Markets: A “Social Decline” in Motion?

Peoplenomics readers will remember our December 18, 2013 edition where I called into question whether social media would be around any longer than CB radio, Pet Rocks, or Hoola Hoops.  Of course, all three are still around today.  It’s just that they are no longer manias like they were, each, once upon a time.

My concern about “social” was simple:  I wondered whether it was much of a business model because it’s time-circular.  In other words, there’s huge growth on  the front, and the potential for huge audience shrinkage on the back end.  But there’s also not much revenue up front – and that does come on the back end.

When you step back from social, companies were urged to bring their customers to social web sites, and now that many have done exactly that, what we see are the social outfits turning around and charging the very people (like bloggers and companies) who bought into the social mythos.  And yes, this is why I don’t post to my FB page every day – because the number of people who get sent links to my site is throttled – unless I pay money.

I don’t suppose you’d care to ventURE who is a cheap bastard, would you?

OK, so fast forward to the market reversal yesterday.

Facebook was down almost 7%.

Now, I’m not going to be so stoopid (sice) as to tell you this is the “End of Social Media!  Run – everyone flee from the Street!

On the other hand, I may point you at the ETF for various social outfits (The Global X Social Media Index ETF, symbol SOCL) makes an interesting chart to look at over here (click on the one-year view, thanks to Yahoo).

When you look at it, there was a low back in late January and – if my eyes aren’t too bloodshot this morning – it looks to me like that low has been taken out.  And that may lead us back to the range below where SOCL was back in December.

No, I’m not saying Facebook is bad (come on, do you think I’m that stupid?).  But I am saying that social media depends on businesses and bloggers continuing to be too lazy to put discussions and effort into keeping their customer bases inside their own ecosystems (web sites).  Once they are migrated (for company or blogger news) to a social site, the social(ists) will then “rent them back their own audience.”

It’s either astounding business acumen beyond my ken or we have the dumbest executive tribes in the world.  Your call…I think you figured my take on it.

This is patently foolish, as I see it, but remember I don’t have millions of dollars, just millions of brain cells.

Oh, and sure, Google has Google+.  But when I look at Google’s financial data here, what I see it a 6.51 price to sales ratio.  And this is for a company with driverless cars, a kick ass search dominance, and social.  Did I leave out robotics and a vision of the future?

When I look at Facebook’s key statistics, what I see is a 21.02 price to sales ratio over here, and they don’t have the robots, search engine or driverless fleet as kickers.

No, I’m not screaming “Ure told you, dammit!” like I did in September of 1999 when my article Death by Dot Coms warned “The End is near for the Internet Bubble.”  That’ll come…I’m patient on this stuff.

I was way early on that call (5-months) so maybe in June or July we’ll revisit this and see how well this prediction works out.  For now, though, I’m more skeptical of social than ever – and I wonder about the IQ of America’s corporate leadership which has been driving customers away from their own websites.  Twits, if you know what I mean… Smile 

If there was an inter-corporate API developed, so companies could share cross platforms without “renting their customers back” social could have a heart driven through it in months.  And if I can think of it, I figure someone else is already on that path and building it.

Meantime, if you’re looking for bogeymen to blame for the pending decline, how about the fact that lots of home equity loans are coming due and that may cause, say regulators – something akin to payment shock…

Gold Drops, Dead Cats Bounce

Since we’re no adjacent to the end of the month, gold is having the tar kicked out of it.  And yes, this may be the beginning of a move down to the $1,000 range as I see it.  The stock market is set for modestly higher gains at the open.

And that gets us to…

The Latest *(Incomprehensible) GDP Data

Assuming you know what a circular reference is in a spreadsheet, I always look forward to the monthly report on GDP (just out) from the Bureau of Economic Analysis.,

The reason is that rather than give a simple number on GDP, there’s an actual number (stashed with the the Ark of the Covenant, somewhere under a moving blanket in a back room somewhere) but damned if it doesn’t take forever to find it.

Since you’re on the bean this morning, maybe this will make more sense to you, than it does to me:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 2.6 percent in the fourth quarter of 2013 (that is, from the third quarter to the fourth quarter), according to the “third” estimate released by the Bureau of Economic Analysis.

In the third quarter, real GDP increased 4.1 percent. The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 2.4 percent. With this third estimate for the fourth quarter, the general picture of economic growth remains largely the same; personal consumption expenditures (PCE) was larger than previously estimated, while private investment in inventories and in intellectual property products were smaller than previously estimated (see “Revisions” on page 3).

The increase in real GDP in the fourth quarter primarily reflected positive contributions from PCE, exports, and nonresidential fixed investment that were partly offset by negative contributions from federal government spending and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP growth in the fourth quarter reflected a downturn in private inventory investment, a larger decrease in federal government spending, a downturn in residential fixed investment, and a deceleration in state and local government spending that were partly offset by accelerations in PCE and in exports, a deceleration in imports, and an acceleration in nonresidential fixed investment.

Actually, I found the GDP number.  It’s  $17.090 trillion.  And, since the Fed has $4-trillion in sacks of collateralized whatever they ares, stashed out back (under a different moving blanket with the Ark which is now powered by the Holy GDP hidden number) this simply means the Fed has a call on 23.4% of America’s annual work product.

Do you ever wonders if they’ll ever close on it?  Let me speak to you frankly in press release-ese:

That’s not a moot question around here, since my IQ is 21% of 13% of my home address, divided by 17% of my social security number times 92% of my least used MasterCard, minus the second derivative of my Visa card balance as of March 21, less the price of a can of cat food plus the last two digits of my Chevron card, divided into my tax refund.  (The correct answer is 142, so no smarty, tell me my balance on March 21…)

God I* love writing press releases!  I could be a press release writer for BEA, too!  Quick, where the number for dial-a-Fed-Gig?  You could stand the break; I could use the dough.

More after this…and say, here’s an ad that fits the news today:

Who You Gonna Trust?

Texas Senator John Cornyn is getting plenty of ink this morning for saying that the democorps press to offer limited press immunity to named media outlets is just a gov-scam to license who is media and who is not.

Besides, he correctly notes, the Constitution is quite clear on the matter, so what’s to fix?

Well, the democrats have other ideas and this gets me down to one of the more important fundamental bits of research I’ve done in a while:  A simple spreadsheet of how many members – of which party – are listed in this data on who (of which party) has been convicted of felonies in office.

I call this my “Crooks by Party by Presidential Term Index


How there are some talk radio bloviators who can hold up Reagan and a deity given the number of convictions (both sides of the aisle) is just amazing.  Am I the only one who remember Iran –Contra?

Before celebrating Obama, remember the clock is still running and I have more faith in politicians being more loyal to their own interests than those of their constituencies than most.

Obama disapproval rating is at a new all-time high.  Apparently, I may be more data driven than most.  Seems to me the crime rate among politicians isn’t that different than the general population, though I will grant you its for high-brow stuff, mainly.

Does this have something to do with why the Golfer in Chief is at the Vatican for a meeting?

I Fall To Pieces, Dept.

More than 300 of them, says the Thai government, based on their satellite.  Me?  Still skeptical.

Gone to Pot

10,000 ganj convictions in Colorado could be overturned.  And this will, no doubt ripple into criminal justice spending down the road. Fewer crimes and some less crimes.  

Paradoxical, huh?  Vote for weed is a vote for smaller government?  Vape me!