Financial Mania Has Yet To End

The past 30 years will be remembered by history books as the biggest financial and paper asset mania of history. While one could hope that after several major crashes of historical amplitude people would understand that they have to stay away from the markets, mass psychology and greed are still at their paroxysm.

Last week we've had the LinkedIn IPO and the company's PER which probably is among the highest ever reached during an IPO since the dotcom bubble burst.

You know you have a mania when:
  • The only thing that matters about a listed company is its ticker
  • When there's a glut of houses on the market after the biggest real estate bubble the US has ever known, and yet analysts explain that there's a shortage of houses and that boom times will be back.
  • You hear than an IPO will change the world
  • When you have companies trading at PERs of 1500, and yet, people deny there's a bubble.
See for yourself, a few quotes from various reports that should show just how much the mania is omni present and has gone wild:
May 27 (Bloomberg) -- Zillow Inc. wants to end the New York Stock Exchange’s monopoly on companies trading under a single letter.

Zillow, a real-estate website that filed last month to raise as much as $51.8 million by going public, disclosed this week that it applied for a Nasdaq Stock Market listing under the ticker Z. Assuming the application is approved, Zillow would be the first Nasdaq stock with a one-letter symbol.

“They’re doing it to attract attention, obviously,” said Bob Stovall, a managing director and global strategist at Wood Asset Management Inc. who has worked on Wall Street since 1953. “I wouldn’t even notice it or look it up,” he said, if Zillow used the traditional four letters for a symbol.

Nasdaq-listed companies have been able to trade under a single letter since July 2007, when the Securities and Exchange Commission changed the regulations that governed ticker symbols. Before then, stocks could only have one to three letters on the NYSE or the former American Stock Exchange, now NYSE Amex.

Another company preparing for an initial public offering, Pandora Media Inc., plans to list its shares on the NYSE under the letter P. The Internet-music service would become the first company to use that ticker since September 2002, when Phillips Petroleum Co. combined with Conoco Inc. to form ConocoPhillips.

The Z ticker has been available since March 2003, when Foot Locker Inc. adopted FL as its symbol. Z had previously been used by Foot Locker and three predecessor companies -- Venator Group Inc., Woolworth Corp. and F.W. Woolworth Co. -- since 1925.
Yahoo Daily Ticker — May the 24th:
[...] soon — the U.S. could face a housing shortage in the not-too-distant future. That's the line coming from one of the most sober, data-driven, non-ideological sources I know: Macroeconomic Advisers. The consulting firm is one of the best short-term forecasters out there, and distributes highly valuable measures of current quarter GDP as new inputs come in. It recently issued a report "The Long View on Housing — There's a Boom Uut There Somewhere," a summary of which can be seen here.

MA doesn't arrive at this conclusion based on blind faith, belief or intuition. Rather, it's a matter of numbers, supply and demand, and a look at historical trends. Times may be tough, but Americans continue to grow up, leave home, get married, form families and have children. At the end of last year, the U.S. had 130.8 million housing units, of which 112.5 million were occupied. Some 18.4 million were empty, leaving us with a vacancy rate of 14 percent.[...]
Yahoo Breakout — May the 20th — Forget LinkedIn, Glencore Will Change the World. The speaker Dan Dicker is a complete incompetent and over-bullish talking head. He doesn't understand the basics of accounting nor financial markets...

Yahoo Daily Ticker — May the 24th —  Calling Web 2.0 a ‘Bubble’ Is Insulting to the Term ‘Bubble’
First there was Renren, the "Facebook of China." Then came the LinkedIn offering last week. Today, Yandex, "the Google of Russia" went public in a deal that was wildly oversubscribed and saw the stock surge on its first day of trading.

These and other echoes of the 1990s tech boom are causing investors and pundits to wonder: Is this bubble 2.0?

"We are nowhere near a bubble," Henry says. "We are debasing the word 'bubble' by attaching it every time there's a price that's higher than we understand."

Despite the hoopla over Web 2.0 valuations — including for private companies like Facebook and Groupon — these companies are far more mature and profitable than the bulk of tech companies going public in 1999 and early 2000.

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