Yields for Italy, Spain, France, and Germany …
Comments »
Monthly Archives: January 2013
Is $AAPL the Next $MSFT ?
“The history of the stock market has pretty convincingly proven that “what goes up, must come down.”
When it comes to hyper-growth technology companies, this is particularly true. At the very least, most of these stocks hit an incredible peak before pulling back and consolidating for years. Some of these companies, such as IBM (NYSE: IBM [FREE Stock Trend Analysis]), subsequently enter another growth phase where investors are once again rewarded by an appreciating stock price.
Most of the world’s iconic companies, however, have been incapable of replicating their early staggering returns on a year-to-year basis. No matter how great the business, these stocks tend to go through an incredible period of appreciation during the company’s growth phase and then settle into uneventful trading ranges as the company matures.
This scenario is most often reserved for the truly exceptional companies. Many other former high-fliers have seen their stock prices fall precipitously from once lofty perches.
Examples of this phenomenon in technology include Intel (NASDAQ: INTC) and Microsoft (NASDAQ: MSFT), which have settled into trading ranges, and Dell (NASDAQ: DELL) and Hewlett-Packard (NYSE: HPQ), which have seen their stock prices plunge. Today’s technology high-fliers almost assuredly await a similar fate, although it is almost impossible to call a top and predict exactly when it will happen.
The chances of stocks such as Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) going up in perpetuity, however, are slim.
The chart below plots the return history of Apple versus Microsoft. If nothing else, the current correlation between the two stocks is eerie (if you are long Apple). The chart begs the question, have we seen a top in Apple, and is the company the next Microsoft?
The question that investors should ask themselves in order to attempt to answer the preceding question is can Apple continue to innovate and create new markets? Microsoft’s growth phase was driven by the rapid adoption of Windows and Office within the context of the exploding PC market. Similarly, Apple’s growth has been driven by the rapid adoption of iPhone and iPad within the context of the exploding mobile market….”
Comments »Anonymous Threatens Massive WikiLeaks-Style Exposure, Announced On Hacked Gov Site
“Hacktivist organization, Anonymous, is threatening perhaps their biggest play ever: a massive WikiLeaks-style exposure of sensitive U.S. government secrets. As proof of their power, they announced details of the plan on hacked government website, the United States Sentencing Commission (USSC.gov). Citing the recent death of free information activist Aaron Swartz, they explain, “With Aaron’s death we can wait no longer. The time has come to show the United States Department of Justice and its affiliates the true meaning of infiltration.”
Swartz was facing up to 50+ years in prison and a $4 million fine after releasing pay-walled academic articles from the popular JSTOR database. Some legal scholars have argued that releasing copyrighted material, or breaking the “terms of service” of a website, should not carry such harsh penalties. Anonymous is demanding that legislation be passed to no longer consider such violations a felony–a law that Congresswoman Zoe Lofgren (CrunchGov Grade: A) has already introduced.
If legal reforms are not enacted, Anonymous has threatened to activate files containing embarrassing or incriminating secrets….”
Comments »James Altucher: America Has Hit “Peak Jobs”
” “The middle class is being hollowed out,” says James Altucher. “Economists are shifting their attention toward a […] crisis in the United States: the significant increase in income inequality,” reports the New York Times.
Think all those job losses over the last five years were just caused by the recession? No: “Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market,” according to an AP report on how technology is killing middle-class jobs.
When I was growing up in Canada, I was taught that income distribution should and did look like a bell curve, with the middle class being the bulge in the middle. Oh, how naïve my teachers were. This is how income distribution looks in America today:
That big bulge up above? It’s moving up and to the left. America is well on the way towards having a small, highly skilled and/or highly fortunate elite, with lucrative jobs; a vast underclass with casual, occasional, minimum-wage service work, if they’re lucky; and very little in between….”
Comments »Marc Faber: “Markets Will Punish Interventionists”
” “Regardless of what the markets do near-term, a correction is overdue,” Marc Faber tells Bloomberg TV’s Betty Liu. From discussing Europe’s ‘apparent’ stabilization – “anything can go up when you print money”; to US equity exuberance – “a correction is overdue and February is a seasonally weak month”; Faber sees no change from Geithner’s handover to Lew as he opines: “The only thing I know is one day the markets will punish the interventionists, the Keynesians and the monetary policy that the Federal Reserve and ECB has enforced because the markets will be more powerful one day. How will this look like? Will the bond market collapse or equity markets become a bubble, which would beembarrassing for the Fed’s sake if the U.S. market became a gigantic bubble and at the same time the economy does not recover.” ”
Comments »Draghi & Monti Implicated in Italian Bank Scandal, Veneer of Recovery Could Crack
“While little has been said in the mainstream western press about the ongoing fiasco surrounding Siena’s Banca Monte dei Pasci, Italy’s third largest bank and the world’s oldest which may get its third bailout in three years – or even be nationalized – as soon as today, for fears that it may break the thin veneer of “recovery” in the European financial system, the situation on the ground in Italy is getting more serious by the minute, and will have implications on both next month’s general election, on Mario Monti, on Silvio Berlusconi, on frontrunner for the Prime Minister post Pier Luigi Bersani, and reach as far up as the head of the ECB – Mario Draghi.
