Bad flick. Bad ending.

[Bill Bonner’s Diary]( Bad Flick. Bad Ending. By Bill Bonner Friday, June 4, 2021 I picked a hell of a day to quit drinkin’ – Russell Casse in Independence Day [Bill Bonner] YOUGHAL, IRELAND – Bubbles, bubbles, bubbles. Today, we look at another institution that has been zombified by the feds – the stock market. The stock market is supposed to allow investors to exchange shares in profit-making, wealth-increasing, goods-and-services-producing businesses. Nobody ever knows what any share is worth. So the market “discovers” the price… minute by minute. This price may be based on a single, most recent trade, but it sets the current value of all the similar shares outstanding. And it changes as new information comes forward. In the U.S., prices are quoted in dollars. And the Federal Reserve has been tampering with the dollar’s value for many years. In the 12 months starting at the beginning of March 2020, it inflated the base supply of dollars (the Fed’s balance sheet) by 78% – with most of it going directly into the asset markets. Even a lot of the stimmy check money has gone into the stock market. In a poll by Deutsche Bank, for example, at least half the respondents said they planned to put some of their stimmy money into stocks. This leads, naturally, to price inflation in the stock market… which leads, naturally, to investors thinking their stocks are more valuable… which leads to a very unnatural situation… …as both investors and Mr. Market himself begin to act a little funny… reacting to the rising prices, rather than actually discovering what individual stocks are worth. Recommended Link [Wall St Legend Who Picked Last “Investment of the Decade” Reveals “#1 for 2020s”]( [image]( Picking the right “investment of the decade” can transform your life… Microsoft in the ‘80s… Amazon in the ‘90s… Apple in the 2000s… Bitcoin in 2016… Any one of these could have made you a millionaire many times over. Starting with very little. Today, the Wall Street legend who picked the last “investment of the decade”… months (even years) before his peers… will finally reveal his new #1 pick for the 2020s. It’s not 5G, artificial intelligence, EVs, or clean energy. The answer will surprise you. And for those who take early action, it could lead to [a massive potential payout](. [See #1 Pick]( -- Dying Business We did not especially enjoy writing the above. It is a textbook-like description of a bubble. It sounds dull. But bubbles are like wars – when normal, civilized life is suspended. And today, the rational, dollars-and-cents stock market has become a mad, mad, mad, mad war of the worlds, with fake money… fake interest rates… and fake prices… all guided by a delusional bunch of jackass generals at the Fed. And this week, it was AMC Entertainment’s (AMC) turn to go berserk. On Wednesday, the price of the stock was twice what it had been on Tuesday. What happened? AMC is a dying business… in a decrepit industry. It has a chain of movie theaters. Even before the COVID-19 panic, it was in decline. And for many years, it’s been borrowing money to buy other theaters. You have to wonder about the strategy. Manufacturing horse-watering troughs at the beginning of the 20th century was a challenging business, too; the new automobiles didn’t stop to take a drink. And gaining market share was not necessarily the best way to deal with it. [Featured: Watch Demo of Elon Musk’s Next Big Project]( In 2021, buying more empty theaters may not be such a good strategy, either. It’s not theaters that AMC lacks, it’s customers. Big home screens are cheaper than they used to be. And the range of shows you can watch at home is now far greater, too. In the typical AMC multiplex, you may have the choice of eight to 12 movies. On Netflix, Amazon, et al., you have thousands to choose from. And the theaters no longer get the best movies first. Watching a movie at home is much cheaper, too. AMC charges about $10 per ticket. At home, you can pay $2.99… and the whole family can watch. And for the price of one evening out at the movies, you can buy your own vintage popcorn maker. This is, of course, bad news for AMC. This flick is probably not going to have a Hollywood ending. Recommended Link [Billionaires Make Big Changes Ahead of “Second Wave”]( [image]( Jeff Bezos… Bill Gates…Warren Buffett… Right now, several billionaires are pulling out millions from popular tech stocks and [moving it to another sector](. Jeff Brown, the founder of Brownstone Research, believes these billionaires are making a shift because the stock market is on the verge of a big “splintering.” Jeff recently sat down for a special interview with Chris Hurt to discuss a “Second Wave” that will catch many investors by surprise. If you’ve got money in the market but are confused as to what to do next, this is a must-see. [Click here to watch the interview.]( -- Crazy Investment But thanks to the Fed’s bubbly, zombified stock market, AMC is a big hit. The company is losing money; ticket sales in the industry have been going down for almost 20 years. AMC also has more than $12 billion in debt that – by the looks of things – it can’t repay. Still, as of this morning… the stock is up nearly 2,500% for the year. No fools, they, the insiders at AMC, decided to take advantage of Mr. Market’s apparent incapacity. They know their shares are overvalued. So what do they do? They sell more! In two separate offerings in the last seven days, the company sold 20 million shares and raised $800 million. That sell-a-thon followed earlier offerings this year, which altogether brought the zombie company $1.6 billion in new blood. But it’s not as if they were trying to pull a fast one. They’re just going along with the gag. In its offering document, AMC clearly warns the gamers: Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment. The story is a bit more complicated (we are not even trying to follow it carefully), but the corporation needed the shareholders to authorize more shares. So AMC’s CEO, Adam Aron, aka “Silverback,” tried to persuade them, giving us this gem: If you arm us with the tool – meaning stock as the tool – to go find value-creating opportunities for AMC