across history) are offensively overvalued from a long-term and full-cycle perspective.

Are we pounding the table about a recession? No; we’d look for fresh deterioration across new orders, production, real sales, and personal income, coupled with widening credit spreads and a material break in the S&P 500

credit burdens have never been higher, and much of that credit is of the covenant-lite variety
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ECB Rejects Buying Stocks As Draghi Drops The 'C' Word To EU Parliament | Zero Hedge

ECB Rejects Buying Stocks As Draghi Drops The 'C' Word To EU Parliament | Zero Hedge | Financial Markets, Economy | Scoop.it
Mario Draghi just dropped the c-word. In his address to the EU Parliament, the ECB President explained that financial-stability risks are "for the time being, contained." Having admitted that Deutsche Bank is correct that negative rates certainly hurt bank profits, Draghi remains "committed to accomodative policy." But it was ECB executive board member Benoit Coeure that spoiled the party by rejecting the narrative of ECB stock buying.
What? Me worry?'s insight:
Draghi is such a powermad IYI!

The earlier he is replaced the better.

Stop money printing as if we were in a crisis. We will get into a crisis BECAUSE of all this money printing!
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Hussman Funds - Weekly Market Comment - Action and Reaction - November 21, 2016

Hussman Funds - Weekly Market Comment - Action and Reaction - November 21, 2016 | Financial Markets, Economy | Scoop.it
What? Me worry?'s insight:
the U.S. lacks enough skilled labor in the heavy construction sector to actually implement large-scale infrastructure spending projects on the scale being discussed, unless foreign firms were recruited to implement them.

providing tax breaks to corporations to repatriate funds is nothing new. The U.S. did the same thing in 2004. Rather than creating jobs, the funds were largely used for corporate stock buybacks, acquisitions, dividends and bonuses, while the top corporate beneficiaries actually cut jobs and decreased research spending

My own argument in favor of normalizing policy is not that the economy is “overheating” or that inflation is a risk, but primarily that deviations from systematic policy have no economic benefit and impose substantial costs on the economy over horizons that are longer than the Fed seems to contemplate

Near-term, my impression is that much of the recent market response is overdone, and that the markets are vulnerable to decided reversals in the opposite direction of recent trends.

As for the near-term market return/risk classification, last week’s shift toward increased internal dispersion and greater equity market bullishness shifted our estimated market return/risk classification from a relatively neutral outlook back to hard-negative.
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The Difference Between GAAP And Non-GAAP Q3 Earnings For The Dow Jones Was 25% | Zero Hedge

The Difference Between GAAP And Non-GAAP Q3 Earnings For The Dow Jones Was 25% | Zero Hedge | Financial Markets, Economy | Scoop.it
for Q3 2016, the blended earnings growth rate for the S&P 500 is 3.0%. The third quarter marks the first time the index has seen year-over-year growth in earnings since Q1 2015 (0.5%).

That's the official version. The unofficial one is that of this 3% increase in EPS, half comes from buybacks
What? Me worry?'s insight:
for Q3 2016, the blended earnings growth rate for the S&P 500 is 3.0%. The third quarter marks the first time the index has seen year-over-year growth in earnings since Q1 2015 (0.5%).

That's the official version. The unofficial one is that of this 3% increase in EPS, half comes from buybacks

The other thing: the gap between GAAP and non GAAP earnings is still widening, GAAP earnings still sinking...
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Can’t Blame Trump for Everything

Can’t Blame Trump for Everything | Financial Markets, Economy | Scoop.it
So much has happened since the Presidential election - and almost none of it very obvious. The plunge in equities on Donald Trump’s victory was foreseeable. The bounce was also foreseeable. The fact that the bounce completely reversed the selloff and took the market to within a whisker of new all-time highs was not, in…
What? Me worry?'s insight:
if you had known in 2008 that growth would be anemic, debt would balloon, government regulation would increase dramatically, taxes would increase, and a new universal medical entitlement would be lashed to the backs of the American taxpayer/consumer/investor, would you have invested heavily in equities?

Yet all stocks did was triple.

The reason they did so was that they started from fairly low multiples and went to extremely high multiples. This was not unrelated to the fact that the Fed took trillions of dollars of safe securities out of the market, forcing investors (through the “Portfolio Balance Channel”) into risky securities.

