The Last Bubble Standing——Amazon’s Same Day Trip Through The Casino

Right. Amazon is the greatest thing since sliced bread. Like millions of others, I use it practically every day. And it was nice to see that it made a profit—-thin as it was at 0.4% of sales—–in the second quarter.

But the instantaneous re-rating of its market cap by $30 billion in the seconds after its earnings release had nothing to do with Amazon or the considerable entrepreneurial prowess of Jeff Bezos and his army of disrupters. It was more in the nature of financial rigor mortis——-the final spasm of the robo-traders and the fast money crowd chasing one of the greatest bubbles still standing in the casino.

And, yes, Amazon’s $250 billion market cap is an out and out bubble. Notwithstanding all the “good things it brings to life” daily, it is not the present day incarnation of General Electric of the 1950s, and for one blindingly obvious reason. It has never made a profit beyond occasional quarterly chump change. And, what’s more, Bezos—– arguably the most maniacal empire builder since Genghis Khan—–apparently has no plan to ever make one.

To be sure, in these waning days of the third great central bank enabled bubble of this century, GAAP net income is a decidedly quaint concept. In the casino it’s all about beanstalks which grow to the sky and sell-side gobbledygook. Here’s how one of Silicon Valley’s most unabashed circus barkers, Piper Jaffray’s Gene Munster, explains it:

Next Steps For AWS… SaaS Applications? We believe AWS has an opportunity to move up the cloud stack to applications and leverage its existing base of AWS IaaS/PaaS 1M + users. AWS dipped its toes into the SaaS pool earlier this year when it expanded its offerings to include an email management program and we believe it will continue to extend its expertise to other offerings. We do not believe that this optionality is baked into investors’ outlook for AWS.

Got that?

Instead, better try this. AMZN’s operating

Originally appeared at: http://davidstockmanscontracorner.com/the-last-bubble-standing-amazons-same-day-trip-through-the-casino/