Capitalogix

Capitalogix Commentary 02/20/09

When America voted for Hope and Change - I don't think they expected to be hoping for a dollar and settling for two dimes, a nickel and a penny.

Market Hits New Crisis Low:

It has been ugly.  One sign that the Markets are having trouble is that Gold touched $1,000 for first time in a year.

Another sign the markets are having trouble? The Dow Jones Industrial Average now has lost nearly half its value, breaking to a new six-year low.

On one hand this seems to confirm people's fears that  stock declines aren't over, and dashes hope for a quick market recovery.  On the other hand, things don't bounce till they hit bottom.

Will dry powder ignite the stock market? One bullish argument rests on the piles of cash sitting in bank accounts and money-market funds earning next to no interest.  As deal-maker's fingers get itchy and companies get more desperate for cash, many expect a flurry of deals.

This Week's Chart:

Unlike the Dow, the S&P 500 has not made new lows.  It did, however, just break a clear trend-line.

Most major US equity indices have been in a "Triangle" consolidation pattern (like the one shown in the chart above).

You can think of the Triangle as a well-contested battle between the bulls and the bears.  Neither side has given-up much ground, yet.  Soon, though, one side will have had enough and the market will surge again. If it is a move up, then we get the relief rally people were looking for.  Even if you get a minor move down in the short-term, it can be constructive.  Here is why.

The bear-swing down, from October through November, had a lot of momentum.  The consolidation worked-off a lot of that.  Consequently, another move down would result in many positive divergences - and would likely be strong support for the next rally.

That doesn't mean the Bear Market would be over.  But an intermediate term rally would not surprise me here.  Especially as an OOPs trade.

Here Are A Few Of The Business Posts I Found Interesting This Week:

• Can This Be True? Federal Obligations Exceed GDP of Entire Planet. (WorldNet)
• Pledge of $275 Billion to Cut Mortgage Payments & curb foreclosures. (Bloomberg)
• Soros Sees No Bottom For World Financial Collapse, And Volcker Agrees. (Reuters)
• Economists' Droopy Outlook for the US. (WSJ & Bloomberg)
• Harvard Prof’s Plan for Saving the Financial System. (Creative Capital)
• Is Starbucks a Leading Indicator of the Economy? (Inquirer)
• Be Leery of Dow Theory - Does It Still Mean What It Used To? (Barrons)

And, A Little Bit Extra:

• Nature Versus Nurture: The Dynamics of Success. (TraderFeed)
• Clever E-Cards For Many Occasions - Very Funny Stuff. (Someecards.com)
• The Biology of Dating: Why Him, Why Her? (Time)
• Psychologists' Worry: Medication May Erase Bad Memories. (MSNBC)
• "Deliciously Gross" Heart-Attack Inducing Food. (This Is Why You're Fat)
• Vintage Tobacco Ads; Apparently They'd Do Anything To Sell You Cigarettes. (Click)

Things Aren't Always What They Appear To Be

This series of photographs is interesting to me because it so clearly gives us the wrong impression. Deep down you know that your mind created a story about what it means; and, yet, you know it didn't happen.

Obviously I picked this series of photos to illustrate a point. Just because we perceive something, doesn't mean it's true.

That point is even more true during emotionally trying times, when we're looking for confirmation of our worst fears. In this market environment, it's not hard to find data to scare you.

We don't just make things up, though, we also notice things and infer meaning from them. I suppose there was an evolutionary benefit to our ancestors who were able to infer danger before it ate them. Nowadays, it's probably better if we temper those instincts a little.

Why Do We See Patterns In Random Data?

The human mind is especially good at finding patterns in data. 

Often, I believe that I see a pattern in random data.  OK, I understand that I don't really see patterns in random data; but to me it seems to me like there are patterns in the random data. 

This happens because we don't look at data neutrally.  That means when the human eye scans a chart, not all data points get equal weight.  Instead we tend to focus on outstanding cases, and we tend to form our opinions on the basis of these special cases. 

In other words, it is human nature to pick up the stunning successes (or failures) of the method and to overlook the more common performances.

So, for example, when I am investigating a new pattern, I see many instances where that pattern works.  And that is precisely the reason that we use a computer; because it will find every instance of the pattern and confirm how often it truly works, and whether it provides a reliable edge.

