Twitter Vs. Facebook - A Tale of Two IPO's

As someone that actually buys advertising from social media sites, the pricing of the Twitter IPO seems outright stupid. Let's compare the Facebook IPO to the Twitter IPO. Just prior to their IPO, Facebook had literally coined a way to print money. On the other hand, the impact of Twitter tweets is fading into little more than white noise.

Immediately prior to the Facebook IPO, we were re-allocating media spending out of print and into Facebook. The capability Facebook had created that both allowed and forced commercial enterprises to buy promoted posts, was a money printing machine. Facebook's promoted posts were the most cost efficient media buy I could find. And our firm was one of millions that increased their spending on Facebook due to the launch of promoted posts and better mobile advertising opportunities.

So how about Twitter. Frankly, at this point, I consider Twitter basically to be a time suck. Given that we have an active social media program, I have to monitor it, and occasionally post (in part, just to keep up with the competition). Twitter does not offer any compelling advertising opportunities yet. The ad positions available will either fall into the category of suffering from "banner blindness" or be rather ineffectual, as it's challenging to come up with a compelling ad given Twitter's character limits.

While my opinion is based on the results being achieved solely by our firm, given that our target audience is 18-49 year old females. this audience is a pretty good one for getting a handle on social media trends. Given that my most recent Twitter posts have had little more impact than if I had just gone outside and shouted into the wind, this seems like a pretty good indication that Tweets are declining in value. Since our fashion site has  over 3,600 Twitter followers, is it sort of shocking how few clicks my tweets yield. When reviewing web analytics, traffic from Twitter is basically inconsequential.

Want to do your own due diligence? Visit any commercial firm's Twitter posts. Check and see how few retweets they are getting. Then check out the Instagram site of a fashion firm or any company that has great proprietary photography and notice how many "likes" they are getting. Instagram is where the action is these days.

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Dang, An Existing PAC Has Already Grabbed the name Throw The Bums Out

I thought I had an inspired idea the other day. It seemed to me that a "Throw The Bums Out" political action committee was a great idea. Given the anger much of United States shares with me in regard to our current Congress, it seemed like this would be an ideal vehicle for a fund raising effort.

The idea behind the PAC would be to fund the campaigns of challengers that were close in the polls and appeared to have a legitimate chance to defeat an incumbent.

I have been beaten to the punch, and not just be a few days, but by years. Although their site does not seem to be active http://www.generalecommerce.com/bumsout.org/ has a copyright date of 2006.

It is a shame that few Congressman will suffer any sort of threat to their re-election bids despite fomenting the stalemate on raising the debt limit and the harm they are doing to the U.S. economy. Election districts have been so gerrymandered that few seats are in competitive districts. Thus, despite the complete breakdown of competent action on the part of Congress, the U.S. electorate is likely to get basically the same Congress even after the 2014 election.  Sadly, the anger felt toward Congress in general is unlikely to be translated into votes against individual incumbents

Oh well, back to the drawing board.

Stifle the U.S. Economy to Set A Good Example on Greenhouse Gas Emissions?

One of the assumptions that guides the posts in this blog is that mankind's pumping of billions of metric tons of greenhouse gases into the atmosphere is likely to result in an environmental calamity. Mankind is conducting an incredibly risky science experiment regarding the sensitivity of the atmosphere to increasing levels of CO2.  Yet, does it make sense for the U.S. to unilaterally hamstring our economy in order to set a "good example".

An editorial in the New York Times describes the Obama administration proposed federal limits on power plant emissions of carbon dioxide as a "welcome sign".  Yet, how does it make sense to feed the world's growing demand for coal by shipping U.S. mined coal to countries around the world, while restricting the use of coal by power plants in the U.S.  Restricting the U.S. use of cheap coal to generate power will hinder the U.S. economy while barely having any impact of global emissions of greenhouse gases. Try telling coal miners and communities that are dependent on coal mining that their jobs should be killed in order to set a "good example" for the rest of the world. Furthermore, making U.S. energy more expensive serves to unilaterally impose a tax on the U.S. economy while the rest of the world gets a free ride.

Frankly, I am glad that I don't have to make a decision on which way to vote on this proposed legislation. While a worldwide reduction in greenhouse gas emissions is urgently needed, unilateral legislation that hamstrings the U.S. economy is challenging to support. And the New York Times rationale of endorsing the proposed power plant emissions limits in order to set a "good example" is not particularly compelling.  

Climate Change Will Be Unstoppable By The Time Politicians Take Steps to Mitigate

It boggles the mind that climate change skeptics think mankind can continue to emit billions of metric tons of greenhouse gases and toxic chemicals into the atmosphere every year without altering the environment. Given that Los Angeles, Mexico City and Beijing demonstrate how severely pollution can foul the air on a metropolitan basis, is it such a leap to reach a conclusion that the global atmosphere may be sensitive to the massive greenhouse gas emissions produced by gasoline and diesel combustion in cars and trucks, coal fired power plants, and the plenitude of other sources of air pollution?

It seems unlikely that the pause in the rising global surface temperature during the last decade proves that "global warming is a hoax". Further, any claim that the pause in the earth's warming trend has been greater than a decade should immediately activate BS detectors. A claim that global warming stopped in 1998 can only be made by someone that is illiterate regarding statistics. While the trend of  increasing surface temperature of the earth has has taken a pause for the last decade, it is an exaggeration to indicate the pause has been for 15 or 16 years. The starting point of skeptics exaggerating the length of the pause in global warming is typically 1998, a particularly warm year because of a strong El Nino weather pattern. Cherry picking 1998 as a a starting point is either an indication of statistical illiteracy of an overt attempt to obfuscate the results.

