Posts by Pras Subramanian

  • Bears on parade: Wall Street market downgrades just beginning

    Pras Subramanian at Yahoo Finance 2 hrs ago

    Is a new reality dawning on Wall Street? Some major financial institutions are now cutting their once bullish market forecasts after August’s steep drop. Morgan Stanley (MS) dropped its S&P 500 (^GSPC) target today, citing slowing growth and a looming Fed rate hike. This followed a similar cut by Credit Suisse (CS) last week, which trimmed its year end S&P 500 forecast to 2,100.

    As the bears rise from their slumber at the big banks, Kathy Boyle of Chapin Hill Advisors believes their roars will start getting louder. “ I think [Wall Street banks are] going to have to continue to lower their sights down unfortunately,” she says in the attached video. “Wall Street is a distribution mechanism - they make the most money from their investment banking side, where they create products basically whether they’re mutual funds or ETFs… So you're never paid to be bearish on Wall Street.”


  • Why Tesla wants Obama’s help in China

    Pras Subramanian at Yahoo Finance 1 day ago

    In just a few weeks, China’s President Xi Jinping will be in Washington for a much hyped state visit to the U.S. While there will be much on the agenda between the two top world powers, one small automaker will be looking to get a foot in the door.

    In a bid to boost prospects in China where sales are lagging, the Wall Street Journal reports Tesla Motors (TSLA) is urging the White House to press China on loosening auto-industry restrictions during President Xi’s visit.

    As Yahoo Finance columnist Rick Newman notes in the attached video, Tesla and other automakers face numerous hurdles in China. “ In order to manufacture and sell heavy products like automobiles in China, the basic rule is you have to have a joint venture with a Chinese partner so that you can get in on this huge market,” he says. “It also gives some of the benefit to the Chinese partner - they get to learn about your technology, they learn Western techniques and so forth.”


  • Why ‘Flash Boys’ are here to stay

    Pras Subramanian at Yahoo Finance 5 days ago

    It’s been called the ‘Flash Boys’ case - and now it might be over, in a flash. Barclays (BCS), along with major U.S. stock exchanges like the Nasdaq (NDAQ), NYSE (ICE), BATS Global Markets, and the Chicago Stock Exchange won dismissal of a suit brought by pension funds and other investors accusing them of rigging the markets. The suit alleged Barclays and the exchanges gave high frequency traders preferred treatment through the use of “complex order types” and access to data feeds of order flow. These suits were brought right around the time Michael Lewis published Flash Boys: A Wall Street Revolt , where Lewis depicted an exchange and dark pool regime where high frequency traders and Wall Street pros were getting an advantage through front running, latency arbitrage, and a host of other high-speed trading techniques. Judge Jesse Furman of the Southern District of New York ruled the exchanges were immune from suit because federal law placed the SEC and the Department of Justice in charge of making sure the exchanges played fair.

  • Crouching Tiger, Hidden Dragon: Time Warner’s sneaky China play

    Pras Subramanian at Yahoo Finance 7 days ago

    Despite growing concern in China over a slowing economy, Hollywood isn't flinching. In fact, one studio is raising the stakes.

    Studios have been able to release a select number of bigger films in the Chinese domestic market, but they’ve been limited by quotas imposed by the government. But now, Time Warner’s (TWX) Warner Brothers studio is in talks to produce local language movies in China, through a joint venture with a state-backed firm.

    A joint-backed venture would allow Warner Bros. and other studios to release movies in China without the imposition of a quota, and grab more market share in a growing market.

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  • Murdoch begins ‘draft Bloomberg’ movement as market uncertainty rises

    Pras Subramanian at Yahoo Finance 8 days ago

    The rumblings are beginning.

    Just as the Democratic party considers drafting a 2016 challenger into take on a floundering Hillary Clinton, GOP voices are speaking up about shaking up their primary race as well.

    Conservative stalwarts Bill Kristol is leaving the door open for an “October surprise,” even suggesting the possibility that a business person, such as a “saner and sounder” version of Donald Trump, could emerge.

    Now enter a man who knows a thing or two of drumming up attention (and selling papers) - Rupert Murdoch. Just as massive stock drop has many investors eyeing the financial headlines, the media mogul is stirring the pot, trying to draft fellow billionaire businessman Michael Bloomberg into the presidential race.

