Archive for May, 2009

  • Best Name of a Penny Stock You’ll See Today
    , May 29th, 2009 at 4:19 pm

    Ladies and gentleman, I give you Jedi Mind, Inc. (JEDM).
    The company just announced a share buyback, but I have to add, these aren’t the shares you’re looking for.

  • Arianna Huffington: Only subsription that works is selling “weird porn.” With video (of the quote, not of porn weird or otherwise)
    , May 29th, 2009 at 10:25 am


    The Huffington Post will not be seeking subscription revenues anytime soon, Arianna Huffington told Kara Swisher on stage yesterday at the All Things D Conference.
    “Unless you’re selling porn — especially weird porn — I would not go the subscription route,” Arianna told the crowd.
    It’s advice we think the woman sitting next to Arianna on stage, Katharine Weymouth of the Washington Post, will probably have to eventually ignore.
    But then, Katharine’s media company has a different cost base than the HuffPo, spending $1 million dollars a year on a Baghdad bureau, for example.

  • Schumpeter’s Moment
    , May 29th, 2009 at 9:16 am

    Carl Schramm has a good article on Joseph Schumpeter in today’s WSJ. Here’s a taste:

    From Schumpeter’s vantage point, capitalism’s very success allows rich societies to use government to relax the impersonal rules that govern markets, creating new rules that buffer citizens from the rigors of risk-taking and failure. In that sense, government invents for itself the task of mediating market outcomes. Schumpeter had seen the dangers of this play out in Bismarck’s conception of Prussia’s welfare state. In the face of the Marxist threat, the elite secured its position by causing government to dispense social benefits. Political entrenchment, not charity, had motivated Bismarck. When distorted in such a way, free-market capitalism is seen to suppress — rather than to encourage — social and economic mobility.
    Since the New Deal, Americans have come to see government as somehow the ultimate protector of their financial welfare. In reality, though, the evidence of the U.S. government behaving in this way during the New Deal is thin to say the least. Although it is largely forgotten now, much of the government’s action during the Depression actually had a marginal impact on individual lives. Monetary expansion and technological innovation boosted the economy, while the “second” depression of 1937-1938 is widely understood as having been induced by Roosevelt’s attempt to manipulate credit markets.

  • Ted Tuner: AOL/TWX Meger “Better than Sex”
    , May 29th, 2009 at 8:41 am

    Mark Hulbert writes on the dissolution of AOL and Time Warner’s nine-year marriage. I had never heard this quote before but Ted Turner said that the deal was “better than sex.” He was married to Jane Fonda at the time.

  • Exceedingly Bizarre Marx Brothers Trivia That I Must Be the Only One Interested In
    , May 28th, 2009 at 9:17 pm

    I noticed this story today that the two surviving Dionne quintuplets just turned 75. That’s whom Chico is referring to in the classic “contract” scene from A Night at the Opera (0:47 to 1:02):

  • The 90s Finally End
    , May 28th, 2009 at 10:03 am

    CNBC reports:

    Time Warner to Spin Off AOL
    Time Warner says its board has approved plans to spin off AOL, the company’s lagging Internet unit.
    The New York company, which owns 95 percent of AOL, said Thursday it will buy out Google’s 5 percent stake during the third quarter and spin the unit off to Time Warner shareholders.
    The long-anticipated move is expected to be completed around the end of the year.
    AOL and Time Warner combined in 2001 in a deal they said would produce a powerful marriage of content and the Internet. But it produced big losses instead.
    In a statement, Time Warner Chief Executive Jeff Bewkes said, “We believe AOL will then have a better opportunity to achieve its full potential as a leading independent Internet company.”
    Time Warner shares rose almost 3 percent in premarket trading.

    For a good laugh, here’s the CNN story announcing the merger more than nine years ago.

    In a stunning development, America Online Inc. announced plans to acquire Time Warner Inc. for roughly $182 billion in stock and debt Monday, creating a digital media powerhouse with the potential to reach every American in one form or another.
    With dominating positions in the music, publishing, news, entertainment, cable and Internet industries, the combined company, called AOL Time Warner, will boast unrivaled assets among other media and online companies.
    The merger, the largest deal in history, combines the nation’s top internet service provider with the world’s top media conglomerate. The deal also validates the Internet’s role as a leader in the new world economy, while redefining what the next generation of digital-based leaders will look like.
    “Together, they represent an unprecedented powerhouse,” said Scott Ehrens, a media analyst with Bear Stearns. “If their mantra is content, this alliance is unbeatable. Now they have this great platform they can cross-fertilize with content and redistribute.”


  • The Most Useless Index of the Financial Crisis
    , May 28th, 2009 at 9:03 am

    Daniel M. Harrison awards the honor of most useless index of the financial crisis to Dow Jones and their Economic Stimulus Index:

    In other words, the DJ Economic Stimulus Index aims to capture how well bailout recipients are faring among investors. That in turn is supposed to be some sort of indicator of U.S. economic momentum.
    But there are two factors that make this index really redundant, and even dangerous to use.
    Firstly, as I discussed yesterday, companies’ capitalizations are more or less irrelevant as a sign of economic growth unless consumer spending is being directed at the products these firms manufacture. Just because there’s a bunch of investors looking to get in on beaten-down share prices, that doesn’t mean that economic conditions in the U.S. are fundamentally getting any better.
    For example, higher share prices among banks and automakers says nothing about lending conditions, home foreclosure rates, auto sales or any of the other indicators you would traditionally associate with economic growth.
    Instead of tracking share prices, a really useful economic stimulus index would monitor the earnings of the top 50 stocks which are recipients of the bailout funds. Then we’d have a much better idea of how these companies are performing.
    But most of all: why does anyone want an index tracking these companies when the stock market is pretty much moving in tandem with their trading patterns these days anyway? Since the stimulus packages were put in place, you could just as easily have glanced at any of the major indexes on pretty much any day and concluded how GM, Bank of America, Citigroup, or Ford are faring.

    Read the whole thing.
    Update: S&P has upped the competition. They have a new index that follows companies that adhere to Sharia Islamic law. In other words, no alcohol, pork or tobacco. Best of all…it’s Canadian!

  • The Yield Curve Steepens
    , May 28th, 2009 at 8:32 am

    The widening yield curve is the most important recent development on Wall Street. Long-term interest rates had already been creeping upward, but they started to break out after mid-May.
    Tyler Durden notes that the spread between the 2- and 10-year yield is now at an all-time record. Arnold Kling says that the short-term effect of stimulus package is negative.
    Here’s a look at the yield curve since December.

  • South Wins Civil War
    , May 28th, 2009 at 8:07 am

    The WSJ reports:

    Some laid-off workers in the financial-services industry are making a novel pitch for jobs: They are offering to work for nothing.
    “People have been sending their CVs to our New York office saying, ‘hire me for free for six months.’” says Christophe Chouard, head of sales at French fund of hedge funds manager HDF Finance. “The CVs we are receiving are pretty good. These people are saying, ‘just let me show you what I can do.’”
    Headhunters said redundant financial-services staffers, particularly those working on institutional sales, were keen to keep their knowledge of the industry and their contacts up to date when they weren’t earning.
    It isn’t just the prospect of cheap labor that might appeal to companies. The chief executive of one asset-management company said it was sad to see rows of empty desks–fully equipped but vacated–as a result of cost cutting.

  • Who Should Replace GM in the Dow?
    , May 27th, 2009 at 8:52 pm

    I guess a 30-year Treasury bond makes the most sense.
    Outside that, I’d vote for UPS (UPS).