Social Media Stocks…..
Guest post by Vix and more.
Back in October 2007, sensing a little too much froth in the stock market, I created something I called the OHFdex, which began as a “watch list of Overripe High Fliers” and quickly evolved into an index designed to track 14 such stocks. When the markets turned down, the group was pummeled, with some spectacular crashes from the likes of CROCS (CROX), Las Vegas Sands (LVS), DryShips (DRYS) and others.
As stocks have continued their rise, I have thought about resurrecting the OHFdex, but I have not found sufficient reason to do so, until recently. The rise of social media stocks and some of the attendant valuations are the reason for my reconsidering the OHFdex. Clearly there will be winners as well as losers in this space, but relatively high valuations for LinkedIn (LNKD), Groupon (GRPN), Zynga (ZNGA), Pandora (P), Yelp (YELP), Angie’s List (ANGI), Jive Software (JIVE) and others have raised my eyebrows and even the launch of a Social Media ETF (SOCL, holdings) is enough to give me pause. The problem is that I have trouble picking the big winner from this group, particularly when adjusted for current market capitalization. The temptation is to short them all, but for now at least, it is time to put these stocks and counterparts such as RENN, YOKU,SOHU, REDF, DMD, FFN, etc. into a social media OHFdex and see how things play out.
I’m not saying this is October 2007 or tech media bubble 2.0, but every coal mine needs at least one canary.
The Spanish Banking Sector (and more)
The Trader has been covering the Spanish economy over the past year. Our readers know we have been extremely bearish on the outlook for the Spanish economy and the stock market. We won’t go on about the state of the Spanish economy here, but we would like to provide objectivity on majority of the topics covered on our site. Therefore, we provide you Banco de Espana’s latest presentation on the Spanish economy, banking sector and much more. Don’t forget it is the “Banco de Espana”…
Full amusing reading here.
ECB on Mars?
Super Mario has been in the office for a while now, but what has the ECB actually accomplished since he joined, except the mighty LTRO? Yes, the LTRO was a great liquidity injection, where Spanish banks have been buying Spanish bonds. This is just like moving money from the left to the right pocket, with leverage….With the ECB balance sheet having expanded aggressively, we should be asking ourselves; are they in control of the situation? From Macrobusiness.
Overnight the president of the European Central Bank, Mario Draghi, gave a speech to the Hearing at the Committee on Economic and Monetary Affairs of the European Parliament. The speech was not particularly out of line with what Mr Draghi usually says, such as:
Available indicators for the first quarter of 2012 broadly confirm a stabilisation in economic activity at a low level. Latest developments in survey data are mixed, highlighting prevailing uncertainty. Looking ahead, growth should be supported by foreign demand, the very low short-term interest rates as well as our non-standard measures. At the same time, downside risks relate in particular to a renewed intensification of tensions in euro area sovereign debt markets and their potential spillover to the real economy. Further increases in commodity prices may also hamper economic activity.
This is the same speech lead-in we have been hearing since Mario Draghi took over the helm of the ECB from Jean-Claude Trichet. Given recent PMI data much of this statements appears to be completely disconnected from the reality of what is happening in Europe, but this isn’t the first time I have noted Mr Draghi’s apparent delusion.
France-Austerity vs Stimulus
The French elections are approaching fast. While the main focus has been on Greece, Italy and SPain, let’s review some facts on France. From Scott Barber of Reuters.
The results of this past weekend’s first round of voting in the French presidential elections may have delivered a warning that the close alliance between France and Germany on strategies for tackling and containing the eurozone crisis may be approaching an end. For the last few years, the team of German Chancellor Angela Merkel and French President Nicolas Sarkozy has been so much in sync that they have become known to all as “Merkozy”. But in first-round voting, Sarkozy became the first French president in half a century to fail to emerge as leader, ceding pride of place to Socialist rival Francois Hollande.
Now the two men will square off in a runoff election scheduled to take place May 6, and it is the one-third of French voters who cast ballots in favor of other parties – including the National Front candidate on the extreme right, Martine Le Pen – who hold the balance of power. To understand the impact of these voters on the outcome, see the interactive graphic, below, which enables you to calculate how many voters who supported candidates that didn’t make it through to the run-off now need to switch their allegiance to Sarkozy in order for him to cling on to his job.
Charts below.
Monti’s honeymoon over?
Chart presented without comments, courtesy Scott Barber.
Essential Chart Update as markets lose momentum
Here is a quick chart update of the European markets. After the big “Apple rally” many were thrown into believing “everything” is fine.
Unfortunately, Apple won’t save Europe. The Spanish market is once again showing very weak action, followed by the Italian MIB.
European charts below.
Agony in Spain
Markets have been cheering Apple, and no news regarding the European situation is seen as good news. With one stock dictating the world markets, one should probably be cautious regarding the overall market. Meanwhile, the Spanish agony persists. Via El Pais.
Trouble brews with regions as PP left “isolated” over state budget.
Deficit triples at the start of year as budget debate kicks off.
Villages of the damned. (austerity hits the man).
More Evidence That Austerity During Depressions Works
Guest post by Azizonomics.
Sorry, no. I am being sarcastic.
From Bloomberg:
The U.K. economy shrank in the first quarter as construction output slumped, pushing Britain into its first double-dip recession since the 1970s and raising pressure on officials to salvage the recovery.
Gross domestic product contracted 0.2 percent from the fourth quarter of 2011, when it shrank 0.3 percent, the Office for National Statistics said today in London.
Last month I described Britain’s problems: GDP levels have never recovered to pre-crisis levels, the unemployment rate continues to climb from post-crisis levels, government debt level continue to climb, inflation levels are elevated, and all of these metrics are somehow worse than the situation in America.
And now Britain is back in recession.
News That Matters
All you need to read and more below.
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