InvestWithAlex.com 

Subscribe Today
My Account

Posts

Posted on

Philippine Stock Market Is Surging. Should You Invest?

philippines-stock-market

With the Philippine stock index surging higher over the last few months and with large funds increasing capital allocation, the question is……should you invest in this fast growing emerging market?

The answer might surprise you. 

NO. The Philippine stock market is more or less reliant/follows the US Market. As soon as the US bear market takes control (2014-2017) and breaks down, I would expect the Philippine stock index to do the same. With one major difference. Since this is an emerging market with a highly speculative banking sector I would expect it’s decline to be much, much worse. How bad? If the PSEI Index breaks below 5,500 there is nothing stopping it (technically) until it gets to about 1,000. As such, if the PSEI breaks as anticipated, it turns into a wonderful shorting opportunity.

Please do your own research and make your own investment decisions.  

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

 

Philippine Stock Market Is Surging. Should You Invest?  Google

Top Philippine Fund Doubles Consumer Stocks With Record Bet

The top-performing Philippine stock fund in the past five years has doubled holdings of consumer companies as record remittances boost the spending power of shoppers in Southeast Asia’s fastest-growing economy.

The UBP Large Cap Philippine Equity Portfolio (IFDLCPE)increased positions in the consumer industry to a record 60 percent of assets from about 30 percent in mid-2013, said Robert Ramos, who oversees about $897 million as the chief investment officer at Union Bank of the Philippines. Holdings include Emperador Inc. (EMP), the nation’s largest liquor company, and Puregold Price Club Inc., the biggest grocery-store operator. Both stocks have jumped at least 12 percent this year.

Overseas remittances to the Philippines increased a bigger-than-estimated 9.1 percent in December, while slower inflation last month eased pressure on the central bank to raise interest rates that have stayed at a record low since October 2012. Consumer spending accounts for almost three quarters of the $250 billion economy, which grew at a 6.5 percent pace last quarter.

“Everywhere you go, people say the economy is better and that global Filipinos are richer and have higher disposable income,” Ramos, 38, whose UBP Large Cap fund returned an annualized 46 percent in the past five years, the most among 28 Philippine stock funds tracked by Bloomberg, said in an interview in Manila on March 4. “I expect more gains from the sector.”

Earnings Jump

Overseas Filipinos sent home a record $2.16 billion in December, bringing the 2013 tally to an all-time high of $22.8 billion, data from Bangko Sentral ng Pilipinas show. The central bank forecast remittance growth of 5 percent this year.

The cash inflows, which make up about 10 percent of the economy, have helped companies such as Emperador and Puregold (PGOLD) post record earnings. Profit at Emperador, the UBP Large Cap fund’s biggest holding, rose to an all-time high of 5.8 billion pesos ($130 million) in 2013.

Ramos shifted the $67 million UBP Large Cap fund’s strategy in the middle of 2013 to shield it from volatility after the U.S. Federal Reserve signaled stimulus cuts. He sold financial, energy and property shares, deterred by regulatory headwinds and rising valuations.

“We wanted stocks that will outperform but at the same time won’t be very erratic,” Ramos said.

Valuation Risk

Consumer companies also stand to benefit as the Philippine currency’s slide against the dollar boosts the value of remittances, Ramos said. The peso has weakened more than 8 percent since May 22, when the Fed signaled it would trim its monthly bond purchases as the economy improves.

“Families of overseas Filipinos feel richer because the peso has devalued,” Ramos said. “They are probably spending a little more than before.”

The Philippine Stock Exchange Index (PCOMP) fell 0.1 percent to 6,508.58 as of 12:32 p.m. in Manila.

Consumer stocks are growing more expensive and the companies are unlikely to match the growth they enjoyed last year, when campaign spending in congressional and local elections boosted demand, according to COL Financial Group Inc.

Puregold is valued at about 25 times estimated 12-month earnings, while Emperador trades at 24 times, according to data compiled by Bloomberg. That compares with a multiple of 17.5 for the Philippine Stock Exchange Index, which has climbed 11 percent this year.

Growth Outlook

“I am less certain that growth will be as fast,” said Jed Pilarca, an analyst at COL Financial. “Consumer stocks aren’t cheap. It might be time for a correction.”

Emperador’s net income will probably increase 24 percent this year, while Puregold’s profit may climb 28 percent, according to analysts’ estimates compiled by Bloomberg. The nation’s economicgrowth is set to exceed 6.5 percent in the first quarter, boosted by rebuilding after Typhoon Haiyan, stronger exports and tourism, Economic Planning Secretary Arsenio Balisacan said on Feb. 4.

