Monthly Archives: April 2011

The Battle of Spain – Second half. Is Real Madrid ready to change the soccer world?

After Manchester United’s win against Manuel Neuer, the champions league today goes into the second round with the much anticipated clash between Real Madrid and FC Barcelona. The opponents of today’s game, however, are finding themselves in round 3 of “The Battle of Spain”. At halftime, Real Madrid has the lead.

Barca, in the next two games, can make up for the losses in the first games. The two coming games will decide who has the say in Spain. The two champions league games are of a different character and require a different approach. Game one was a league game and ended with a tie that left Barca with an 8 point lead for the championship. While the game fueled Real’s confidence bucket, the result was enough for Barca. The second game, the final for the Copa del Rey was a one game competition and in such, everything is possible. Real won, deserved, but the cup final can’t be seen as the biggest game of the year, at least not this year.
Despite all the if’s and when’s around the first two games, Real managed and accomplished a few things that might be of importance of the outcome of the two champions league games. First, after a 5 -0 loss in the league at Barcelona and hopelessly trailing Barca, they have restored their confidence. They have shown the World, we can keep up with them, and, win. Second, while boosting their own confidence, they managed to “let some air out” of the over inflated Barca boat. Unlike two weeks ago, today, not everyone is so sure that Barca is advancing into the final. Third, and that was accomplished by “the special one” Jose Mourinho, Real showed that they have options in their game. Not only with players, but in strategy and game approach. While Barca is a great team, no doubt, it appears there is only one approach the team is world class in: Move the ball around the field with incredible speed and wait for the mistakes of the defenders, to set the deadly pass and score. Real has interrupted that circle and with that, called Barca’s weakness out, there is no other approach or a plan B that can work on a high level. Real has also shown that if you give Barca’s defense something to chew on, they might lose a few teeth during the process. They have taken the game to Barca and in doing so successfully brought in the real gain in the first two games. Respect from Barca, yes, being afraid, no.
Today’s first leg will not be the decider of the two-legged semi final. Well, if one of the two can pull off a win with three goals difference it is probably over, but everything less, doesn’t matter in who’s favor, leaves the second game as the decider. Real has shown they can beat Barca, the challenge is now to do so at Camp Nou next week.

Quick Tip – Attention Arsenal, Manchester United, Manchester City, Barca and the Milan clubs – This video is a must see.

For the clubs above, you all need a new or better goalie in the next season. Watch the video, Manuel Neuer is available

Apple is buying Yahoo, just thinking…

We are in the midst of earnings season and, as always, a lot of excitement, hope and fantasy is hovering through the room. In my excitement about what’s going to be reported today, I also took a look at the tea leaves this morning. What they told me was something I was thinking about for a few months, Apple is going to buy Yahoo! How about that?

