Ad Blocking - A Growth Industry

So just last week the number one paid app on the apple app store was a three day old ad blocker. The developer of this ad blocker had "a change of heart" after the app had been out for three or four days and pulled it. Today I fire up my work computer that has the very popular AdBlock extension installed, only to find that it was now participating in the "Acceptable Ads program" and if you read the fine print, the developer is selling his company. It's enough to make you go HUMM? who is bribing/buying up these popular ad blockers.

PS Also last week, Bloomberg had a article that outlined the joke that online adds had become because of bots and the ad blockers.

Grexit

All I have to say about the Greece "issue" is that if you have money with someone and that someone loses any statistically significant amount* of it because of the Greece issue, replace that person now. This has been a six year train wreck in the making.

*unless you were positioned for multiple Greek/Euro possibilities. If you were, then you accepted the risk/reward profile and any money lost/gained is part of the game.

Its a Health INSURANCE Bill People!!!

As I have written before, the "Affordable Care Act" was neither affordable nor concerned with your care. It was and is a mandatory insurance bill. How is this now more affordable? How has care gotten better because the government subsidizes approx 85% of the premium increase for those who signed up. What about those of us that had insurance coverage before this act? If you don't feel the pain of the increase then you don't care. If you don't care then nothing will change. Meanwhile the medical group that I "subscribe" to, continues to build monuments to itself while paying its CEO 10's of millions all the while keeping its "non-profit" status. Fun.

QE3...... No not the boat

So last week there was a lot of chatter about QE3. This week there has been a lot of chatter about Greece finally defaulting on its debt obligations. So what would happen if Greece defaults? Most likely there would be a flight to quality. What this means is that money would flow out of Europe (Euro) and into dollars (I'm not making a statement on the "quality" of US dollars). This happens because people, investors, institutions see the dollar as a liquid, relatively stable currency thus ensuring a non-volatile place to park their money until they decide what to do. Ok, then what happens? Well I'm glad you asked.

Money is an interesting concept. You trade paper slips and electronic blips for goods and services you need or want. Currency has no intrinsic value. Our belief in it is the only thing that gives money any value. Because of this belief and with no "real" value, currency's are traded and priced relative to each other. As of 5/17/12 @ 3:20pm mst, a euro is worth $1.2694 which is worth 79.32 yen which is worth ..... etc. Because of this ability to trade in devaluing currency's, people, investors, institutions can "sell" devaluing currency's and "buy" stable currency's with a click of a mouse button. This will cause extensive money outflows/inflows during times of crisis'.

So what does this have to do with me you might be asking yourself. Actually quite a bit. If the dollar is bought when someone sells their euros, the "value of the dollar" appreciates. This causes the USA's exports to become more expensive for anyone buying goods and services with euros (this is a simplified example). On the flip side, the products and services we import from euro zone countries are cheaper (so are vacations). So its always a balancing act for governments to on one hand keep currency's cheap enough to buoy exports while making imports available for a reasonable cost.

Which brings us back to QE3. If Greece does default, and their is a flight out of euros and into dollars, then the dollar will appreciate. This would be good for the average consumer in the US for a short period of time. Oil becomes cheaper with respect to the dollar, imports become cheaper, etc. What a strengthening dollar would do is choke exports. QE3 would lesson the impact of a strengthening dollar to the US export industry.

So why was there chatter about QE3 last week? I believe it was to get the discussion started for an eventual Greece default and what the fallout of the expected euro crisis would entail. This could include a slip back into recession for the US and possible TBTF bank issues. Talk about a quantitative easing (turning on the printing press) now in preparation for the coming future unknown. Just my $0.02.


PS - Why are we making it more expensive to go solar when what needs to happen is to let market forces drive out inefficient manufacturers and thus bring on the gained efficiency that a distributed electrical system can provide. Who's protecting whom???