shareholders, we can do that. Go find “value-creating” opportunities? Management seems to be turning itself into a [SPAC]( with no time limit. What will it do with the money? Nobody knows. Maybe it will stumble on something. But what a crazy way to invest – buying a stock for 25 times what it is probably worth… giving your money to people who, just six months ago, were warning of bankruptcy… hoping they’ll find something else. Makes us dizzy just thinking about it. [Featured: The 3-Stock Retirement Blueprint]( Slick Move But the fun isn’t over… AMC then pulled what might be one of the slickest moves we’ve seen… one that could set the pace for a whole new level of hype… and nuttiness. It decided to talk directly to the players who were pushing up its stock. Here’s the announcement… a work of genius: AMC Entertainment Holdings, Inc. (NYSE: AMC) (“AMC” or “the Company”), announced today that it is launching AMC Investor Connect, an innovative, proactive communication initiative that will put AMC in direct communication with its extraordinary base of enthusiastic and passionate individual shareholders to keep them up to date about important company information and to provide them with special offers. Over the last several months, AMC has seen its retail shareholder base grow beyond 3 million owners. With this sizable number of retail shareholders, AMC is taking a groundbreaking new approach to investor relations and investor communications. [...] Beginning today, shareholders can sign up to receive special offers and investor updates by registering at amctheatres.com/stockholders. Investors who sign up starting today and in the coming weeks will be awarded with an initial free large popcorn usable this summer when attending a movie at an AMC theatre in the United States. The offer will be made available in their AMC Stubs rewards account. Matt Levine at Bloomberg summarizes: If you buy AMC stock it comes with popcorn. AMC is boldly going where no company has ever gone before… into the dark heart of the Reddit crowd… where it can stoke the fire of enthusiasm for its new product. We’re not talking about its old theater seats; nobody cares about them. We’re talking about its real product – its own stock. Recommended Link [Do you Own a Cell Phone? Then Watch this Now.]( [ad_img]( Tell-all video reveals alarming details of bizarre mobile phone investigation. It could affect over 300 million Americans [See video here.]( Darwin Award Whew! And what do we take from this story? The price of the stock alone doesn’t have much information content. But combined with the background story, it is almost an encyclopedia of investing no-nos. An inflated market… fake, free money… an over-hyped stock… a bubble atmosphere… too much debt… bad business… falling sales… huge volume… staggering volatility… And what’s this? What is Mr. Market whispering? That the company is actually worth 25 times more in June than it was in January? Or that the whole market is setting itself up for a disastrous ending… like a cynic’s version of Independence Day, where the aliens attack the earth – and win! Regards, [signature] Bill --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=Bad flick. Bad ending.). --------------------------------------------------------------- MAILBAG This week, Bill debated the real [dangers of smoking…]( and the real benefit of [wearing face masks to prevent COVID-19](. Dear readers have strong opinions… If second-hand smoke killed people, all my kids would be dead. I smoked two to three packs of unfiltered Camel cigarettes and filled the house with second-hand smoke. I would sit in my recliner, watching TV, with a big ashtray on a table next to my chair and I smoked much. Then when we all went somewhere in the car, all six of us, I smoked with all the windows closed in cool or cold weather. They are in their 50s now and are doing well. – Richard S. Wow, hard to even make it through your piece. Clearly you haven’t been working in an Emergency Department to see the devastation that COVID-19 has wrought on patients that have ended up gasping for breath, just hoping to make it through the night. As a physician in the ED, having to care for them days on end due to not having beds to transfer patients to throughout the city, I hope and pray that your words are not influencing those who are undecided to not proceed with vaccination. Worse yet, your misguided information will place even more of the unvaccinated people at risk, as they mistakenly believe that the worst is behind them. And since the vaccinated people don’t need to wear a mask, why should they? I can assure you that masks were what prevented me from contracting COVID-19 during those many months in the ED before vaccinations came along. I can also assure you that, for now, I will continue to wear a mask while flying and working in the ED, even though I have been vaccinated… not because I don’t believe in the vaccine, but because even with 94-97% protection due to the vaccine, it is not 100%. If something as simple as wearing a mask protects me further from contracting COVID-19, for now, I will continue to exert additional precautions when it makes sense. – Mark M. What are your thoughts on the “world improvers’” demands Bill addressed this week? Are they making a meaningful difference? Write us at [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=Bad flick. Bad ending.). IN CASE YOU MISSED IT… [New Cash Law Will Be Disaster for Savers]( New law has expert warning seniors and retirees to beware. There’s a darker truth behind this political event… [Read the shocking details.]( [image]( --------------------------------------------------------------- Get Instant Access Click to read these free reports and automatically sign up for daily research. [image]( [The Ultimate Guide to Taking Back Your Privacy]( [image]( [The Gold Investor’s Guide]( [image]( [An Insider's Guide to Making a Fortune from Small Tech Stocks]( [Rogue Economincs]( Rogue Economics 55 NE 5th Avenue, Delray Beach, FL 33483 [www.rogueeconomics.com]( [Share]( [FACEBOOK]( [Tweet]( [TWITTER]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. 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