Barrow Bits

The Facebook IPO

2012-05-18T11:11:49Z

Well the big day is here. Facebook will go public at $38 per share and before the day is out the stock should be selling at a much higher price. Many people will get very rich today including many angel investors in Facebook and that is a good thing for the economy. These early stage investors will have more money to help fund future companies and that will stimulate the economy. Of course the main guys at Facebook will become zillionaires and one of the creeps is already looking to skip out of the USA in order to avoid a big federal tax hit. Isn't it amazing that for some people they can never have enough money!

As for investing in Facebook I urge investors to proceed with extreme caution. The valuation being accorded this company is in my opinion way too optimistic. Facebook faces a major challenge on the advertising end of the business. Currently, mobile devices do not include Facebook advertisers. Facebook was configured as a PC oriented service and the challenge to the company is to advertise on mobile which is the fastest growing area for viewing Facebook. At some point I figure they will find some way to deal with this issue but for now I wouldn't' go near the stock.

Thursday thoughts..................

2012-05-17T12:25:31Z

It's a wonder that Obama is even close to winning in November. Voters must really like the guy because most folks still think the economy stinks. No president wins reelection if folks think economic times are bad for them. Fact is Obama inherited a mess much greater than even he suspected. He didn't push for a big enough initial stimulus with both houses of Congress in Democrat hands. He bungled health care reform. Yes, things have recovered and Obama has faced unparalleled Republican opposition that borders on rage and hatred but ultimately the president gets blamed. Not looking too good for Barry.

Speaker of the House John Boehner is once again threatening to let the US default on its debt instruments. Haven't we seen this show before? Really, is there one statesman left in the GOP?. It's hard to watch Boehner on TV. He is such a hack jerk. Then again, Princess Polesi is not much better. In my time a remember the likes of Sam Rayburn, Everert Dirksen, and Jacob Javits. Real legislative statesmen. Could we ever use a great leader now!

Willard Romney is not letting reporters ask him any questions. Really folks can anyone envision voting for this guy? Sure folks will vote against Obama and he will be their vehicle. But I have yet to hear anything from this robot's mouth that would sound like coherent public policy. If elected he will be a disaster. Before too long I expect the "Mormon" card will be used in this campaign. It will get real ugly.

I hope that John Edwards goes to jail. He is one of the most repugnant public figures in memory. What a piece of human waste. Got a feeling he will get off though. He is a sociopath.

Ignorance is Bliss

2012-05-16T12:23:37Z

It's always been this way. Even as a little boy I was very interested in politics. I grew up in a household where my very intelligent mother had an active interest in current affairs and was an avid reader of newspapers. She was a rabid Republican who hated Democrats. Perhaps she was the forerunner of the current political environment. She particularly hated FDR since he closed the banks for awhile during the depression and the family lost money. She despised Truman who although a good president was a big partisan in his own right and accordingly was loathed by Republicans. I remember going with my mother to vote and thinking it was really exciting. Could go on and on but it would get boring. For now the point I want to make is that I always seemed to be a political junkie which today is a very depressing experience.

Just over 50% of the eligible voters in the USA cast ballots in a presidential election. Less than that on for Congress in off-years. It seems that while Americans love to complain about their government they don't seem much inclined to do something about it by voting. There are millions of Americans who are clueless as to the dangers that face the citizens of this country if Republicans take over all three branches of government in November. It will be a disaster for the middle class and the poor will really suffer. This could lead to a full fledged revolt of the masses and bring forth unparalleled social unrest. It's happening in Europe and it could happen here.

The coming presidential election once more offers the prospect of voting against someone (Romney) rather in favor of candidate. I voted for Obama in 2008 but won't vote for him again this year unless New Jersey is close. I like the guy as do many people but truth is he was not up to the job and sadly hasn't learned much in three years. Currently, his pandering to women is getting me sick. That Barnard speech really turned me off. As for Romney it's hard for me to express how much I despise him. The man has no soul and I would not trust him for one second in a crisis. For a political junkie these are hard times. Sometimes ignorance really is bliss!!

Let's get real folks!!

2012-05-15T10:57:25Z

I'm confident that gay activists along with the NY Times want folks to think that the most pressing issue in the national consciousness is "marriage" equality". They are wrong. Come this November folks will be, as usual, voting with their pocket books in mind. Honestly, all this clamor over gay marriage is getting too much to bear. If gays want into enter into a contract that in the heterosexual world ends in termination 50% of the time, let them do it with my blessing. As an aside,in my life I have known several gay couples that although they were not "married" were devoted partners and they never complained about not having the ability to get married. They took care of each other and wrote very specific wills about what would happen financially after one departed.