By analogy, might stocks decline over the next four years even if the business climate is more agreeable? You betcha – and, starting from these levels, that’s not terribly unlikely.

Equity investors don’t seem to fear the Great Unwind, even though stock multiples are one of the clearest beneficiaries of government largesse over the last eight years. As mentioned above, I can see the argument for better business conditions, even though margins are still very wide. But I’m skeptical that better business conditions can overcome the headwinds posed by higher rates and inflation. Still, that’s what equity investors are believing at the moment.
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Hussman Funds - Weekly Market Comment

Hussman Funds - Weekly Market Comment | Financial Markets, Economy | Scoop.it
What? Me worry?'s insight:
Overall, our longer-term and full-cycle expectations remain dismal, but our very near-term views are better characterized as neutral than hard-negative, due to some fairly modest changes in various components of market action. An expansion in bullish sentiment or an increase in the dispersion of market internals would restore a hard-negative expected market return/risk profile.

We define the “standard of living” of a nation by the amount of goods and services that a person can obtain for an hour of work. We define “productivity” by the amount of goods and services that a person can produce with an hour of work. While real wages ebb and flow over the economic cycle, over the long-term, “standard of living” and “productivity” go hand in hand.

If you net out all the assets and liabilities in an economy, you’ll find that the nation’s accumulated stock of real investment is the only thing that remains. ... Broadly defined, it includes a nation’s accumulated stock of real private investment (e.g. housing, capital goods, factories), real public investment (e.g. infrastructure), intangible intellectual capital (e.g. education, inventions, organizational knowledge and systems), and its endowment of basic resources such as land, energy, and water.

In short, the best way to improve both the growth and the distribution of income in the U.S. economy would be to encourage productive investment at every level, including government (productive infrastructure, clean energy), industry (investment and R&D incentives), and individuals (education, employer credits for job training).

The primary source of failure in the U.S. economy over the past 15 years has been a policy environment aimed at encouraging consumption over productive investment. Those policies have been dominated by the Federal Reserve’s quest to punish saving, fuel debt-financed consumption, and produce an illusory “wealth effect” from financial speculation.

In my view, these are the measures by which economic policy should be judged, to estimate whether or not they are likely to benefit the country. Does the policy encourage productive investment, or does it instead encourage consumption, malinvestment, or speculation?
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Hussman Funds - Weekly Market Comment

What? Me worry?'s insight:
Short-term oversold conditions offer a sense of potential knee-jerk dip-buying behavior, but the conviction of that behavior is often fairly weak and short-lived. Meanwhile, extreme valuations imply the likelihood of steep market losses over the complete cycle, and also for poor S&P 500 total returns on a 10-12 year horizon, but valuations often have little effect on near-term market behavior.

Given that deteriorating market internals (particularly since mid-September) have continued to suggest increasing risk-aversion among investors, it’s not at all clear that short-term “oversold” measures will provide much support. For our part, we continue to classify market conditions among the most hostile market expected return/risk profiles we’ve identified across history.

Put simply, we continue to classify the expected market return/risk profile as hard-negative. Valuations remain offensive, and market action continues to suggest increasing risk-aversion and an exhaustion of yield-seeking speculation.
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Draghi is mad and totally on the wrong track...

What? Me worry?'s insight:
The reality is that since Mr Draghi’s infamous “whatever it takes” speech in 2012, the eurozone has delivered barely any growth, the worst labour market performance among industrial countries, unsustainable debt levels,

the misallocation of capital caused by ECB policy is preventing creative destruction and causing asset bubbles....the negative repercussions of these policies are now greater than the benefits....politicians need compelling reasons to risk their job on reforms...Since 2012, policies such as OMT and PSPP have prevented the eurozone facing hard realities.

Such detachment of domestic bond yields from changing political and fiscal risks can be attributed to ECB asset purchases. Depressed or misrepresentative sovereign bond yields not only shield politicians from market oversight. They also distort the whole fixed income universe that is priced off government debt.

