Google knows too much about you
Comments »(CNN) — If you use Google, and I know you do, you may have noticed a little banner popping up at the top of the page announcing: “We’re changing our privacy policy and terms.” It gives you the choice to “Learn More” or, another option, the one I’m betting most people followed, to “Dismiss.”
Who wants to read about what Google plans to do with all that information it has about us?
I, too, clicked “Dismiss.” That’s because the very idea of considering what Google knows about me can give me heartburn. And if that happens, I may want to Google “heartburn,” and then I’ll wonder if my insurance company will find out that I was searching “heartburn,” or, worse, that one day I will apply for a new insurance company and the side effects of having considered what Google knows will result in a denial of coverage. But I digress.
When Google announced its new policy, lovingly explaining its reason as “our desire to create one beautifully simple and intuitive experience across Google,” the authorities in Europe immediately told the Internet leviathan to put off its March 1 start date until European Union officials had a chance to review Google’s new quest for beauty and simplicity.
Europeans, it turns out, are much less trusting of invasions of our electronic privacy than Americans are. Americans have an intense aversion to government intrusion. If the FBI wanted to examine Google searches, the left and the right would come together — the ACLU, Tea Party, liberals and libertarians would raise their fists together to fight for freedom of privacy. The Supreme Court would join in, as it did in the case of GPS surveillance, and conclude the people have a right to privacy, a right against any “unreasonable search,” as the Constitution says.
But in the case of Google’s latest move to consolidate user’s data, however, most Americans paid little attention.
Is the Bull Market Just Beginning or Long in the Tooth ?
Buffett: Bonds Among Most Dangerous Assets on Inflation Risk
Art Cashin Points Out Insiders are Dumping Stocks in Massive Quantities
Warren Buffet Explains Why Equities are a Better Choice Than Gold
U.S. Equity Preview: V, TQNT, SCSS, PRU, GRPN, DMND, & CSCO
Cisco Systems Inc. (CSCO) : The biggest maker of networking equipment reported profit and sales that exceeded analysts’ estimates, signaling that corporate-network revenue helped make up for slower spending by phone and cable companies.
Diamond Foods Inc. (DMND) : The snack maker said it will restate earnings for the past two years and replace its chief executive officer and chief financial officer after an internal probe found the company booked payments to walnut growers in the wrong periods.
Groupon Inc. (GRPN) (GRPN US): The largest daily-deal site had an unexpected fourth-quarter loss after an expansion into lower- margin businesses sapped profitability during its first period as a publicly traded company.
Prudential Financial Inc. (PRU) : The life insurer that expanded in Japan through acquisitions said fourth-quarter profit more than tripled and beat analyst projections on non- U.S. earnings and narrower losses from investments and derivatives.
Select Comfort Corp. (SCSS) : The maker of air bed mattresses posted fourth-quarter earnings excluding some items of 24 cents a share, exceeding the average analyst estimate for 22 cents, data compiled by Bloomberg show.
TriQuint Semiconductor Inc. (TQNT) : The chipmaker forecast first-quarter excluding some items earnings of 1 cent to 3 cents a share, compared with the average analyst estimate of 3 cents, data compiled by Bloomberg show.
Visa Inc. (V) : The world’s biggest payments network said fiscal first-quarter profit climbed 16 percent, exceeding analyst projections, as consumers increased use of credit and debit cards.
Comments »Gapping Up and Down This Morning
Gapping up
SPRT +13.7%, AKAM +13.2%, STXS +12%, UHAL +7.2%, ENS +6.8%, SCSS +6.7%, THOR +6.3%, V +3.4%, ANDE +3.4%, MTGE +3.3%, FMC +3%, ONNN +1.3%,
Gapping down
DMND -42.7%, IRBT -21.7%, PZZI -21.6%, GRPN -14.6%, ARRY -12.2%, APRI -11.8%, PSDV -11.3%, USAT -9.9%, TRIP -9.7%, BGC -9.2%, VLNC -7.7%, AFFX -6%,
TQNT -5.8%, LODE -5.1%, DVOX -5%, KRC -3.7%, CS -3.4%, RIO -2%, ZNGA -1.4%, ERIC -1.3%, WFM -1.2%,
Comments »In Play and On the Wires
Canadian Bankers Get the Last Laugh
BlackRock’s Fink: Investors Should be 100% in Equities
Investors should have 100 percent of investments in equities because of valuations and higher returns than bonds, said Laurence D. Fink, chief executive officer of BlackRock Inc. (BLK), the world’s largest money manager.
