courtesy of SNL.
Ground Changing News from the Treasury Department
Facebook is Looking for a New CFO
The popular social networking company did not give an official reason for the departure of its previous CFO, Gideon Yu, but the speculation is that it is looking for an executive with strong a strong background working in public companies. Essentially, they need a CFO to help them prepare to become a publically traded company. Facebook is looking for more capital to fund its growth and ever expanding technical cost.
Here is the full story via the WSJ.
Americans Versus Germans: GM Edition
The state of the American auto industry is in quite a mess. And while Americans are divided about if, how, or what our government should do to help revive it, Germans have an altogether different faith in their auto industry. In fact, they trust their automakers to act as banks, and gladly keep their savings with the auto companies.
Here is the full story at WSJ.
Tweedle and the IASB Have Their Work Cut Out for Them
The International Accounting Standards Board, which is chaired by Sir David Tweedle, has come under scrutiny for bowing to political pressure from the European Union. The issue at hand is the method banks use to value their assets on the financial statements. Political interference in the accounting and financial sectors are nothing new in the US or abroad, but one of the key components of the IASB is supposed to be its ability to resist such political pressure.
Sir David, defended the boards decision even though his stated that it nearly led to his resignation. I am a big fan of the movement to International Accounting Standards, but I forsee such political pressure being a much larger issue then either the Securities Exchange Commission or the IASB has let on so far.
Here is the full story by Glenn Kessler courtesy of the Washington Post.
Be Fearful When Others Are Greedy, And Be Greedy When Others Are Fearful
Those are the words of the master himself, Warren Buffet. He shared a few more tidbits of wisdom in a recent interview:
…What is likely… is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up… if you wait for the robins, spring will be over… …But fears regarding the long-term prosperity of the nation’s many sound companies make no sense…they ‘will be setting new profit records five, 10 and 20 years from now…
Here is the full story at Reuters.
It is good to hear the Warren repeating the sound fundamental advice in a time when so many Americans are gambling away their wealth due to fear.
One of my finance professors once gave made the following point during one of his lectures: “Most investors who get in trouble in the market get into trouble because the buy alot when the market is high and sell when it is low.”
The Best Line I Have Read About The Financial Crisis to Date: It’s in people’s minds.
From Yale economist Robert Shiller via Fox News:
Trillions in stock market value — gone. Trillions in retirement savings — gone. A huge chunk of the money you paid for your house, the money you’re saving for college, the money your boss needs to make payroll — gone, gone, gone.
Whether you’re a stock broker or Joe Six-pack, if you have a 401(k), a mutual fund or a college savings plan, tumbling stock markets and sagging home prices mean you’ve lost a whole lot of the money that was right there on your account statements just a few months ago.
But if you no longer have that money, who does? The fat cats on Wall Street? Some oil baron in Saudi Arabia? The government of China?
Or is it just — gone?
If you’re looking to track down your missing money — figure out who has it now, maybe ask to have it back — you might be disappointed to learn that is was never really money in the first place.
Robert Shiller, an economist at Yale, puts it bluntly: The notion that you lose a pile of money whenever the stock market tanks is a “fallacy.” He says the price of a stock has never been the same thing as money — it’s simply the “best guess” of what the stock is worth.
“It’s in people’s minds,” Shiller explains. “We’re just recording a measure of what people think the stock market is worth. What the people who are willing to trade today — who are very, very few people — are actually trading at. So we’re just extrapolating that and thinking, well, maybe that’s what everyone thinks it’s worth.”
Shiller uses the example of an appraiser who values a house at $350,000, a week after saying it was worth $400,000.
“In a sense, $50,000 just disappeared when he said that,” he said. “But it’s all in the mind.”
Here is the full article.
Economy Got You Down: The Federal Reserve Has Your Cure
They have a few commercials that are designed to renew your confidence in the in the economy. I know I feel better after watching them. They are a bit subtle; in fact, you have probably seen them before. This one is my personal favorite:
This one isn’t bad either.
And for those of you keeping score at home, I ripped almost this entire post off from Tyler Cowen.
Smart Financial Services By Kroger
This kiosk jumped out at me in the checkout line at Kroger. I cannot help but wonder how much financial incentive these companies are giving to Kroger for pushing their products.
AngryRenter.com: Glenn Beck and Dick Armey Sound Off Against The Mortgage Bailout
See the video here and sign the petition here.
I can’t stress it enough. The real losers in the housing bailout are responsible Americans who continue to save and not overextend themselves financially. Anybody whose mortgage is saved via taxpayer intervention should be forced to forfeit any gains from the future sale of their property.