This leaves the risk that the final backstops are taxpayers of other eurozone member states. They would then have to pay, if only through forgoing potential profit transfers from their national central bank over a long period. Fundamentally, however, the debt will have already been socialised. As early as 2011, Bu ndesbank president Jens Weidmann strongly suggested that the ECB did not have the democratic mandate to accumulate such risks on the German central bank’s balance sheet. If bailouts on such a vast scale do materialise , the public anger towards bailing out ba nks after the financial crisisc ould be mild in comparison. OMT supported “zombie companies” via evergreening, which prevented banks from the need to write down the existing loans. Moreover, the paper also shows that the misallocation of capital is hampering employment and growth in the eurozone. In industries with a high share of such zombie firms, quality companies have to pay higher interest rates and invest significantly less than good companies in sectors with a small share of zombie companies.
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Hussman Funds - Weekly Market Comment: The Illusion that "Old Measures No Longer Apply" - October 24, 2016

Hussman Funds - Weekly Market Comment: The Illusion that "Old Measures No Longer Apply" - October 24, 2016 | Financial Markets, Economy | Scoop.it
What? Me worry?'s insight:
Unfortunately, given current valuation extremes, we fully expect the entire total return of the S&P 500 since 2000 to be wiped out over the completion of the present market cycle. That loss is likely to be an interim low on another journey to nowhere, ultimately leading the S&P 500 to an estimated total return averaging less than 1.5% annually over the coming 12-year period.

there’s simply no evidence that the mapping between reliable valuation measures and long-term, full-cycle market outcomes has been altered one iota. The illusion that old measures no longer apply is identical to what we observed during the 2000 and 2007 top formations, and is identical to what we’ve observed at valuation extremes across history.

now a nearly two-year sideways top formation

the ratio of market cap to nominal GDP offers a longer perspective, and is presented below. The only points in history featuring similar valuation extremes were 1929, 1937, and 2000, all which were followed by market losses of 50% or greater.

From Graham & Dodd: “One of the striking features of the past five years has been the domination of the financial scene by purely psychological elements. In previous bull markets the rise in stock prices remained in fairly close relationship with the improvement in business during the greater part of the cycle; it was only in its invariably short-lived culminating phase that quotations were forced to disproportionate heights by the unbridled optimism of the speculative contingent. But in the 1921-1929 cycle this ‘culminating phase’ lasted for years instead of for months, and it drew its support not from a group of speculators but from the entire financial community....The notion that the desirability of a common stock was entirely independent of its prices seems incredibly absurd. Yet the new-era theory led directly to this thesis.

Investors currently face the most hostile set of market conditions we identify across history: extended overvalued, overbought, overbullish extremes that are then joined by early deterioration in market action.

the “mode” of the probability distribution is positive, but the average market return is strikingly negative.
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Caterpillar Retail Sales Decline For 46 Consecutive Months; Worst Month For North America Since 2010 | Zero Hedge

Caterpillar Retail Sales Decline For 46 Consecutive Months; Worst Month For North America Since 2010 | Zero Hedge | Financial Markets, Economy | Scoop.it
While Caterpillar's CEO may have resigned recently, the woes at the heavy industrial manufacturer continue, with yet another month of declining global sales, the company's 46th in a row.
What? Me worry?'s insight:
but isn't all fine? us stock market is near all time high
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TRUMP CARDS - Edge and Odds

TRUMP CARDS - Edge and Odds | Financial Markets, Economy | Scoop.it
The Trump story has been remarkable, not really on its impact on the bull and bear population, but mainly on the denizens of the “correction camp” as these Yardeni charts illustrate. Bullish investors (per Investors Intelligence) are back at their usual high number of hopefuls but they have been joined by a significant number of …
What? Me worry?'s insight:
median SP500 stock valuation:
P/E to growth 100 %ile
EV/Sales 100 %ile
EV/EBITDA 99 %ile
P/B 98 %ile
Forward PE 94 %ile
FCF 33%ile (wow, the rest doesn't matter, this market is cheap!)
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Hussman Funds - Weekly Market Comment: Complacency and the Fat Left Tail - December 5, 2016

Hussman Funds - Weekly Market Comment: Complacency and the Fat Left Tail - December 5, 2016 | Financial Markets, Economy | Scoop.it
What? Me worry?'s insight:
The present combination of overvalued, overbought, overbullish conditions, coupled with rising interest rates and broad dispersion among market internals, is one that most closely resembles only three other points in the post-war period; the first in early-October 1987 (though at less extreme valuations), the second in January 2000, and the most recent in July 2015 (the S&P 500 lost -12% over the next 6 weeks).

