Hey VC's . . . Are You Still Buying Violin Memory $VMEM Trading Below Cash Value?

Why is Violin Memory $VMEM Trading Below Cash Value?
Will These VC Funds & Corporate Investors let this company fail?  
Windcrest, Juniper Networks, Toshiba, SAP Ventures, GE Capital, Highland Capital

I have often said the Venture Capital is a game of getting bigger and dumber money to follow the smart money.  This one takes the cake.  Violin Memory has priced its IPO of 18,000,000 shares at $9 per share for a value of $162 million. J.P. Morgan, Deutsche Bank Securities, EM Securities and BofA Merrill Lynch are underwriting the IPO, with Barclays serving as a joint book-running manager. Baird and Pacific Crest Securities are also co-managers. Based in Mountain View, Calif., Violin Memory, which is backed by SAP Ventures, Highland Capital Partners, Toshiba and Juniper Networks, is a provider of memory-based storage solutions.

Revenue Growth Looks Good But Spending Money For Sales Expansion

If you can dismiss their last quarter below guidance based on not closing a few Government contracts and their CTO leaving the story looks pretty interesting bringing on 30+ new customers in the quarter.  This chart looks horrible but it feels like an interesting public venture capital growth opportunity if you don't mind trying to catch a falling knife of a pretty good growth opportunity. 
The $VMEM IPO Priced at $9 and now it trading at $2.6?  
Is this an overreaction?

Here are Silicon Valley’s 10 most in-demand startups
Big Data Storage Companies:  Cloudera, Nimble Storage, Dropbox, Violin Memory

Violin Memory $VMEM currently has market cap of $100M and $NMBL $1.5B which is a difference of 15x. Nimble and Violin have similar tech, customers, industry, revenue, losses. Go figure Wall Street due your due diligence before investing.

Why The Fed's 0% Interest Rate Policy Hurts The Economy & Savers



Hedge Fund Manager David Einhorn explains how $200 billion per year is not being spent in the economy by savers because of the 0% interest rate policies.  Janet Yellen said yes our policies hurt savers but helps the overall economy?  I frankly think the Feds theories are incredibly flawed.  Gains in the stock market and housing are not being spent and the whole wealth effect theory only benefits a few people and not the masses.    

Hedge Fund Manager David Einhorn

For over a decade, the Federal Reserve has maintained near-zero interest rates, a policy intended to stimulate economic growth by making borrowing cheaper and encouraging spending and investment. However, while these low rates may have provided short-term relief during times of crisis, they come with significant downsides that are increasingly becoming evident. The Fed’s 0% interest rate policy has far-reaching implications for the economy and for savers, potentially undermining long-term economic health and financial stability.

Distortion of Investment Decisions

One of the primary effects of 0% interest rates is the distortion of investment decisions. When borrowing costs are low, investors are more likely to take on higher risks, seeking higher returns in speculative assets rather than in stable, income-generating investments like bonds or savings accounts. This can lead to bubbles in asset markets, such as real estate or stocks, as investors chase yield in riskier ventures. Such bubbles, while they may boost short-term gains, often set the stage for future economic instability, as evidenced by past financial crises.

Savers Penalized

Savers are among the hardest hit by the Fed’s low-interest-rate policy. Traditionally, savings accounts, certificates of deposit (CDs), and other fixed-income investments have provided a reliable, if modest, return on investment. However, with interest rates at or near zero, the returns on these savings vehicles have plummeted. This erosion of interest income is particularly detrimental for retirees and other individuals who rely on their savings for living expenses. The inability to generate adequate returns on savings forces many to either spend down their principal or take on higher-risk investments, both of which can jeopardize their financial security.

Impact on Bank Profitability and Lending

Banks, which typically rely on the spread between the interest they pay on deposits and the interest they earn on loans, find themselves squeezed by low rates. With the cost of funds so low, banks’ net interest margins have shrunk, impacting their profitability. This can lead to a reduction in the availability of credit, as banks may become more selective in their lending practices to maintain profitability. Consequently, businesses and consumers may find it harder to secure loans, which can stifle innovation, expansion, and consumer spending, ultimately slowing economic growth.

