Monday, November 09, 2009

The economy is in the toilet...Let's buy stocks!!

At least there are plenty of daytrading bucket shops hiring....

The market has reacted as expected following the jobs report -- things look awful so traders expect more stimulus and an accommodative Fed which means a weak US dollar and strong markets for commodities (I've seen gold forecasts of $1,350/oz recently) and stocks.



This rally caught more than a few people off guard and I think there's a decent chance that it pushes through for another week or two, however, the market remains very, very hard to gauge.



One other item that I failed to note after last week's jobs report - Average hours worked fell to just 33 hours last month. This is a leading indicator of future economic activity and as this number keeps falling it shows that there is plenty of slack in the system. When the economy picks up there will be very few jobs associated with the recovery because employers have plenty of room to add extra hours for their existing employees.



Also, I'm really concerned by the consistently bad job news coming from our best companies. If the CEOs of Pfizer, Johnson and Johnson, Microsoft, etc are 18 mths into the recession and don't see any reason to delay layoffs, it's a sign that the outlook remains bleak.



Pfizer streamlines R&D - this is a meaningful blow for NNY because Pfizer looks to be closing research facilities in Rouses Point and Plattsburgh. I don't know what R&D took place at these facilities, but these are high skilled jobs leaving the north country.



US Lawyer job cuts deepest in 30 years - Global economic carnage has pushed US firms to make the deepest cuts in lawyer numbers for more than 30 years, according to The National Law Journal.



It said America’s top 250 law firms axed 5,259 lawyers in the last 12 months.



Johnson & Johnson cutting 7,000 jobs....

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Did you see SNL pick up on the Goldman Sachs H1N1 vaccine story? Funny video link here......



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I left the world of Facebook a few months ago, because I could see that their need to drive revenues was starting to reduce the application's functionality.



There is a poorly written, but well documented expose of some of the scams going on on Facebook right now. The scams seem to target the social gaming crowd (think Farmville or Mob Wars) and they are pretty blatant. I don't think the average adult would fall for these tricks but I could easily see teenagers falling for these scams.



"users are offered in game currency in exchange for filling out an IQ survey. Four simple questions are asked. The answers are irrelevant. When the user gets to the last question they are told their results will be text messaged to them. They are asked to enter in their mobile phone number, and are texted a pin code to enter on the quiz. Once they’ve done that, they’ve just subscribed to a $9.99/month subscription. Tatto Media is the company at the very end of the line on most mobile scams, and they flow it up through Offerpal, SuperRewards and others to the game developers.


As you can see in the image below, nothing in the offer says that the user will be billed $10/month forever for a useless service.





I could see an interesting business model for Google/Microsoft or others creating a similar site to Facebook that was subscription based so that you could avoid all of the garbage.... I mean advertising, on Facebook.

Cheers!

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