The government estimates growth of between 6.5 percent and 7.5 percent this year. The economy expanded 7.2 percent in 2013 and 6.8 percent in 2012, the fastest two-year pace since the 1950s, data compiled by Bloomberg show.

“A big chunk of the economy is driven by consumption,” Ramos said. “When GDP is growing, you know that a lot of people will be consuming more.”

Posted on

Job Creation Surges Higher. Now What?

Despite the bad weather, the US Economy added 175,000 jobs in February Vs. estimated 149,000.  Damn, I am impressed. Let me run out and buy some shares of Facebook, Netflix, Tesla, Google, etc… Even though I can puncture the “validity of data” hole (as I have done before) wide enough for a semi to drive through, that is not the angle I am going to take today.  

Listen, jobs is a lagging indicator. It’s a trend measure and is not indicative of future market developments. Let me give you an example. The US Companies were hiring hand over fist at 2000 and 2007 tops. In fact, they continued to do so 6 months after said tops. With the stock market surging higher over the last 6 months, I would hope that the February jobs report come in above expectations. Yet, it is all in vein.  As the 2014-2017 bear market accelerates speed over the next few months, any job gain will quickly turn into mass layoffs. 

What Bear Market? Read the  bear market report here.  

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

 

Job Creation Surges Higher. Now What?  Google

jobs-feb-14-2

The U.S. economy added 175,000 jobs in February, more than anticipated despite brutal weather conditions across much of the U.S., with the unemployment rate ticking slightly higher.

Economists had predicted 149,000 new jobs. The headline unemployment rate was 6.7% last month, up from 6.6% in January, actually a positive sign because it means more people entered the workforce.

The December and January figures, both well-below expectations, were revised higher by a combined 25,000.

Weather had been widely predicted to put a dent in the numbers ahead of the release of Friday’s data by the U.S. Labor Department. That was the case but it didn’t impact overall hiring as much as analysts had anticipated.

“The weather was unseasonably cold in February, especially during the period leading up to and including the (Labor Department’s) survey week. In addition, snowfall has been unseasonably high over the same period,” analysts with Nomura’s Global Markets Research unit wrote in a note prior to the release.

Instead of chilling overall hiring, the Labor Department said the weather resulted in 7 million people working part-time last month rather than full-time, 10 times the number in January and the largest figure since January 1996, when a blizzard paralyzed the Northeast.

Todd Schoenberger, managing partner at LandColt Capital in New York, said the February numbers bode well for the spring.

“Despite headwinds, such as the continuation of a brutally cold winter, the labor market persevered, which leads to added optimism for a spring thaw in discretionary spending as we close out the first quarter of 2014,” he said. “Wall Street will cheer this report because strict attention is now given to economic and fundamental analysis as the (Federal Reserve) continues its tapering strategy.”

Despite a weak January jobs report, Fed policy makers voted unanimously earlier this  year to continue scaling back the central bank’s monthly bond purchases by $10 billion. The amount has been whittled down to $65 billion a month.

In public comments, Fed members have said the economic data would have to shift dramatically for the Fed to alter its stated objective of reducing bond purchases at $10 billion intervals until the program, known as quantitative easing, expires later this year.

After gaining an average of 194,000 jobs each month in 2013, the numbers have fallen off significantly in early 2014. The economy added a meager 113,000 jobs in January, which followed the  addition of just 75,000 new positions in December.

But members of the policy-setting Federal Open Market Committee, including newly installed  Fed Chair Janet Yellen, have taken pains to explain that labor data, especially the headline unemployment rate, is one of several economic indicators the Fed is using to determine future policy.

The unemployment rate has fallen to its lowest level since the onset of the 2008 financial crisis  but often for the wrong reasons, namely because thousands of people have been leaving the workforce each month which reduces the number of people the government counts as unemployed.

In addition to labor numbers, gross domestic product, which slowed to 2.4% in the fourth  quarter compared to the 4.1% growth in previous quarter, and consistently low inflation have been cited by policy makers as key barometers for the health of the U.S. economy.

In any event, central bankers have vowed to take a cautious approach to tapering, seeking to  find a balance between dialing back bond purchases too quickly, which could backfire if the economy shows signs of stalling again, and not scaling back fast enough, which could lead to runaway inflation.

Posted on

The FED Continues To Impress With Stupidity

In another point of reference that, once again, proves without a shadow of a doubt that the FED doesn’t know what is happening within our economy and our financial markets, the FED is talking about accelerating tightening.  Of course, exactly at the wrong time.

You see, most of the damage from their loose monetary policy since 2008-09 has already been done. They have already distorted most of the markets to the 10th degree and with speculation running rampant, the worst thing they can do now is to stop or tighten. Doing so will collapse all markets.

