Lookout below

I think this says it all. (Thanks to The Big Picture by Barry Ritholtz). Nothing says leaving in style like millions of dollars. 

The future of Wall Street in five words

1. Transparency
2. Reputation
3. Trust
4. Filters
5. Context

The markets will stop going down when we have all of the above coupled with demand. The lack of clarity and the absence of a real plan with details is really starting to show.

Washington is handing out Magic Pixie Dust

First Citi and Bank of America get a sprinkling – next comes AIG which is now clearly bankrupt.

WTF is wrong with Washington – don’t they see that a lack of clarity and NO FRICKING plan is causing immense harm to the stock market and to the millions of 401k’s and other investments.

It’s now beyond embarrassing – it’s just plain lying. 

Global Economic Trend Analysis: Purposeful Joint Lie by the Treasury, Fed, FDIC

Citi and the Treasury

A conversation overheard this morning…

“Explain this to me again: We put in many times the value of this company — we have already given them $45 billion dollars, and guaranteed almost $300 billion dollars worth of bad paper — and we get less than 50%? WTF? How the hell does THAT work?”

I guess this is what CHANGE is all about. How f’ing ridiculous is this all becoming. The inmates are now clearly in charge of the Washington/Wall Street Asylum.

What they continue to appreciate is that the whole world is watching and totally embarrassed by the shear level of incompetence by those in power. Moral hazard, what moral hazard. Citi, BofA, GM Chrysler are all toast – wake up and smell the roses.

All we’re doing is prolonging (via politicizing) these events.

Washington should be embarrassed – and we’ll get another does of gloom and doom tomorrow night with the State of the Union speech. Only thing is that we’re going to get another watered down version of the truth.

Bloody embarrassing.

More Tech Start-Ups Call It Quits - WSJ.com

(Subscription required) bottom line – lots of startups are failing. One more reason that if you’re going to be in this business drive to profitability above all else. Too many startups are experimenting with capital and now is not the time.

Build a must have, figure out exactly who the customer is and how you’re going to deliver it and then execute on the plan. Remember “Profits are the mothers milk of corporations”. 

More Tech Start-Ups Call It Quits - WSJ.com

Why We Often Write About Twitter And Will Continue To Do So

How about writing about it when it has a business model that makes money. Everyone keeps talking about how big Twitter is going to be. The Telco’s love it because they make all the money. At some point in the future both Facebook and Twitter are going to have to come up with a sustainable business model that generates profits. Until then they will continue to be propped up by the VC’s.

Why We Often Write About Twitter And Will Continue To Do So

Facebook appraisal pegs company's value at $3.7B

One simple question… based on what?

The article indicates that the share value is just under $9 ($8.88) – lets call it $9 to make the math a little easier. That gives us roughly 412m shares outstanding. (that’s a lot for a privately held company). Now let’s look at revenues which are roughly a $200m a year – we have no idea of what costs are but they are north of the $200m – so therefore Facebook is not yet profitable and is negative cash flow. So it’s hard to use a discount to future cash flows to value the company.

Let’s look at the number of users it has – let’s say 150m. We could divide that into the $3.7 billion to get a value per user = $24.67 (This is low because Twitter just got a deal at $42 a user)

Facebook loses money every month. Without VC capital it could not stay afloat. It cannot go public because it doesn’t make a profit – it never has.

So why can something that has never made money, probably will never make money be worth $3.7b ?

As they say, only in America – but not for long. Unless they turn the corner and get to sustainable profitability they are not a real business. Just something propped up by VC’s. And we all know how that ends.

Facebook appraisal pegs company's value at $3.7B

Soaring Job Losses Drive Stimulus Deal

Soaring Job Losses Drive Stimulus Deal – this is the headline at the WSJ. Here’s the associated job graph.

Now let’s say on Tuesday we get a vote on the bill and $820 billion is now available. Exactly how long is it going to take to reverse that graph?

The short answer is nobody knows. The long answer is nobody knows. Exactly how is the spending (stimulus) going to bring jobs back at say Caterpillar, or IBM or any of the other myriad of companies who have laid off people?

The stimulus is really a joke. It’s more debt that we cannot afford, targeted to places that don’t need it and it’s not temporary enough (it will take years to spend this money) to solve the problem.

More haste makes more waste. 2 years from now we’ll know how much we’ve wasted. It’s really embarrassing yet it’s business as usual in Washington.

Can’t wait to see what Geithner has in store for the banks on Monday. My bet is that it’s at least another trillion dollar bailout.

The Fierce Urgency of Pork

This article really sums things up in Washington.

It starts with:

"A failure to act, and act now, will turn crisis into a catastrophe."

And finishes with this":

After Obama's miraculous 2008 presidential campaign, it was clear that at some point the magical mystery tour would have to end. The nation would rub its eyes and begin to emerge from its reverie. The hallucinatory Obama would give way to the mere mortal. The great ethical transformations promised would be seen as a fairy tale that all presidents tell -- and that this president told better than anyone.

I thought the awakening would take six months. It took two and a half weeks.

In 17 days we’ve seen the Presidents ratings drop dramatically, we’ve seen that it’s really business as usual in Washington and that soon we’re going to be staring a multi-trillion dollar deficit in the face. All because a couple hundred people think they have things figured out in Washington.

They will all be patting themselves on the back on Monday or Tuesday when this stimulus bill passes and then what? Do they really know how hard it is to spend that kind of money wisely? No, they don’t have a clue, but by then it will be someone else’s problem – ours and our children's. Thanks a bunch.

 

Charles Krauthammer - The Fierce Urgency of Pork - washingtonpost.com

Steve Jobs speaks out - On the birth of the iPhone

15 slides – a must read for every entrepreneur out there.

Steve Jobs speaks out - On the birth of the iPhone (1) - FORTUNE