Is Facebook worth the price?

Jun 29th 2011, 18:28 by A.D. | LOS ANGELES (The Economist)
ON MONDAY, news surfaced that a small investment fund, GSV Capital, had purchased $6.6m worth of private shares of Facebook, valuing the popular social network at $70 billion. The shares of GSV Capital, which are publicly traded, shot up 42% on the news, adding $14m to the fund’s market value. That suggests the stock market believes Facebook is worth roughly twice its current private market valuation.


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Zynga IPO Implies a $15-$20 Billion Valuation

Published: Tuesday, 28 Jun 2011 | 1:00 PM ET
By: Kate Kelly
CNBC Reporter

As a Harvard Business School student, Mark Pincus scoffed at Wall Street firms whose interview questions he felt were beneath him. Now he’s hiring some of those very companies to help take his game maker, Zynga, public.

Zynga, the San Francisco Internet company responsible for FarmVille, Zynga Poker, and other popular online games, plans to file registration documents with the Securities and Exchange Commission as early as Wednesday to launch an initial public offering of stock, say people familiar with the matter.

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China's debt bomb

By Katie Benner June 28, 2011: 10:41 AM ET
(CNN Money)

As the world watches the Greek credit crisis unfold, a Sino-debt disaster is brewing halfway around the world.

Jim Chanos, the hedge fund manager who is famously shorting China, told Fortune late last year that the country was "embarking on something unprecedented." He was referring to the massive construction boom that has been underway for years, and that was supercharged by a 2008 stimulus package that pumped four trillion yuan ($586 billion) into the economy. In his opinion, the speculative bubble in real estate would end in a big pop, empty buildings, and pain for the country's broader economy.

For those who side with team Chanos, data is seeping out of China that suggests that he may right.
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Fed set to buy $300B more Treasuries

By Chris Isidore @CNNMoney June 28, 2011: 9:54 AM ET

NEW YORK (CNNMoney) -- QE2 is just about done. But the Federal Reserve will still be buying massive amounts of long-term Treasuries.

In fact, the Fed's purchases over the next year will likely be at least $300 billion. That's half the size of QE2 -- even if QE3 never takes place. Think of it as QE 2.5. 

While the Fed's efforts to pump about $600 billion of new cash into the economy over the last eight months comes to an end this week, the program, known as quantitative easing or QE2 for short, was not the only way the central bank was an active buyer of Treasuries.
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Citi Plays Catch-Up In China And Russia, Stock Smells Like $56

Jun. 24 2011 - 2:23 pm
posted by TREFIS TEAM
(Forbes - Investing)

Citigroup announced its move into the consumer and retail banking sector in Russia last week reinforcing its focus on emerging markets.

This move comes on the heels of the group’s investment banking joint venture in China that will allow it to offer underwriting and merger & acquisition (M&A) advisory services in the country.

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Apple's iPhone Deal with China Mobile Has Huge Profit Potential

By Douglas McIntyre - Posted 9:00AM 06/24/11

Apple (AAPL) buys many of the components for its electronic devices from Chinese suppliers. Now, it plans to get more aggressive about selling those devices in the world's largest cell phone market, which could substantially boost its earnings. Beijing's Ministry of Industry and Information Technology has just announced that there are now 910 million mobile phone subscribers in China. Users of 3G networks rose to almost 74 million. The number of wireless subscribers in the world's most populous nation is more than three times the number in the U.S., and its growing much more rapidly.

TheShanghai Daily reports Apple will begin to sell the iPhone this fall with China Mobile (CHL), by far the largest wireless operator in the People's Republic. Apple already has a partnership with smaller China Unicom (CHU). "A new iPhone with China Mobile's network will debut and the cooperation will be announced in September," China Mobile's Beijing-based marketing official Liu Yang said on his microblog, according to the newspaper.

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Oil Prices Were Already Falling, So Why Tap Reserves Now?

Published: Thursday, 23 Jun 2011 | 11:55 AM ET
By: Jeff Cox
CNBC.com Staff Writer
An aggressive global effort to drive down oil prices even further appears aimed not only at easing gasoline prices but giving a boost to a faltering economy.
Dual announcements on Thursday by the US Department of Energy and International Energy Agency that reserve stockpiles would be released came even as the price of US crude had fallen more than 16 percent in just two weeks, while the more widely used Brent crude was down about 12 percent.