I have had this idea that Apple should buy Yahoo for a while now, but for some reason, I never really took a look at that or discussed it with someone. Here it is, I believe that Apple should acquire Yahoo. To master the first hurdle, Apple could pay for that acquisition with some of the content in its penny jar. With that out of the way, what would they get for it? Yahoo is a bid “out of favor” with the net population, even though Ms. Bartz, Yahoo’s CEO, told the analysts that traffic is rising and the situation is getting better. She saw a few “proof points” for improvement.
Looking at the numbers, revenue 24% down to $1.21 billion and earnings down to $223 million from $310 million compared to the same time a year ago. Wow, that is quite a chunk! The analysts have expected a bigger shrinking, so the stock was rising after hours. I must say, however, making $1.21. billion in revenue is a surprise for me. How did they do that with just a small share of the search market? Anyway, combining technology from Microsoft and from Yahoo displayed major issues and delays for a better search experience. Looking at the 800 pound gorilla Google and Microsoft’s Bing, there might not be enough in the search market for Yahoo to reach past heights.
What’s in it for Apple? Well, that is the question. First of all, they would be in the search business. And there is a quite sizeable user base. By far not all Apple users, but, and here I would have to speculate, a good number of users that have access to Yahoo from Google’s Android mobile platform, and others of course. I am sure there is some valuable information buried in these transactions. Apple bought this small research company last year. I remember the “turmoil” in market research last year over Nielsen, the TV rating and audience measurement company. All the movie and content owners didn’t know what people are doing in the future, watching shows on TV, or iPad or the phone. Apple has a good advantage with being in control of some big market. Due to the iPhone, iPad and iTunes, a portal such as Yahoo could increase that advantage in the research market. 
A few weeks back, stepped on the music and movie industries’ toes, with launching a cloud application to enable users to stream music and movies on the internet. That was a huge step and now everyone is waiting for what Apple is coming up with. At this point, Apple only has the more or less static iTunes. Well, I am sure they have a complete cloud solution, just waiting to be launched at the right time. If not, here is the point where the tea leaves saw the “opening”.
There are quite a few other parts of Yahoo that could be of interest for Apple. Blogging, email, social media like “pulse”, finance and all the other services that Yahoo delivers. I believe that would be a great addition for Apple and would answer Google’s call when they decided to jump into Apple’s business with smartphones and Android.
The longer I think about this, if I would be Apple, I would take a close look at this possibility. 

Negative Debt Outlook and Budget Discussions

While following the budget discussion over several news channels, I feel the need to comment on this. Let’s step on the devil’s tail and focus on facts that are already established and need no discussions. After that, we can discuss actions our government and parties want to take.

  • The country is in debt! Deep debt! We are at a point that we can’t pay for it anymore. If you have children, look at them, they will have to pay for it. If we continue to do what we do, and that includes the stuff what they just came up with, we can start looking at our grandchildren to pay for it.
  • Our health care system is ridiculous! Over 10% of the population without health insurance! We claim we are the best in the world, but we are unable to provide health care and sufficient health care for ALL. If you have a parent that needs medical care and is struggling to pay for it, or needs to discuss for weeks and months until the provider finally decides to pay a share, look at your parent and think about what they did all their life that they have to go through this. Also, as it stands, prepare yourself for worse to come. If you don’t believe it, wait until you are retired, you might want to die.
  • Our infrastructure is in complete disarray and needs fixing and several new add-ons. Bridges, roads, airports, sewers, drinking water supply lines and lots of other stuff are closing in on third world status. We need hundreds of billions of good old dollars to catch up on that issue.
  • Our defense budget is the highest in the world. Not by a few bucks, but with great distance to the second we are leading the list in defense spending. As an example, our defense budget is 3 times higher than the budget of China and Russia together. Almost $700 billion!! Some of our politicians want to increase it by $5 billion. What is that for? To finance the checks? Our 3 most important allies, GB, France and Germany together can barely together reach a quarter of our spending.
  • The newest warning signal about “The Real State of the Union” is S&P’s downgrade of the outlook, which at one point leads to a downgrade in credit rating.
So, that’s quite a list of issues we have here (There are more issues out there, but lets just focus on those for now). With that, we can look at every single one and then discuss what we want to do with it. But first, let’s go over some of the ideas our leadership in D.C. came up with.
Paul Ryan, a Republican from Wisconsin came up with what he believed is a great idea. Besides others, he wants to cut taxes for the rich and affluent and cut and privatize Medicare. His idea is, if he cuts taxes for those that have enough money, they will reinvest it and it will bring additional tax revenue. Maybe. How about investing it before getting taxed, so that you can save taxes? Not so popular with the people who want to cut taxes for the above reason, because that would mean they would have to follow up with action, rather than coming up with “toilette paroles” and then cash in. This is what people do in so-called “high tax” countries and they do very well with it. Compare the economies in these countries with ours.
In regards to Medicare, some want it to go away. Health care is expensive, that is nothing new either. So, first they will cut certain services and then they want to privatize with the idea that it falls off the government books entirely. If its that easy, why don’t we outsource our defense completely, and pay some mercenaries when we need them? I mean more than we already do.
Our population is aging. That means we have increased health care costs in the future. Either we pay it on our own, or we get support from the government in form of Medicare or Medicaid. While there are lucky people amongst us who can pay for their own health care after they retire, the majority of us won’t be able to do it. And that is not a political phrase, that is just as clear as water. We might, as long as we don’t get sick or get sick and don’t go to the doctor. It is up to everyone to evaluate these options at an age of 65 and older. The old news in this case is, expenses will rise and with the proposed nonsense we will now save for health care entirely.
Health care is business. That means that those providers will increase prices for service on a regular basis. Not only will we face more people needing medical services, we will face the pressure of the medical providers to make more and more money. Not really a good recipe for saving money in retirement. The result will either be astronomical cost in well fare or a huge humanitarian crisis. Which one would you like? 
We need to cut our defense budget by half and increase taxes. With the money we save and the increased tax income we can tackle important issues such as debt cutting, infrastructure, health care and education. And while we cut in such drastic numbers, we wouldn’t have to wait until 2050 or so, to see results. The quicker and more intense we start, the shorter the period of “suffering” will be. On top of that, we wouldn’t have to take away important government services that we need in order to avoid a complete humanitarian fiasco down the road.

