Wednesday Worries – Ireland “Fixed” – Who’s Next?
Courtesy of Phil at Phil's Stock World
So many things are pissing me off today.
I got my political outrage out of the way in my earlier post: "Thanks for the Gas Money, Mr. President," so we don't need to talk about that again. Ireland, as of 7:45, has not actually voted to accept the EU's deal, which will pull $20,000 per Irish family directly from national pension funds to pay for the speculative mistakes of Irish Banks. Additionally, the Irish people are being asked to borrow another $75,000 per family from the EU at about 6% interest, also to pay for the speculative mistakes made by the Irish Banks. While this may seem insane - it's only a drop in the bucket compared to what Americans are spending to bail out our own speculators so why shouldn't they join the club?
At least Ireland gets to vote for their obligations, we have a Federal Reserve System where a single man, known as "The Bernank" is able to spend what is now heading towards $3.5Tn of OUR MONEY to bail out his banking buddies. That's $31,818 per American family spent over two years IN ADDITION to the stuff I complained about Obama and our spineless Government spending in the last post. As I said, things are pissing me off today! I should be in a better mood - we had a fabulous day trading in Member Chat yesterday. In yesterday's post, I closed with "One last stab at making some bearish profits for us (see Morning Alert)" and you can click on that Alert, which was posted on Seeking Alpha and check out our trade ideas for the $10,000 to $50,000 Portfolio which included (at 7:22 am yesterday) QID Jan $10 calls, which opened at $1.80 and finished at $2 (up 11%), DIA Dec $114 puts, which opened at .80 and finished at $1.33 (up 66%), XRT Jan $44 puts, which opened at .35 and finished at .55 (up 57%), USO Jan $36 puts, which opened at .66 and finished at .90 (up 36%), PCLN weekly $400 puts, which opened at $.50 and finished at $1.40 (up 180%) and NFLX Jan $155 puts, which opened at $1.70 and finished at $2.30 (up 35%) but should look much better this morning, where we will exit. Of course I featured the idea to short NFLX last Thursday in the Morning Post (which you would get at 8:30 every morning in progress if you subscribed!) and we talked about shorting oil in the Weekend Post and I mentioned XRT last week as well so it's not like these are even our "super-secret" trade ideas - this is just the stuff that looked obvious enough to risk our small portfolio plays on (as you don't want to take too much risk in a small portfolio, even when it is aggressive like our virtual $10,000 Portfolio). Once we got into Member Chat for the morning we went with more aggressive trade ideas like PCLN weekly $410 puts at $1.60, which finished the day at $4.20 (up 162%) and 6 other plays that we're not done with yet plus shorts on the oil futures at $90 that worked out very well. So why am I angry? You can't really have a better day than we had yesterday. Yesterday is the reason we have sat patiently (well kind of patiently) in cash for a month as we finally got an opportunity to commit to a whole bunch of very obvious trades, the most trade ideas I've had in a single day since early September, when we jumped on Uncle Ben's bullish bandwagon. Sure we find things to trade every day but these are the opportunities we wait for. I guess I'm pissed because we had to pull our December short plays off the table because the cartoon bears have warned us that they will be "Buying the F'ing Dips" and we know better than to argue with cartoon bears because it's simplistic little BS premises like that that rule this market. Ah, that's why I'm angry! As I keep saying, I don't enjoy day trading - it's not satisfying but it's what we do while we wait for real investment opportunities to come along. While it may be exciting to make 100% on a trade in a single day - it's small money and a tedious (and stressful) way to build up a portfolio. I suppose at heart, I'm a long-term investing coupon-clipper but those kind of investors are being chewed up and spit out in this market and, while we found many, many things to buy earlier in the year, now we're down to one or two long-term opportunities a day while most of the rest of the market looks better as a short. But you can't even stay short past the closing bell. Even as I write this post our paranoia in taking the money and running (our usual strategy) on our quick gains is looking justified as the dollar is, as usual, being shoved off it's overnight highs (used to prop up the Nikkei in our famous "3am Trade") during the slower EU lunch break in order to now goose the US futures to give US markets the best possible open on the least possible amount of volume (ergo cost to the Gang of 12). Despite debasement efforts by Obama and The Bernank yesterday, the dollar still rose back to 80.81 in overnight trading and that sent the Dow futures all the way down to 11,285 but don't despair - they've already been goosed back to 11,350 - just 5 points shy of yesterday's weak close. See, in a "normal" market we would have simply stayed short because clearly the momentum was down and the fundamentals indicate that all the efforts of Obama, The Bernank, the BOJ, the BOC, the ECB... are "too little, too late" to put the Humpty Dumpty global economy back together again. Some of the fundamentals we're watching: These are just