Archive - May 11, 2015 - Story

Before there was Tinder, which just won a student the Ira Sohn contest for best write up for its "underappreciated valuation" in IAC, there was Adult Friend Finder, aka FriendFinder networks, a website whose sole purposes was finding, to put it bluntly, a fuck buddy. Here is a quick remind what happened to Tinder's predecessor.

As the years have passed without Washington hearing, Russia and China have finally realized that their choice is vassalage or war. Had there been any intelligent, qualified people in the National Security Council, the State Department, or the Pentagon, Washington would have been warned away from the neocon policy of sowing distrust. But with only neocon hubris present in the government, Washington made the mistake that could be fateful for humanity.

At least 22 states are facing budget shortfalls thanks to a combination of fiscal mismanagement and falling oil prices. The negative impact on the public sector has been dramatic suggesting that in the event of a sustained economic downturn, citizens' patience for austerity could wear thin leading to political instability and social unrest. 

Wal-Mart is facing questions tonight after CBS13 learns the company draws its bottled water from a Sacramento water district during California’s drought. "Sacramento sells water to a bottler, DS Services of America, at 99 cents for every 748 gallons - the same rate as other commercial and residential customers. That water is then bottled and sold at Walmart for 88 cents per gallon, meaning that $1 of water from Sacramento turns into $658.24 for Walmart and DS Services."

As data on non-performing loans at Chinese banks shows the biggest sequential increase on record in Q1, Fitch wonders if perhaps the data actually obscures a far larger problem. Official figures on China's NPLs are obscured by a number of factors and may be grossly understated the ratings agency suggests. Furthermore, Fitch says "a protracted downturn in property markets could threaten the solvency of Chinese banks, given their modest loss-absorption capacity."

"It was, at least in theory, simple enough in the old days," wrote a wistful W. Randolph Burgess, head of the New York Federal Reserve, in 1938. "In the present strange new world, where the old gold portents have lost their former meaning, where is the radio beam which the central banker may follow? What is the equivalent of gold?" The men of his era and of the late nineteenth century understood the meaning of such a question and, more importantly, why it is one that must be asked. But theirs was a different world, indeed — one without "QE," ZIRP," or "Unknown Knowns" as fiscal policy. And there were no helicopters, either.

"I'm not sure if it’s the biggest trade ever, but it's certainly one of them," noted Jamie Tyrrell, a VIX specialist on the CBOE floor, as Bloomberg reports almost $100 million worth of options pegged to the volatility of US equities were traded in a split second at 1216ET today. "Someone is interested in owning a lot of protection," Tyrrell added as just over 1 million contracts were traded, all told, about 54% of the total amount of index options that traded at the CBOE all day Friday. While for every buyer of VIX Calls there is a buyer, the notable push higher in volatility after this trade suggests the trades had characteristics of someone hedging stocks.

Did you know that 89 percent of all minimum wage workers in the United States are not teens?  At this point, the average age of a minimum wage worker in this country is 36, and 56 percent of them are women.  Millions upon millions of Americans are working as hard as they can (often that means two or three jobs), and yet despite all of their hard work they still find themselves mired in poverty.  One of the big reasons for this is that we have created two classes of workers in the United States. 

If the Fed's bubble busting team led by Stanley Fischer was looking for runaway inflation, it could have easily found it earlier today without any particular effort, only not in the usual CPI place, but in the price of Women of Algiers (Version O), a "vibrant, multi-hued painting" from Pablo Picasso which moments ago became the world's most expensive artwork, selling for $179,365,000, included the house's premium in a Christie's auction.

Less than two years ago, the number of smartphone shipments in China soared by roughly 100% year over year, rising over 80 million for the first time. Fast forward to Q1 of 2015 when according to IDC, the Chinese smartphone market - the largest in the world since 2011 when it overtook the US - has not only reached maturity but is now also fully saturated and as a result smartphone shipments suffered their first Y/Y decline, dropping 4.3% on an annual basis. As IDC notes, "this is the first time in six years that the China smartphone market declined YoY as the market continues to mature." Worse, on a quarter over quarter basis, the market contracted 8% on the back of a large inventory buildup at the end of last year.

If anyone expected the Obama administration to admit that, as Seymour Hersch alleged last night, it had openly lied and fabricated the entire account of Osama bin Laden killing - perhaps the most defining narrative of Obama's entire first term, we have some bad news: it won't.

Like everything else in America, faux patriotism is also for sale.

"The White House’s story might have been written by Lewis Carroll: would bin Laden, target of a massive international manhunt, really decide that a resort town forty miles from Islamabad would be the safest place to live and command al-Qaida’s operations? It was inevitable that the Obama administration’s lies, misstatements and betrayals would create a backlash... High-level lying nevertheless remains the modus operandi of US policy, along with secret prisons, drone attacks, Special Forces night raids, bypassing the chain of command, and cutting out those who might say no." - Seymour Hersh

Chinese stocks are the most expensive relative to bonds in almost six years. For the first time since June 2009, Bloomberg notes, the earnings yield on the Shanghai Composite Index has dropped below the yield on top-rated corporate debt... and just like in now, stocks rallied 100% in the preceding year before plunging over 20% in the next month, and further still in the ensuing months. Already we are seeing Chinese stocks faltering - with a disappointying post-rate-cut move - which leads on analysts to note, "the market will enter a correction phase, and it will be very volatile," and comments by officials have raised concerns that PBOC will "quickly erode its credibility."

There is propaganda, and then there is the harsh reality, as shown by the case of Denny Rder, 47, of Decatur, Illinois: "look closer, and this city of 75,000 resembles many communities across the industrial Midwest, where the unemployment rate is falling fast in part because workers are disappearing: moving away, retiring or no longer looking for a job."