Inflation Concerns

While low interest rates are designed to combat deflation and stimulate spending, there is a growing concern that they may inadvertently lead to inflation. When borrowing is cheap, money supply tends to increase, potentially driving up prices for goods and services. While moderate inflation can be a sign of a growing economy, excessive inflation erodes purchasing power, making it harder for consumers to afford everyday necessities. This can disproportionately affect low- and middle-income households, exacerbating economic inequality.

Long-Term Economic Health

The long-term impact of sustained low interest rates on the economy is a topic of considerable debate among economists. Some argue that while low rates can stimulate growth in the short term, they may lead to a misallocation of resources and create economic imbalances that are difficult to correct. For instance, prolonged periods of low interest rates may discourage savings and investment in productive capacity, potentially leading to slower economic growth and reduced productivity over the long run.

In conclusion, while the Federal Reserve’s 0% interest rate policy has played a crucial role in stabilizing the economy during times of crisis, its negative impacts on savers, investment decisions, bank profitability, and potential inflationary pressures highlight the need for a balanced approach. Policymakers must carefully consider these factors as they navigate the complexities of economic recovery and strive to ensure sustainable growth that benefits all sectors of society.

The Best Eastern Conference NHL Team Would Not Qualify For The Playoffs in the Western Conference

The Western Conference NHL has clearly been beating up on the Eastern Conference in the first 22 games of the season.  

What Is The Best Bitcoin Wallet or Exchange Service?

Where is the Best Places to Buy & Trade Bit Coins?
What Wallets and Exchanges Are Certified?
How Are Merchant and Bitcoin Owners Vetted?

Bitcoin is the World's first decentralized digital monetary system and "bitcoins" are the currency units used. A decentralized system is essentially a P2P or pier to pier system versus a centrally managed system like PayPal.  The system has existed since January 3rd, 2009 and is used in every Country in the World. Bitcoins are created and controlled by advanced mathematics and cryptography, instead of by governments or banks (no government, bank, or corporation owns or controls Bitcoin). Bitcoins as a currency unit are created over time at a diminishing rate, and there will never be more than 21 million of them in existence (though they are highly divisible).

Bitcoin is different from any other payment system because:
  • It is decentralized (no group has monopoly control over it) 
  • It is not tied to US dollars or other government fiat currencies 
  • It is impossible to suffer chargebacks or frozen accounts 
  • It is (relatively) anonymous 
  • Fees are optional (you may pay to make your transactions process slightly faster)
  • Merchants can accept payments easily with hardly any fees.
Other virtual currencies do exists and are used for other services such as video games.  It will be interesting to see how this phenomenon evolves and if it will ever become commercially viable in the United States due to the enormous protection of the existing US banking laws.  China is one of the leading countries in World using and exchanging bitcoins.  The US is lagging far behind other countries in the World with adoption.  

US Governments officials and regulators will obviously be interested in stopping / regulating this for the following reasons:  
  • Cutting Off Terrorism Funding
  • Leakage of Tax Revenue 
  • Money Laundering 
  • Tax Evasion 
  • Exchange of Illegal Goods and Services
Would love to learn more about these services and would appreciate the feedback below.  Please add links and comments.  

Federal Reserve Whistleblower Says "Insiders Know Quantitative Easing Doesn't Work"

Andrew Huszar: WSJ Oped:  Confessions of a Quantitative Easer We went on a bond-buying spree that was supposed to help Main Street. Instead, it was a feast for Wall Street.  Posted at the WSJ. Mr. Huszar, a senior fellow at Rutgers Business School, is a former Morgan Stanley managing director. In 2009-10, he managed the Federal Reserve's $1.25 trillion agency mortgage-backed security purchase program. 