Um, that's what books are for

So, I'm just going along with my day when I read a facebook post about the Too Big To Fail banks getting bigger. In the comments to that post, someone posted a book title that sounded interesting to me. I search for the book at my local library; no dice. Went to Amazon, $15 for an "updated" version (the original book was written in 1871. I have found most "updated", "abridged", "edited", etc. versions of classic finance books to pale in comparison to the original authors intent and words); um nope. So, since it is no longer under copy write protection, I find it as a downloadable PDF book at the authors own named site (who knew that someone who died 114 years ago could have their own web site. Technology from the grave.) Anyway, I start to read some of the reviews for this particular book. Six five-star reviews and one one-star review. I always like to know why someone doesn't like a particular book, so I clicked on the one-star review. I quote "was too distant from my beliefs to lend any true credence to the author's arguments." Ok, I can understand you not liking the book or the conclusions the author makes, but to disparage the authors arguments because they don't line up with your own beliefs is to me, very egotistical. Books are there to challenge us, to teach us, to shape past ideas into new ideas. If you don't like the authors hypotheses, then point out the flaws. What you don't do is say that since the author, who died in 1897, doesn't agree with me then his arguments are invalid. Blindness does not only come from not seeing with the eyes but also from not opening up the mind.


FYI - The book I downloaded was an edited and abridged version. :) But it was free!


FYI Dos - The book is called "Progress and Poverty". The author, Henry George.

Zucker Love

So I just finished reading Accidental Billionaires and started The Facebook Effect. Both books deal with that great timesuck, Facebook.com. Now I don't spend much time on facebook (check in once every few weeks???), but I am fascinated by the narrative of its founding and its incredible growth. Both books address the founding of the company, Accidental Billionaires in depth, The Facebook Effect superficially and both books introduce us to Mark Zuckerberg. Thats about all they have in common. I have yet to read two books about the same subject that diverge in such a degree on what, where, why and how things happened. Accidental Billionaires (from now on AB) went into depth on the beginnings of the company in that eponymous college dorm room and the characters who helped M.Z. start the phenom that is facebook. The Facebook Effect (from now on TFE) introduced us to the people facebook would like to credit with its founding. That is the crux of what is wrong with TFE. While AB seems to produce a more well rounded view of the founding of facebook, TFE is all about the Zucker Love. For example, did you know that an early strategic treatise on the direction and future facebook offerings, written by M.Z., has the "weight" of Michelangelo's notebooks?  Neither did I until TFE told me so (I nearly packed it in right there as I rolled my eyes and laughed out loud at the absurdity of that statement. FYI - Mark Zuckerberg's handwriting is "beautiful", roll my eyes some more). While AB reads like the movie script that it turned into, TFE is 384 pages of public relations / Zucker Love dribble. I will be the first to deny any and all writing talents ascribed to me, but TFE reads like a high school essay (including high school like snide remarks) at times and insults its readers with overt explanations of obvious conclusions at others. Do we really need to know that Shawn Parkers girlfriend was kind enough to let him stay in an extra room while some construction debris was cleaned up. NO!

In conclusion, both books have their issues and biased views, but TBE goes overboard with its Zucker Love while AB is definitely anti Zucker Love. Both books deal with the founding story, but only TFE goes past that founding story and takes us up to 2010 (while keeping up the Zucker Lover throughout). So I'll leave it to you dear readers which book you like better, Zucker Love or Anti Zucker Love. I know which way I'm leaning.

Turning 40

Over the weekend a blessed event took place in our household (shophold???). We had a birthday. 40 wonderful time units. See the one year anniversary post here.


















Yes the KTM turned 40 hours this weekend. Good times were had by all except that the rear tire decided to get flattened by something.

Paper Slips and Electronic Blips

So, after looking back through my latest posts I've decided that maybe I will only post once a month. I know, I know how will you go on with life with me posting fascinating finance facts only once a month, but don't worry, I have faith that you will endure.

Anyway, so today Standard and Poor's put the United States government on notice that its run away spending has not gone unnoticed. By cutting the USA's credit outlook to negative, S&P basically stated that they think the USA has a 1 in 3 chance of being downgraded (credit wise) in the future. This means that if the USA can borrow at a hypothetical 3% today with its AAA rating, in the future, that interest rate may climb to a hypothetical 3.5%, all things being equal. This doesn't sound like much of a difference, but multiply those additional 50 basis points by trillions of dollars of debt and you begin talking about real money.

