You know there is a bubble when...

"Dozens of tiny companies have gotten big stock-market boosts simply by adding the word “China” to their names. While the total dollars at stake are small, the trend is reminiscent of the Internet bubble’s heyday, when a company could launch its stock price to the moon merely by tacking “.com” onto its official name."


...http://ftalphaville.ft.com/blog/2010/03/24/185806/whats-in-a-company-name-if-its-china-it-matters/

Dow @ 11k?

I don't understand how the Dow is at almost 11,000.  It makes no sense....

Assuming efficient markets, the explicit reasoning is that the market is worth roughly 66% more than it was in March of last year (market low = roughly 6,600).  You can factor in risk aversion and uncertainty, but I can honestly say that our economic situation hasn't changed enough to justify a 66% run-up in the value of the stock market in 1 years time.  Unemployment is high, underemployment is high (yes, I agree they are lagging indicators, but unemployment dictates consumer demand, which is ~70% of GDP), the housing market sucks (WAAAY too much inventory, too few buyers, and inventory numbers won't materially change for a while due to the waves of ARMs resetting and eventual foreclosures), and China has turned into a net importer (just plain weird).  Looking two or three years down the line, tech companies (on the whole) will have dry pipelines because they cut R&D over the last few years.  Small acquisitions will go up, providing a much-needed boost to VC, but R&D through acquisition is an expensive proposition. 

I don't see an event out there that will cause the correction that is needed, but I'll be damned if this run-up continues. 

One last note: the amount of high-yield debt being issued is astronomical.  There is a huge bubble in this asset class, so watch out...

"We are broke... here is your ticket"

"They’re trying to use police officers to balance the budget on the backs of drivers, and it’s too bad. The people we count on to support us and help us when we’re on the road are the ones who end up paying the bills, and they’re ticked off about it. We might as well just go door to door and tell people, ‘Slide us $100 now since your 16-year-old is going to end up paying us anyway when he starts driving.’ You can’t blame people for getting upset."
But some localities are converting to even more automated ways of making money from drivers.
For example, "red-light cameras" have become huge revenue raising tools in many areas of the country. In Los Angeles, revenue from red-light cameras has doubled from $200,000 a month in 2007 to $400,000 a month at the end of 2009.
California Governor Arnold Schwarzenegger wants cities and counties in his state to take thing seven farther. He wants them to install speed sensors on existing red-light cameras. Speeders caught by these sensors would face fines ranging from $225 to $325.
Don't all of us wish we could start a business that could make so much money from each customer?"

http://www.financialarmageddon.com/2010/03/the-enforcement-tax.html

Depression, meth, and workplace violence: the best of the recession

"Mr. Lattarulo says the number of calls to Harris Rothenberg's programs rose every month in 2009 from the previous year, sometimes by as much as 40%. There was a jump of 400% or more some months in manager referrals for suicidal, homicidal, or otherwise dangerous employees."

""With the recession and economic problems, I have seen a surge in mental health issues. At some level, people are postponing getting care longer and longer, some have lost insurance, some are more worried about losing their jobs or their insurance has gotten downgraded, so by the time they get help, it's more of an acute or distressing problem.""

"But as the economy continues to cave, there's at one least one record Illinois didn't know it might break. The number of meth labs being seized is reaching new proportions.
In the Pekin area, what was once called the 'meth capital' of the state, police have seen a 48 percent increase over the past year.
What some meth response teams have noticed is drug dealers need to make a buck. Compared to crack, heroine, and other, more expensive narcotics that many people can no longer afford, meth is easy to make and even easier to sell."




http://www.financialarmageddon.com/2010/03/paying-a-heavy-price.html

Cool graph

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/summers/Shadow%20Banking.jpg

Earnings Management

People learn to play the game over time... hooray wall street.



http://panzner.typepad.com/.a/6a00d83451591e69e201310f6ade0b970c-pi

6% for $600k

Interesting idea.  I've definitely had this thought before.

"Three entrepreneurs are offering a share of their life’s income in exchange for cash upfront and have banded together to form the Thrust Fund, an online marketplace for such personal investments.
 Kjerstin Erickson, a 26-year-old Stanford graduate who founded a non-profit called FORGE that rebuilds community services in Sub-Saharan African refugee camps, is offering 6 percent of her life’s income for $600,000.
“So many friends are in the same boat as me — they’re struggling along, wanting to see so much more from their organizations or to let them fly on their own. But it’s hard not being able to get out of the daily grind and raise what you need for payroll,” she said. “The Thrust Fund is appealing because it lets me fast-forward a couple years.”
Erickson said she’s close to signing a deal within the next few weeks and is already fielding several potential investors. A back of the envelope calculation suggests that she would have to earn roughly $250,000 a year after taxes until she turned 65 for an investor to break even, excluding inflation and the opportunity cost of investing elsewhere."


http://deals.venturebeat.com/2010/03/03/life-investment/

California: Iiiis Broke! (And CDS on California are more costly than Kazakhstan)

I'd imagine that if Goldman Sachs is found to be involved in the financial destruction of California, we might hear a similar refrain about throwing someone down a well... but Borat wouldn't be the one singing.

"California's debt is seen by investors as riskier than Kazakhstan's, according to Bloomberg News. Five-year credit default swaps tied to California's debt, which are a key measure of the market's belief in the likelihood of default, are actually trading at 100 basis points above those of Kazakhstan. In other words, the market believes a developing country of just 15.7 million people is actually less likely to default on its debt than California, which makes up the eighth-largest economy in the world."


http://www.huffingtonpost.com/2010/03/01/californias-debt-now-risk_n_481058.html