2014: Supercars Taking Steps To Go Eco-Friendly

Tesla Motors IPO was just $19 a share in 2010, and many on Wall Street thought the company was doomed for disaster. Boy, were they ever wrong? As of 5/5/2014, Tesla is trading at $216/share with specialized Tesla recharge stations starting to pop up across the country. This story of the “little electric engine that could” now looks to be one of the biggest, most daunting shadows to be cast over the car industry since the likes of Henry Ford. Top Gear’s Jeremy Clarkson said on October 31st, 2004, “[Supercars] are designed to melt ice-caps, kill the poor, poison the water table, destroy the ozone layer, decimate indigenous wildlife, recapture the Falkland Islands, and turn the entire Third World into a huge uninhabitable desert… but only after they’ve nicked all the world’s oil.”  10 years ago, this sentiment was amusing. Today, as we have become significantly greener as a […] Read More

2014: The News Industry Isn’t Dead… But Has 1 Foot In The Grave

Journalism and investment research have a lot in common, notes ConvergEx’s Nick Colas; after all, both essentially ask the customer to freely part with three scarce resources: time, attention and money. It’s been a tough decade or two for both the newsroom and the research department in that effort, but at least one prominent venture capitalist, Marc Andreessen, thinks there is a future for the news business, however, due to a rising middle class in emerging markets and mobile Internet distribution. While this audience may not (yet/ever) be hankering to read Buy-Sell-Hold reports on their smartphones, Andreessen’s recently published 8-fold strategy for journalism has lessons for investment research as well. The big takeaway: sell-side research needs to change a lot – and quickly – to survive as anything more than an advertising vehicle for brokerage firms. Via ConvergEx’s Nick Colas, Early on in my sell-side brokerage career – this […] Read More

2014: “The Oceans Will Rise; Nuclear Winter Will Be Upon Us; And The World As We Know It Will End”

As U.S. Justice Department prosecutors begin to bring the first criminal charges against global banks since the financial crisis, they are facing dire warnings of uncontainable collateral damage from none other than the sell-side’s banking analysts… “Don’t play with matches,” warned Brad Hintz, bringing up the specter of Enron (somehow suggesting we would better if that had not been prosecuted?) “The mere threat of requiring a hearing could cause customers to lose confidence in the institution and could cause a run on the bank,” warns a banking lawyer (well isn’t that how it’s supposed to be?). Too Big To Prosecute is starting to tarnish a little as Preet Bharara begins to bring the heat, adding, somewhat humorously that, banks have a “powerful incentive to make prosecutors believe that death or dire consequences await.” It seems Eric Holder’s words – as we noted here… “But I am concerned that the […] Read More

2014: Two Days After Swearing Market Isn’t Rigged, SEC Slaps NYSE Wrists For Rigging Markets

It is somewhat ironic, actually make that criminal, that two days after new SEC head Mary Jo White (whose conflict of interest list is so vast courtesy of her prior position as defending every Wall Street from their criminal acts she now has to recuse herself from virtually every enforcement action) solemnly promised Congress under oath that the “markets are not rigged“, the SEC comes out swinging and slaps the wrist of the NYSE with an intolerable $4.5 million fine for allowing market rigging “for a period of time from 2008 to 2012.” From the SEC complaint: The Securities and Exchange Commission today announced an enforcement action against the New York Stock Exchange and two affiliated exchanges for their failure to comply with the responsibilities of self-regulatory organizations (SROs) to conduct their business operations in accordance with Commission-approved exchange rules and the federal securities laws.  Also charged was the […] Read More

2014: David Stockman On ‘The QE Follies’: Bernanke’s Swell Gift To The Big Four Banks

