Venture, Angel or Private Placement?

Original Article from The Reformed Broker

Seems like there is funding in the private company space once again; virtually everywhere you look these days, deals are happening.  With that in mind, I thought I’d put together this quick guide for understanding the various types of funding and investing options that are out there.

Good luck and be careful, intrepid investors!

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Op-Ed: I’m Calling for $50 Trillion in New Stimulus

Original Article from The Reformed Broker

Reading Paul Krugman’s latest op-ed, in which he declares himself Smartest Man Alive for his calls in early 2009 about the need for big and bold stimulus, I can’t help but feeling that the professor does not go far enough.

You see, in his piece The Real Story, Krugman picks on conservatives and all levels of Austerians for being obstructionist in their opinions back when the size of the stimulus plan was being decided.  The fact that Obama couldn’t create private sector employment if his administration depended on it (it might) tells Krugman that it is only an issue of stimulus size, rather than shape or constitution, that has led to our failure to truly recover.

I have been very consistent on this site for two years now about the fact that it is the TYPE of stimulus that has been wrong all along, I’ve not yet weighed in on the SIZE of it.  But since Krugman’s opened the door with his renewed calls for “boldness”, I’ll bite.  Here goes…

When the President addresses the nation this week with his pre-midterms new stimulus Hail Mary pass, I don’t want to hear about deliberate or even responsible spending.  I want that crazy crazy, nahmean?  I’m looking for intergalactic dollar amounts.  No more half-steppin – time to drop a nuclear bomb on the anthill.

I am publicly calling for $50 trillion in stimulus.  And I want it now.

How do I arrive at that figure?

For starters, it ain’t even real money anymore.  For all the talk of “printing presses”, I go 4 or 5 days at a time without even touching a filthy paper bill.  I bought a Kit Kat yesterday with a Discover Card.  For serious.  It’s all fake money anyway.

The difference between another $1 trillion and $50 trillion is like the difference between how Tiger’s ex will live based on whether she got $100 mil or $750 mil in the divorce.  There’s no difference at all really.

Here’s something else to consider – no one in this country (or their kids or their grandkids) is ever actually going to be paying it back anyway.  Who the hell do we even owe this money to?  Last I heard, one branch or department of the government was making loans to another part of the government with Wall Street banks in the middle laundering it and exacting their commission.  What’s wrong with the refinancEES refinancing the refinancERS?  When the debtors are the creditors are the debtors, who even bothers trying to unravel that pretzel?

I don’t know what you people are all worked up over, a trillion, a few trillion, a lot of trillions, what’s the difference at this point?  Let’s have a stimulus bill so gargantuan that 600,000 people have to be hired just to proofread it.

Whatever, let it rip.  $50 trillion, Barack.  Go big.

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Hot Links: Summersong

Original Article from The Reformed Broker

Three more days of Summer ahead of us, then it’s Back To Skool, kids.  I don’t know about you guys, but I’m getting pumped for the fall…

Martin Scorsese’s HBO show about Atlantic City mobsters during Prohibition (Boardwalk Empire) is going to kick all our asses and Mario Batali just opened up Eataly on 23rd Street – a multi-floor, 50,000 square foot restaurant/market/foodhall/shrine to Italian cuisine.  Flannel shirts are coming back again this fall (which is cool ’cause I’m still fully loaded) and the gang from Arrested Development is back with a new series called Running Wilde on Fox (trailer).

Anyway, we’re not quite there yet, so let’s do the last weekday linkfest of the Summer.

