Weil on Finance: Facebook's Wild Ride
Happy Thursday, View fans. Here’s a look at some of my breakfast reading this morning.
An after-hours roller coaster
Facebook Inc. rose as much as 18 percent yesterday in extended trading after the company reported earnings -- and then gave it all up after executives’ remarks on the company’s conference call. Chief Financial Officer David Ebersman said news-feed advertisements, which had been a big revenue driver, won’t rise significantly. And younger teens aren’t using Facebook as much as they used to –- not cool. It’s a mo-mo market out there.
The man behind the Justice Department’s bank lawsuits
I’ve written a bunch this year about the government’s novel use of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 to sue big banks, as well as Standard & Poor’s. It’s a weird statute. The standards of proof are low. The government pleads violations of criminal law but only sues civilly. Banks can be sued for frauds that “affect” themselves. Anyway, New York Times reporters Peter Lattman and Ben Protess found the career prosecutor, Leon Weidman, who came up with the idea of using the statute this way. It’s a good read. And they pay him a nice compliment at the end: “In an era when lawyers routinely shuttle between the Justice Department and lucrative law firm partnerships, Mr. Weidman is something of a relic. Earning a government salary of $155,000 a year, he says he has no plans to spin his recent success into a seven-figure salary. `I’m not going anywhere,’ he said. `There’s plenty of work left to do.’”
Blackstone bottom-feeding in Spanish housing market
Blackstone Group has spent $7.5 billion buying 40,000 homes in the U.S. What I didn’t know until I read this article by Sharon Smyth and John Gittelsohn of Bloomberg News is that it’s also trying to replicate the same approach in Spain, where property prices are down 40 percent from their peak.
A view from India on the prospects of Fed tapering
This comes from the Mumbai-based Economic Times, by a writer named Kshitij Anand. You can sense the fear about the Fed’s plans from the article’s headline: “Can Indian markets weather U.S. tapering storm in 2014?” Here’s an excerpt: “Indian markets are trading at all-time highs and talks of tapering may put a speed breaker to the emerging market rally, including India. Given that markets have moved ahead of fundamentals, analysts are not ruling out a knee-jerk reaction. `Valuations seem frothy everywhere. So, from that perspective, just from fundamentals, you can say that markets are becoming exhausted,’ said Taimur Baig, Chief Economist-Asia, Global Markets Research, Deutsche Bank.”
Fun read of the day
OK, so it came out two days ago, but I didn’t see this article from the Atlantic until this morning. Great headline: “Why So Many Icelanders Still Believe in Invisible Elves.”
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)