Inveslogic.com Daily Blog Report: Recession is in full swing, Yahoo! regretting Kelkoo purchase, Chinese Markets going crazy

This is a selection of today’s most popular blog articles from Inveslogic.com where you will find the highest-rated stock market and investment blogs, videos and podcasts on the web.

Recession is already here

A recent post from Vigilant Investor, a financial blog written by private equity managers, has noted several specific indicators that we are currently in the throws of a recession. One key reason recession is the current state of the housing market. The post mentions that “economists said the housing market’s woes show no sign of improving soon, down 22% from prior year.” Additionally, the post also mentioned that “Ford’s U.S. sales plummeted 21% in September as the automaker saw a steep drop-off in car sales. Toyota reported a 4% decline.” Vigilant Investor also mentions that the credit crunch has now started to affect small businesses. The post states that, “entrepreneurs looking to tap home equity for business capital are facing increased scrutiny from mortgage lenders.”

The post was adamant that these three factors are clear indications that, despite the stock market at near-record levels, America has entered a recession and that things are about to get worse. Vigilant Investor declared that “Housing will lead to a recession… This recession will be severe unless successfully papered over.” They also warned that this would inevitably lead to “hyperinflationary problems.” They also expressed a total lack of confidence in the Federal Reserve’s ability to manage the dollar.

More bad news for Yahoo!

VentureBeat, a widely-read business blog focused on the venture capital industry, has revealed that Yahoo! has apparently made a big mistake with its purchase of an online shopping comparison site. According to the post, “Yahoo said it is considering the sale of Kelkoo, its online shopping comparison service, only three-and-a-half years after it acquired the company for €475m ($672m).” The post described Yahoo!’s acquisition of Kelkoo as “another one of those ‘what were you thinking?’ moments, when industry experts were widely perplexed at why Yahoo had paid so much for what many considered the king of spam, a second rate service that bought most of its traffic from other search engines such as Google.”

Matt Marshall, the author of the post, compared Yahoo! and Kelkoo’s deal to the similarly disappointing performance of Skype, owned by eBay. Marshall declared that both of “these deals [were] made by a company desperate to show some sort of long-term growth strategy, but where the company failed to articulate how the acquisition would make it money.” Yahoo! has refused to disclose revenue numbers from Kelkoo since the acquisition, but assumptions are extremely negative. Marshall explained how Yahoo! attempted to integrate Kelkoo into both its search marketing and online shopping efforts, but it was continually usurped by competitors Shopping.com and Swedish company Pricerunner.

The post also noted the recent rumor that Yahoo!’s days in the search marketing business are numbered. Marshall stated that “the move also comes amid speculation that Yahoo has talked with Google about pulling out of the search engine game altogether and letting Google handle its search business.”

Chinese Markets getting more volatile

According to the latest post from expert business blog Alpha Trends, the Chinese stock market is becoming more and more like a game of roulette thanks to speculative market conditions. The recent glut of IPO’s combined with a surging Shanghai Composite Index, which has improved over 107% within the year, have increased the speculative nature of the Chinese markets. Alpha Trends reports that “speculative market conditions like the one being experienced in the Chinese stocks encourages and even rewards undisciplined trading which raises the overall market risk.”

It is clear that Alpha Trends believes that the Chinese market is not for inexperienced investors or those who lack tenacity. While the author of the post observes that “these stocks can be money-making machines if you catch the timing right,” although he is quick to emphasize that, “if you don’t it can be very painful very quickly.” As an example, he states that “I am staring in disbelief as one of the stocks I wanted to concentrate on (EFUT) has just soared from 19 to 26 in the pre-market, looks like it went without me.”

Macy’s adopts Solar Power

A recent post from the Energy Blog has reported that Macy’s is now the latest company to use solar power to off-set operating costs. According to the post, “Macy's is launching a program to install solar electric power systems at 28 California stores.” The post also reports that Macy’s has partnered with SunPower “a Silicon Valley-based manufacturer of high-efficiency, solar cells, solar panels and solar systems, is partnering with Macy's to design and install the systems.” Macy’s plans to lease the system from SunPower, and they have a 10 year agreement to do so. At that point, Macy’s has the option to purchase the buy the system outright.

The state of California has a subsidy program in effect that alleviates some of the cost of purchasing and maintaining the solar cells. Energy Blog reports that Macy’s will save a substantial amount of money thanks to their switch to solar power. “This is a very large commitment by Macy's and with a potential energy savings of 40%, with energy efficiency improvements, demonstrates that solar power combined with energy savings has a great potential.”

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