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A Look Inside the Fed’s Balance Sheet

JUNE 21, 2011, 4:49 PM ET

By Phil Izzo (WSJ)

Ahead of the Federal Reserve‘s policy-setting meeting tomorrow and the coming end this month of QE2, it’s worth taking a look at the latest figures from the Fed’s balance sheet.

Assets on the Fed’s balance sheet sit at around $2.811 trillion as of last Wednesday. That’s up from less than $1 trillion prior to the recession. During the recession the Fed expanded its balance sheet through several programs aimed at keeping markets functioning. As markets stabilized the Fed shifted out of emergency programs and into purchases of U.S. Treasurys, mortgage-backed securities and agency debt securities to drive down interest rates and encourage more borrowing and growth in two separate rounds of what is known as quantitative easing.

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Grupo Financiero Galicia Looking For Triple Digits In Growing Argentinean Economy

Jun. 21 2011 - 10:46 am (Forbes)

Is Argentina overheating?Grupo Financiero Galicia S.A. (GGAL – Snapshot Report) is expected to see triple digit earnings growth in 2011 as the Argentinean economy heats up. Shares, however, have fallen in the last few weeks, making this Zacks #1 Rank (strong buy) even more attractive.

Grupo Galicia is the holding company for Banco Galicia, one of Argentina’s oldest banks, which provides financial services to corporations and individuals throughout Argentina. It also is a big supplier of credit cards.

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RIM starts handing out layoff notices, report says

TORONTO | Tue Jun 21, 2011 8:32pm IST
(Reuters) - BlackBerry maker Research In Motion has started to hand out layoff notices after it said on Friday it would cut an unspecified number of jobs, a local newspaper said on Tuesday.

A spokesman for the Canadian company could not be reached immediately to confirm the report in the Waterloo Region Record, which serves the Ontario city where RIM is headquartered.

The report gave no specific numbers on the layoff notices, but noted that RIM employs about 17,500 workers globally, including 9,000 in the Waterloo region.

Shares of RIM, which once dominated the business segment of the smartphone market, have dropped about 27 percent since it revealed dismal quarterly results and lowered its full-year outlook on Friday.

The stock is down more than 50 percent this year after a series of missteps as it tries to keep pace with Apple Inc and other innovators in the smartphone and tablet computer markets.

(Reporting by Frank McGurty; editing by Janet Guttsman)

If Greece Defaults, What Happens to Portugal and Ireland—and Spain?

By Gonzalo Lira

MONDAY, JUNE 20, 2011

So it looks like Greece is about to go down the toilet. Last year, Greece got a bailout—so this year (wouldn’t you know it), they want another.
But it’s looking like France, Germany, Holland and the UK are all balking at the reality of having to save the Greek’s hide once again. Boris Johnson, the flamboyant Mayor of London,openly called for Greece to exit the euro in an op-ed in the Telegraph. Several of the participants in the negotiations are asking for Greece to make deeper austerity cuts first, before getting more bailout money—.

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Is it the summer of 2008 all over again?

By Paul R. La Monica June 20, 2011: 12:42 PM ET

NEW YORK (CNNMoney) -- Is Greece the 2011 version of Lehman Brothers?

More and more investors are starting to worry that this summer could be a mirror image of the dog days (emphasis on dog) of 2008.

Big banks, particularly in Europe, have massive exposure to Greek debt. And just as Lehman's bankruptcy in September 2008 led to meltdowns at other big financial firms, the worry is that if Greece defaults, it could be the first proverbial domino to fall.

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Why the economic recovery is lagging—Posner

06/19/2011

The U.S. economy is stagnant; the proposition that we had a mere “recession” which “ended” two years ago, is, like the terminology of sovereign default (“debt restructuring”), just an exercise in euphemism. Real (that is, inflation-adjusted) GDP per capita has declined by almost 3 percent since 2007. (This is on the assumption that the first-quarter 2011 increase in GDP at an annual rate of 1.8 percent, not adjusted for inflation or population growth, will be the full-year real per capita increase—in fact, if unadjusted GDP grows by less than 3 percent for the year as a whole, the real per capita GDP will decline.) At the same time, the national debt has soared (it is currently $14.3 trillion, of which $9.7 trillion is “public debt”—that is, debt owed bondholders rather than social security annuitants and other entitlement holders), and unemployment exceeds 9 percent, with about half the unemployed not having worked for at least six months.