Real Madrid – FC Barcelona, Start of “The Battle of Spain”!!

Over the next 8 weeks the excitement in the European soccer leagues will reach its peak. While in all leagues the fight for championship and relegation is fierce and is promising many exciting soccer games, in Spain, the situation is extremely electric. Game plan, faith and results of the different competitions present a very unique situation: Within barely 3 weeks, the two Spanish giants Real Madrid and FC Barcelona face off 4 times in increasingly critical games.

Tomorrow, Saturday, April 16th, the two face each other for the second league clash this season. A game that is always loaded with emotions to say the least, it is waited for since months. Barca won the first game at Camp Nou 5-0 and crashed Real’s hope for champion honors in Spain. Currently, Barca has an 8 point lead and it is very unlikely that Real can make that lead up, even with a win tomorrow. Does this take anything away from the game? No way! This clash is always loaded, no matter what the standing in the league is and a win is of major importance for both of them.

This year, the game has a much more explosive background compared to other years. It is the beginning of a series of clashes between the two within a short time. On Wednesday, they face each other again, in the Spanish Copa del Rey, the Spanish FA cup. It will be the final and that alone is promising absolute dramatic, excitement, agony and joy. Who gets what, has to be seen.

Not enough with that, a week later, they face off again. This time in the Champions League semi-final. A week later, game number 4 takes place, the second leg of the semi-final, this time in Barcelona.

The Spanish have quite some problems in their Country and working hard in trying to solve their issues. Over the next 4 weeks, however, it can’t be expected that a lot of work will be accomplished. For the time of “The Battle of Spain” work will only run on the side and daily worries over the economy will have an early summer break. You can bet that the main topic in Spain is soccer, by far. The good thing, some industries will experience a rise in business volume. If you have a soccer bar in Madrid or Barcelona, or anywhere else, this is your time.

As far as the teams go, the feelings before the games are different. While Barca and its players are no less excited than the Real players and supporters, following the reporting and commentary in the press, they sit much more confident, for the moment. Listening to the reports coming from Real, one can feel a lot of respect coming out of that corner. Maybe a little too much. Considered the importance of the games and what is at stake, some statements of players sounded almost like “toilette paroles”. The last game, a 5-0 win of Barcelona in last fall, 8 points short of Barca and the common opinion that Barca is the best team in the world, doesn’t leave the “Madridistas” untouched. A statement from Real’s superstar Ronaldo, confirms this:  “We have to believe it is possible for us to beat them. We are having a good run and feel confident”. One can debate the content of this statement, an expression of strong confidence it is not.

