Mr Wave Theory

Liz Claman Interviews Warren Buffett on Fox Business

2007-10-19T23:55:00.000-07:00

Liz Claman has moved to Fox Business Channel and her first interview is in Omaha Nebraska with Warren Buffett. The video of the interview is online at FoxBusiness. The interview is in a hotel in Omaha and Warren Buffett talks about Petrochina, Bear Stearns, Countrywide among others.

On the Economy - Warren Buffet says there is a slowdown in retail and also really substantially in housing. Nothing suprising here. The economy could be headed for a recession. Watch Video.

On Succession - Buffett has four managers picked out to be Chief Investment Officer who would be able to take over. These managers are working for someone else right now, but would join immediately if something happened. Warren Buffett Talks about succession in the video.

On Petrochina (NYSE PTR) - He bought his stake when the entire company was worth $30 billion and sold it when it was worth $180 billion. Today, Petrochina is worth $410 billion. Buffett or Liz says it is the second highest valued company in the world after Exxon Mobile (NYSE XOM). They made $3 billion on PetroChina from an investment of $500 million. The maximum sale price was $110. The stock is around $220 now. Buffett admits he sold too soon and he sold too soon. Wow!?! Watch Warren Buffet Video on PetroChina.

On Bear Stearns (NYSE BSC) - "Hotter than Lindsay Lohan on rumors." Warren says he knows people at Bear Stearns and he never talked to them about investing in them and that the New York Times article about a Berkshire Hathaway investment in Bear was totally false. Watch Warren Buffett Video on Bear Stearns.

On Countrywide (NYSE CFC) - Buffett spoke to Angelo Mozillo about Countrywide and never got close to a deal because they would have needed an entire package to redo the company. Bank of America came along and did it. Warren seemed cool about Countrywide and kind of smirked like he dodged a bullet on CFC. Video.

On Best Investment Ever - Berkshire Hathaway $7 3/8. Today around $90,000. Probably Geico. Watch Warren Buffett's Best Investment Ever video.

On Alex Rodriguez - AROD?! Video.

Have fun!

Jamba Juice Coupon - Buy One Get One Free

2007-10-16T07:54:00.000-07:00

I found a Jamba Juice coupon. It's buy one get one free when you purchase at Functional Jamba Juice Smoothie. To download the Jamba Juice Coupon, click on the picture and print it out. Take it to your Jamba Juice and get a Free Smoothie!

Functional smoothies are the new smoothies that Jamba Juice launched last month. The include:

Pomegranate Paradise - Pomegranate Juice
Heart Defender - Pomegranate, Yogurt, strawberries, and blueberries
Cold Buster - OJ + sherbert
Fit n Fruitful - Lemonade, greentea, strawberries
Protein Berry Workout - Soymilk, strawberries, bananas
Acai Superantioxidant - Acai juice, strawberries, blueberries plus some yogurt

The coupon is valid today: October 16, 2007.

Scandal Hits Kim Kardashian

2007-10-15T06:07:00.000-07:00

Is there a part 2 to the Kim Kardashian saga? Apparently yes! Kim has been performing on home video again. After causing a scandal (smaller than the Paris Hilton one) with her sexy tape last year, Kim landed a hit show on E! the Entertainment Network which is about her family and her sexcapades.

Vivid Entertainment, the company behind the release of Kimmy’s raunchy sex tape with Brandy's lil brother Ray-J, has used the series premiere to hit the socialite with yet a new sex scandal.

Vivid has released a press releasing outlining plans to release new footage of the former BFF of Paris Hilton. Everyone is cashing in! Ka-Ching! $$$ Just look at the pussycat dolls photos from her latest photo shoot and magazine spread!

SEC Nails CEO of Countrywide Angelo Mozillo

2007-10-11T16:36:00.000-07:00

A while ago, I pointed out the suspicious timing of stock sales by CEO of Countrywide, Angelo Mozillo. Mozillo sold Countrywide stock literally a week before it announced that it would have a massive big bath on subprime writedowns! You will remember that Angelo was the CEO who sold $10 million of stock in Countrywide at $28 per share 2 weeks before the whole mortgage market started coming apart and CFC got cut in half to $15. He must be the most luckiest person ever to have that kind of timing. Oh... I forgot. He's CEO of Countrywide! If that wasn't insider trading, I don't know what is. This is the same guy who says regulators needed to do more about their industry. Well, Angelo, you got your wish!

Today, the SEC launched an investigation into the timing of the stock sales and I applaud them for finally going after this blatant insider trading. Seriously, what a dolt!? If you are going to do insider trading, at least be smart not to do it 2 weeks before you pre-announce! I have serious doubts about any CEO who isn't smart enough to recognize how obvious that is!

Here's the scoop...

Countrywide's shares have fallen nearly 56 percent since January, and the company may now be facing an investigation from the Securities and Exchange Commission into the timing of stock sales made by Chief Executive Angelo Mozilo.

North Carolina State Treasurer Richard Moore, in a letter to SEC Chairman Christopher Cox, claims that Mozilo "apparently manipulated his trading plans to cash in" as the subprime crisis was heating up.

Moore cited reports that Mozilo was unloading 4.9 million Countrywide shares worth more than $138 million between November 2006 and August 2007.

On Friday, Countrywide announced Mozilo plans to sell more shares under a prearranged trading plan that began Monday and ends Friday.

Angelo ... I recommend Countrywide take out a full page ad in the Journal about your self dealing and insider trading ways.

Starbucks Recall Not the First Time!

2007-10-11T00:42:00.000-07:00

I did some research into Starbuck's recall of those deadly baby sipping cups and it turns out Starbuck's most recent recall is hardly the first time that the omnipresent coffee house has had a run in with Chinese imports. In fact, I did a search on the Consumer Product Safety Commission site for Starbucksand found a deadly coffee maker, the pair of choking bears, and some turtles that can cause kids to choke - when swallowed.

Starbucks Announces Recall of 8-Cup Coffee Brewers Due to Possible Fire Hazard

CPSC, Starbucks Coffee Co. Announce Recall of Children's Tumbler Cups

Starbucks Recalls Children's Plastic Cups Due to Choking and Laceration Hazards

It makes you wonder how these guys sleep at night! I hope Howard Schultz was fortunate enough to be born without a conscience!

Stripper Wins Workman's Compensation

2007-10-11T00:24:00.000-07:00

You know stripping is in when strippers can win workman's compensation! Angela Hobson injured herself while stripping at the Shangri-La West club in Fort Wayne on 20 December 2001. She suffered neck pain and numbness from an injury and got surgery for a herniated disc in her cervical spine (the seven vertebrae at the base of the skull).

That seventh vertebrae was worth $10,000 according to the state Worker's Compensation Board who tipped Ms Hobson $10,000 for her troubles at the Shangri-La! Even stripper's have rights too you know!

John Edwards Affair

2007-10-10T20:21:00.000-07:00

Let the mudslinging begin in Presidential Race 2008! It should come as no surprise that the National Inquirer has become the official authority on mudslinging. The latest salvo: the John Edwards affair! The tabloid is claiming that John Edwards who is a presidential candidate cheated on his wife while she was undergoing chemo - that is chemo for cancer!

Who broke it!? The one and only conservative spokesblonde Ann Coulter announced that the National Enquirer was just reporting that John Edwards had an 18-month affair while on the campaign trail.

Who's the third party? Apparently a campaign staffer who didn't expect the otherwise platonic relationship to turn sultry.

"The affair started about 18 months ago," a friend says the woman confessed to her. "When they met at a bar, sparks flew immediately.

"She never expected it would turn sexual since John is married and is running for President. But it soon did — and she fell for him."

In one bombshell e-mail message provided to The NATIONAL ENQUIRER, the woman confesses to a friend she's "in love with John," but it's "difficult because he is married and has kids."

In another e-mail, she writes: "Last night and this a.m., he actually has amazed me. He is a great man. My heart is loud and my head is silenced."

Every candidate hopes to reach their voters heart and John Edwards clearly has succeeded. If that's not good political campaigning, what is!? As far as I can tell, he's got her vote.

Michele Linehan - A Stripper Commits Murder, One Straight from the Movies

2007-10-10T20:11:00.000-07:00

Michele Linehan was a stripper who married a doctor, became a soccer mom, and then took out a $1 million life insurance policy on her husband and had him erased. Do we live in a real world? Or do we live in a world of fiction!?

Linehan — then known as Mechele Hughes — was one of the top girls at a strip club called the Great Alaska Bush Co. in 1996. A former co-worker said she was so sexy, she didn't have to dance to earn big tips; men would pay just to talk to her.
She may have been hot, but she doesn't look too hot in prison garb!

In the 1994 movie "The Last Seduction," a femme fatale coaxes her lover into killing her husband for money. Prosecutors say a beautiful stripper obsessed with the film followed the script to its murderous end.

Mechele Linehan, 34, is on trial on charges she masterminded the decade-old slaying of her fiance in hopes of collecting $1 million in insurance.

Life and art were so similar, prosecutors say, that they even sought, unsuccessfully, to have the movie shown to the jury.

It's a case of sex, greed and manipulation that has transfixed the Pacific Northwest, from Alaska to Washington state, where Linehan had made a new life for herself as a college graduate, doctor's wife and suburban soccer mom before cold-case investigators came calling.

Prosecutors say that is where the blonde borrowed the plot of "The Last Seduction" and had her fiance, 36-year-old fisherman Kent Leppink, killed.

Chicken Pot Pies ... Oh My!

2007-10-10T06:33:00.000-07:00

Banquet Chicken Pot Pies! Everyone who eaten TV dinners has had them, and oh my! They've been infected with salmonella. These delicious and nutritionless pies have been a staple of TV diners world wide and I am still having a hard time believing they can actually be infected with salmonella. After all, doesn't all that bacteria die when you nuke it in the microwave?!

Omega and Patek Phillipe Rig Watch Auctions

2007-10-08T18:50:00.000-07:00

The Journal has a great story about how luxury watch makers are rigging their own auctions by bidding on their watches at high profile events. Omega paid over $300,000 for one of the very watches that it put up for auction in Geneva, beating genuine bidders. What is even more amazing is that Patek Phillipe, the well known watch maker, has engaged in shill bidding for even longer.

On eBay, if you shill bid, ie bid on your own item, you get banned. At the auction houses in Switzerland, you're encouraged to do so! Amazing!

Watch makers are rigging their auctions to maintain the high prices consumers pay for their watches. Apparently, they want consumers to believe that watches are "investments." If that's the case, then this is no worse and no better than a pump and dump stock scam where a company inflates its stock price so it can sell stock to unwitting buyers!

Yang Huiyan is 26 and She's Got $16 Billion

2007-10-08T13:44:00.000-07:00

Yang Huiyan is the daugher of a rice farmer turned real estate tycoon. She's 26 years old and she's got $16 billion. In case you were wondering, she's married! That's the photo of her and her groom at a wedding ceremony. Sorry dudes! You missed the wedding in April!

Yang's father, Yang Guoqiang, started his company Biguiyuan in 1997 and the rise was meteoric. The Biguiyuan Group was listed in the Hong Kong Stock Exchange on April 2007. Lee Shau Kee and Cheng Yu-Tung, two of Yang's townmates (Their native places are in Shunde), bought 1 billion of Biguiyuan IPO stocks respectively. He transferred his stock to his daughter.

China's MOFCOM talked about the IPO back in April. The company is called Country Garden Holdings (2007.HK). It's huge:

During 2006, Country Garden and its subsidiaries had 23 projects with an aggregate completed gross floor area (GFA) of 6,237,192 square meters, on which it had built 36,951 units to house an estimated 129,000 people, an aggregate GFA under development of 4,281,889 square meters, and an aggregate GFA of 12,525,272 square meters, relating to land held for development.

The stock has doubled since its IPO and the company is worth a little under $30 billion.

$16 billion is alot money. It's also alot of press on a 26 year old's shoulders! Imagine having to operate a multi billion dollar enterprise just 3 years of out of college!

I wonder how she's dealing with it! How would you deal with it? No pressure!?

Melinda Englanda aka Teacher Gone Wild on MySpace

2007-10-08T13:25:00.000-07:00

Melinda England is a 28-year old Knoxville schoolteacher and mother by day and a sexy, nude exhibitionist by night on Myspace. That last part was a problem because her principal found out!

Melinda England's MySpace picture is causing a firestorm at her school because Melinda England MySpace nude pics are showing up at school!

The pictures are clearly amateur and you have to feel bad for Melinda who is obviously just trying to have a social life! That photo? I'd say she is just being friendly.

Melinda’s also has a picture on AbsolutePunk.net where her screen name was “xlpaws” and again this isn’t a naked pic or anything. Her profile is still up (so quick! go check it out!). It says her birthday is February 8, 1979 (28). She may have even had a livejournal journal.

Melinda England xlpaws

Here's what's interesting: Even teachers have a first amendment right to freedom of speech. The catch is that if the principal thinks it's inappropriate, she can be fired. I say if she didn't try "friending" her students, it's all fine and games! Apparently the principal didn't think so because Melinda's on leave from her teaching gig. She got a letter from school asking her to boot for her sorry ass!

I say all's well that ends well and it's great to have all that new found fame! Melinda - boot your ass from school and go become a new MySpace model. Forget Knoxville USA. Become Paris and be famous for just being famous.

If you think there's anymore privacy in world, think again. Melinda literally talks about everything in her life online -even prescription drug use!

The haters are raving that she’s blogging on MySpace about prescription drug use and “out of control” kids. Well, it turns out her “prescription drug use” is Prednisone to help with flareups from fibromyaglia.

Melinda -you've found your true calling. Now go for it! What would you do if you were the Melinda, the student, or the principal?

Christina Aguilera Plays Mommy at Bel Bambini

2007-10-08T13:20:00.000-07:00

Christina Aguilera, when she is not shaking her ass in front of the camera, likes to play Mommy - at least that's what she did this weekend. The paps caught Christina Aguilera and husband Jordan Bratman shopping for baby items on Saturday (October 6) at the Bel Bambini store on Robertson Blvd in Los Angeles. The pregnant mommy got some practice carrying a friend's baby out of the store.

I reiterate: That's not her baby! Yes, her life is makeshe has props - even to play Mommy! Can you imagine that?

I think her pop career will be on hiatus for quite a while as she settles into the pop diva moma role! Unreal.

