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Pinterest is ready to go public but the “catalogue of ideas” is still blocked in China

I wrote about an upcoming Pinterest IPO on January 12, 2015. I said it was probably to early for them to go public at that time, but now four years later Pinterest has confidentially filed paperwork with the SEC for an IPO.

The photo-posting app firm Pinterest has chosen Goldman Sachs and JPMorgan Chase to lead its IPO, and shares will be available later on this summer. They have begun interviewing bankers and could raise $1,5B.


(Picture: Chinese Wall)

 

The company was launched in March 2010, so this is a young start-up that will follow many other start ups to go public this year. They have 250 million MAUs as of October 2018, and they have 800+ employees that is working with «catalogue of ideas.»

In 2012, Pinterest was valued at $1,5 billion. Two years later the company was valued at $3,8 billion. A few year later (June 2015) Pinterest was valued at $11 billion. The same year, Fortune Magazine listed Pinterest in the 8th position on its Unicorn list.

Since its inception, it has developed into a well-funded site financially supported by a group of successful entrepreneurs, and in 2011, the company secured a US$10 million Series A financing led by Jeremy Levine and Sarah Tavel of Bessemer Venture Partners.

Later on the same year, Pinterest secured US$27 million in funding from Anderssen Horowitz, which valued the company at US$200 million. Now, a few years later, the value of the company is 60 times higher.

Internet service provider in populist India had blocked Pinterest following a Madreas High Court order in July 2016 but the block was temporary. It`s even worse in Communist China. In 2017, Chinese authorities blocks Pinterest and the website is still blocked after Two Sessions in 2017.

No response has given, but some media guess that the blocks was related to the Two sessions. Huaban, Duitang and 30 more websites has many similaarities to Pinterest, so they are not alone on the market. However, they are not blocked in Hong Kong.

The same happened to Google in China. Once a popular search engine in China with a market share of 36,2 percent in 2009, but they blocked the web site and Google`s search market share dropped to only 1,7 percent.

Communist China is authoritarian and authorities was scared and stopped Google and this is what protectionism and Nationalism works. Most services offered by Google China were blocked by the Great Firewall in the People`s Republic of China.

In 2010, searching via all Google search sites, including Google Mobile, were moved from mainland China to Hong Kong. The same year, Google announced that, in response to a Chinese-originated hacking attack on them and other US tech companies, they were no longer willing to censor searches in China and would pull out of the country completely if necessary. Is this really fair trade?

Four year earlier, co-founder Sergey Brin said that virtually all of Googles customers were using the non-censored version of their website. Google critics in the United States claimed that Google China is a flagrant violation of the Google motto: «Dont be evil.»

On 13 January 2010, the news agency AHN reported that the U.S Congress planned to investigate Googles allegations that the Chinese government used the companys service to spy on human rights activists.

The US Secretary of State Hillary Clinton said at that time that analogies were drawn between the Berlin Wall and the free and unfree internet. Chinese articles came back saying that the United States uses the internet as a means to create worldwide hegemony based on Western values.

The issue of Google`s policy toward China was cited as a potentially major development in world affairs, marking a split between authoritarian socialism and the Western model of free capitalism and internet access.

China and America are two of the biggest economies in the world, so it is important for companies to have access to the market in both countries. A year ago, president Trump announced trade war with China, but now seems like a seven-month trade war is coming to an end.

The U.S has accused Beijing of forcing U.S companies doing business in China to share their technology with local partners and hand over intellectual property secrets, but China denies it engages in such practices.

Trump administration is looking at non-tariff barriers in China, including industrial subsidies, regulations, business licensing procedures, product standards reviews and other practices that keep U.S goods out of China or give an unfair advantage to domestic firms.

Visa and MasterCard have waited years to have access in China and Steve Mnuchin has pushed for China to open its market for them. But the clock is ticking and time is running short of the March 1 deadline to resolve the dispute or see U.S tariffs on $200 billion worth of Chinese goods rise from 10 percent to 25 percent.

