Baltbear on Finance markets are like marshmallows

first, it needs be noted, if it has not been before, that i am utterly apolitical.

period.

however, i do happen to have as a matter of courtesy the strong belief that “a deal is a deal” and that in 1776 a bunch people made a deal, and anybody in the usa who wants to stay there is stuck with it. if not, then apoloigise to saxe-coburg-gotha (now rebranded as the “house of windsor”) and go back to being a colony of the union jack.

that being said, i also note that on this site i arearely comment about things not direcrtly perceivable to the prudent speculator’s enightened self-interest.

but today, i find such a thing.

the author in question seems rather non-plussed about the lack of direction in what is being ever so lyingly called “reform” in the american fiscal, budgetary and capital processes.

in a way that makes a certain amount of sense at least so far as the non-stop chatter of “pundits” can be allowed to do.

from the standpoint of simplicity, i would note, going for the quant, that those of the so-called tea party are calling the fiscal, budgetary and capital expense processes of ronald reagan extreme socialism.

check the actual charts:

now add the expenses of $2 trillion worth of war since 2001, with the principal beneficiarys of said wars being the ologcarchic class.

i am a radical, cold-blooded capitalist who would put clients into baby-seal hunting, kitten skinning, or making cookies out of real vegans if the numbers were right. however, as a capitalist i am bound and beholden to adam smith–who would be overseeing the hanging of most of the “business leaders” and “economists” of  all this neo-con tea party garbage that is noe more than wussified, whiny, wet dreams about john galt somehow conflated with some end-times strangelovian racism that went on steroids as soon as the usa had a prez who couldna be painted into some comic book about plymouth rock.

wanna avoid qe3??? wanna avoid qe3 turning into qe4, 6 months later??? then speculate on what it will take to get the tea party to get shipped to monaco or some other dang place.

Posted under business

the recent 10k has btx telling the sec it is getting out of the volume expander and solutions game.

that means about $40mm in shareholder’s deficit will be unrecoverable.

when mikey moved from his seat on the bod to the ceo slot, the first thing he did was go to switzerland for a conference and buy a $750k seat license to a genomic data base. he then started a “subsidiary” to promote that database.
when cirm was handing out grant $$$, mikey got some for the purpose of getting actual quality control into the shotgun cloning platform.
somebody else–the university system–got a grant to develop a genomic database for the cirm grantees,
and mikey lost again.
now, a “new” proposal: create yet another subsidiary, for the purpose of funding a way to sell xennex’s gene card platform, and pay for that seat by issuing 1mm shares of the new subsidiary’s stock to xennex. since over the pasat 5-10 years the xennex “genecard” platform has emerged as one of the more efficient tools in bioinformatics, where the action actually is.
:” in an arrangement for links to LifeMap Sciences’ database from GeneCards. XenneX will receive an option to acquire 1,000,000 shares of LifeMap Sciences common stock. ”
is there a mkt for the stock?
yes, because ak and milkey will be vested with tonnes of shares, and when they want some cash, they can arrnage with garfies for the 1502-c  when the time comes for mikey and ak to cash in.
the prudent speculator may note that xennex moved from nowhere to about the top of the heap in the arena without evvver thinking about doing an ipo.

the priudent speculator will note that xennex has been selling seat licenses for quite a while, and that just like the millipore “partnership” there appears to be nothing in this new deal binding xennex in any way from doing whatever business it wants to. indeed, it already has long term contracts all over the place, such as

http://www.xennexinc.com/jp/company/press-room/epo-press-release.html

will this add to btx “value” ??
btx will be taking $833,300 of 1x cash and attempting to create sales in excess of $105k per year of “gene card” product.
that would be a break even.
except of course that mikey, ak, and a xennex insiders will be splitting 1/3 or so of the o/s as performance options, so that the enterprise can keep consistent funding.
call it $150k sales minimum per year for break even on valuation.
if and when there is an ipo of “lifemap” and no further funding has gone into it, and btx has let go of no more cash or stock than it has.
since the first $750k spent into genomic db went nowhere, i have to guess that this $830k goes nowhere as well, but that garfies, neil, et al will toss in another pile of cash from their btx marginability and get the puppy rolling.
good enuff for the science side. from the stock side, less than a wash.
why? because a share price of 7 1/2 for this puppy prices in more than all the next 10 years of earnings from the existing subsidiariees.

as has been every “subsidiary” btx has formed.
the 10q will be out before 0515, and speculators will have a very clear look at what btx has accomplished in 2011 towards sustaining itself without further dilution.
this new 8-k gives the hint: very little.