Marla Omstead - The 4 Year Old Picasso

2007-10-08T13:04:00.000-07:00

I was fascinated to learn about Marla Omstead who paints like Picasso, except she's just 4 years old. Child prodigies are quite fascinating because they appear to have no experience to back up their talents and gifts, yet they excel in what they do. If art doesn't get you excited, then money will. Marla's art is viewable only on her website MarlaOmstead.com and she has sold her paintings for tens of thousands of dollars. It's so interesting that filmmakers made a film about it.

"The only venue to see her art work is a Web site. ... As far as us being here today, it's really just because we feel like we don't want 'My Kid Could Paint That' to be the last true and only word about our family."

It all sounds good. Except she maybe a pretender. Her dad is a painter - and a plant manager at Frito-Lay, the potato chip company - yes. When Snow asked Olmstead if he ever helped his daughter paint the pictures, he responded, "I think we should define help. I do have to be involved, and I have, because she is -- was -- a one-year-old, two-year-old, three-year-old. And I help her by priming the canvas, by lifting her up over the canvas when she was younger so she could reach certain points, doing the edges, helping her with the paints themselves, as far as getting them in ketchup bottles. From that standpoint, yes, I help."

I hate to be a doubter or a basher but you have to wonder how much of it is real. Even the documentary maker expresses his doubts - at the very end of the film!

"As soon as my doubts reached a point where they were strong enough that it wouldn't have been right to keep them from the Olmsteads, I told them and that's the climax of the film," he said.

Her mom, Laura, has an emotional moment at the end of the film, where she says to Bar-Lev, "I need you to believe me."

You can't blame Marla's parents for wanting to believe their kid is special. However, the film leaves everyone hanging at the end: Is Marla a pretender?

Vonage Settles with Sprint, New Lease on Life?

2007-10-08T12:55:00.000-07:00

Vonage (NYSE VG) settled their patent dispute with Sprint (NYSE PCS) undoubtedly because neither of the two are doing particularly well. VG is up about 125% today which is up significantly from $1 when it hit bottom on the Verizon patent news. It's still not smooth sailing for Vonage. Looking at the balance sheet, Vonage has about $400 million in cash. The Sprint settlement is for $80 million which brings cash down to $320 million. If a settlement with Verizon is made for a similar amount, cash will be $240 million. The company is burning around $40 million per quarter so it has about 1.5 years in cash left. Vonage will need to raise money soon, sell, or go BK and be known for its stupid and funny and sometimes odd television commercials.

Is Bank of America Ripping Customers Off?

2007-10-06T21:40:00.000-07:00

I have gotten charged a fee every time I received an incoming wire transfer at Bank of America even though my account entitles me to get wires for free. It is becoming such a nuisance because every time I receive a transfer, I am charged $10. Then, I have to write to customer service to "remind" them that I have an "Advantage Account" which entitles me to free incoming wires. I have sent at least 10 emails to them about this problem and each time, they apologize and reverse the fee.

Bank of America advertises free wire transfers for its Advantage Accounts. I hate getting nickeled and dimed. My experience has left me wondering: Is Bank of America intentionally misleading and ripping off its customers? Bank of America has 1.4 million retail customers. It is a big deal because with so many accounts, ripping off customers for a fee of $10 multiplied by 1.4 million times can translate into $14 million of earnings each month. That can help make or break a quarter if things are falling short and I am not happy that they are doing this to me and to 1.4 million customers.

Bank of America is the largest bank in America and the largest bank of its kind in the world. As such a large institution, Bank of America has duty to its customers to uphold high standards. I would argue standards have to be higher than anywhere else. If they make one mistake, I can understand if they apologize and correct it. If they make two mistakes, maybe something is wrong. If they continue to make "mistakes" and have to apologize, then there is something evil about what they are doing. Shame on you Bank of America. You are not worthy of your name!

Monika Kurowska - Did She Kill His Pregnant Girlfriend?

2007-10-05T10:07:00.001-07:00

Monika Kurowska is a body builder. She is also former girlfriend of former Chicago Bears player Shaun Gayle. Now, Monika may also be the murderer of Shaun Gayle's pregnant girlfriend. A modern day Casanova, Gayle may have knocked up on too many girlfriends. Allegedly, Kurowska was pissed that Gayle left her for his new girlfriend, Phoni Reuter, and starting harassing the both him and her. In an order of protection he sought against the former girlfriend, identified in the court records as Monika Kurowska of Park Ridge, Gayle said Reuter had received a "harassing anonymous letter" from the woman in May 2006.

Apparently, Kurowska was so pissed she took a shotgun and blew Gayle's new girlfriend to bits. Gayle's girl, Phone, died of multiple gunshot wounds! Police discovered the body of Rhoni Reuter, 42, in her third-floor residence of the Deerfield Crossing complex in the 400 block of Elm Street after receiving a report of a woman screaming about 7:55 a.m., authorities said.

What a sordid tale! Truth is better than fiction!

George Clooney's $100,000 Bet Against Himself

2007-10-05T09:52:00.000-07:00

George Clooney is making a $100,000 against himself. He is betting that he will never again be married. Clooney declared he would never marry again after his divorce from Talia Balsam, and so far he has been a man of his word. Unfortunately, things are looking up for Clooney's love life and looking down for his bet.

The bet with Kidman and Pfeiffer went from a 10,000 dollar bet to a 100,000 dollar bet. The way things look now, Clooney could lose the bet. The actor is dating Sarah Larson, and the pair have been spotted everywhere together. Larson has reportedly quit her job to travel with Clooney.
"I bet him he would get married and he keeps inflating the bet from 100 dollars to 100,000 dollars,” says Pfeiffer. “I still think he will, he’s a handsome devil.”

Jeri Thompson Trophy Wife

2007-10-04T16:23:00.000-07:00

Jeri Thompson is 41, 24 years younger than her husband, and very pretty. She is the wife of Fred Thompson, GOP Presidential candidate. They met 11 years ago in a Nashville supermarket when she looked at the items in his cart -- a can of "beanie weenies" and half a pre-made sandwich -- and said "I'm so sorry."

So, is she a trophy wife? People writer Sandra Sobieraj Westfall scores Thompson "0 for 4" on "perfect hair, a fresh manicure, a spotless home and afternoons with the ladies-who-lunch set." For her interview with the magazine, Thompson was "in sweatpants -- her hair caught up in a ponytail, her fingernails ragged from stripping wallpaper."

I'm not into politics and I had never heard of Fred Thompson before hearing about Jeri Thompson. Have you? I think it's safe to say that we won't be having a president with a trophy wife - trophy wife or not.

Perez Hilton Gets a Black Eye

2007-10-03T07:42:00.001-07:00

Celebrity Blogger Perez Hilton got a Black Eye. We assume a fan probably kapowed the deutsche for all the dirt she dished on Britney Spears. You can see that nasty big bump on his eye in photo is not pretty, especially if you're standing next to Hugh Hefner and trying to mack on Playboy bunnies at his mansion.

China Automative Revs Up Its Engine Again!

2007-10-03T07:31:00.001-07:00

China Automotive Systems Inc (Nasdaq CAAS) is up about 10% and has made the top 10 gainers list on Nasdaq. The stock broke above $10 for the first time for a long time. China Automotive made a big run up to $16 last time and it's leading the Chinese related auto stocks. The stock has traded 1.6 million shares today which is its entire float and it's only been 1 hour into the trading day, so it has revved up its engine again.

I checked out the China Automotive website. The company is based in Jinzhou. They have some very strong partnerships with the big auto makers in China - especially Chery Automotive which is their largest customer and Daimler Chrysler. Operating income doubled year over year to $6.5 million and net income was up 227% to $2.7 million. The fundamentals are very strong. It's a fairly impressive performance. If this stock is anything like the other Chinese stocks during the past few weeks, we could see $20-$30. I am still amazed at the performance of China Resources (Nasdaq CHNR) which I wrote about just last week in a piece called "The Real Reason China Resources is Going Up". The stock was trading at $14 a week ago and today it is $37! Up up and away!

The Great Tea Bubble of China

2007-10-02T13:13:00.000-07:00

The Great Tea Bubble of China is promising vast wealth and fortune to tea traders in China. According to the journal, tea farmers in China are making a fortune selling "puer" tea. A cake of tea can fetch $13,000! That's for tea aged 150 years ago and pressed into a discus shape.

Puer is named after the Pu'er county of China in Yunnan, China, where it is cultivated. For normal varieties of puer, the price of one of the hottest varieties of puer soared to nearly $35-a-cake this past April, seven times the $5-a-cake value just three years ago. Today, a cake of puer sells for nearly $16, a 60% backslide from the peak, fueling fears of a crash.

You have to love the speculative nature of the business. Even the guy who owns a ton of this tea is trying to toot his own horn. Mr. Bai (the dude in the picture above) is reluctant to talk about the value of his puer, saying he collects it for its taste, not its monetary value. Still, he estimates his 56 cakes of 100-year-old puer are worth about $640,000. He has two 150-year-old cakes whose value he declines to discuss.

There are even stories of Chinese tourists buying and flipping puer cakes - ie buying that for $13,000 and flipping them for a quick double! The Great Tea Bubble is reminscent of the Great Tulip mania that struck Holland four or five hundred years ago. That particular mania got speculators Europe wide hot and heavy over tulip bulbs where one single tulip bulb sold for several thousand florin. To put that into perspective, one hundred florin could buy 1 ton of butter. Can you believe it?

Food Technology Service Ensures Food Safety

2007-10-02T10:34:00.000-07:00

Food Safety is a big important issue. In fact, the US government has setup a portal to to the nation's food supply at FoodSafety.gov and there is even legislation to ensure the safety of the nation's food in Congress according to the Washington Post especially with the rotten tofu and rotten beef scare from China. One day it is Chinese catfish, bass, eel and shrimp containing high levels of cancer-causing toxins. Another day it is toothpaste made from diethylene glycol—the poisonous chemical found in antifreeze. Even Chinese-made pet-food could not escape the wrath, with some animal feed containing melanie—an industrial chemical used to make plastics and fertilizer.

Considering that China feeds 1.3 billion people every day, the incidents are still uncommon in the grand scheme of things. However, the problem is still a major one.

That's where a little $9 million company is focusing on. It's called Food Technology Service (Nasdaq VIFL). According to their company profile, Food Technology Service, Inc. is engaged in the business of operating a gamma irradiation facility using Cobalt 60 for the sterilization of medical, surgical, pharmaceutical and packaging materials. It also disinfects fruits, vegetables and meat products, which extends their shelf life.

The stock is up 20% today and could go up more if we get more food scares which I am sure we will. That's great news because Food Technology keeps produce - fruits and vegetables - meat & poultry, shell eggs, crustacean and molluscan shellfish safe. Around 66,000 shares have traded so far and the float is only 1 million shares. It's a microcap and it's focused on a hot sector. All that's needed is another big food scare for this stock to rocket up. Can you believe this VIFL traded as high as $10? I didn't believe it either until I saw it.

Tianchi Lake Houses China's Loch Ness Monsters

2007-10-02T08:06:00.000-07:00

Tourists have spotted monsters swimming in Tianchi Take on the border of North Korea. The Chinese Central Television station broadcasted a tape of the monster and you can see it in this YouTube video of Tianchi Lake monsters. There are 6 monsters swimming in the video and they look like the Loch Ness Monsters from Scotland.

A TV reporter said he shot a 20-minute video of six "Lake Tianchi Monsters", near the border with the Democratic People's Republic of Korea (DPRK).

Zhuo Yongsheng, who works for a local TV station run by the administration office of the nature reserve at Mount Changbaishan, Jilin, has sent pictures of the Loch Ness-type creatures to Xinhua's Jilin provincial bureau.

One of them showed the creatures swimming in three pairs, in parallel. Another showed them together, leaving ripples on the surface of the deep, volcanic lake.

The first sightings of monsters at Tianchi Lake was about a century ago in 1903. The first reported sighting was in 1903. It was claimed that a large buffalo-like creature attacked three people, but was shot six times. The monster then retreated under the water.

Mirthala Salinas Sleeps Her Way to the Top

2007-10-02T07:57:00.000-07:00

Mirthala Salinas slept her way to the top. The former Telemundo evening newscaster had a fling with LA Mayor Antonio Villaraigosa and landed the most coveted broadcasting job ever in LA. Then, the sh*t hit the fan and Mirthala Salinas, former mistress, current girlfriend and disgraced Telemundo newscaster, got outed for her affair.

Her two month suspension for having an affair with the Mayor while reporting on his marriage’s demise is up. Telemundo has offered Salinas a reassignment at Inland Empire bureau in Riverside, a serious demotion from her previous role as fill-in evening newscaster. She decided not to show up for work. Sometimes sleeping your way to the top doesn’t work.

Mirthala, go write a book about your affair with El Mayor. Sultry love exposes always sell like hot cakes. It's sure to land on the NY Times best seller's list and you'll never work another day in your life again.

How to Deal with DeadBeats

2007-10-01T18:09:00.001-07:00

America has alot of deadbeats. If you don't believe me, believe this: In 2005, businesses lost $180 billion due to deadbeats. To be successful, you have to deal with deadbeats, because very few businesses are lucky enough to have a complete roster of perfect customers who always pay on time. These are the customers who tell you that "the check is in the mail" and one month later, you call and "the check is still in the mail." You wonder if they must live in Antarctica or Timbuktu because your check is always late - or gulp! - lost in the mail. Dealing with deadbeats is essential for startups because oftentimes your customers are small businesses too. After all, a startups first customers are often early adopters who work with you because there are no alternative solutions. How do you deal with deadbeats and how do you wean yourself off of them?

I have studied this issue and am a student and former victim of Deadbeats Anonymous. I say that half jokingly but it is a lesson from the school of hardknocks. Only after having gotten burned have I realized how important it is to have rules on choosing and dealing with your customers. After much pain and loss, I believe these are some essentials on how to deal with them.

Tips on Dealing with Deadbeats.

1) If you are a startup, choose large established customers. Let me put it another way: If you are a startup, avoid having startups as customers. I will draw upon a personal lesson as an example. A few months ago, a friend of mine decided to work with a startup to serve ads on his blog. The startup, backed by lots of venture capital (close to $20 million), had a sterling team of entrepreneurs running the company. They had built a successful dot-com during the late 90s. As a result, he trusted them to bring ads to his site. The relationship started off great in the beginning and they promised big results. Great - he thought. You can't beat that. Unfortunately for him, things didn't turn out so great.

