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marmar
marmar's Journal
marmar's Journal
March 2, 2016
Before Justice Antonin Scalia was on the Supreme Court he taught at the University of Chicago Law School from 1977 to 1982 and several of his former African American law students are calling him a “blatant racist” for the way that he treated them.
According to a Facebook post from Arnim Johnson that has since gone viral, Scalia flunked every black student who took his class. “When I was there, Scalia was outed as a blatant racist to the extent that the Black American Law Students Association (BALSA) chapter at the law school brought it to the attention of acting Dean Norval Morris in several meetings,” Johnson said.
According to him, no students flunk courses at elite law schools. “He flunked one brother so badly, it skewered his grade average, and he became the first, last, and only student in the history of the school to repeat first year. That man went on to become a respected military judge.”
Apparently no actions could be taken against Scalia because the sources of the information were all “private, confidential and privileged, and Scalia’s racist attitude and actions toward black students could be plausibly denied, but just barely,” Johnson explained. Scalia always defended himself that he graded blindly, but apparently the same thing happened when he was on the faculty at the University of Virginia and “politicking for a federal judgeship with national political connections.” Johnson explained that Scalia got away with it at UVA because “the actual facts regarding his intent could not be adduced in a tribunal.” .........(more)
http://www.rawstory.com/2016/03/former-student-antonin-scalia-was-outed-as-blatant-racist-while-teaching-law/
Former student: Antonin Scalia was outed as ‘blatant racist’ while teaching law
Before Justice Antonin Scalia was on the Supreme Court he taught at the University of Chicago Law School from 1977 to 1982 and several of his former African American law students are calling him a “blatant racist” for the way that he treated them.
According to a Facebook post from Arnim Johnson that has since gone viral, Scalia flunked every black student who took his class. “When I was there, Scalia was outed as a blatant racist to the extent that the Black American Law Students Association (BALSA) chapter at the law school brought it to the attention of acting Dean Norval Morris in several meetings,” Johnson said.
According to him, no students flunk courses at elite law schools. “He flunked one brother so badly, it skewered his grade average, and he became the first, last, and only student in the history of the school to repeat first year. That man went on to become a respected military judge.”
Apparently no actions could be taken against Scalia because the sources of the information were all “private, confidential and privileged, and Scalia’s racist attitude and actions toward black students could be plausibly denied, but just barely,” Johnson explained. Scalia always defended himself that he graded blindly, but apparently the same thing happened when he was on the faculty at the University of Virginia and “politicking for a federal judgeship with national political connections.” Johnson explained that Scalia got away with it at UVA because “the actual facts regarding his intent could not be adduced in a tribunal.” .........(more)
http://www.rawstory.com/2016/03/former-student-antonin-scalia-was-outed-as-blatant-racist-while-teaching-law/
March 2, 2016
Corporate Default Rate Jumps Past Lehman Moment
by Wolf Richter • March 2, 2016
[font color="blue"]And then there’s S&P’s “pessimistic scenario.”[/font]
The US corporate default rate, according to Standard & Poor’s Global Fixed Income Research, soared from 2.8% in January to 3.3% in February, a big jump for just one month, and the highest rate since December 2010, when it was recovering from the Financial Crisis, with QE and ZIRP running at full bore, and with banks and big corporations getting bailed out by the Fed and the Treasury.
And it’s higher than it had been during the early phase of the Financial Crisis in September 2008, when Lehman Brothers filed for bankruptcy, when all heck was breaking lose, when stocks and bonds were plunging, and when the default rate was “only” 2.96%.
But this time it’s different, they reassure us. In December 2007, the default rate was 1.02%. At the time, banks were already cracking at the seams. Bear Stearns would soon pop. The Financial Crisis was visible on the horizon. And the economy entered what would later be called the Great Recession. By November 2009, nearly two years later, the default rate peaked at 12%.
These aren’t overnight fireworks. This isn’t binary options trading. Credits take their time to react.
But then newly created money surged through the system. What followed was the greatest credit bubble in US history. By July 2014, the default rate had dropped to 1.4%. That was the peak of the Fed’s fanciful handiwork that had “saved” the economy, an era when even the riskiest borrowers could get new money to fill their financial sinkholes, when bankruptcies had become rare, when the business cycle had been abolished, and before the price of oil fell off the cliff. .................(more)
http://wolfstreet.com/2016/03/02/corporate-default-rate-soars-above-lehman-moment/
Corporate Default Rate Jumps Past Lehman Moment
Corporate Default Rate Jumps Past Lehman Moment
by Wolf Richter • March 2, 2016
[font color="blue"]And then there’s S&P’s “pessimistic scenario.”[/font]
The US corporate default rate, according to Standard & Poor’s Global Fixed Income Research, soared from 2.8% in January to 3.3% in February, a big jump for just one month, and the highest rate since December 2010, when it was recovering from the Financial Crisis, with QE and ZIRP running at full bore, and with banks and big corporations getting bailed out by the Fed and the Treasury.
And it’s higher than it had been during the early phase of the Financial Crisis in September 2008, when Lehman Brothers filed for bankruptcy, when all heck was breaking lose, when stocks and bonds were plunging, and when the default rate was “only” 2.96%.
But this time it’s different, they reassure us. In December 2007, the default rate was 1.02%. At the time, banks were already cracking at the seams. Bear Stearns would soon pop. The Financial Crisis was visible on the horizon. And the economy entered what would later be called the Great Recession. By November 2009, nearly two years later, the default rate peaked at 12%.
These aren’t overnight fireworks. This isn’t binary options trading. Credits take their time to react.
But then newly created money surged through the system. What followed was the greatest credit bubble in US history. By July 2014, the default rate had dropped to 1.4%. That was the peak of the Fed’s fanciful handiwork that had “saved” the economy, an era when even the riskiest borrowers could get new money to fill their financial sinkholes, when bankruptcies had become rare, when the business cycle had been abolished, and before the price of oil fell off the cliff. .................(more)
http://wolfstreet.com/2016/03/02/corporate-default-rate-soars-above-lehman-moment/
March 2, 2016
Published on Mar 1, 2016
Check Keiser Report website for more: http://www.maxkeiser.com/
Every week Max Keiser looks at all the scandal behind the financial news headlines.
In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the ‘Concrete Club’ of the banking sector as RBS announces an eighth year of losses after yet more fines for yet more ‘bad conduct.’ In the second half, Max interviews Taiwanese shipping tycoon Nobu Su about the lawsuit he’s filed in Singapore against RBS for billions in losses on swaps.
Keiser Report: ‘Concrete Club’ of Banking Sector
Published on Mar 1, 2016
Check Keiser Report website for more: http://www.maxkeiser.com/
Every week Max Keiser looks at all the scandal behind the financial news headlines.
In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the ‘Concrete Club’ of the banking sector as RBS announces an eighth year of losses after yet more fines for yet more ‘bad conduct.’ In the second half, Max interviews Taiwanese shipping tycoon Nobu Su about the lawsuit he’s filed in Singapore against RBS for billions in losses on swaps.
March 2, 2016
(The Intercept) A leading House Democrat expressed serious concern on Tuesday that the FBI is exploiting the ISIS-inspired massacre of 14 people in San Bernardino to sidestep Congress on the encryption debate.
Rep. John Conyers, D-Mich., said it was troubling “that in the middle of an ongoing congressional debate on this subject, the FBI would ask a federal magistrate to give them the special access to secure products that this committee, this Congress, and the administration have so far refused to provide.” He spoke at a hearing of the House Judiciary Committee, of which he is the ranking Democratic member.
“Why has the government taken this step and forced this issue?” he asked.
It was a rhetorical question.
“I suspect that part of the answer lies in an email obtained by the Washington Post and reported to the public last September,” Conyers said.
“In it, a senior lawyer in the intelligence community writes that ‘although the legislative environment towards encryption is very hostile today … it could turn in the event of a terrorist attack or criminal event where strong encryption can be shown to have hindered law enforcement.’” ........................(more)
https://theintercept.com/2016/03/01/congressman-suggests-fbi-is-taking-advantage-of-san-bernardino-tragedy-to-push-agenda/
John Conyers Suggests FBI Is Taking Advantage of San Bernardino Tragedy to Push Agenda
(The Intercept) A leading House Democrat expressed serious concern on Tuesday that the FBI is exploiting the ISIS-inspired massacre of 14 people in San Bernardino to sidestep Congress on the encryption debate.
Rep. John Conyers, D-Mich., said it was troubling “that in the middle of an ongoing congressional debate on this subject, the FBI would ask a federal magistrate to give them the special access to secure products that this committee, this Congress, and the administration have so far refused to provide.” He spoke at a hearing of the House Judiciary Committee, of which he is the ranking Democratic member.
“Why has the government taken this step and forced this issue?” he asked.
It was a rhetorical question.
“I suspect that part of the answer lies in an email obtained by the Washington Post and reported to the public last September,” Conyers said.
“In it, a senior lawyer in the intelligence community writes that ‘although the legislative environment towards encryption is very hostile today … it could turn in the event of a terrorist attack or criminal event where strong encryption can be shown to have hindered law enforcement.’” ........................(more)
https://theintercept.com/2016/03/01/congressman-suggests-fbi-is-taking-advantage-of-san-bernardino-tragedy-to-push-agenda/
March 2, 2016
Following the Jan. 23 blizzard — which caused a shutdown of the LIRR, followed by a bumpy resumption of service that confused and infuriated riders — the MTA promised to take a hard look at what happened, with an eye to lessons learned.
"It was a very, very difficult storm," said LIRR president Patrick Nowakowski. "We were obviously at it for several days before we got back to normal service."
He said the agency could benefit from additional snowfighting equipment, like more plow trains, as well as the trucks necessary to provide fuel. It also needs centralized train control to help keep track of where trains are at all times. Going into the agency's command center in Jamaica, Nowakowski said, is like "going into the Dark Ages."
But those upgrades are years away, and MTA board member Ira Greenberg said that what really annoyed riders was the lack of accurate information. "And that's not just this snowstorm," Greenberg said. "That's been going on for years." .............(more)
http://www.wnyc.org/story/lirrs-snowstorm-postmortem-we-need-better-technology-and-communication-skills/
Long Island Railroad's Snowstorm Postmortem: We Need Better Technology — And Communication Skills
Following the Jan. 23 blizzard — which caused a shutdown of the LIRR, followed by a bumpy resumption of service that confused and infuriated riders — the MTA promised to take a hard look at what happened, with an eye to lessons learned.
"It was a very, very difficult storm," said LIRR president Patrick Nowakowski. "We were obviously at it for several days before we got back to normal service."
He said the agency could benefit from additional snowfighting equipment, like more plow trains, as well as the trucks necessary to provide fuel. It also needs centralized train control to help keep track of where trains are at all times. Going into the agency's command center in Jamaica, Nowakowski said, is like "going into the Dark Ages."
But those upgrades are years away, and MTA board member Ira Greenberg said that what really annoyed riders was the lack of accurate information. "And that's not just this snowstorm," Greenberg said. "That's been going on for years." .............(more)
http://www.wnyc.org/story/lirrs-snowstorm-postmortem-we-need-better-technology-and-communication-skills/
March 2, 2016
from the Metro Times:
How international news media tried to find conflict in Hamtramck’s new city council — and missed it entirely
Caniff and Quran
By Michael Jackman
As the rest of the city council meets for a work group at Hamtramck City Hall on a Tuesday evening, one Muslim council member is off in a side room where national news media are doing interviews. They happen to be in town for the North American International Auto Show, but they're also using this trip as an opportunity to report on the city's new Muslim-majority city council, elected in November.
I know this because I'm lost, and happen to accidentally head into the room where these interviews are taking place. I back out and listen at the door to the line of questioning from our national news media. In this particular interview, they seem to be turning over every stone looking for evidence of conflict. Or are they simply playing devil's advocate? It's hard to tell.