Believe it or not, even though markets are surging higher and the economy seems to be doing better, we are on a verge of a vicious bear market and a deep recession within our economy. That is based on my mathematical and timing work. In fact, it would be wise to be liquidating all of your long positions as we speak.  You can read an in depth report on this matter HERE. If you would like to know the exact structure of the upcoming bear market, please CLICK HERE. 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

 

The FED Continues To Impress With Stupidity Google

stupid fed

(Reuters) – The Federal Reserve may find its monetary policies quickly becoming overly easy if it sticks to the current pace of reductions to its bond-buying program in the face of a growing U.S. economy, a top Fed official said on Thursday.

“If the economy continues to improve, we could find ourselves still trying to increase accommodation in an environment in which history suggests that policy should perhaps be moving in the opposite direction,” Philadelphia Federal Reserve Bank President Charles Plosser said in remarks prepared for delivery to the Official Monetary and Financial Institutions Forum in London.

“Reducing the pace of asset purchases in measured steps is moving in the right direction, but the pace may leave us well behind the curve if the economy continues to play out according to the (Fed’s) forecasts.”

Since the onset of the Great Recession and throughout the more than four years since its end, Fed has kept interest rates near zero and has bought trillions of dollars of long-term assets in order to suppress borrowing costs and boost investment and hiring.

Late last year, in a nod to the improving economic and labor market outlook, the U.S. central bank took its first step toward easing up on the monetary gas pedal by trimming its current round of bond buying and signaling it could end purchases altogether later this year.

But the hawkish head of the Philadelphia Fed worries the wind-down will take too long, if, as he expects, the economy grows about 3 percent in 2014, pushing down the jobless rate to at least 6.2 percent by the end of this year and “plausibly” even below 6 percent.

Plosser’s forecast for growth falls squarely inside the 2.8 percent to 3.2 percent forecast range from the majority of Fed officials.

“As the expansion gains traction, the challenge will be to reduce accommodation and to normalize policy in a way that ensures that inflation remains close to our target, that the economy continues to grow, and that we avoid sowing the seeds of another financial crisis,” Plosser said.

“While there continues to be some downside risk to growth, for the first time in years, I see the potential for more upside risk to the economic outlook. We need to consider this possibility as we calibrate monetary policy.”

The economy grew at a 2.4 percent pace last quarter, and recent soft economic data suggests growth may have since slowed. But Plosser cautioned against reading too much into recent weakness, chalking most of it up to severe winter weather.

That’s a view shared by many at the Fed.

Most investors expect the central bank to look past the soft data and continue to reduce its bond-buying program by $10 billion per month at each meeting, setting it on course to end the program before the year is out. The Fed next meets to discuss policy in less than two weeks.

But Plosser, who votes this year on the Fed’s policy-setting meeting and is among the most hawkish of the nation’s central bankers, wants to ratchet back super-easy policies more rapidly than most of his colleagues.

Unlike many of his colleagues, who predict it could take years for inflation to return to normal levels, Plosser said Thursday he sees upside risks to inflation, now languishing at just above half of the Fed’s 2-percent target.

Plosser also called for the Fed to remake its guidance to markets for how long it will keep rates low, because the current promise, to keep them low until well beyond the time the unemployment rate falls to 6.5 percent, has lost any usefulness.

The U.S. unemployment rate stands at 6.6 percent.

He reiterated his view that the Fed should strive to follow monetary policy rules, reduce its reliance on discretionary decisions, and pull back from the aggressive intervention that has marked its actions since the financial crisis.

Posted on

Russia To Everyone: Take Your Sanctions And Shove Them

Russia’s parliament gave its defiant support to Putin and Crimea on Friday, indicating that no sanctions imposed by the US or EU will change its mind. 

With all the BS floating around here is what most people don’t understand. This is not about Ukraine, Crimea and Russia. This is about NATO taking over Ukraine and being closer to Russia than it has ever been. Since the collapse of the Soviet Union, NATO has been pushing its forces east, closer and closer to Russia. To the point where NATO is now right on Russia’s doorstep. Imagine if Russian forces where positioned right on the Canadian border and you begin to understand that the West has pushed the Russian bear between a rock and a hard place.  

As I have said many times before, under such circumstances, Russia has no choice but to go all in. Sanctions or not. It will fight the war if pushed too far. Thus far, the only agitation I see is coming from the West. The real question here is as follows. Since the wars in Iraq and Afghanistan are now over, does our industrial military complex need another war? I will leave you with these wise words. 

