The Chinese government was attempting to gain credibility by attacking a very visible company. Now when they go after US companies, people will be less likely to accuse them of favoritism. Nothing happens by accident in China.
I don't think anyone could have foreseen this crash. Yahoo stockholders lost about $5 billion in the last two days. Expectations were high in many dimensions, and all failed.
I don't bet on recessions, I try to avoid them. A recession hits the USA every 6 to 7 years. The last was in 2009. I was concerned in early 2014, but felt we were going to coast for awhile before conditions headed down.
Structural changes have been occurring throughout the world. There is less and less spending for plant and equipment as compared with the amount devoted to consumption. Wealth creation comes about by way of investment in productive plant and equipment, so the pace of wealth creation is dropping. This began in the USA in about 1980, and is now spreading to other countries. The middle class will have to adapt to a lower standard of living, or embrace a Marxist society as we are seeing happen in Greece, with the primary purpose of redistributing available wealth.
The important thing is that we're losing. Japan won for a while. China has been winning for the last ten years, but it looks likely that the EU will take the crown late this year. India will soon enter the game.
What you say is generally correct. When expectations for the economy are positive, investors tolerate a poor performer better than otherwise.
There's a fairly large amount of error in the weekly numbers. Claims had been trending down until October of last year, at which time the trend turned upward. Fast food joints are probably just putting their people on reduced hours, which will result in a lag in claims.
In the last couple days we've been seeing increased concern spreading throughout the market. JCP is not immune.
Oil continues down, and will probably bottom somewhere in the 30's. Contrary to public opinion, people are not taking their savings in gasoline and spending it at the mall. Let's face it, $2 a gallon is still a lot of money. Tell me when it reaches $0.50 per gallon. The reason for the decline in oil is production in excess of consumption because the economy is just not doing well enough to consume added supplies, which is not a good thing.
Greece is a wild card. The new government appears to be more closely aligned with Russia than the Euro zone, something that I think everyone should find to be a tad alarming. I would be surprised if Greece had any more free elections for many years; Tsipras strikes me as a person with no intention of ever relinquishing control.
Lastly, the Fed appears to be disconnected from reality, though not as badly as under Bernanke. Any talk of an interest rate hike will be quelled by the continued drop in the 10YR note rate.
The markets never value anything properly. The spinoff puts all of the 385 million shares on the market at the end of the lockup. So with this arrangement, MM has flooded the market with BABA shares. That caused BABA to fall and Yahoo went with it. This may prove to be a short-duration over-reaction.
Keep in mind that the overall market also fell out of fear of world wide deflation. It's hard for any stock to rise under such circumstances.
The announcement yesterday had no material change on the value of Yahoo. The market price of Yahoo did not reflect a tax saving today because there was no tax saving, only a deferment. What's important now is whether Alibaba can repatriate the shares at a lower tax rate, or even wants to. If they can make a couple billion dollars by doing so it would seem to justify a couple days work.
Yahoo's announcement may have hurt BABA shares because it made clear that the full 384 million that Yahoo currently holds will be actively traded in the form of Spinco at the end of the lockup. If I were running Alibaba I would be pretty angry about the whole thing.
The best thing that could happen now is for someone to come forward and buy Yahoo after the spinoff, and put MM out of her misery. She completely unqualified to run a company.
The shares in Spinco will sell at a discount because the transaction is not tax free, only tax deferred. The book value of Spinco will be about 66% of the value of the BABA shares, since the unpaid tax will be recorded as a liability on the balance sheet. MM has screwed up again.