Googles Californication Episode plays into a Chinese Gambit. Read How $GOOG $YHOO $MSFT $AAPL #Xiamoi

Google (Nasdaq:GOOG) has a high level love triangle which shows how Sergey Brin is losing focus. Sergey having a bad case of seven-year itch has become bored with Anne Wojcicki and has separated. He keeps most of the money due to clever pre-nup.

Sergey is now romantically involved with a women who was previously involved with Hugo Barra a key Android executive. Hugo is leaving for a fast expanding Chinese telephone company called “Xiamoi” which competes with Motorola in the Android space.

Sergey and Google if you recall have had their problems in the Chinese market incurring the wrath of Beijing and being marginalized. Knowing how the Chinese operate someone in Beijing signed off on Hugo Barra; most likely knowing they are taking a key Google brain and turning another gun against Google.

Will this be the demise of Google? Unlikely the game is too big. What is does say about Sergey Brin is most important. Sergey has two children after a six-year marriage. He exercises the droit de seigneur and becomes involved in an affair with a women who was involved with one of his key executives.

Come on buddy. What were you thinking at all those executive presentations. Complicating the issue is Anne Wojcicki’s sister is a Google vice president for advertising. The sister originally rented her garage to the Google founders in the very early days. But surely to God those debts must have been paid in full by now. Is there some sentimental issue involved.

If it wasn’t for the fact Sergey Brin is a founder and major shareholder this would not be important. In other companies executives would have been asked to leave or be re-assigned.

At Google they are still fumbling with China and playing a Californication dating game. the executive suite is beginning to look like a corrupt European court. Oh well let them eat cake.

Xiamoi means little rice in mandarin. Three years old and privately owned Xiamoi may be the next big contender. So who-ever the ex-girlfriend is she doesn’t get market potential concepts.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

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Tragedy Strikes Zurich Insurance What Sordid Scandals To Come? $ZURVY $XLF $KIE $KIX

Zürich Insurance (OTCBB:ZURVY) experienced tremendous tragedy when their group Chief Financial Officer  Pierre Wauthier committed suicide. My condolences to the Wauthier family and friends.

Now the Chairman of the Board  Josef Ackermann has resigned stating that the family may be blaming him for the suicide of Pierre Wauthier. So he can’t go into the office anymore.

There is a CEO Martin Senn that supposedly is driving the Zürich Company and you would think he is the one calling the shots. Also a Vice Chairman Tom de Swann would supposedly have had direct influence and presumably now becomes the de facto Chairman at least for the time being.

Both Martin Senn and Pierre Wauthier do not sit on the board of directors but obviously inter-related closely.

The financial press has hinted darkly about Josef Ackermann past at other financial institutions. Lots of unresolved innuendo which I’m sure will be revisited.

Also there are dark hints that Zürich has some kind of difficulties coming to the surface. The Chairman has chosen to vacate his post and walk away from probably some very lucrative compensation.

It sounds like he needs to have the storm blow over. The question is what kind of storm will it be. Markets hate uncertainty and a normally staid Swiss Insurance Company is serving up a jumbo platter sized serving of uncertainty.

Is Warren Buffett checking his liquidity just in case some great opportunities present themselves? Probably looking at a few assets with hungry eyes.

The family has a few questions and may have a few answers that they are unaware of. While everyone is grieving it would be an hypocrisy to hide behind grief and not come clean on the corporate governance side of the issue.

Is there something to be concerned about? Why does a seasoned CFO at the top of his game commit suicide? Why does the Chairman resign? This sounds like a Tom Clancy novel with a strange Swiss Financial Secrecy twist. In the mean time I pity the stockholders who have lost wealth. More than a few will or should contact their lawyers because someone is getting screwed and it could be you.

For the deep deep value players keep your powder dry and watch the stock closely. Eventually they will fix this and there will be profits to be made. Tragedies aside investing is a blood sport and there are no prisoners.

George Gutowski writes from a caveat emptor perspective. follow him on Twitter @financialskepti

Syria Will Cause Commodities Deflation Read How $VXX $VIX $GLD $JJC $JJM $JJN $JJT $JJU $FOIL

Connect these dots. Syria gets punched in the nose, hard real hard. Iran comes on the scene and gets kicked in the balls with no remorse. Iran stops sending oil to China. China shakes, shimmies and weaves about. In the mean time as China slows down they reduce demand for commodities. Copper, Tin, Nickel, Aluminum and a host of other commodities stay in the ground. Commodity prices fall hard and splatter.

If China is smart they will try to buy the miners at depressed prices. They will deal directly with cash impoverished host countries who will see their royalty revenues drop dramatically. Mines will be reverse purchased allowing mining companies an exit from poorly producing properties.

Connect the dots.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

War with Syria-China Damages $VXX $VIX $DJX $SPX $FXI $EWH $OIL $GLD

War with Syria is almost a safe bet. Syria’s sponsor and pay master will not stand by idly and watch the Alawite’s lose control. They cannot go to other clients and ignore losses in Syria without putting up a fight.

While Iran will be nasty it will not ultimately destroy the US. Iran’s best bet will be a shadowy terrorist war trying to hurt America. But how to bring Iran to its knees. It takes money to be a terrorist. That means oil sales. Much Iranian crude goes to China. By boat through the Straits of Singapore.