The first warning sign was that they chose to pay him on a net-60 day basis. Normally, the online advertising companies pay net 30. For those who are just starting a business, remember this: business is about making money and you can't make money if you don't get paid. Net 60 means that you get paid almost 90 days after you serve their ads. This was not a problem because he received the first check - they were slightly late on the check. They paid after 100 days. But then the problem happened again because they "forgot" to send the next 3 checks. The "deadbeat" alarm went off and he researched more about the founders of this startup and realized that they had looted their previous dot-com and it went bankrupt. It had even been investigated by the SEC. It's amazing how a few years can wash their slates clean and enable them to start a fresh and con investors out of another $20 million.

Startups tend to be scrappy and while that may be great if you are an entpreneur, it sucks if you are their partner and need to get paid. Large companies have far fewer reasons to stiff you. My lesson learned: Choose large established customers.

2) Insist on Net 30 day payment terms or better. If you are a startup, you are probably short on capital and financing your business out of your own pocket. You eat what you kill - oftentimes ramen noodles for dinner and program in your underwear. If your customers don't pay you, you don't eat.

Starvation is bad. That is why you need to ensure that you collect early. My friend could have reduced the amount of grief working with this particular deadbeat if he had insisted on Net 30 day payments. The simplest way to deal with deadbeats is to insist to your customers that your payment terms are 30 days and that is simply your policy with all customers. If you do not receive the payments every 30 days, you stop work immediately.

Why is this important? It's important because your business is about building the product or service that you want to create. It is not about managing deadbeats. Insist on these rules - because this is in your control - and the rest will take care of itself. The deadbeat customers will avoid you because you will find that the deadbeats realize you're not easy prey. Yes, for every hardworking entrepreneur in America, there is a lazy-ass deadbeat.

3) Insist on cash on delivery if the customer pays late - even once. According to the Wall Street Journal, That's what Dave Hirschkop did after his customer failed to pay him for a $16,000 salsa bill. That's alot of salsa and Dave learned that the hard way after a customer dragged their feet for 6 months. For Dave, it's especially important because he sells salsa and week old salsa is nasty and irrecoverable!

4) Offer incentives for early payment. If you have repeat customers, offer them a free month of service if they pay for a year's worth of service in advance. That's what many companies do. Think of all the online companies that charge you for content. If you sign up for content online, whether it's online newspaper or subscription content, they all ask you to pay ahead of time - before you use their service. Do that!

5) Get your customers to pre-pay. This is not hard and in fact is becoming the gold standard on the internet. Instead of waiting for customers to pay you after you have delivered the service, charge them before you deliver. That's what Google does with Adwords and Yahoo does with Overture. Here's how it works: If you want to advertise your business on either of those sites, Google and Yahoo ask you to give them your credit card and pre-pay a mininum of $25 to $50. They do that to millions of customers and they're running multi-billion businesses. It's a no brainer and as an entrepreneur you should do that too.

In Summary ...

Dealing with deadbeats is as much about collecting on them as it is about choosing your customers and incentivizing them in the right way with the proper rules in place. If you have the proper systems in place and insist that your customers prepay, you might not have deadbeats at all. I hope these 5 tips are useful to entrepreneurs starting their own businesses.

The solutions I have offered are from my experience and so it is limited to what I know working with startups. I am curious to hear from entrepreneurs and people who have dealt with deadbeats. Do you have a deadbeat story or need help? Feel free to share.

Is Broadcast Intl the Next Broadcast.com?

2007-10-01T11:06:00.000-07:00

Stocks like Handheld Entertainment (Nasdaq ZVUE) have been very volatile - fast ups and fast downs - because of speculation about online video sharing. There's a small company called Broadcast Intl (BCST.OB) which may be the next Broadcast.com. You probably remember Broadcast.com and how it was acquired by Yahoo (Nasdaq YHOO) for a couple billion dollars. Broadcast.com was about radio. Broadcast Intl is about video - delivering video over satellite. The stock is unlisted and trades on the bulletin board which means the same rules for disclosure are not in play. The stock is one fire lately, running up from $1 to $2 in September. Is it a speculative play? I would be the first one to admit that it is! Five years ago, Broadcaster traded as high as $10.

Eva Longoria Sex Tape

2007-10-01T08:04:00.000-07:00

The Eva Longoria sex tape is being verified and already available on many websites on the internet. You may recall she plays Gabrielle, the sexually liberated cougar on Desperate Housewives who seduces a teen.

Rumors are that the tape is real. The tape is said to contain steamy footage of the Desperate Housewives actress with new husband, Tony Parker. I suspect she made it herself ala Paris Hilton. According to moles who have the inside scoop, the tape will become a class collectible. We sure hope so!

Blonde Bombshell Wins Ukrainian Election

2007-10-01T07:54:00.000-07:00

Yulia Tymoshenko is one of the wealthiest women in Ukraine and she is going back to being prime minister. Businesswoman? Check. Photogenic? Yes. By the way, she used to run the largest company in Ukraine called United Energy Systems of Ukraine. They sell gas. Lots of it! To Russia. She started off her business career running a video rental chain and bootlegging video tapes and selling them in Ukraine. Allegedly, Yulia was such a good business woman, she took the Russians for a ride.

All those things and you have a politician who has the ambitions of a Ukrainian Hilary Clinton. She's got a blog . She has online videos. She is now back as prime minister. This woman knows PR! The Eastern Europeans may be behind the times economically, but are way ahead in terms of political equality for women.

Nicole Begg Bares It For PlayBoy

2007-10-01T07:46:00.000-07:00

Nicole Begg is not just a 19-year old speed skating champion from New Zealand. She is also being chased by PlayBoy which wants to feature her in their January edition. After being picked up earlier in the year, she's become a local sensation. I had never heard of her until her latest publicity stunt, but she's doing for speed skating what Tanya Harding did for ice skating.

Apparently, Nicole comes from Timaru which is a town in New Zealand. There is nothing to do there all year around except to prance around in skates. Now, she is doing so in the buff. We congratulate her!

What does she think of all this? She thought it's nothing worse than what everyone else does. In fact, a fellow skater called her out on her indecent exposure - and ironically, got her own photo shoot in the buff. Competitive jealousy!? Absolutely! Think Vanessa Hudgens. It seems like everyone wants to be in the buff. It probably beats the starting pay in skating!

Watch The Kingdom Online

2007-09-30T10:02:00.001-07:00

The Kingdom is available on Google Video. You can watch The Kingdom online. It's a movie about suicide bombing in Saudi Arabia against Americans living and working there for oil company Aramco. The movie has an all star cast. Think Jamie Foxx, Jennifer Garner (from Alias), Chris Cooper, Jason Bateman. The plot is fast in the beginning and then really slows down.

The Kingdom Part I [Google Video]
The Kingdom Part II [Google Video]

You can watch The Kingdom at Google and the quality is OK, but I give the movie a 6 out of 10 rating. Good but not that great. There is probably something better to do with 2 hours of time.

Breasts Not Bombs

2007-09-29T05:56:00.000-07:00

Nearly a century after FDR promised a chicken in every pot, Breasts Not Bombs is campaigning for ever American woman's right to a pair of silicon in every breast. Breasts Not Bombs is a women's group that has decided that getting attention is easier when topless. Breasts Not Bombs staged a protest against the increased federal spending ($190 billion) for the new Pentagon budget to confront the boobs in the White House. That's a lot of weapons and the ladies at Breasts Not Bombs are not happy because the money could have bought every woman in the US a pair of silicon implants. I wholeheartedly agree that it's a shame the money is being spent on bombs rather than breasts. Breasts not Bombs is based in Mendocino California. For more hot coeds, go to Breasts Not Bombs website where you can find 18 Breasts for piece - presumably of college girls who truly understand that the sure way to get the attention of any hormone filled male is to show some skin.

For more info, you may go to the official site. Breast alert: Please note there are alot of breasts so it is not for the breast-o-phobe.

Million Breasts Virtual March Pictures
Another 8 Breasts for Peace
Eighteen Breasts for Peace
Eight Wet Breasts for Peace

Breasts Not Bombs definitely got my attention. Their technique is certainly unconventional. Did they get yours?

170,000 Chinese Investors Lose $170 Million in Swiss Mutual Fund Scam

2007-09-29T00:28:00.001-07:00

The hot stock market in China has encouraged devious promoters to scam investors out of their retirement savings. The Swiss Mutual Fund scam is the latest and according to official sources in China scammers swindled over 170,000 Chinese investors out of $170 million. Chinese investors on average put in $1,000 each into the fund with a promise of 1% return every day or a 300% return per year. What's toogood to be true really was too good to be true! The Swiss Mutual Fund scam operated a website at http://www.swissmutualfund.biz/ and investors started to suspect foul play after the site became unreachable for a variety of excuses - due to hurricane in August and due to "websites upgrades" in September. The site never came back up in September after regulators shut it down.

What is interesting is that prospective investors suspected foul play at the Swiss Mutual Fund on Google Answers as early as November 6, 2006. One Google Answers user asked about the fund and another user with the screenname pafalafa pointed out that the fund management company was probably an "entirely fictitious company" and that the domain for the site had only been registered in 2005 even though the company claimed to be over 50 years old. Furthermore, pafalafa pointed out that the company was registered in Dominica but the company's head promoter Michael Mansfield didn't have a telephone listing in that country. The final nail in the coffin was the fact that Swiss Mutual Fund claimed to be a $9 billion company, yet it did not have a listing in Dun & Bradstreet, "And believe me, D&B isn't likely to miss a $9 billion company. "

Palafa was spot on. The Swiss Mutual Fund was a scam. In fact, over 170,000 Chinese investors got suckered into believing the Swiss Mutual Fund was real, and diligently checked the website for daily price quotes and trades. It was so pie in the sky that they all believed it. Before the website was closed on August 18, it received more than 200,000 page views per day. It also appeared to be real. Investors could cash out – not from actual stock market gains – but from new investors' money coming in. It was a classic pyramid scheme. Most investors were so mesmerized by the returns that rather than cash out, they reinvested their "profits".

Pyramid schemes like these often signal market tops. They happen because scammers know that investors have lots of cash sloshing around and are seeking high returns. Many of these scams occur because operators take the cash and try to invest it for a greater return in the stock market, only to fail when the market collapses. Whether this happened with SMF is debatable. However, if you look at the performance of the China A-share market, I suspect that the pyramid scheme collapsed because the China A-share market suffered a major correction during the summer which may have hampered the SMF from continuing to produce excess returns in the stock market. Unable to meet redemptions, the scammers probably decided to close up shop while there was still cash in the bank. This is all my speculation but it wouldn't be the first time this has happened. I can only wonder how it must feel to be scammed out of your entire retirement savings. How would you feel if you invested 80%-100% of your money into a pyramid scheme only to find out that it was a scam?

Update: The Malaysian press is reporting that one of the main figures behind the scam has been identified and 35 million malaysian ringgit have been seized. $1 = 3.4 malaysian ringgits. So the sum is around $10 million.

"The Securities Commission (SC) has achieved a breakthrough in its civil enforcement case against the Swisscash Internet investment scheme when it secured a court order to direct one of the defendants, Amir Hassan, to transfer back to Malaysia all Swisscash monies held in bank accounts overseas within seven days.

About RM35 million is currently held in six bank accounts in Hong Kong and eight bank accounts in Singapore, the SC in a statement here today."

They also identified the bosses behind the scam.

Once transferred back to Malaysia, the monies will be subject to the worldwide Mareva freezing orders pending the outcome of civil proceedings filed by the SC earlier this year against Amir Hassan, Albert Lee Kee Sien, Kelvin Choo Mun Hoe, Dynamic Revolution Sdn Bhd, Swiss Mutual Fund (1948) SA, SMF International Ltd and SMF (1948) International Ltd.

Also, be careful of these 4 websites linked to the scam: www.swisscash.net, www.swisscash.biz, www.swissmutualfund.biz, and www.swisscashguide.com.

1 Amy McCarthy Down, 1 More Jenny McCarthy To Go

2007-09-28T10:47:00.001-07:00

For those who are lusting over Jenny McCarthy, you may be interested to know that Jenny's sister Amy McCarthy has gotten engaged. Soon, there will be one fewer McCarthy sister on the block! Amy McCarthy is 31 and a graduate of the University of Illinois and was cybergirl for PlayBoy January 2005. There is a striking resemblance to Jenny McCarthy.

Actress Jenny McCarthy’s younger sister Amy McCarthy has become engaged to NHL hockey player Dan Hinote. Amy, who was once name “cyber girl of the month” by Playboy, will wed Hinote next year in Colorado.

The couple lives in St. Louis as that is who Hinote is currently playing for. Amy works at the St. Louis Children’s Hospital.

According to the PlayBoy Playmate stock picking contest, she is quite the penny stock picker, loading up her portfolio with names like Law Enforcement Associates Cp (Nasdaq AID), Sky Petroleum Inc (Nasdaq SKPI), STEMCELLS INCORPORATED (Nasdaq STEM), Terax Energy (Nasdaq TERX), and THIRD WAVE TECHNOLOGIES, INC. (Nasdaq TWTI). Out of all the stocks she picked, only one stock went up. She made a good choice to be a healthcare worker. She may be blonde, but she is not that dumb.

Stock Name	Symbol	Price on January 1, 2006	Closing Price on Dec 31, 2006	Today's PowerRating	% Change
Law Enforcement Associates Cp	AID	$2.27	$0.84	-	-63.00%
Sky Petroleum Inc	SKPI	$1.86	$0.68	-	-63.34%
STEMCELLS INCORPORATED	STEM	$3.45	$2.65	6	-23.19%
Terax Energy	TERX	$1.78	$0.06	-	-96.63%
THIRD WAVE TECHNOLOGIES, INC.	TWTI	$2.98	$4.81	-	61.41%
			Total % Change:		-36.95%

You can see in her candid photo that yes she probably made the right choice to get married at the age of 31 years old. One can wonder what she will look like in 5 years. You know what I mean.

SilverStar Holdings Makes a Big Move

2007-09-28T07:48:00.000-07:00

I read the earnings press release of SilverStar Holdings (Nasdaq SSTR) and they make video games. They make lots of money too! EBITDA was $4.6 million in the quarter. Net income was $2.6 million. The stock is up +62% at $3.99.