We currently view a hard-defensive stock market outlook as appropriate.

I have very weak expectations about direction of long-term interest rates here, but much stronger views about the likelihood of widening credit spreads.

in any given week, the single most likely market outcome is actually a small gain, even though the average outcome is negative (near -40% at an annual rate).

Every market crash in history has been associated with essentially the same skewed distribution. It’s the positive “mode” that creates complacency, it’s the negative average return that drives cumulative losses, and it’s the fat left tail that strikes out of nowhere.

valuations are the primary driver of long-term and full-cycle market returns, while outcomes over shorter segments of the complete market cycle are driven instead by the preferences of investors toward risk-seeking or risk-aversion. Since risk-seeking speculation tends to be indiscriminate, the most reliable measure of these risk-preferences we’ve found is the uniformity or divergence of market internals across a broad range of individual stocks, industries, sectors, and security types, including debt securities of varying credit quality.

Presently, we observe wide internal market dispersion, including weakness among interest-sensitive securities, tepid uniformity across developed markets, and an abrupt whack to technology stocks last week.
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After A "Run On The Pension Fund" Dallas Mayor Demands Halt Of Withdrawals | Zero Hedge

After A "Run On The Pension Fund" Dallas Mayor Demands Halt Of Withdrawals | Zero Hedge | Financial Markets, Economy | Scoop.it
"If the mayor believes that his letter will stop the 'run on the bank' he is wrong.  He just created a SPRINT to the bank."  
What? Me worry?'s insight:
pension funds which are that massively underfunded are a crime... high time to do smth against this
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Dallas on Verge of Bankruptcy Due to Pensions; Just a Matter of Time (For Dallas, Houston, LA, Oakland, Chicago, etc) | MishTalk

Dallas on Verge of Bankruptcy Due to Pensions; Just a Matter of Time (For Dallas, Houston, LA, Oakland, Chicago, etc) | MishTalk | Financial Markets, Economy | Scoop.it
What? Me worry?'s insight:
funding level at 40smth... not good
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The Percentage Of Stocks In A Bear Market Is Growing | Zero Hedge

The Percentage Of Stocks In A Bear Market Is Growing | Zero Hedge | Financial Markets, Economy | Scoop.it
More than one out of five developed market stocks )and more than two out of five emerging market stocks) are in a bear market (down over 20% from a high) in the past 200 days.
What? Me worry?'s insight:
Think about a year ago. Someone tells you:

Brexit will be accepted
Trump will be President
earnings will fall for over a year


  --- and stock market is at all time highs!
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What Did Draghi Know About Potential Loss And Abuses At Italy's Largest Bank? | Zero Hedge

What Did Draghi Know About Potential Loss And Abuses At Italy's Largest Bank? | Zero Hedge | Financial Markets, Economy | Scoop.it
Apparently lax and/or incompetent regulation of systemically important banks by bureaucrats, central bankers, and politicians may not be just a recent American phenomenon.
What? Me worry?'s insight:
Draghi is powermad... did he know?
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European Central Bank gold reserves held across 5 locations. ECB will not disclose Gold Bar List. - Ronan Manly

European Central Bank gold reserves held across 5 locations. ECB will not disclose Gold Bar List. - Ronan Manly | Financial Markets, Economy | Scoop.it
The European Central Bank claims to hold 500 tonnes of gold stored across 5 international locations. It never audits this gold & won't publish a weight list
What? Me worry?'s insight:
strong article on ECB gold holdings

why is ECB not transparent in this regard?
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Geo-Graphics » Paul Krugman Doubles Down On Fiscal Expansion Claims Contradicted by Data

Geo-Graphics » Paul Krugman Doubles Down On Fiscal Expansion Claims Contradicted by Data | Financial Markets, Economy | Scoop.it
A graphical take on geoeconomic issues, with links to the news and expert commentary.
What? Me worry?'s insight:
in other words: Krugman is a publicity seeking idiot
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Not Getting It: Michael Moore, Hollande, Merkel, Financial Times, Stephen Colbert | MishTalk

Not Getting It: Michael Moore, Hollande, Merkel, Financial Times, Stephen Colbert | MishTalk | Financial Markets, Economy | Scoop.it
Non-Solutions

Central bank sponsored inflation is not the solution, it is the problem.
Regulation is not the solution, it is the problem.
Public unions are not the solution, they are the problem.
Competitive currency debasement is not the solution it is the problem.
More debt is not the solution, it is the problem.
Warmongering is not the solution, it is the problem.
Tariffs are not the solution, they are the problem.
Minimum wage hikes are nor the solution, they are the problem.
More military spending is not the solution, it is the problem.
The status quo is not the solution, it is the problem.