Access to the Chinese market will help companies like Pinterest and other companies a lot. 50 percent of the world’s population live in Asia but it wont help if they spend most of their time on protectionism, nationalism, authoritarian behaviour, censorship, socialism and communism.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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President Donald Trump is nearing a decision on whom to pick to lead the Federal Reserve

Fed Chair Janet Yellen`s job is coming to an end. She took over the job from Ben Bernanke who started to «print» money. Four years is over and President Donald Trump have a few but strong candidates on his table.

President Donald Trump had a meeting with Standford University economist John Taylor and according to a White House official, Mr Trump is nearing a decision on whom to pick to lead the Federal Reserve.

 

 

John Taylor is one of the candidates and Janet Yellen is the other one. Other candidates are Fed governor Kevin Warsh who is on Trumps shortlist. Current governor Jerome Powell and Trumps economic adviser Gary Cohn is also on the list.

Mr Trump has scheduled a meeting with Federal Reserve Chairwoman Janet Yellen on Thursday.

Ms Yellen`s four-year term as chairwoman expires on February next year and Mr Trump will meet her to discuss the possibility of nominating her for a second term as central-bank chief. Mr Trump is considering offering Yellen the chance to stay in the job, but will announce his nominee before leaving for a trip to Asia next month on November 3.

John Taylor said he agree with the Fed`s strategy to remove economic stimulus, and the Fed policy rate is now set at 1 percent to 1,25 percent. What the right thing to do about the rate is a matter of debate among economists, also among Taylor and his camp.

John Taylor is a Ph.D economist with a strong expertise in monetary policy and institutional leadership which is key attributes for the Fed Chair, and this is probably why Taylor is one of the biggest favorite for Mr Trump.

Donald Trump is planning to cut the taxes and monetary policy is therefore critical and important.

Former Fed Chair Ben Bernanke started the QE program after the financial crisis in 2008, and Fed governor Warsh was against further monetary stimulus in 2010 with unemployment above 9 percent and inflation decelerating.

Ben Bernanke is an expert on the stock market crash in 1929, and called Warch`s political and markets savvy «invaluable,» according to Bloomberg.

Central banks are often independent from other policy makers. This is the case with the Federal Reserve and Congress, reflecting the separation of monetary policy from fiscal policy and the latter refers to taxes and government borrowing and spending.

The Federal Reserve has what is commonly referred to as a «dual mandate»:

  • to achieve maximum employment (around 5 percent unemployment), and
  • stable prices (2-3 percent inflation).

In addition, it aims to keep long-term interest rates relatively low, and since 2009 has served as a bank regulator. Its core role is to be the lender of last resort, providing banks with liquidity in order to prevent the bank failure and panics.

The central bank of the United States is the Federal Reserve System, which Congress established with the 1913 Federal Reserve Act.

Central banks are inherently non-market-based or even anticompetitive institutions. Many central banks, including the Fed, are not government agencies, and so are often touted as being politically independent.

Monetary policy consists of the actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates.

There are two types of monetary policy; expansionary and contractionary.

Expansionary monetary policy increases the money supply in order to lower unemployment, boost private-sector borrowing and consumer spending, and stimulate economic growth.

Contractionary monetary policy slows the rate of growth in the money supply or outright decreases the money supply in order to control inflation, while sometimes necessary, contractionary monetary policy can slow economic growth, increase unemployment and depress borrowing and spending by consumers and businesses.

An example would be the Fedral Reserves intervention in the early 1980s: in order to curb inflation of nearly 15 percent , the Fed raised its benchmark interest rate to 20 percent.

This hike resulted in a recession, but did keep spiraling inflation in check.

Mr Trump is planning to cut taxes and build more and better highways, and this is fiscal policy, which is trying to control inflation, stabilize business cycles and to improve unemployment rate. Sooner or later, we all know that the recession will come.

The tools will then be fiscal policy and the government will start to lower tax rates to try to fuel economic growth. If people are paying less in taxes, they have more money to spend or invest, and increased consumer spending or investment could improve economic growth.

On the other side; too much spending could increase inflation.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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