Investors who seek the safety of treasury bonds will have minimal returns and will not be able to meet their needs with the U.S. Federal Reserve expected to keep interest rates low, said Fink, who in 1988 co-founded the New York-based manager with $3.5 trillion of assets. By contrast, equities are trading at the lowest valuations in 20 or 30 years.
“I don’t have a view that the world is going to fall apart, so you need to take on more risk,” he said in an interview with Bloomberg Television in Hong Kong today. “You need to overcome all this noise. When you look at dividend returns on equities versus bond yields, to me it’s a pretty easy decision to be heavily in equities.”
Read the rest here.
Comments »Why has GOP turnout been so bad?
Comments »(CNN) — Beneath Rick Santorum’s stunning three-state sweep on Tuesday stands another stubborn sign of dissatisfaction with the status quo: Republican turnout is down.
I’m talking embarrassingly, disturbingly, hey-don’t-you-know-it’s-an-election-year bad. It is a sign of a serious enthusiasm gap among the rank and file, and a particularly bad omen for Mitt Romney and the GOP in the general election.
Here’s the tale of the tape, state by state, beginning with Tuesday night: Minnesota had just more than 47,000 people turn out for its caucuses this year — four years ago it was nearly 63,000 — and Romney came in first, not a distant third as he did Tuesday night. In Colorado, more than 70,000 people turned out for its caucus in 2008 — but in 2012 it was 65,000. And Missouri — even making a generous discount for the fact that this was an entirely symbolic contest — had 232,000 people turn out, less than half the number who did four years ago.
Even with months of pre-primary hype and attention solely devoted to the Republican field, turnout in this election cycle essentially flat-lined. In Iowa, a little more than 121,000 people voted, compared with nearly 119,000 four years before, when action in the Democratic caucuses absorbed most of the attention.
John AvlonIn New Hampshire, the same dynamic applied — 245,000 voters turned out in 2012, compared with 241,000 four years before, despite Republicans being the only game in town and independents making up 47% of the total turnout in 2012, according to CNN exit polls. Take out the independent voters and you’ve got a deep net decline.
Always proudly rebellious, South Carolina has been the great outlier in this election cycle. With Newt Gingrich making an all-out push for conservatives in a conservative state, turnout was up almost 150,000 over four years before.
But in Florida, the decline became unmistakable. Maybe it decreased because the Romney and Gingrich campaigns, plus super PACS, spent more than $18 million in the Sunshine State on TV ads, of which 93% were negative in the last week alone, according to the Campaign Media Analysis Group. After all, negative ads depress turnout. But after all the mud was thrown, 1.6 million people turned out in the nation’s fourth largest state, which might sound impressive until you compare it with the nearly 2 million who turned out in 2008.
Nevada was even worse, with 32,894 people turning out to vote in a state with more than 465,000 registered Republicans. Four years before, more than 44,300 participated in the caucus. Turnout was down more than 25% despite the GOP caucuses being the only game in town. Party officials were expecting a turnout of more than 70,000.
Santorum trifecta shakes up GOP race All this should be a wake-up call for the GOP. Despite an enormous amount of national media attention devoted to each of the states to date, the response has been a notable yawn among the Republican rank and file.
The turnout numbers are even worse when you compare them with the number of registered Republicans in each state that has voted to date.
The caucuses in particular bring out an unrepresentative sample of a state’s Republican Party. For all the grass-roots romanticism, there has got to be a better way to pick a presidential nominee.
But the news is worst for Romney, long the presumptive front-runner in a party that tends to reward the man next in line.
“Reluctantly Romney” could be a bumper sticker, even for his supporters. The former Massachusetts governor has found it difficult to climb above 35% in national polls, meaning that a majority of Republicans still support someone else in a notably weak field. His vote margins and totals lag behind those of four years before, when he lost the nomination to John McCain in a crowded and comparatively competent field, although Minnesota is the first state he won in ’08 and lost in 2012.
You reap what you sow, and part of the reason turnout is down is directly related to the problem of polarization. The Republican Party is more ideologically polarized than at any time in recent history. Therefore, it put up more purely right-wing candidates than it did four years before, when center-right leaders such as McCain and Rudy Giuliani were also in the race. A bigger tent inspired bigger turnout.
But the other reason is simple dissatisfaction with the candidates.
Republicans seem united in their anger against the president — like the Democrats in 2004 — but they are uninspired by their options. Draft movements for fantasy candidates ranging from Chris Christie to Mitch Daniels to Paul Ryan and even Jeb Bush have started and failed. Some party leaders show more enthusiasm for a hypothetical 2016 crop of candidates, including Marco Rubio and Bobby Jindal, than they do for the flawed choices before them in this election. Divided and dispirited is an odd place for the Republican Party to be so soon after the enthusiasms of the 2010 tea party-driven election.
