Market Talk

- Microsoft (MSFT) insists one of its top priorities is to bring a Windows-based tablet to market sooner than later. Sounds straightforward. The problem is, [Microsoft] doesn’t always manage to do things really right,” Digital Daily blogger John Paczkowski says. “Certainly, it didn’t manage it with Windows Vista. Or Windows Mobile. Or Zune. Or, more recently, Kin. Who’s to say this time will be any different?”

- Tough to get true read on what’s happening in the stock market these days. “The cross-currents lately are absolutely cartoonish — back-to-back-to-back triple digit rallies while each morning we are treated to fresh evidence of ‘Slouching Housing, Hidden Consumer,’” Joshua Brown writes at The Reformed Broker.

- Hank Paulson says government policies promoting homeownership should be blamed as a major cause of the financial crisis, but FusionIQ CEO Barry Ritholtz disagrees, saying the former Treasury secretary ignores facts and is rewriting history. “His commentary is thinly veiled attempt to rewrite what actually occurred, and to shift his own sad role from conductor of the theft, to hapless victim of long standing government policy. If this exercise wasn’t such a transparent attempt at self-exoneration, it would be amusing.”

- Facebook isn’t planning to go public until 2012, Bloomberg reports. “That certainly sounds plausible,” MediaMemo blogger Peter Kafka says, especially considering Facebook likely doesn’t need to raise cash for operations. And if Facebook doesn’t IPO anytime soon, expect social games giant Zynga to face less pressure to go public too.

- “There is good news and bad news,” Ryan Avent writes at Economist’s Free Exchange blog, regarding 2Q GDP report. “Underlying growth looks quite weak, and in quarters to come the contribution from both government and inventory shifts will fall, or turn negative. All indicators suggest that second half growth will be no faster than first half growth.”

- GDP growth rate of only 2.4% isn’t nearly enough for the economy to properly recovery. “This shows clearly that Congress and the Fed should have taken a more aggressive posture already, not doing so was a mistake, and it’s a clear signal that the economy still needs more help,” Mark Thoma writes at MoneyWatch.

- But NYT’s Floyd Norris still thinks the recovery will pick up steam in near future. He notes this was third-straight quarter in which private sector investment rose at an annual rate of more than 25%. “The last time that figure rose as rapidly was in 1984, in the midst of a very strong recovery,” Norris says. “To be sure, private investment is coming off a very depressed level. But it is worth recalling that 1984′s recovery was also widely doubted.”

- As the Fed grapples with methods to support flagging economic growth, Monument Securities economist Stephen Lewis says (via Alphaville) that central bankers “seem close to recognizing” that their actions don’t determine the economy’s performance. “They can no longer demonstrate, or credibly claim, the omnipotence attributed to them by credulous markets in the era of the Greenspan cult.”

- Slate Group, the Washington Post’s (WPO) online unit, is shutting The Big Money, a business site it launched in September 2008, Kafka reports. “The problem, in a nutshell, is that the site is not pointed toward profitability on a fast enough timetable,” Slate said.

- “The global corporate-bond boom is gathering steam as companies rush to take advantage of some of the lowest borrowing costs in history,” WSJ says.

- “The key to a sustainable recovery and robust economic growth is to get companies to start investing in America,” a recent Washington Post op-ed says. But Big Picture blogger Barry Ritholtz disagrees with that premise. “Since we know that personal consumption expenditures comprise 70% of GDP, I’m not sure why ‘getting companies to start investing’ would be considered the key,” Ritholtz writes. “The demand problem we have on our hands is what is keeping companies’ spigots closed.”

- S&P 500′s 5% gain last week comes on the heels of a 5% drop the week before, highlighting “one more example of how sentiment in this market turns on a dime,” Bespoke Investment Group says. “Sentiment heading into the current earnings season is certainly a lot less positive than it was last quarter.”

- Google (GOOG) launches App Inventor for Android, a do-it-yourself tool that makes it easy for anyone – programmers and non-programmers — to create mobile applications for Android-powered smartphones. App Inventor should make Android more accessible — and useful — to more developers, a key constituency as Google vies with Apple (AAPL) for dominance in the emerging smartphone market.

- Deflation chatter seems to be ramping up of late, especially as worries over a double-dip gain steam. “If you have loads of cash and no debt, falling prices sound wonderful,” Tom Petruno writes at LA Times’ Money & Co blog. “But the danger is that a broad deflation could cause many people to stop spending and hoard cash, figuring that they could get whatever they wanted for less if they just waited.”

- Amid all the banter between bulls and bears, it seems like both parties have actually been right in 2010, Joshua Brown notes at The Reformed Broker. Bulls are right because stocks are still in the same bull market since March 2009, he says. But bears are also correct because everything’s down year-to-date except gold, silver, treasurys and the yen. Calls for more stimulus make sense, but concerns about deficit-spending are also justified. “Only the future can serve as judge.”

- Flight to safety and quality is the biggest reason foreigners, mutual funds, banks and households keep increasing their Treasury holdings. “But, unless financial conditions deteriorate further, I wonder why there would be a similar increase in demand for Treasury debt over the next two years,” James Hamilton writes at Econbrowser. “What I’m having more trouble seeing is who is going to buy the additional $8 trillion in net new debt that would be issued over the next decade under the CBO’s alternative fiscal scenario.”

- “There’s an old adage that tapes that are oversold are bought on bad (but not horrid) news while tapes that are overbought are sold on good (but not great) news,” Minyanville’s Todd Harrison says. “Through that lens, last week’s rally made the upcoming earnings entirely more difficult to game.”

- Google (GOOG) has secretly invested $100M-$200M in social gaming behemoth Zynga, TechCrunch reports, which will be the cornerstone of a new Google games service that will launch later this year. TechCrunch points out Google has posted a job opening for a product manager who will be responsible for developing Google’s games commerce product strategy. Both companies declined comment.

- “As we evaluate financial reform and political change, we should keep in mind that it is not 2008 that we must struggle to prevent,” Steve Randy Waldman writes at Interfluidity. “It’s 2006 that was the worst of times, the piranha were feeding while we splashed and giggled in our water wings.”

- “Many individual investors were tiptoeing back into stocks in the spring,” WSJ says. “Now, they’re running for cover again.”

It may get hot in the valley again pretty soon.

Local review website Yelp.com reportedly has turned down Google’s (GOOG) $500 million offer, marking yet another curious event in the world of tech start-ups.

TechCrunch’s Michael Arrington reports Yelp CEO Jeremy Stoppleman walked away from “an all-but-signed deal” as the two companies had agreed on a price and were working through the acquisition’s final details. But “something happened” and Yelp notified Google over the weekend that it wasn’t going to sell, he says.

The news comes on the heels of reports that Twitter may actually turn a profit this year. The microblogging sensation will make $25 million from search deals with Google and Microsoft (MSFT), according to Bloomberg, which estimates Twitter’s operating costs between $20 million to $25 million a year.

And just a few days ago, Digital Sky Technologies, a Russian firm that has invested in Facebook, said it is buying a $180 million stake in social-gaming company Zynga.

These developments prompt VC Paul Kedrosky to wonder whether the tech world has gone crazy, or if the industry is on the verge of something big.

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