Accordingly I think the important issue before the public should be the collapse of Greece and the import to the global economy. Also, growth in China is slowing down which has ominous portends for the world financial system. In this country we still have big banks being reckless in their investment activities and apparently no one has the courage to face up to them because they contribute so much money to politicians. We have a Supreme Court that has allowed corporate America to buy the political discourse in this country, and in a few weeks will say that health care reform is dead. As a society we face a right wing takeover of all three branches of government in November and all people can talk about is gay marriage. Give me a break. The world has truly gone mad. Time to get real folks!!!

Lessons not Learned

2012-05-14T11:43:39Z

One would have thought that after the disasters of 2008 the financial industry would have learned some lessons on how not to run their businesses. However, judging from the blockbuster news that the esteemed JPMorganChase recently lost $2 billion using extremely risky and as it turns out stupid trading strategies. Theses strategies involved the "hedging" of very complicated derivative securities. Yes, those same type of derivatives that got us in all that trouble in 2008. These credit derivatives are essentially a "paper" product developed with the use of sophisticated computer software developed by the best and brightest of the nation's business schools. The type of trade that led to the $2 billion trade was supposedly banned by post-2008 regulations, but as usual Chase used paid for legal opinions to claim they were within the law. They were not and now we see the heads starting to roll. The entire episode disgusts me.

I worked on Wall Street for more than thirty years and the culture then was so much different than today. When I obtained by first job as a research analyst I had to learn how to use a slide ruler for calculations. There were no such things as computers let alone the overall technology that drives the Street today. When I worked on the Street the commercial banking industry didn't play the important role that it plays today. It was a simpler more clear cut business environment and I'm glad I was able to work on the Street during that period. Investment fundamentals were the important items not the latest no-value derivative product. However, what really frosts me in the latest debacle is the arrogance of it all. In a capitalist society there must in my opinion be a profit motive or the entire concept collapses. However, there must be limits. This country has moved to break up monopolies and reigned in the robber barons. It's time for the morons in Washington to get tough with Wall Street but I'm surely not holding my breath on that one since many of those elected to represent "us" only represent their biggest donors many of which work on Wall Street.

Bits of the Week

2012-05-11T11:02:04Z

The past week witnessed significant developments that will have long term consequences for the world economy and social norms. In Europe the votes in France and Greece signaled that many people are not in favor of austerity as a cure for the debt woes that plague not only Europe by the USA as well. Consequently global markets have reacted poorly and all the major stock market indexes are off badly for the week. At this point the future of the Euro Currency has to be considered in doubt and as long as this doubt remains markets will falter. Not an easy time to be an investor.

Domestically, the revelation on Wednesday that Barack Obama favored same sex marriage has triggered a tidal wave of discussion about the political consequences of this move by the president. First off, can anyone with any smarts at all have doubted that Obama was in favor of gay marriage? He was just being coy about it owing to political calculation. However, his hand was forced by Joe Biden's big mouth and at that point there was no way Obama could remain silent. So he was forced into it the day after the voters of North Carolina approved a ballot issue to ban gay nuptials via a constitutional amendment. Indeed, in the 30 states that have voted on gay marriage in every case voters rejected the concept. The president was likely well aware of the political land mine he was walking into but nevertheless made the decision to take his position. On the other hand much of Mr. Obama's support is centered in the gay community and significant financial backers are gay. However, I would like to think that one of the benefits we received when we elected Obama in 2008 was that he was "hip". For many of us the fact that he was an educated youthful fellow made us more comfortable with him being in charge. I like to believe that the president really came to understand that gay marriage was becoming more widely accepted particularly by the country's youth and that not withstanding moral objections it was a civil right above all else. I particularly enjoyed the word's from the Declaration of Independence,"the pursuit of happiness" that were often quoted this week. That sort of sums this up.

Of course the new darling of the right, Willard Romney, declared that he opposes gay marriage or civil unions. He defines marriage as the union between an man and a woman. In the case of some of his distant relatives this meant the union between many men and many women!! Now the story emerges that as a teenager Willard engaged in anti-gay bullying at an exclusive boarding school and that it went so far as Romney organizing an attack on a student believed to be gay which involved Willard cutting the boy's hair while the poor fellow was pinned down by other rich brats. True to form Willard can't remember the incident. This man is a pathological liar. Now this is the man who enjoys firing folks and doesn't care about the poor. He is a rotten human being.