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Number of the Week: Compensating for High Gas Price

By Justin Lahart (WSJ)

138.45 billion: Gallons of gasoline the U.S. is forecast to consume this year, according to theEnergy Information Administration.

The price of gasoline eased in recent weeks, but it’s still high. At the current level of $3.71 for a gallon of regular, the U.S. would spend $140 billion more at the pump annually than a year ago, when it fetched $2.70. That’s equal to about 1.3% of the $10.9 trillion consumers look likely to spend this year according to a forecast from Macroeconomic Advisers.

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Oracle seeks billions in Google lawsuit

Thu June 16, 2011 11:09 PM (Seeking Alpha)

June 16--Oracle (ORCL) has put a multibillion-dollar price tag on its claim that Google (GOOG) built the popular Android software by using some of Oracle's Java code without permission, according to documents filed Thursday in San Jose federal court.

Google is disputing Oracle's claims for patent and copyright infringement, but recent court filings indicate Oracle is seeking a share of Google's extensive advertising revenue in

damages for the alleged violations.

The case is being watched closely in the tech world because it could have broad implications for the commercial software and mobile computing industries. 

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Groupon: The Good, Bad and Ugly

By Chris Stuart 06/17/11 - 06:00 AM EDT
BOSTON (TheStreet Ratings) -- Groupon has been taken behind the proverbial woodshed to be roughed up.

And deservedly so. The deal Web site's S-1 form released last week exposed many weaknesses, including a loss of over $400 million last year. After reading the registration statement, it's obvious the company is growing like a weed, yet has done so at a cost -- namely, huge marketing expenditures to acquire customers.

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The clock is ticking on Bitcoin

June 17, 2011: 12:29 PM ET

With recent exposure bringing the online currency to the attention of wary lawmakers, expect to see Bitcoins disappear. But it may take a while.

By Daniel Roberts, reporter

FORTUNE -- If you want a chicken burrito from Meze Grill in midtown Manhattan today, you can fork over $8.75 or give them about half a Bitcoin. The restaurant began accepting Bitcoin Tuesday and its owner is excited, although so far not a single customer has paid this way.

Bitcoin is an unregulated, peer-to-peer currency that only exists online; it sounds like a concept out of Mario games or The Matrix. It was started in 2009 by a programmer known by the pseudonym Satoshi Nakamoto. And a few weeks ago most people had never even heard of Bitcoins.


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IMF cuts US growth forecast, warns of crisis

17 JUN, 2011, 06.46PM IST,REUTERS 
SAO PAULO: The International Monetary Fund cut its forecast for U.S. economic growth on Friday and warned Washington and debt-ridden European countries that they are "playing with fire" unless they take immediate steps to reduce their budget deficits . 

The IMF, in its regular assessment of global economic prospects, said that bigger threats to growth had emerged since its previous report in April, citing the euro zone debt crisis and signs of overheating in emerging market economies.


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How to profit from the coming Greek default

By Matthew Lynn

LONDON (MarketWatch) — You don’t exactly need a crystal ball to know what the biggest event in the financial markets of the next 12 months is going to be: Greece defaulting on its debts.

This week Standard & Poor’s cut its rating on the country to CCC, the lowest of any nation in the world. Only last week we learned that Greek industrial production was down 11% year-on-year. Unemployment has risen 40% over the past year, and now stands above 16% nationally. A year on from the European Union and International Monetary Fund “rescue,” Greece is slipping into 1930s-style depression.

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Foreigners Make Run on US Housing Market

Published: Wednesday, 15 Jun 2011 | 11:12 AM ET

By: Diana Olick
CNBC Real Estate Reporter

Falling home prices may be plaguing the US economy, but they are candy to foreign investors, who already have a weak dollar on their side.

Buyers from overseas spent roughly $41 billion on US residential real estate last year, a bump up from the previous year. US real estate agents report a surge this Spring especially, as foreign buyers see continued pressure on home prices and ample bargains.

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US Housing Crisis Is Now Worse Than Great Depression

Published: Tuesday, 14 Jun 2011 | 12:04 PM ET
By: Jeff Cox
CNBC.com Staff Writer

t's official: The housing crisis that began in 2006 and has recently entered a double dip is now worse than the Great Depression.

Prices have fallen some 33 percent since the market began its collapse, greater than the 31 percent fall that began in the late 1920s and culminated in the early 1930s, according to Case-Shiller data.

