David Shambaugh's Wishful Thinking

Added on by C. Maoxian.

David Shambaugh, the academic and think tanker, posted a piece in the Wall Street Journal titled "The Coming Chinese Crackup." I didn't find his argument that "China’s system and society ... [is now] closer to a breaking point" persuasive in the least. Just for reference, Shambaugh got his BA in 1977, which means he was probably born in 1955, making him a "Middle Boomer" who will turn 60 this year.  Here are his five points:

  1. "China’s economic elites have one foot out the door" -- not new, and not entirely true
  2. "greatly intensified the political repression" -- has waxed and waned for 30 years now
  3. "propaganda has lost its power" -- actually they're savvier on this front than ever before
  4. "corruption riddles party-state, military, Chinese society" -- has for "5000 years"
  5. "economy is stuck in a series of systemic traps" -- they're well aware of the issues

The truth is guys like Shambaugh can't stand the idea that an authoritarian, one-party state can be successful and long-lived. The Chinese are practical above all else, and survivors. His idea of political reform is anchored in liberal western ideals, not Chinese reality. What he should be concentrating on instead is how the West will become more Chinese: the rise of crony capitalism, regulatory capture, Washington-Wall St. client patron relationships, sham elections ("re-districting"), the rise of the surveillance state, etc.  

The Chinese aren't going to become more like us, we're going to become more like them.

Geron Pop, Overlay View

Added on by C. Maoxian.

GERN was up 35% so I went back to see when I would have seen it, and I'm ashamed to say it would have been 9:55 AM (stock already at $3.15 then).  When I get back to the US and in the right time zone and have some free time (well, even more free time), I need to set up the scanner to catch these kinds of things earlier.

I have to go talk to my photoshop girl to see if she can quickly teach me how to do these overlay charts better.  I used to know how to do it but have forgotten. That's the 1 min and 10 min., not exactly in line, but you get the idea.

Fallen NeuStar

Added on by C. Maoxian.

Scanner screaming at 14:18 ... probably couldn't locate shares to short and the move was over in under ten minutes ... impressive ... you need a scanner which will alert you on a sub-minute level to catch something like this. 

How Etsy Makes Money

Added on by C. Maoxian.

From their S-1 [MY COMMENTS IN CAPS]:

"We operate a platform for third-party sellers. Our business model is based on shared success [LOL, FIRST TIME I'VE HEARD THIS ONE]: we make money when Etsy sellers make money, and we offer services to help Etsy sellers be more successful. [MAKES YOU FEEL GOOD, DOESN'T IT?] We do not compete with Etsy sellers, hold inventory or sell goods. [NO, WE ARE SIMPLE MIDDLEMEN] Our revenue is diversified, generated from a mix of marketplace activities and the services we provide Etsy sellers to help them create and grow [BUT NOT OUTGROW ETSY!] their businesses.

Our revenue consists of Marketplace revenue, Seller Services revenue and Other revenue. Our revenue is recorded net of actual and expected refunds [WONDER HOW MANY FRAUDULENT SELLERS ARE ON THERE?].

  • Marketplace revenue includes the fee an Etsy seller pays for each completed transaction [SALES COMMISSION] and the listing fee an Etsy seller pays for each item she [HE] lists.
  • Seller Services revenue includes fees an Etsy seller pays for services such as prominent placement in search results via Promoted Listings, payment processing [THE BIGGIE] via Direct Checkout and purchases of shipping labels [IS THIS A MATERIAL AMOUNT?] through our platform via Shipping Labels. 
  • Other revenue includes the fees we receive from a third-party payment processor [PAYPAL? CAN'T NAME NAMES].

Marketplace revenue.  Marketplace revenue consists of the 3.5% fee that an Etsy seller pays for each completed transaction [BAM!] on our platform, exclusive of shipping fees charged. Marketplace revenue also consists of a listing fee of $0.20 per item that she [HE] lists in our marketplace. Although revenue from completed Wholesale transactions is included in Marketplace revenue, revenue from Wholesale enrollment is included in Seller Services revenue. [ODD?] Transaction fees are recognized when the corresponding transaction is made. Listing fees are recognized ratably over a four-month listing period, unless the item is sold or the seller relists it, at which time any remaining listing fee is recognized.

Seller Services revenue.  Seller Services revenue consists of fees an Etsy seller pays us for the Seller Services she [HE] uses, including Promoted Listings, Direct Checkout, Shipping Labels and Wholesale.

• Revenue from Promoted Listings consists of cost-per-click based fees [WHAT ARE THE RATES?] an Etsy seller pays us for prominent placement of her [his] listings in search results generated by Etsy buyers in our marketplace. Revenue is recognized when the Promoted Listing is clicked.

• Revenue from Direct Checkout consists of fees an Etsy seller pays us to process credit, debit and Etsy Gift Card payments. [USE PAYPAL OR] Direct Checkout fees vary between 3–4% [BAM!] of the item’s total sale price plus a flat fee per order [HOW MUCH?], depending on the country in which her [his] bank account is located. Direct Checkout fees are taken from the item’s total sale price, including shipping. [THEY MAKE MORE FROM PROCESSING THE PAYMENT THAN THEY DO ON SALES COMMISSION? ... INCL. SHIPPING IN THE SKIM HELPS ... LOVE TO KNOW MORE ABOUT THAT FLAT FEE BASED ON SELLER'S GEOGRAPHY]

• Revenue from Shipping Labels consists of fees an Etsy seller pays us when she [HE] purchases shipping labels through our platform, net of the cost we incur in purchasing those shipping labels. We are able to provide our sellers shipping labels from the United States Postal Service and Canada Post at a discounted price due to the volume of purchases through our platform. [HOW MUCH DOES ETSY MARK THESE UP?]