The Muslim councilman is telling the interviewer emphatically that "Sharia Law" won't be a factor in politics. The interviewer changes his tack: how about in their own lives? Doesn't Sharia Law enter into the day-to-day life of the community? The interviewer almost pleads, "In daily matters, outside of politics, do you ever say, 'This doesn't conform to Sharia Law?'" The interviewee is too clever for this trap.
Soon the interviewer is trying to appeal to the emotions, asking about a Muslim candidate's campaign signs that were vandalized. The Muslim councilperson says it was unfortunate.
.....(snip).....
It's an odd scene. The representative from the national media seems almost determined to get one of these Muslim council members to say anything controversial, anything that can be taken out of context, and to no avail. ..............(more)
http://www.metrotimes.com/detroit/how-international-news-media-tried-to-find-conflict-in-hamtramcks-new-city-council-and-missed-it-entirely/Content?oid=2399323
How international news media tried to find conflict in Hamtramck’s new city council — and missed it
from the Metro Times:
How international news media tried to find conflict in Hamtramck’s new city council — and missed it entirely
Caniff and Quran
By Michael Jackman
As the rest of the city council meets for a work group at Hamtramck City Hall on a Tuesday evening, one Muslim council member is off in a side room where national news media are doing interviews. They happen to be in town for the North American International Auto Show, but they're also using this trip as an opportunity to report on the city's new Muslim-majority city council, elected in November.
I know this because I'm lost, and happen to accidentally head into the room where these interviews are taking place. I back out and listen at the door to the line of questioning from our national news media. In this particular interview, they seem to be turning over every stone looking for evidence of conflict. Or are they simply playing devil's advocate? It's hard to tell.
The Muslim councilman is telling the interviewer emphatically that "Sharia Law" won't be a factor in politics. The interviewer changes his tack: how about in their own lives? Doesn't Sharia Law enter into the day-to-day life of the community? The interviewer almost pleads, "In daily matters, outside of politics, do you ever say, 'This doesn't conform to Sharia Law?'" The interviewee is too clever for this trap.
Soon the interviewer is trying to appeal to the emotions, asking about a Muslim candidate's campaign signs that were vandalized. The Muslim councilperson says it was unfortunate.
.....(snip).....
It's an odd scene. The representative from the national media seems almost determined to get one of these Muslim council members to say anything controversial, anything that can be taken out of context, and to no avail. ..............(more)
http://www.metrotimes.com/detroit/how-international-news-media-tried-to-find-conflict-in-hamtramcks-new-city-council-and-missed-it-entirely/Content?oid=2399323
March 2, 2016
Dahr Jamail | Climate Disruption's New Record: Carbon Dioxide Levels Reach Highest Point in 15 Million Years
Monday, 29 February 2016 00:00
By Dahr Jamail, Truthout | Report
Recently, a Norwegian Coast Guard icebreaker ship took an interesting trip into the Arctic. The ship found no ice to break, despite the fact that it was the dead of winter and barely 800 miles from the North Pole.
Indeed, record-low levels of Arctic sea ice are becoming normal. The ice is disappearing before our very eyes.
Satellite data now shows we are witnessing a very rapid acceleration in global sea level rise. In the last six years, oceans have risen by five millimeters per year, which is a rate not seen since the ending of the last Ice Age - and it is accelerating.
One of the most alarming indicators of ever-accelerating anthropogenic climate disruption (ACD) this writer has witnessed since beginning these dispatches is the fact that atmospheric carbon dioxide, in early February, reached a level not seen on the planet in the last 15 million years.
Thanks to humans, the earth was (since the 1990s) already experiencing atmospheric carbon dioxide levels in a realm not experienced on the planet since the Pliocene epoch, which was the period 2.6 to 5.3 million years ago that saw atmospheric carbon dioxide levels between 350 and 405 parts per million and average global temperatures that ranged between 2 and 3 degrees Celsius warmer than the climate of the 1880s. .............(more)
http://www.truth-out.org/news/item/35008-climate-disruption-s-new-record-carbon-dioxide-levels-reach-highest-point-in-15-million-years
Climate Disruption's New Record: Carbon Dioxide Levels Reach Highest Point in 15 Million Years
Dahr Jamail | Climate Disruption's New Record: Carbon Dioxide Levels Reach Highest Point in 15 Million Years
Monday, 29 February 2016 00:00
By Dahr Jamail, Truthout | Report
Recently, a Norwegian Coast Guard icebreaker ship took an interesting trip into the Arctic. The ship found no ice to break, despite the fact that it was the dead of winter and barely 800 miles from the North Pole.