TODAY'S headlines and they all add up to RISK. Lack of risk recognition by the markets was the primary reason I called for cash in early November. We are approaching 2008 pre-crash market highs with many stock trading higher than they were then on LESS revenues than they had at the time. Meanwhile, 10% of our population is unemployed, consumer credit is down by over $1,000,000,000 (15%), household wealth is down 20% and income is down while the CPI, even by BS Government measures, is up 5% since then, effectively giving those people who still have jobs 5% less to spend anyway. And when you consider that discretionary income is just 20% of income - if the 80% they HAVE to spend went up 5%, then that's 4% of discretionary income gone, which is 20% of discretionary income out the window - FOR THE PEOPLE WHO ARE STILL WORKING. The other 10% have ZERO to spend and that's not good either. All of this is being ignored as "investors" buy stocks on the hopes that they will expand sales internationally and keep cutting costs despite the same inflation the speculators are using to justify their very high valuations. We're effectively writing off the US economy and placing all of our bullish eggs in the global basket - even though they have 20% unemployment "over there." - that's kind of nuts, don't you think? I'm not even going to ask if the above chart (from Calculated Risk) disturbs you . Clearly, from the results of the last election, it does not. We are over 6M jobs away from recovery and we added less than 40,000 last month. At least in Ireland, their population is shrinking, with 65,500 people (1.5%) abandoning the sinking ship as of April of this year. That's less likely to happen in America as Mexico is not that attractive and Canada doesn't want us and most people can't afford to move anyway as they are upside down on their mortgages so we, as a people, sit and wait. We sit and wait for something good to happen. Any minute now... Something good is bound to happen... NOW! OK, maybe not now but really soon - something good has got to happen, right? That pretty much sums up our national policy - we don't actually do anything to create jobs but if we sprinkle enough magical fairy money on the rich, we're sure they'll start hiring people real soon! Maybe as soon as they are done merging and acquiring smaller companies with all that money where they then create efficiencies by laying off 50,000 people a month (Challenger Job Cut Report) while more and more jobs are outsourced every day ($6Tn worth of jobs are currently outsourced). And why not? There are huge tax advantages to outsourcing US jobs - tax advantages that our President is perpetuating as he bends over and accepts the massive Republican tax cuts for the wealthy on behalf of the American people. Did I mention I was pissed? Good, then moving along... So we kept our Jan shorts and didn't add any longs because we expect a bounce on the usual opening nonsense but I don't see enough dry powder left for the bulls to take us over that critical Dow 11,500 mark. Meanwhile, CAT is way too high and they are a Dow component, as are XOM, CVX, IBM and MCD - all stocks that are major components in the price-weighted Dow and are more likely to pull back than move higher. EU money printing will not inflate our stocks - it may even boost the Buck and that would be bad for commodities, who had a pretty rough day yesterday (and we shorted a few). I wish it were easier and I wish we could just say "CAT is overbought so we're going short" but the fundamentals of the stock are trumped by rumors of infinite Chinese demand and inflation expectations that somehow ignore the negative impact of rising steel prices and increasing borrowing costs on the company. Of course the weak-dollar expectations have everyone moving into stocks, which are just another form of commodity to trade and, even as I write this, the dollar is being jammed back below 80.50 to goose the US open. At least we know how this game is rigged and we can have lots of fun betting the suckers never do find that red queen but what a shame that this is what the global economy has been reduced to - a shell game - and it's an empty shell at that!
What to make of Bill Cohan’s big Vanity Fair piece on a slightly skeevy lawsuit where a pair of Democratic party operatives are trying to pull a Winklevoss on Arianna Huffington? Arianna’s flack, Mario Ruiz, is clearly enjoying being asked to comment on it:
It’s a great story — if you read it backwards. At the end of the article, the writer takes apart Boyce and Daou’s case piece by piece, leaving it in tatters — and rendering everything that has come before it pointless.
Meanwhile, the plaintiffs’ attorney seems much more well-disposed towards the story, despite the fact that — as Ruiz says — it’s almost impossible to read the whole thing and think that they have any case at all.
The question of who’s got the stronger moral and legal case is pretty clear, from Cohan’s reporting: it’s Arianna. As Jay Yarow says about the Winklevii, “ideas are a dime-a-dozen. It’s execution that counts. Mark Zuckerberg executed. The Winklevosses didn’t.” Similarly here: Peter Daou and James Boyce had an idea for a “liberal Drudge Report” in late 2004, at much the same time as about a million other people had exactly the same idea. (Even Gawker launched one such site, Sploid, in April 2005; it closed in August 2006.)
