Hi folks. Hope you are all keeping well. I’ve missed you. Hope you can say the same.
I’m back, sort of. I had a sudden enforced blogging break thrust upon me when I received an SOS from a good friend of mine. His company was in need of help.
I thought at the time that it would be a two week job at most, but when he said he was in trouble he wasn’t kidding. We’re still not done, but at least now things are looking a little bit better.
I’m in “Yurp” right now, watching the refugees take over. More of that in a future post perhaps. In the meantime take Trump’s advice a close your borders or you’ll end up like this place.
I could have done some blogging when I was travelling around, I certainly had plenty of time at airports, in between flights and wading through the dumbest security checks you could imagine, but I wanted to take a bit of time to prepare my next post. Hopefuly I’ll get to it next week.
Meantime, if you can believe WP stats, this blog has whizzed through the 200,000 views landmark without me and there are actually MORE daily hits now than when I was blogging almost every day.
Do you think the world is trying to tell me something?
Maybe I should stay away?
Actually I don’t know whether to be pleased that I have created something with a life of it’s own or dismayed that I’m not really needed.
Now in an effort to get some of my dignity back I think I will indulge in a quick gloat.
This is not going to be pretty so feel free to skip over this bit if you haven’t got a strong stomach.
I’m having a laugh at the stupidty of the Fed again and the dumb financial journalists and fund managers who hang on their every word despite a mountain of evidence that should lead them to do otherwise.
The Fed has wimped out AGAIN. Lost their nerve. Promised and hinted and leaked stories to the financial press for months that an interest rate rise was imminent – and then they bottled out.
No surprise to me. At the beginning of May I wrote a post explaining why they wouldn’t put up interests despite all the pifle they were saying. (if you want to read it click here.)
Then in mid-June I did another one ( click here for that one), saying there was no way the Fed could make good on their threats to raise the rate in September.
Of course nobody listened and the meeting on Thursday was one of the most anticipated Fed meetings of all time. And it all came to nothing. No interest rate hike.
And I don’t think they’ll do it next time either. There’s talk about December, but as far as I see the Fed’s hands are tied and rates are going to remain at zero or close to it for years.
Good news for borrowers. Not so good for savers with all the traditional yield opportunities such as bonds, Treasuries and bank CDs offering little or no returns. If you have cash to invest you should be looking at solid low risk undervalued stocks with a decent dividend. Otherwise your savings will be eroded by inflation for at least another year, proably longer.
Having said that, no rate hike is on balance good for the economy as a whole.
That will do for the gloating for now. Not sure when the next post will be exactly. Hopefully next week so if you’re interested keep a look out for that.
Meantime warmest regards to everyone who visits – even when I’m not around.
Twitter is a good invention. It’s easy and fun. Much less demanding and intrusive than Facebook. So much so that many millions of people, from the famous to ordinary people like you and I, use it every day.
On the back of that success the Twitter company is doing very well. But recently it did even better when its shares jumped four per cent in a matter of minutes.
It all happened after a buyout story appeared on the internet that claimed that Twitter had received a significant offer. It started off, “Twitter is working closely with bankers after receiving an offer to be bought out for $31 billion…”
Investors piled in. And not just the amateurs, lots of the ‘professional’ Wall Street guys too.
The trouble was, however, that the internet story was on a bogus web site and was completely fake. The site was called “bloomberg.market”. It was not “Bloomberg.com” the official name of the web presence for the Bloomberg financial organization.
“Bloomberg.market” was what they call a ‘mirror’ of the genuine “Bloomberg.com” website. Whoever designed “bloomberg.market” set it up to look like “Bloomberg.com”. They copied real headlines and linked them back to the real dot-com website. With one exception: the fake Twitter story, which was dressed up to look like a legitimate webpage.
The spike in the Twitter share price only lasted about 15 minutes before Bloomberg denounced the story as fake and the share price dropped back to its previous level. But 15 minutes is a long time in the world of finance and plenty of time for someone to profit substantially from the scam.
No one yet knows who owns the dot-market domain – except the people who own it, of course – but it was registered just days before the scam message, using a proxy service called “WhoisGuard”, based in Panama, that protects registrant details by offering its own address and contact numbers. But the details of “WhoisGuard” on its own website at “WhoisGuard.com” also appear to be fake, listing a telephone number that is disconnected. Emails to their contact address have not received a response either.
