Comrade Moonshine! Russia Raises Vodka Price 36%!

Great post on ZH today :  http://www.zerohedge.com/news/2012-11-19/inverse-deflation-alert-russia-hikes-minimum-vodka-price-36

Dimitri Cirrohski here, and many of his fellow patriots, are racing to ramp up black market vodka production to save Russia from agony and despair.

An instantaneous 36% government-dictated price increase on the national staple is going to make some waves.  Vodka is sacred in Russia.  More important than... well, just about anything really.

A tax hike this big is sure to be almost as effective as a Prohibition for stimulating unregulated entrepreneurial inclinations.  A glorious new chapter in Russian history is about to unfold!  Just think, modern day RPG-tottin Al Capones reinvigorating the collective adrenal gland.   And the news media can rub their hands in anticipation for attempted political assassinations.

Exciting Times!   Za vas!

Scapegoat Betrayus

OK maybe I'm getting more cynical, but the scandal-slapping of General Petraeus really activated my BS-detection antennae.  How convenient that a central actor in the Benghazi mystery gets taken down for indiscretion, with all the licensed media following the diversion like a pack of pheromone-sniffing hounds.

The story is limp if sad to begin with.  Who doesn't want to feel like they're interesting and desirable?  Petraeus is 'mature', but this kind of limbic phenomenon is not affected by age.  Sad for him and his wife, but not exactly the stuff of high crimes, notwithstanding his function and title.

No, what now-General Betrayus has become is just another in the historic stream of scapegoats.  Scapegoats exist to take the light and heat off of someone else.  And you know what, that someone else is by definition always higher up.  Given Petraeus was head of CIA, that doesn't leave too many characters higher up now, does it?   So regardless of what misdeeds have occurred or what well-intentioned schemes backfired in Benghazi, we get a pretty good idea who the actors are.

This story will be mangled develop for a long time, and the truth will take even longer to come out.  The theorists are already having a heyday - Benghazi, training center for Al Qaida.  Al Qaida, hired hand (still, to this day) of US efforts to destablize Syria.  Etc.  Why were diplomatic staff unprotected and then erased?  Have fun speculating.  I doubt it will prove to have much to do with Scapegoat Betrayus.  

All hail the scapegoat!

Why the "Global Debt Cloud 1.0" App Will Crash

I've been involved with software businesses for most of my career.  Software is a great illustration of the aphorism about History not repeating, rather rhyming.

Many legendary software applications have covered the same covers album:

1) Feels Like The First Time
inspired concept with singularity of purpose brought to market by a small, passionate team
2) I'm So Glad
adoring adoption by a growing community of users; team grows to give them love
3) Getting Better
expansion of the mission in response to clamoring of the adoring users, further expansion of team and probable move to beautiful new headquarters
4) We Are the Champions
forecasts of rule-the-universe possibly concurrent with IPO win
5) Hotel California
difficulty getting the next release nailed down, and decelerating innovation as layered complexity begins to snarl every move
6) Clubbed to Death
Proliferating competitors/enemies, and they're winning; everything seems crazy.
7) My Heart Will Go On
spectacular epic FAIL new version/upgrade release and earnings disaster/s
8) Is That All There Is?
dispirited company acquired by a grasping conglomerate that preys on the less imaginative remaining users
9) The End
another footnote in history

The Global Financial System is a lot like a big software application, in fact resting on countless interconnected software systems.  The unprecedented expansion of private and public debt and chaotic blow-ups and near misses squarely locates us at step 6 on our software timeline.  First just Japan, then the USA was ZIRPing and QEing, now everyone's in the act.  Rogue actors regularly hijack the geopolitical scene.

It's not hard to anticipate Step #7, the Epic Fail of the Global Financial System aka Global Debt Cloud 1.0.  It could come from anywhere.  Implosions in the near-$quadrillion notional pile of derivatives worldwide.  A misstep in any of the world financial citadels.  A melt-down in the world of High-Frequency-Trading - the bastard child of Moore's Law and the always-seductive GIGO. Or just an awakening and realization by the little people.

