Reflections on the LinkedIn IPO and the Usability of LinkedIn Itself
by ilene - May 19th, 2011 11:06 pm
Courtesy of Mish
In Mania is Back: LinkedIn IPO Soars as Much as 173% in One Day, I discussed the mania over the LinkedIn IPO.
I have a few more comments that I also added as an addendum to the above post. ….
Addendum:
People chased the IPO as high as 122.70. After hours the price is down to $92.40. Those who just "had to have it" at any price are now down 24.7%
I suspect insiders will be bailing like mad as soon as the restricted lock-up period is over.
Reflections on LinkedIn
LinkedIn has 100 million accounts. How many are active? How often? For what purpose other than everyone being "linked in" to everyone else?
The key questions are:
- How will the growing number of accounts translate into actual earnings?
- What valuations will investors place on that growth?
It’s fair to point out just because I have little use for LinkedIn at the present time, does not mean others feel the same. Indeed, I may even change my mind and find a use later on.
Merging Profiles
I setup a LinkedIn account primarily because hundreds have asked me to be "Linked In", not because I had a particular need.
In fact, I have two LinkedIn accounts, both in my name, one under an email account I no longer have. I do not know my password for that account. I would like to merge the profiles because people find the wrong (inactive) "Mike Shedlock" profile all the time.
Unfortunately LinkedIn offers no convenient way to merge profiles. Worse yet, I get invites all the time with no real way to reply to them. It is a mess.
People have been bitching about this for something like forever as a search for merging linked in profiles shows.
LinkedIn has a cumbersome solution that involves inviting everyone from one group to another.
Log into your old account and click on My Contacts.
Scroll down to the bottom of that page and click on Export Connections
On the next page make sure that "Microsoft Outlook (.CSV File)" is selected from the drop down menu and then click on Export.
In the pop up window select "Save to Disk" then click on Ok.
Make sure that the file was saved to your computer
Log into your new account and click on "Add Connections" with the green button in
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Digging Still Deeper In Friday’s Jobs Report; What’s the Real Unemployment Rate?
by ilene - May 9th, 2011 2:37 pm
Courtesy of Mish
Every month the government posts the unemployment rate yet few know where the unemployment rate comes from, how it is determined, and the relationship between the unemployment rate and the monthly reported jobs total.
For a quick recap, the unemployment rate comes from a "Household Survey" while the reported headline jobs total comes from the "Establishment Survey". The former is a monthly phone survey, the latter is a sample of actual business employment.
The reason for the "Household Survey" is that it will pick up new business formation, especially small businesses that might not be on the radar of the "Establishment Survey" sample. Even if the "Establishment Survey" sample size was 100%, unless duplicate names were weeded out, it would double-count those holding multiple jobs.
The "Household Survey" attempts to determine five key items.
- Do you have a job?
- Is so was it full or part-time?
- If not, do you want a job?
- If you do not have a job and want a job, did you look for a job in the last 4 weeks?
- Are you in school, on leave, etc.
The BLS does not ask the questions like that, instead the BLS attempts to determine those answers by a detailed list of questions.
For a discussion of exactly what questions the BLS asks to determine the unemployment rate, please see Reader Question Regarding "Dropping Out of the Workforce"; Implications of the Falling Participation Rate
Definition of Unemployed
Logically, one might think one would be unemployed if they want a job and do not have a job.
However, the official definition of unemployed is you do not have a job, you want a job, and crucially, you have looked for a job in the last 4 weeks.
Every month the government reports "alternative" numbers but even though many of the alternate numbers are a more accurate representation of the unemployment rate, the media focuses on the headline number, ignoring millions who have "dropped out of the labor force" simply because they stopped looking for work.
Millions more are in "forced retirement", which I define as someone over 60 whose unemployment benefits ran out so they retired to collect Social Security even though they really want a job.
244,000 Jobs Added Last Month, So Why Did the Unemployment Rise?