To get ahead in these games requires incredible skills, not only of physical nature, but also, and probably more, on the mental side. Both are fit and can run for hours if necessary, but the one that has a mental “blackout”, will lose the game and give away important momentum. Tomorrows game will set the tone for the next 3 weeks. While it is considered the least important of the 4 games, the result will influence the outcome of “the overall war”. Right now, Barca has the momentum. A Real win tomorrow would bring them level. And this will be important for the coming games. A loss would increase pressure on Real and require much more effort to get back. The game tomorrow is therefore probably the most important. Game on!

Google reporting numbers – 17% increase in profit!

Google was due to deliver earnings for the first quarter today. Expectations were high, but Larry Page announced, in my opinion, outstanding results.

Expected revenue was $6.3 billion, Google delivered $6.5 billion. Earnings per share turned out at $8.08 vs expected $8.11. Operating expenses rose from $1.84 billion to $2.84 billion. Google shares fell 5% right after the report.

In my opinion as a Main Street Analyst, this is an outstanding result with a rosy outlook. Google hired over 2,000 employees during the first quarter which, in my opinion, takes care of the sharp increase in operating expenses. Google does not hire just to fill offices, I trust there is substantial business potential behind this move. This, combined with paid-click growth and increased advertising prices allows a positive outlook on the company.

Please see my stock picks as well and, as always, please read the disclaimer!

Fernando Torres – Mystery?

59 million Euro and still no goal for Chelsea. While in Liverpool the supporters can’t hide their smiling faces, Chelsea fans and officials are wondering what is going on with Fernando Torres. Coming from Liverpool in January, he hasn’t scored in 11 games. Roman Abramovich’s face is getting longer and longer as the season goes on. Carlo Ancelotti even “admitted” a mistake in bringing Torres from the beginning in Chelsea’s Champions League game against Manchester United.

So, what is going on? Torres can’t play anymore? He lost his ability to play soccer? As it always is when players, coaches or teams are in crisis, there is quite a number of people who knew that (in this case) Torres is not as good as the press made him. Looking at his game at this time, if you wouldn’t know better, it almost looks like it. However, in my opinion, Torres is still a world class player. Yes, he is completely out of his game, nothing works. There are quite a few reasons for that. Some easy to understand, other’s need a little understanding and experience of the subject.
Let’s go back to the Euro 2008. Torres just made Spain European Champ with his goal against Germany in the final. He came back from the Euro 2008 and had a good season in Liverpool with awesome games, against Manchester United in March of 2009 for example. At one point, he caught an injury and Liverpool, including coach Benitez, a crisis. As it often is the case, Torres is not the first player that faces a problem to find form after injury and other issues, the dynamics take over and the entire “run” comes to a stop and all of the sudden nothing works. The pressure is increasing and one thing comes to the other and the problems mount. In between is the world cup, where Torres got injured again. While, like every other player, he was happy the world cup and the long (unsuccessful) season was over and he could rest, the new injury just put him back again. Injured, only a short break after the world cup, no real good preparation for the new season and a lot of pressure in Liverpool to do better than a year before. It didn’t look promising.

Playing Europa League wasn’t good enough for anyone at Anfield Road. Pressure, injury, only a short break after world cup and a team that is actually not a top class Premier League team is a recipe for disaster in an environment like Liverpool. By the way, Torres is not the only one that is suffering from loss of performance. As the best example you can use Bayern Munich and a few players of that team, including Arjen Robben and Frank Ribery.

To keep your cool in a situation like that is difficult. You want to perform, you can perform, but everything seems to be against the team and the player. Liverpool wasn’t able to stay in touch with the top five in order to play for Champions League glory in the next season. Torres, and a few others became nervous. While “the others” didn’t have offers, Torres had one, Chelsea! Was it the right thing to do? In my eyes not. It wasn’t good for both, club (Chelsea) and player. The only one that made good in that deal was Liverpool. With that, I want to bring your attention to my blog post from early January, “Liverpool and the p…”! In that post I talked about luck in soccer and that sometimes luck comes back for some incredible reason. In this case, Torres leaving the club served as a turning point for Liverpool. Deep inside, this freed the team and club of pressure and somehow things that already started to get better with Kenny Dalglish, turned the curve for good. Personally, I was hoping it would have been something else and it would have turned out good for both, Torres and Liverpool. I think he had a good platform at Anfield Road. All it took was the turn of the tide, somehow.

