Monday, March 31, 2008

Corn Acres to Drop; Soybeans to climb; Monsanto Might Smash Some Face

It might be another year of high corn prices because farmers are going to plant 7.6 million less acres of corn. However, it looks like it will be a banner year of soybeans:

Nationwide, soybean acreage is expected to jump 18 percent, to 74.8 million acres. This is an increase of 11.2 million acres from 2007 and is just 1 percent below 2006’s record high.

Acreage increases are expected in nearly every state, with the largest growth in Iowa, up 1.25 million acres, and Nebraska, up 1.2 million. Increases of at least 800,000 acres are anticipated in Indiana, Minnesota and South Dakota, while Kansas, New York and Pennsylvania are expected to plant their largest soybean crops in history.

I guess this is bad news for companies that make fertilizer since corn seems to use far more Potash and Nitrogen then Soybeans do.

However it should be great news for Monsanto since they have an almost monopoly position in bioengineered soybean seeds. In fact there may even be a soybean seed shortage in some parts of the country.

This may be great for margin expansion since Monsanto may have some strong pricing power if they crank out those seeds in a timely manner. Soybeans are planted in May so we won't get any sense of these numbers on Monsanto's bottom line until after that. In any case I am hoping for a pullback below the $100 mark so I can get long Monsanto.

Vytorin and Zetia Deemed No Better That Generic

I guess all of those ads on TV amounted to nothing in terms of stopping heart disease.

The cardiologists made the recommendation at a conference Sunday in Chicago, where researchers presented full results of the so-called "Enhance" study. The patient trial showed the drugs were no better than an older, cheaper drug at slowing artery thickening, despite
producing a greater drop in bad cholesterol levels.

I guess combining Zetia and Zocor which seemed like a way to end-around Zocor being made into a generic doesn't do anything in particular. It should be especially bad for Schering-Plough since a majority of their revenue came from sales of these drugs.

One thing I noticed was that if this $5 billion cut in sales number is to be believed SGP may be heading for bad times unless they tighten their belts considerably. You would figure that they would lose about $2 billion in sales and they could burn through their $2.2 billion in cash on their books in no time. The bad part is that they already have $9.48 billion in debt on their books so any slip-up could be disastrous for SGP.

I guess it is all up to how fast people dump these drugs for either the generic or their competitors. My guess is that it will be fairly fast since people are already facing high healthcare costs and the generic is pretty much does the same thing as Vytorin/Zetia but for much cheaper. SGP better have a great pipeline.

It should also be good for Pfizer's Lipitor and AstraZenica's Crestor. Those stocks may get the lions share of that $5 billion shortfall. Also it makes me wonder if they will be making a combo Lipitor/Crestor in the near future to dodge when they will become generic?

Thursday, March 27, 2008

Obama's Housing Market Fix Could Create a Banking Disaster

I recently read Obama's Housing Market fix and it is a big fat plan the kill the financial industry and is a $30 billion handout to housing speculators. Some of it even sounds dangerous to our fragile economy. It might even throw this country into a decades long depression. Also on reading it struck me that Obama hates the idea that taking on excessive risk (and not managing it) could cause you to lose a bunch of money or maybe even your house. However you could also make a ton of money as well. That is the nature of risk! In any case here we go point by point:

1. Provide the Federal Reserve with basic supervisory authority over any financial
institution to which it may make credit available as a lender of last resort.

I guess he wants the FED to actively check on what their borrowers of last resort do with their money. What sort of oversight does the FED have to do? Are they going to check the credit worthiness of the loans that that bank uses the FED money for? Will they be saying "this plan is just too risky for the FEDs money so Citigroup deny that loan?" Thus, the next Microsoft or Starbucks might just be getting their seed money from an Irish Bank and launching in Dubai instead of in the US. Good job, Obama you will made risk a dirty word and will have caused all the risk-takers to leave for greener pastures overseas.

2. Capital, liquidity and disclosure requirements should be developed and strengthened for all financial institutions.
So even more money will have to be set aside as capital requirements (and thus can't be loaned out,) and another layer of Sarbanes-Oxley nonsense will be put to banks in the future? I guess Obama wants to choke banks out and make it so that extending credit in the US a thing of the past. Also the idea of the Government looking over the shoulder of ratings agencies should be something that needs to be avoided. I guess the Government could take over as a ratings agency but isn't that like the bond issuer saying "yes our bonds are AAA *wink*?"

