Eagle Eye Opener

‘Chinese Google’ Looking for $8 Billion in Handouts; Speaking of the FaceBook Face-Plant; End of the 30-Year Bond Rally?

‘Chinese Google’ Looking for $8 Billion in Handouts (Bloomberg)
Alibaba Group Holding, Ltd is China’s biggest e-commerce company, and it is currently going door-to-door on Wall Street looking for handouts. So has the largest online business in the world’s second-largest economy hit the skids? Not really, but it is trying to pull together funding ahead of its product expansion plans, such as purchasing China’s biggest Twitter-like service and introducing a line of smartphones. Or, just perhaps it is trying to pull together another $8 billion in 3-5 year loans in case its imminent initial public offering does a FaceBook face-plant.  Should Alibaba come up far short of its potential $100 billion initial public offering (IPO), it’ll need every spare billion it can panhandle to fund its mighty plans.

Speaking of the FaceBook Face-Plant… (Reuters)
Is the Internet’s pace of change frustrating even the industry’s 800-lb gorilla as it plans to rule the online world? It appears so. As newer services continue to gain a foothold in the online world, FaceBook’s had to dial back some of its more grandiose plans, such as taking on search giant Google. The writing may have been on the wall as far back as last May, when its IPO belly-flopped. At around $23 each, today’s FaceBook shares are still 40 percent lower than the IPO price. It is unclear if the San Francisco-based social media giant began rethinking its plot to rule the world then. What is clear is that Mr. Zuckerman’s company is now nine years old, and that’s certainly middle age in online years. But is it too old to change?

End of the 30-Year Bond Rally? (Bloomberg)
Richard Fischer, president of the Federal Reserve Bank in Dallas, is continuing to bang the drum loudly for an end to quantitative easing (QE), as he sees the three-decade-long rally in bonds coming to an end. And when it does, he doesn’t want the United States to be caught with $85 billion of bad assets. However, Fisher’s rationale could be just as full of holes as everyone else’s who has been trying to make a call on which way the bond market will go. In speaking to reporters yesterday, he succinctly said, “At some point secular markets change.” It is insights like this one that keep investors on pins and needles, but where else can we look for guidance?

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