Blog Posts by Henry Blodget

After Groupon reported its Q4 earnings yesterday, I suggested it was time for all the folks saying the company "can't make money" to finally admit that they're wrong.

And it is time for that.

Groupon's business generated a nice operating profit and cash flow in Q4, while still posting modest growth. And the company expects to post more growth and profit in Q1. So it obviously can make money.

(The cool-kid argument had been that, once Groupon cut marketing costs, revenue would tank because the company was "just a Ponzi scheme." That theory, however popular, has been proven wrong.)

True, Groupon lost money on its net income line in Q4. But this was the result of a bizarrely huge international tax bill, which is not what Groupon dissers were referring to when they opined that Groupon couldn't make money. This big tax bill will apparently persist for a few quarters, but it has nothing to do with the company's operating business, which is now profitable.

But...

Just because it's time for

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A big potential investor in the Facebook IPO, the California State Teachers Retirement System, has sent a letter to the company complaining about the amount of voting control in the hands of Facebook's 27-year old founder, Mark Zuckerberg.

Like other media-tech moguls, Mark Zuckerberg has decided to keep control of his baby, even while the company sells shares to the public. The class of stock that Mark Zuckerberg owns carries greater voting rights than the class of stock the public will own, giving Zuckerberg disproportionate control relative to the size of his stake in the company.

This is the same strategy that the founders of other hot tech companies like Google have used, and it has long been a technique used in the media industry: Rupert Murdoch, for example, controls a lot more of News Corp. than his financial stake would imply.

So, is this a horrible abuse of power?

No, says Rob Cox, the U.S. editor of Breaking Views. The

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There isn't a sentient being on the planet who believes Greece will ever pay its debts, and, thankfully, that condition has been dropped from the latest round of negotiations.

Now, Greece is trying to negotiate a "voluntary" restructuring with its creditors, one that will result in those creditors losing at least 70 cents on the dollar but also one that will someone not be declared a "default."

The latter is important: If Greece were to actually default, instead of just not paying its debts, the event could trigger credit default swaps written by banks and insurance companies to protect against a default. And this, in turn, could require banks and insurance companies to pay out claims, which could deplete their capital and, possible, render them insolvent. But because Greece's default will be declared "voluntary," it has been decided that this event will not trigger credit insurance.

That's the good, if absurd, news.

The bad news is

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Friday morning the U.S. finally got a monthly jobs report that was unequivocally good: According to the BLS, 243,000 jobs were created in January, way more than expected.

Of course, this immediately led to a political fight about who or what is creating those jobs.

One of the most commonly repeated theories about job-creation is that "rich people create jobs"--specifically, rich investors and entrepreneurs who build companies that eventually employ hundreds or thousands of Americans.

This theory is often used to justify very low taxes on investors and high-income earners, under the theory that such folks have to be given an incentive to "create jobs."

But the trouble with the theory, says Nick Hanauer, is that it's just wrong.

Hanauer, an entrepreneur and investor and the author of The Gardens of of Democracy, built an online advertising firm called aQuantive that he sold to Microsoft for several billion dollars. He was one of the

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The stock market got off to a surprisingly strong start in January, posting the best first-month results in more than a decade.

This despite the fact that the economy itself continues to be disappointing, with weak job creation, high unemployment, and sluggish GDP growth.

But Barry Ritholtz, the chief investment strategist at FusionIQ, isn't surprised by this. Having come into the year "fully invested" in stocks, he has been looking for reasons to sell, and he just hasn't seen any yet.

But what about the concerns of fund managers like John Hussman, who say that market conditions like today's almost always lead to sharp pullbacks over the next six months?

Barry's not buying it--at least not yet.

All the free money the Fed and the European Central Bank are pumping into the system is flowing straight into asset prices. And for now, anyway, this ocean of cash is drowning concerns about fundamentals.

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After months of breathless anticipation, Facebook is finally preparing to file documents in preparation for an IPO.

According to reports, the company will file a prospectus with the SEC this Wednesday. This document should lay out the company's financials and business in extraordinary detail and start the clock running for the IPO itself, which is expected to come this spring.

Facebook's IPO is expected to be enormous—one of the biggest in history. It will also quickly give "liquidity" to more than 1,000 paper-millionaires.

Facebook's stock has been trading at a valuation of about $80 billion in the private markets, and the IPO is expected to value the company at $75-$100 billion. Given the extraordinary consumer awareness of Facebook, some are expecting a huge IPO "pop" when the shares start trading, and there will be presumably be a colossal amount of hype around the deal in the weeks leading up to the pricing.

Those looking for a

Provided by Business Insider:

I spoke with Yale professor Robert Shiller in Davos earlier this week.

Shiller has correctly identified (in advance) two major price bubbles in recent decades—the stock market bubble of the late 1990s and the housing bubble of the late 2000s.

One of the key attributes of most bubbles is that, when they finally burst, prices tend to "overshoot" on the downside, crashing well below fair value until all the exuberance is wrung out of the system.

So is that what's going to happen to house prices this time? Or, as many people think, are house prices finally "bottoming" and getting ready to blast higher again?

BLODGET: A lot of people have just called the bottom in the housing market in the United States, and there's been some okay data recently. Is that your take? That finally housing prices are bottoming?

SHILLER: When people phrase is that way, they say 'we've reached the bottom.' That suggests that we have the expectation of a major turning point right now.

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I had breakfast yesterday with Steve Roach, one of Wall Street's most respected economists. Steve is now the chairman of Morgan Stanley Asia and a professor at Yale.