WASHINGTON, May 20, 2013 – Perennial Internet also-ran Yahoo took another chance on improving its moribund fortunes Sunday by agreeing to purchase Tumblr for approximately $1.1 billion in cash. Like other longtime web portals such as AOL, Yahoo is seeking, somewhat late in the game, to get more social media, mobile and blog operations like Tumblr under its corporate umbrella.
Yahoo’s growth-by-engulfing strategies have never really succeeded, however, and it remains to be seen whether the company’s still-new chief exec Marissa Mayer can do any better than her predecessors at creating synergy via new and likely overpriced acquisitions.
Meanwhile, the “will he or won’t he” assault on stock traders continues as some Fed spokespeople claim that “tapering” the current QE money printing regime is imminent while others imply these operations might just continue indefinitely. This kind of decisiveness doesn’t create a very certain environment for investors, and the market is showing that this morning with its very indecisive opening numbers.
On the political front, Administration flacks spread out among the Sunday talk shows yesterday blaming all their recent scandals on the Republicans. This asinine strategy has irked even the liberal MSM. Happy to be co-opted by the administration when it could get away with it, the predominant leftwing media has duly noted that the Benghazi, IRS, and AP scandals are so extensive and so obvious that any wounds that have been inflicted have been self-inflicted by the Administration, not by the hapless Republican Party, which still can’t fight its way out of that proverbial wet paper bag.
Over the last two weeks, Obama has been trying to draw attention to his always-vague job-creation ideas with small events in Austin and, on Friday, in Baltimore. The daytime visits have been coupled with modest executive initiatives that tend to garner local media attention but get lost in Washington’s attention to the contentious issues of the moment.
“There does seem to be a risk of getting bogged down in noise,” said Jared Bernstein, who was part of Obama’s economic team when he served as Vice President Joe Biden’s chief economist. “He doesn’t need to get out to talk about Benghazi and the IRS and the budget deficit. He needs to talk about investment in the nation’s productivity.”
Wrong answer, actually. He does need to talk about Benghazi and the IRS. And the AP phone bugging scandal, too. But, as usual, the President and the Administration are trying to yell, “Squirrel!” so the growing cadre of media dissenters will abandon the scandals to follow the President’s latest false efforts to support middle class employment.
Typical of this so-called support, Obama has called for more government spending on education, public works projects, and research and development and has proposed paying for it largely with higher taxes. But after letting one tax increase on the rich pass at the beginning of the year, Republicans have steadfastly refused any further tax hikes and have resisted Obama’s spending plans. The result has been a fruitless search, at least so far, for a “grand bargain” to trim the nation’s long-term debt.
In the face of Republican-led investigations in Congress, some Obama advisers say that boldly elevating the economy would create a sharp contrast and emphasize their belief that Republicans are overplaying their hand. In reality, that’s a pipe dream. The Republicans have yet to find a hand they can overplay.
“What the president can do is make decisions about what he wants to talk to the American people about,” said Democratic consultant Tad Devine. But what the President does not want to talk about is how he and his fellow ideologues long ago ignored real private sector job encouragement while pursuing the destruction of the Republican Party with such ferocity that their entire left wing propaganda and defunding operation has come back to bite them even as Obama II tries to get its act out of the gate.
Today’s stock ideas:
This morning’s market is iffy and somewhat directionless as the Fed debates out loud whether to and/or when to pull the QE punchbowl away from stocks. Tech and oil looked reasonably good as the market opened, but the overall tone for all stocks is a little queasy. After all, less than half of “Sell in May” May remains, so this kind of wobbliness seems overdue at this point.
The market is now incredibly overdue for a correction. And now, or soon, the big money dudes on the East Coast will want to take off from the Big Apple and head either for their yachts, the Hamptons, or both, meaning trading volume, already apparently anemic, is likely to get lower leaving us entirely in the hands of the HFT machines. Not a good place to be. Cash may soon be king, particularly now that the gold bubble seems to be in a long-term downward trajectory.
Note: Our photo above depicts one species of a strange-looking South American animal known as a tapir. Sporting a tentative, truncated trunk somewhat like that of an elephant but a great deal smaller, it occurred to us that the tapir could serve as a swell mascot for the oft-threatened Federal Reserve QE “taper” which has probably become the most boringly over-used headline cliché during the month of May.
We’ll find more tapir pictures to post which we’ll do every time we’re forced to discuss the latest blather surrounding this so-far nonexistent Fed taper. The propaganda and pabulum the Federal government has been feeding taxpayers since 2008 has been jumping the shark for a long time now, and we’d like to draw attention to these carny side shows that are always meant to distract rather than inform.
–AP contributed to this report
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.
Positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.
Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.
References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.
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