Revenues, operating EBITDA and net income improved dramatically as we expeditiously leveraged the company's new large back catalog and began the transition to next gen game platforms, like Xbox 360, Nintendo, DS and Wii; and introduced new titles.

Empire Interactive and Strategy First are the names of SilverStar's gaming brand. Games include Starsky and Hutch and Starship Troopers.

The guidance is fairly strong too. Based on the current release schedule, most of the company's new high profile titles for fiscal 2008 will be released during the October through June period. Management anticipates revenues will exceed $40 million for the full fiscal year 2008, with operating EBITDA in the range of 17.5% to 25.0% or $7 million to $10 million.

The market cap of the company is $40 million which means it is trading at 4-6x EBITDA which is fairly cheap.

Update: SilverStar is now the #6 stock on Nasdaq by volume traded today with 16 million shares. I looked at the historic chart and it traded as high as $15 back in 2000. Hard to believe! Maybe it closes at $8?

Update: There is clearly some speculation here. You have to love this post on the Y! Finance message board "Should I buy 10,000 shares now?" The poster asks, "Please help me. I just inherited some money and am new to the stock market." What do you think?

The9 Buying MSN China

2007-09-28T06:11:00.000-07:00

The9 (Nasdaq NCTY) is buying MSN China according to my Chinese media sources. The purchase price for a 50% stake is $100 million. The9 has been very successful with World of Warcraft in China but doesn't own its own portal so this will be an interesting addition for the9.

About 11 million people use MSN's instant messaging service in China, making it the second most popular messaging system in the country behind QQ.

The9 is the domestic operator of the World of Warcraft, the world's most popular online game. It has attracted more than 3.8 million players in China since it was launched nationwide two years ago.

WoW is the major revenue source of The9, whose earnings dropped 40 percent in the second-quarter of this year.

The rumor has been confirmed by Shanghai Daily.

Natalie Portman Hotel Chevalier

2007-09-28T06:05:00.000-07:00

Watch Natalie Portman get all hot in Hotel Chevalier. It's online and on iTunes. A very industrious Natalie Portman lover apparently thought others would want to watch Natalie in Hotel Chevalier online and posted the video online.

Watch Hotel Chevalier [Youtube]

Why would Natalie want to appear in an independent film? For the freebies of course. It took about 15 minutes to shoot the scene in India according to Natalie herself. She spent the rest of her 10 day trip vacationing and exploring India!

While you are at it, you might want to check in to the real Hotel des Chevaliers.

Doda Elektroda - Playboy Genius!

2007-09-28T05:46:00.000-07:00

If Albert Einstein had an IQ of 160, what do you think is the IQ of the average Playboy model? I bet most of you are thinking 100 or 120 or something quite low. Doda Elektroda has proven all conventional wisdom wrong! Guess what she scored on her IQ test when she was 20 years old? 156! She is a member of Mensa - there are about 100,000 members worldwide.

Doda Elektroda is not only smart, she was voted #2 most beautiful woman in Poland - yeah, I know, there had to be something wrong with her! She is a singer and also a model.

Doda has made many appearances in magazines. Isn't it easy to be fooled?

She appeared in a concert recently.

For Doda fans, a big lesson learned is to look under the hood, before you make fast judgments - no pun intended.

Antonella Barba Pictures and Fake Scandals

2007-09-28T05:39:00.000-07:00

Antonella Barba was a failed American Idol contestant, but she continue to be a success in "fake scandals" when her scandalous pictures surfaced on the internet. Even though Antonella Barba placed 15th on American Idol, she continues to be popular in the vein of Vanessa Hudgens - Antonella had a photos in wet -shirts taken and also photos taken ala American Pie style! Imagine that must be popular. There were even some doctored ones of her giving a gentleman some Bill Clinton type treatment - you know what I mean.
Which one is your favorite? The Halloween Antonella? The American Pie Antonella? Or the Smart Antonella?
I don't think anyone cares except for the tabboo slash "oohhhhh" and "ahhh" factor. The Vanessa Hudgens scandal proves that PR firms have latched on to the fake leak as a way to build publicity and we all know it - we just don't want to admit it.

Japanese Economy Moving Industrial Output +3.2%

2007-09-27T17:19:00.000-07:00

There is no fallout from subprime or at least that's the message from Japan. Export growth unexpectedly accelerated in August, also encouraging manufacturers to step up output. The Bank of Japan's Tankan survey next week will show whether companies expect overseas demand to remain strong as fallout from the U.S. subprime-loan crisis threatens to curb global economic growth.

Carmakers are strong. Toyota and Honda, Japan's two largest automakers, stepped up output last month to make up for the July cutbacks. Honda's production rose 6.8 percent and Toyota's increased 3.3 percent. Nissan Motor Co. added an extra work day, helping to boost manufacturing 10.1 percent.

The US matters less. Bank of Japan board member Miyako Suda said yesterday that the U.S. housing recession ``will have a limited impact on exports'' and the world economy will keep expanding even if U.S. growth slows.

RealNetworks Buys GameTrust for $20 million

2007-09-27T13:06:00.001-07:00

Real Networks is paying $20 million for GameTrust which is a casual game contest portal. Finally, they start using some of that big stash of cash!

King Kong Zhong, Hip Hip Hurray

2007-09-27T11:11:00.000-07:00

These two stocks, Kong Zhong (Nadsaq KONG) and Hurray (Nasdaq HRAY) are taking off. Kong is trading up almost 65% and Hurray is bring in 27% gain. Volume is very health, 25 million and 1 million respectively. Volume is picking up in Hurray so expect HRAY to start moving soon. Its playing catch up and can probably move to $8.

KongZhong, Hurray, and Linktone Get Unwired

2007-09-27T08:08:00.000-07:00

The Chinese wireless value added service provider stocks are getting a huge boost today on good news that China Mobile (NYSE CHL) is going to share more lucre with the content providers. These stocks have tanked big time recently and now are going up 20, 30% today. KongZhong (Nasdaq KONG) is up 36%, Hurray Holdings (Nasdaq HRAY) and Linktone (Nasdaq LTON) are up 20%.

The big question is how far these stocks have to run. Big shareholders in these stocks are Renaissance Technologies, Caxton, and Farallon Capital which are all major hedge funds. Goldman Sachs is also an investor. They may be just picking up these stocks cheap and flipping them. Buy to flip or buy to hold?

If the revenue and profit picture improves on these stocks, then these will be good companies to own.

Update: Kong has the highest trading volume today 8.4 million shares. Hurray has about 500K and Linktone 800K.

Update 2: KongZhong is the 7th most actively traded stock on Nasdaq today - 18 million shares traded so far with 3 more hours to go. Its up 56% now. It is the top gainer on Nasdaq today. Also up more are Linktone +34%, the #2 gainer on Nasdaq playing catch up with Kong. Hurray is getting more interest +23%, #7 gainer on Nasdaq.

Swastika Building

2007-09-27T06:54:00.000-07:00

A Swastika Building!? Yes, what you are seeing is a Swastika building, not in Germany, but in the heart of California in USA! Weird huh? Yes, but true.

The Swastika building was a Navy building, built unintentionally in the shape of a Nazi Swastika in California. When it was built, I bet the creators didn't think the general public would be viewing buildings from the sky all that much! It has been up since the 1960s.

CNN is saying that the building is being relandscaped because of all the hate mail that the Navy got [CNN Video]

The Invisible Condom Scam

2007-09-27T06:46:00.000-07:00

Want an invisible condom? That's what an Australian detergent company hoped would get investors to get its stock up. Well, it's a scam. According to the Australian Securities Exchange, a company called Citrofresh claimed to have an invisible spray on condom. It was too good to be true. You can just imagine what happened next! Investors got scammed by the businessman behind the biocide company. The website of Citrofresh is offline. The company is being sued and fined $400,000 for false marketing.

According to the exchange,

ASIC has obtained orders in the Federal Court declaring that Citrofresh engaged in misleading conduct in contravention of section 1041H of the Corporations Act - ASIC's proceedings against Citrofresh and Mr Ravi Narain, its then-managing director, arose from statements made in two company announcements to the Australian Stock Exchange Ltd on 27 and 29 September 2005 - the Court declared that Citrofresh engaged in misleading conduct

It's back to making detergent for Citrofresh!

Vivitar 8625

2007-09-27T06:40:00.000-07:00

The Vivitar 8625 is a super camera. Can you believe it has an 8.1 Megapixel CCD sensor? The specs speak for themselves:

8.1 Megapixel CCD sensor
6x Optical Zoom; 4x Digital Zoom
2.5” Color TFT Display
Four Selectable Flash Modes
Use as a Digital Video Camera with Sound
Uses 2 AA Ni-MH Batteries
32 MB Built-In Memory
Supports SD Cards to 1 GB
PictBridge Compatible

Amazon is giving it away for 25% off for $180 which is $55 off the list price of $240.

Vivitar 8625 for $180 [Amazon]

Tania Head - Liar, Loser or Survivor?

2007-09-27T06:31:00.001-07:00

Tania Head claims she was the top of the World Trade Center during 9/11 and she is a survivor. She claims she only made it down the tower because she wanted to get married with her fiancee Dave, who she claim perished - and hence conveniently, the marriage never happened. Is she a liar or is she a survivor? According to the NY Times, she may be a liar. She missed 3 interviews with the New York Times, failed to be confirmed by Merrill Lynch as an employee. Ironically, she is the head of the 9/11 Survivors Network and has spent alot of time helping others cope with their loss according to blog posts by the community.

She was badly burned by the burning fuel, when a plane hit a floor above her, she saw some of her co-workers die in the flames, and her fiancee was killed in the other tower.

I do not know whether people should feel bad for her or feel bad about her. She was just removed from the World Trade Center Survivors Network as President. How do you feel and what do you think? Liar, loser, or survivor?

Will Vonage Go Out of Business?

2007-09-26T13:28:00.000-07:00

VG lost to VZ and it's VF LOL! Translation: Vonage (NYSE VG) just lost their appeal on some key patents to Verizon (NYSE VZ) and the stock is now down 26% today. It broke the buck so to speak and is now $.96. This stock has been a train ride to hell for investors! VG is burning money at the rate of $50 million per quarter. That's alot of Halloween candy you can buy. J/K. Can you believe this cash pit once had a market cap of $2 billion!? It is now worth less than $200 million. It will be hard for Vonage to raise any money since they lost the lawsuit. Some of the venture investors in the deal include NEA (New Enteprise Associates), IVP (Institutional Venture Partners), and 3i. I hope they sold some on the way down!

PS: Don't feel too bad for the venture capital investors. They bought their shares around $1-2 per share. As far as I can tell, they might even be up! I know it's hard to believe, but the public investors really got screwed by the VCs when they took this company public.

It really gives new meaning to the uh-oh uh-uh-oh commercials.

Maybe they shouldn't have spent so much money on stuff like free phone calls at CES.

Nasdaq Small Cap Listing Requirements

2007-09-26T12:29:00.001-07:00

I've doing some research on Nasdaq Small Cap and found that there are several listing requirements:

$2.5 million stock holder's equity or
$35 million market cap or
$500,000 in net income (in latest fy or 2 of the last 3 fy)

That probably explains the big move in stocks like VerticalNet (Nasdaq VERT) which has run up and just about doubled in the past 2 days on just 1 million shares of trading.

VerticalNet fails on all three continued listing requirements:

-$.9 million stock holder's equity
$11 market cap
-$24, -13, -9 million in net income (last 3 fiscal years)

So, how will VerticalNet stay listed?

The remedy is to either inject $3.5 million of capital into the company.
Triple the stock price from $6 to $18 per share.
Earn $125,000 for the next four quarters.

The rapid rise of VERT in the last 2 days suggest the company is pursuing tripling the stock price. The stock was just $3.50 two days ago and today it is close to $7.

Nan Goldin’s Klara and Edda Belly Dancing photo

2007-09-26T12:14:00.000-07:00

Nan Goldin’s Klara and Edda Belly Dancing photo is stirring up controversy in London, because Elton John owns the photo and police in England think it is inappropriate material - aka child porn. The truth is that the photo shown above has been exhibited at major international art exhibits with absolutely no problem. It's art and sometime art is provocative.

The British are just pulling Elton John's leg and we all know it! The photograph 'Klara And Edda Belly Dancing' of two young girls, is taken by Goldin. One of the girls is depicted sitting on the ground with her legs spread wide apart. Further details of the picture are unknown.

The nice thing about the internet is that Elton John was able to respond to the seizure on his website. He had a statement posted immediately.

The photograph entitled "Klara and Edda belly-dancing" (1998) is one of 149 images comprising the "Thanksgiving" installation by renowned US photographer Nan Goldin.
The photograph exists as part of the installation as a whole and has been widely published and exhibited throughout the world. It can be found in the monograph of Ms Goldin's works entitled "The Devil's Playground" (Phaidon, 2003), has been offered for sale at Sotheby's New York in 2002 and 2004, and has previously been exhibited in Houston, London, Madrid, New York, Portugal, Warsaw and Zurich without any objections of which we are aware.
Elton John is known as one of the world's foremost collectors of photographic art and has several thousand photographs in his collection, including works by Man Ray, Richard Avedon, Irving Penn, Diane Arbus and Ansel Adams.
Elton John purchased the "Thanksgiving" installation from the White Cube gallery in London (contact: Deirdre Cott. + 44 (0)20 7930 5373) in 1999, and the installation is presently on loan to The Baltic Centre For Contemporary Art in Newcastle.

Thank goodness for the internet.

Mamma.com Comes Back as Copernic

2007-09-26T11:23:00.000-07:00

The erstwhile search engine company Mamma.com is making a comeback as Copernic (Nasdaq CNIC). Frankly, Mamma.com, fka "the mother of all search engines," was a horrible name, but Copernic is probably even worse. The stock is up over 100% today trading at $3.72 + 1.93. Mamma seems to make big moves every 12 months or so. The last time it did so was on the backs of an AOL distribution deal for its desktop search product, during the 1 month or so when desktop search was all the rage. That petered out quickly. This time, it's rising because the SEC has decided not to prosecute the company for suspicious trading activity back in 2004.

Copernic Inc., (NASDAQ: CNIC), formerly known as Mamma.com Inc., a leader in internet search technology and online advertising, announced that the United States Securities and Exchange Commission (“SEC”) has informed the Company by letter that it has completed its investigation of the Company concerning certain trading in the shares of the Company in 2004, and that the SEC does not intend to recommend enforcement action against the Company.

