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Posts Tagged ‘Gerbsman Partners’

So What’s the Real Unemployment Rate?

Posted in Board Of Intellectual Capital, tagged , , , on August 10, 2009| Leave a Comment »

Here is a good article from The Campaign Spot.

“Hmm. In June, the Bureau of Labor Statistics said the civilian labor force was 154,926,000 people.

In July, 796,000 of those were taken out of their definition of the workforce, and thus their unemployment calculations for this month, because they have stopped looking for work “because they believe no jobs are available for them.” Ten percent of the June workforce would be 15.4 million, 1 percent would be 1.5 million, and so 796,000 is roughly one half of one percent.

In other words, BLS took .5 percent of what you and I would consider unemployed and took them out of their total. And with that, unemployment went down one tenth of one percent.

Of course, if you take the July number of unemployed, 14.5 million, and add that 796,000 of discouraged workers, you get a total of 15,296,000.

In a work force of July’s number of 154,504,000, that’s an unemployment rate of 9.9 percent.

In a work force of June’s number of 154,926,000, that’s an unemployment rate of 9.8 percent.

UPDATE: Apparently we’re in the Economy of the Beast, with 6.66 million lost jobs over 19 months of contraction.

ANOTHER UPDATE: A few folks with serious reading-comprehension issues are interpreting this post as accusing the Bureau of Labor Statistics of “fudging” the unemployment numbers. No, BLS has always taken the “discouraged workers” out of their workforce pool, and I never suggested that they did not. It’s just that the number of them in this recession means the BLS definition of “unemployed” is working out in an extremely convenient manner for the Obama administration. Roughly 800,000 people who want jobs and can’t find any disappeared off the books.

The unemployment rate declined from month to month, even though the total number of Americans employed with a job decreased. If you don’t find that a signal that the happy headlines are misleading, I don’t know what else to tell you.”

Read the full article here.

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The Fed Buys 47% of Last Week’s Treasury Notes

Posted in Board Of Intellectual Capital, boic, Economy, Gerbsman Partners, Market research, tagged , , , , on August 7, 2009| Leave a Comment »

Here is an excellent article from Chris Martensson.

“And now it turns out that 47% (!) of the bonds that were taken by the primary dealers in that auction have been quietly bought by the Fed and permanently secreted to its balance sheet.

They didn’t even wait a full week!  A more honest and open approach would have been for the Fed to simply buy them outright at the auction but this way, using “primary dealers” and “POMOs” and all these other extra steps the basic fact that the Fed is openly monetizing US government debt is effectively hidden from a not-too-terribly inquisitive US press and public.

The speed of the shell game is accelerating.

This immediate repurchase of newly auction bonds by the Fed tells us that demand for these bonds is not nearly as high as advertised, and that things are not quite as strong as represented.

And oh, by the way, don’t expect any stock market weakness while so many billions are being shoveled out the Fed and into the pockets of the primary dealers.  They’ll have to do something with all that freshly minted  cash…..”

Read the full article here.

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Venture-Backed IPOs Still On Hold, But There’s Promise

Posted in Board Of Intellectual Capital, Venture Capital, tagged , , , on August 6, 2009| Leave a Comment »

Here is an excellent article from WSJ venture Blog.

“Should venture capitalists brace for a rebound in the IPO markets?

In a six-week period between May 20 and July 1, four venture capital-backed companies managed to price their initial public offerings, quite a feat considering none had done so in the previous nine months. All four priced at or above the high end of expectations and now trade higher than their pricings.

Sensing the urgency to catch the market while it’s hot (relatively speaking), some venture capital firms have scrambled to get some of their best candidates in shape to file for an IPO, several investment bankers say.

“This environment has led people to start up [the IPO process] again,” said Jeff Becker, managing director with investment bank JMP Securities. “The markets have been strong, and recent IPOs have done well.”

But market observers say start-ups that are ready to go public have already done so, and that the deal pipeline will take months to rebuild.

“For anybody who isn’t already on file… you’re talking four months at the shortest, but likely six months or more” before an IPO could be priced, said Becker, who expects to see more venture-backed IPO filings this year but few pricings before Thanksgiving.

Bryan Pearce, Americas director of the venture capital advisory group at Ernst & Young, said his firm began seeing an uptick in IPO interest from its venture- and PE-backed clients around April.