I suspect that the desire to find patterns is the same element of human nature that leads people to become superstitious, read their horoscope, or go to a fortuneteller.  It is also the reason so many authors and speakers sell access to their chart patterns that supposedly work. The successes are much more startling than the failures.  So the successes stand out.

The Last Time I Felt This Bearish:

Here is a picture of my S&P chart analysis from August 2003.

I was painfully bearish, and wrong. Yes there was a giant downtrend, and many of the technical trading chart patterns that I knew indicated that the market was likely to plunge yet again.  But it didn't.

That points out a very interesting aspect of trading; every trade happens because of a disagreement. The buyer thinks prices likely to go up. The seller thinks it's likely go down. If that wasn't true, neither one would take their side of the trade.

The point is that it's important to see each trade from both sides of the fence. In order to remove some bias, learn to visualize the trade from the other perspective. Then you can re-evaluate and decide if you still want to take that trade.

The OOPs Trade:  When a well-known pattern fails, the response is often dynamic. In fact there's a name for this, it's called an "OOPs Trade". This often happens with obvious, high profile, situations like a "Head-and-Shoulders" pattern, the break of long-standing Trend-Line, violation of a clear Price Channel, crossing the 200-Day Moving Average, at big Round Numbers (like Dow 10,000), or even at key Support and Resistance Levels (like these recent lows). The violent reversal happens when the crowd realizes that it was wrong and has to get out of the trade. This is very similar to a short squeeze; and the move is often violent and prolonged.

The markets are oversold here, lots of people know that we just made new lows, and we have been bombarded with bad news recently.  So, I'm not predicting that the market will reverse here. I am just suggesting that it is possible.  OOPs.

Best Practices For These Uncertain Times

I spent part of the week in Chicago, and had had the privilege of spending some quality time discussing the current situation with a group of experienced traders and industry professionals. A couple of things struck me immediately.

• First, even these pros were rattled by the state of the economy and the prospect of recovery taking longer than expected or wanted.
  
  
• Second, even for those in the room who had well-crafted theories about why they were expecting an intermediate-term rally, it didn't take much discussion for them to admit the same sense of uncertainty that others have expressed.
  
  
• Finally, and most importantly, once the obligatory fear, uncertainty, and doubt talk was on the table - the conversation quickly turned to the best ways to make money in this environment.

Are Times Uncertain - Or Is It You?

I also went to a Strategic Coach quarterly planning session this week. Not surprisingly, the topic was primarily about best practices during uncertain times. Dan Sullivan recounted that many of his clients expected a tough year, but still expected a recovery to follow that. Then, he posed these questions.

• How long will this turmoil last? 
• What if the recovery doesn't come as quickly or as fully as you hope or expect?
• What if things stay like this?
• Who do I have to become for this to be okay?

Good questions, and it made me think:

Mastery isn't measured by the number of bad things you eliminate ...
but by the number of times you eliminate calling them bad.

Many of our biggest innovations or course corrections took place after a seemingly disastrous occurrence or bad thing happened. That's why lots of psychologists and self-help gurus encourage people to focus on the hidden gift that many of these experiences provide.

Examining several instances from my past, I came up with this list of the seven steps I use to transform almost any situation.

Seven Best Practices for Uncertain Times.

1. Accept Reality: We are where we are. Focus on being complete with what happened before this; and think about this as a new beginning with an even bigger future.
2. Do Something Positive: Take action and build momentum and confidence. Big wins are great. Yet, in scary times, even small items are worth noting and building upon.
3. Take Care of Yourself: Increase your physical activity, meditation and massage. This is the time to eat and sleep well. Many studies show decision-making suffers when you're stressed. Taking care of yourself goes a long way to making a lot of other things better.
4. Communicate More: The natural tendency is to hide or to recuperate in private. Instead, be open and receptive to help and ideas from friends, partners, or wherever it comes from.
5. Creative Destruction: The old game and the old ways of thinking are over.  Shift energies to what is working.
6. Increase Your Options: It often takes a different level of thinking to solve a problem than the level of thinking that got you into the problem. So, be open to new opportunities and new possibilities.
7. Choose a Bigger Future: Instead of resigning yourself to playing small and doing with less, recognize that the clearing creates the space for something even better. Choose what you want, plan it and stick to your process.

They say everything happens for a reason. The secret is that you get to choose the reason, what it means to you, and what you're going to about it. Choose well, and someday you could look back on this time as one of the best things that ever happened to you.