Indeed, record-low levels of Arctic sea ice are becoming normal. The ice is disappearing before our very eyes.
Satellite data now shows we are witnessing a very rapid acceleration in global sea level rise. In the last six years, oceans have risen by five millimeters per year, which is a rate not seen since the ending of the last Ice Age - and it is accelerating.
One of the most alarming indicators of ever-accelerating anthropogenic climate disruption (ACD) this writer has witnessed since beginning these dispatches is the fact that atmospheric carbon dioxide, in early February, reached a level not seen on the planet in the last 15 million years.
Thanks to humans, the earth was (since the 1990s) already experiencing atmospheric carbon dioxide levels in a realm not experienced on the planet since the Pliocene epoch, which was the period 2.6 to 5.3 million years ago that saw atmospheric carbon dioxide levels between 350 and 405 parts per million and average global temperatures that ranged between 2 and 3 degrees Celsius warmer than the climate of the 1880s. .............(more)
http://www.truth-out.org/news/item/35008-climate-disruption-s-new-record-carbon-dioxide-levels-reach-highest-point-in-15-million-years
March 2, 2016
By Juan Cole | (Informed Comment) | – – Lindsey Graham has been posing as the voice of reason in the Republican Party for the past few weeks, warning Tuesday that if Donald Trump gets the Republican nomination and Hillary Clinton is the Democratic standard-bearer, then “crazy loses to dishonest” in the public’s eye. There isn’t any real evidence that Hillary Clinton is personally dishonest in the way that Graham is charging. She’s just a politician.
But of course there is a lot of evidence that Donald Trump is unbalanced.
The problem is, Graham and many other members of the Republican Establishment are blind to the ways in which the Trump stances they call crazy are mostly simply explicit statements of what they say with dog-whistles. Or they employ the same rhetorical tricks but apply them to what Graham thinks are the wrong targets.
Graham complains that Trumps speaks in a bigoted way about Latinos, who he says are the fastest-growing part of the electorate. He is frustrated that Trump is chasing away a key demographic.
But Graham himself has called Middle Easterners all “crazy” and characterized Iranians as all “liars.” He made the latter slur in order to argue that diplomacy could not succeed in dealing with Iran. But the Iranians did concrete in their planned heavy water reactor and met every other obligation of the JCPOA agreement with the UN Security Council.
After the Dylann Roof shooting at Emanuel ME Church in Charleston, Graham opposed removing the Confederate flag from the statehouse grounds, on the grounds that it represented ‘who we are.’ But 66% of SC African-Americans wanted it gone, and SC is the state with the largest proportion of African-Americans in the country (if they were actually enfranchised Graham wouldn’t be senator). .....................(more)
http://www.juancole.com/2016/03/dont-be-fooled-lindsey-graham-gop-establishment-just-as-crazy-as-trump.html
Don’t be fooled: Lindsey Graham & GOP Establishment just as Crazy as Trump
By Juan Cole | (Informed Comment) | – – Lindsey Graham has been posing as the voice of reason in the Republican Party for the past few weeks, warning Tuesday that if Donald Trump gets the Republican nomination and Hillary Clinton is the Democratic standard-bearer, then “crazy loses to dishonest” in the public’s eye. There isn’t any real evidence that Hillary Clinton is personally dishonest in the way that Graham is charging. She’s just a politician.
But of course there is a lot of evidence that Donald Trump is unbalanced.
The problem is, Graham and many other members of the Republican Establishment are blind to the ways in which the Trump stances they call crazy are mostly simply explicit statements of what they say with dog-whistles. Or they employ the same rhetorical tricks but apply them to what Graham thinks are the wrong targets.
