Finance Geek

While the world awaits the white smoke of quantitative easing from the Jackson Hole conclave, the banking system persists in a state of chronic disorder. This is no benign disorder, either, as it threatens the general welfare of the global economy in much the same way as 2008. So much attention about this persistent, incurable financial malady centers on the general perceptions of south European countries and their tenuous ability to service or repay laden debt. While there is certainly merit to that line of inquisition, it misses the central diagnosis of our dying monetary age.It is very…

More…

Hopes are fading for a big announcement from Ben Bernanke at Friday’s Jackson Hole confab. “Fed Chairman Ben Bernanke is unlikely to use his speech…to unveil new efforts to bolster the U.S. economy—despite financial markets’ lingering hopes that he will,” David Wessel writes in The WSJ, which had a similarly themed story on Wednesday. In [...]

More…

During my morning reading today I was surprised to read articles about one, then two, then three mid-sized software companies filing to go public.  The three are Eloqua, Jive Software and Brightcove, all decent businesses with good reputations, but they are not juggernauts like LinkedIn, Zynga or Facebook.

I was surprised at this news because the stock markets have taken such a pummeling recently, and many tech stocks have been hit particularly hard.  Last night I had dinner with the CEO of Zeus Technology, our portfolio company that was recently acquired by Riverbed, and he was describing how Riverbed’s share price has dropped 50% over the last month or so, and how Zeus’s competitors F5 and Cisco have seen similar drops.  Going public now seems unlikely to maximise valuation, and it will be interesting to see whether there is appetite for these issues at all and if there is at what level they price.

These facts will tell us whether the IPO remains open as a route to liquidity for venture backed businesses at all and also at what sort of valuation metrics.  If the news is good it will help underpin the valuation of investment rounds in equivalent but less mature tech companies.

We are in a funny market right now, with signs of chaos and meltdown in government circles and financial markets but relative stability in the private sector, for now at least.  In times like this people are always on the look out for signs of green shoots and often ready to invest heavily when they find them.  Additionally, the world is desperately in need of the growth offered by many technology companies.

My best guess is that the overall economy will lurch from mini-crisis to mini-crisis for the next few years without hitting severe problems or achieving much in the way of growth (there are downside risks to this scenario though).  During those years I think we might see a couple of periods similar to the one we’ve just been through where investors and corporates chase valuations for tech companies up to exciting levels.

If Eloqua, Jive and Brightcove get away at good valuations then we may get into one of those periods sooner than I would have thought.

More…

A few weeks back, the Daily Ticker’s Henry Blodget wrote an editorial for the Business Insider entitled: OUTRAGE OF THE DAY: Do You Realize That The Government Is Still Paying Banks Not To Lend…? In the story Henry describes how “the Federal Reserve is still paying big banks not to lend money. And it’s doing [...]

More…

Warren Buffett is a one-man bailout machine. For pretty much every major institutions, the Oracle of Omaha is the guy you go to when you want some validation. When Democrats and the White House turned to him for intellectual succor over the need to raise taxes on the wealthy, he complied with a New York [...]

More…

It’s no real surprise that Tim Cook has been tapped to serve as Apple’s CEO following Steve Jobs’s resignation to become Chairman. Cook has spent thirty years distinguishing himself in the industry, spending the first half with IBM and Compaq and the second, more than fourteen years, as Jobs’s right hand. He joined Apple’s operations …

More…

In the wake of the terrible and sad news that Steve Jobs has resigned as CEO, Apple’’s stock is down less than 5% in pre-market trading. This is actually barely any drop at all. And that suggests two things: First, that the market was expecting this news (and was obviously wise to be expecting it, [...]

More…

According to a report by antivirus software maker McAfee, Android is now the “most attacked mobile operating system,” with a jump in malware attacks of 76 percent in the last quarter. This impressive win is even more so when you consider that Android “outpaces second place Java ME threefold”.

While we are normally skeptical of scary …

More…

Economic Policy: The Democrats’ aggressive push to extend the payroll tax cut for another year has nothing to do with boosting economic growth and everything to do with class
warfare politics.
The Democratic National Committee (DNC) made it known this week that it plans a full-court press to extend the temporary payroll tax cut into 2012.
Enacted as part of the deal last December to extend the Bush income tax cuts, it trimmed workers’ Social Security tax rate to 4.2% from 6.2% this year.
President Obama routinely includes the extension as part of his jobs plan because, he says,…

More…

It’s a sign of desperation that the latest cure being suggested for the ailing economy is higher inflation. In the 1970s and early 1980s, inflation (peaking at 13 percent in 1979 and 1980) was a national curse. Now, it’s being advanced as an antidote to high unemployment and meager economic growth. It’s bad advice for the Federal Reserve, which holds its annual research retreat at Jackson Hole, Wyo., this week. What seems plausible in the classroom would probably backfire in the real world.
The economy’s central problem today is lack of confidence - fear - reflecting…

More…

Congress shows no signs of passing legislation to fix our convoluted immigration laws. Indeed, despite much discussion on Capitol Hill and much public debate, Congress has passed no broad revision of immigration law since the 1990s. So President Obama is taking matters into his own hands and changing immigration policy by executive action.
That this is a good way for our government to address the question of what to do about illegal immigrants is doubtful. In my mind, legislation is the better way.
Last week, Department of Homeland Security Secretary Janet Napolitano wrote to Assistant Senate…

More…

As we look back at Steve’s greatest hits, the big question is: Will Apple be able to continue the string of successes Jobs leaves in his wake?

More…

News of Steve Jobs’s resignation as CEO of Apple (AAPL) Tuesday night shook both the tech and investing worlds, even if neither could be totally surprised given his fight with pancreatic cancer in recent years. Following word that one of the great technology leaders of all time would be parting ways with the company he [...]

More…

Apple stock dipped as much as 7.39 percent Wednesday, stripping $24 billion from its market cap in after-hours trading, after its iconic leader Steve Jobs announced he was stepping down as CEO amid longstanding health concerns.

More…

In Part 2 of this two-part essay, first excerpted from the introduction to the new edition in 2009, Frank Rose explains how Jobs could be the fall guy one decade and Apple’s savior the next.

More…