Capitalogix Commentary 02/06/09

Humor usually has its base in truth.

Perhaps that is why this cartoon caught my eye; it pokes at a sore spot.

It has been weeks since many people figured things changed.  Not much seems better, yet, does it?

Emotions are not logical.  So even though I might consciously understand that we are going through a long process, I want instant gratification.  It is human nature.  And that explains a lot about the market in-and-of-itself.

I once heard that a Recession is when your neighbor loses his job, and a Depression is when you lose yours. With unemployment spiking, a lot more people are feeling "depressed".

Market Commentary: The good news is that the lows held, and it looks like there's decent support at these levels. It is worth noting that we saw a strong rally anticipating the Senate's Stimulus Plan.

Déjà vu, though; didn't we see this pattern before?  Last October the markets rallied off the lows in anticipation of the bailout deal, only to move down again once it passed. It will be interesting to see what happens to the market when the Stimulus Plan actually passes. Will confidence spur a further rally, or will speculators have to switch back to bear-mode?

In a bear market, it's common to see large rallies. So, it wouldn't surprise me to see a rally off these lows. However, it would surprise me if we didn't actually make new lows. Here is a chart comparing the market action from the 1929 crash to what's happening currently.

The January Barometer Predicts a Down Year:  I talked about this a few weeks ago; research published by Yale Hirsch in the "Stock Trader's Almanac" suggests that market performance during the month of January often predicts market performance for the entire year. This January Barometer has worked especially well in odd years (the first year of a new Congress), with only two misses in 69 years. While the January barometer has a good record of prediction, StockCharts.com still puts it in the "for what it's worth" column because, while it is interesting to note, it might simply be coincidental.

It is hard to imagine 2009 being a positive year.  As I talk to business owners, I sense a weariness and fear. The economy is catching up with them, directly or indirectly. An interesting side effect is that some of the more successful entrepreneurs I talk with are starting to get excited about the new opportunities in front of them.  In contrast, several expressed feeling a little guilty and sad about their success in the face of what's happening around them. This is what happens during periods like this. Old models fall away and new leadership emerges.

Here Are A Few Of The Posts I Found Interesting This Week:

• Was All The Doom And Gloom At Davos A Contrary Indicator Of Better Times Ahead? (Slate)
• Obama's Wall Street Initiative: Getting beyond slapping the hand that feeds you. (Daily Beast)
• Doesn't Everything Use Flash Memory? SanDisk reports $1.8BB loss amid demand slump. (CNet)
• More tech troubles, Motorola Q4 loss of $3.6BB with sales falling 26%. (CNet)
• Are Morgan Stanley and Goldman Sachs showing new leadership? Price says "Yes". (Bespoke)
• Is Stronger Medicine Needed To Fix The Banking Crisis? (Barrons)
• Facebook growing 7X faster than LinkedIn, but that's not the whole story. (Silicon Alley Insider)
• Necessity is the Mother of Invention. A new class of start-up ventures (BusinessWeek).

And, A Little Bit Extra:

• Jennifer Hudson lip-synced the National Anthem at the Super Bowl. (ABC)
• Interactive Data Visualization of Twitter Chatter During the Super Bowl. (NYTimes)
• Crowd Behavior Explained; the herding instinct is chemical. (New Scientist)
• Mating Season Is Over for the Alpha Males of Banking. Wallet-size matters. (Bloomberg)
• Professor Uses Math to Decode What Makes The Beatles Music Special. (WSJ)
• Teleportation Is Now Real – Just Don't Try It at Home Yet. (Time)
• Verne Harnish Rockefeller Habits one-page strategic planning tool. (Classic & New Version)

Are We There Yet? Some Changes Happen In Slow-Motion.

Change is a constant. Yet it's often hard to see the forest for the trees. 

It seems like just yesterday that my son, Zach, was making sand castles on the beach. This week he turned 16 and is driving.  It reminds me of line from a song in the show, Fiddler On The Roof: "Sunrise, Sunset; Sunrise, Sunset ... Swiftly Go the days."

                    

On a day-by-day basis, I rarely noticed the change. However, looking at old pictures makes it obvious that there was growth and progress. 

So, what did I notice?  Sometimes it was what a great kid, or how loving, he has been.  Other times I noticed that he didn't eat his vegetables, or that he drives passionately with a very heavy foot.  In any case, what I focused on is what my life seemed filled with, to me. 

