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  • Zynga (ZNGA) files paperwork in Nevada to start the process to become licensed in the state to enter real money gambling markets. Though the process could take up to 20 months, the move shows the company intends to be right in the thick of the online gambling space as a regulatory framework works itself out. ZNGA +5.7% premarket. [View news story]
    After the Full Tilt debacle, people are going to be looking for the most trustworthy names in this space. That includes both regulators and players. The eventual winners in this space will be people like Steve Wynn and the bigger corporate players like LVS, along with a few of the existing big-time names in Europe. It remains to be seen who their technical partners will be in the US, but again I would be looking to Europe for leadership as there is an established market there already. Most are companies you've never heard of, which is exactly how the brand owners like it. Only the most degenerate gambler would give someone like Zynga his money.
    Dec 6 11:47 AM | 1 Like Like |Link to Comment
  • The Keynesian Depression [View article]
    But then the booze manufacturer, tired of being heavily taxed so that bums can drink for free, moves his operation to Ireland. He pays less tax there, and now Irish workers make his booze instead of American ones. So there are more Americans out of work. But not to worry, the American government will still buy them free booze. And we end up with a low-tax country with high employment and a high-tax country with low employment but plenty of free booze made by workers in the low-tax country and paid for by printing money. Eventually the Irish booze maker stops accepting that money and now the Americans have lots of bums but neither jobs nor booze for them. Whoops! Revolution time!

    Both of these descriptions are woeful oversimplifications. But I would suggest that what I'm describing here is much closer to something that actually happens than your description of textbook Keynesian theory.
    Dec 5 10:33 AM | 9 Likes Like |Link to Comment
  • The Keynesian Depression [View article]
    Ever stop to think about why Australia and Canada are doing a bit better? Hint: it's nothing to do with policy.
    Dec 5 01:36 AM | 1 Like Like |Link to Comment
  • The Keynesian Depression [View article]
    Actually a monetary system of buying dinner with seashells would be far more credible than the one we have. While the number of seashells is very large, and therefore their individual value very low, that number is at least finite, and not subject to manipulation by politicians and bankers. There is no way to make more seashells overnight; one can grow more mollusks, but the seashells still take time, and one must feed the mollusks while waiting. Such a system acknowledges that there is no free lunch. The one we currently suffer under makes no such concession.
    Dec 5 01:34 AM | 7 Likes Like |Link to Comment
  • The Keynesian Depression [View article]
    "I don't like my dollars being inflated away."

    Why are you holding dollars? The thing not to like is one's future earnings being inflated away. Since there's no hope of salaries keeping pace with devaluation, that's the real danger here. But surely no one these days is so foolish as to be holding dollars or dollar-denominated debt. That's for the fully-hedged bankers and no one else.
    Dec 5 01:29 AM | 4 Likes Like |Link to Comment
  • After voters approved tax hikes for the rich in the recent election, California’s Legislative Analyst’s Office is forecasting that the state will enjoy a surplus of $1B by FY 2014-2015. Critics says the increases will lead to an exodus of residents, businesses and jobs, although Governor Jerry Brown's office points to a report which says that the link between tax policies and migration are untrue. [View news story]
    The same Texas that closed a $31 billion budget shortfall last year primarily with accounting tricks? The same Texas that's on the hook for billions more in unused sick and vacation time owed to its enormous payroll? The same Texas in which cities have raised sales taxes to continue paying for socialist programmes the state cut?

    No, thanks. Texas talks big but is really no different from California. But if you have a real alternative -- say, a state in which the state's constitution prohibits the state and all of its combined political entities from consuming more than 5% of the state's GDP -- I'd like to hear about it. It's spending that has to be strictly limited if taxes are to be kept low. Everything starts and ends with spending. Put hard caps on spending, and you'll never have to worry about taxes.
    Dec 4 11:03 AM | 5 Likes Like |Link to Comment
  • After voters approved tax hikes for the rich in the recent election, California’s Legislative Analyst’s Office is forecasting that the state will enjoy a surplus of $1B by FY 2014-2015. Critics says the increases will lead to an exodus of residents, businesses and jobs, although Governor Jerry Brown's office points to a report which says that the link between tax policies and migration are untrue. [View news story]
    Zero. Because if this projection is still being made when the time comes to pass the budget for 2014-15, more spending will surely be added. It's a vicious circle; taxes rise, it starts to look like the budget will be balanced finally, someone comes along and insists that we think of the children, spending rises, budget shortfalls crop up, budget shortfalls get worse, issuing debt and paying bills becomes very difficult, taxes rise. Lather, rinse, repeat.