Several hours ago, on Saturday morning, the four-member board of the Bank of Italy – this time without its prior president Mario Draghi – met to consider the position of scandal-hit bank Monte dei Paschi di Siena and decide whether to authorize its request for 3.9 billion euros ($5.3 billion) of state loans.
As we reported previously, it has emerged over the past week that due to previously undisclosed derivative contracts first exposed by Bloomberg, the Siena bank has hid as much as $1 billion in losses. However as was explained in “Will The Super Goldman Mario Brothers Succeed In Covering Up The Latest Italian Bailout Scandal“, this discovery has far greater implications for both the bank’s future viability, as well as the implied credibility of both the Bank of Italy, and especially the man who headed it for five years before becoming head of the ECB (where he now demands the same supervisory authority over all European banks that he had in Italy, only to supposedly let countless derivative fiascos slip through his fingers).
As Zero Hedge first connected the dots, it is not so much a question of why BMPS engaged in a variety of derivative deals, of which only three have emerged so far and likely has many more on the books, but how or rather why, the then-Draghi led Bank of Italy allowed this to happen not once, not twice, but at least three times….”
Comments »$BLK Would Like to Buy $80m Worth of Twitter Valuing the company at $9b
Investment-management giant BlackRock Inc. BLK +0.04% has offered to buy around $80 million of Twitter Inc. stock in a transaction that would value the short-messaging service at more than $9 billion, according to people familiar with the deal.
Some of the people said BlackRock’s offer is to purchase Twitter stock from some of the company’s early employees, and perhaps from others.
Twitter wouldn’t make any money from the transaction. If completed, the stock sale would bump up the San Francisco company’s valuation from the $8.4 billion that stemmed from 2011 stock purchases by private investors.
One the people familiar with transaction said BlackRock is offering to buy shares at about $17 each, compared with the 2011 stock sales at $16.09 each.
The Financial Times earlier reported news of BlackRock’s offer for Twitter shares.
The transaction spotlight’s Twitter’s growth and amps up pressure on the company to justify a rich valuation before it goes public in a year or so.
Twitter in the last two years has built an advertising business from essentially nonexistent to an estimated $288.3 million in 2012 advertising revenue, according to research firm eMarketer Inc.
The BlackRock investment also is likely to fuel questions about whether rich valuations for young companies can pay off with even richer IPOs, sales or stock-market appreciations down the road. The worries have been fueled by limp stock market debuts, such as those of Facebook Inc. FB +1.48% and Zynga Inc.,ZNGA +0.81% whose stock price have dropped by 17% and 75%, respectively, since their IPOs.
Since Twitter launched nearly seven years ago, the company has raised more than $1 billion from investors including Union Square Ventures, Benchmark Capital, Spark Capital and Charles River Ventures. Twitter Chief Executive Dick Costolo has said the company has plenty of money and doesn’t need to raise more by selling stock….”
Comments »State of the Union: Economy Feeds on Workers Who Delay Retirement
“Retirement is becoming a more distant dream for a rising number of older Americans, largely because they need the money but also because they are healthy enough to keep working.
The share of Americans 65 and older in the labor force went from 12.1 percent in 1990 to 16.1 percent in 2010, and the increase was larger for women, according to new analysis of Census data released Thursday.
“As with all age groups, the increase in labor force participation of women has been a driving factor for this overall trend,” said Braedyn Kromer, an analyst in the Census Bureau’s Labor Force Statistics Branch.
The percentage of 65-plus women who are working jumped more than 4 percentage points to 12.5 percent. Men in the same category rose 3.2 percentage points to 20.8 percent. For workers younger than 65, women increased 1.9 percentage points to 69.8 percent, while younger men’s participation dropped 5.2 points to 78.2 percent.
“The data reflect a national economy relying increasingly on older Americans — especially women — working part time,” says retired RAND Corp. demographer Peter Morrison….”
Comments »
Key Earnings To Watch Net Week
“Earnings season is shifting into high gear in the final week of January, with six Dow Jones components, and more than a fifth of the S&P 500 companies reporting. With the Dow rallying to its highest level since October 2007 and the S&P hitting 1,500, expectations are building for a range of industries to reveal a strengthening economy.
We’ll hear from a number of industrials, including Caterpillar Monday morning andBoeing before the bell Wednesday. With so much focus on the Dreamliner debacle, investors will hope to hear more guidance on how it’ll impact the company’s bottom line. And Caterpillar will be watched as a bellwether for the global economy.
(Read More: Whistleblower Says Dreamliner Batteries Could ‘Explode’.)
Internet companies will be in focus with Facebook reporting its fourth quarter results after the bell Wednesday. With the stock making dramatic gains on various new monetization efforts, Wall Street’s waiting to see whether the company will live up to heightened expectations.
When Yahoo reports after the bell Monday we’ll hear what kind of progress CEO Marissa Mayer is making in her brief tenure. While Facebook and Yahoo reveal what’s happening with online advertising, we’ll get a peek into the TV advertising market when Viacom reports Thursday morning.
When Amazon reports after the bell Tuesday we’ll see how well its Kindle lineup sold over the all-important holiday season. On the component side, we’ll hear fromVMWare Monday afternoon, EMC Tuesday morning, and Qualcomm Wednesday afternoon….”
Comments »Why Worst Not Over for Europe
“Bank of Canada Governor Mark Carneywarned on Saturday against an emerging consensus among delegates at the World Economic Forum in Davos that the worst of the euro zone debt crisis was over.
Carney said that tail risks — an unlikely event which could prompt a market sell off — are “still out there.”
“I got here on Thursday midday and at that point the discussion was that the tail risks had been reduced. Sometime by last evening that became: tail risks have been eliminated,” he said.
Central banks alone cannot remove risk, said Carney , who takes over as governor of the Bank of England this summer.
“It’s not just about central bank action. Central bank action (is) absolutely important. The LTRO (long term refinancing operations) and then the OMTs (outright monetary transactions) by the ECB (European Central Bank) (is) crucial, but not decisive,” Carney said.
The key focus for monetary policy now, Carney argued, should center on achieving “escape velocity” — or getting the major economies to take off.
He said action by the ECB had been reinforced by measures at the national level, both on the fiscal side within Europe and on the structural side. “Clearly neither of those agendas are anywhere close to being finished,” he said.
The situation in the United States was similar, he said. The extraordinary actions of the Federal Reserve had been “crucial but not absolutely decisive.” “
Comments »Could You Imagine a World Economy Where 50% of the People Do Not Work?
“WASHINGTON (AP) — They seem right out of a Hollywood fantasy, and they are: Cars that drive themselves have appeared in movies like “I, Robot” and the television show “Knight Rider.”
Now, three years after Google invented one, automated cars could be on their way to a freeway near you. In the U.S., California and other states are rewriting the rules of the road to make way for driverless cars. Just one problem: What happens to the millions of people who make a living driving cars and trucks — jobs that always have seemed sheltered from the onslaught of technology?
“All those jobs are going to disappear in the next 25 years,” predicts Moshe Vardi, a computer scientist at Rice University in Houston. “Driving by people will look quaint; it will look like a horse and buggy.”
If automation can unseat bus drivers, urban deliverymen, long-haul truckers, even cabbies, is any job safe?
Vardi poses an equally scary question: “Are we prepared for an economy in which 50 percent of people aren’t working?”
___
EDITOR’S NOTE: Last in a three-part series on the loss of middle-class jobs in the wake of the Great Recession, and the role of technology.
___
An Associated Press analysis of employment data from 20 countries found that millions of midskill, midpay jobs already have disappeared over the past five years, and they are the jobs that form the backbone of the middle class in developed countries.
That experience has left a growing number of technologists and economists wondering what lies ahead. Will middle-class jobs return when the global economy recovers, or are they lost forever because of the advance of technology? The answer may not be known for years, perhaps decades. Experts argue among themselves whether the job market will recover, muddle along or get much worse.
To understand their arguments, it helps to understand the past.
Every time a transformative invention took hold over the past two centuries — whether the steamboat in the 1820s or the locomotive in the 1850s or the telegraph or the telephone — businesses would disappear and workers would lose jobs. But new businesses would emerge that employed even more.
The combustion engine decimated makers of horse-drawn carriages, saddles, buggy whips and other occupations that depended on the horse trade. But it also resulted in huge auto plants that employed hundreds of thousands of workers, who were paid enough to help create a prosperous middle class.
“What has always been true is that technology has destroyed jobs but also always created jobs,” says Nobel Prize-winning economist Joseph Stiglitz of Columbia University. “You know the old story we tell about (how) the car destroyed blacksmiths and created the auto industry.”