Unfortunately, that is what has been happening in the markets as well.  There is a lot of fear, uncertainty and doubt because people are focusing on what is wrong or what is missing.  And frankly, the world has given us a lot of opportunities to focus on that lately.

But that isn't all there is to focus on in the market.  I was talking to an old trader friend of mine, this week, and said he is "cautiously optimistic" because the lows have held even though everything but the kitchen sink has been thrown at the markets recently.

It is all about perspective, isn't it?

Here is a series of photos starting with Bush and ending with Obama. In the series, the differences from picture to picture are subtle.

This is also a metaphor for what I expect to happen over time. We are where we are. It doesn't really matter how or why we got there. We are here. And little-by-little we won't be here anymore.

If you are looking at the country or the economy, realize that it took years to get here. Simply changing a regime won't flip a switch.  Some changes happen in slow-motion.  Or, perhaps from our perspective, some changes appear to happen in slow-motion.  From a different vantage point, the rate of change might seem very different.

The same can be said for changes in a person are changes in the business. It's easy to see the gap between where you are and where you'd like to be. Regardless, you will probably get there faster by building momentum and confidence by focusing on the improvements and progress you're making.

Tough times are great opportunities to discover character.  I'm often amazed at the innovation and insight that occurs at times like these.

Capitalogix Commentary 01/30/09

In Davos, they are holding the World Economic Forum.  The tone is a little different this year.

Putin warned about the first truly global economic crisis, which he says is continuing to develop at an unprecedented pace.

Soros said “Central banks have lost control,” and basically predicted a new economic world order and the end of the Dollar as the world's default currency.

So far at the Forum, the U.S. has played the role of the wounded giant.

Meanwhile, at home, the WSJ says there have been more than 70,000 layoffs this week alone, something President Obama called "a continuing disaster for America's working families." He urged passage of his $900 Billion stimulus bill and issued Executive Orders to increase the clout of unions.

Reports show the U.S. economy shrank about 5% last fall — the worst contraction since 1982. Because businesses failed to cut production fast enough after the financial crisis hit in October, they're now stuck holding vast inventories of unsold goods. In order to correct, they've begun aggressively closing factories and shedding workers.  The Washington Post says the economy is sinking under the weight of this excess inventory, and that the data suggests the worst is yet to come.

This story is playing-itself-out in different forms across the globe.  For example, I got an e-mail from a trader showing ships stacked-up in the Port of Singapore.  This picture was taken a few weeks ago. Apparently these are empty ships, waiting for cargo.  Since the docks are full of other empty ships, the result is a near complete slow down.

Question: Does that illustrate the state of the commercial world in the Far East?  Or, perhaps, could it simply be the result of Chinese New Year celebrations? I guess time will tell.

Charts That Caught My Eye This Week:

The January decline was steep, but U.S. Markets held above their late November lows. Most surged over their 50-Day Moving Averages, only to sink back downwards.

With Equity Indices suffering and Bond prices falling as well, is there anything performing well?  Recently, Investors have turned to gold as a safe haven. It looks like gold just broke above and successfully re-tested its trendline.  On a closing basis, Friday was the highest gold close in six months.

 

Here are a few of the posts I found interesting this week:

• Why Obama unloaded on Wall St execs, as JFK once unloaded on steel barons. (NYTimes)
• UK article spotlighting 25 people at the heart of the economic crisis (Guardian)
• Apple awarded key patent on things that makes the iPhone, the iPhone. (AppleInsider)
• Elliott Wave Theory's explanation of "irrational herding" during uncertain times. (Prechter)
• Americans display venturesomeness, even in grim economic stretches. (NYTimes)
• Steve Jobs a music visionary, or just visionary? Judge for yourself. Interesting article. (CNet)

And, a little bit extra:

• An attempt to make the ThinkPad sexy. I'll admit, they caught my eye. (Lenovo)
• Watch the Ads From the Super Bowl Online (Hulu)
• Add "Obama-cized Poster Effects" to your photos. Interactive and flexible. (Obamicon.Me)
• Malwarebytes fixed a Trojan for me that apps I paid for couldn't remove. Nice. (Download)
• Big Brother's Watching: Swiss Police Spy Marijuana Field With Google Earth (ABC News)
• Printing the NYT Costs Twice as Much as Sending Every Subscriber a Free Kindle (Silicon Insider)

Capitalogix Commentary 01/23/09

Last week I said that it didn't matter whether we were in a depression or a recession. My basic rationale was that if you don't have a cure, then recognizing the disease provides little benefit. The second rationale was that much of the commentary I read talks about our troubles is if they're happening in a vacuum, when in fact, the whole world is suffering from similar financial challenges and instabilities. What that implies is that independent actions (or events that happen here in America) will have less long-term effect than hoped.