    Those of you in the rest of the US should look very carefully at California, specifically as an example of what one-party rule looks like. There is little or nothing to like about the Republican Party, but it will be missed all the same.
    Dec 4 10:54 AM | 4 Likes Like |Link to Comment
  • Some Microsoft (MSFT) news: 1) Microsoft has begun selling Office 2013, along with new versions of Exchange, SharePoint, Lync, Project, and Visio, to businesses. Office 2013 brings a touch-friendly UI, SkyDrive integration, and a stronger emphasis on subscriptions. Many of the complementary products are seeing price hikes. 2) A Microsoft insider claims Redmond will launch 3 new Surface models next year: an 8.6" RT model with a Qualcomm chip, an 11.6" Pro model with an AMD Temash chip, and a 14.6" "Surface Book" with an Intel Haswell chip. Surface RT sales have disappointed thus far. [View news story]
    Who cares what CPU Surface Pro 11.6" uses? No one's going to buy it anyway.
    Dec 3 11:20 PM | Likes Like |Link to Comment
  • The fiscal cliff doesn't matter, writes The Brooklyn Investor. Selling stocks because you are worried about it is a mistake; so is buying because you think it will be resolved. To help ignore the noise, he says, think of Buffett's 20-hole punchcard - invest as if you'll only ever be allowed to make 20 decisions. [View news story]
    Republicans spend, Democrats spend, but through it all, Terry330 trolls on with irrelevant politically charged commentary.
    Dec 2 11:16 PM | 12 Likes Like |Link to Comment
  • The executive hemorrhaging at Zynga (ZNGA) continues as VP Roy Sehgal, who created Café World, quits to take a sabbatical from work, while Steve Schreck, a general manager who led the development of a recent hit called "Hidden Chronicles," is leaving to join the mobile gaming start-up of another Zyngal alumnus, Mike Verdu.
     [View news story]
    "Sheesh. Zynga is a buy. You're paying for their cash in the bank and getting all their product and business for FREE. "

    That's not how it works. You're paying for a minority stake in the company, period. What you get for that depends on two things, as it does with all companies: how the businesses perform, and what the board and management decide to do with the company's assets. You seem to be of the opinion that the business will succeed; why? The fact that autocratic management style does not automatically imply imminent financial collapse is not sufficient to construct a bullish case for the business.

    Regardless of what happens to the business, what makes you think you'll see any of the profits? You can't possibly expect a dividend, and it's hard to imagine anyone buying the company at a good price. But as bad as that is, the real problem is with your assumption that buying a company for cash or less is a riskless move. While you have two ways to capture upside -- distributions (you've got to be kidding) or selling your stock, you cannot conclude that there is no downside. Pincus controls the company and has no intention of liquidating. I absolutely guarantee you that if the business continues going south, that cash will be spent, and it will not be spent on you. You will lose substantially your entire investment.

    So I come back to it: even if you think Pincus's alienation of his staff in the midst of the biggest seller's market in tech labour history is irrelevant, what is your thesis for this business being successful?