If you can blame Torres for anything, it is the bad advice he took. If he acted on his own, he made a wrong decision. This, however, can be made up very quick. Soccer is a fast pace business, what happened yesterday is worth nothing tomorrow. Liverpool is already out of the woods, Torres will score goals again, I am sure of that, and Chelsea will play Champions league again next year. If that is enough for the “ownership” of Chelsea, is a different story. There could be the next storm coming up for Fernando Torres. Back in January, I gave Liverpool the advice to stay cool and have a beer, the tide will turn. Now I am giving Torres advice: Forget about yourself for the rest of the season, rest mentally and just support the team. Try to shift your focus on something else. Go to the coach and ask him to only bring you after 60 minutes and start with the others until you get your game back. Your game is scoring goals, and once you hit again, many more will follow. Until then, you need to get out of the firing line. Small example, Wayne Rooney and his crisis after some “private matters” earlier this season.

Bayern Munich and the difference – Or why Louis van Gaal fell over his own feet

The German record champ is one of the first addresses in world soccer. Ranked number 5 in the“world ranking for revenue”, the club is interesting for top players as well as for the top coaches in the world.

Last week, Louis van Gaal, a commonly considered top coach in soccer, lost his job in Munich. The press and soccer experts around the world are wondering about the reasons. Louis van Gaal made many mistakes, not only in managing the team, but also in managing the club and its grown structures. It is all his fault, clearly!

Lets look at a few details. Last year the Bayern made it into Champions League Final and lost against Inter Milan. At that time already clear, they need to shore up the defense. Both central defenders and the left full back position should have been reinforced. Van Gaal let it go, despite the fact that the Bayern were willing to spend money. After the World Cup, the real trouble started: The entire team was at the World Cup, for Germany, France and the Dutch. A real good preparation for the season was not possible. Van Gaal laid that out, and he was right. Until the team was getting back in some kind of normal form, the half of the season was over. Most important for the club, Bayern was not in the top five and had to struggle to keep up and put themselves  into Champions League qualifying position. At that time, while completely underestimating and disregarding competition and valuable resources, van Gaal got the glorious idea to shape the team for the next season. Butt out of goal and Kraft in. Sold Demichelis, the better of the two central defenders, and let van Bommel go to AC Milan. All  these actions, as expected, went straight into the pants, as the Germans say. Butt, who was mandatory for Bayern’s and van Gaal’s strategy, had to watch from the sideline how the young Kraft was overwhelmed with the tasks at hand. Many mistakes in the traditional goalie game, and hopelessly “under equipped” to support the Bayern strategy of keeping the ball and use the goalie to do so. Letting van Bommel go, with his experience and leadership abilities, comes close to a beginner mistake. If one wants to put numbers to just those two mistakes, those cost the Bayern five to six points at least, since the winter break. Add those to the current points, and van Gaal would still be in charge. You can go on and consider the dynamics that are created by such actions, and you have another 3 or 4 points.

Much more ridiculous, van Gaal managed to p… off the entire management “high society” at Bayern. Unlike other top clubs, were management has no clue about the game and just throws money out to buy players, at Bayern, everyone in charge knows everything about the game on the field and off the field. If, as a coach, you don’t take advantage of such resources, you are either stupid or you lost the ground under your feet. Van Gaal is not stupid.

One can charge management for not putting an end to this earlier, but you can also give them credit for letting the coach do his thing. Considering everything on the table, I find this worth to give them credit. As a coach, where do you find that kind of opportunity? A big club, money to buy players and incredible resources in management that help you do the job.  All you need to do is manage a “rose garden”. Van Gaal failed to do so.