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. – Dwight D. Eisenhower

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

 

Russia To Everyone: Take Your Sanctions And Shove Them Google

blinking putin

Moscow (CNN) — Russia’s parliament gave its defiant support Friday to Crimean lawmakers who want to see their region split from Ukraine and join Russia, saying no sanctions imposed by the United States or Europe will change its mind.

A delegation from the Crimean parliament, in Moscow a day after its lawmakers voted unanimously to split from Ukraine, said it would put the decision to a public vote on March 16.

But Ukrainian interim Prime Minister Arseniy Yatsenyuk has condemned those backing a split.

Crimea, an autonomous region in southern Ukraine with an ethnic Russian majority and strong cultural ties to Russia, has become the epicenter of a battle for influence between Moscow, Kiev and the West.

Valentina Matvienko, the speaker of Russia’s upper house of parliament, told the Crimean delegation it would “support and welcome” any decision made by the Crimean people to become a part of Russia.

“We have no rights to leave our people when there’s a threat to them. None of the sanctions will be able to change our attitude,” Matvienko said.

The delegation was greeted with applause in the lower house, where the speaker described the decision to hold the referendum as “dictated by the willingness to protect human rights and lives.”

The Crimean government, which was installed a little more than a week ago after armed, pro-Russian men took over the parliament building in Simferopol, does not recognize the interim government in Kiev.

The authorities in Kiev, in turn, say the Crimean government is illegitimate.

Yatsenyuk, speaking Friday in Kiev, said: “I want to warn separatists and other traitors of the Ukrainian state who are trying to work against Ukraine, any of your decisions taken is unlawful, unconstitutional, and nobody in the civilized world is going to recognize the results of the so-called referendum of the so-called Crimean authorities.”

He said he’d requested a second telephone conversation with Russian Prime Minister Dmitry Medvedev.

Yatsenyuk, who was in Brussels, Belgium, on Thursday as European Union talks on sanctions against Russia took place, insisted then that “Crimea was, is and will be an integral part of Ukraine.”

Monitors suggested

U.S. President Barack Obama set out a potential solution to the crisis in Ukraine when he spoke to his Russian counterpart, Vladimir Putin, on Thursday, the White House said.

The proposal would include direct talks between Kiev and Moscow, the withdrawal of Russian forces to their bases, international support for elections due May 25, and the presence of international monitors to “ensure that the rights of all Ukrainians are protected, including ethnic Russians.”

Obama also rejected the Crimean lawmakers’ decision to call a referendum, saying: “In 2014, we are well beyond the days when borders can be redrawn over the heads of democratic leaders.”

International observers are welcome to witness Crimea’s upcoming referendum on joining the Russian Federation, the delegation of the newly installed Crimean parliament said in Moscow

Meanwhile, international monitors called in by Kiev will try again Friday to gain access to Crimea, which has been under effective Russian control for several days.

On Thursday, armed men at checkpoints turned back the 35-strong team from the Organization for Security and Co-operation in Europe, a regional security bloc.

But members of the OSCE team told CNN’s Matthew Chance, who is traveling with them from Kherson in southern Ukraine toward the Crimean peninsula, that they intend to be more assertive Friday as they seek to get in and assess the situation.

Asset freezes, visa bans

As they seek to put the diplomatic squeeze on Russia to pull back its forces from Crimea and negotiate with Kiev, EU nations announced Thursday they will suspend bilateral talks with Russia on visa matters and have threatened travel bans, asset freezes and cancellation of a planned EU-Russia summit.

French Foreign Minister Laurent Fabius told French public radio Friday that tougher measures are planned if Moscow doesn’t act to de-escalate the situation.

“Without very prompt results, there will be further measures against Russian officials and companies. Those could be asset freezes, cancellations, visa denials,” he told France Info.

“And if another attempt is made, then we would enter into something completely different — that is to say serious consequences for the relations between Europe and Russia.”

The United States also has taken action. The State Department has imposed a visa ban on Russian and Ukrainian officials and others that it said are responsible for, or complicit in, threatening Ukraine’s sovereignty and territorial integrity. Obama has signed an executive order laying the groundwork for sanctions against individuals and entities responsible for the crisis.

Paralympic plea

The Paralympic Games get under way Friday in the Russian city of Sochi, and Putin is expected to attend the opening ceremony.

Ukrainian Paralympic Committee chief Valeriy Suskevich appealed for peace in his country and said he’d made the same request of Putin at a meeting Thursday night.

“We are staying in order to be remembered, for Ukraine to be remembered as the state which sent a unified team,” he said at a news conference. “We’ve taken the decision to raise the flag of the independent sovereign state of Ukraine here at the Paralympic Games.”

Ukraine’s sports minister will not be attending.