In a startling revelation that has sent ripples through the financial community, a whistleblower from the Federal Reserve has come forward with allegations that senior officials within the institution are well aware that Quantitative Easing (QE) does not effectively stimulate economic growth as intended. The whistleblower, who has chosen to remain anonymous for fear of retaliation, claims that the longstanding policy of purchasing long-term securities to inject liquidity into the financial system has been largely ineffective in achieving its goals.

Quantitative Easing, introduced by the Federal Reserve in response to the 2008 financial crisis, was designed to lower interest rates and increase the money supply to stimulate economic activity. By buying vast quantities of government and mortgage-backed securities, the Fed aimed to drive down long-term interest rates, thereby encouraging borrowing and investing. The policy was expanded and maintained through several rounds of QE, especially following the economic downturn and during the COVID-19 pandemic, as the Fed sought to support the economy in the face of unprecedented challenges.

However, according to the whistleblower, the intended effects of QE have been largely superficial and, in some cases, counterproductive. The source claims that insiders have long known that the policy has failed to generate the expected inflationary pressures or significantly boost economic growth. Instead, it has primarily served to inflate asset prices, contributing to growing wealth inequality and distorting financial markets.

The whistleblower pointed to several key issues with QE. One major concern is that the policy has primarily benefited large financial institutions and wealthy individuals, who have seen their asset holdings appreciate substantially. Meanwhile, middle- and lower-income households have not experienced the same benefits, leading to a widening wealth gap. Critics argue that QE has contributed to asset bubbles in markets such as real estate and stocks, potentially setting the stage for future financial instability.

Furthermore, the whistleblower suggested that the Federal Reserve’s focus on monetary policy has overshadowed the need for more comprehensive fiscal measures to address economic challenges. The lack of coordinated fiscal policy, the whistleblower argues, has left the economy vulnerable to shocks and has hindered efforts to achieve sustainable, broad-based growth.

The revelations have sparked a heated debate among economists, policymakers, and the public. Some experts argue that the whistleblower's claims highlight the need for a reevaluation of the Federal Reserve’s approach to economic policy, advocating for more targeted interventions that address the root causes of economic inequality and promote inclusive growth. Others defend the Fed’s actions, contending that QE was a necessary and effective tool given the extraordinary circumstances of the past decade.

As the debate continues, the question remains whether the Federal Reserve will take the whistleblower’s concerns into account and consider a shift in its policy framework. For now, the spotlight is on the Fed and its leadership to clarify their stance on the efficacy of Quantitative Easing and to address the growing calls for a more balanced and equitable approach to economic policy.

Has the Fed Lost Control of Interest Rates & the Bond Market?

Is the 10 Year about To Breakout of This Long Term Monthly Range into the 5-6% Range?

Is the 30 Year about to Breakout of this Long Term Monthly Range to 8%?

TLT is the 30 Year Bond vs S&P 500

Google Domains & Google Apps for Business Billing is Confusing

Google Domains & Google Apps for Business Billing is Confusing

I have been using Google domains for over 2 years and gladly pay $10 per year for this domain registration service.  However, now I mysteriously got a bill from Google Apps for Business charging me $10 for a service I don't use.

I never opted into this service and had to sign up for it when I registered the domain.  Their subscription billing is completely confusing and does not tell me I am required to subscribe to Google Apps for Business to use their domain services.

Hopefully, someone from Google will find this blog post and clear up the issues I cannot find in any of their forums or technical support.  

Historical Chart Fed Interest Rates vs SPX 1971 to 2013

how much impact the Federal Reserve has on the overall economy
This chart alone should tell you how much impact the Federal Reserve has on the overall economy.  The Fed can obviously influence bankers but they have a little trickle-down effect on the overall economy.  Housing market bubbles yes but business growth and jobs no.   

40 years at risk to collapse
 Is the economy 27x stronger than it was in 1971?  Or is this a Ponzi scheme spending and debt policy that have simply propped up markets artificially. Is the value created over the last 40 years at risk to collapse? 
Historical US Unemployment Rate
Historical US Unemployment Rate
Duration of Unemployment
Duration of Unemployment 
The labor participation rate is collapsing.
The labor participation rate is collapsing.  