3. End our balkanized framework of overlapping and competing regulatory agencies.
I'm not sure if he simply wants to abolish the SEC, FDIC etc. or just roll them all into one complicated mega-agency? It seems like a pie-in-the-sky plan because those agencies are entrenched and some like the SEC are very effective at what they do. Also a vast agency will concentrate too much power into only a few hands. Finally, like any other mega-agency there will be fraud, waste, and abuse coming out of every pore.

4. Regulate financial institutions for what they do, rather than who they are.
I guess that is an interesting plan but you are punishing everyone for the excesses of a few. It is true that mortgage brokers like Countrywide originated these bad loans but why are we punishing the pension funds and the investment banks who just bought those bundled mortgages looking for a greater return for their shareholders? Also how can you regulate what something like an investment bank does? They are in so many parts of the economy that they would probably just move their headquarters to Dubai or something just to avoid the regulation morass.

5. Crack down on trading activity that crosses the line to market manipulation.
I think Obama needs to read what the SEC does on a daily basis. There might have been rumors swirling around Bear Stearns but no one could have stopped a canny trader from buying those $30 Puts on Wednesday and just following that 500K spike in volume and made money along with the big boys. You would have risked $15 a Put with a chance to make $1000s. Risk=Potential Reward Senator Obama.

6. Identify systemic risks to the financial system, no matter where they arise.
I guess this would be the department of reading minds or crystal balls or something. Maybe we can get Harry Potter to head it. I guess this puts the FED Chairman out of a job and allows Congress to grill some other poor fool about something they clearly do not understand themselves.

Create a New FHA Housing Security Program:
This looks like a strait prop-up that keeps housing prices going up and up artificially. If the I can get a government guarantee that I won't lose money in my home then sign me up. The trick is who is going to pay me for my home once I sell? A house is only worth what some other person would pay for the thing. If you bought at the wrong time you should not be rewarded.

Call on Lenders to Write Down Loan Amounts on More Conventional Borrowers at Risk:
So when house prices drop then the banks need eat the difference? That doesn't make any sense at all. This would mean that the banks take the risk that the prices would drop but the homeowner gets all the benefits. What happened to wait a few years until supply and demand get back into balance and then selling the home? You are underwater for a while but eventually things will pick back up. Markets are cyclical Senator Obama.

Close the Bankruptcy Loophole for Mortgage Companies:
So now we will have bankruptcy judges deciding on what interest rate would be fair in a bankruptcy proceeding? That doesn't make any sense. Bankrupt people with multiple homes and vacation homes usually have other revenue streams, securities, performing businesses etc. in order to pay off restructured mortgages. People that took on too much house and signed a no-money down ARM do not have anything left to pay the mortgage. Even if the thing was restructured they still couldn't pay for it.

Lower People’s Interest Payments by Creating a New Mortgage Interest Tax Credit:
This suggestion doesn't make any sense. This would provide a mechanism to get a tax credit even if you don't itemize deductions. What middle-class American with a mortgage doesn't itemize deductions? I think Obama has a pathological fear of itemizing taxes.

Provide an Additional $10 Billion of Mortgage Revenue Bond Authority:
He wants people who are lower income to buy a home? That also doesn't make any sense. People with low incomes usually don't have enough job security to keep up with 30 years worth of mortgage payments. We should be working on getting that low income person to become a high income person. They should be able to work for a decent company, start their own business, or aquire other skills. McDonalds has upper management that used to by fry cooks in just about every level of their company. They just had to work their asses off to get there.

Combat Mortgage Fraud and Predatory Subprime Loans: and
Mandate Accurate and Easy to Understand Loan Disclosure:

This seems like a laudable goal and should be pushed through. I think people not knowing what they were signing is what caused alot of this mess in the first place. Borrowers need to be given a point by point breakdown of how much they need to pay per month so that they aren't blindsided by ARMs in the future. So the borrower would see a table that has a cell that shows a 5% interest rate and you pay $900 a month, 6% interest you will pay $1100 a month, etc. That way people can budget and anticipate what they can afford before they sign any documents. If that McMansion causes them to pay $5K extra if the interest rate goes from 5% to 6% then the borrower needs to know that before he signs a single document.

Create a $10 Billion Foreclosure Prevention Fund to Help Americans Keep their Homes:
This allows people who bought too much house then they could afford keep their white elephant houses until they would be able to sell them. It looks like this would reward people for buying into the bubble instead of using sound fiscal constraint on what amount of house they could afford. So this pretty much amounts to Obama giving out billions for McMansion buyers and rips off people who were fiscally smart.