Posted under business

i’ve been w/yhoo since 1997 or so. in spite of numerous complaints i see about its “liberal” bias, the constant stream of racist garbage on its boards, the constrant stream of birthers, 911 conspiracy nuts, etc, i find yhoo to be fairly balanced. currently it does not think the same of me. ..but that’s for another post.

a video article yhoo shows today is:

http://finance.yahoo.com/blogs/daily-ticker/good-reason-scared-stocks-insider-trading-isn-t-20110404-072310-688.html

the featured guest argues directly (using the language of the trade) that those who run outfits like aig, pru-bache, citibank, are the “finest financial minds” of our time, and cannot be policed or supervised by those who failed to get employment there–that is, the staff of the sec.

he argues that insiders gaming stocks, and hedge fund managers are the one getting the greatest value for everyone out of the equities markets.

that would be an amusing idea if, during the 1980s, the productive environment had not been turned upside down by those who noted that reagan made it possible for insiders to suck all the future prodictivity out of any enterprise, all the community building ops out of any mfg base, by gaming the tax system, and loading debt onto the balance sheet.

the techniques developed then by such as icahn, kravis, al kingsley and others made it possible for those on the winning end of “information asymmetry” to rape the future value from an enterprise, and front load it into the clearing price.

information asymmetry is always a fact. it’s built into biologic systems, and is manifest whenever you notice a “reflex response”–the body part closest to the stimulus responding before the message even reaches the actual brain.

for this reason, prudent speculators always work towards a basis like that of insiders, so that their reflexes will not be cuase cramps in the speculator’s wealth.

markets exist because of information asymmetry. price exists as the dynamic balance point. insiders sell for many reasons, but they only buy for 2: they kniw thingds are about to get much better or they know that the game is gonna collapse without a capital infusion.  that second fact is always ignored by pumpers. >>>always<<<. when it is noted, it is called a “vote of confidence.” it’s not. it’s a reality check.

people on stock boards almost always do their best to induce that spin. the “weak” news is always spun into what’s about to happen. those who point out what >>is<< happening are accused of every crime in the book except one: honesty.

Posted under business

i am increasingly reminded of the fact that people think “science” is a talking animal, that “says” and therefore has an oracular value to point to wealth.
as an 11k year running joke, it used to have great value.
here’s why not: ticker abcd:obb is developing a fail safe 1x vaccination that adds 5 years to life expectancy, and sells for $1 a dose.
let’s get semi real and price humasn life world wide at $4k a year. $20k times 7 bb people:
this is a >>>>$140 trillllllion<<<<< drug.  that’s what “the science” is worth.
in the course of moving from “development stage company” to fda approved product maker abcd.obb tranches out 2bb shares for $600mm, and……
it >>>succeeds<<<<.
the cog thru the factory is $0.60. the distro cost makes delivery a $5 purchase.
this gives a reasonable shot at 4 billion customers over the first 5 years, and an additional 2 billion over the patent life. (becuase outside of the g-7, lotttsa people will die before they have $5 to spend.)
7 billion over 17 years: $412mm in revenues per year.  $164mm a year to g&a of, let’s call it $30mm.
let’s add 400mm shares of options that strike @1,
while the puppy was trading 5/16…
on day of fda approval, abcd goes to 2, and keep rocketing, cause after all….”we all know” and 400mm shares option out to cash.
$133mm in revs to 2.4 billion in shares, w/ share price at 12x sales….. this puppy gets stable @ 21/32.
that’s what “the stock” is worth.
that’s all.
and it’s just that simple.
and the guys who trade into accumulation on the capitualtions and rallys along the line and have a basis of 1/16 on the day the “news” sends this puppy to 6 will make more $$ than the company ever will.
and those playing in the space between will be both agora and cramer, barron’s and ibd, and everybody in between.
and in the meantime, Fortuna? the wealth Goddess??
“She says, Hey babe
Take a walk on the wild side
I Said, Hey baby
Take a walk on the wild side
And the coloured girls go
Doo do doo do doo do do doo..

Posted under business