The significance of this incident is not that some greedy and stupid people lost money rushing to buy Twitter shares on the back of this fake announcement.
The problem is that so many new dot word domains have recently been allowed – hundreds of them in fact – that the whole internet is becoming bloated and confusing. And expensive.
If you are a company that wants to protect your online identity and integrity it could now cost you tens of thousands of dollars to cover all the permutations. Not many companies, even huge affairs like Bloomberg, will choose to do that.
That leaves the way wide open for cyber criminals to take advantage of gullible internet users.
I am certain they will.
Like the Twitter announcement, it’s just too good a deal to refuse.
Can’t let the month end without another Sunday Sermon.
This time a little bit of an update on the political and financial scene as I see it.
So far the Obama administration is doing great! (That was a little sarcasm in case anyone didn’t get it.)
Troops are being sent to Syria and soon we’ll get bogged down in another mess that’s none of our business and will probably take many years and many lives to get us disentangled from – leaving behind chaos and confusion and a worse situation than the one we tried to fix.
Meanwhile the economic crisis continues. Not that you’d notice. The sham recovery has meant that stocks have been on an upward trend, bonds have been doing well, and confidence is high.
And all because….
….well all because the Fed continues to print money and pour it into these markets.
Or at least it has been.
Then Bernanke made a statement a few days ago to “clarify” the government’s position.
Oh dear me!
He said that the government would… he thought… he hoped anyway…. assuming nothing unforeseen happened…. at least nothing major that they didn’t see coming… that they would ease off their money printing and bond buying… or at least they might… soon or maybe later… but sometime at least… well, it was being discussed…
Needless to say with that dithering statement confidence immediately melted away from the market and the DOW headed down by more than 500 points. In fact investors and brokers seemed to be selling everything, not just stocks and bonds but gold and other commodities too. Not quite panic but definite unease was clear to be seen.
The only reason it didn’t all collapse is that while the underlying message is clear, the Fed’s delay in implementing their tap turn off gives investors a little more time to make a little more money – they hope.
The problem with that is knowing when to sell. And that is the trick that has eluded investors from individuals to hedge fund managers since the markets began.
What Obama and Bernanke want is crystal clear. They see the folly in printing money and buying bonds at near $100 billion a month and they know they have to stop it eventually otherwise an even bigger financial catastrophe will result.
Their problem is they want to stop it without causing a massive market correction.
And that, as Samuel Goldwin used to say, can be summed up in two words – im possible!
It will be interesting and perhaps a bit painful to watch what happens next.
As well as being the biggest F’ing title ever seen on a WordPress blog, it drew attention to the debacle that was the much heralded launch of Facebook shares on the stock market.
Well, the fallout from what is now being called the IPOcalypse continues.
The head honcho at Nasdaq has had his CEO’s bonus slashed because of it, and rightly so.
But don’t start feeling sorry him just yet. Even with a slash he will still be taking home a $1.3m bonus, slightly north of half a million dollars lighter than it would have been, but still enough to get by on.
Oh yes, and that’s bonus on top of his $1 million salary!
Others at Nasdaq have also been penalized, including Anna Ewing, VP in charge of “technical glitches” that messed up the first day of trading. Her bonus was cut by over a quarter of a million dollars. But keep those hankies where they are, she is still left with a $574,125 bonus for the year.
Losses for angry brokers and traders from the botched IPO, on the other hand, have been estimated at around $500m. Nasdaq has approved just $62m in compensation, I suppose they needed the rest of their money to pay out the bonuses?
Like the banksters, it all begs the question of just how incompetent do you have to be in the financial industry to not just lose your bonus, but lose your job as well?
Launched at the ridiculous price of $38 a share, or about 100 times the company’s earnings, the price momentarily made it to $45, but then quickly plummeted to $34.
In my post in May I suggested that the shares were worth more like $18 a share rather than $38. As of yesterday (August 16th) the price had fallen below $20.
I’m not saying this by way of blowing my trumpet, because I now think that my $18 peg may have been rather optimistic too. Investors have by and large turned against Facebook.
Apart from the odd blip, the stock has been on a downward trend pressured by disappointing earnings and by the fact that from today the so-called “lockups” that have prevented some early Facebook backers from unloading their stakes begin to expire. This simply means they will be able to sell shares into the market and with around two billion shares eligible for a sell off between now and May 2013, with a big one coming in November, the signs for a price recovery are ominous.