Last month many were surprised to see the jobs report claim 244,000 jobs were added yet…
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Kidnapping, Torture, and Reflections on Alleged “American Values”
by ilene - May 6th, 2011 2:34 pm
Mish is on fire today with excellent posts. Here, Mish reports on the horrifying story of what the CIA did in kidnapping the wrong man, a German citizen Khalid El-Masri, and the CIA’s subsequent torture and abuse of him. Our court system failed too, citing "national security" grounds to throw out Khalid El-Masri’s case against the CIA. (Sounds like a specious excuse to me as sensitive information wouldn’t have to be made public.) – Ilene
Kidnapping, Torture, and Reflections on Alleged "American Values"
Courtesy of Mish
I do not agree with using torture, nor do I believe the end justifies the means. The problem with both is that others can act the same way.
If the US can torture to extract vital information, then why can’t Iran and every other country on the planet?
It is pure hypocrisy to think that the US has a monopoly on "justified torture". Indeed, there is no such thing as "justified torture".
This has been my position forever. I bring it up because of a post Barry Ritholtz made yesterday stipulating “Torture didn’t provide useful, meaningful, trustworthy information”
“Torture [at the Guantanamo Bay detention camp] didn’t provide useful, meaningful, trustworthy information. Everyone [at the CIA] was deeply concerned and most felt it was un-American and did not work.” – Glenn L. Carle, a retired C.I.A. officer who oversaw the interrogation of a high-level detainee in 2002
“The bottom line is this: If we had some kind of smoking-gun intelligence from waterboarding in 2003, we would have taken out Osama bin Laden in 2003. It took years of collection and analysis from many different sources to develop the case that enabled us to identify this compound, and reach a judgment that Bin Laden was likely to be living there.” – Tommy Vietor, spokesman for the National Security Council.
Khalid Shaikh Mohammed was waterboarded 183 times — repeatedly misled interrogators about the courier’s identity. …
Barry Ritholtz went on to say "Thinking that torture is wrong is not a liberal or conservative value — it is an American value."
I sure wish Barry was correct. Sadly he is not, at least right now. Both president Bush and president Obama have condoned torture.
Moreover, President Obama had a campaign pledge to shut Guantanamo Bay. Sadly, I report Guantanamo Bay is still in operation. On March 8, 2011, the Irish Times noted Guantánamo trials freeze lifted
Hina Shamsi,
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Stock World Weekly
by ilene - January 2nd, 2011 8:18 am
Here’s the latest Stock World Weekly Newsletter, New Year’s Edition.
Feedback welcome — please leave comments, we value your input. - Ilene
Picture credit: William Banzai7
For Stock World Weekly archives, click here.
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Bernanke Is Making the Crisis Worse
by ilene - November 23rd, 2010 7:10 pm
Bud Conrad of Casey Research delivers some more harsh criticism to Ben Bernanke regarding QE2, foreign relations and currency devaluation. – Ilene
Courtesy of Casey Research
The Fed is a corrupt and powerful institution, and Chairman Bernanke is making the global crisis worse. His new speech given last week in Europe was terribly misguided and will upset markets as the Chinese and Germans won’t ignore his challenges. Bernanke’s interpretations of the markets have been wrong since before he was appointed to head the Fed, and his actions are doing nothing but aggravating the situation.
In this seminal speech, titled “Rebalancing the Global Recovery,” Bernanke not only defended QE II as the right policy, but also attacked the monetary policy of China, the biggest holder of U.S. debt, an action that must be understood for how misdirected it is.
Here are a few excerpts from the speech:
On our "tepid" recovery
- In sum, on its current economic trajectory the United States runs the risk of seeing millions of workers unemployed or underemployed for many years.
Indeed, although I expect that growth will pick up and unemployment will decline somewhat next year, we cannot rule out the possibility that unemployment might rise further in the near term, creating added risks for the recovery.
