It's the last Friday of the month, so Frank (author of value site frankvoisin.com) and I are chatting messenger, where we discuss stories from the web that caught our interest:
Saj: Can you believe there are people who actually want Donald Trump to be President?
Frank: Maybe the same people who have invested in some of his bankrupt businesses, hoping he will one day be in a position to pardon some of his own business decisions?
Saj: If he runs, it's great news for Sarah Palin. She's no longer the biggest comedic target in politics.
Frank: Palin goes from being the biggest laughing stock in the party to "wow, she makes a lot of sense compared to that guy who keeps going on and on about how great he is"
Saj: Alas, unlike Palin, Trump doesn't seem able to laugh at himself. He sits there stone-faced while parodied at the White House Correspondents' Dinner.
Frank: Though Obama finally got some chuckles out of Trump after showing a video of Obama's birth.
Saj: So value manager David Einhorn buys a stake in Yahoo!, claiming its Asian assets are worth much of its market cap. But then we find out one of those Asian assets was "transferred" out of the Chinese company Yahoo! has an ownership stake in (Alibaba), sending Yahoo! shares down almost 10%!
Frank: So it's not just small investors...Even conglomerates are losing their shirts investing in Chinese companies!
Saj: Maybe Yahoo! should hire Kerrisdale Capital to see if Alibaba even exists.
Frank: "We at Kerrisdale visited Alibaba's headquarters in China and found a bunch of empty offices"
Saj: "We then tried to buy a product from Alibaba.com but they wouldn't take our credit card"
Frank: So China's got an inflation problem, suspect business practices, a massive government that gets involved in the private sector, and a bunch of ghost cities.
Saj: Hey sounds just like the US! China's got nothing on the city of Glendale, which this month voted to subsidize the NHL hockey team there to the tune of $25 million:
"...Glendale Mayor Elaine Scruggs and a majority of city councilors successfully argued the costs of losing the team would be more damaging than the $25 million expense incurred to keep them for one more season. Though there was precious little evidence presented to back up that claim..."
Frank: So hockey teams are owned by billionaires, who employ millionaire pro-athletes, and yet the team is getting bailed out by some of the poorest citizens in the country?
Saj: At least hockey isn't poison. Check out Quebec's guarantee of a loan to an asbestos company:
"Jean Charest's government recently announced a $58-million loan guarantee to keep [the Jeffrey Asbestos Mine] open."
Frank: "Hey, sometimes the private market fails. If the private market doesn't think it's economical to pull poison out of the ground and sell it to 3rd world countries where it's still legal, then the government has no choice but to step in"