Liverpool – Manchester City 3 – 0: City refusing to work!

Liverpool beat Manchester City today with a walk in the park performance. Andy Carroll with two goals and Dirk Kuyt before break clarified quickly who would leave the field as the winner.

Manchester City refused to work and had no chance to turn the game at any point. Looking at the performance and some obvious “little mind games”, it almost appeared the team is playing against coach Mancini. Tevez reported injury early, Milner throwing an armband at Mancini’s feet, Balotelli, coming for Tevez after 16 minutes, was taken off the filed in the 83rd minute. At City, nothing seems to be ok. It would not be surprise, if Mancinci would have to leave before the season is over.

Chelsea now has two points on City and a game on hand against Birmingham. With a win and not much left to play, Chelsea can shut the door on City, which in turn now has to fight off Spurs, who are only 3 points behind. 4th place seems to be the maximum City can get out of this season.

City faces rival Manchester United in the FA-Cup semi final on Saturday. A performance as weak as today and the end of that competition is sealed as well.

Let’s see what happens at City over the next couple of days.

UEFA Champions League: Chelsea – Manchester United – Preview

Manchester United and Chelsea face off today in a “super-clash” in the Champions League quarterfinal.

Besides of winning the game, there is much more at stake. For the fans, the usual bragging rights are up for crab. For the clubs there are millions of dollars at stake. Within the Champions League competition, each of the clubs collected already around $45 million. The winner of the two-legged quarterfinal can collect another $15 – $20 million, other millions of marketing income “on the side” not counted.

As far as the game goes, the winner is impossible to predict. Everything can happen and much will depend on how well the players got up this morning. Both teams know each other very well and major tactical inventions are not to expect. Manchester United seems to be the team that displayed more consistency over the season, but at this stage of the competition it is about “win or die” and the past performance is worth as much as the paper it was commented on.

Chelsea is awaiting Fernando Torres’ first goal for the club since his arrival in January. For Chelsea and Torres, it couldn’t be a better day than this event to finally set a tone and value the price tag for the transfer. On the other side, Wayne Rooney is in the spotlight. Rooney is facing a two game ban in the Premier League for a “verbal outburst” in last Saturday’s game in West Ham. He is asked to make up for his poor public display and play his soul out.

Watch the game on Fox Soccer Channel at 2:45pm.

Champions League – Real Madrid busts Spurs dreams: 4-0!

It will take a few days until this defeat is settling in. Not only with the result, but the way how this nightmare developed for Spurs.

Within a few minutes all hell broke lose for Spurs and shook them out of their Champions League dreams. First, minutes before the game, Aaron Lennon got sick. Spurs had to take him off the roster and couldn’t add him again, not even for the bench. The game is on, after 4 minutes it is already 1-0. Adebayor scoring with a header after an Oezil corner. Gomes and Modric were trying to scratch the ball off the line, but were more in each others way than clearing the situation. Not enough with that, after 7 minutes Peter crouch got a yellow card for sliding into Sergio Ramos, close to the Real corner flag! An unnecessary yellow card, and, as it turned out, one with consequences. 7 minutes later, Crouch saw another yellow, and a s a result, a red as well. Not even 15 minutes played and already behind and a player sent off.

Well, it can happen that Real scores against you early, but two yellow cards within 15 minutes, one more ridiculous than the other? Who knows what Peter Crouch had in mind with his tackles.

From there on, the duty was to defend and calm the game and keep the result in an area that doesn’t kill the chance for the second leg. While Spurs did well in the first half, and had a couple of chances, van der Vaart and Bale, in the second half things went down the hill. Real put the lid on the pot and scored 3 more goals. At the end a 4-0 stood for the Spaniards.

Realistically, there is not much chance for Spurs to turn this around. They need a 4-0 win, at least. However, the ball is round. You never know in what direction that thing is rolling.