What I find fascinating is that the cost of insuring US debt rose to ~95 basis points. Who is selling this insurance? AIG ;). Who is buying? If you need to cash in on this insurance, there is nobody on earth who can honor these CDS agreements. You see, if the US government defaults ("all" US government debt is priced in US dollars that the US government can print at will), then the world has crashed and paper slips and electronic blips will mean nothing. I'm exaggerating slightly, but only slightly. I guess the tin foil hat crowd could be right and we do have aliens among us. The aliens could sell the insurance and honor the agreements since their economic system should be uncorrelated to the earths finances. But, that assumes that they haven't been here long enough to become fully invested in the US / Greece / Japan / Ireland / Portugal / Spain / England / France / etc. by buying the massive amounts of debt that have spilled off the printers machines. Kang and Kodos, I beseech thee to forgive our mis-spending ways and allow us three cups of drool instead of two. All hail our Rigellian overlords. VOTE KODOS!!!!

Sobering Thoughts

Its been awhile since I last posted something and for that I apologize. (I have written things but did not post them for a variety of reasons) Anyway, with the events in Japan growing more desperate with every passing hour, my thoughts have turned toward the differences in cultures. Haiti experiences a massive destabilizing event much like Japan has just experienced and still, after close to 14 months, has debris piled in the streets.  Will Japan still have tsunami debris choking roads and building lots after 14 months? I would wager that would be a emphatic no. If the coast of California was hit by the type of wave Japan was hit by, would debris be piled on the streets after 14 months?  I would bet on yes.  Why, you may ask, do I think that in the land of the free and brave, junk would still be piled on the streets of LA after 14 months?  Its taken 10 years to dig a hole at ground zero in NYC, several buildings were to be completed by now but have yet to be started, and the Port Authority has gone through 3 or 4 directors in that time.  Would California be any different?  We are passing from an industrious country with the will and desire to get it done, to a country that needs a new study on the impact of everything and anything all the time.  One day we will be faced with something along the lines of what Japan has experienced. Will we stand up and clean up or will we study the problem till our deaths consume us?

He Made It!!!!

Whoooo! that was close. Mr. Emanuel made it on the ballot for the Chicago mayoral race. A day after he was kicked off the ballot for allegedly not actually living in Chicago for the mandated 1 year before the election, Mr. Emanuel's appeal has been heard and a judge has declared that the ballots must carry Mr. Emanuel's name until the appeal is ruled upon. This seems fair to me.  But what happens when Mr. Emanuel wins the election. Hummmmmm. The 2000 election all over again.

I didn't know Apple was based in Chicago

Bloomberg story about Rahm Emanuel's ouster as a candidate for Chicago Mayor.  At the very bottom it lists Steve Jobs as donating $50k to his election fund.  David Geffen donated $100k.  Since Mr. Jobs has left the day to day running of Apple to others, I guess he could now want to live in Chicago.  Personally, I would be in Hawaii / Australia / Vietnam / Indonesia / Maldives / any other place but cold and windy Chicago.  But apparently Mr. Jobs wants to live in Chicago so thats why he donated $50k for Chicago's mayoral race.  Do I think Mr. Jobs and Mr. Geffen care about Chicago city politics? NO! But having the former chief-of-staff of the sitting President become Mayor of Chicago, the current Presidents "home town", on your $50k could definitely open white house doors for any ideas you may have.

And don't worry. I'm sure Mr. Emanuel will get his shot at the highest office in Chicago. This is Chicago Illinois we're talking about. Hint hint. Wink wink. Graft graft. Bribe bribe.    ;)

Too Fast for Me

Does google.com still offer the best search results?  Is bing.com surpassing the almighty Google? (ok so Bing is the almighty Microsoft, but it's still the underdog)  Should we now only put one space after a closing sentence punctuation?  Whoa the questions I ask and then read about.  FYI, google.com's search results are being spammed up like Yahoo's became.  Is Google the next Yahoo? Is bing.com the next google.com? Should I put one space or two after this sentence? Who knows?

