The zero coupon is back on the block. With yields being pushed towards zero, it is the closest thing to a saving account without the risk of depositing it in a bank.
The reason is simple: there is no place to invest. Even the dollar which was challenged, remains the denomination of choice because there are no other safe assets.
Newspapers have died because the hussle of the web is always connecting people through failed business models.
There are reports of companies eliminating the word innovation from their vocabulary because in reality most people don't know what it is. As soon as an innovating idea comes up anywhere is already a threat to the already established law of diminishing returns.
Spain is next, France is a rumor, and Germany is hesitant to serve anymore on the silver platter.
The country who was always the rescuer of last resort is unable to rescue other countries nor engage in any side of the world anymore.
China's slowdown is hitting the BRIC especially the B, the C, and Australia.
Now they call the future:
- The next 11
- The MIST
- The CIVEST
The M is Mexico. The I stands for Indonesia. The S is South Africa or South Korea. T is Turkey. What is different is that the R has dropped from everywhere which was usually reserved for Mother Russia. And many other predictions.
There is a theory that describes how the ups and down in history have an amazing correlation with 50 years intervals of innovation. This Kondratiev wave theory was correlated by others that matched it with technological revolutions.
The 50 years of innovation fueled unseen growth followed by 50 years of slow down or contraction. The slow growth phase was characterized by the implementation of the innovation from the previous 50-year cycle cannibalizing industries and squeezing margins from slow growth industries.
I came across this graph in the 1990s, and it placed history at that moment towards the end of the 50 year innovating cycle.
It has been the most accurate predictor of current times while everyone spoke of a self regulating financial industry that crashed, the promise of the web, and the rise of a global economy.
Thursday, May 31, 2012
Saturday, May 26, 2012
TheFacebook.com
So many stories of legend come to mind when an IPO goes off the cliff. It brings back the old pools of pumping news and assurances while the Charleston plays and Prohibition offers the greatest of times.
But from 23 deals made since 2011, only 4 have seen a drop in price. In the other side of the counter, Citi, UBS, and e-Trade counting their missing beans offers beyond reasonable doubt, the idea that the technology glitch was a major dreams popper.
It is probable that the underwriters bought into the hype treating the market as an unexpected and unpredictable beast without realizing that in such a large offering, they are the voice of reason and the market maker. An 800 hundred pound gorilla has its name because it is singular in a plural world.
The warnings to major partners carried the same content that everyone already knew. It might not be a sign of asymmetrical information. I think it is a sign of asymmetrical perception of our own roles when failing to realize this is just not one more offering; this is The Offering.
This is one of those times when it would be so nice if the SEC could say after reminding the underwriters of their fiduciary duty to the offering and the public:
OK. Now, let's try that again: what is the price supposed to be?
But from 23 deals made since 2011, only 4 have seen a drop in price. In the other side of the counter, Citi, UBS, and e-Trade counting their missing beans offers beyond reasonable doubt, the idea that the technology glitch was a major dreams popper.
It is probable that the underwriters bought into the hype treating the market as an unexpected and unpredictable beast without realizing that in such a large offering, they are the voice of reason and the market maker. An 800 hundred pound gorilla has its name because it is singular in a plural world.
The warnings to major partners carried the same content that everyone already knew. It might not be a sign of asymmetrical information. I think it is a sign of asymmetrical perception of our own roles when failing to realize this is just not one more offering; this is The Offering.
This is one of those times when it would be so nice if the SEC could say after reminding the underwriters of their fiduciary duty to the offering and the public:
OK. Now, let's try that again: what is the price supposed to be?
Thursday, May 17, 2012
Masters of the one level below the ultimate know-how
In a recent fund raising event where the main speakers were major hedge fund managers, certain prediction were made.
Listening to any of these people is like listening to Copernicus rearranging the Solar System. Understanding their frame of reference or lack of is challenging and eye opening.
People paid large sums of money to have the privilege of listening to what could be next. But the predictions were all dire. They ranged from France defaulting to deflation, Europe splitting back to individual struggling nations, and no sign of growth in the US.
Even the established notion of personal banking was challenged like back in the 1930s. There is not worse advise to people who just dropped large sums of money to find out the good angles: "Take three boxes of cheerios. Empty them, and fill them with 100 bills."
Listening to any of these people is like listening to Copernicus rearranging the Solar System. Understanding their frame of reference or lack of is challenging and eye opening.
People paid large sums of money to have the privilege of listening to what could be next. But the predictions were all dire. They ranged from France defaulting to deflation, Europe splitting back to individual struggling nations, and no sign of growth in the US.
Even the established notion of personal banking was challenged like back in the 1930s. There is not worse advise to people who just dropped large sums of money to find out the good angles: "Take three boxes of cheerios. Empty them, and fill them with 100 bills."
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