Four important investing lessons from departing legend Stanley Druckenmiller.  (MercenaryTrader)

In case you missed this – James Saft’s We Are All Widows and Orphans Now was terrific.  (Reuters)

Hearing about Wall Street guys wearing makeup makes me want to go be a lumberjack in the Great North Woods.  (Dealbreaker)

Chess is looking to China and sees a possibly bullish inflection point for US equities.  (iBankCoin)

“Spend enough money and you can move the GDP up. Hire enough people and you can get unemployment down. It’s not that complicated.” LOL.  (DailyReckoning)

The economics of being The Situation.  (WallStCheatSheet)

Based on earnings yield (earnings divided by price) stocks are the cheapest they’ve been in a half century.  (MyBackPages)

Perhaps the most important question of all – Can the rest of the world continue to grow if the US stays flat?  (CuriousCapitalist)

Hilarious: Cancel FDIC insurance, that’ll get everybody spending cash again!  (Weakonomics)

Trader Leigh Drogen has is head in the sand, but here’s what he’s watching for.  (SurfView)

Too many economic indicators?  (AbnormalReturns)

The Yahoo! Tech Ticker message board is an Idiot Ghetto.  (TBP)

These non-traditional guitarists will seriously blow your mind, one by one.  Unbelievable.  (MentalFloss)

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A BTE Jobs Number Before the Holiday

Original Article from The Reformed Broker

The rate of unemployment slows (future revisions permitting) and a much better than expected Non Farm Payrolls number hits The Street just before the long holiday weekend…

From MarketWatch:

Nonfarm payrolls fell by 54,000 last month, matching the level of revised losses recorded the previous month, the U.S. Labor Department said Friday. Economists had predicted a drop of 110,000. The unemployment rate, calculated using a separate household survey, edged up to 9.6%, as expected, after holding at 9.5% for previous two months.

It’s a tepid number (like all signs of this tepid recovery) but I guess it gives the bulls a chance to hold the line on this week’s constructive action in stocks, Dow futures up nicely as of this posting.

Source:

US Stock Futues Jump (MarketWatch)

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Another Winning Summer for the “Secret Sauce”

Original Article from The Reformed Broker

My pal Jake over at EconomPic updates us on how the “Secret Sauce” strategy did this summer.  If you don’t know, Secret Sauce is a playful way of saying sell the S&P for the summertime and switch over to government bonds/ credit bond index.

Here’s a cumulative look at how this stance has performed versus  the stock market since 1974:

An amusing bit of data mining to be sure, head over for more info on how this works…

“Secret Sauce” Makes a New High (EconomPic Data)

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Gekko Vulnerable

Original Article from The Reformed Broker

The man behind Gordon Gekko, Michael Douglas, talks with Letterman about his throat cancer battle. I know he hates being associated with the character from Wall Street but it’s too iconic.

Here’s Michael:

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The Chinese-Hedging-Gone-Awry Theory of Treasuries

Original Article from The Reformed Broker

Today must be a risk-on day, my entire screen isn’t crimson all at once and the bonds are taking a breather.

I got a bunch of feedback from my recent post on the bull market in bonds the other day, and much of it was of the disbelief variety.  Anyway, from regular Peter F in NYC comes this interesting bit of speculation on what some in the The Business think may have actually gone on over the last month to propel government paper to its recent peak:

Just putting it out there, responses encouraged:

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Legends of the Fall

Original Article from The Reformed Broker

Firstly, I apologize for my recent absence from the site this week, I was temporarily struck down by a digestive attack that required 4 days of hospitalization and stomach pumping.  But I’m out and about and starting to make some new health changes… Josh Brown 2.0.  For example, Josh Brown 2.0 will probably not be rolling up pizza slices and wedging them into his face like “Italian Spring Rolls”.  Josh Brown 2.0 will also not be taking escalators instead of stairs or putting butter in his coffee.

OK, back to the regularly scheduled programming.  Let’s start with the Sept/October/Fall market meme…

I see that the “September is the Cruelest Month” linkbaiting posts have already been arriving in droves.  I’ll shred them to pieces real quick typing with one hand and only about a tenth of my common sense.

Let’s start here with a bit from Minyanville:

The month of September gives equity investors a sinking feeling and for good reason: Historically, this has proven a bad month for the stock market.

