The other day the IRS announced new rules for settling tax liabilities for individuals. It’s a sweet deal. I thought that was interesting. Then yesterday we get an announcement from Altria (MO) that they too have cut a deal with the boys at the IRS. …
Must Read
Economic and and financial news and analysis
Charts, Contributors- Economic and Financial, Must Read, Tainted Alpha
May HSBC/Markit China PMI At 48.7
by Belisarius • • 0 Comments
HSBC/Markit PMI fell from 49.3 to 48.7.
Large discrepancy between HSBC/Markit and “official” PMI.
Money Morning, Must Read
Is Facebook (Nasdaq: FB) a Replay of the AOL/Time Warner Deal?
by Martin Hutchinson • • 0 Comments
I hope you didn’t buy shares of Facebook (Nasdaq: FB). The valuation was always too aggressive.
And increasing both the price and amount of Facebook stock at the last moment ensured that both underwriters and retail investors ended up with far more shares than they bargained for.
In fact, the Facebook fiasco reminds me of another deal that marked the peak of the dot-com boom.
No, not the ineffable and rather sweet Pets.com- their IPO was far too small a deal to have genuine market significance.
Instead I’m talking about the AOL and Time Warner merger announced on January 10, 2000.
Like Facebook, the deal was sold as a big success. It was only later that it quickly became clear that AOL had sold itself at the absolute peak of the market.
From there on out it was all downhill as the storied merger practically top-ticked the market.
Before Facebook There Was AOL
AOL had built up a nice business from “dial-up” Internet access, but it was already obvious by January 2000 that the arrival of broadband Internet would make for a difficult transition.
As such, AOL’s market capitalization of around $200 billion was purely the result of the frothy market of 1999.
Nevertheless, that rich valuation enabled AOL to become the senior partner in an acquisition of the Time Warner media conglomerate, getting 55% of the merged company in a deal valued at $350 billion. It was the largest merger in U.S. history.
Contributors- Economic and Financial, Must Read, William Black
An Invitation to Brad Plumer to join us in Warning against the Folly of Austerity
by keltons • • 0 Comments
Yesterday, I wrote an article entitled Why Progressive Austerians do the Greatest Damage. The article was prompted by a column written by Brad Plumer. Plumer commented on my article, expressing his disagreement with my characterization of his position.
Money Morning, Must Read
Gold Prices and the "Grexit" Effect
by Guest Editorial • • 0 Comments
Lately gold priceshave been affected by a strengthening dollar resulting from troubles overseas.
On Tuesday, Greek Prime Minister Lucas Papademos told Dow Jones Newswires that considerations were being made for a potential exit by Greece from the euro. He also warned that such an exit would be “catastrophic” for the country and that fallout across the entire Eurozone would be severe.
Contributors- Economic and Financial, Must Read
Jamie Dimon And The Legitimacy Of The Federal Reserve System
by Simon Johnson • • 0 Comments
By Simon Johnson There are two diametrically opposed views of how the largest financial companies in our economy operate. On the one hand, there are those like Charles Ferguson, director of the Academy Award-winning documentary “Inside Job” and author of … Continue reading →
Money Morning, Must Read
Facebook Stock Price Drama Heats up with Lawsuit (Nasdaq: FB)
by Diane Alter • • 0 Comments
Investors are not taking lightly the lackluster performance of the Facebook stock price (Nasdaq: FB).
On Tuesday the finger pointing blame game began, followed today (Wednesday) by lawsuits.
Charles Hugh Smith, Contributors- Economic and Financial, Must Read
The E.U., Neofeudalism and the Neocolonial-Financialization Model
by Charles Hugh Smith • • 0 Comments
To fully understand the Eurozone’s financial-debt crisis, we must dig through the artifice, obfuscation and propaganda to the real dynamics of Europe’s “new feudalism,” the Neocolonial-Financialization Model.
Forget “austerity”and political th…
Contributors- Economic and Financial, Must Read, William Black
William K. Black- Video: JPMorgan’s “Wild, Crazy Insane Gamble” Puts Global Economy at Risk
by New Economic Perspectives • • 0 Comments
Watch Video.
Contributors- Economic and Financial, Must Read, William Black
William Black on JP Morgan and the Failure to Regulate Wall Street Fraud- Video
by Newswires • • 0 Comments
William Black on JP Morgan and the Failure to Regulate Wall Street Fraud- Video