Trump is wrong on 7, 9, and it appears 5 although he says otherwise. Trump is either correct, or positioned correctly on the rest.
What? Me worry?'s insight:
Non-Solutions

1. Central bank sponsored inflation is not the solution, it is the problem.

2. Regulation is not the solution, it is the problem.

3. Public unions are not the solution, they are the problem.

4. Competitive currency debasement is not the solution it is the problem.

5. More debt is not the solution, it is the problem.

6. Warmongering is not the solution, it is the problem.

7. Tariffs are not the solution, they are the problem.

8. Minimum wage hikes are nor the solution, they are the problem.

9. More military spending is not the solution, it is the problem.

10. The status quo is not the solution, it is the problem.

Trump is wrong on 7, 9, and it appears 5 although he says otherwise. Trump is either correct, or positioned correctly on the rest.
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Hussman Funds - Weekly Market Comment: Far Beyond Double - October 31, 2016

Hussman Funds - Weekly Market Comment: Far Beyond Double - October 31, 2016 | Financial Markets, Economy | Scoop.it
Presently, the expected market return/risk classification we identify is not only in the lowest quintile, but is among the most severely negative members of that quintile in history. These return/risk profiles are associated with “unpleasant skew” - a tendency toward modest market gains punctuated by near-vertical losses, producing a distribution with a positive “mode” but awfully negative average returns.
What? Me worry?'s insight:
Presently, the expected market return/risk classification we identify is not only in the lowest quintile, but is among the most severely negative members of that quintile in history. These return/risk profiles are associated with “unpleasant skew” - a tendency toward modest market gains punctuated by near-vertical losses, producing a distribution with a positive “mode” but awfully negative average returns.

Presently, deteriorating market internals across a broad range of individual securities, industries, sectors, and security types continue to signal a shift toward increasing risk-aversion among investors.
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Central Banks and the Revenge of Politics

Central Banks and the Revenge of Politics | Financial Markets, Economy | Scoop.it
In recent decades, central banks have enjoyed high prestige as guarantors of economic stability – a reputation bolstered after their resolute action in the wake of the 2008 global financial crisis prevented a repeat of the Great Depression. That may be about to backfire – with serious implications for central-bank independence.
What? Me worry?'s insight:
the ECB also faces “extra-institutional overburdening.” This became apparent in May 2010, when the ECB assumed the responsibility of purchasing the government bonds of countries that otherwise would have experienced substantial increases in long-term interest rates. That intervention was a lose-lose proposition for the ECB. It was essentially driven by politics.

From that moment on, however, the ECB took on the political role of guaranteeing not only the survival of the euro, but also the continued inclusion of every EMU member country.

Against this background, it is perhaps unsurprising that central-bank independence – de jure or de facto – is once again up for debate. The purpose of central-bank independence has always been to enable monetary policy to focus on maintaining price stability, without being subject to political pressure.

When central-bank mandates exceed price stability, however, their independence may seem increasingly out of place in a democratic society. This is particularly true for the ECB: the stronger the perceived link between the extension of the ECB’s mandate and politics becomes, the more criticism its independent status will confront.
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Apple Slides After Missing Revenue, China, ASPs Despite Better iPhone Sales, Guidance | Zero Hedge

Apple Slides After Missing Revenue, China, ASPs Despite Better iPhone Sales, Guidance | Zero Hedge | Financial Markets, Economy | Scoop.it
Despite guiding notably higher for the holiday quarter, and beating modestly on EPS, AAPL just reported its third consecutive quarter of declining results and iPhone sales, and its first fiscal year of lower revenue since 2001. The market was not impressed, despite Tim Cook's strong guidance for the holiday quarter when AAPL expects to make as much as $78 billion.
What? Me worry?'s insight:
not dramatical, but not good either
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