Submitted by David Stockman via Contra Corner blog, I recently pointed out that the Fed’s 5-year campaign to drive the 30-year mortgage rate from 6.5% to 3.3% had accomplished nothing except to touch off another of those pointless “refi” booms which enable homeowners to swap an existing mortgage for a new one carrying a significantly lower interest rate and monthly service cost. Such debt churning exercises have been sponsored repeatedly by the Fed since the S&L debacle of the late 1980s. I further noted that this time the Fed had really outdone itself: During some periods upwards of 80% of new originations were not money purchase mortgages to finance a new home, the declared purpose of interest rate repression, but just refi’s of existing debt. By resorting to this maneuver to leave more money in the pocket of borrowers each month, our monetary central planners undoubtedly hoped that America’s […] Read More

2014: The Market Is Not The Economy And The Winner-Takes-All Society

You hear that old saw that “the market is not the economy,” a lot these days, and for good reason. As ConvergEx’s Nick Colas notes, the S&P 500 breaks to record highs – but U.S. labor markets remain sluggish; investor portfolios do well – but over 47 million Americans (more than 15% of the population) are still in U.S. food stamp program – the same as August 2012. The important question now is: “Is the market TOO different from the economy?” Record corporate profits – the reason for all-time highs in U.S. equities – come with little hiring or wage gains.  The hottest growth stories are business models with lots of customers but very few employees. The recently purchased WhatsApp – for $19 billion – has 55 employees. Investment payoffs – and increasingly social outcomes as well – are technology-enabled, asymmetric and sporadic. How soon before we reach a […] Read More

2014: D.C. Insider: There’s a Shadow Govt. Running the Country, and It’s Not Up for Re-Election

Power centers in DC and the corporate corridors of Manhattan and Silicon Valley are calling the shots. Rome lived upon its principal till ruin stared it in the face. Industry is the only true source of wealth, and there was no industry in Rome. By day the Ostia road was crowded with carts and muleteers, carrying to the great city the silks and spices of the East, the marble of Asia Minor, the timber of the Atlas, the grain of Africa and Egypt; and the carts brought out nothing but loads of dung. That was their return cargo.—“The Martyrdom of Man” by Winwood Reade (1871) There is the visible government situated around the Mall in Washington, and then there is another, more shadowy, more indefinable government that is not explained in Civics 101 or observable to tourists at the White House or the Capitol. The former is traditional Washington […] Read More

2014: 20 Early Warning Signs That We Are Approaching A Global Economic Meltdown

By Michael Snyder The Economic Collapse Blog Have you been paying attention to what has been happening in Argentina, Venezuela, Brazil, Ukraine, Turkey and China?  If you are like most Americans, you have not been.  Most Americans don’t seem to really care too much about what is happening in the rest of the world, but they should.  In major cities all over the globe right now, there is looting, violence, shortages of basic supplies, and runs on the banks.  We are not at a “global crisis” stage yet, but things are getting worse with each passing day.  For a while, I have felt that 2014 would turn out to be a major “turning point” for the global economy, and so far that is exactly what it is turning out to be.  The following are 20 early warning signs that we are rapidly approaching a global economic meltdown… #1 The looting, […] Read More

2013: Federal Judge Slams DOJ For Not Prosecuting Wall Street Execs

A federal judge with a history of slamming the regulatory system issued scathing remarks against the Department of Justice on Tuesday for allowing Wall Street executives to escape criminal prosecutions. Speaking at an event hosted by the New York City Bar Association on Tuesday, U.S. District Judge Jed Rakoff of Manhattan said the DoJ’s “unconvincing” excuses for not prosecuting individuals were “technically and morally suspect.” “[Not] a single high level executive has been successfully prosecuted in connection with the recent financial crisis, and given the fact that most of the relevant criminal provisions are governed by a five-year statute of limitations, it appears very likely that none will be,” Rakoff said. While the DoJ has not said that all the top executives are innocent in the lead-up to the financial crisis, it “has offered one or another excuse for not criminally prosecuting them—excuses that, on inspection, appear unconvincing,” the Financial Times reports Judge Rakoff […] Read More