The idea was, as Larry David says in the piece, “terrible”: the site was to be called fourteensixty.com, after the number of days between presidential elections. It had hypocrisy baked in to its business plan:
www.fourteensixty.com will be a Democratic-leaning site with enough non-partisan news so as to appear more mainstream than it truly is; this is critical for credibility and for advertising revenue.
And rather than build one big site, the idea was to build lots of little ones, including (I’m not making this up) mamadonkey.com, “a blog aimed at Democratic supporters over the age of forty”.
On top of that, the site was envisaged as a way to sell the services of political operatives:
1460’s staff technical and web-communication strengths will enable 1460 to offer candidates a full range of strategic and technological tools…
1460 will also help shape a candidate’s overall communication strategy, develop television and radio communications and coordinate that strategy through the Internet. Utilizing Peter’s extensive knowledge of online political communication, 1460 will develop and manage a candidate’s web site, email acquisition and communication strategy, blog communication strategy, volunteer acquisition and deployment, and more.
The plan goes on to detail all the different ways this would make money for the site, including taking “a percentage of monies raised, online and off”, as well as a percentage of all media buys.
No wonder that, when he saw the plan, Kenny Lerer told Arianna that “this doesn’t work for me on many levels”; the two of them went on to do something much smarter, much more innovative and, as befits a news site, much less beholden to party-political interests. And, I daresay, much less likely to ever dream of writing the words “blog communication strategy”.
But what of Cohan’s story? Given that this entire lawsuit seems to be a nonevent, is it reasonable for the Huffington Post to criticize Vanity Fair for printing it in the first place?
There are certainly good reasons why VF might have spiked the story, or buried it on VF.com somewhere. Rich and successful people get sued opportunistically all the time. There’s little new news in the piece. And the conflicts are enormous: not only has VF’s editor hosted Arianna’s book party, one of the plaintiffs has actually worked as a consultant for the magazine.
On top of that, Cohan overstretches in his attempt to demonstrate that there even might be a real story in the lawsuit:
The questions raised are profound: Did Huffington and Huffington Post co-founder Kenneth Lerer take ideas from Daou and Boyce—ideas the two men call “groundbreaking”—without properly compensating or acknowledging them? Or is this just a case of sour grapes, with Daou and Boyce looking to cash in on the hard work of Huffington and Lerer now that the site is successful and valuable?
Er, no, those aren’t profound questions at all. Even if Arianna and Lerer did take an idea or two, it’s hard to see that the plaintiffs would have any claim to compensation — and indeed neither of them asked for compensation or even the opportunity to invest in Huffington Post for six years, before they suddenly decided that they had been so egregiously wronged that they had no choice but to sue.
But the fact is that Vanity Fair loves nothing more than a gossipy tale of celebrity entanglements and the name-dropping in this piece is truly something to behold: Larry David, David Geffen, Brian Grazer, Aaron Sorkin, Meg Ryan, Tom Freston. Graydon Carter simply isn’t capable of passing up a story which includes a sentence like this one:
On Election Day 2004, after attending a Bruce Springsteen concert for Kerry the night before, he, the Davids, and Kristen Breitweiser, a 9/11 widow and political activist, were visiting polling places in Ohio before boarding a private jet to fly to Boston.
The biggest celebrity of all in this piece, is Arianna herself, a blow-dried visionary in a glamorous large-format portrait by Robyn Twomey. The picture speaks much more loudly than the words: she’s clearly the winner, not the men wearing suits lent to them for the duration of the photoshoot by VF staffer Peter Holleran.
This story isn’t bad publicity for Arianna then — the vast majority of VF readers will look at her picture but not read the article. And most of the ones who do read the article will come to the obvious conclusion. My guess is that when Arianna next bumps into Graydon, it’ll be kisses all round, like nothing happened. Especially if he agrees to write something for her website.
(Cross-posted at CJR)
free rental agreement forms
Huffington Post: Reinventing the “Big <b>News</b>” Experience with IE9 <b>...</b>
Huffington Post is a leading social news and opinion site, "The Internet Newspaper." They want to serve their customers relevant and timely “Big News” content and get them engaged to respond through blogs and social posts. ...
YouTube - DESKTOP <b>NEWS</b>!!
WHHHAATTT?? The internet isn't woking here in the hotel, so today's show is all the news stories that I have saved on my desktop :) MY FACEBOOK: http://Faceb...
Will an ad network work for your <b>news</b> website? Or are you just <b>...</b>
The journalism industry's traditional ethical "wall" dividing advertising and editorial has left some journalists so frightened by the idea of selling to potential advertisers that they choose not even to try launching their own news ...
No comments:
Post a Comment