    We can debate the merits of autocratic management style and the circumstances under which it may or may not work separately. Suffice it to say that I believe Pincus's specific moves and style are not appropriate for this company at this time in this market. And I'm far from the only one.
    Dec 2 10:19 PM | 2 Likes Like |Link to Comment
  • The executive hemorrhaging at Zynga (ZNGA) continues as VP Roy Sehgal, who created Café World, quits to take a sabbatical from work, while Steve Schreck, a general manager who led the development of a recent hit called "Hidden Chronicles," is leaving to join the mobile gaming start-up of another Zyngal alumnus, Mike Verdu.
     [View news story]
    You may be interpreting a sequentiality that's not really present here. It's widely known in the industry that most if not nearly all the employees of Zynga want to leave. Reasons range from working conditions to Pincus's leadership to the options clawbacks to the general hopelessness of striking it rich and the sepulchral morale pervading the place for all of these reasons. It's not surprising that each person finds the right opportunity elsewhere at a different time. While the previous departure of an especially respected colleague or leader might provide additional incentive or opportunity to leave, it's silly to imagine each successive executive departure as creating another batch of people saying "ok, that's it; now I want to leave too". That's not really how it works. When things are terrible, everyone wants to leave and is looking more or less seriously. And because the things making people want to leave are integral to Zynga itself, no turnaround is possible. The company's only possible recruiting strategy is to target the desperate, who are going to be of lower quality than those they replaced. All part of the downward spiral that begins with an incompetent tyrant at the top, leads to an obviously flawed strategy, and then extends into abusing and alienating the people you need on your side to right the ship. That will never happen as long as Pincus is in charge, and there is no way to dislodge him, so this one's going straight to the bottom. The perceived loss of critical mass at the executive level is merely an observational bias, and the steady stream of departures is a symptom, not a cause, of the company's failure.
    Dec 2 11:38 AM | 3 Likes Like |Link to Comment
  • Exelon: Potential Dividend Cut May Be Deeper Than You Expect [View article]
    Lots of words but only a few matter. The management team told common shareholders that it doesn't consider them to be the boss. Common shareholders should respond by either sacking management or selling their shares. If management wants to work for Moody's, they should call Moody's HR department. When it comes to management and board alignment with the interests of common shareholders, the only sane strategy is zero tolerance. If I owned this company I would be incensed.
    Nov 30 10:21 PM | 4 Likes Like |Link to Comment
  • The Settlement Delay Of MBS Purchases Under QE3 And The Price Of Risk Assets [View article]
    Gold is not a "risk asset", it is the one and only riskless asset. Everything you're explaining makes sense if you stop treating the dollar as the pricing unit and accept that gold is. With that perspective, what you are seeing that the the true "risk asset" is the dollar short that these heavily indebted entities have put on. Any news that implies constrained dollar supply can cause sharp spikes in the price of the dollar, triggering short squeezes. It's very obvious that this is what's happening as it is seen in the dollar prices of virtually all assets that are traded on liquid markets. You will get a much better understanding of market behaviour and asset pricing if you take the dollar out of the equation and price everything in gold. The behaviour of the heavily-shorted (i.e., there is too much dollar-denominated debt in existence) dollar overwhelms charts and leads people to incorrect conclusions, such as yours that gold is a "risk asset". Periodic short squeezes in the dollar are a story, but they're not the only one.
    Nov 30 11:13 AM | 1 Like Like |Link to Comment
  • ARM Holdings: Buyout Rumor Fuels Lucrative Short Opportunity [View article]
    "It seems that the seeking alpha populace has not grasped the idea of buying richly valued stocks that are going higher."

    I certainly grasp that there are people who do this and make money on it. They are called momentum traders, and they also lose a lot of money when their trades blow up. I'd rather just go to the track; it'll take a lot less time to win or lose my money, and I'll get to see a horse race. In the meantime, I'll continue to invest my money in companies that generate operating income and distribute it to me. That's a concept that momentum traders certainly haven't grasped.
    Nov 29 01:57 PM | Likes Like |Link to Comment
  • Gold futures sank $20 at the open and never recovered, hit by a wave of stop-loss orders in a move blamed on a variety of reasons including technical selling, the expiration of options and futures contracts, deflationary concerns and a stronger U.S. dollar. One thing was certain: “There were no fat-finger trades or technical errors... This was a market-driven selloff." [View news story]
    Who cares? Many of us are now using gold as the standard by which we evaluate all other charts. The dollar's worth is all but meaningless now.
    Nov 29 12:33 AM | Likes Like |Link to Comment
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