In fact further falls are more than likely.
Those who can are shorting the stock like crazy. (Shorting is where your broker borrows shares which you sell immediately in the hope that you can buy them back later at a lower price.)
The number of Facebook shares on loan to short sellers has risen from 63 million a month ago to more than 93 million.
So is it a good buy now at $18? I think not. Not for a while anyhow, until these locked shares find their way into the market and the price stabilizes and that will probably be well into 2013.
In the short term the status quo is probably down down deeper and down.
Forget Facebook and enjoy some music from the 70s instead.
Fasab disclaimer: this blog post does not constitute professional advice as regards investments on the stock exchange, such advice would only be given and indicated thus if an outrageous fee were being charged and this blog is being given to you for free. Also any investor should always be aware that shares can fall as well as plummet and should act accordingly by not investing any money they can not afford to lose.
When I first though about this subject for a post on my blog, I had America mainly in my mind, I suppose because that is where the rot started to show. But when I though about it a little more I quickly realized that the same charge could equally be brought against the banksters in the United Kingdom, Ireland, Spain, France and in fact the entire European Union.
They took money that was not theirs, that was placed in trust with them for safe and responsible stewardship, and they gambled it and lost it.
Then they used their influence on stupid politicians to steal the honest taxpayer’s money to fill up their coffers again. They were apparently too big to fail – what an utter load of nonsense!
They promised when they were stealing OUR money that they would use it to make loans to businesses and thereby stimulate and reactivate the economy that they themselves had brought to a standstill when they lost OUR original cash in stupid and foolhardy deals that no one with any brains or any sense of responsibility to their clients would have dared to go near.
They took OUR money for the second time and kept it for themselves. A lot of it went on bonuses, sometimes in the tens of millions of dollars. A reward to themselves for staggering incompetence.
In any other industry, if you were so bad at your job as to bankrupt your company, you would not only be fired but stand a good chance of being charged with fraud or negligence or something. But if you are a bankster and have successfully sold the lie that you are “too big to fail”, then you get away with it. It doesn’t hurt if you have a few politicians in your pocket either!
And, apart from paying yourself huge bonuses for losing OUR money the first time, what do you do with the proceeds of stealing OUR money the second time? Well, of course, first you give yourself another big pay rise, and then you gamble again and lose even more of OUR money.
Remember the J P Morgan $2billion loss – er, make that a $9billion loss would you. Just as Hillary Clinton “mis-spoke” when she lied to the public, J P Morgan “mis-counted” the first time they declared the extent of their incompetence! We probably have not heard the truth yet.
And President Obama has the gall to tell the world that these morons and liars are “the best we have”! Seriously? Do you really expect the people to believe that? I don’t think so. I certainly hope not.
But the J P Morgan $2billion loss turning out to be a $9billion loss is just the tip of a colossal iceberg. This one is a hell of a lot bigger than the one that sank the Titanic – it’s threatening to sink entire countries.
The public and even the various governments have not been made aware of the full extent of the catastrophic losses these idiots (remember the best we have) have made. All the big banks, whether in the US, or Britain, or Spain or France or wherever are furiously cooking their books and have been for the last five years. Their companies are insolvent, they are bankrupt, but they are hiding the truth from everyone.
This is fraud.
In fact, because of the power that they have, and the impact their stupidity inevitably has on the entire national economy, what they have done and are continuing to do is commit treason.
In a country run by Joe Stalin or Saddam Hussein (perhaps proving that not everyone is all bad all of the time) these treacherous banksters would have been put up against a wall and shot. That may be a bit extreme for us, but at the very least they should lose their jobs, have their stashes of personal wealth confiscated, and be thrown into jail. If it was good enough for a thief like ponzi king, Madoff, it should be good enough for thieves like them.
End rant, cue a few videos on the subject.
A view from Britain
A view from Ireland
The best government money can buy
Understanding The Financial Crisis–For Kids and Grownups
I should make it clear right at the start of this blog post that the person who was being accused of being an asshole was ME!
Of course, you know from reading my blog that such a description could never be applied to me ….ahem, however, a while back I had somehow managed to get my name on an “idiot” list of people who could be called about various scams and “investments”.
I suspect that one of those companies that would never sell your details, sold my details.
Well, as an unwanted consequence, I had cold callers by the square yard for a while.
And on and on and on and on it went for several months.
