by ilene - April 23rd, 2015 11:08 am
Facebook Is Hiring Like Crazy (Bloomberg)
Mark Zuckerberg is going to need to find some more pinball machines and rock-climbing walls. The social networking company, known for its many perks that make it a regular on the hottest-places-to-work lists, is increasing headcount at an incredible pace.
China Still Has Plenty of Savings to Unleash (Bloomberg)
The People’s Bank of China lowered banks’ required reserve ratios on Monday, making the largest cut since Nov. 2008. Even so, they still have about 23 trillion yuan ($3.7 trillion) to lock away, begging the question: how much will be allowed to flow into the nation’s slowing economy and boost lending?
Garrett Camp made a fortune helping people navigate the digital world, then a far larger fortune helping them navigate the physical one. The Canadian-born Camp co-founded StumbleUpon, the early online links hub, in 2002, sold it to eBay for $75 million in 2007, and bought it back for 40 percent less in 2009. That same year, it occurred to him that many taxi drivers tooling around in search of their next fares had smartphones in their pockets and could be easily summoned by an app that made use of GPS data. The idea became Uber, and co-founder Camp is now worth an estimated $5.3 billion. As Uber’s chairman, he doesn’t have an operational role at the company, so he had enough time last year to found the tech industry incubator Expa, spread lavishly across the 27th floor of a downtown San Francisco office tower.
Vladimir Putin is determined to make sure that Russians don’t run out of affordable bread, even if it means a few bankrupt farmers and a disrupted grain market.
The country that last year was the fourth-largest wheat exporter is now taxing all overseas sales of the grain. Shipments dropped by more than half, and the loss of income is squeezing already thin profits for growers. While Putin’s move kept more wheat at home, farmers have cut back spending to stay solvent, including using
by phil - April 23rd, 2015 8:30 am
The Chinese economy is collapsing.
That, of course (in this insane QE World) is being taken as good news by equity traders who anticipate another wave of free money to come gushing out of Beijing ON TOP OF the $194Bn that was announced on Monday. That's right, China's economy is so big that they need $194Bn PER WEEK to keep it afloat. How long do you really think they are going to be able to keep that up?
We're short on China with some FXI puts, but not too many yet as we don't know WHEN this madness will end – only that it will end and that it will end very badly when it does. China's PMI is once again contracting at an accelerating rate DESPITE all the stimulus but last year Chinese market rallied while the economy was clearly contracting as well – popping FXI from 32 in March to 42 in September (up 35%) before collapsing back to 36 in October.
The Sept/Oct drop happened when Manufacturing numbers were improving, which indicates that the Chinese market, like Japan's and, to some extent, the US and Europe, have nothing to do with how well the economy is doing and everything to do with how much free money the Central Banksters will be able to transfer to their Top 1% buddies.
The reason the markets don't seem to make sense to you is because you are not in the top 0.01%, where all the free money is going. From their perspective, they don't give a crap about the economy or the companies they own and invest in, they only care about how much money they can funnel out of the Government, through the banks, that can end up in their pockets.
How else do you explain the madness of CAT, who haven't had good sales numbers since the beginning of 2013 (another indication of the World-wide slump) yet have kept their stock net flat over that time period? The stock even surged to $108 (up 30%) last year before coming back to the $80s but even…
by ilene - April 22nd, 2015 8:07 pm
The trade that George Soros and Stanley Druckenmiller pulled off in 1992 by betting against the British pound — and making $1 billion in the process — has gained legendary status. (More)
Sales of previously owned homes jumped in March by the most in four years, putting the U.S. residential real estate market on firm footing heading into the busiest time of year.
Purchases increased 6.1 percent to a 5.19 million annualized rate, the highest level since September 2013, figures from the National Association of Realtors showed Wednesday in Washington. Houses were snapped up in 52 days on average, the fastest since July, and property values appreciated. (Continue)
The European Central Bank almost doubled an increase in emergency funding to Greek banks from last week before political talks shift to Brussels and Latvia over the country’s bailout review.
The European Central Bank’s Governing Council raised the cap on Emergency Liquidity Assistance by about 1.5 billion euros ($1.6 billion) to 75.5 billion euros on Wednesday, people familiar with the decision said. ELA is funding provided by national central banks at their own risk and is extended against lower-quality collateral than the ECB accepts. (More)
If you want a consistent stream of income when you retire, you’ve probably heard about a few familiar investment strategies. A dividend-paying stock gets you a regular cash payout from a company while letting you participate in the stock market’s upside. Municipal bonds are safely backed by governments, and their income usually isn’t taxable. (Read more)
Google Inc. is taking a plunge into the $189 billion market for wireless service, creating fresh competition for Verizon and AT&T and stepping up efforts to boost sales and lure users to its Android mobile-phone software. (
by ilene - April 22nd, 2015 3:21 pm
Wade Slome takes on Larry Fink in this interesting defense of the 500 CEOs that Fink thinks are spending too much money on dividends and buybacks.