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CNBC's Fast Money: Gold to Reach $5,000 an Ounce Due to Supply Shortage: Report - CNBC

CNBC's Fast Money: Gold to Reach $5,000 an Ounce Due to Supply Shortage: Report - CNBC

Welcome to IPOville

Social-media firms see champagne; others see bubbles

Jun 9th 2011 | SAN FRANCISCO | from the print edition

INITIAL public offerings (IPOs) of internet start-ups are like buses: you wait ages for one to arrive, then several turn up at once. After years in the doldrums, the IPO market for technology firms has suddenly sprung to life again in America.

LinkedIn, a social network for professionals, kicked things off last month with a flotation on the New York Stock Exchange (NYSE) that valued it at $8.8 billion—572 times its profits last year—at the end of the first day of trading. Now a number of web outfits, including Groupon, which offers online coupons, and Pandora Media, an internet-radio firm, are queuing to join the party. Other start-ups could soon add themselves to the crowd, notably Zynga, the creator of addictive online games such as FarmVille, in which players grow turnips and breed pigs.

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Optimistic UBS Analyst Sees Citi At $56

Jun. 13 2011 - 1:50 pm - Forbes

posted by BLAKE WILSON 

Citigroup (NYSE: C) has been looking sloppy for most of 2011, and downright ugly for the past month. Citi shares have declined 14% since the company’s reverse stock split on MarMay 9, compared to a 2%  drop for the S&P 500.

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Buffett: How inflation swindles the equity investor (Fortune, 1977)

June 12, 2011: 9:15 AM ET

The central problem in the stock market is that the return on capital hasn't risen with inflation. It seems to be stuck at 12%.

By Warren E. Buffett

FORTUNE -- It is no longer a secret that stocks, like bonds, do poorly in an inflationary environment. We have been in such an environment for most of the past decade, and it has indeed been a time of troubles for stocks. But the reasons for the stock market's problems in this period are still imperfectly understood.

There is no mystery at all about the problems of bondholders in an era of inflation. When the value of the dollar deteriorates month after month, a security with income and principal payments denominated in those dollars isn't going to be a big winner. You hardly need a Ph.D. in economics to figure that one out.

It was long assumed that stocks were something else. For many years, the conventional wisdom insisted that stocks were a hedge against inflation. The proposition was rooted in the fact that stocks are not claims against dollars, as bonds are, but represent ownership of companies with productive facilities. These, investors believed, would retain their value in real terms, let the politicians print money as they might.

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The checkered past of Groupon's chairman

Groupon's largest shareholder and chairman, Eric Lefkofsky, has a back story investors might want to know.

By Kevin Kelleher, contributor

FORTUNE -- "Lets start having fun... lets get funky... let's announce everything... let's be WILDLY positive in our forecasts... lets take this thing to the extreme... if we get wacked [sic] on the ride down-who gives a shit... THE TIME TO GET RADICAL IS NOW... WE HAVE NOTHING TO LOSE..."

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Groupon is Effectively Insolvent

Conor Sen, On Friday June 3, 2011, 12:00 pm EDT

I'll start by tipping my hat to Andrew Mason. He caught social mood just right, creating a coupon/local/flashmob hybrid business model at the perfect time, and has created the fastest-growing company on a revenue basis in American history. That being said, it's operating like a Ponzi scheme that needs constant infusions of cash to stay afloat as it's hemorrhaging money.

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Crude Oil Market: A $2.5-Trillion-a-Year Global Fake Out? (Guest Post) | eWallstreeter

Crude Oil Market: A $2.5-Trillion-a-Year Global Fake Out? (Guest Post) | eWallstreeter

By Ilene

From Phil Davis:

Speculators at the NYMEX are doing it again and have NO INTENTION WHATSOEVER of accepting delivery of even 1/10th of the 367M barrels they had as open contracts last week. In fact, Wednesday (June they traded their contracts 454,043 times. It’s a 123% daily churn rate!

Of course, it’s easy to churn 454 million barrels of crude because the only one that ends up paying for all those fees is the end consumer of crude. All those fees are passed on to consumers as part of the price of oil.

Don’t forget to thank Lloyd and Jamie when you fill up your tank, as Exxon’s CEO Rex Tillerson told us, without those speculators, a barrel of oil would be $70. You can see Jamie sweating…

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