Today is the day. Mr. Greenspan’s last Fed meeting.
CNBC has been making much of the fact that when Volker handed the reigns over to Greenspan, the dollar crashed and the markets quickly followed. Hopefully things won’t go to hell quite so fast during this transition but, if the dollar does start falling, get out of everything!
Greenspan is faced with a little conundrum today. If the Fed raises rates and they’ve overdone it (they may have already overdone it) then his legacy will be a mess. If they stop suddenly, the markets may see that as a sign that we are already in some sort of crisis and it will have the opposite effect.
My solution is simple: The Fed ends today’s meeting with no rate increase but Allan says: As the data at this moment is inconclusive, we will leave rates unchanged but with a bias towards another rate hike at the next meeting should Mr. Bernanke feel that the additional data mertits a change at that time.
This would let Greenspan step down and graciously leave the final hike or two decision in the hands of his successor. It would be a vote of confidence for Bernanke and a huge boost for the markets as clearly the end is finally near (which, ironically, would be better than if it were already here).
So far, Allan isn’t returning my calls but he does have all morning to get in touch with me so we can hammer out his farewell address…
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My thanks to Trader Mike for running down this nugget:
According to the NY Post, Google’s long-simmering click-fraud problem could explode into a billion-dollar headache for the Web giant, some Web marketing experts are warning. In fact, a growing number of Google-watchers claim the search giant is ignoring the click-fraud issue because it’s so large.
Click-fraud happens when surfers click on Goggle advertisers with no desire to get to the advertiser’s site. Knowing Google charges advertisers based on how many surfers click on their ads, the fraudsters click on the ads simply to drive up the advertiser’s costs.
The fraud also falsely inflated Google’s revenues. The estimates on the Street, if even close to being true, could rock the stock market darling, set to announce fourth-quarter results Tuesday.
“If Google were to implement a method for stopping click fraud today, it would lose 30 percent of its revenue overnight,” said Joseph Holcomb, a search marketing expert. Holcomb estimates that almost one-third of all clicks on Google’s network are suspect, thanks to sophisticated software programs known as “click bots” or “hit bots” that mimic human activity and fool search engines into believing the clicks are legit.
With Google set to report about $6 billion in annual revenue, Holcomb’s estimate would put $2 billion in top-line revenue at risk. Google denies the problem is that large.
Yeah, this is what I was saying back when Google was at $475 when we called the top. Now, the question is – Is this real or is this just a form of Google bashing pre-earnings?
My own research (which is not perfect but I’ll put it up against the guys who get paid millions any day) indicates that, although click fraud is a concern and will be more so if it spreds, the fact is that Google ads flat out work better than any other use of media expenditures and no one is going to stop using it unless this problem really escalates.
While we are on the subject – please visit my sponsors!!!
CME has earnings today, they tend to be a good indicator of what can happen to Google on a good or bad day. I will be playing a large CME move just like I will Google tomorrow – take $20-30 out of the money options on the confirmed direction (but for goodness sakes don’t be wrong) and sell them the second the stock reverses. Google went up $120 in the two weeks (12 sessions) following last earnings but be mindful that it gapped up $30 the first day and closed down for that day before going on a $90 tear over the next 11 days.