    Murdoch wrote in a tweet last night, “with Trump becoming very serious candidate, it's time for next billionaire candidate, Mike Bloomberg to step into ring. Greatest mayor.”

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  • Why you'll be paying a 'Netflix tax' soon

    Pras Subramanian at Yahoo Finance 11 days ago

    They’re calling it a ‘Cloud Tax,’ but it is sounding more to consumers like a Netflix tax. As more consumers turn to streaming video on services like Netflix (NFLX) and Hulu, and music on Spotify, states are looking to fill the taxes lost on the sale of tangible media goods.

    Annual U.S. sales of DVDs and Blu-ray discs has fallen from a high of $20.2 billion a decade ago to around $10 billion, according to data from the Digital Entertainment Group, while the Recording Industry Assocation of America reports shipments of CDs fell from $13.2 billion in 2000, to $1.9 billion last year.

    In response, the city of Chicago is experimenting with having local taxes collected on cloud computing services and streaming music and video. Other state governments like Tennessee and Idaho are experimenting with new taxes as well.

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  • Why the future is cloudy at The Weather Channel

    Pras Subramanian at Yahoo Finance 12 days ago

    When it comes to M&A on Wall Street, the old saying “When it rains, it pours,” usually applies. And while that certainly is the case with recent mergers in the world of media, it is quite apt when talking about The Weather Channel. Several reports claim Comcast’s (CMCSA) NBCUniversal unit and its private equity partners have hired bankers to explore a sale. NBCUniversal and the private equity investors paid $3.8 billion for the Weather Channel back in 2008.

    On its face, as a cable operator and content creator, it doesn’t necessarily make sense why Comcast would want to unload The Weather Channel, which is ostensibly a money-making venture. Yahoo Finance senior columnist Mike Santoli has an idea why.

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  • World Cup sponsors to play advantage at FIFA meeting

    Pras Subramanian at Yahoo Finance 13 days ago

    It’s damage control time for soccer’s FIFA. Reuters is reporting every soccer fan’s favorite dysfunctional, semi-autocratic governing body is meeting behind closed doors in Zurich with key World Cup sponsors tomorrow, as the company tries to contain the fallout from the massive bribery scandal that has ensnared 9 officials so far.

    While FIFA president Sepp Blatter is still around until he steps down in February, it’s not a stretch to imagine FIFA officials will send Sepp out on a fact-finding mission to some remote area of the globe while this crucial meeting takes place.

    Big World Cup sponsors like Coca-Cola (KO), Visa (V), and McDonald's (MCD) are demanding changes - and as many fans and commentators will tell you - rightfully so. Yahoo Finance’s Mike Santoli believes the sponsors, who pay hundreds of millions of dollars for exclusive rights, can really put the screws to a squirrely FIFA.


  • Major win for Shell as US grants Arctic drilling permit

    Pras Subramanian at Yahoo Finance 14 days ago

    It's “Drill, baby, drill” in Sarah Palin's home state. After years of battles with environmental groups, Royal Dutch Shell (RDS-A) was given final approval by the federal government to drill an exploratory well for oil and natural gas in the Arctic Ocean near Alaska. It’s a major win for big oil, and one that has environmental groups vowing to keep fighting.

    In the near term, however, Shell is one step closer to tapping into a huge reserve located in the remote Arctic. However, one need only look at the currently sliding price of oil to ask whether the industry really needs to drill for more oil when a supply glut currently exists.

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    While the opening of fields like those in the Arctic are a huge boon for big energy, Santoli surmises that won’t have an effect on their slumping stock prices. What they will do, however, is keep dividend investors happy.

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  • How the Bezos cult of personality drives Amazon

    Pras Subramanian at Yahoo Finance 15 days ago

    Amazon (AMZN) customers want to have it all. From TVs to diapers to the company’s original shipped goods - books, the company likely has most Americans covered. But is there another ‘hidden’ cost for getting your copy of Go Set a Watchman with Amazon Prime same-day delivery?

    The New York Times, in an expose of sorts, depicted a company and culture with a “bruising” work culture, fueled by confrontation and casting aside of those who weren’t deemed grade A employees. Amazon CEO Jeff Bezos responded to the New York Times article that described his company as having a harsh and back-stabbing work environment. He wrote in a letter to employees: “I strongly believe that anyone working in a company that really is like the one described in the NYT would be crazy to stay. I know I would leave such a company.” He then asked employees to report any abuse they witness directly to him or HR.

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