UEFA Champions League Preview: Real Madrid – Tottenham Hotspurs


Spurs are gearing up for their most important game since 50 years. While confronted with a lot of injury problems, it looks like that Gareth Bale will be ready to play. Harry Redknapp has serious staffing issues in defense, however, the players available are not second choice. With Bale back in the team, Spurs are in full strength.

Real had their injury worries as well, Cristiano Ronaldo was questionable, but according to Mourinho will be clear to play in Tuesday’s clash at Bernabeu. Real has to digest the home defeat against Gijon. While they can’t afford losses at any time, this might have been the wrong time to make such an experience. Tottenham is showing up with an opportunity to show off and seeing that Real can lose at home is fuel for them. It just adds a psychological effect to the game.

There has been some speculation going on that Real was looking at the possibility Gareth Bale. Jose Mourinho explained there is no current interest on the Welch. As an explanation he delivered the excuse that Real already has Marcelo and Ronaldo on the left side and under those circumstances Bale is too expensive. He is right, Real has other “construction areas” in their team and an investment in these areas would make more sense. However, I have a hard time to believe that the “special one” is not taking a look.

Looking at the performances of both teams in this season, Spurs don’t have to hide. While Real is a big name in the world of soccer, it turned out “they boil their eggs with water as well”. No miracles there. Especially in defense are some weak spots. Teams that were able to put some pressure on that defense, made good experiences. Especially the full back positions with Sergio Ramos and Marcelo have their problems. The holding midfielders Khedira and Xabi Alonso are also not always on top of their defensive game. Spurs would be well advised to ask a few questions and seek a goal.

Spurs didn’t convince the soccer world in their last league game as well, but that can be seen as a normal slip before a great game. On the Real side this is different. Every misstep will cause the crowd to get nervous and fall into a state of disbelieve and overexcited criticism. On the flip side, when Real find is finding their game, they can chase every team around the field. Ronaldo and Oezil are able to create lots of turmoil in the opponents defense.

This match up gives lots of opportunity to speculate and forecasts of all kind, depending of the hat one is wearing. I will try a prediction as well: While I like Real, I do believe that Spurs will get a very good result. It might not be enough for a win, but a tie or a one goal loss is possible. That will turn Whitehard Lane into a mad house for the second leg.

2nd Quarter 2011 Outlook

Please read Disclaimer!

2nd Quarter 2011 Outlook  Shortened, adjusted for Main Street to understand. No misleading and confusing numbers and rhetoric, just a plain description of important indicators that influence growth.

While the quarter started with good news regarding the job market, several other major uncertain issues will determine the outcome of the second quarter 2011. Jobs, as reported on 04/01/2011 look promising, but it has to be seen if the trend has feet and continues.
My opinion: Unemployment will further decrease

The situation in the Middle East is another unknown for the markets. Change is imminent and at the moment it is unclear how the political situation in a number of countries is developing. This, in addition to other uncertainties, will keep prices for oil and gold highand possibly put unrest on the stock market.
My opinion: This can be explosive for a while. For peace and the world economy, it will be important that fundamentalist and religious groups have no major influence in the region. Therefore, current and later US and European involvement is necessary. It will keep oil prices stable and hopefully will turn investors away from gold and into more economical investments.

For the short term, this earnings season will be of major importance, particularly the situation in the banking sector. This is important because many other sectors are depending on the bank’s “well being”. Positive reports from the banks could spike technology and over the next 2 quarters, the very important small business sector. It will also determine the bank’s appetite for mortgage lending. For the short term, the banks can take advantage of the delay of the “interchange regulation”, important for debit and credit card swiping fees. For the future, it is hopefully possible to find a solution that doesn’t pull the fee revenue completely from the banks and leaves something in the pockets of small businesses. The consumer, originally supposed to take advantage of the new regulation with price cuts, one way or the other, will pay for the change in the new legislation. Intended price cuts will not occur and loss of fees by the banks will be passed on in checking fees and other actions taken by the banks, which some of them can already be seen. Disappearing rewards programs have already been reported.
My opinion: The industry will report mildly good results and will make forecasts depend on  regulatory changes. As a result, changes will be mild and serve the purpose of business.