In medicine, I suspect that doctors would prefer to cure a disease rather than treat symptoms. On the other hand, until the disease is cured, treating symptoms can often make the patient feel a lot better. While governments around the globe look for a cure, investors will feel a lot better if they figure out a way to make money in this economy, rather than the one they hope for.

It amuses me when I hear that "markets went down today on concern that "XYZ" did ABC". No one really knows why markets go up or down. Sometimes markets respond favorably to news, but other times they don't. Ultimately markets go up when more people buy than sell. Conversely markets go down when there are more people intent on selling, than buying.

So when people insist on creating certainty around what caused markets to move in one direction or the other, I suspect this is a symptom that relates back to a tendency shared by many humans. We are naturally afraid of the dark. It's comforting to believe that there's enough light to see what's going on and to make sense of what's happening around us. It doesn't even really matter that we truly believe it, as long as it's believable and it makes us feel better.

So Where Are We?  We are in an alternate universe. We have a wildly popular African-American President and the Cardinals in the Super Bowl. Remember Seinfeld? Castanza would be a Billionaire.

The market had another terrible week, including the worst inauguration day decline in history; but the White House has a new blog, so apparently everything is okay.

The VIX seems to be saying the same thing.  According to Bespoke, one difference between the current decline and the declines in October and November is that the VIX has not spiked nearly as much.  Many think of the VIX as an indication of fear in the market, and whether it's good or bad, there seems to be more complacency during the most recent downturn.  This chart shows the VIX volatility index along with the S&P 500. 

Here are a few of the posts I found interesting this week:

• Obama's Inauguration Speech. (Transcript, Visualizations, & Commentary)
• No soft landing for Asian airlines. (WSJ)
• Despite Crisis, Jim Rogers is Still a China Bull. (Reuters)
• Are riots in Iceland, Latvia and Bulgaria are a sign of things to come? (Times UK)
• If Google can't make it work, newspaper advertising must really be dying. (SJ Mercury)
• Be Nice to Those Who Lend You Money.  Another great Fallows piece. (The Atlantic)
• Thought Provoking Article discussing Business Cycles and Creative Destruction. (Guardian)

And, a little bit extra:

• The cure for retail doldrums ... Obama has an action figure with "Presidential Accessories".
• Timely article called "Reading the Energies of the Time". (Quantum Think)
• W's Greatest Hits:  Love him or hate him, these 25 BUSHisms will make you smile. (Slate)
• Open Source Democracy: The technology that helped elect Obama (AFP & .GOV)
• Pictures of Obama's Inauguration from Space;  see a different perspective. (TechBoost)
• Super squeaky safe sex. Funny condom ads with balloon animals and bloopers. (Durex)
• Free video and worksheet from Tony Robbins about the Power of Momentum. (Nice tool)

Hope Is Only The First Step.

It doesn't matter whether you liked or supported Obama during the campaign. Something changed, and the effects will be felt around the world.

That isn't a political statement.  It is a call for action and an alert to the opportunities and possibilities ahead.

Watching the Inauguration I knew, deep in my body, that I was watching (and a part of) something historic.

Just because the change hasn't yet flowed through to something you're looking at, doesn't mean that the change hasn't already occurred.  So, simply looking around, you might not notice that anything changed (for example, the market continued to go down on Inauguration day). Make no mistake, though, things Changed.

Hope Is Only The First Step.

In business (and certainly in trading) hope is not a great strategy; so it's ironic that it's what we need most right now.

Hope creates confidence, and confidence breeds action. 

Sitting around waiting for governments to fix what's wrong is a recipe for disaster.  Gandhi said "Be the change you seek in the world." It's never been more true than now.

This is not the time to wait for others to fix everything and clean up the mess.  This is a time for action.  This is a time to be open to possibility.