Have a good weekend folks.

A Left Turn in France

2012-05-07T11:41:32Z

As I opined last week the French elected Francois Hollander as president yesterday in a narrow but still convincing victory. At the same time voters in Greece turned to the left as well. However, the French results were the most important since the French economy is one of the largest in Europe and the world. Mr. Hollander is a committed socialist and has promised to stop the austerity program that was started by former president Nicolas Sarkozy. Indeed, he has promised to increase public sector spending believing that growth policies and not austerity are the way to solve the debt issues that are plaguing the European Union.

In my opinion the austerity measures proposed by many in Europe, particularly the Germans, are for the most part ill advised. The same goes for this country where the Republican mantra of deficit reduction may be a good political slogan but is bad economics. Austerity will not solve the deficit issue, but economic growth will so to the extent that Mr. Hollander seems to take this position it's a plus. However, he is an extreme leftist and my hope is that his proposed spending spree will be more moderate than what he has propose during the campaign.

Bits of the Week

2012-05-04T11:19:35Z

Relatively calm week on the political front. Mitt Romney continues to tour the country with potential VP candidates and yesterday he was in Virginia with the governor of the state who recently thought that vaginal probes of women were perfectly fine in an effort to appease the radical pro-lifers. Also by his side was Michele Bachmann who chimed in with her endorsement as if that really will help with women voters. Always nice to have a true nut on your side. No wonder the latest poll in Virginia has Romney down by 18 points among women voters.

President Obama went to Afghanistan to sign some worthless piece of paper with a corrupt regime and posed for some great photo ops with the troops who apparently will be staying there until hell freezes over. I think that Obama's Afghanistan policies are ridiculous and I'm very disappointed in his approach. We should get out now not 10 years down the road. At the same time the Obama campaign was touting the anniversary of the killing of Bin Laden trumpeting the president as the most courageous man on the planet. For my part, the Navy Seals were the ones who got Osama and maybe Obama should be a little more modest.

But for Yankee fans this week was a true disaster. The best closer of all time Mariano Rivera is probably finished for the season and forever because he choose to shag fly balls in center field and in the process banged into a fence and hurt his knee. What a sad end to a brilliant career. Number 42 was truly the best reliever in the history of baseball and as a Yankee fan I was privileged to see him work his trade. On the plus side I'm glad I decided that my Yankee season tickets were too expensive and did not renew this year. Thanks for the memories Mariano, You are a class act!!

The French Connection

2012-05-03T11:23:45Z

This coming Sunday there will be an election for President of France that will have wide repercussions for American investors. As of this writing it appears that the current President Nicolas Sarkozy will lose to socialist candidate Francois Hollande. Mr. Hollande is a hopelessly leftist candidate pledging to hire more teachers and spend money in other social service areas, while raising the marginal tax rate in France to 75%. He has threatened to renegotiate the recent European bail out of Greece and is not expected to be a strong supporter of Euro Zone austerity measures, particularly the type espoused by Germany.

Accordingly, I am very concerned that France will become the next European basket case as the country's debt will soar even more out of control and their debt will turn into garbage. This means real trouble for the world's economy since France is a major player unlike Greece or Spain. I'm concerned that the fallout from the French election will cause a severe market drop next Monday as investors start to recognize the import of the socialist victory. Indeed, next week the market will be experiencing the French Connection and how long it will last is anyone's guess.

When will John McCain stop whining?

2012-05-01T16:50:54Z

When will Crazy John McCain get over to losing the last election to Barack Obama? Regular readers of Barrow Bits know how I hold John McCain in utter contempt. Beyond thinking him to be unstable mentally I also believe that by picking Sarah Palin as his VP choice, McCain opened a Pandora's box of political nut jobs who have dominated the political discussion for way too long. Palinism has poisoned the national dialogue and made it chic for Republicans to be no-nothings. Blame it all on the "moderate" McCain who by being so reckless in choosing a totally unqualified running mate in 2008 set wheels in motion for the possible destruction of the Republic. What he couldn't do by starting a nuclear war with some country, he will accomplish via the destruction of intelligent political debate. Just read the book or see the movie Game Change to see what havoc Palin caused.

Now McCain is whining about the Osama thing. He can't get over that Obama the wimp took out the world's most notorious terrorist who was responsible to killing more than 3,000 Americans. John McCain should shut up and get over it. He disgusts me.

Bits of the Week

2012-04-27T10:02:15Z

For me the highlight of the week was the John Edwards trial. What a soap opera!! All of the characters in this drama are first class sleaze bags and it's hard to determine which one is the worst, although I do think that Edwards sets a new standard for being a first class creep. Thank goodness he never made it to the White House.

