If my brain is still functioning (a matter of some dispute, I’ll admit) we should have Facebook earnings out after the close today. Not always, but often enough, when a company announces a new way to raise revenue a week or three before earnings, there is a reason.
Might be an unspoken message like “If we come out with earnings that aren’t all that spectacular, remember, we are well on our way to putting in new systems and software that will make more money for us – so don’t you worry about anything – we got you covered and we’re still a great investment.”
I don’t care much about Facebook, quite candidly, because I don’t see the point of “social media” – other than it is a HUMONGOUS waste of time, it is almost like a self-reporting system to police (and probably political) authorities, and for sure HR departments. If you want to know anything about Ures truly, there is this website but here it’s me who get the money (both cents from ads) rather than sending you off to a third-party site to be exploited by someone else – and, as we have explained previously, where a company’s audience can be “held hostage” unless you play fees to talk to your own people. I’ll do my own audience exploiting, thanks.
Like I said, in the cold light of analysis like this, farming out “customer interaction” to a third party “social” outfit is like asking to be taken hostage…but is is what? (Hint: Everything is a business model.)
One of these days, someone besides me is going to figure all this out, but in the meantime, I have been marvelously amused watching the comparison between the Social Media ETF which, if I read the comparison chart versus the S&P from over here, would have been up 46% versus 80% for that old, boring, S&P 500.
So that’s one axe hanging over the market: social media being “found out” as a business model. So now I’m off watching to see if the introduction of a new class of stock by Facebook will change anything.
I will leave it to your superior intellect to discern my real feelings and outlook. But when the NY Times headlines that “Facebook Plans New Stock Class to Solidify Mark Zuckerberg’s Control,” I find myself asking “Where is the value to the shareholder – and do I want to invest in MZ or his business model?”
I know: Don’t throw rocks at giants, particularly ones that own a huge group of timewasting people as their advocates.
Still, there is this pile of “rules” that I’ve pulled together from investing for about half a century and one of them is to look at every headline that rolls by and ask one simple, stupid question.
“Does this make sense for the customers or shareholders?” Is all about ME a business model I should invest in?
Again, you go discern your own answer. I am just whelmed (not OVERwhelmed) by social media because I believe it has diluted the relationships between companies (and even bloggers) and their customers and readers. At least in my view – which, considering I am 6 hours from eye surgery, isn’t all that good, if truth be told.
And this gets us to the other part of the headline – the politeness shown by the markets to the Federal Reserve. Again, bah humbug.
I explained to Peoplenomics.com subscribers earlier something that most people don’t think about. The day of the Fed decision doesn’t matter so much as the day after because this morning the impact of the decision will really ripple through the markets.
You go read the Fed comments from the FOMC meeting, but to me they might just have well have put things into more simplified English. Something like:
:The economy still sucks and it’s so bad out there, we can’t raise rates from these miserable levels – and in case you don’t read economic history, rates are now down to about one half of what they were in the middle of the Great Depression and into the darkest days of America in World War II.”
Yes, some damn fools actually read their history and learn something from it.
Of course, we need to lay out a series of asterisks. One is that the table above is the Fed Discount Rate for the St. Louis Fed (data series DISCNTD8 if you don’t trust me) and that’s different than the Fed Target Rate which is a rather recent (made up_fictional nonspecific) invention. Some would argue target rates relates to the ECB nontraditional rate moves as has been suggested in some papers, as globalism is entraining.
Except when the Bank of Japan overnight failed to raise rates or spew enough happy-talk, the JA market kicked down 3.6% and Europe is trying to shake it off this morning, but at the outset things are down over one percent in the major markets when I looked. And there’s the asterisk about my “looking skills” today…
All in all, this is why I went short recently (last week) and why I think we are on the verge of a decline which could, over the next couple of weeks, knock off 50% or more of the rally since the February bottom, but don’t hold it against me if I’m wrong. I have real money on the table however, and it wouldn’t be there is the market had punched through overhead resistance.
So a slightly lower low than February might be the real agenda in the next couple of months, but like the Alcoholics Anonymous people say “Cinch by the Inch, hard by the yard” some of the best advice in life and it applies to trading and relationships, as well.
Maybe Americans are so medicated against Depression by drugs like Prozac that we can’t see Depression when it’s really here. I expect, sooner or later, we will have to address the national rehab problem, but for this morning, it should be just a hundred (or two_) points lower as a temporary downer.
Hot off the press release:
Real gross domestic product — the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes — increased at an annual rate of 0.5 percent in the first quarter of 2016, according to the “advance” estimate released by the Bureau of Economic Analysis.
In the fourth quarter, real GDP increased 1.4 percent. The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and “Comparisons of Revisions to GDP” on page 4).
The “second” estimate for the first quarter, based on more complete data, will be released on May 27, 2016. The increase in real GDP in the first quarter reflected positive contributions from personal consumption expenditures (PCE), residential fixed investment, and state and local government spending that were partly offset by negative contributions from nonresidential fixed investment, private inventory investment, exports, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP in the first quarter reflected a larger decrease in nonresidential fixed investment, a deceleration in PCE, a downturn in federal government spending, an upturn in imports, and larger decreases in private inventory investment and in exports that were partly offset by an upturn in state and local government spending and an acceleration in residential fixed investment.
Skip the mumbo jumbo: The Fed is printing money at 8% and the GDP is going up at one half of one percent. Look up the word Apogee.
Know why gold and silver are alive?
Trump’s Foreign Affairs Speech
I watched the whole thing Tuesday and liked it very much. Strength, not weakness, and very much anti-globalism. And Pro Jobs and anti corporate tax exploiters.
The NY Times has a recap over here, but one of the organizers is panning it.
Which no doubt figures into why the corporate media is panning it, including one of the organizers. But that was likely more knee-jerk reaction to Trumps hinting that he would clean out the nest of Neocons in the State Department, which have handed America a spectacular series of failures, and which is still firmly ensconced.
Despite the naysayers, CBS is reporting in Commentary: Yes, Donald Trump can beat Hillary Clinton.
Ted and Carly’s Not Yet Excellent Adventure
Trying to look legit: Cruz Picks Nation’s Most Aggressive Champion of Offshoring as Vice President.
Thanks, but no thanks, Ted. But I’m sure the GOP insiders and corporatists will love it…specially when that mean, nasty old Trump wants to bring jobs back to America and punish offshoring…
If at Second You Don’t Succeed…
They seem to be “out to launch” when comes to being rocketeers.