“I haven’t seen signs yet that we’re going to see the floodgates open, but I think we’re starting to take logs out of the dam and the water’s starting to flow over,” Pearce said.

Pearce predicted that “2010 will be the strong year.” He said technology companies with $50 million or more in revenue should be well-positioned if they have “stability and sustainability of their customer base,” experienced management and dry powder in case the IPO window doesn’t open as expected.

The broader IPO market is far from fully recovered. As of July 31, 16 U.S. offerings totaling about $3 billion had priced this year, down from 46 IPOs totaling $30.2 billion a year earlier, according to data provider Dealogic.

The current IPO market is the worst since early 2003, despite the “incremental increase” in the number of filings over the last couple months, said Richard J. Peterson, director at Standard & Poor’s Markets, Credit & Risk Strategies group.

However, private equity-backed companies appeared to be a bright spot on an otherwise bleak picture. According to Dealogic, seven IPOs by private equity-backed companies (including venture capital) were priced as of July 31 with a total value of $1 billion. While the number is down from $2.7 billion of such offerings in the same 2008 period, it accounted for a bigger percentage of all IPOs that were priced – 33% versus 8%.”

To read the full article, click here.

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Spotify Closing New Financing At €200 Million Valuation; Music Labels Already Shareholders

Posted in Board Of Intellectual Capital, tagged , , , , , , , on August 5, 2009| Leave a Comment »

Here is a piece on Spotify from TechCrunch.

“Has European music startup Spotify finally figured out the online music business? Some big investors seem to think so. Rumors surfaced today that the company is raising a new round of financing of $50 million or so, at valuation of $250 million. We’ve confirmed those rumors from a source close to the company, and have uncovered lots more information about the secretive startup.

First, we’ve confirmed that Asian investor Li Ka-Shing, who invested in Facebook in 2007, will invest in this round, as will a yet to be finalized venture firm. Also, data on previous financings was not completely accurate. Last October there were rumors that the company had raised €15.3 million from Northzone Ventures and Creandum at a €71.6 million pre-money valuation.

In fact, that round was closer to €20 million, and included investments from the big music labels – Universal Music Group, Sony BMG, EMI Music, Warner Music Group. All of the labels, says our source, paid the same price for the stock that the venture capitalists did, other than one label that got in very early. That deal valued the company at €100 million, and secured (as much as possible) the long term support of the big music labels.

The new financing will bring in new “strategic” investors, which include rights holders in other geographic locations, according to our source. And while new investors are balking at the $250 million valuation, strong demand from venture capitalists is supposedly driving this deal to a close.”

Read the full article here.

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Biggest tax revenue drop since 1932

Posted in Board Of Intellectual Capital, boic, tagged , , , , , on August 4, 2009| Leave a Comment »

I have been saying for some time that current deficit projections, even the more realistic Congressional Budget Office projections, are understated owing to overly optimistic forecasts of tax revenue. Now, the data is coming in and it is very bad. California state tax collections will likely be even worse.

Here is an Yahoo article further explaining my point.

“WASHINGTON – The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation’s plate and struggling to find money to pay the tab.

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.

Other figures in an Associated Press analysis underscore the recession’s impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.

The last time the government’s revenues were this bleak, the year was 1932 in the midst of the Depression.

“Our tax system is already inadequate to support the promises our government has made,” said Eugene Steuerle, a former Treasury Department official in the Reagan administration who is now vice president of the Peter G. Peterson Foundation.

“This just adds to the problem.”

While much of Washington is focused on how to pay for new programs such as overhauling health care — at a cost of $1 trillion over the next decade — existing programs are feeling the pinch, too.

Social Security is in danger of running out of money earlier than the government projected just a few month ago. Highway, mass transit and airport projects are at risk because fuel and industry taxes are declining.

The national debt already exceeds $11 trillion. And bills just completed by the House would boost domestic agencies’ spending by 11 percent in 2010 and military spending by 4 percent.

For this report, the AP analyzed annual tax receipts dating back to the inception of the federal income tax in 1913. Tax receipts for the 2009 budget year were available through June. They were compared to the same period last year. The budget year runs from October to September, meaning there will be three more months of receipts this year.”

Read the full Yahoo article here.


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