“The Company is pleased with SEC’s decision to close the investigation,” said David Goldman, Executive Chairman of the Company. “The successful conclusion of the SEC investigation will allow the Company to remain focused on executing its core business strategy in internet search technology and online advertising, for the benefit of its shareholders”

What a colorful company. I still can't figure out what the company does except pay fat salaries to their executives and chase after the latest fad. Revenue is flat. Company is losing money. It seems to exist so that the executives can sell stock every few months or so. :-)

China Shenhua Energy Draws $350 Billion in IPO

2007-09-25T18:30:00.000-07:00

China Shenhua Energy is setting two records when it goes public in Shanghai. It drew $350 billion in IPO orders. Also, it will be the largest IPO worldwide this year. The company is a coal producer in China.

Shenhua, listed in Hong Kong since October 2005, may raise as much as 66.6 billion yuan in the world's biggest share sale this year. The last six companies to hold mainland initial public offerings have jumped an average 250 percent on their first day of trade.

Shenhua shares have more than doubled in Hong Kong since Jan. 1, outpacing the 32 percent gain in the benchmark Hang Seng index and making it the third-best performer this year among the 40 members of the MSCI AC Asia Pacific Energy Index.

I have been seeking a reason for the huge rise in China commodity stocks over the past week. The huge demand for Shenhua Energy partially explains the rise in China Resources (Nasdaq CHNR) which has gained more than 50% in the past week on Nasdaq. It could also explain the big gains for China related energy stocks like China Sunergy (Nasdaq CSUN), Trina Solar (NYSE TSL) and Yingli Solar (Nasdaq YGE) as well as stocks like China Automotive (Nasdaq CAAS), China Precision Steel (Nasdaq CPSL) and China Technology (Nasdaq CTDC).

Shenhua is the second largest coal company in the world, second only to Peabody Energy (NYSE BTU). A potential China play for US investors is Yanzhou Coal Mining Co. (NYSE YZC). YZC is up about 15 points in the past week, at around $105. It's a large cap ADR. Yanzhou Coal is an ADR of the Hong Kong listed shares. The ADR ratio is 1:50 with the HK shares ticker 1171.HK. The HK shares trade at 16.26. With $1 = 7.76 HKD, you have a price of $104.76 per US ADR.

VerticalNet Goes Vertical! Up 40%

2007-09-25T15:24:00.000-07:00

It's stranger than fiction. VertialNet (Nasdaq VERTD) went up 40% on no news and just 100,000 shares of trading.

I wonder what is going on with these tiny stocks. It seems the smaller the stock, the faster the rise these days.

If anyone has info on this stocks mysterious rise, please let me know. I can't seem to find any news on why it should be up. It's in a death spiral of sports.

Maybe small cap growth stocks will outperform large caps now that we are towards the latter half of the business cycle.

It's days like this that stocks like VerticalNet make value investors look like fools, but what goes up fast tends to collapse even faster.

A Tale of Two Airlines - China Eastern and China Southern

2007-09-25T15:16:00.001-07:00

Strangely enough China Eastern Airlines (NYSE CEA) and China Southern Airlines (NYSE ZNH) traded in oppose directions today.

China Eastern lose $10 and closed under $100 for the first time in a week while China Southern tacked on $4 to close at $84.

I am thinking this has to do with potential strategic investor interest in China Southern because Air China and Cathay Pacific got spurned by China Eastern. The Chinese government refused to let Air China and Cathay Pacific increase their stake in CEA, so maybe China Southern Airlines will get a strategic investment. Of course, this is just an educated speculative guess.

China Is the New Dot-Com - China Precision Steel, China Technology, China Automotive

2007-09-25T13:55:00.000-07:00

China Precision Steel (Nasdaq CPSL) is up another 31% today since starting at around $3 last week. It's up to $10.45 today. There is alot of speculation in CPSL.

Other stocks up in sympathy are China Technology Development (Nasdaq CTDC) and China Automotive (Nasdaq CAAS). CTDC is up 15% and CAAS is up 4%. Both are showing more trading volume in recent days which tends to precede these fast sharp rises. CAAS has gained the least, so maybe it has more room to go up. CTDC and CAAS were really wild stocks about a year ago and traded as high as $15. The stocks like CPSL and CHNR have all traded to the mid teens in the last week.

What about a China energy play? That would be China Sunergy (Nasdaq CSUN) up 41% today.

Just add China and your stock will go up. China is the new dot-com. Fully half of the top 10 gainers of today are China related stocks:

CDS 7.50, +2.30, +44%
CSUN 9.85, +2.82, +40%
CPSL 10.45, +2.53, +31%
XFML 7.94, +1.46, +22%
FMCN 58.48, +9.98, +20%

Some of them were not even listed until yesterday. CDS is China Direct which is an OB company was just recently listed on AMEX. I can't figure out what they do at their website but their profile says they offer direct access to china. Okay. What does that mean? Very vague, but it looks like an investment bank/reverse merger specialist company.

The name of the game is speculation.

Air China and Cathay Pacific Get Owned, Denied Right to Bid on China Eastern

2007-09-24T20:42:00.000-07:00

If there is one lesson from what happened the Air China/Cathay Pacific's failed attempt to bid on China Eastern, it's that China is still not a free market. If it were America and Air China and Cathay Pacific had put up a rival bid for China Eastern, all of Wall Street would be up in arms if the government told them that they couldn't submit a higher bid for China Eastern. Unfortunately, we are in America. If it were America, private equity houses might have even joined in the fray to up the price of the deal. If this were Wall Street, we'd be seeing a bidding war. Alas, the government steppd in and ruined the party just when things were getting started! That is why China Eastern stock is not trading higher today in Hong Kong. In fact, it is cratering because the Chinese government told Air China and Cathay Pacific to p*ss off. That is why everyone is hurting.

Cathay Pacific Airways 21.05, -1.65, -7.3%
Air China 10.12, -1.72, -14.5%
China Eastern Airlines 7.27, -1.43, -16.4%

That's alot of red ink. Oh well. Another day, another blowup! Just another day's work!

The Real Reason China Natural Resources is Going Up

2007-09-24T12:55:00.000-07:00

Aside from the boom in commodities, there's another reason why China Natural Resources is going up today, up 42% that is. I did a search for "China Natural Resources" on Google and found that last month, August 8, 2007, CHNR had completed a $35 million financing round.

The investors agreed to purchase a total of 2,187,500 units, each unit consisting of two common shares and one warrant to purchase one common share, for a purchase price of $16.00 per unit. The warrants are exercisable at $10.00 per share for three years commencing one year following the date of the closings. Closings of the several purchases are expected to take place on or before August 26, 2007.

Let's translate that into simpler terms, each unit at $16 bought 2 shares of CHNR plus a warrant at $10. So, at the very most, the stock cost the investors $8 per share. The stock is trading at $14 today which means that investors have almost doubled their money on the stock. That's not including the warrants which are now in the money. All in, a very sweet deal for investors in the private placement.

The stock was trading at around $8.50 when the investment was made so the market cap of the company was $97 million. That means the investors bought around 26% of the company for less than $8 per share. Sweet deal! Now wonder the stock is on fire.

Update: Also, in a more recent press release, CHNR announced that Andy Xie is an investor. Andy is widely published as the former Morgan Stanley China analyst. He was widely quoted in the Wall Street Journal. That may also have to do with the recent rise. This is the quote from the press release.

Among the investors is Rosetta Stone Capital Limited, a company owned and managed by Mr. Andy Xie Guozhong. Mr. Xie is an independent economist and financial advisor. He was the former chief economist of Morgan Stanley Dean Witter Asia. Mr. Xie was ranked as the number one economist in Asia between the years 2000 to 2005 by the Institutional Investors Magazine. He was also selected by CCTV, China's largest national television network and the World Economic Forum in 2003 as one of the ten future economic leaders in China.

So, there is alot of excitement around this one.

Hannah Montana is Pregnant

2007-09-24T09:08:00.000-07:00

Rumor alert says that Hanna Montana is pregnant. Hanna Montana is a hit TV show by Disney and rumors are that its 15 year old star Miley Cyrus is pregnant. No word on who is the father. She is the daughter of Billy Ray Cyrus. It could be more bad news for Disney (NYSE DIS) which recently had to deal with the Vanessa Hudgens pictures scandal. Of course, these could just be vicious rumors about Hannah getting knocked up.

One magazine claims it is true. “Yes, sadly it’s true. Miley herself confirmed the pregnancy rumors during a J-14 interview. ‘I’m going to take good care of my baby. I’ve already gained 7 pounds. I was in real shock when it happened accidentally. I went a little too far. I’m sorry to all of my fans’,” the magazine photo reports Miley as saying.

“While Miley is still planning on going on tour for her new solo cd, she’s currently filming the series finale of ‘Hannah Montana’. Even though she’s keeping hush about who’s the father. Miley’s parents are very disappointed in her: ‘Whatever’s meant to happen will happen. I guess it was meant to be this way.”

Miley's reps are denying with full force.

“The story is a complete fabrication. Someone mocked up a fake J-14 article.” For their part, J-14 posted this statement on their website: “Despite Internet rumors, J-14 NEVER reported that Miley Cyrus was pregnant. Someone doctored the ‘This Just In’ article that appeared on page 16 of J-14’s July 2007 issue, where a few of Miley’s Hannah Montana co-stars talked about her gross habits. Miley is an intelligent, respectable role model for young girls, and the editors of J-14 pride themselves on presenting our readers with credible stories and information.”

Does she look pregnant to you in these pictures?

Chinese Precision Steel Continues Rise

2007-09-24T08:55:00.001-07:00

I pointed out China Precision Steel's potentially inaccurate P/E information on Friday on Y! Finance and today the stock continues to rise. It is up 54% today and at $8.25. The stock was trading at $3.45 three trading days ago on Wednesday last week. It shows that all things China are getting bid up. I can't seem to find a website for the China Precisiona Steel, Inc. (Nasdaq CPSL). Maybe somebody can point me to it. I don't want to be too quick to judge, but isn't having a website a requisite for being a public company?

Also up today China Technology Development (Nasdaq CTDC) and China Natural Resources (Nasdaq CHNR) which are also well known China stocks that have had sharp rises - and falls - in the past. With the single thread of commonality being the name "China" in their names, these companies all seem to do various odd things and are roll up businesses - meaning previous shell companies doing reverse mergers into existing companies. In a word, built for trading and packaged for investors to exit based on skillful financial engineering.

DryShips is Totally on Fire +650% Since Last Year

2007-09-23T08:14:00.000-07:00

I've been reading the stock tables and DryShips (Nasdaq DRYS) is totally on fire. It is up over 6 fold in the last year! This chart is unreal. Can you believe that this $81 stock was trading at $12 last year?

I wonder how much further this stock has to go given the slowdown in the US. It trades at 13X current year P/E and 7X forward P/E.

A well known investor wrote that the time to buy commodity related stocks is when their P/Es are really, really high - when they are unprofitable. The time to sell is when their P/Es are low - when they reach peak earnings. Commodity related stocks operate on the business cycle.

Has the time arrived to sell for Dryships? Revenues rose over 100% percent last year to $338 million and earnings were $216 million. It trades at an eyepopping 8x trailing twelve month revenues. Sell sell sell?

Goldman Sachs China MD Richard Ong Fails Chinese Test

2007-09-23T08:01:00.000-07:00

Do you speak and write Chinese? If you want the top job at Goldman Sachs China, you apparently do. Goldman Sachs China's managing director, Richard Ong, failed the Chinese test that is required of all finance professionals. As a result, he got booted out of the top job at Goldman Sachs China. Goldman instead promoted Zha Xiangyang, deputy chief executive of its China joint venture, Goldman Sachs Gao Hua

Richard Ong was originally picked to lead the investment banking unit of Goldman Sachs in China back in October 2006. Unfortunately, the China Securities Regulatory Commission began requiring senior executives to take the test in 2004. Managers in place before then have until 2009 to pass the exam before losing their titles. Richard Ong, an ethnic Chinese born in Malaysia, did not write Chinese well enough to take a government-mandated test for senior managers. Oops. Its too bad the bloke couldn't make himself study hard enough to pick up the language. After all, he's Chinese!

The Chinese government's enforcement of language testing is part of a plan to give its citizens increased access to top positions at securities firms. The rule sets China apart from Japan, another Asian nation where language proficiency is low.

By the way, I love this quote.

“If the boss of a securities company in China doesn’t know the language, how could we expect him to communicate effectively with the staff, the government and investors?” says Xu Weijuan, who heads the department that preps bankers for the test at the Securities Association of China. “He wouldn’t even understand the notices we post on policy changes.”

How Not To Invest for your Retirement

2007-09-23T07:34:00.000-07:00

I visit the finance message boards occasionally at Yahoo to see what people are talking about. I do it just for kicks rather than for investment advice, so it was interesting to see some posts about people buying and selling "momo" sticks and getting burned. One of the top Nasdaq stocks on Friday was a company called "Handheld Entertainment" (Nasdaq ZVUE) and so I checked out the board. As usual, many people were bragging about how much money they made trading Handheld Entertainment which was to be expected since the stock had gone up 55% on Friday. However, I saw a post entitled "i lost $20K on ZVUE - why ZVUE is pump and dump". The title of the post could also have been "How to invest Never to Retire" because it talks about an investor who bought ZVUE when it ran up to $7 last time the stock made a mysterious rise. Apparently, the poster sold it at under $2 before it mysteriously ran up again on Friday. I bet he must be pissed. I would be if I were him. It's a sobering lesson that there are many ways to invest, but that investing in momentum stocks is a sure way to the poor house - for everyone but the pump and dumper. There is an interesting reader comment from last week about ZVUE. The reader noticed that "they" started a spam campaign on Thursday right before Friday's big rise.

Join the Army, Get Free Citizenship, Are We Rome?

2007-09-21T13:30:00.001-07:00

When Rome ran out of recruits for its military two thousand years ago, it offered citizenship to Germanics who agreed to enlist in the Roman army. Two thousand years later, in the year 2007, America has run out of military recruits for its volunteer army. Guess what legislators are now doing? Congress is proposing a bill to offer illegal immigrants citizenship in return for military service. That means the military will be staffed with noncitizens and mercenaries.