Time to be thinking about Step 1.

The Too Sad Trick or Treat Sequel - FAIL Tech IPO Class of 2011/12

Second update to my June 1 'Commencement Post" for the Tech IPO classes of 2011 and 2012.  After two months, the career prospects for these recent 'grads' was still pretty dim overall... so I thought I'd see how they survived Trick or Treat, Dia de los Muertos and the Electile Dysfunction of 2012.... not pretty... do we need viagra for stocks or get started preparing some coffins?   I'll let you be the judge.... "fair and balanced"  LOL!

Presented in the same order, with updated charts....

1. Zynga, When are they going to do Stockville, featuring the E*Trade baby?

6/1:  Opened at 11, a real Christmas gift!  Woops, touching 6 now... don't bother bottom fishing until around 4.  Isn't StockVille such a neat game to play?!

7/31: Bottom fishers, you now have a yellow caution light to proceed depending on your level of self-loathing.

4 was a good reference point,  ZNGA gapped right past it to the 2s by 7/31.  Dead since then. Self loathers got another reason to loathe themselves if they bit this summer.  A bitter taste in the mouth indeed.  Don't be looking for a big win here... either in their games OR the stock.

2. Get Your Daily Deal - Rotten StockFish!

7/31: Back on 6/1 GRPN was trading a bit under 10. I said wait for 5.  We are getting there....

11/13: Yee-howdy, now THERE'S a discount. But compared to bankruptcy?  Do you like remorse with your pain?  This one could go all. the. way.

3. HELP! I've been YELP'd!

7/31: Back on 6/1 YELP was looking at 16 after opening at 22.  Nice levitation since then, but too early to get giddy about upside.  Needs more time wallowing at lower levels.  

11/13: I am the Wallow-Rus!  Koo Koo Katchoo!  Here's a 5-star Round Trip! Let's meet up at '14' again, k?  We can pretend to be Elite...

4. FaceJuke!  The Mother of all Bogus IPOs!  Long Live the Zuck!

7/31: FB touched $45 on opening day. On 6/1 I said way to early to even seriously watch it.  Mr. Market seems to agree.  Let's see if the fall offrom disgrace can stop at $16.  

11/13: So far the Maginot line at 16 has held... but I'm not holding my breath.  The crystal ball keeps seeing numbers between 10 and 15...

And finally, the winner.... the CHAMPION!!!!

5. LNKD -  like my 81 year old pops-in-law says, "I'm on the "LINKIN" (no it doesn't do anything for him).  Hotrod Lincoln?  Or a Ford with a fake badge?

7/31: On 6/1 I said watch out because LNKD could be "the first commercially viable social network, OMG!!!"  It was actually UP over it's opening day.  I said it was "in the pool of indecision" and it's still there, hovering around its opening price.  I still think it needs to spend some time underwater but LNKD remains the champ in this IPO group... it has legitimate earnings prospects. 

11/13: LNKD was at around 102 on 7/31, and still close to 100.  The LNKD "Pool of Indecision" is bigger than Olympic-sized!  At least with LNKD, you have not already lost most of your investment.  You may even have a gain.  With next year's tax picture, you might want to pocket that and go buy yourself a double latte.  If it drops much more here, it could roundtrip to 60.  Oh, that's not very winner-like.  My condolences to this graduating class.

Summary for the Graduates of 2011/12

7/31: The next few months could be pretty unkind to this whole group.  The low-volume manipulated rising market is very very tired and everyone seems to be focused on Central Bank moves rather than profits and prospects for more.  Main Street is tired too.  The economy is just not in great shape, it's getting harder to fake with government statistics.   This IPO class has its work cut out for it.  At least they have big cash cushions to weather economic storms and headwinds.   I think they're going to need it.

11/13: Yes, a cruel summer for the recent Grads.  And a cold winter, too.  Ned Stark was an optimist.  Winter Has Come.  And not just for these puny hype-rockets coming down with a thud.  Everyone's invited.

Your Faithful Curmudgeon