Provide $10 Billion in Relief for State and Local Governments Hardest-Hit by Housing Crisis toPrevent Cuts in Critical Services:
So if you are in a high speculation state like California, Arizona, Nevada, or Florida then Obama is going to give you some free money. I think someone needs to tell the Senator that part of the home price drop was due to homebuilders building tons of supply and speculators providing the demand. That demand dried up quick and those areas are now ghost towns. So some of the hardest hit areas are in states that had very high rates of speculation. The homes that we are talking about are usually luxury homes that some speculator tried to flip and now cannot sell or had to walk away from.

Extend and Expand Unemployment Insurance: I was with him on this until the last part and then it became asinine. Extending unemployment insurance to part-time workers makes no sense at all and would make quite a few high school and college kids suddenly able to claim unemployment. I guess this is to prepare the next generation of Americans be able to climb aboard the Obama hand-out wagon.

Obama Decries "Ethic of Greed" Then Goes to Fundraiser

The bad thing is he went to the fundraiser in a room that that greed paid for.
Barack Obama went to New York Thursday and blamed lobbyists, greedy
businessmen and complacent Washington politicians for creating “an ethic of
greed” that led to today’s foreclosure crisis.
Not long after he left the stage, the Democratic presidential hopeful attended a fundraiser held by his campaign in a room in the Manhattan headquarters of Credit Suisse, one of the major investment companies caught up in the subprime lending mess.

He basically said you greedy bastards got us into this mess now give me your money. Too bad Obama didn't blame one very important party that is part and parcel of the foreclosure mess. That would be the homebuyer. These people took on too much house, didn't know that an no-money down ARM would eventually cause them to pay a rate above their heads, and treated their houses like ATMs.

You can also blame those house-flippers that thought home prices would rise forever and took on 10 loans to buy 10 houses when they couldn't afford to pay the mortgage on one. These speculators and high risk homebuyers are just as complicit in the mortgage mess as greedy businessmen and complacent politicians.

Why Reverend Wright has Scuttled Obama in my Eyes

This is a great look at the Wright issue from a lefty blog that I usually dislike quite a bit but this poster I actually agree with:
Obama's doing a great job of telling us what's wrong about Bush's
presidency - which appeals to the left. He's also offering an emotionally
powerful idea of hope and cooperation - which appeals to everyone, including

Obama is the Democratic Reagan. The Dems for Reagan voted
not for his right-wing policies, but for his message of optimism.
That's why Republicans will vote for Obama in the fall, and he might even win a

Reverend Wright blows this notion up by providing a message that seems to preach anything but hope and cooperation at least from black America toward white America. His other sermons may have been about Christian values but saying things like "the government created the AIDS virus to kill blacks" undermines that message. Wright brings up the angry race hatred that Obama was supposed to be a step away from.

The funny thing is Obama even had me seriously thinking about liberal canards like universal health care by making them seem like something that a "new and hopeful" America should try. I was willing to hear him out if he came up with a decent way to pay for it. He could say stuff like "a great country such as ours should have health care for the poorest of our citizens" and make it sound like something worth paying for. He could sell things like this without a guilt-trip but a "hope-trip."

But when Obamas spiritual mentor says "God Damn America" it is hard to get on board something like that. Obama has been fairly or unfairly lumped in with the "hate America first" wing of the Democratic party. The more I look at it the more I think the YouTube clips of Reverend Wrights sermons might just be the "Dean Scream" of his campaign.

Wednesday, March 26, 2008

Yamana Gold Approached with Tender Offer

Hmm, this seems kind of strange to me.
YAMANA GOLD INC. announced that it has received a copy of an unsolicited
below market "mini-tender" offer made by TRC Capital Corporation, pursuant to
which TRC Capital has offered to purchase up to 3,000,000, or approximately 0.48 percent of the outstanding common shares of Yamana. The offer price of C$15.75 per common share represents a 1.87 percent and 1.68 percent discount,
respectively, to the C$16.05 and US$15.70.

Why would they approach Yamana with such a low-ball offer? Were they simply hoping that the company would just accept a below-the-market price? I guess TRC Capital was hoping to build a large position in the stock but wanted to do it under the radar.

I wonder why they couldn't simply wait until the stock dropped into their range and started buying little by little like most funds do? In any case I still think that the market is undervaluing the price of gold when it comes to Yamana's shares. So maybe that was TRC Capitals was thinking when they approached them with the offer.

Google Paid Clicks Up 3%

It seems that growth may have slowed at Google but these numbers seem very hard to interpret and seem to be contradicted by other sources.
Web search marketing firm SearchIgnite, which places $300 million in ads on
behalf of large- and mid-sized advertisers and their ad agencies, says its own
data shows Google's year-to-year paid click rate growing 29.0 percent in

So is the February paid click-rate up 3% or 29% in February? Can Comscore be trusted to give decent measures or do we trust an ad placement firm instead? I would be willing to side more with the ad placement firm because they are actually getting money to place the ads on Google. In any case I guess we won't know for sure until Google brings out its numbers on April 17th.