I was around for the birth of the wide variety type of internet.  I remember being amazed by the vast amounts of information that I could get from the web.  I remember printing out hundreds of pages on race vehicle dynamics from a site that had diagrams, formulas, small pictures, stories, and examples, worried that the site might disappear  the next week like many sites I had found previously had seemed to do. I remember going from 12.4(?) to 28.8 to 56.6k speeds and being astounded by what the increased bandwidth could do, let alone the speed when trailrunnings work installed a ISDN line into our home. WOW!!!  So its with a little reluctance that I see the relevance of websites, and all the info contained there in, being relegated to a 2nd class structure of information delivery. First personal blogs, then Facebook, and now Twitter have become the defacto(sp?) delivery "device" for information. I'm not dissing, as it were, on Facebook and Twitter, but I do quietly long for the days of more than 140 character information streams. Many interesting bloggers are getting bored and reducing their posts, while their readers are now checking on so and so's Facebook/Tweet status. Oh well, it must mean I'm getting old.

What do these two paragraphs have in common you may ask? Well, its the speed of change. I have gone from researching junior high class reports with the use of a paper encyclopedia, to having the worlds information at my fingertips. I have seen the substitution of two spaces after a sentence to only one space. And the search giant who defined a new generation of internet info gathering, has now become the hunted whale, still formidable, still swimming, still destroying Ahab's boat, but now with a few spears piercing its skin and a new boat closing in. I have more to say, but you probably didn't get past the first 140 characters. :)

Holidays Shmalidays

I love general holidays in the US.  No, its not that I get to stay home from work (what work?).  Its the flood of announcements that come gushing from the PR departments throughout corporate america.  Today's big announcement?  Steve Jobs is stepping back from the day to day operations of Apple to focus on his sketchy health.  What does this announcement by Apple have anything to do with the holiday you may ask?  Only that if it was a normal trading day, Apple stock would be pummeled and the general market would most likely end lower.  Releasing this announcement on a holiday allows people to step back, assess the situation and hopefully make a rational decision about the company and not the man running it.  Of course you can still trade the market on a "off" day by using futures, but who's counting.  My totally unsolicited and purely theoretical theory is that Apple will sell off Tuesday morning and then flatten when all the bandwagoneers are through jumping.  The stock will then climb higher but will not reach its current level for ........ oh I don't know, 6 months. ;p

Speaking of press releases, whatever your thoughts on Wikileaks (I will not be giving my opinion on Wikileaks at this time), I'm surprised that Bloomberg does not have this story on its front page as of 10:45am.  Does this mean I need to go to Yahoo Finance to get my finance fix.  Even my "home town" news channel has the story on its front page.  Please tell me its not so Bloomberg!  Hummmmmm, maybe Mayor Bloomberg is on the "list" and doesn't want his news organization spreading the story that there is a "list".  Big Corporate Media conspiracy theorists converge!  Maybe Steve Jobs is on the "list" too? :)  Cheers!

PS -SARCASM ALERT!!!!- Just found this pop up at the top of Bloomberg.  Really the same people screaming that a barrel of oil is as rare as a pink striped hippo are now saying don't worry, there's no need to increase the production of oil, supplies are above the five year average.  Its a good thing they're being paid all that money to talk their book and run our country. (and finally one more set of parenthesis - No I don't buy into the idea that GS is a vampire squid out doing the Lord's work for the enrichment of the leisure class while enslaving the workers of this once proud and prosperous nation.  Or at least I don't believe all of that ;)  )  SARCASM ALERT ENDED!!!!

What do you Know ....... dovetailing

As soon as I posted the last post, I came across and article about Brazil's Real appreciation against the dollar.  Never have I had my last two posts nicely dovetail into one another.  Cheers!

OK, so I need a new closing phrase other than the oft used "Cheers".  People do know that that show left the air over a decade ago :p

Tilt

I have been visiting a new site called Financial Times Tilt, or Tilt Financial Times.  Basically its a emerging market  financial site (did you really think it would be anything but a financial or motorcycle site???) with news from the front lines of the different emerging markets.  News and analysis not filtered through New York.  Supposedly. ;)

As of last Tuesday you could get a Tilt Pro account for free.

Right now I think I have a mild migraine.  Only the third or fourth one I have ever had.  :(  Should I twitter and facebook this fact?????