Courtesy of Wade of Investing Caffeine
Do you need four kitchens in your house? Apparently financial industry titan Larry Fink does. If Mr. Fink were a designer for millionaire homeowners, he would advise them to use their millions to build more kitchens in their house (reinvest) rather than distribute those monies to family members (dividends) or use that money to pay back an equity loan from mom and dad for the down payment (share buybacks). Essentially that is exactly what is happening in the stock market. Companies that are generating record profits and margins (millionaires) are increasingly choosing to pay out larger percentages of profits to stockholders (family members) in the form of rising dividends and share buybacks. Contrary to Mr. Fink’s belief, corporate America is actually doing plenty with room additions, landscaping, and roof replacements – I will describe more later.
As a consequence of corporate America’s increasingly shareholder friendly practices of returning cash, Fink believes this trend will stifle innovation and long-term growth in American companies. Here’s a snapshot of the supposed dividend/buyback problem Mr. Fink describes:
Fink Mails Letter from Soapbox
For those of you who do not know who Larry Fink is, he is the successful Chairman and CEO of BlackRock Inc. (BLK), an investment manager which oversees about $4.65 trillion in investment assets. Mr. Fink ignited this recent financial controversy when he jumped on his soapbox by mailing letters to 500 CEOs lecturing them on the importance of long-term investing. What is Mr. Fink’s beef? Fink’s issues revolve around his belief that CEOs and corporations are too short-term oriented.
In his letter, Mr. Fink had this to say:
“This pressure [to meet short-term financial goals] originates from a number of sources—the proliferation of activist shareholders seeking immediate returns, the ever-increasing velocity of capital, a media landscape defined by the 24/7 news cycle and a shrinking attention span, and public policy that fails to encourage truly long-term investment.”
by ilene - April 22nd, 2015 1:59 pm
Business Insider presents "The sad state of inequality in America in 12 charts." Bookmark the post if you might need to make your point in graphic form next time you get into an argument about "level playing fields."
Looking beyond just the real incomes of the 1%, several other measures show that inequality in the US has been rising for the past few decades.
We put together a dozen charts and maps that show some of the core issues of inequality.
Income inequality in the US has gone up over the past 40 years.
The Gini index is a standard measure of inequality, ranging from 0 to 1. The index measures how far away the income distribution in a population is from a completely egalitarian distribution. An index of 0 corresponds to a distribution in which everyone has the same income, and an index of 1 is a distribution in which one person gets all the income and everyone else gets nothing. The Gini index has steadily risen in the US since the late 1960s.
But just looking at the top 10% doesn't tell the whole story. Here's that group broken into smaller components.
The top 1% is responsible for most of the top decile's gains, while the rest of the top 10% saw much more modest increases.
by ilene - April 22nd, 2015 11:55 am
Tesco Plc reported the biggest annual loss in its 96-year history after writing down property values and taking steps to reduce its pension-fund deficit as it seeks to ease increasing financial strains.
The net loss was 5.74 billion pounds ($8.6 billion) in the 53 weeks ended Feb. 28, Britain’s largest supermarket company said in a statement Wednesday, seeking to put behind it a year that’s included an accounting scandal, management upheaval and slumping sales both at home and internationally. (More)
You’d think two defaults in two days would be negative for markets in China.
Apparently, they’re not. Investors seem almost downright happy about missed interest payments by Kaisa Group Holdings Ltd. and Baoding Tianwei Group Co. this week, and are responding by piling more money into the Asian nation’s securities. (Read more)
From a modest stucco house in suburban west London, where jetliners roar overhead on their approach to Heathrow Airport, a small-time trader was about to play a hand in one of the most harrowing moments in Wall Street history.
Navinder Singh Sarao was as anonymous as they come — little more than a day trader by the standards of the Street. (Continue)
Dressed as a banker from a bygone age, with a black top hat, a cigar and a briefcase full of fake money, Eduardo Martinez Cobo traveled to Madrid to protest what he considers unfair clauses in his mortgage contract. (More)
Bank economists tracking the Norwegian central bank can’t decide whether the next rate cut will come in May or June.
After unexpectedly keeping rates unchanged in March and signaling a 100 percent chance of a cut in one of the bank’s next two meetings, analysts are struggling to decipher the nuance of Governor Oeystein
by phil - April 22nd, 2015 8:35 am
What a crazy-assed market!
With virtually NO volume at all, the S&P (along with the other indexes) gapped up 10 points at the open (0.5%) but then proceeded to sell off all day as the Fund Managers that manipulate the Futures trading sold their stocks to all the suckers who ran in to buy into the "rally" that the Media Puppets were applauding all morning.