On the political front the fall campaign seems to have begun in earnest. Can't say I was impressed with Obama's "slow jam". I do think it was beneath the dignity of the office. That said, I still plan on voting for him since the alternative is so disturbing. Seems I spend my life voting for the lesser of two evils.

On the financial front Apple continues to rule the world! Truly amazing what this company has achieved. Recently finished the Steve Jobs biography and I must say he was not a very nice person, but he did create a company that is now a legend.

Have a great weekend.

Why China will not rule the world

2012-04-26T12:13:42Z

It seems that there is a constant chorus of voices telling us that China will one day rule the world. I never really bought into that position and the recent article in the Economist is a must rule for anyone thinking that China is unstoppable. It seems the demographic profile of China will likely stall their ascendency of rulers of the universe.

Carolina Soap Opera

2012-04-25T10:56:39Z

I must admit that I never liked John Edwards. Indeed, it was his presence on the 2004 Democratic ticket that prevented me from voting against George Bush. There was something about him that I thought was as phony as a three dollar bill and I didn't want him near the Oval Office. Since then my feelings about him have been justified as he has been revealed to be one the biggest sleazes in politics. This pretty boy creep is now on trial in North Carolina over campaign finance abuses that the government contends were committed in an effort to keep his girl friend and ultimately the mother of one of his children living in a lavish life style.

The story is replete with soap opera qualities. A wealthily aging rich women who wrote checks to a guy she fancied as another Kennedy. A horny whacked out mistress who thought she had found a meal ticked. A wife who sometimes looked the other way because she wanted to live in the White House. And a former butt boy who turned stoolie and is now testifying against his boss. Really folks you can't make this stuff up. However, the bottom line is that John Edwards is a mega creep and I thank heaven he is finished with politics. In fact, I hope he goes to jail and gets a nice and friendly cell mate named Bubba.

It's all about housing

2012-04-23T11:41:12Z

The economy will never return to a high level of growth until the housing market recovers, and unfortunately that recovery is still not in the cards. I get a kick out of listening to all these economic experts who try and analyze the economic tea leaves. For the most part they focus on the short-term while ignoring the biggest economic event of our lifetimes. Specifically, my generation made lots of money in real estate. If you were smart and had the luck of good market timing a small fortune could have been made by buying and selling real estate. However, the bursting of the housing bubble in 2005-06 marked the end of the housing wealth effect. I wrote about the "wealth effect" many times prior to the bubble bursting and warned of the dire economic ramifications. When housing kept rising in price people felt more prosperous and used the expanding equity of their homes to spur other purchases, which in turn was great for the economy. Today, just the opposite seems to be happening. Many people are under water on their mortgages and in turn they have felt a lot less wealthy and not inclined to spend much. The economy will not get into high gear until housing is once again providing a source of comfort for folks. Unfortunately, there is scant reason to believe that will happen any time soon.

Bits of the Week

2012-04-20T10:19:29Z

As weeks go the past few days have not been particularly exciting. On the political front a rash of new polls show the presidential race as tight although Obama has the edge in most surveys. I should caution readers that at this stage in the race polls mean very little. There is lots of time until election day and so many things could change the dynamics of the race. However, one thing that is not likely to change is that people just don't like Willard making his chances in November very problematical. Let's face it folks he is not the type of guy that most people would like to hang with. On the other hand for all his mistakes and failures Obama is perceived as a nice guy and that will help him immensely in the fall. His base is solid and enthusiastic for his reelection and that should be enough to carry him to victory. But again, it's early.

Here in NYC Emperor Bloomberg is at it again. He is now proposing that people shouldn't be able to smoke in their own homes. I wrote about this yesterday but my anger at Bloomberg just keeps growing. Who the hell does he think he is? This elitist Boston snob is out of control. The arrogance of this douche is just unparalleled. Can anyone imagine Emperor Bloomberg reading the Sunday funnies to kids on the radio because there was a newspaper strike? Can anyone imagine him greeting people walking over the Brooklyn Bridge during a transit strike? He should get into one of his flying machines and just go away and leave us plebeians to our own destruction. Better yet he should get on a bicycle and ride one of his bike lanes out of town.

Hoping for some rain this weekend. Desperately need some in the NY region. The climate has been very strange this year. Global warming is real and only a total moron can deny it. We have planted the seeds of our own destruction and they are now sprouting. On that cheery note have a nice weekend folks.