FACEBOOK IS THE NEW GOLDRUSH, MICROSOFT MIGHT BUY RIM AND MERRILL LYNCH DOWNGRADES WAL-MART

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Facebook applications are a flaming money pit: Mark Evans

Mark Evans, a widely-read tech blogger, reports on the “thriving Facebook application landscape that a growing number of companies are enthusiastically jumping on.” Facebook, the popular social networking tool, recently opened itself up to outside developers and a literal cottage industry has sprung up almost overnight dedicated to created small tools and applications that Facebook members use to enhance their profile. Evans makes mention of several small start-ups that have recently been acquired.

It is clear that Evans believes the ship has sailed on profiting from Facebook applications. Evans said “the big question is monetization, and how these applications can turn users into dollars… If an entrepreneur thinks there’s a big score to be made by jumping into Facebook now, he and his money will soon be separated.” Essentially, Evans is arguing that while several companies have made big waves with Facebook applications, the market is too limited to turn that many different applications into financial opportunities. In fact, Evans draws a stark comparison between 2007 and 1897.  “In thinking about it, the landscape looks like like the Yukon gold rush of 1897 with a small number of lucky miners…scoring the biggest and best claim while thousands of miners scramble to get in while the going is good.”

The market is taking on a casino look: David Fry

David Fry posted today in Seeking Alpha’s US Market Blog addressing growing volatility in the US markets. Fry was adamant that speculation over another interest rate cut combined with relatively light volume was making Wall Street look more like the Vegas Strip. Fry stated, “Is there really much to say about these last two days? You can’t make this stuff up!”

Fry shifted a significant amount of the blame for the market volatility squarely onto the shoulders of Fed Chairman Ben Bernanke. He referred to a press release from Bernanke saying that the Fed is monitoring markets and is prepared to act if necessary. Seemingly, that potential action would be another cut to interest rates, prompting significant volatility due to relatively low market volume. Fry said “volume remains light and it’s easy for day-trading trading desk and hedge funds to push markets around… He definitely tipped-off bulls that the Bernanke Put is in play.”

Fry made it clear that waiting a few days for the market to stabilize would be advisable and he also offered a stern warning to Bernanke. “Should the Fed not cut interest rates there will be hell to pay.”

No Chinese Investment in Hong Kong?

China Venture News had a post today explaining that China’s government has quashed the notion of lifting economic restrictions so that mainland Chinese investors could begin buying stock on the Hong Kong exchange. The blog announced today that “barely a week after word came out that Mainland China's private investors were going to be allowed to invest in the Hong Kong Stock Exchange, the government in Beijing has evidently had second thoughts.”

The Chinese government appears to have gotten cold feet about the idea. The author of the post believed that China’s government was concerned “about the idea that large amounts of money could move out of China through investment in foreign firms listed in Hong Kong without much government control over the flow of the funds.”

Merrill Lynch downgrades Wal-Mart

Joseph Hargett, writing for Schaeffers Daily Market Blog, stated “We could be seeing the beginning of the backslide for Wal-Mart Stores.” After posting a disappointing earnings report two weeks ago it appears that the world’s largest retailer, once thought to be invulnerable, could be starting a downward slide for the first time in recent history. Hargett noted since August 14th “the shares have plunged more than 6%.”

The bad news was compounded today as Merrill Lynch finally broke ranks and became the first investment firm to downgrade the stock to “sell” status. Hargett quoted the report from Merrill to explain the rational behind the downgrade “following years of weak comps, declining new door productivity and aggressive expense management, margin erosion in the core U.S. division looks set to continue, and may, in fact, accelerate in the years ahead." Investors seemed to heed Merrill Lynch’s recommendation today with Hargett also reporting that “WMT was last seen lower by more than 2% on the session.”

Microsoft may move for Research in Motion

Late in the trading day, Reuters news service reported that Microsoft is mulling a potential bid for Blackberry creators Research-in-Motion. Howard Linzon posted in his blog that Microsoft should make the move to buy RIM” while also adding, “and if not them…Google should or even DELL.”

Linzon is convinced that RIM represents a big opportunity for large companies to get ahead of their competition. Linzon said “if they (Microsoft, Dell, Google) want to be in the game the next leg of the consumer electronics phase, it makes complete sense.” Linzon was convinced that if the rumors are true then a potential purchase of RIM would be a good move due to the strength of the sector. He declared, “tech is acting strong and something big is brewing. The financial mess should be having way more of an affect on the market. Time will tell on this rumor.”

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