The astounding capabilities of computer technology are forcing some mainstream economists to rethink the conventional wisdom about the economic benefits of technology, however. For the first time, we are seeing machines that can think — or something close to it…”
Comments »Japan Defends Stimulus Policies Against IMF Criticism
“DAVOS, Switzerland (Reuters) – Japan’s economy minister rejected criticism on Saturday that his country’s extraordinary fiscal and monetary stimulus program was aimed at weakening the yen and undermined central bank independence.
Akira Amari told the World Economic Forum in Davos it was up to the market to determine the currency’s exchange rate, and theBank of Japan had chosen independently to sign a joint statement with the government on actions to fight deflation and revive economic growth.
“You might think there’s a deliberate policy to drive down the value of the yen but we in government refrain from commenting on the exchange rate of the yen,” Amari said in response to criticism of Japanese action.
South Korea’s central bank governor questioned the efficacy of Japan’s easing of monetary policy and said the BOJ’s decision to start buying unlimited amounts of assets in 2014 could have unintended long-term consequences.
“What they did created a couple of problems,” Bank of Korea Governor Kim Chong-soo told Reuters in an interview in Davos. “One is that the level (of the currency) is affected, and the pace of change is also a problem. They did it too hastily.”
A stable exchange rate is key for the Bank of Korea, Kim added.
The yen has come under pressure since reports on Thursday quoted deputy economy minister Yasutoshi Nishimura as saying the yen’s decline was not over, and that a dollar/yen level of 100 would not be a concern.
The Japanese currency is now trading around a 2-1/2 year low against the dollar at around 90 yen, as the market remained focused on Japan’s pursuit of a reflationary economic policy.
BREAK CYCLE OF DEFLATION
Amari said the government and the BOJ had agreed on exceptional measures because Japan had to break a prolonged cycle of deflation and economic contraction.
Appearing on the same panel, International Monetary Fund Managing Director Christine Lagarde refrained from direct criticism but urged Japan to put forward a medium-term plan to reduce its public debt after this week’s measures.
“Japan has made very important decisions. We are very interested in these policies. We would like them to complement it with a mid-term plan on how the debt would be reduced,” Lagarde said.
Japan’s debt stood at 235 percent of gross domestic product before new Prime Minister Shinzo Abe announced a new deficit-financed stimulus program this month. The BOJ said it was doubling its inflation target to 2 percent and would take new monetary stimulus measures….”
Comments »Who Won, Icahn versus Ackman? (Full Interview and Poll)
LIVE STREAM: ICAHN-ACKMAN BATTLE LIVE ON CNBC
Flash: Business Insider is Live Blogging Hedge Fund Wars, Starring Carl Icahn and Bill Ackman
Co starring Daniel Loeb.
Activist investor Bill Ackman, the founder of $12 billion Pershing Square Capital Management, is on CNBC now after rival Carl Icahn blasted him yesterday on Bloomberg TV.
We’re already into the segment, and Icahn is already calling in after the commercial break to respond to Ackman.
Yesterday, Icahn, who has publicly said before that he doesn’t like Ackman and has “no respect” for him, ripped into his “holier than thou” short on Herbalife in an interview with Trish Regan.
Icahn also called Ackman “disingenuous” and said he’s not shorting Herbalife “for the good of humanity.”
Ackman then fired back yesterday evening in a press release saying Icahn is a good investor, but he doesn’t keep his word.
Ackman tells CNBC he finds it interesting that Icahn thinks it’s a bad thing that he gave a short at a Ira Sohn event when Icahn also gave a short thesis in 2002 and 2003 at a Sohn Conference.
Ackman says that Herbalife has done harm to millions of people and it deserves scrutiny.
Click here to access live blogging
Documentary: Rise of the Drones
Cheers on your weekend!
Click here for the documentary
More on the subject….
[youtube://http://www.youtube.com/watch?v=msHJLwYWX30 450 300]Link for iPhone users: http://www.youtube.com/watch?v=msHJLwYWX30
Link for iPhone users: http://www.youtube.com/watch?v=WpYeekQkAdc
Comments »
Market Update
Elevator going up on a low volume slow grind scenario…
Link for iPhone users: http://www.youtube.com/watch?v=1SoXbXbh2Vc
Comments »
Gapping Up and Down This Morning
Upgrades and Downgrades This Morning
ATK, AMZN, AMCX, AMGN, AAPL, ADSK, EBAY, FLEX, JNS, ORCL, TIF, WPRT, GS, JPM, UBS,
Comments »