The link between green house gas emission and climate change impacts are firm in some cases and circumstantial in others. The impact upon the oceans are almost certainly related to mankind's activity. The west coast fires, the cycle of heat waves, drought and flash floods around much of the world, and the increased destructiveness of storms such as Hurricane Sandy and other examples of weather on steroids all are indicative of a changing climate.

The greenhouse gases and toxic chemicals emitted to date are already having an impact on the world's oceans. Sea level is rising by 1/10th inch per year and the ocean is becoming more acidic. The mercury content in deep water fish is increasing. Fish are migrating away from the tropics.  Arctic sea ice is declining in the area it covers.

The negative impacts of climate change are leading to worrisome outcomes. As examples, 1) the migration of pests, and 2) reductions in the flow of the Colorado River, could have disastrous impacts if these trends pick up speed. Property insurance rates are increasing to unaffordable levels for many living in flood prone areas.

Yet the question becomes - how much loss of life, property destruction, famine, and economic harm must occur before action is taken to mitigate greenhouse gas emissions? Given that any action that would truly be meaningful to mitigate greenhouse gas emissions must be taken jointly by the U.S., China, and the world's other leading economies, it seems unlikely that anything significant will be agreed upon this decade. The Chinese are moving in slow motion in acting to control the life shortening pollution that clouds the country's major cities. It seems unlikely that a significant reduction in greenhouse gas emissions will become a priority in that country. And in the U.S., much of the Republican party continues to spout a "global warming is a hoax" message.

Thus, given the growth  in greenhouse gasses and CO2 in the atmosphere, we may well be on the path to a climate catastrophe. If the predictions of the climate Cassandras turn out to be true, a very challenging environment awaits future generations. And mankind has no better option than to hope that the most pessimistic predictions of climate change are wrong, because the world's politicians are unlikely to take any action to avert climate change until the impact is upon us and unstoppable.

Environmentalists Block Sensible Solutions To Reducing Greenhouse Gas Emissions

A case can be made that the "greens" are often the biggest enemy of reducing greenhouse gas emissions utilizing methods that do more than simply reduce economic activity. The roadblocks the environmentalist put in the way of the development of energy sources hugely hinders the deployment of lower polluting solutions.

An effective energy policy would first seek to allow solutions to develop. If we want to shut down coal plants, don’t make it difficult to replace them.  Such a simple statement, however, one that is oddly prohibited by current policy.  Regulation makes it difficult to obtain permitting for new facilities, as an example water permitting can takes about five years before a construction permit can even be issued.  Want to build a nuke, better start permitting 10-years in advance.  Want to replace old reactors with new reactors, getting a design license through the Nuclear Regulatory Commission takes upwards of 15-years.  Want to build a new combined cycle plant, but you don’t have pipeline access.  Good luck getting the right-of-way for the new pipeline.  Our solution to this is to mandate clean energy, give subsidies, loan guarantees, fund extra research, create dedicated national laboratories, etc. None of these solutions address the fundamental problem, i.e. we presume to know what is best and prohibit meaningful action.  The climate crisis, the energy crisis, the anything crisis are a result of our continued interference and meddling presuming knowledge we don’t have.

Read the entire post by Cal Abel

If the Tea Party ever moves away from their denial of climate change, addressing the above hurdles to the development of cleaner energy sources would be productive.

Chicago's Extreme Weather - Are Rainstorms Being Amplified By Increased CO2 in the Atmosphere?

The Chicago area suffered record flooding the other day. While Chicago's weather is famously variable, the fact that 3 of the city's 8 heaviest recorded rainstorms have occurred within the last 6 years certainly raises suspicion that something is amiss. While this correlation between more frequent heavy rainfall and increased CO2 in the atmosphere could certainly just be a due to the random variability of weather, it is cause for concern.

Over at Weather Underground, meteorologist  Dr.Jeff Masters goes out on a limb and declares that

"The new normal in the coming decades is going to be more and more extreme flood-drought-flood cycles like we are seeing now in the Midwest, and this sort of weather whiplash is going to be an increasingly severe pain in the neck for society."

Given the cold spring we've had in the Midwest, it seems hard to accept the global warming could be occurring. However, confusing local weather with global climate change would be a mistake. There are lots of places around the globe which have experienced warmer than usual temperatures in 2013, including the Southwestern U.S., the Arctic and Australia.

The Chicago area  flooding led to my drive to work being greatly extended. As I zigged and zagged due to numerous closed roads, viewing the massive number of other cars on the road  made me pause and think about all the pollution that is being spewed into the atmosphere just from car exhaust. Regardless of how skeptical one is of about whether there is causation between higher levels of CO2 in the atmosphere and the unusually heavy rainfalls, this does not seem to be a good time to be buying a home on a flood plain.

Will A Physical Gold Squeeze Lead To A Rapid Retracement in Price?

One of the few aspects of the markets that seemingly makes sense is that the price of gold is stabilizing. Given the competition among central bankers around the world to win the money printing contest, it seems bizarre that the price of gold is heading toward the production cost of marginal producers. Further, the daily dose of bad economic news from the Euro Zone could also be bullish for the shiny metal.

Over at Zero Hedge, they are suggesting that a shortage of deliverable gold is starting to develop. Assuming that the Zero Hedge post is accurate (and since it is posted on the Internet, it must be true), then the potential develops for a rapid increase in the price of gold as those short of paper gold scramble to cover their positions.
I have no idea where the price of gold is headed in the short term, but suspect that over the long term this will turn out to be a nasty correction in the midst of a multi-year bull market. The risk/reward ratio for shorting paper based gold at this point in time seems abysmally skewed toward being risky. I am most certainly not taking any of my gold jewelry over to the cash for gold shops as long as the price remains close to the marginal producers cost of production.