Oy vey, when it starts like that, you already know you’re reading filler.  Allow me to deconstruct the genre of “month/season/timeframe” articles and posts so that you never waste your time on another one again:

1.  Timing – designed to coincide within a few days of the beginning of the new time frame (September in this case, post date on this example is Aug 30th)

2.  Post Title – The title will mention the month and within a descriptor or two attempt to scare you into to clicking on it.  It will work, you will click, because we were all conditioned by the same commercials as kids when Duck Tales came on after school.  Cereal was purchased, let’s keep it real.

3.  Data – They will steal all the data from either the Bespoke Investment Group or Ned Davis Research so just set your feedreader to grab both of those for the raw numbers minus the ex-banner ad salesman’s “contextualization”.

4.  But wait! – About halfway through the post which has just given you all the historical reasons you should just blow your brains out rather than be invested, a White Knight shall come galloping up over the crest of the hill, banners aflutter, with a reason to live, dammit!  The White Knight will be the Chief Investment whatever at an asset-gathering operation whose prima facie mission is to keep you invested, read his commentary accordingly.

5.  The non-conclusion – the last sentence will be exactly the evidence you need to tell you that you’ve just read something with almost zero value to anyone other than Scottrade, who have had the 1 minute-and-15 second opportunity to flash banner ads at you like a 42nd Street vagrant.

The point is this, it’s all unprecedented.  What the markets did in September over the last 11 years or 6 years matters as much as the hair styles of this year’s top ten American Idol competitors.  The variables are too large, too unknown and too unbound from historical calculation.  The context is always different also, especially now in our era of roadside attraction-sized superlatives.

Investors should try to incorporate historical quantitative stuff in their search for probable outcomes, but should never live and die by it.  Monthly market machinations make for good headlines but stupid fodder for helpful forward thought.

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Save This Post Like It Was Private Ryan

Original Article from The Reformed Broker

Let me tell you something, Cabrón…they’re coming for that long bond.  Oh yes, they may let it double-top at the 2008 Lehman crash highs (120ish), but oh my gosh are they coming.

And it’s Knives Out when they do.

Because the post-Lehman crash period was maximum fear and the spike to 120 was the manifestation of that.  What we’re looking at now is different, it is a moment that is more about apathy than fear.

That 20% bulls to 50% bears sentiment number in the AAII survey this week was built up to steadily.  The drumbeat that helped sentiment get to this point has been an even-keeled rhythmic apathy and the dawning mass recognition of the futility of it all.  One lost decade down, a third of the way or so into another even lost-er decade – “Screw it,” says your neighbor, “sell all my stocks and just buy me some bonds until this blows over.”

And guess what…his neighbor on the other side of him said the same thing, and so did his dentist and his brother-in-law and the dentist’s brother-in-law, too.

And this is what you think will continue indefinitely?  It never does.

My pal Ex-Wirehouse nails it best:  “You only need $16 million in the 10-Year to retire on $100,000 a year.”  Laughable, and moreover, unsustainable.

So yes, they’re coming for that TLT booty, even if they come in slow-motion and take their time in getting here.  Treasury bonds should not be expected to collapse like stocks, but in the context of what most holders think they’re doing with them (sidelines?), it may end up feeling exactly like a collapse when the unwind begins.

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The Big Yawn

Original Article from The Reformed Broker

So what am I supposed to do here, put up another friggin’ post about quantitative easing?  Or the half million jobless claims each week?  Or bonds?  Or China?

The market is as lethargic as Kirstie Alley after being locked inside The Cheesecake Factory overnight.  And the newsflow is too. 

So here’s some stuff to do in the meanwhile:

This site let’s you turn any website into a horrific looking Geocities page circa 1998.  Try it with your blog or my blog or NewYorkTimes.com.  Just put the URL into the white box, this will easily kill an hour of your day:

http://wonder-tonic.com/geocitiesizer/

Also, I came across this picture of a cheetah ripping a duck out of the air. 

Yeah, I don’t know.

Anyone have the new Arcade Fire album?  Love the band but was underwhelmed by Neon Bible.  Convince me to go buy it, somebody.

Awright, you guys.  Let’s see how this suckfest closes, Dow down 25 as of this post.  I’m gonna go get a Twix bar and a diet ginger ale.

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