The bottom line is that voter turnout matters. And what should be most troubling for Republicans is that this enthusiasm gap among the conservative base is accompanied by a lack of candidates who might appeal to independents and centrist swing voters in the general election. It is a double barrel of bad news for the Republican Party. The numbers can be spun and rationalized by professional partisan operatives all day long, but the fact remains — voters just aren’t turning out to cast their votes for this crop of conservative candidates in 2012.
Has Wallstreet lost its mojo?
Read here:
Comments »Is Wall Street over? Done?
In the months since the Great Panic of 2008, investors, regulators, politicians, and the culture at large have given Wall Street banks a series of kicks to the groin. And while the stock market may have recovered some of its lost swagger, the Wall Street investment banks haven’t. That’s the thesis of Gabriel Sherman’s New York cover story, “The Emasculation of Wall Street.”
And he’s right — to a large degree. Surveying a world in which structured products have disappeared, new capital standards have reduced the ability to take on leverage, regulations have prohibited once-profitable practices like proprietary trading, Sherman concludes that Wall Street is “afflicted by a crisis it would not be flip to call existential.” Indeed, the widely documented decline of bonuses — combined with the high cost of living — has many bankers wondering what the point of the whole thing is.
As we discuss in the accompanying video, this delayed reaction has been a long time coming. Any time a sector blows up and inflicts damage on the economy, its financial and cultural footprint shrinks. The dotcom sector quickly went from massive hero to much smaller goat in 2000 and 2001. But Wall Street was spared a good deal of the pain associated with popped bubbles because the taxpayers and the Federal Reserve rushed to their aid. Ironically, investment bankers and traders were among the biggest short-term beneficiaries of the emergency efforts that reflated credit and stock markets in 2009 and 2010.
But time has been less kind to the bankers. And the Occupy Wall Street movement is the least of its problems. Turmoil in Europe and volatility has helped tamp down the pace of trading and dealmaking. The businesses of mortgages and their associated products, which fueled so much growth and easy profits in the past decade, have dwindled and are unlikely to return. “Certain products are gone forever,” J.P. Morgan Chase CEO Jamie Dimon told Sherman. “Fancy derivatives are gone forever. Prop trading is gone. There’s less leverage everywhere.” Dodd-Frank forbids banks from risking depositors’ capital on proprietary trading. The low-yield environment makes it tough to generate returns. And so banks are left with the boring, lower-margin, lower-octane of making commercial lines, advising big companies, and managing assets. All that translates into lower profits, less risk, and, worst of all, smaller bonuses.
It would be premature to write Wall Street off completely. Over the past 30 years, investment banks and financial players have shown an ability to transition, almost seamlessly, from one boom to the next — bond-trading in the 1980s, dotcom and telecom stocks in the 1990s, mortgage-backed securities in the 2000s. The industry has generally viewed regulations as obstacles to skirt through fancy maneuvering, or to tear down through lobbying. There’s always a bull market somewhere, as the saying goes.
Of course, when the next boom does come, Wall Streeters are going to find it more difficult to cash in on it. For while the industry has felt its share of pain from Washington, there’s likely more to come. Low tax rates on capital gains, dividends, and massive bonuses are likely to rise in coming years. Mitt Romney’s presidential run has brought heightened focuses to one of Wall Street’s most absurd advantages — the carried interest rule, which applies long-term capital gain tax rates to money private equity firms earn for managing other people’s money. The Masters of the Universe, who were held aloft by cheap money and favorable regulation, are increasingly floating back to earth. As Sherman writes, “The system is being designed so that Wall Street grows as fast as Main Street.”
That may be a bad thing for young Wall Streeters with visions of private jets — and for the real estate brokers and restaurateurs who cater to them. But it’s not a bad thing for the rest of us, or the economy at large.
The STOCK Act: It’s a start
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Comments »You would think members of Congress would realize, on their own, that trading stocks based on inside political information they may possess is wrong. But it turns out they may indeed need a law to telll them so. Ever since 60 Minutes exposed the ways in which some lawmakers, and their staffers, have profited based on privileged insider knowledge, the public has clamored for action.
President Obama heeded those cries in his State of the Union Address in January.