On China
- The strategy of currency undervaluation has demonstrated important drawbacks, both for the world system and for the countries using that strategy.
… For large, systemically important countries with persistent current account surpluses, the pursuit of export-led growth [i.e., China and its strategy] cannot ultimately succeed if the implications of that strategy for global growth and stability are not taken into account.
On defending QEII as the right policy
- Following up on this earlier success, the Committee [i.e., the Federal Open Market Committee] announced this month that it would purchase additional Treasury securities. In taking that action, the Committee seeks to support the economic recovery, promote a faster pace of job creation, and reduce the risk of a further decline in inflation that would prove damaging to the recovery.
Fully aware of the important role that the dollar plays in the international monetary and financial system, the Committee believes that the best way to continue to deliver
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Telling Signs-of-the-Times: Layaways, Off-Brands, Goodwill Stores, Consignment Sales, Frugality, all Thrive in Middle-Class Suburbia
by ilene - November 9th, 2010 6:51 pm
Telling Signs-of-the-Times: Layaways, Off-Brands, Goodwill Stores, Consignment Sales, Frugality, all Thrive in Middle-Class Suburbia
Courtesy of Mish
Telling Signs-of-the-Times: In grocery stores, "No-Name" sales are up 2% and now represent 22% of total sales. Some full priced stores now offer consignment sections, an unheard of practice a couple years back.
Layaway sales are back in vogue at Toys-R-Us and jewelers alike. Layaways are a depression era phenomenon that all but died with the mass marketing of credit cards.
Old Stigmas Become New Badge of Honor
Frugality is the new "badge of honor" says the Yahoo!Finance report In a tough economy, old stigmas fall away
The Goodwill store in this middle-class New York suburb is buzzing on a recent weekend afternoon. A steady flow of shoppers comb through racks filled with second-hand clothes, shoes, blankets and dishes.
A few years ago, opening a Goodwill store here wouldn’t have made sense. Paramus is one of the biggest ZIP codes in the country for retail sales. Shoppers have their pick of hundreds of respected names like Macy’s and Lord &Taylor along this busy highway strip.
But in the wake of the Great Recession, the stigma attached to certain consumer behavior has fallen away. What some people once thought of as lowbrow, they now accept — even consider a frugal badge of honor.
At the supermarket, shoppers are buying more store-labeled products, like no-name detergents and cereal, and not returning to national brands.
And in a telling trend, Americans are turning to layaway more often when they buy expensive items such as engagement rings and iPads. The wealthy are also using layaway more often, a drastic change from the past.
"The old stigmas are the new realities," says Emanuel Weintraub, a New York-based retail consultant. "Now, people don’t have a problem saying, ‘I can’t afford it.’ It’s a sign of strength."
Two years ago, having second-hand clothes in the same store that sells regular-priced goods might have driven well-heeled shoppers away. Today, the concept works. The new consignment area, called My Secret Closet, has brought in new customers. Shoppers browse both the retail and consignment areas without hesitation.
"We are seeing a permanent change in how people shop, and we have to respond to that," says Tom Patrolia, who has owned the store for 24 years.
The growth in layaway also reflects Americans’ new willingness to set aside
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Double Dip Delayed, Not Derailed; Understanding Consumer Spending
by ilene - October 29th, 2010 3:08 pm
Double Dip Delayed, Not Derailed; Understanding Consumer Spending
Courtesy of Mish
The BEA Advance GDP for Third Quarter 2010 came in at +2.0%. However, Table 2. Contributions to Percent Change in Real Gross Domestic Product shows that Change in private inventories contributed +1.44 while real final sales contributed a mere .6.
How sustainable is that?
The answer is not very. This is likely the last hurrah for inventory replenishment even without factoring in upcoming cutbacks at the state level.
Not a V-Shaped Recovery
In terms of real final sales, this "recovery", is the weakest on record. Dave Rosenberg has some thoughts on that in Lunch with Dave.