Graham complains that Trumps speaks in a bigoted way about Latinos, who he says are the fastest-growing part of the electorate. He is frustrated that Trump is chasing away a key demographic.
But Graham himself has called Middle Easterners all “crazy” and characterized Iranians as all “liars.” He made the latter slur in order to argue that diplomacy could not succeed in dealing with Iran. But the Iranians did concrete in their planned heavy water reactor and met every other obligation of the JCPOA agreement with the UN Security Council.
After the Dylann Roof shooting at Emanuel ME Church in Charleston, Graham opposed removing the Confederate flag from the statehouse grounds, on the grounds that it represented ‘who we are.’ But 66% of SC African-Americans wanted it gone, and SC is the state with the largest proportion of African-Americans in the country (if they were actually enfranchised Graham wouldn’t be senator). .....................(more)
http://www.juancole.com/2016/03/dont-be-fooled-lindsey-graham-gop-establishment-just-as-crazy-as-trump.html
March 2, 2016
Blowback: Donald Trump Is the Price We Pay for the "War on Terror"
Tuesday, 01 March 2016 00:00
By Mike Lofgren, Truthout | News Analysis
The "war on terror" is the longest continuous war in US history. Taxpayers have ponied up over $4 trillion to wage it. Yet the consensus of our intelligence community is that we are more in danger than ever. Did we spend more than $4 trillion to make ourselves less safe? Let us unpack the contradictions.
Terrorism in the United States is statistically a negligible cause of mortality: One is about as likely to die from being crushed by a flat-screen TV, and more likely to die falling in the bathtub than from terrorism. Imagine if we had spent $4 trillion to cure cancer or heart disease. Nevertheless, nearly every word US government officials have uttered about the matter during the last 15 years has been designed to instill dread of terrorism in the population. And it has worked.
Voters in the Republican primary in South Carolina declared terrorism to be their foremost concern, eclipsing a stagnant, low-wage economy; deteriorating living standards leading to an actual increase in the death rate of GOP voters' core demographic; and the most expensive and least available health care in the "developed" world. The operatives of the national security state must have been rubbing their hands with glee: Through relentless conditioning, their agenda is now the creed of a numerically significant and highly motivated segment of the electorate.
But there was a flaw in their calculation. Those voters who felt most strongly about terrorism chose Donald Trump, who comfortably won the primary. The national security state, which is a subset of the corporate state, doesn't want Trump. They prefer to maintain the present corporate oligarchy that offers a façade of democratic process by putting forward safe, obedient, pre-programmed candidates. Since the "war of terror" began, this charade has worked rather efficiently: Bush or Kerry, Obama or McCain, Obama or Romney. And this year it was to be Jeb Bush or Hillary Clinton. Or, in a pinch, a second-stringer like Marco Rubio. ...............(more)
http://www.truth-out.org/news/item/35030-blowback-donald-trump-is-the-price-we-pay-for-the-war-on-terror
Blowback: Donald Trump Is the Price We Pay for the "War on Terror"
Blowback: Donald Trump Is the Price We Pay for the "War on Terror"
Tuesday, 01 March 2016 00:00
By Mike Lofgren, Truthout | News Analysis
The people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.—Hermann Göring, in an interview by Gustave Gilbert, April 18, 1946
The "war on terror" is the longest continuous war in US history. Taxpayers have ponied up over $4 trillion to wage it. Yet the consensus of our intelligence community is that we are more in danger than ever. Did we spend more than $4 trillion to make ourselves less safe? Let us unpack the contradictions.
Terrorism in the United States is statistically a negligible cause of mortality: One is about as likely to die from being crushed by a flat-screen TV, and more likely to die falling in the bathtub than from terrorism. Imagine if we had spent $4 trillion to cure cancer or heart disease. Nevertheless, nearly every word US government officials have uttered about the matter during the last 15 years has been designed to instill dread of terrorism in the population. And it has worked.