Britain, the Netherlands, Canada and Poland are among those who also have said they will stay away. Earlier this week, the White House canceled a presidential delegation to the Paralympic Games.

Crimean threat?

Moscow has denounced the events that led to Ukrainian President Viktor Yanukovych’s ouster in late February as an illegitimate coup and has refused to recognize the new Ukrainian authorities, putting Russia and Ukraine on a collision course over control of Crimea.

Putin has insisted he has the right to use military force in Ukraine if necessary to protect ethnic Russians in Crimea. But Ukrainian officials say no threat exists and that Putin is using it as a pretext to control the region.

The peninsula was part of Russia until Soviet leader Nikita Khrushchev gave it to Ukraine in 1954. Ukraine was then part of the Soviet Union. Russia has a major naval base in the port city of Sevastopol, and thousands of troops are stationed there.

Russian speakers make up about 60% of the population, but around a quarter are Ukrainian and 12% are Crimean Tatar, a predominately Muslim minority. Neither of the latter two groups would welcome a switch to Russian control.

Meanwhile, a second Russian naval vessel was scuttled Friday morning at the entrance to Lake Donuzlav, an inlet on the western coast of Crimea home to a Ukrainian naval base.

Viktor Shmihanovsky, vice commander of the base, told CNN that the inlet is now sealed off and that several Ukrainian naval ships are trapped inside. Russian vessels remain in the waters beyond the blockade, he said.

Interpol asked to arrest Yanukovych

The EU and the United States also announced plans to freeze the assets of ousted leader Yanukovych, who turned his back on a trade deal with the EU in favor of one with Russia.

The rejected trade deal prompted months of protests that culminated in February with bloody street clashes that left dozens dead and Yanukovych out of office.

Back in Kiev on Friday, Yatsenyuk, the interim prime minister, said an agreement to sign an EU trade deal reached Thursday, and the offer of an EU financial aid package worth $15 billion, were the result of historic unity with EU members.

“We are leading Ukraine into the European Union,” he said.

Interpol said it is reviewing a request by Ukrainian authorities that would allow for the arrest of Yanukovych on charges of abuse of power and murder, an allegation tied to the deaths of protesters.

Posted on

Stock Market Update, March 6th, 2014. InvestWithAlex.com

daily chart Feb 28, 2014

A typical day with the Dow Jones up +62 points (0.38%) and the Nasdaq down -6 points (0.13%). 

With the market pushing all time highs, most market pundits agree that this bull market is likely to continue for the foreseeable future. Yet, that is not the case based on my mathematical and timing work. In fact, in one of my earlier posts today I have outlined why bull markets very rarely last over 5 years, particularly during the cyclical bear market we have been experiencing since 2000. As such, it would pay to be very careful here. 

XXXX

The bottom line is this. Maintain your positioning as described below. It won’t be long now before our previously forecasted price and time targets are hit. When that happens the market will shift gears by surprising both bulls and bears. One thing is certain. It will be an exciting period of time for those who have positioned themselves properly. 

As a quick reminder …..our existing forecast and positioning: 

Turn Date: XXXX.  
Turn Price: XXXX

XXXX

Hence, I suggest the following positioning over the next few days/weeks to minimize the risk while positioning yourself for a forecasted market action.

If You Are A Trader:  XXXX 

If No Position: XXXX 

If Long: XXXX

If Short: XXXX

Please Note: XXXX is available to our premium subscribers in our + Subscriber Section. It’s FREE to start. If you would like to learn exactly what the stock market is going to do over the long term as well as over the short term (including exact dates and prices), this would be a great place to start. 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!




Click here to subscribe to my mailing list

Stock Market Update, March 6th, 2014. InvestWithAlex.com Google

Posted on

Carl Icahn Is Going After Ebay. Should You Buy

ebay chart

Carl Icahn is at it again. His latest fight is against E-Bay and it’s getting dirty fast. In a nutshell, Icahn claims that E-Bay has been mismanaged by current management/board. Further, he is demanding the spin off of PayPal as a separate publicly traded company. Doing so would release substantial value or so the thinking goes. 

Should you follow in Carl Icahn’s footsteps and invest in E-bay in anticipation of a spin off?

Maybe. Icahn has a very good track record when it comes to such fights, shareholder activism and releasing value. While this process can be highly volatile, unpredictable and lengthy the chances are good some sort of a value will be released. If there is a PayPal spin off, I would expect that value to be significant. Just recently Ebay’s stock price broke an important level indicating further upside and consideration for possible investment. 

Either way, you should always do your own research and make your own investment decisions.  

Please see the letter from Carl Icahn on merits of the fight below. 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!