At the start I listened politely. I’ve had to cold call people on a few occasions myself and I know what a horrible job it is, so I answered their inane questions, pretended I was vaguely interested in what they had to say, but eventually declined all their more than generous offers.
Man, if only I had done a few of those investments I would have been richer than Bill Gates by now – or broke a lot faster!
But as the weeks went on, a bit like the telemarketers I wrote about in the cunningly named “Telemarketers”, my patience ran out. I started to say up front that I wasn’t interested and couldn’t afford it and if they couldn’t take that hint, I hung up.
However there was one particularly unpleasant young guy who worked for an investment brokerage in New York. He probably had never made it farther than Manhattan in his life, but he was an authority about everything, about everything, about everything. You know the type. And like most people so endowed he actually knew hardly anything at all.
So one day he phoned me up. I must have been at a bit of a lose end (before my blogging days!) so I listened to what he had to say. He had spoken to me before, but didn’t remember, so I knew his patter and what was coming and therefore was well prepared with my answers.
Was I interested in investing? Yes, absolutely.
Had I ever invested in the stock market before? Yes, indeed I had.
Had I any stocks at the moment? Well, no, not at the moment. I’ve been waiting on a “really great deal” to come along.
Of course, I knew he had a “really great deal”.
“Terrific!” he said. “Because I am about to offer you a really great deal!”
Am I psychic or what?
Naturally I got a little excited at this wonderful news and wanted more details, like pronto!
Ah, but first he had a bit on his cold call sheet to quality investors.
What kind of amount was I comfortable with? How much did I normally invest?
I knew this would be where the fun would really start. So I said that it depended on the deal, if it was good enough then it could be a decent amount.
That wasn’t good enough. He wanted to quantify it.
“Would you be comfortable with something in the $5000 range?” he asked.
“Not really,” I said, then hearing him deflate on the other end of the phone I followed with, “No, if I’m interested, and there’s no guarantee that I am because you haven’t told me anything about this investment, it would have to be a much bigger amount than that.”
Almost immediately I could hear the vacuum pump activating and re-inflating him.
Now he was sure he had hooked a whale, but tugging on his line was just the big bunch of crap I was giving him.
Then he told me what the investment was. Some pharmaceutical company that was about to go into orbit once a new drug they were working had been perfected and FDA approved and all that rigmarole.
If you don’t know about these things, firms like these who cold call hyping some obscure share or other are on a BIG percentage of the price they get. Could be as high as 75% in some cases. The shares are usually completely worthless and virtually unsaleable on the open market so if you are foolish enough to buy them you are stuck with them and the chances of the company coming good are millions to one. Better to buy a few lottery tickets.
So he could do me a great deal on these shares. They had been trading at up to 90 cents a few months ago (I presumed on IMDAQ, that’s the imaginary stock exchange) but his company had managed to secure some at a fraction of that price. If I were to invest say $50,000 I could get them at 30 cents.
Boy was I interested?
No, not in the slightest, but I didn’t tell him that.
What I said was something like, “Yeah that sounds okay, but for that level of investment is that really the best you could do. What if I could get a few friends interested and maybe raise $100,000? Could you sweeten the deal on your end?”
I got the feeling that this was the most exciting thing that had ever happened to this idiot. He could hardly contain himself.
He talked and he talked and he better talked.
Unsurprisingly he could sweeten the price a little for that level of investment and the price duly came down to 25 cents per share.
I wasn’t very impressed. I asked for a better deal.
This time he would have to consult his supervisor to see if he could get a better deal on the share price, so the line went dead for a couple of minutes (a well known sales ploy) and then back he came, 23 cents was the best he could do.
“So that’s 434,782 shares for the $100,000?” I asked. Our calculators agreed the number.
“It’s good,” I told him, “But for that sort of cash I would need at least half a million shares, probably more.”
“Let’s not play games,” he said, ready to make another counter offer.
“Why not?” I asked. “I like playing games.”
“You like playing games?” he asked, a little confused.
The penny was very close to the edge but it hadn’t quite dropped.
“Yeah, don’t you?” I answered happily. “This has been fun.”
…..You mean you’re NOT interested?”
“Well I did say up front that there were no guarantees,” I reminded him.
“But?…. Why did….? ….”
Sound of penny finally dropping.
Then, in a very high pitch girly kind of voice,
“You’re a f****** asshole!”
He was great fun. But, alas, he didn’t want to play any more because he never called again ;(