Under the Dream Act, "tens of thousands of well-qualified potential recruits would become eligible for military service for the first time. They are eager to serve in the armed services, and under the Dream Act, they would have a very strong incentive to enlist because it would give them a path to permanent legal status."

Interesting that history repeats itself. I first learned about the Roman problem after reading the book Are We Rome? It's fascinating that America is now facing the same military crisis that Rome faced so long ago before us. I guess we lack creativity and feel compelled to copy the model that works for Rome.

The caveat? Do you want to know why Rome fell? Germanics serving in the Roman army sacked Rome because they got pissed at Rome for not giving them for land. In fact, Rome was invaded by one of their very own when the Germanic Odoacer deposed the last emperor ruling from Rome. Odoacer was a Roman mercenary!

Let that be a lesson to us all!

China Precision Steel P/E of 1?!

2007-09-21T10:27:00.000-07:00

Yahoo Finance reports that China Precision Steel has a P/E of 1. Somehow I doubt that's accurate.

The stock is up 20% today. If the P/E is indeed is 1, then this stock could go from $5 to say $20 easily! China fever! Go go go!

17 Year Old Teen Makes $1 Million on MySpace Layouts

2007-09-21T10:09:00.000-07:00

Teens are making millions on the internet with myspace layouts! Ashley Quall was 14 when she started her site. She dropped out of high school and dropped into business. She's now 17 years old and running Whateverlife.com, the definitive resource for myspace layouts. To boot it, she has made over $1 million!

Girl Power: Ashley Quall FastCompany magazine article

ZVUE Rocks Again

2007-09-21T06:52:00.000-07:00

A stock that is so highly volatile that it makes my head spin is Handheld Entertainment (Nasdaq ZVUE). If there is one stock with more style than substance, it's ZVUE. They have made at least 5 acquisitions in the past year that I can count and each has been in the video sharing space. Most of these are has beens in the video sharing space and they are purporting that they are the fastest growing site in August 2007 according to Comscore. I have no doubt that is probably true, but that's because they bought a site called eBaumsworld which brought in quite a bit of traffic. I'd be careful with this one. The stock is up 40% today on the Comscore report. I have a gut feeling that the only people trading this stock is probably the company itself.

Update: ZVUE float is 8.9 million shares. Too many shares to make this a real short squeeze candidate. Plus, the insiders are dumping.

China Stocks! China Stocks! China Stocks!

2007-09-21T06:45:00.000-07:00

Repeat after me! China Stocks! China Stocks! China Stocks!

The top gainers list today is full of China stocks:

E-Future Information Technology (Nasdaq EFUT) +12% Chinese ERP software
KongZong (Nasdaq KONG) +9% Chinese wireless value added services
LJ International (Nasdaq JADE) +8% Chinese diamonds
China Finance Online (Nasdaq JRJC) +8% Chinese finance portal
Fuwei Films (Nasdaq FFHL) +8% Chinese film/chemical company
China Grentech (Nasdaq GRRF) +8% Chinese wireless

It's China stock markup day. In all fairness, they've all been marked down quite a bit lately.

Chinese A-Share H-Share Arbitrage Trade Goes on

2007-09-21T06:35:00.001-07:00

A market strategist in Hong Kong writes that China is slowly letting money flow into Hong Kong - rather than in one fell swoop. It just means that A-Share and H-Share arbitrage traders will have more time to put the trade on and make $$$:

"The thing to remember here is that China never likes to do anything straight off," said Andrew Sullivan, head of trading at Daiwa Securities SMBC in Hong Kong. Anecdotal evidence by Hong Kong brokers suggests outward investment demand from investors in China has been very strong.

Chinese regulators were seeking safeguards against a sudden and destabilizing outflow of capital, Sullivan said. It is likely regulators will restrict fund flows initially but then relax them over time, Sullivan said, much as they have done with other regulations affecting trade and travel to Hong Kong.

"They want to slowly wind down the bubbles that they've got in Shanghai and Shenzhen," he said. "And the way to do that is to allow the money out that will initially arbitrage the difference between the A share and the H shares." There are 41 dual-listed companies which trade in Shanghai as class A shares and in Hong Kong as class H shares.

The stocks that are arbitrage related in the US are:

Aluminum Corporation of China (NYSE ACH)
China Southern Airlines Limited (NYSE ZNH)
China Eastern Airlines (NYSE CEA)
China Petroleum (NYSE SNP)
Sinopec Shanghai Petrochemical (NYSE SHI)
China Life Insurance Company (NYSE LFC)

e-Future Information Technology Rocks Again

2007-09-20T18:01:00.000-07:00

e-Future topped the Nasdaq top gainers list today going up 50% on China fever. I wrote about e-Future Information Technology Inc. (Nasdaq EFUT) last year when this microcap Chinese ERP software company did its IPO and proceeded to go up 627%. This little known company e-Future became the #1 IPO of 2006. Almost an entire year has passed and e-Future is back again. Its the same story. The low float combined with the large amount of shares concentrated among a few investors is making this hot stock go up like a rocket again.

What is amazing is the tiny market cap of this software company. With a free float of only 45,000 shares out of 1.5 million shares outstanding, the freely tradeable shares is less than a fraction of 1%! That makes it ripe for a fast rise and a short squeeze. e-Future has a market of only $27 million making it easily manipulated up or down with just a few million dollars. In all, this company looks more like a venture stage software company than your average software company.

Investing in e-Future is a game of musical chairs. Early buyers reap big rewards. Last one in gets left holding the bag. You can see it from the market action. The potential of fast profits is leading day traders to "rent" this stock and trade it like mad. The entire share base turned over close to 2 times - ie volume was 2.6 million shares vs 1.5 million shares outstanding.

I honestly can't figure out what they do, so unfortunately, it is too sizzling hot for my taste. The more adventurous among you may decide to buy or sell and I have no doubt some people will make money. I'll take a pass.

Teen Sues Virgin Mobile for Stealing Her Flickr Photos

2007-09-20T17:00:00.000-07:00

Alison Chang is suing Virgin Mobile for stealing her Flickr photos and pastering them in Virgin Mobile ad campaigns. The 16-year old Alison was attending a Christian camp in Australia when a camp counselor took a photo of her flashing a peace sign and uploaded it to Flickr. That photo ended up in a multimillion Virgin Mobile ad campaign featured in bus stop ads like the one above urging Alison to "Dump your pen friend girl"! Virgin never asked Alison for permission and Alison never them her blessing. Big mistake!

You can seee that Alison found out about the photo and she logged on to Flickr to express her outrage. In the comments for the Flickr photo, Alison replied to the photo "hey that's me! no joke. i think i'm being insulted...can you tell me where this was taken."

I guess she has every reason to be pissed off. "It's the tag line; it's derogatory," said Damon Chang, 27. "A lot of her church friends saw it." Allison's family filed a lawsuit late Wednesday in state district court in Dallas against Virgin Mobile USA LLC, its Australian counterpart, and Creative Commons Corp., a Massachusetts nonprofit that licenses sharing of Flickr photos.

The suit has triggered a rave discussions at Flickr over the Creative Commons licensing scheme and hundreds of people are posting how this could have happened.

China Eastern Airlines and China Southern Are on Fire

2007-09-20T09:56:00.000-07:00

China Eastern Airlines and China Southern Airlines are topping the biggest gainers list on the NYSE today. A few weeks ago, China Eastern Airlines (NYSE CEA) got an investment from the Government Investment Corp of Singapore and ever since the stock has been on Fire. When the investment was announced, I thought "gee, this stock will probably open at $100". It took a more than a few days, but it got there. Today, it's up close to $30 points. It broke $100 when the stock opened at $110 which is $15 points above the close at $95 yesterday. The other stock that is up alot is China Southern Airlines Limited (ADR) (NYSE ZNH) which is up a respectable $15, not yet over $100 but getting there!

China Southern focuses on Hong Kong and Macau routes where China Eastern focuses on Shanghai. These two are moving because of rumors of restructuring in the aviation industry in China - this could mean either state asset sales or shuffling of smaller regional airlines into these entities. Let me translate that into English for you: ZNH and CEA will get state assets at bargain prices! Anytime you get something for nothing, you create value from thin air. The winner: shareholders! The Chinese government seems to be taking the approach that if you allow people to make money, then they'll have no complaints about state enterprise privatization. Quite the contrary of the Russian privatizations, where only a few people made alot of money (which is not to say there aren't back door deals in China).

Arab Man Hides Sex Toy in Very Large Sausage

2007-09-20T08:43:00.000-07:00

Where do you hide sex toys from customs if you're an Arab man traveling back to Dubai? Apparently, a very enormous German sausage.

Staff at a German butcher's shop were shocked to discover a customer had hidden two sex toys in their sausages for transport to Dubai, police said Wednesday.

"It was two latex dildos with a natural look," said a spokesman for police in the southwestern city of Mannheim.

After shopping there earlier in the day, the man, who spoke broken English, returned to the butcher's with two large "Schwartenmagen" sausages. He asked a shop assistant to wrap and cool them until he departed for Dubai the next day.

But the assistant noticed the goods had got heavier and alerted police. Officers discovered the man, who was about 50, had removed some of the meat and packed the dildos inside.

"He could have used a loaf of bread," the spokesman said. "It's not against the law here. But obviously I can't speculate on what customs in Dubai will have to say about it."

Fire Fighters Set Fire to Cracker Barrel

2007-09-20T04:31:00.000-07:00

In one of the oddest stories ever, a company that was hired to maintain Cracker Barrel's fire supression system accidentally set fire to the restaurant - thereby ensuring a steady supply of follow on work for the company! Their van went up in flames early today damaging the exterior of Cracker Barrel (CBRL Group Inc. Nasdaq CBRL) restaurant is owned by the company hired to maintain the restaurant’s fire-suppression system.

No one was injured in the blaze reported to the Cumberland Trail Fire Department at 12:02 a.m. today. According to Chief Greg Reline, the fire started in the engine compartment of a van owned by Kool Kleen of Murrysville, Pa. The St. Clairsville Cracker Barrel is located across from the Ohio Valley Mall, and the van was parked behind the restaurant.

Cracker Barrel owns a bunch of restaurants that serve "American" cuisine like pancakes, burgers, chicken, and other types of cheap Midwestern fare. They sell close to $3 billion worth of this stuff.

Is China Launching the Nuclear Option on Dollar Sales?

2007-09-20T01:11:00.000-07:00

The yuan (aka renminbi) strengthened immediately following the US rate cute on Tuesday, triggering fears that China is launching a nuclear option against US dollars. While the US is cutting rates because of slowing growth, China is raising rates because of fast growth and inflation. In fact, inflation is getting so bad in China that Beijing issued a price freeze! You heard right, they are putting in government price controls on everything ranging from oil, electricity and water to the cost of parking and park entrance fees.

Before trading started on Wednesday morning, the People's Bank of China (PBOC) set the yuan midpoint at 7.5170 against the greenback, compared with 7.5266 on the previous day. The yuan may rise or fall 0.5 percent from the mid-point each day.

It's all about fighting inflation ahead of the Communist party meeting on October 15th. “Any unauthorised price rises are strictly forbidden . . . and in principle there will be no new price-raising measures this year,” the ministries said. Events since the initial State Council announcement that inflation in August hit an 11-year high of 6.5 per cent appear to have galvanised the bureaucracy into a tougher stance.

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Xia Bin, finance chief at the Development Research Centre (which has cabinet rank), kicked off what now appears to be government policy with a comment last week that Beijing's foreign reserves should be used as a "bargaining chip" in talks with the US.

He Fan, an official at the Chinese Academy of Social Sciences, went even further today, letting it be known that Beijing had the power to set off a dollar collapse if it choose to do so.

"China has accumulated a large sum of US dollars. Such a big sum, of which a considerable portion is in US treasury bonds, contributes a great deal to maintaining the position of the dollar as a reserve currency. Russia, Switzerland, and several other countries have reduced the their dollar holdings.

The threats play into the presidential electoral campaign of Hillary Clinton, who has called for restrictive legislation to prevent America being "held hostage to economic decicions being made in Beijing, Shanghai, or Tokyo".

She said foreign control over 44pc of the US national debt had left America acutely vulnerable.

Hilary, maybe the problem is not China, but the free spending ways of Americans caused by Greenspan's 14 consecutive rate cuts and Ben Bernanke's insistence to follow in his footsteps! America is in a tough spot because of all those free credit cards and 0% offers that Greenspan lavished on consumers with his 1% interest rate! Just when consumers are being taught a lesson, Bernanke cuts rates and gives consumers more rope to hang themselves!?

Is the Bin Laden Trade On? Saudi Arabia Breaks Dollar Peg

2007-09-20T01:02:00.000-07:00

For the first time ever, Saudi Arabia refused to lower interest rates after the Federal Reserve cut rates by 50 bps. There is massive panic in the currency markets right now on fears of a dollar collapse. Whoever sold $4.5 billion worth of S&P 500 calls may turn out to be a real genius. The $4.5 billion Bin Laden trade may be on!

"This is a very dangerous situation for the dollar," said Hans Redeker, currency chief at BNP Paribas.

"Saudi Arabia has $800bn (£400bn) in their future generation fund, and the entire region has $3,500bn under management. They face an inflationary threat and do not want to import an interest rate policy set for the recessionary conditions in the United States," he said.

All that oil money is causing inflation in the Middle East and Saudi Arabia so the Saudis are refusing to play ball with Bernanke. Big oops for Ben! Foreigners are no longer buying dollar bonds either and this could cause a collapse in the US bond market.

The latest US government data on foreign holdings released this week show a collapse in purchases of US bonds from $97bn to just $19bn in July, with outright net sales of US Treasuries.

"They were willing to provide the money when rates were paying nicely, but why bear the risk in these dramatically changed circumstances? We think that a fall in dollar to $1.50 against the euro is not out of the question at all by the first quarter of 2008," he said.

For Saudi Arabia, the dollar peg has clearly become a liability. Inflation has risen to 4pc and the M3 broad money supply is surging at 22pc.

The pressures are even worse in other parts of the Gulf. The United Arab Emirates now faces inflation of 9.3pc, a 20-year high. In Qatar it has reached 13pc.

Angelo Mozilo is a Real Insider Trading Putz

2007-09-19T16:19:00.001-07:00

I can't believe what the CEO of Countrywide is saying. After blowing up Countrywide (NYSE CFC) by issuing subprime mortgages to people who shouldn't have gotten them in the first place, he is now blaming the government for causing the subprime meltdown. He is such a hypocrite.