Click here to subscribe to my mailing list

Carl Icahn Is Going After Ebay. Should You Buy  Google

wealth-investwithalex

Carl Icahn is a prominent activist investor and the chairman of Icahn Enterprises L.P. This letter originally appeared on his website Shareholders Squaretable. You can follow Mr. Icahn on Twitter here > @Carl_C_Icahn

New York, New York, March 6, 2014 – Today Carl C. Icahn released the following open letter to stockholders of eBay Inc.:

We are strongly encouraged by the results published yesterday of an investor survey conducted by Bernstein Research regarding our campaign to prove to eBay’s board of directors that stockholders are in favor of separating PayPal from the company. A majority of eBay owners responding to the survey said they believe that the composition of the board should change. 55% of the survey respondents said that the composition of eBay’s board should change, while 43% said that splitting PayPal from eBay is the right move to make. We are therefore naturally skeptical of recent articles reporting eBay CEO John Donahoe’s claims of widespread stockholder support for keeping the companies together.

While I find the Bernstein data points astounding in light of the fact that we have not yet even begun to formally reach out to our fellow eBay stockholders to make our case, I cannot say that I am particularly surprised at the level of apparent stockholder dissatisfaction with this board – especially in light of (among other things) –

  • what we believe was an epic blunder in which the board allowed an investor group which included director Marc Andreessen’s venture capital firm to capture the lion’s share of the enormous upside from Microsoft’s acquisition of Skype at the expense of eBay’s stockholders;
  • the fact that during Mr. Andreessen’s time on the eBay Board he has made investments in and actively advised, no less than five direct competitors of eBay (four of which are competitors of PayPal), including Boku (mobile payments platform), Coinbase (Bitcoin wallet), Dwolla (secure online money management), Jumio (online and mobile credit card payments) and Fab (design e-commerce); and
  • the fact that Board member Scott Cook, the founder of Intuit (which competes with PayPal) allegedly asked eBay not to recruit any Intuit employees, according to an ongoing Department of Justice investigation.

I am also not surprised that our spinoff proposal already seems from this survey to have so much support despite the fact that we have not yet even made public our full business rationale for the separation. What I see as some of the obvious potential benefits of a spinoff –

  • a spinoff of PayPal could eliminate the conglomerate discount that we believe the market has afforded eBay;
  • a spinoff could allow two separate management teams to focus more closely on the core businesses and make better strategic decisions regarding the long-term health of their respective companies;
  • an independent PayPal could provide an even more valuable currency for bolt-on acquisitions as PayPal strives to remain the market leader in mobile payments;
  • a spinoff of PayPal could provide a more compelling currency to attract top talent to the respective companies; and
  • separately, PayPal may be more able to facilitate strategic partnerships with companies that may now be reluctant to do so due to competitive concerns with eBay –

seem already to be apparent to many, many other eBay stockholders. Again, we are encouraged.

We are looking forward to the upcoming annual meeting, where stockholders will have an opportunity to vote on our precatory proposal and send a message to the board that PayPal should be separated from eBay NOW. Stockholders will also at that time have the power to vote out of office two members of eBay’s board of directors and replace them with our nominees, who we believe will be focused more on enhancing value for ALL eBay stockholders than on leveraging their relationships with eBay to benefit their outside personal investments.

Stockholders, please stay tuned. There is more to come – much more. Thank you for your continued support.

Sincerely,

Carl C. Icahn

Posted on

Porn Czar Arrested On Child Porn Charges

Seriously, you can’t make this stuff up. Reports have emerged that top David Cameron aide Patrick Rock — who helped draw up proposals for the country’s Internet porn filters — has been arrested for child pornography.

Why is it always the guilty ones or the sick ones who always want to push their “righteousness” and moral values down our throats?

This is just another indication of how out of line and out of sink our Western Governments have become. If we could only put a filter and block all of the nonsense that is coming out of Washington, that would be a technological breakthrough even I would be happy about. 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

Porn Czar Arrested On Child Porn Charges Google

Monkey see monkey do investwithalex

UK Porn Filter Architect Arrested On Child Porn Charges

from the do-as-I-say-not-as-I-do dept

The UK government has spent years trying to impose its version of morality upon the Internet, demanding that ISPs impose mandatory opt-out porn filters, even if those filters have since been easily bypassed and often block entirely legitimate websites. Worse, the UK government has seemed intent on throwing itself face-first down the slippery slope of censorship, with plans to expand these filters to block arbitrarily-defined “extremist” content. Prime Minister David Cameron has repeatedly and loudly proclaimed to anyone who’ll listen his sole mission is to “protect the children” from the beasts that dwell in the “darkest corners of the Internet.” In the process he’s blamed nearly everyone, including Google and Yahoo, for not doing enough to thwart child porn. 