I'm excited!  Periods like this are ripe with opportunity. And it brings to mind something my father told me a long time ago.  The difference between good and great is infinitesimal.  People who are good take advantage of opportunity, while people who are great create opportunity.

Data Visualization of President Obama's Inauguration Speech

Here are two interactive ways to look at and understand what was said.

Go to Wordle's site to make one yourself.  You can choose colors and layouts to get the look you want.

Also, here is a Word Tree from IBM's Many Eyes site.  I like this type of tool because you can interact with the data.  Type in any word you see in the Word Cloud above.  This will show you every instance of that word, in context.

Also, here is an embedded link to a version you can interact with yourself.  I suggest you start with words frequently used in the speech like: Nation, People, Today, New and Must.  You can also try phrases like "We Will".

The Word Tree tool is interesting and useful. Also, I can see how it will work in a business setting with business plans, proposals, marketing material, etc.  This is very cool; and it is easy to build a word tree on your own data at Many Eyes.  Have Fun. 

Other Links:

• Word Clouds of Inaugurations Compared (Bush, Clinton, Reagan, Lincoln). (Read Write Web)
• Hand-Drawn Mindmap of Obama's Speech. (Agerbeck)
• Photosynth Image of Inauguration site. (Mashable)
• Another Inauguration site panorama with incredible detail. (Gigapan)
• Pictures of Obama's Inauguration from Space; puts things in a different perspective. (GeoEye)

Capitalogix Commentary 01/16/09

Are we in a Recession or Depression?  From my standpoint, I don't think it matters much.  Naming the disease doesn't fix it if you still don't know the cure.  Regardless of what you call it, we're still faced with the symptoms: the credit collapse, carnage in the financial sector, higher prices but less money to spend, and rising unemployment. 

The kicker is this has been happening worldwide.  Yet, most commentary I read treats this like the cause and effect happen here.  If you look around, though, there haven't been many safe havens. And I suspect that we have less to do with the start or end of this mess than we give ourselves credit or blame for.

It Is Not What Happens, But What You Do.  You see it repeated through history ... Times like these are the catalyst to great wealth for some, and the poor-house for others.  If someone were looking back on this time from 10 or 15 years in the future, this is probably early in the new cycle.  This is a good time to figure-out what you believe will work going forward. 

The party isn't over.  It is just a new dance, with a different rhythm and a faster pace.  So, maybe it is time to be nimble and to learn some new steps?

A Look at the Markets:  A few weeks ago, 80% of stocks in the S&P 500 were trading above their 50-day moving averages.  With the declines we've seen since then, that percentage has moved down to 40%.  Financials have led those declines

This chart shows 2009 performance, by sector.  So far most sectors are doing well.  The exception has been Financials, which look a bit oversold.

Nonetheless, with the S&P 500 approaching its November lows, it's comforting to see 40% of stocks still trading above their 50-day moving averages.  At the prior lows, the number got down nearly to zero.  The fact that the overall declines have been limited to a smaller area of the market is a positive for those hoping that the lows will hold.

Here are a few of the posts I found interesting this week:

• Is so much bad news good news for you? A Bullish forecast. (Dash of Insight)
• Bank of America gets another $20 Billion from the Fed (Federal Reserve)
• Yahoo has a new CEO, how did Wall Street react? (TechCrunch)
• Sony looks set to lose $1.1 Billion in Fiscal 2008 for first loss in 14 years. (Gizmodo)
• Circuit City Pulls the Plug.  They are liquidating and closing over 500 stores. (Huffington Post)
• Disney seeing some positive signs? (Jim Hill)
• Great Visualization showing GM's woes, the least of which is lack of cash. (WallStats)
• Twitter's New Status as an Investment Tool. (MSN Money Central)

And, a little bit extra:

• Size Does Matter: Finger length may reveal your financial acumen. (New Scientist & Telegraph)
• Your inner voice never lies. But does it know what it is talking about? (Psychology Today)
• Schools get futuristic face scanners to identify students and strangers. (Telegraph)
• In retrospect, this was a huge marketing boner. Funny. (YouTube)
• MS’s new Songsmith product adds music to any vocal track. "Epic Fail". (Blog & Gizmodo)
• The taxman cometh? IRS urged to tax virtual worlds, economies. (Ars Technica)
• Surprise, surprise ... research shows Facebook still mostly for the young. (MIT Tech Review)