“I’ve talked tonight about the deficit of trust between Main Street and Wall Street. But the divide between this city and the rest of the country is at least as bad — and it seems to get worse every year,” Obama said. “Send me a bill that bans insider trading by Members of Congress, and I will sign it tomorrow. Let’s limit any elected official from owning stocks in industries they impact. Let’s make sure people who bundle campaign contributions for Congress can’t lobby Congress, and vice versa — an idea that has bipartisan support, at least outside of Washington.”
Earmarks are another prime example of how politicians can wield their influence for personal gain. The Washington Post on Tuesday published the results of a comprehensive investigation into pork-barrel spending on infrastructure projects that conveniently took place close to property that Congressional members own.
“Thirty-three members of Congress have directed more than $300 million in earmarks and other spending provisions to dozens of public projects that are next to or within about two miles of the lawmakers’ own property,” reports the Washington Post.
The STOCK Act
In a rare example of Congress responding with alacrity to a call from the president, the Stop Trading on Congressional Knowledge (STOCK) Act has been moving its way quickly through Congress. The Senate passed the bill in a sweeping 96 to 3 bipartisan vote last Thursday. The House is working to take up the legislation this week but has pledged to strengthen the version passed by the Senate.
“Members of Congress want to keep their jobs, so that is why I think the vote was so lop-sided,” says Peter Schweizer, author of Throw Them All Out who was featured in the CBS 60 Minutes interview. He joined The Daily Ticker’s Daniel Gross to discuss the bill, which “by no means is perfect.”
In its current form the Senate’s version of law does the following:
#1 Makes insider trading illegal: “It says that it is a federal crime to use congressional inside information to trade on stocks to gain an informational advantage,” says Schweizer, a fellow at the Hoover Institution. “There would be penalties for that for congressmen but also for their staff members.”
#2 Changes financial reporting requirement: “Right now they only have to report their finances — that is their assets and their trades — once a year and they only do it on paper,” he says. “The STOCK Act says they now need to report every 90 days, rather than just once a year.”
#3 Regulates political intelligence: “It would regulate the people who collect political intelligence” and then sell it to the financial community, says Schwiezer.
The three regulations above have Washington spinning, but the last point has caused the most uproar from political insiders. The provision introduced by Sen. Chuck Grassley (R-Iowa) would require those who collect political intelligence to register in a similar manner as lobbyists.
But the bill overlooks several items Schweizer believes are necessary. “It does not deal with options trading, it does not deal with members of Congress who get these sweetheart IPO deals and it doesn’t deal with land deals and other forms of enrichment,” says Schweizer. It is hard to know how pervasive this issue is “but [the bill] is a first-step forward and I think there are other steps we need to take to make sure this practice ends completely.”
Can Groupon handle margin compression?
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Comments »In his Twitter photo, Groupon CEO Andrew Mason is on the floor, in pajamas, looking like a giddy five-year-old on Christmas. Yet his accomplishments are anything but juvenile. He has built a 10,000-person organization operating in 45 countries that is expected to have 2011 revenue of roughly $1.6 billion. And he has done it all since October 2008.
For the fourth quarter, to be reported on Wednesday, analysts expect sales of $473 million, up nearly threefold from a year ago. Still, as Mr. Mason leads his first earnings call, the hard work may just be starting for the newly public company. Groupon has to prove its business isn’t just a fad and, as important, that it can make money. Otherwise, its $15 billion market value makes little sense.
Slowing revenue growth is a potential concern. Groupon chopped marketing costs in the third quarter. While that got the company closer to profitability, it may have been a reason sales growth versus the prior quarter slowed to 10%. Analysts expect Groupon maintained that pace in the fourth quarter. A related worry is churn. Groupon doesn’t disclose how frequently users are clicking “unsubscribe” on its emails. As users drop off, it gets harder to replace them with new subscribers, especially given how large Groupon has already become. Groupon has done well to launch new products to existing subscribers. In addition to the core business of spa and restaurant coupons, product and travel deals appear to be growing nicely. But the share of revenue Groupon gets to keep—its “take rate”—is lower than with the core business. Another new product—instant deals delivered to users based on their location—is one Groupon has touted as distinguishing it from smaller rivals. But it isn’t clear instant deals are catching on.
Rival LivingSocial may be pressuring margins. The private company’s 2011 financial results were outed in the annual financial filing of an investor, Amazon.com, showing $245 million in revenue. A person familiar with the matter says LivingSocial did about $750 million in gross billings. That translates to a 33% take-rate, undercutting the 37% Groupon reported last quarter, itself down from 44% at beginning of the year. Add it up, and Mr. Mason still has to convince investors Groupon can handle any growing pains.
Is Facebook Cooking Visitation Numbers ?