The FED goes to Crazy Town

Great discussion and stories about the basic question of "What is money?".  This is a topic I have thought about quite a bit lately.  Is money physical?  Is money psychological?  Is money real?  When and where does money end?  Is money trustworthy?  Is money "magical"?  Download it in MP3 format to listen on your iPod thingy while you run, or walk, or ride a bike, or drive your car, or ski, or take a hike, or .......

 By the way the FED got within pennies of "spending" all of the mandated $1.2 Trillion buying MBS's.

Where I should be is different than where I am

If I hadn't decided that my employment situation was untenable back in May, I may not be here now.  No not dead or missing, but not here setting in front of my computer typing this out.  You see, as I type this, the biggest off road race in the northern western hemisphere is happening right down south of the USA.  Baja to be specific.  My plan was to hook up with a local or semi-local team and become a crew monkey, drink getter, designated drive, etc. but since I would be paying my own way this became much harder when the cash flow slows to a crawl.  Oh well, I was only counting on a 50/50 shot at it anyway.  Maybe next year or the next or the next or the next ..............

Indecision 2010!!!!

The biggest election since the last one and before the next one just finished up.  What can I say?  Well a whole lot.  During these indecisive times I often think back to a time in my life that I had to deal with state level politicians and the wonderment (not the good kind) I beheld.  Double talk, lies and power plays were the name of the game.  Everyone needs to have the opportunity to push a publicly beneficial law or resolution through the morass that is our legislature.  Even at our state level, the idiocracy is amazing and disheartening.  Only then will the vast majority of the public realize what a system composed of amoral and broken people we send to represent us, does.  Now don't get me wrong, not all legislators are corrupt lier's, only the ones who hold any and all power.  Even then there are exceptions.  The State Senator who represented my district (think of the holiday in the middle of February and no its not my birthday) ALWAYS dealt in a fair and honest manner.  Because of this I will vote for that Senator as long as they stay in office or I live in their represented district.  If more people had this opportunity to see the real person behind the slogan, I think that the idiocy would be driven from office and good people with a REAL concern over their districts welfare would be elected.

I must admit I have a slight subversive streak.  In races that are already decided I sometimes vote for people that may upset the status quo by garnering more votes than was expected.  This way the perception of a multi-party system stays intact and might just give pause to the winner(s)/party(s) and their possible extreme views.  Till next time and the biggest election since the last one and before the next.

Lego Makerbot Oh Yea!!!

I'm a big Lego fan.  I'm also a big MakerBot fan.  Combine them and I think I have gone to heaven.  See what heaven looks like here.

The TIPS of the iceberg

One of the funnest things about writing this blog is I get to come up with AWESOME! blog titles.  Now I have never been a great fan of TIPS (Treasury Inflation-Protected Securities) because of the nature of the way the "inflation" component is calculated.  Unfortunately the inflation number the government uses can be manipulated and cajoled into showing what Washington wants to see and not actually whats going on.  In the past this has usually taken the form of showing a lower inflation number than is actual.  This has helped get politicians re-elected by a public inferring low inflation rates with good fiscal stewardship of the country.  Because of the lower than actual inflation figures, the treasury pays a lower interest rate on TIPS and buyers of TIPS receive a lower real yield.  But now the tables are turned.

For the past couple of years the USA, and to some extent the world, has been slightly deflationary.  Now, I want to be clear, deflation is bad.  People stop spending money because next week the price will be lower than today.  While its good for our individual pocketbooks, it can devastate a consumer economy based upon inflated asset values (houses).  At the moment the Fed is contemplating a strategy to pump more money into the economy and thus drive up inflation.  Increasing the inflation rate drives up asset prices and thus will keep the housing market buoyed, keeping bank balance sheets healthier, increasing money velocity, and finally getting you to spend what little savings you may have today to avoid paying more next week.  This strategy may now also encourage the government to report higher than "normal" inflation numbers to show that its policies are working and hopefully for them (not so much for us) get them re-elected.  This will be good for TIPS and the buyers of TIPS.

This is just a working theory and does NOT constitute investment advice.  As I stated earlier, I have never been a fan of TIPS because of the potential for manipulation of the inflation number and thus the interest rate the number setter pays.  TIPS can be a relatively cheap way to buy inflation protection that doesn't include a lot of market risk if held to maturity.


PS Sorry for the clunky writing.  The brain and finger connection is kind of weak today.