I know it sounds like a conspiracy theory when I tell you the markets are manipulated but, just yesterday, they accused a 36 year-old guy (31 at the time) with a very small trading firm ($5M) of crashing the Global Markets in the "Flash Crash" (May 6th, 2010).
Aside from the sad fact that it took them 5 years to find the culprit, it should scare the crap out of people that a single person, with no special equipment and a fairly ordinary margin broker account could knock $1Tn in value off of global equities in less than an hour. If that's how easy it is to manipulate the entire market – how can you NOT believe that there are people manipulating individual stocks every day?
“Things like this don’t build a lot of confidence,” said Timothy Ghriskey, the chief investment officer at Solaris Asset Management LLC in New York.
“It’s ridiculous, it’s the government at its best — inept,” Rick Fier, director of equity trading at Conifer Securities LLC in New York, said in a phone interview. “It really is just another one of many things to deal with, it’s extremely frustrating. We’ve seen flash crashes and we’ll see them again and it’s definitely disconcerting.”
According to the government, Sarao had trading software altered to let him send and modify orders to sell stock futures thousands of times a day with virtually no risk they’d be filled. That was his goal: to make it seem like orders for futures were piling up so they’d fall and he could buy them on the cheap, the complaints say. Oddly enough – I just pointed out that same activity going on in the Oil Futures during yesterday's Live Webinar.…
by ilene - April 21st, 2015 10:11 pm
Some mortgage-bond investors are criticizing a change in Freddie Mac debt that increases the risk of loss from homeowners who can’t afford their loans. (Continue)
Yahoo! Inc. Chief Executive Officer Marissa Mayer outlined plans to explore options for the company’s stake in its Japanese division, heartening investors dismayed by another report showing disappointing sales and profit.
The company has hired advisers to consider opportunities to maximize value for its stake of about 35 percent in Yahoo Japan Corp., valued at more than $8 billion, Mayer said on a conference call Tuesday. Earlier, the company said first-quarter sales fell 4 percent to $1.04 billion, and gave a lackluster forecast for the current period. (More)
Perrigo Co.’s board unanimously rejected Mylan NV’s $28.9 billion takeover proposal, saying it doesn’t reflect the value of the over-the-counter drug company’s growth potential. (Read more)
VMware Inc. reported first-quarter profit that topped analysts’ estimates, even as the software maker reported slower revenue growth and reduced sales forecasts for the year due to currency fluctuations.
Profit, excluding some costs, was 86 cents on sales of $1.51 billion, VMware said in a statement Tuesday. Analysts had projected 84 cents and revenue of $1.5 billion, according to data compiled by Bloomberg. (More here)
Chipotle Mexican Grill Inc. posted first-quarter sales that trailed analysts’ estimates, hurt by higher menu prices and supply-chain woes that are causing shortages of one of its main ingredients.
Sales rose 20 percent to $1.09 billion, the Denver-based company said Tuesday in a statement. The average of analysts’ estimates compiled by Bloomberg was $1.11 billion. (Continue reading)
Canada will extend natural gas export licenses to 40 years while cutting taxes for small businesses and the
by ilene - April 21st, 2015 5:07 pm
By John Mauldin
I can sense a growing unease as I talk with investors and other friends, from professional market watchers and traders to casual observers. What in the Wide World of Sports is going on? It is not just that markets are behaving in an unusual and volatile manner (see chart below showing multiple double-digit moves in the last few months); it’s that the data seems to be so conflicting. One day we get data that shows the economies of the developed world to be slowing, and the next day we get positive numbers. The ship of the economy seems to be drifting rudderless.
My dad used to say about a situation that just didn’t seem quite right that things were “about a half a bubble off dead center.” (This was back in the days when we used bubble levels to determine whether something was level or plumb – before today’s fancy digital gadgets.)
There is a reason, I think, that everything seems just a little out of kilter. I believe that central banks, in their valiant, unceasing efforts to restore liquidity and growth, have unleashed numerous unintended consequences that are beginning to show up in earnest. Today we are going to review the well-meaning behavior of central banks for clues about our near future.
But first, let me take one final opportunity to invite you to come to the 2015 Strategic Investment Conference. We’ve assembled an amazing cast of speakers who will delve deeply into what is really driving the world’s economy. I have some of the finest experts on China from around the world, central bankers, some very powerful analysts whose work commands the attention of the biggest institutions and hedge funds in the world (and whose work costs 20 times or more the price of my conference). Market analysts, geopolitical wizards, and futurists will be on hand, too. This is really the finest gathering of minds I have been pleased to assemble for a Strategic Investment Conference. Click on the link above and peruse the lineup and schedule. The conference starts in a little over a week, on the evening of April 29, and lasts through…