The sudden disruption of oil supplies will disrupt the Chinese economy. Plants will shut or reduce. Public energy consumption will be curtailed. Brownouts and long line ups at the gas pumps. It will pay to be a member of the communist party just for the gas privileges.

Reduce China exposure or if you are brave enough short. In the meantime China will be throwing around its huge reserves of western currency especially the US Dollar buying up whatever oil it can get its hands on.

Watch for selective destruction of Iran’s oil infrastructure. Opportunistic. Much of the infrastructure is old and crumbling. Destroy enough to cripple the Mullahs and spark an overthrow. Then bring in Western Oil Technology and bring everything up to date. About a year for the round trip.

In the meantime China takes it on the nose so sorry. Globalism is a double-edged sword.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

War Soon. How to Profit When the Shooting Starts. $VXX $VIX $SPX $DJX

War with at least Syria is coming soon. You can hear the rattle of musketry. You could see this one coming a mile off. For some reason the market did not price it in and has sold-off. The sell-off makes no sense. If there is something to truly fear from Syria and their sponsors Iran than it’s a lot worse than a couple of percentage points drop in the general averages.

If you believe in America, modernity, the western world than you still believe in the stock market. Albeit with the usual caveats about selecting the right stock. To my way of thinking the market reminds me of a large bird of prey flapping its wings to scare smaller weaker minded animals; hoping the animal makes a run for it and can be easily picked off as it runs about.

What will they strike in Syria? They will try to cripple Assad’s ability to make war and his ability to use chemical weapons. Some of the rebels are as bad as the Assad forces so expect some two for one deals. Syria will try to engage Israel and will be unsuccessful. The Israelis have been waiting for this one for a long time. The Egyptian military will do whatever it takes to marginalize the Muslim Brotherhood and will not strike against the United States and Allies.

The conflict in Syria will be loud and hysterical but no commodities or trade patterns will be disrupted. Not to many on this planet have relied on Syria.

So because of unbridled fear the stock market will sell off offering some excellent bargains.

The world will still turn to the US Dollar and it will get stronger.

As foreign funds pour into the US Dollar they will be parked in US Debt. Therefore prices will appreciate and interest rates will stay down. This will help the Fed Reserve Taper as more buy Uncle Sam’s paper.

Gold and precious metals will of course strengthen. The rupee will stay screwed up. Oil of course will go up and up  and up regardless that any major producing fields will be relatively undamaged. Remember that Iraq has substantial internal strife and car bombs constantly. Yet the oil still flows relatively unimpeded.

The Pentagon will not spend that much because a ground conflict is to be avoided. The missiles have already been paid for and a few new ones will not incrementally cost that much more. The Syrian air force and helicopter capabilities will be destroyed early. Airports will cease functioning.

Syria will descend into a longer cycle of sectarian violence as the ruling Alawite lose their grip. Watch for members of the extended clan fleeing to safe havens around the world and more defections of top military brass. Some front line units will mutiny or disintegrate into roving rabble without effective command and control. They will prey on the population and eventually lose all legitimacy.

As time goes on the investing public will become inured to the Syrian Headlines and life will go on.

So strictly from a stock picking point of view. Keep your powder dry. The market has progressed some feel to far. The Syrian thing will be the pin that pops the balloon; which is exactly what you want.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti George Gutowski is bullish on America.

Microsoft Bizarre Behaviour like a fish out of water. What to watch for! How to profit! $MSFT$GOOG $AAPL $YHOO

Steve Ballmer CEO of Microsoft is leaving (Nasdaq:MSFT). OK so now what? How to make a buck and not get skinned alive. Here’s a few things to keep in mind.

  1. This is going to take a year. That’s a long time even in dare I say it a “blue chip high-tech company”. Lots of noise with only a few anointed ones knowing the truth will be the norm.
  2. Everyone wants the culture changed. This means someone from the outside will be brought in and handed a big crowbar. He will then go ahead to cut, chop, slice, dice, splice and even fire people as he or she sets sail for shores unknown.
  3. Microsoft is a huge company. The MoJo that say an Apple or Google have going is hard to replicate at Microsoft. Microsoft is tied to the PC and it is now a mobile marketplace. A new guy will take forever to turn it around.
  4. Prepare for the worst and assume the new guy will fail. There are no guarantees. A failed successor will be worse than Steve Ballmer.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

Microsoft Investors will be bribed, pampered, coddled and other neat stuff. Read how! $MSFT $GOOG $AAPL $YHOO

Steve Ballmer (Nasdaq:MSFT) is leaving in the next twelve months. Here are a few things Microsoft will do to keep investors loyal, happy warm and fuzzy.

 

  1. Serious dividend increases. Money talks and Microsoft has some. Lots actually. To keep investors focused the board will increase the payouts. A strong dividend will keep a floor under the stock price. Many of Microsoft’s businesses are steady predictable earners.
  2. To unlock value some businesses may be spun out and or sold off. Anyone new to Microsoft will want to write on a clean slate so let’s get going with the divestitures.
  3. No new major products and/or  initiatives will be undertaken before the new boy wonder arrives and starts putting his fingerprints on projects and idea’s. So in the meantime capex will shrink and cash flow will grow. Not a good thing but a real thing.

 

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti