Posts Tagged ‘nasdaq’

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by @anarchyroll
10/6/2014

The biggest Initial Public Offering (IPO) in the history of the New York Stock Exchange occurred recently.

Have you heard of Alibaba? Had you heard about Alibaba before last month? Have you already forgotten about Alibaba after it didn’t carry over to a fresh news cycle? When someone mentioned it to me last month, all I thought of was the Beastie Boys song.

What is Alibaba?

  • Google, Amazon, PayPal and eBay all rolled into one
  • A wholesale marketplace; Alibaba is the middleman the connects retailers/sellers directly to customers/buyers
  • Alibaba is the top dog in the largest e-commerce market in the world

How did Alibaba become the biggest IPO ever?

  • Capitalizing on the Chinese consumers’ desires to shop online, for cheap, with trustworthy retailers/merchants
  • 80% of China’s e-commerce is done through Alibaba
  • Domination of the world’s largest growing market paired with international expansion has Wall Street drooling

So China’s biggest internet cash cow has gone public on stock market. Yahoo is the biggest American company to directly benefit from Alibaba’s IPO success as the two are very¬† much in bed together, on the level, and in public NOT under the table. In fact, Yahoo has benefited so much from Alibaba’s success there is talk of them investing in and/or acquiring Snapchat.

What are potential problems with Alibaba?

  • It’s Chinese, the communist government/central bank could throw a monkey wrench into the mix at any time, and already has
  • The stock being bought isn’t actual stock in the company, but in their Cayman Islands shell corporation
  • Is Alibaba-Mania a product of a new Dot Com Bubble? The question is worth asking.

Should you go out and buy as much Alibaba stock as you can afford? Well, if you’re a good investor, you should always asked yourself; what would Warren Buffett do?

As with most IPOs, if you weren’t ahead of the curve or a fan of the band before they were cool, the ship has mostly sailed on this one. What I find personally noteworthy about Alibaba, is everyone I know who invests and is well off because of it, wants nothing to do with Alibaba. Why? They all say the same thing; the Chinese government. How much is the government involved with Alibaba? How much influence do they have? How much transparency is there and how much of that can actually be trusted?

When the Head of the FBI goes on 60 Minutes and openly talks about the Chinese military attempting to cyber attack the US economy, one should be very cautious about investing in the Cayman Islands shell company of a Chinese internet marketplace with direct ties to the Chinese government.

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by @anarchyroll
4/27/2014

The stock market in the United States is rigged like crooks who have the fix in on a casino table game.

Many skeptics and people who have lost money have been saying this under their breaths at bars and loudly at family gatherings for decades now. But since the economic collapse of 2008, many people who have watched even the most sanitized network news show that Wall Street is an insider social club with insider language, insider trading, meant for only those in the club to benefit at the expense of those on the outside.

Do you know what flash trading is?

Whether or not you have any money in the stock market you need to know about it. Because if you’re smart, then one day, you will have some money in the stock market. Like it or not, most wealth generation is created by people who are able to make money in the stock market. The US stock market, though rigged, is the gold standard of using money to make more money in the world we live in. High Frequency Trading or Flash Trades leverages technology to rig the game for those in the know.

A con using fiber optic cables is still a con. The great author Michael Lewis recently exposed flash trades to the world for the con that it is. If flash trading wasn’t/isn’t a con, then why are both the SEC and Congress already looking to enact laws to make it illegal?

If flash trading isn’t as shady as it gets, why has a separate stock exchange called the IEX opened for business on a foundation of being able to prevent flash trading? If flash trading isn’t a con, why has the IEX gotten both so much positive press, high level start-up capital, and high-profile clients/traders?

I first heard of flash trading when the Flash Crash of 2010 become public knowledge. I also remember reading an article in TIME about buildings in Manhattan being bought and turned into server farms. Considering the price of Manhattan real estate, the fact that buildings would be bought and not turned into residential or commercial property to collect rent of any kind should raise an eyebrow.

Flash trading is the epitome of why my economics blog is called Excess and Algorithms. Excess and Algorithms is what flash trading is all about. Flash trading symbolizes what Wall Street has become over the past 25 years. Shady, dishonest, illegal but allowed to exist because of high level bribery, blackmail, and under the table handshakes between those in power and those in the know. The pervasiveness of flash trading in turning the stock market into a rigged game shows why the movement was called Occupy Wall Street. #OWS tried to teach and preach many things. Their critics would argue, too many. Two of the aspects related to business and Wall Street were/are:

  • Bailouts for citizens > Bailouts for banks
  • Jail for economic collapse architects > Bonuses paid to economic collapse architects
  • Cash > Credit
  • Credit Unions > Banks

Now, thanks to Michael Lewis we know one more thing about Wall Street to adapt to going forward:

  • IEX > NYSE & NASDAQ

Act accordingly…