This is what he said when the Fed cut rates by 50 basis points yesterday:

Mozilo said Tuesday's surprise half-point cut in the federal funds rate signals the Federal Reserve "has also realized the importance of home financing and the need to return liquidity to the [mortgage] market."

The current cycle "is the most severe in the contemporary history of our industry," so policymakers need to do more, he added.

Angelo, if the policymakers need to do more, maybe you and your gang at Countrywide need to do less - as in less lending to poor people who can't afford to pay you back on your usurious loans! Oh, by the way Angelo, aren't you the same guy who sold $10 million of stock in Countrywide at $28 per share 2 weeks before the whole mortgage market started coming apart and CFC got cut in half to $15! What kind of CEO are you? Don't answer. I'll answer for you: the self dealing scumbag kind!

Angelo, the regulators aren't at fault for the mortgage mess that you got yourself into! So stop blaming them. Wake up and face the facts! If the SEC needs a target for insider trading, they should start with you Angelo Mozilo.

Mozilo ... hmmmm.... Mozilo ..... Sounds like an evil villain. Don't let his gray hair trick you into thinking that he's an honest banker.

Alicia Silverstone Strips For Peta Ad and Video

2007-09-19T08:47:00.000-07:00

Alicia Silverstone is a vegetarian and to prove her point, she stripped down in an ad for Peta. Peta is an organization against cruelty to animals. Alicia takes that to the extreme and I guess eating meat could qualify as animal cruelty. Here's the Alicia Silverstone PETA ad and the Alicia Silverstone Peta video. I don't know about you, but I like meat!

$4.5 Billion Bin Laden Trade

2007-09-19T08:37:00.001-07:00

Someone is betting big that the stock market will crash on or before September 21, 2007. There are 65,000 contracts @ $750.00 for the SPX 700 calls for open interest. That controls 6.5 million shares at $750 = $4.5 Billion. Not a single trade . But quite a bit of $$ on a contract that is 700 points away from current value. No one would buy that deep in the money calls. No reason to. So if they were sold looks like someone betting on massive dislocation. Lots of very strange option activity that I haven't seen before. That's according to someone who's been doing this about 25 years.

The entity or individual offering these sales can only make money if the market drops 30%-50% within the next four weeks. If the market does not drop, the entity or individual involved stands to lose over $1 billion just for engaging in these contracts!

Clearly, someone knows something big is going to happen BEFORE the options expire on Sept. 21.

THEORIES:
The following theories are being discussed widely within the stock and options markets today regarding the enormous and very unusual activity reported above and two stories below. Those theories are:

1) A massive terrorist attack is going to take place before Sept. 21 to tank the markets, OR;
2) China, reeling over losing $10 Billion in bad loans to the sub-prime mortgage collapse presently taking place, is going to dump US currency and tank all of Capitalism with a Communist financial revolution.

Either scenario is bad and the clock is ticking. The drop-dead date of these contracts is September 21. Whatever is going to happen MUST take place between now and then or the folks involved in these contracts will lose over $1 billion for having engaged in this activity.

QuickSilver is Shopping Cleveland Golf

2007-09-19T07:23:00.000-07:00

QuickSilver (NYSE ZQK) just acquired the 36% of Roger Cleveland Golf Co that it doesn't own according to SEC filings. Yes, it's the QuickSilver that sells surf wear and apparel. QuickSilver does over $2 billion in sales a year so the Cleveland Golf part of it is basically a nonevent as far as the business goes. The Rossignol family originally owned the Cleveland stake and brought it with them when QuickSilver acquired Rossignol. Golf Week is spreading a rumor that QuickSilver is preparing to sell Cleveland Golf. Golfweek thinks TaylorMade-Adddas could buy them, as could Puma.

I used a Cleveland Launcher a while ago when I played some golf. The black and yellow color scheme looks really nice on their clubs. The Cleveland clubs were really nice to play but I think the company has changed strategy recently. I visited a few golf stores recently and Cleveland has definitely gone downstream - as in reduced the price of its clubs to reach more buyers. The clubs were piling up. Maybe that explains the sale.

The price tag: a cool $60 million. Industry sources say Quiksilver Inc., which acquired Cleveland in 2005 as part of a deal to buy ski-maker Rossignol, is in the final stages of unloading the golf equipment maker for roughly $60 million to $70 million. Some analysts say the price is a bargain, noting Cleveland likely is worth at least $100 million, but they add an expedient sale even at a discount is in Quiksilver’s best interests.

After 10 Years, NetBank.com Finally Goes Bust

2007-09-19T05:18:00.000-07:00

A few months ago, I wrote about NetBank Inc. (NTBK.PK) as a short trade because it had lost $200 million. Of all things, it lost it on RV loans. Let me translate that for you. RV loans = trailer park loans. The less PC bankers of the financial community would call these "trailer trash loans" because they are made to borrowers who live in trailer parks and have no chance of repayment. It turned out to be completely accurate. As it turns out, that short trade was a "SHORT TO ZERO" trade, because the stock of NetBank is now worth $.08. You are reading it correctly. 8 cents. It is down from $3.59 on the day that NetBank announced its $200 million write off! And over $80 at the peak of the dotcom mania back in 1999.

Of all things, NetBank shows everyone out there that the writing was on the wall on this whole subprime mortgage loan crisis way before last month. The weak players were already crumbling 6 months ago, except that the people who had the data didn't really want to face the facts.Example: EverBank didn't face the music and signed a term sheet to acquire NetBank's $2.5 billion loan portfolio in May. It turns out EverBank was lucky. The closing conditions were not met and there were little in the way of closing conditions except regulatory approval by a certain date. No regulatory approval = no liability. See no evil. Do no wrong. EverBank got out of jail scott free! I bet Everbank investors are breathing a sigh of relief. They really dodged a bullet on this piece of trailer trash.

The more adventurous of you are wondering whether this is a nice penny stock trade. The answer is in NetBank's regulatory filing :

As a result of ongoing financial and regulatory pressure, the Company believes that its outstanding common stock may have little or no value. Accordingly, investment in the Company’s common stock would be highly speculative.

You have to give these guys credit. At least the management team is finally learning to be honest about something! It took them over 10 years, but they finally learned!

NetBank RIP. I have a suggestion for your tombstone. Take the logo and change it to "NetBank : Part with Your Hard Earned Money"

Farmers Shouldn't Play with Credit Derivatives!

2007-09-19T03:14:00.000-07:00

Calyon - aka the French Agricultural Bank - blew 250 million euros on credit swaps showing that farmers should stick to farming - not trading credit derivatives! LOL! Apparently, Calyon (aka Credit Agricole aka French Agricultural Bank) had fortuitous timing - they waited 2 weeks - until the Fed rate reduction - before announcing the results of their tragic gamble.

Agricole senior management were told on Sept. 4 that Calyon had an unusually large market position at the propriety trading desk of its New York-based business. It said that unwinding the position would cut Calyon's third-quarter earnings by EUR250 million.

The bulk of the position had been built up at the end of last month and was centered on certain credit market indices, which Calyon did not name, although it stressed that none of the trades was linked to the US sub-prime mortgage sector.

Caylon says they have taken the necessary disciplinary actions against the rogue traders.

Do you see the picture above? Yes, the decapitated bodies. Those are the statues next to Calyon headquarters on Avenue of the Americas in New York. I have a feeling that's what happened to the rogue traders.

Fed Rate Cut Extends Lifeline to Deadbeat Borrowers

2007-09-18T12:15:00.000-07:00

The Fed just increased the risk of the financial markets by extending a 50 basis point rate cut.

1) Credit card borrowers get a lower rate. Hurray for more 0% credit card offers.
2) Home flippers get their ARMs lowered to a more affordable rate. Expect more home flipping!
3) Housing bubble gets reinflated. Expect home values to stay where they are!
4) Home owners who refinanced their floating rate loans to fixed rate loans get screwed again! ARMs are now all the rage again!
5) Subprime lenders get more time to unload and mark to model their worthless paper.
6) Stock market gets a 300 point boost! Expect more to come. We're coming up on elections!
7) Gold keeps going higher. What can you expect!? When you keep printing money, people run for the hills!

Uncork the champaign. Say hello to Ben Bernanke - the Web 2.0 version of Alan Greenspan. We will just inflate our way out of our problems.

Wesco Annual Meeting Notes 2007

2007-09-17T08:14:00.000-07:00

Whitney Tilson took notes at the Wesco Annual Meeting this year - 2007. Charlie Munger, who is Warren Buffett's partner, talked about various investing themes. One of the shareholders of Wesco Financial (AMEX WSC) asked an interesting question, "Is the China stock market a bubble?" Charlie Munger responded as follows.

Is the Chinese stock market a bubble?

The Chinese market is divided into two parts: Shanghai and Hong Kong. The Shanghai market shows some signs of gross excess and I have no interest in what’s traded there given prices at present. But there are other parts of the Chinese market that are at least interesting. We don’t comment on individual securities for obvious reasons.

Note the annual shareholders meeting happened on May 9, 2007 which is about 4 months ago - and subsequently the China stock market has gone up even higher! It just goes to show that bubbles can go on much longer than you expect them to - until they've proven everyone wrong!

New Apple iPOD Nano Commercial

2007-09-17T01:25:00.000-07:00

The Brand new spanking Apple Inc. (Nasdaq AAPL) iPod Nano commercial features a song by Leslie Feist "1234." The new IPOD nano plays video.

Here are the lyrics used in the new iPod Nano ad:

One Two Three Four
Tell me that you love me more
Sleepless long nights
That is what my youth was for

Old teenage hopes are alive at your door
Left you with nothing but they want some more

Oh, you’re changing your heart
Oh, You know who you are

Setara Qassim Is Too Sexy To Fly

2007-09-15T07:01:00.000-07:00

Is there such a thing as being too sexy to fly Southwest Airlines Co. (NYSE LUV) ? Apparently yes! Setara Qassim wore a revealing halter top on her flight and was asked by the flight attendant to cover her plunging neckline, short skirt, and well ... busty bust. When interviewed by reporters, Setara complained that the flight attendant told her she was too sexy to fly! "The flight attendant came up to me and asked me if I had a sweater and I said no because why would I pack a sweater in the heat. So, I asked her why and she said I need to cover up." The flight attendant asked Setara too bundle herself up in a blanket. Maybe they should have just asked her to wrap herself up in sheets like an Arab! Seriously! WTF?! How can you blame a lady for having nice proportions! I suspect that the flight attendant was just jealous!

Southwest Airlines wouldn't comment on the incident, but said that they let their employees make the judgment call on passenger’s outfits. “We don’t have a dress code. We rely on our employees to use common sense good judgment and good taste. It’s so rare for us to have to address a customer’s clothing issue."

Apparently, this was the second incident in a week at Southwest! Kayla Ebbert, a 23 year old blonde, was booted from the plane because her clothes were too revealing. The reason was her mini skirt and the snug fitting tank top. An airline employee asked her to change her miniskirt, top and sweater or get off. In a compromise, Ebbert was allowed to stay on the flight to Tucson, AZ after pulling her skirt down a bit and her top up. If you ask me, there's nothing revealing about that outfit she's wearing.

Shanghai World Financial Center Looks Like a Giant Bottle Beer Opener

2007-09-15T06:43:00.000-07:00

The tallest building in China is the Shanghai World Financial Center. Look at the picture above and I see a giant beer bottle opener. The building cost $1 billion and was built by Mori Building, a Japanese company that started the project in 1994. It took over a decade to complete because of the problems in Japan during the mid 90s. Mori Building is one of the largest privately held property developers in Japan and developed Mori Tower in Roppongi Hills which is where alot of the tech startups are located in Tokyo.

The Shanghai World Financial Center has 101 stories / 1614 feet high and is the second tallest building in the world. The tallest building in the world will be the Al Burj which is a 160 story / 3445 feet high building in Dubai.

When completed, Shanghai will have the two tallest buildings in China - the World Financial Center and the Jinmao Tower next door.

Check out the live camera view of the Shanghai World Financial Center. It's pretty cool. You can see the WFC and the Jinmao Tower to the right of it.

Northern Rock Goes Bust - Customers Run on Bank

2007-09-14T12:03:00.000-07:00

Northern Rock customers are stuck between a Rock and a hard place! Lines are stretching out the door at Northern Rock (London NRK.L) with depositors waiting to take all their money out of the bank. Fears are that Northern Trust has gone bust and customers are running on the bank, doing what British people do best - which is queuing up!

The stock is down 30% because the darned mortgage lender couldn't stop itself from lending to all those poor folks who couldn't afford to pay in the first place. It's one thing to get a bailout from the Bank of England. Totally another, when the day after the bailout, the sh** hits the fan!

At least the management knows how to play charades. Speaking like a true deadbeat, the management team of Northern Rock boasted how they have an unlimited line of credit from the Bank of England. Asked if he or his customers should be worried, Mr Applegarth (some shmuck) replied: "Knowing that we have an uncapped facility with the Bank of England, you don't get better than being banked by the Bank of England."

Right! JP Morgan would roll over in his grave if he heard that from one of his branch managers!

OMG! EONS is RUN BY MORONS

2007-09-14T11:15:00.001-07:00

Have you seen the Eons commercial? It's the lamest ad in town. Eons is supposed to be a social networking site for 50+ year olds. WTF? 50+ year olds don't need social networking! As if that weren't enough, they put together a commercial spot where the person in the ad looks like a 30 year old. Come on people! Wake up! If your target audience is 50+, try to get someone 50+ in the ad!

By the way, this is the same company that raised $32 million from Sequoia Capital and General Catalyst on the backs of the founder's reputation - which has gone up in spoke - being a founder of Monster.com. They just laid off a third of their staff. Hopefully, they got rid of the moron who appeared in the ad.

There is No Vanessa Hudgens Sex Tape LOL!

2007-09-14T05:23:00.001-07:00

If you're looking for the Vanessa Hudgens sex tape, you've been had! Apparently, the rumor started when a satire site decided to get creative and spread the rumor that the clip shows Vanessa sitting in front of a Christmas tree wearing only a Santa hat, pasties to cover her breasts and a red thong with mistletoe decoration. Slowly Vanessa took off her ‘attributes’ one by one and murmured “I want Santa come up my chimney because I’ve been a good little girl this year.’ at the end of her ’striptease’.