Ireland, Greece, Portugal and Spain remain weak and are still seen as the “undertakers” of Europe. However, in my opinion, while all of them still appear to be a bottomless pit, enough funds have been allocated in the past to save the four from going under. While calling the situation under control would be to much, calling it getting better soon, is in the picture. There is, however, another situation that can derail the European Union. Last weeks election  results in the German States of “Baden-Wuerttemberg” and “Rheinland-Pfalz” displayed concerning results for Europe. With the SPD and the Green Party winning those elections, in the short term, the German economy might get a hit and show some not so desired results. That is important since the Germans are more or less carrying Europe. At least they have over the recent past. It has to be seen if that political trend continues in Germany.
My opinion: Both issues will solve itself. For “business political reasons” the issue with the broke European countries will be used for a while, but eventually will turn into positive news. The political situation in Germany will not disturb the positive German economy in the long run.

Housing in the US is still weak and will stay weak. From my view, there are no major changes expected and therefore, this should not have any influence on the economy’s developments for the rest of the year. There might be a seasonal increase in sales, however, the situation for Main Street’s ability to buy has not changed significantly. The job market shows signs of recovering, but this has not been for a considerable time and therefore “overlapping” positive results will need more time.
My opinion: Housing will not significantly improve before the second quarter of 2012, given the job market will improve.

As reported, the job market showed signs of improvements. Household incomes, however, have not increased. This is concerning. The consumer will lose important buying power due to increasing inflation. Changed behavior in spending might also cut spending. Should the Fed interfere with rate hikes, this might even become worse. Growth, currently, can only happen without rate hikes. At this time, for this quarter, I do not believe the Fed will increase rates.
My opinion: The economy will further grow. Inflation will rise as well, but rate increases will not occur before 3rd or 4th quarter of this year.

Stock Pick, Demand Media, closing 04/01/2011, $24.23

Please read Disclaimer!

While Demand Media has been around for a while, after the IPO in January the company appeared not only on the radar of investors, but also on the radar of the entire publishing world. Financial analysts opinion is divided at this time and they are unable to give a clear outlook on the company.

Considering the service the company provides, in my opinion, the stock has a potential to reach a price range of $27.00 – $28.00 until the end of 2011. My forecast is not based on commonly used analyst data, but just on the fact that the company has gotten much more exposure since the IPO. There is more consideration for the service and this will increase business volume. On whether this increase will be of substance has to be seen and depends on the company’s ability to sort out qualified content and promote and produce this content.

Barclay’s English Premier League – Round 31 review. Manchester United increased lead.

Manchester United was able to increase their lead to seven points in the Barclay’s English Premier League. While Arsenal and Chelsea drew their games and left valuable points on the table, United was able to turn around an already lost game against West Ham. At halftime the Hammers were leading 2-0. Wayne Rooney, with a hattrick, helped United to gain the lead. Hernandez secured the important win with United’s fourth of the game.

Besides United, Manchester City was the only team in the top 5 that could win and make an impact on the table. City passed Chelsea and regained 3rd spot with an impressive 5-0 win against Sunderland. The win also took the pressure of City Manager Mancini.

West Brom and Birmingham City were the winners at the other end of the table. West Brom beat Liverpool and Birmingham City left Bolton with the short stick.

The line for relegation contenders can be drawn at place 13 and West Brom. Everyone from 13 to 20 is in a fierce battle to avoid the drop. West Brom currently shows 36 points as 13th, Wigan on 20th has 31 points. Depending on next weeks results, teams from 12th to 9th can be thrown back into the relegation battle. Sunderland, a few weeks ago was hoping to secure 6th and a chance for European honors, might next week find itself just 3 points from relegation. The bottom part of the table guarantees excitement until the last game.