U.S. REAL FINAL SALES 60 BASIS POINTS SHY OF DOUBLE-DIPPING
The major problem in the third quarter report was the split between inventories and real final sales. Nonfarm business inventories soared to a $115.5 billion at an annual rate from the already strong $68.8 billion build in the second quarter — this alone contributed 70% to the headline growth rate last quarter. If we do get a slowdown in inventory investment in Q4, as we anticipate, it would really not take much to get GDP into negative terrain. We estimate that if the change in inventories slowed to about $94.0 billion in Q4 (about $22 billion below Q3 levels), GDP would contract fractionally. In other words, it won’t take much for GDP to slip into negative terrain.
The recession may have technically ended, but outside of inventories, and the best days of the re-stocking process look to be behind us, this has been a listless recovery. At 60 basis points above zero, real final sales are just a shock away from double-dipping — a shock like looming tax hikes, accelerating fiscal cutbacks at the state/local government level or the millions of “99ers” about to fall off the extended jobless benefit rolls at the end of November.
In terms of components, the good news was that consumer spending did accelerate to a 2.6% annual rate from 2.2% in the second quarter — the best performance since Q4 2006. Non-residential construction eked out a 3.8% annualized gain, the first advance since Q2 2008. But the good news pretty well stopped there.
It is also no surprise to see imports bulge when inventories did the same, but what caught our eye in the external trade portion of the GDP report was
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Inflation Expectation Noise
by ilene - October 7th, 2010 5:01 am
Inflation Expectation Noise
Courtesy of Mish
Scott Grannis on Seeking Alpha has written a pair of interesting articles regarding inflation expectations and Quantitative Easing. Grannis thinks that Quantitative Easing is working. I don’t, but that debate depends on the definition of "work".
In regards to inflation expectations as measured from TIPS, Grannis says Bond Market Bracing for Return of Inflation
Lots of important action in the bond market these days. 10-yr Treasury yields have plunged to a mere 2.36%. Recall that they hit a generational low of 2.05% at the end of 2008, when the entire world was terrified of impending economic death and destruction. Are yields today telling us that doom is just around the corner? Absolutely not. This time around things are very, very different.
The interesting part of the bond market action is in the TIPS market, where yields have plunged by much more than Treasury yields, and in the long end of the Treasury curve, where the spread between 10 and 30-yr Treasuries has widened to its steepest level ever. Since the end of August, when QE2 expectations started to heat up, 10-yr Treasury yields have declined by 10 bps, whereas 10-yr TIPS real yields have dropped by 50 bps. That’s a 40 bps increase in annual inflation expectations over the next 10 years. Using the more sensitive measure of inflation expectations—the 5-yr, 5-yr forward breakeven rate—inflation expectations have jumped almost 50 bps since the end of August. The spread between 10- and 30-yr Treasuries has shot up to a record-breaking high of 127 bps, up from 105 bps at the end of August.
Note in the chart above how the drop in Treasury yields in late 2008 reflected deflationary fears (with inflation expected to average zero over the subsequent 10 years), whereas the current drop reflects inflationary fears.
So the market is saying that it has little doubt that the Fed will ramp up its quantitative easing efforts, and almost no doubt that this will prove inflationary in the years to come. The plunging dollar and the soaring price of gold fully support this interpretation.
This is the best evidence you can find that deflation risk has evaporated. The question now is not how low inflation will be, it’s how high it will be in the years to come.
If the prospects for the economy are improving and inflation expectations are
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Real Time Probabilities of Recession Above 20% Second Consecutive Month
by ilene - October 6th, 2010 3:29 pm
Real Time Probabilities of Recession Above 20% Second Consecutive Month
Courtesy of Mish
Seeking to eliminate the enormous lag of NBER in declaring the beginning and end of recessions, economist Marcelle Chauvet computes real-time recession probabilities in a manner consistent with the long after the fact findings of the NBER.