Is a Currency War about to Cause the Next U.S. Stock Market Crash?


Is the money printing debt ponzi scheme about to come to a crashing end?

In the intricate web of global finance, the notion of a currency war looms ominously over the stability of economies and financial markets. With recent geopolitical tensions escalating, particularly between major global powers, concerns about the onset of a currency war have intensified. But what exactly is a currency war, and could it spell disaster for the U.S. stock market?

Understanding Currency Wars

A currency war can be broadly defined as a situation where countries engage in competitive devaluations or monetary policies to gain a trade advantage. Typically, this involves countries deliberately weakening their currencies to boost exports, protect domestic industries, or reduce the burden of debt denominated in foreign currencies. While each country may have its own justifications for such actions, the collective impact can destabilize global markets and economies.

Current Geopolitical Landscape

As of recent updates, tensions between major economic powers, such as the United States, China, and the European Union, have been strained. Issues ranging from trade disputes to sanctions and geopolitical posturing have heightened the potential for economic retaliation, including currency manipulation strategies.

Implications for the U.S. Stock Market

The U.S. stock market, being one of the largest and most influential in the world, is intricately linked to global economic conditions. A currency war could impact it in several ways:

  1. Market Volatility: Increased volatility is a hallmark of uncertain economic environments. Currency fluctuations can exacerbate this volatility as investors react to sudden changes in exchange rates.

  2. Corporate Earnings: For U.S. companies with significant international exposure, currency fluctuations can impact their earnings. A strong dollar can make exports more expensive and reduce revenue from overseas operations when converted back into dollars.

  3. Investor Sentiment: Currency wars often lead to heightened uncertainty and can dampen investor confidence. This could lead to capital flight from riskier assets like stocks to safer havens, affecting stock prices negatively.

  4. Interest Rates and Inflation: Central banks often adjust interest rates in response to currency movements. Higher interest rates to defend a currency can increase borrowing costs for companies and consumers, potentially slowing economic growth.

Historical Precedents

Past instances of currency wars, such as the competitive devaluations during the Great Depression and more recent trade disputes involving China and the United States, offer lessons. These events have shown that currency tensions can escalate quickly and have profound implications for global markets.

Mitigation and Preparedness

While the specter of a currency war looms, investors and policymakers can take steps to mitigate its potential impact:

  • Diversification: Maintaining a diversified portfolio across asset classes and geographic regions can help mitigate the risks associated with currency volatility.

  • Monitoring Policy Developments: Keeping abreast of central bank policies and geopolitical developments can provide valuable insights into potential market movements.

  • Risk Management: Implementing robust risk management strategies, such as hedging currency exposure where feasible, can help protect portfolios from sudden currency movements.

Conclusion

The possibility of a currency war causing the next U.S. stock market crash remains a significant concern amidst current global economic tensions. While the future is uncertain, understanding the dynamics of currency wars and their potential implications is crucial for investors and policymakers alike. By staying informed and prepared, stakeholders can navigate the complexities of a volatile global financial landscape more effectively, potentially mitigating the worst impacts of such a scenario.

In summary, while a currency war may not be inevitable, its potential ramifications underscore the interconnectedness of global financial markets and the importance of prudent risk management in safeguarding investments and economic stability.

New Phony Fed Stimulus Financial Paradigm = Deflation Not Inflation

Fed Stimulus = Long-Term Deflation Not Inflation 

The Fed has created another bubble that will likely pop but this time all the hedge funds are all long the market and not short.  Is the business environment REALLY getting any better with all the Fed Stimulus, QE1, QE2, or QE3?  Not really if you ask me and it has created a phony sense of reality with the over-inflated equity markets.  Historically, investors would value buying stocks based on that company making money.  Today, investors are making stock purchasing decisions based on liquidity, yield, and price action.  The Fed wants investors to chase equities and bonds higher so we feel wealthy and spend more.  But their intentions to create inflation could have the opposite effect on those who actually create the jobs and invest.