Apparently, people who live in glass houses should not throw thermonuclear warheads (I think that’s how that saying goes). Reports have emerged that top Cameron aide Patrick Rock — whohelped draw up proposals for the country’s Internet porn filters — has been arrested on suspicion of possession of child pornography. There seems to be some heated criticism pointed Cameron’s direction for keeping the issue quiet, with several UK news outlets also suggesting Rock was given a little extra time between his dismissal and his arrest:

 

“Mr Cameron’s official spokesman has confirmed that No 10 was first made aware of the alleged offence regarding child abuse imagery on the evening of February 12. The matter was immediately referred to the National Crime Agency (NCA) and Mr Rock resigned his position as deputy head of the policy unit. In the early hours of the morning of February 13 he was arrested at his home in London.”

So if this timeline is correct (and the Guardian seems a little murkier on those specifics) the government was made aware of Rock’s offense on February 12, Rock “resigned” on February 12, but he wasn’t arrested until February 13 after the government contacted the NCA. Presumed innocent and all that, but it seems a touch hypocritical and inconsistent to whine like a screaming banshee for years about how everybody else isn’t doing enough to protect the children, while your own staff member and architect of your porn filters is storing child porn on his PC. It’s of course notably worse if it’s found the government gave Rock a little extra time before law enforcement came calling (though perhaps the NCA just moves slower when it’s higher ranking officials). 

Regardless, I think it’s time for UK ISPs to begin developing sophisticated algorithms capable of filtering out David Cameron’s bad ideas from the public discourse.

 
Posted on

Everyone In America Is Worth $215,142

duck tales investwithalex

In a bit of seemingly good news the FED announced that in NET terms the total US household net worth is close to $81 TRILLION with net debt at $13.1 Trillion. Hmm, really? Lets do some high level math ($81T-T13.1T)/315 Million Americans… Hmm, that would mean that every man, woman, child, homeless person and housewife in America is worth $215,142…..Debt Free. Are you f*#(ing kidding me? 

Last time I checked 47 Million Americans were on food stamps, on average working Americans will only have $46,000 saved by the time they are 50 and 36% of Americans will not have any saving at all by the time they retire. If you believe this nonsense, give me a call, I still have some WorldCom and Nortell stock to sell you.  

Then again, if by some supernatural force this number is true, why don’t we take a small portion of it and pay off our National Debt $17 Trillion and all of our Household Debt $13 Trillion. According to the FED we should still have $51 Trillion left. Now, that’s rich. 

Nice try FED propaganda machine. 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!




Click here to subscribe to my mailing list

Everyone In America Is Worth $215,142 Google

WASHINGTON (Reuters) – U.S. household net worth jumped to a new high at the end of last year, as the value of real estate and shareholdings rose and bank accounts swelled.

The Federal Reserve said on Thursday net worth increased $2.95 trillion to $80.66 trillion in the fourth quarter, eclipsing a previous record high.

The value of households’ property, consumer goods, bank deposits and stocks all increased in the quarter.

The Fed said household net worth rose 14 percent in the full year, driven by a $5.6 trillion rise in the value of shares and a $2.3 trillion increase in the value of real estate.

The U.S. central bank has used ultra-loose monetary policy to encourage a recovery in the nation’s housing market following a severe 2007-2009 recession, which has also helped drive U.S. stocks to record highs.

Increases in housing wealth make it easier for families to borrow against the equity in their homes, while overall wealth gains make consumers feel generally more comfortable spending their money. Many economists think consumers spend a few cents of every dollar they gain in wealth.

Growth in household debt slowed to an annual rate of 0.4 percent in the fourth quarter, from 3.0 percent previously, while home mortgage debt fell. Net debt hit $13.11 trillion.

Posted on

California Middle Class Is Priced Out. What’s Next For California Real Estate?

Do not worry my dear friends. The upcoming “severe” bear market in real estate will fix this issue. To read my full report on this matter and to see the “why, how and when” please Click Here

While upscale places like Irvine and Pasadena approaching their 2006-07 highs, the middle class neighborhoods are still down to the tune of 30-40% with higher % of Californians not being able to afford a home.. Plus, over 30 percent of California buyers are cash investors (hedge funds, institutions, etc…). BTW, that number is as high as  75-80% in Las Vegas.

All of this is just another symptom of the enormity of the credit bubble juiced by the FED. While this might be the case now, the upcoming bear market in real estate will resolve this problem sooner rather than later. 

california-home-ownership-rate-investwithalex

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!