Sorry people! You'll just have to settle for the Vanessa photos.

Goldman Sachs Global Alpha Blows Up Again!

2007-09-14T05:11:00.000-07:00

Goldman Sachs Global Alpha blew up again. It is down 22% in August 2007 according to a "Dear Investors" letter from Goldman Sachs Group Inc. (NYSE GS), the venerable and occasionally heretofore erstwhile slimy investment bank. LOL! The only solice that investors can relish in is that the largest investors in the fund are Goldman Sachs partners themselves - former and current. The poor risk management of the fund shows that even funds that say they are risk neutral can run into problems. You might remember they also had problems last August - like in 2006!

The problem at GS Alpha? They shorted Asian bonds! Oops. Japan didn't raise rates as fast as they hoped.

August was the worst month in the fund’s 12-year history; it was down 22.7% last month alone, according to a recent letter to investors. So far this year through the end of August, it was down 33.4% due to bad bets on everything from the Australian dollar, the Norwegian stock market and Japanese government bonds. The letter gave no indication about how the fund was faring this month. Over the past 12 months, the fund has lost 37% of its value.

Bummer! Better luck next time.

Cash Warren Dumps Vera Mishina - Cheats on Jessica Alba Back Again!

2007-09-14T04:44:00.001-07:00

Cash Warren dumped Vera Mishina after having a one night stand with her. Now, he's trying to get back with Jessica Alba again. What an idiot! The Pulse says Cash cheated on Jessica Alba by bringing Vera back to his hotel room at the W Hotel in New York. The 20 year old Vera spilled the beans after Cash dumped her. Come on Vera. You're a blonde and a little ditzy, but don't act suprised!

Mr. Cash, you shouldn't piss off these russian ladies. They can be mighty feisty!

The model reveals, "On the night he picked me up and got me into his bed, he was acting like the world's biggest single man. But I found out that only hours after being with me, he was on a plane back to L.A., where he was then photographed having dinner with her (Alba) and acting affectionate."

The spurned model adds, "If he had told me they had gotten back together there's no way I would have allowed him to sleep with me. I now feel like all he wanted was a one-night stand. I feel used. Cash wasn't very honest to lead me along like he did. Jessica may want to rethink taking him back. He cheated on her the minute he was away from her."

Oops!

Counterfeit iPhones Flood the Streets of Taiwan and Shanghai

2007-09-12T12:35:00.000-07:00

Steve Jobs used to say, "Good artists copy. Great artists steal." If that's the case, then merchants in Taiwan are incredible! Six months before the iPhones launched in the US, merchants in Taiwan and in Shanghai started selling fake iPhones to kids on the streets that look exactly like iPhones. They look exactly like the one pictured above. It's hard not to be flattered if you're Apple (Nasdaq AAPL).

Ben, the iPhone peddler, says he has sold over 10,000 iPhones since the summer in China, Hong Kong, Singapore, Malaysia, Australia and the U.S. The knockoff phones are produced in batches of 1,000 at a factory in Shenzhen, China, across the border from Hong Kong, says Ben, 26. He advertises his phones on the Internet and sells them for NT$8,900 ($270). On Sept. 5, Jobs cut the price of the top iPhone to $399, a $200 reduction. You got to love them! If fakers can sell them for $270, then I'm sure more price cuts are coming.

``The guts aren't hard,'' Ben says. ``The hard part is the design and the exterior.''

In Shanghai, the knockoffs are kept under the counter of a cramped market stall on the sixth floor of a trash-strewn building near the railway station.

Britney Spears Goes Panty Less Again - Gone Flashing Photos After VMA

2007-09-11T03:06:00.000-07:00

Britney Spears went panty less again - this time right after the VMA! In an effort to show that her crotch is still functional after delivering two babies and a VMA dance off, Britney decided to go pant less after the VMA to get more attention after she performed her new song - the first one after four years of resting in peace and raising her kids. The song was called Gimme More - which is what fans had hoped she would do, except I think fans were hoping that she would lose not only her panties, but also her top.

Disappointed fans need not fret. After going blonde, going panty-less, I surmise that going top-less is the only stunt left for Britney Spears. Peace out to the lucky fool slash paparazzi who gets those million dollar shots!

Shanghai Stocks and Hong Kong Stocks Are Converging

2007-09-11T01:48:00.000-07:00

I have a theory that stocks that are dual listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange will converge in price. That is because the P/E of the stocks listed in Shanghai are on average 2x the P/E of the dual listed stocks in Hong Kong. Today's market action proves it is starting to happen. The Shanghai stock index fell about 4.5% while the Hong Kong market fell 0.22%

^SSEC Shanghai Composite 5,113.97 -241.32 (-4.51%)
^HSI Hang Seng 23,946.27 -53.43 (-0.22%)

This is a unique example of free market economics at work. In a perfectly free market with no arbitrage opportunities, one would expect two geograpically similar markets like Shanghai and Hong Kong to trade at a similiar P/E. Today, they are not. Since Shanghai was a closed market, it traded at a significant premium. In economics this is the theory of segregated markets in action, where price premiums exist because investors in mainland China are unable to invest in the Hong Kong stock market. High demand and scarcity of stocks lead to higher prices in Shanghai. The convergence had to wait until the loosening of capital flow. That is happening now.

Ever since the Chinese government allowed mainland investors to invest in Hong Kong, Hong Kong stocks have been performing much stronger than Shanghai stocks. Some stocks I follow are Aluminum Corporation of China and China Eastern Airlines and China Southern Airlines. You can see that stocks like Chalco are demonstrating the rule of converging. Chalco rose today in Hong Kong even as their Shanghai listed counterparts tanked. That's because the Shanghai listed shares of Chalco Shanghai trade at a greater than 100% premium to Chalco Hong Kong. That is an enormous price premium that would not exist in arbitrage free markets. An investor in a free market would short Chalco Shanghai and buy Chalco Hong Kong - assuming no limits on shorting (which is of course not the case since shorting stocks is not allowed in Shanghai).

The chart below shows that Aluminum Corporation of China Limited aka Chalco rose 5.55% in Hong Kong while the Shanghai shares fell 0.44%
Hong Kong (2600.HK) 20.35 +1.07 (+5.55%)
Shanghai (601600.SS) 47.01 -.21 (-.44%)

Chalco is not the only stock that is starting to converge in price with its Shanghai counterpart. China Eastern Airlines fell in both Shanghai and Hong Kong but fell more in Shanghai than in Hong Kong. That is the expected price action based on the theory of arbitrage free conditions in perfectly efficient markets. The charts below show the price action.

China Eastern Airlines
Hong Kong (0670.HK) 6.68 -.04 (-.60%)
Shanghai (600115.SS) 16.74 -0.28 (-1.65%)

The market is not perfectly efficient yet. You can see in the charts below that China Southern Airlines rose more in Shanghai than in Hong Kong. That is not expected behavior. One would have expected the opposite.

China Southern Airlines Limited
Hong Kong (1055.HK) 10.22 +0.16 (+1.59%)
Shanghai (600029.SS) 23.25 +0.97 (+4.35%)

I will be the first to admit that this is a very exciting time in the development of the Chinese stock market. The adoption of market based policies is taking hold every day as seen from the convergence of the prices of stocks listed on the "free market" of Hong Kong and the "insulated market" of Shanghai. History is being made. It will be painful for Shanghai listed stocks and it will be positive for Hong Kong listed stocks which have been neglected. The removal of market inefficiencies is the cost of moving to a free market, and it will be the first real lesson for mainland Chinese investors who have tasted the sweetness of pure profits up until now. Investors will learn that not only can markets bring tremendous profits when they go up, but they can also bring devastating losses when they fall.

Delta Airlines Charges $50 for Standby - Ouch Ouch Ouch!

2007-09-11T01:41:00.000-07:00

Delta Airlines Inc. (NYSE DAL) is turning every travel option into a revenue generating opportunity. I just learned at the check in kiosk that there is a $50 fee for standby on Delta. On the plus side for Delta, it means less people going standby and less hassle for gate agents. It also means an extra $50 per ticket change fee! On the minus side, it means fewer full planes. I don't know what the impact will be, but I do think that travelers like me are somewhat unhappy at having to pay $50 to fly standby. That sucks. They also started charging an extra $5 each way on one way tickets and $10 for roundtrip. Ever since they went public in April, Delta has become seriously serious (lol!) about making some serious money at the expense of travelers like me!

MacDonalds Employee Thrown in Jail for Serving Salty Burger

2007-09-10T05:34:00.000-07:00

Serve a salty burger? Get sent to jail. A MacDonald's employee found that out the hard way after spilling salt over a police officer's burger. The cop returned with the burger, questioned her, and threw her in the slammer! The employee was charged with serving a the burger "without regards to the well-being of anyone who might consume it." LOL! McDonald's Corporation (NYSE MCD) beware, you could get sent to jail for serving over salty, un-nutricious burgers! Seriously, it would be alot cooler if they had actually threw her in jail for recklessly endangering children with high transfat fries.

Hong Kong Stock Exchange is Smoking Hot - Stock Up 10x over past 2 years

2007-09-09T22:46:00.000-07:00

The Hong Kong Stock Exchange and Clearing Corporation is smoking hot. The chart shows that shares are up about 10X in the past 2.5 years up from around 15 HKD to over 185 HKD today. Shares of Hong Kong Exchanges and Clearing Ltd. (hkeX) (HK:388 185.20, +27.20, +17.2%) , operator of the local stock market, surged more than 17% to a record Monday after the Hong Kong government disclosed Friday it has become the largest shareholder in the company. The Hong Kong government said Friday it has expanded its holding in the bourse operator to 5.88% and will hold the stake in its Exchange Fund. Analysts said the enlarged share holding may reflect the government's interest in becoming more involved in the daily operations of HKEx as the local stock market strengthens ties with financial markets in the mainland. Shares of HKEx rose 17.2% to a record HK$185.20 at midday, bringing its year-to-date gain to 73%.

The craze over stock exchange stocks has clearly taken over this particular stock. The Hong Kong Exchange has a market cap of 198 billion HKD which is rougly $20 billion. The P/E multiple is 50x earnings. There are more headwinds in this story than most people see. One particular issue is that Beijing is discouraging the largest and best companies in China from listing in Hong Kong and instead encouraging them to list in Shanghai. That's why Bank of Beijing is listing in Shanghai (Xinhua) instead of doing the traditional dual listing - first in Hong Kong and then in Shanghai. Its 15 billion yuan IPO was supposed to be done in Hong Kong but regulators did a convincing job of preventing that from happening - simply by denying them the license. Anyhow, the winds are blowing a different way now.

Amazon Launches Where's Waldo Search for Steve Fossett

2007-09-09T17:30:00.000-07:00

Steve Fossett may have taken his final adventure when the hot air ballooning adventurer's airplane disappeared over Nevada. Ballooning is a fairly dangerous sport because you're basically dangling in the air hoping that the wind doesn't swoop you away. But ironically, it wasn't ballooning that did him in. It was merely flying an airplane. Amazon.com has launched the Web 2.0 version of a Where's Waldo! search for Steve Fossett. Amazon.com, Inc. (Nasdaq AMZN) has setup a webpage to help find Steve Fossett by reviewing 50,000 satellite images of the areas where he is likely to be.

Finding people using satellite images is a fairly novel idea. What's even more unique about Amazon.com's search for Steve Fossett is that they are asking users to review the satellite photos - lots of them - using Mechanical Turk. It's called Mechanical Turk because people are performing very specific tasks rather than computers. In this case, you, the Mechanical Turk, will be reviewing millions of photos by hand and indicating whether you found him. I was always a big fan of Where's Waldo? and this search will be fun for Where's Waldo fans worldwide!

On Monday, September 3, 2007, Steve Fossett , the first person to fly a plane around the world without refueling and the first person to fly around the world in a balloon went missing in Nevada. An airplane he was flying failed to return. No one has any idea where he is.
Through the generous efforts of individuals at several organizations, detailed satellite imagery has been made available for his last known whereabouts.
HITs have been created to ask volunteers to help review these images and flag potential areas of interest which will be instrumental in the search and rescue efforts.
If you are interested in helping, please click here to participate in the search effort.

This is a really cool way to use technology. Fossett made his fortune trading on the Chicago Board Options Exchange.

Quick Hits That Caught My Eye

2007-09-09T00:27:00.001-07:00

China is continuing to promote and encourage outbound investments to cool off the asset bubble, says Zhou Xiaochuan, governor of the People's Bank of China. It will become easier to convert RMB to foreign currencies and vice versa, and also for Chinese banks to setup branches abroad.

``We will remove unnecessary controls on reviewing sources of foreign-exchange funds, and on foreign currency purchase and remittance procedures to allow companies to use their own funds or converted currencies to invest abroad,'' Zhou said today.

China wants more investment in R&D and technology businesses according to Wu Yi, vice premier.

``We strongly recommend foreign investment take an active part in the government's plan to revitalize the northeast rustbelt region and to develop central and western China's economy,'' Wu said today, citing her government's plan to rebalance the growth of the world's fourth-largest economy.

``We welcome foreign companies to set up more research and development centers, and they can also cooperate with Chinese companies to jointly explore overseas market together,'' Wu said today.

China this year scrapped tax rebates on more exports, raised export tariffs and increased levies on low-end manufacturers to curb growth of exports where foreign investment is heavy and decided to make income tax rates for foreign and domestic companies a unified 25 percent, ending the lower rates foreign investors have enjoyed for the past decade.

Beazer Homes USA Inc. defaults on $1.2 billion in debt (NYSE BZH) and claims it has not.

Gulf nations like Saudi Arabia are running into problems with developing a single currency for the Arab region.

Bahraini Princess Elopes with a US Marine

2007-09-09T00:03:00.001-07:00

It's interesting what kids do, and it's even more interesting what royal kids do. 18-year old Meriam Al Khalifa made headlines when she eloped with a 25 year old US Marine. Meriam was a member of the royal family of Bahrain looking for some action and she sneaked out o the country with her boyfriend, a US Marine stationed there. She was a Muslim. He was Mormon. The relationship: starcrossed from the beginning.

Meriam sneaked out of the country posing as a US marine. They got married in Vegas. NBC made a made for TV movie called the Princess and the Marine. He went home to the US and got demoted from the military and began a parking attendent. She partied hard in Vegas. They got divorced. What an adventure!