The probability is down from last month, nonetheless Real Time Probabilities of Recession are above 20% for the second consecutive month.
Real-time means a one quarter delay, but that is still faster than the NBER is likely to make proclamations.
click on chart for sharper image
| Month/Year | Probability of Recession% |
| January 2009 | 100.0% |
| February 2009 | 99.7% |
| March 2009 | 98.9% |
| April 2009 | 94.3% |
| May 2009 | 92.6% |
| June 2009 | 69.4% |
| July 2009 | 41.0% |
| August 2009 | 39.3% |
| September 2009 | 27.1% |
| October 2009 | 18.9% |
| November 2009 | 7.9% |
| December 2009 | 6.5% |
| January 2010 | 4.1% |
| February 2010 | 2.4% |
| March 2010 | 2.1% |
| April 2010 | 1.1% |
| May 2010 | 2.8% |
| June 2010 | 27.0% |
| July 2010 | 20.6% |
Note the drop from 69.4% to 41.0% in June/July 2009 accurately timing the end of the recession well in advance of the NBER. Also note the huge leap from 2.8% in April to over 20% in June and July.
For a description of the methodology, please see the Center for Research on Economic and Financial Cycles post CREFC Real Time Probabilities of Recession.
Also see Real Time Analysis of the U.S. Business Cycle
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Open Dissent at the Fed: Charles Plosser (Philly Fed) Opposes QE2; Thomas Hoenig (Kansas City) attends Tea Party
by ilene - September 29th, 2010 4:04 pm
Open Dissent at the Fed: Charles Plosser (Philly Fed) Opposes QE2; Thomas Hoenig (Kansas City) attends Tea Party
Courtesy of Mish
An open battle exists at the Fed concerning Bernanke’s second round of Quantitative Easing (QE2).
Hoenig Attends Tea Party
Bloomberg reports Fed Dissenter Hoenig Wages Lonely Campaign Against Easy Credit
Thomas M. Hoenig, dressed in a gray suit, white shirt with French cuffs, and baby-blue tie, faces an edgy crowd of 150 people in a hotel meeting room in suburban Lenexa, Kan. A large “Kansas City Tea Party” banner covers a table at the door. Attendees wear anti-tax stickers on their lapels. This is not an after-dinner speech for which most central bankers would volunteer.
Hoenig smiles at his audience and begins: “This is a support-the-Fed rally, right?”
Dead silence. Then the room erupts in laughter. Disarmed, the Tea Partiers listen politely as Hoenig defends the Federal Reserve as an indispensible institution, even if at the moment, he says, it happens to be heading in the wrong direction.
And, by the way, if it were up to him (though it’s not, really) he would break up the biggest Wall Street banks.
This is Tom Hoenig’s moment, and it’s a strange one. In Washington, he is the burr in Fed Chairman Bernanke’s saddle: the rogue heartland banker who keeps dissenting alone — for the sixth straight time on Sept. 21 — to protest the Fed’s rock- bottom interest-rate policy. Hoenig warns that the Bernanke majority is setting the country up for an as-yet-unknown asset bubble: the next dot-com or subprime craze. He can’t tell yet where the boom-and-bust will materialize, but he can feel it coming, like a Missouri wheat farmer senses in his bones the storm that’s just over the horizon.
In abundant speeches and articles, Hoenig has condemned the political influence of the financial elite. “We’ve had a Treasury Secretary from Goldman Sachs under a Democratic President and a Treasury Secretary from Goldman Sachs under a Republican President. The outcomes were not good,” Hoenig says while being driven to a luncheon talk at an affordable housing conference in Topeka, Kan.
Hoenig harbors powerful misgivings over not dissenting more often and more forcefully during the Greenspan years. “He regrets going along with the votes when Alan Greenspan was chairman to get rates so low and keeping them so low so long,” says his
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site