Bitcoin taking a bite out of FANGs

The booking of FANG profits is very apparent in the last five trading days as the Nasdaq has lost 1.7% in value.

The rotation out of high-flying tech stocks, which I saw happening as the Trump tax cut moved through Congress last week, is continuing while the Dow Jones continues to move higher. Continue reading


Dow 22K doing it old school

The few equity floor traders left at the NYSE — you know him from their standing around the kiosks in the live shots on the financial shows during the day — have their Dow 22K at the ready.

The recent moves from the FAANG stocks to the Dow 30 blue chips has to be based on valuations, since Facebook, Apple, Amazon, Netflix and Google have reached astoundingly high price/earnings ratios die to the crowded trade.

Smart money is moving into more traditional tangible manufacturing stocks to offset the surprises like Amazon’s recent reporting. CEO Jeff Bezos beat on the revenue, but tanked on the bottom line due to increased spending.

Just not enough discipline, when your P/E ratio is approaching 250 and the S&P 500 ratio is around 25.

While only Apple +28% and Microsoft +17% are in the Dow 30, Caterpillar and Boeing are having their day in the sun being up 23% and 56% this year respectfully.

So break out the party hats and streamers as the new bosses, same as the old bosses push their way back into the spotlight.

Welcome to the ‘Ransom Spring’ and bitcoin attack

So whose Spring is this going to be?

As elections across Europe and the US may have placated the masses, will an Arab Spring materialize again? Or Occupy Something?

Perhaps this season will be the “Ransom Spring” as hackers unleash a massive cyber attack that infected hundreds of thousands of computers running Microsoft Windows.

Microsoft has pointed to the National Security Agency as the hackers are using a technique purportedly stolen from the ultra secret spy agency. The cyber attack targets Microsoft’s operating system through a back-door channel put in the code to allow government access to the computer without the user knowing it.

The hack effectively takes over the computer and demands a $300 ransom, to be paid in 72 hours with bitcoin.

I can’t help to think that there could be another nefarious motive behind this attack. By asking for bitcoin to pay the ransom, which most people will not pay preferring to wait for a software fix, it could also be an operation to discredit the cryptocurrency as its valued soared to more than $1,800.

Bitcoin’s value saw a $200 decline as the global hack was taking place. However the sell off was short-lived and values have rebounded somewhat into the low $1,700 range.

In another ransom attack, Disney’s Chairman and CEO Bob Iger told company employees on Monday that the newest installment of “The Pirates of the Caribbean” franchise is being held hostage by hackers and will be released on the web unless the company pays the undisclosed ransom.

Disney’s ransom attack is similar to the cyber theft Netflix faced last month when hackers  stole unreleased episodes of the hit “Orange is the New Black.”

Netflix refused to pay the price and the shows were leaked online.

And so it may begin The Ransom Spring. Look for this uprising online.

Saving Face on Zuckerberg's charitable trust

Facebook founder Mark Zuckerberg and his wife Priscilla Chan — on the birth of their child Tuesday — pledged to give away 99 percent of their wealth to their charitable trust.

“In philanthropy, 30 is the new 70,” as Mike Bloomberg said yesterday.

There is a long history of ultra-rich Americans giving back to charity upon their death or soon before.

But Microsoft founder Bill Gates turned that on its head 15 years ago by setting up his foundation with his wife Melinda. He not only pledge his vast wealth, but talked other billionaires to do the same. His sometime bridge-playing partner Warren Buffett signed on, though he is closer to the traditional age of giving it away.

So the question is what do you get from  younger hands-on entrepreneurs having a seat at the charity table?

The Gates foundation has focused on health initiatives in Africa, and has said it is on its way to eradicating malaria by 2040. That seems a far way off, with very few people alive today ever seeing that occur including the benefactors.

Gates has committed $1.6 billion to the Global Fund to Fight AIDS, Tuberculosis and Malaria in Africa, which provides about 50 percent of international funding for malaria control worldwide.

I think, if you have a brash new organization coming in to help solve a problem, with plenty of resources and different ideas on how to solve it, you could get faster results.

But that doesn’t seem to happen. There are too many living off of the problem they wish to solve, including other aid providers to provide quicker results.

Zuckerberg should already be aware of the pitfalls of thinking that throwing millions at a problem can solve it. He donated $100M to the failing school system in Newark, NJ in 2010 funding a 5-year turn around.

His thought was to reward better teachers with higher pay, but he ran into an entrenched teachers union, which would have no part in “liking” his proposal and so Newark still has a failing school system and $200M, with matching donations,  went down the rabbit hole.

So when these brash, young ideologues think they can change the world, because of some code they “acquired or tweaked” 10-20 years ago that made them filthy rich, well welcome to the real world where vested interests have more to say about your cause célèbre.

I don’t mean to sound cynical, but seeing the possibilities of what DOS can do for personal computing before IBM did, does not make you a visionary in all things going on in the world.

Carnegie, Mellon, Morgan and Vanderbilt built things, so in their philanthropy they built things. They knew were the money went and built lasting organizations that have endured over a century.

Hoping to solve one problem in a century, does not mean endurance.

Perhaps the Zuckerberg Foundation can look at providing the world with the access tools for a free digital network with a platform, where the citizens can decide what needs to be done in their own neighborhoods.

Oh yeah, and that platform should not host cat videos.

As I wrote yesterday off of the lackluster retail sales over the Thanksgiving weekend shopathon, Main Street America is in recession and Washington is ignoring its plight.

Tuesday morning after my post, the manufacturing number came out and it was bad. The number says we are not making enough things here and the level says the manufacturing sector is in decline.

Let’s see what Friday’s Nov. jobs number has to say. It’s the last piece of the puzzle, before the Fed meets in two weeks.