David Stockman: Obama Mortgage Refinance Plan is Crony Socialism
What Would Replace the Fed if it Were to Be Abolished
Will the Fed Buy More Mortgage Bonds ?
AIR MARSHALS GONE WILD! Tales Of Sexism, Suicide and Bigotry
Managers at the Federal Air Marshal Service regularly made fun of blacks, Latinos and gays, took taxpayer-paid trips to visit families and vacation spots, and acted like a “bunch of school kid punks,” current and former air marshals tell ABC News.
One supervisor was even photographed in 2006 asleep on a flight, carrying a loaded pistol, the air marshals said.
In interviews to be broadcast tonight on “World News with Diane Sawyer” and “Nightline,” the air marshals describe a culture of incompetence, bigotry and sexism on the part of senior managers at some offices that has endured for the last decade and raises questions about the professionalism and performance of the force entrusted with preventing acts of in-flight terrorism.
“Sooner or later, if you do not have people operating at their peak efficiency, then you take the risk that a terrorist is going to get away with his dirty deed,” said Sen. Bill Nelson, D.-Florida, who asked for an inspector general’s investigation of the allegations made by current and former air marshals two years ago.
“The culture is, hate African Americans, hate females, go after gays and lesbians cause we don’t like the way they think,” said former air marshal Steve Theodoropoulos.
It was Theodoropoulos, working in the Orlando air marshal office, who provided a photograph to reporters in 2010 of a “distorted air marshal Jeopardy game board” with classifications that were racial slurs aimed at minority and gay air marshals.
“Category pickle smokers was directly aimed at gay males,” he said of the board, which he discovered in a training room at the air marshal office in Orlando. The air marshals say it was removed in 2009.
Other categories included “Our Gang” for African-Americans, “Geraldo Rivera” for Latinos, and “Ellen DeGeneres” for gay female air marshals.
One of the five women listed on the board later tried to commit suicide, according to Theodoropoulos and other air marshals familiar with the case.
Air marshals who were military veterans were listed as “Operators” because they were often called away for training and perceived to be shirking their flight assignments.
“Anybody that’s not like them, they’re against,” said Theodoropoulos. “I mean, how do you operate under those conditions?”
Sen. Nelson says the attitude calls into question the judgments and training of air marshals involved in the incident.
“This behavior went well over the line,” said Sen. Nelson. “This is unprofessional, this is unacceptable and it should have been corrected two years ago when I first reported it to the Inspector General.”
The Inspector General’s report is scheduled to be made public on Thursday, but according to an advance copy obtained by ABC News, the investigation found “a great deal of tension, mistrust and dislike between non-supervisory and supervisory personnel in field offices around the country.”
READ: Excerpts From DHS Inspector General’s Investigation Into Air Marshal Allegations (PDF)
The report, which was triggered by a CNN broadcast about the Jeopardy board in 2010, concludes that the allegations, perceived and real, “posed a difficult challenge for the agency” but, according to a survey of air marshals, “do not appear to have compromised the service’s mission.”
The survey found that 76 per cent of air marshals asked said “people they work with cooperate to get the job done.”
But the Inspector General also warned that”these allegations add unnecessary distraction at all levels at a time when mission tempo is high and many in the agency are becoming increasingly concerned about workforce burnout and fatigue.”
Security ‘Not Compromised’ By Air Marshals
John Pistole, who oversees the air marshals as head of the Transportation Security Administration, said security had not been compromised by the behavior of some air marshals. “Absolutely not,” Pistole told ABC News Tuesday. “The national security mission is always paramount.”
“TSA took a proactive approach to the issues raised and has developed and implemented solutions ahead of the conclusion of the investigation,” said the TSA in a statement to ABC News.
But some members of Congress questioned the report’s conclusion that the mission was not compromised. The Inspector General’s report also failed to fully investigate many of the more damning allegations made against air marshal manager.
“Our review does not support a finding of widespread discrimination and retaliation” within the Federal Air Marshal Service, the report said.
Other air marshals, still working undercover on flights and unable to reveal their names publicly, alleged that managers regularly scheduled themselves on flights so they could visit family or vacation spots.
In one example, the air marshals provided a photograph of a manager who arranged to fly to Brussels at Christmas time, and then jumped a fence to sit next to the Baby Jesus in a nativity crèche in the city’s main square.
Former federal air marshal Theodoropoulos has had his own issues, stemming from an altercation with a bartender that led to his dismissal from the air marshals after a 20-year career in law enforcement.
He and his union say the government used a relatively minor incident as a way to get rid of a whistleblower and send a message to other air marshals to keep quiet.
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