Click here to subscribe to my mailing list

California Middle Class Is Priced Out. What’s Next For California Real Estate? Google

From our friends at DoctorHousingBubble.com 

California is a land of booms and busts.  Generations ago gold rush fever brought many to speculate and gamble for future glory.  In the 1900s the promise of uninterrupted sun and great weather lured families to the area.  This trend has only magnified with global forces becoming so dominant and people fully connecting and thinking alike on the technological hive mind.  In other words, people are seeking the same goals and dreams.  People also love speculating on real estate.  Language is hardly a barrier when documents can be translated in the click of a mouse button.  California housing is leaving many middle class families behind as the state gentrifies dramatically.  Reports are very clear, and that is only one out of three California families can actually afford to purchase a home at today’s prices.  Yet the market is attracting investors from all across the country and world.  People are willing to leverage their income with low interest rates and funnel upwards of 50 percent (or more) of their household income into real estate.  What is interesting is that in many “prime” areas housing prices are inching back close to their former peaks.  Yet working class areas, only a few miles away from these markets are still years away from reaching their former peaks.  California is a magnifying glass to the slow erosion of the American middle class.

Prime areas reaching peaks while other areas crawl out of recession trough

As mentioned in a previous article, housing is an odd industry where prices are set at the margins.  In the US, we have 81 million single family homes.  From the latest figures we have something like 2.2 to 2.5 million homes available for sale (existing and new homes).  What this means is that at any given point we have roughly 3 percent of all existing inventory on the market for sale.  This is nationwide.  In some prime markets, you have even lower percentages and this drives up prices especially if speculation is running wild.

Zillow has some great reports on markets across the US.  Let us look at a few Southern California cities in terms of the latest housing figures:
California areas

Source:  Zillow

This chart is very telling.  First, you’ll notice that places like Irvine and Pasadena are only 4 percentage points away from reaching their previous peaks hit in 2006-07.  These markets pull from local investors, global investors, flippers, Wall Street, and of course professional families.  But take a look at areas like Compton (still off by 38 percent from the peak), Inglewood (off by 32 percent), Santa Ana (off by 36 percent), and Santa Clarita (off by 26 percent).  Santa Ana is only a few minutes away from Irvine but this is like comparing two different worlds.  Of course the majority of people by definition live somewhere in the middle and that is why looking at household incomes is important.  Yet these are unlikely to be the current buyers.  Over 30 percent of California buyers for close to half a decade are coming from big money investors.  Many are stretching out with FHA insured loans but this is likely to be in more working and middle class neighborhoods.  Talking with colleagues in the industry they mention that FHA in prime areas is virtually a no-go for buying with sellers.

People might look at a home value of $749,200 in a place like Irvine and scratch their heads.  But with ARMs, interest only loans, and dual income families people are willing to stretch to buy.  Investors of course are willing to go deep into the game.

Yet we may be seeing a slowdown here, even in prime areas.  For example, in Irvine inventory hit a low of 400 late in the fall and is now at 620 (up 55 percent).  You’ll also notice that month-over-month prices dipped which is telling but then again, your typical California family is not going to swing a $750,000 home.  Which is really the big divide happening across the US, a gutting of the middle class.

Homeownership not available to everyone

I made the argument close to a decade ago that homeownership was not always the best option.  For most parts of the US, owning may be a good option (when the median home price is $190,000) but in high cost areas the math isn’t so simple.  Renting may make a lot more sense for those starting a career and looking for mobility for work.  Yet young Americans are facing a very tough economic climate.  Beyond the economics, the homeownership rate has fallen dramatically in California:

Even before the bust, the homeownership rate was already trending back to where it was in the late 1980s.  Not much has changed since.  In fact, with high levels of investors buying properties and lower sales figures, this trend is likely to continue.

For many families, the quick run-up in prices in 2013 has completely shut them out.  We are now seeing investors slowing down given that good deals are harder to find.  Some are venturing into lower priced areas but you also deal with lower incomes.  This may matter if you are looking at hiking rents or trying to flip to an actual potential long-term homeowner.

Housing starts and future trends

Even if housing were to erase the gains of 2013, California has essentially shut out a good number of middle class families from owning.  The market has hit a turning point recently:

CAR report

You’ll see that across the state, year-over-year prices went up 22.1 percent but fell 6.2 percent over one month.  Inventory is up 22 percent from last year and time on the market is up 20 percent as well.  More to the point, sales volume has fallen by 13 percent even in the face of rising prices.  At current price levels in more selective markets, you really have to be upper middle class to wealthy to own a home.  In fact, you will likely need to be in the top 15 to 10 percent of household income (meaning a household income of $150,000 a year is the minimum to play the game without leveraging your entire future on real estate).

California is largely leaving a good portion of the middle class out of the homeownership race.  This trend looks to be the case for years to come.