• Revenue from Wholesale consists of fees an Etsy seller pays us when she [HE] is approved to enroll in our Wholesale program. The one-time Wholesale enrollment fee is recognized ratably over the estimated customer life. [WHAT'S ADVANTAGE OF BEING IN WHOLESALE PROGRAM? LOWER FEES? HOW MUCH IS THE ONE-TIME FEE?]

Other revenue.  Other revenue includes the fees we receive from a third-party payment processor [PAYPAL? GRUDGING SINGLE MENTION BY NAME IN PROSPECTUS]. Other revenue is recognized as the transactions are processed by the third-party payment processor."

Of interest: How Etsy Alienated Its Crafters and Lost Its Soul, CAN ETSY GO PRO WITHOUT LOSING ITS SOUL?

Orexigen Therapeutics Unusually Active

Added on by C. Maoxian.

Rare to see something trade more than SPY, but OREX did (showing nearly 350,000 trades) ... I don't have the scanner results in front of me but it probably popped up before 10 AM ... maybe it was front and center from 9:30 sharp, will check later. UPDATE: OK, I checked ... it actually showed at 9:29, then 9:43, then :46, :47 and of course every minute thereafter.

Headlines:

Mar-03-15

First notices on StockTwits ... only a few dozen messages between 9:30 AM and 9:50 AM (I'm in China, 13 hour ahead time stamp confusing) ... RBC note referenced in BBG headline 9:39 AM? ... must go back to see how early I would have caught it:

Here's my "pop" view ... using a 2 min chart because the 1 minute mysteriously isn't coming in.

Bosch -- Season One

Added on by C. Maoxian.

I finished watching season one of "Bosch." Watched all ten episodes in a binge over a couple days.  It was ok, not great.  I've read all the books so I was interested in the TV adaptation.  The show seems pretty squarely aimed at Gen-Xers, maybe also late Boomers. The kids (Gen-Ys and Millennials) probably wouldn't care for it.  Here's the main cast:

Titus Welliver as Det. Harry Bosch b. 1961 
Jamie Hector as Det. Jerry Edgar b. 1975 
Amy Aquino as Lieutenant Grace Billets b. 1957 
Lance Reddick as Deputy Chief Irvin Irving b. 1962
Annie Wersching as Officer Julia Brasher b. 1977
Sarah Clarke as Eleanor Wish b. 1972
Jason Gedrick as Raynard Waits b. 1965

There are a couple of Gen Yers on there, Jamie Hector, who plays the token black sidekick (he's not a great actor, I think he was also in the Wire?), and Annie Wersching who plays Bosch's lover (she has a great, voluptuous bod when not in uniform). Aquino plays a Latina Lieutenant, and later a Lesbian Latina Lieutenant, unnecessarily I thought.  Had the stiff police chief Irvin Irving reprising his Wire role. Cast included a craven blogger. Not enough Latinos in this given the LA location, just a few bit parts. Gedrick is pretty sinister as the psycho, he must work very hard to look that good at 50.

Bosch was a Vietnam vet, a "tunnel rat," and they tried to update him as an Iraq/Afghanistan vet, which doesn't really make sense since he'd be 40 when 9/11 happened. And Bosch was a tortured guy in the books, he didn't have a cute teenage daughter whose eyebrows needed plucking ... he was in a very dark place all the time. And he was sharp, a street-smart detective who could read anybody. Welliver can't really pull this off, going harder on the tough guy with a soft spot routine.

The arc wasn't that great, show to show writing and acting wasn't very even.  I guess overall I'm pretty disappointed with it.

My selected screenshots:

Opting Out from Being CONned

Added on by C. Maoxian.

Interesting bit from the Barclays ATS – LX and Equities Electronic Order Handling FAQ:

Opt-out notice: By default, all firm orders sent by Barclays algorithms will be conditional-eligible so that clients’ orders may interact with the maximum amount of potential liquidity. If you have any questions regarding how conditional orders operate, or if you do not want your algorithmic orders to be conditionally eligible, you can opt out of this functionality by contacting your Barclays Equities sales representative

If you don't opt out, they'll sorta kinda protect your interests:

Barclays may revoke or limit a participant’s ability to submit conditional negotiations if the subscriber exhibits a low rate of responding to conditional invitations with firm-up orders.  ... Firm-up rates are monitored across all conditional-supported venues, including Barclays LX.

UBS "expects" traders using their ATS will come through with a firm-up order. But no word from them on monitoring firm-up rates.

Weight Watchers Collapses

Added on by C. Maoxian.

This thing has been going down for ages but really collapsed today (-35%) on earnings.  I looked at the top ten shareholders (as of 12/31/14):

Invus Public Equities Advisors, LLC 51.94%

Fidelity Management & Research Company 10.55%

Capital Research Global Investors 6.23%

First Manhattan Company 4.88%

Millennium Management LLC 3.34%

North Tide Capital, LLC 3%

The Vanguard Group, Inc. 2.97%

BlackRock Institutional Trust Company, N.A. 2.49%

Camber Capital Management LLC 2.02%

Putnam Investment Management, L.L.C. 1.9%

There was a lot of opportunity to short this at around $15 after hours (it looks like) ... surprised it tanked under $12 during the regular session.  Usually 90% of the move happens after hours, and just scraps are left for the normal market hours.