Voters in the Republican primary in South Carolina declared terrorism to be their foremost concern, eclipsing a stagnant, low-wage economy; deteriorating living standards leading to an actual increase in the death rate of GOP voters' core demographic; and the most expensive and least available health care in the "developed" world. The operatives of the national security state must have been rubbing their hands with glee: Through relentless conditioning, their agenda is now the creed of a numerically significant and highly motivated segment of the electorate.
But there was a flaw in their calculation. Those voters who felt most strongly about terrorism chose Donald Trump, who comfortably won the primary. The national security state, which is a subset of the corporate state, doesn't want Trump. They prefer to maintain the present corporate oligarchy that offers a façade of democratic process by putting forward safe, obedient, pre-programmed candidates. Since the "war of terror" began, this charade has worked rather efficiently: Bush or Kerry, Obama or McCain, Obama or Romney. And this year it was to be Jeb Bush or Hillary Clinton. Or, in a pinch, a second-stringer like Marco Rubio. ...............(more)
http://www.truth-out.org/news/item/35030-blowback-donald-trump-is-the-price-we-pay-for-the-war-on-terror
March 2, 2016
It Gets Ugly in the Startup Bust
by Wolf Richter • March 1, 2016
[font color="blue"]Debris from the collapse hits investors left and right.[/font]
Some startups succeed beyond anyone’s wildest dreams. This is the lure used to get investors from around the world to pour money into VC funds and mutual funds that invest in these miracles at ever higher “valuations” before they become miracles, before they have profits, or even revenues. The idea is to get in on the ground floor of a miracle. No price is too high. But now the miracles are deflating, reality is resurfacing, and a brutal drawn-out process has set in.
Yahoo investors are now coming to grips with this, because it’s their money that went down the drain when it bought Tumblr for $1.1 billion in 2013. At the time it recognized $750 million of that investment as “goodwill,” an intangible asset on which Yahoo blew tangible money. In January, it disclosed that it wrote down that investment by $230 million. And on Monday, it disclosed in its annual 10-K filing that it might write off “some portion or all” of the remaining goodwill.
But Tumblr is still out there, people are still using it, and revenues are creeping up. It’s just that after all these boom years when everything soared, the rout back to reality has set in, and its valuation is now being viewed with a more realistic eye, even at Yahoo.
Numerous startups have recently raised desperately needed new money at much lower valuations, including fitness-tracker maker Jawbone, whose valuation plunged 55% in that “down round,” and Foursquare, whose valuation was cut by 62%. ...........(more)
http://wolfstreet.com/2016/03/01/gets-ugly-startup-bust-investors-hit-mutual-fund-write-downs/
It Gets Ugly in the Startup Bust
It Gets Ugly in the Startup Bust
by Wolf Richter • March 1, 2016
[font color="blue"]Debris from the collapse hits investors left and right.[/font]
Some startups succeed beyond anyone’s wildest dreams. This is the lure used to get investors from around the world to pour money into VC funds and mutual funds that invest in these miracles at ever higher “valuations” before they become miracles, before they have profits, or even revenues. The idea is to get in on the ground floor of a miracle. No price is too high. But now the miracles are deflating, reality is resurfacing, and a brutal drawn-out process has set in.
Yahoo investors are now coming to grips with this, because it’s their money that went down the drain when it bought Tumblr for $1.1 billion in 2013. At the time it recognized $750 million of that investment as “goodwill,” an intangible asset on which Yahoo blew tangible money. In January, it disclosed that it wrote down that investment by $230 million. And on Monday, it disclosed in its annual 10-K filing that it might write off “some portion or all” of the remaining goodwill.
But Tumblr is still out there, people are still using it, and revenues are creeping up. It’s just that after all these boom years when everything soared, the rout back to reality has set in, and its valuation is now being viewed with a more realistic eye, even at Yahoo.
Numerous startups have recently raised desperately needed new money at much lower valuations, including fitness-tracker maker Jawbone, whose valuation plunged 55% in that “down round,” and Foursquare, whose valuation was cut by 62%. ...........(more)
http://wolfstreet.com/2016/03/01/gets-ugly-startup-bust-investors-hit-mutual-fund-write-downs/
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