Monday, March 24, 2008

Mexico now 2nd Fatest Nation

I think America's fatness is one of our key exports now.
More than 71 percent of Mexican women and 66 percent of Mexican men are
overweight, according to the latest national surveys.
With diabetes now Mexico's leading cause of death, activists and leaders hope to renew efforts to crack down on junk food and other fatty-food consumption and encourage citizens to exercise more.

I wonder how diabetes has passed heart disease as the top cause of death? Is it a genetic thing or what? In any case I think Mexico may be heading for a health crisis in a few years if that many Mexicans are obese.

Googles White Space for Wireless Plan

Sounds like a good idea from the good people at Google.
"As Google has pointed out previously, the vast majority of viable
spectrum in this country simply goes unused, or else is grossly
underutilized," Richard Whitt, Google's Washington telecom and media lawyer,
wrote in the letter. "Unlike other natural resources, there is no benefit to
allowing this spectrum to lie fallow."

Google said the white space, located between channels 2 and 51 on
TV sets that aren't hooked up to satellite or cable services, offer a
"once-in-a-lifetime opportunity to provide ubiquitous wireless broadband access
to all Americans."

Yeah most of those channels are just worthless snow and if they can be turned into a viable cheap wireless category it would be great for everyone. I think it will get a lot more people to try wireless broadband if it was easily available.

I wonder if Google is planning to add national wireless carrier to their business ideas? I would switch to a Google branded wireless connection in a heartbeat even if I had to pay like $25 a month for it. The Verizon Wireless plan is an idiotically high $59.99 a month. I mean the Koreans pay only $17.60 a month for their wireless broadband why should we have to pay 5 times more?

A Response to Dollar Weakness

Here is another article that talks about how being long commodities and short the dollar may be a bad place to be going forward.
Our debt to GDP ratios are still amongst best in the developed world, and a
few mere changes of government policy with respect to entitlement
sustainability, tax policy, energy and food subsidization, and redirection of
war spending to local infrastructure improvement can easily usher an era of US
broad economic leadership.

There are just too many factors against further dollar weakness to keep it sustainable. Despite what the goldbugs say there are real supply and demand fundamentals to the price of gold. I mean quite a bit of current gold sales are going to ETFs now and not jewelry creation like it is supposed to. I agree with the premise that much of the dollar weakness has been self-inflicted and can be changed with sound fiscal policy and investment leadership in alternative energy. I mean the idea of a "Moonshot for Green Energy" could potentially bring trillions into the US.

Friday, March 21, 2008

Starbucks Ordered to Pay Tips

It seems that Starbucks might get a $106 million dollar haircut if this verdict stands.
The lawsuit was filed in October 2004 by Jou Chou, a former Starbucks
barista in La Jolla, who complained shift supervisors were sharing in employee
The lawsuit gained ground in 2006 when it was granted class-action
status, allowing the suit to go forward for as many as 100,000 former and
current baristas in the coffee chain's California stores.

I guess Starbucks had it so that shift supervisors would dip into the tip jar instead of being paid a higher wage by Starbucks higher-ups. I wonder if other service industries are this way as well. It would suck for a waitress/waiter to have to share her tips with their supervisor because the restaurant they worked for wanted to keep their salary costs down.

Weird Wildlife Found in Antarctic waters

It seems like there is some weird stuff living in the Ross Sea up in the antarctic.
Large sea spiders, jellyfish with 12-foot tentacles, huge sea snails
and starfish the size of big food platters were found during a 50-day voyage,
marine scientist Don Robertson said.

Cold temperatures, a small number of predators, high levels of oxygen
in the sea water and even longevity could explain the size of some specimens,
said Robertson, a scientist with NIWA.

It sounds like a D&D sort of environment. It would be the kind of thing you would see in a Ocean Giants abode under a frozen sea. Kind of something above the Spine of the World in FR.

Thursday, March 20, 2008

A Battle for Bear Stearns?

It seems that that $2 a share offer by JPM is getting some billionaires riled up.
The Wall Street Journal reports British billionaire Joe Lewis is trying
to amass support among investors looking for an alternative to the JP Morgan
JPM) takeover. According to Bloomberg, the Bear debacle has cost Lewis $1.19
billion - almost half his net worth. He called the $2 per share offer

Other Bear shareholders, such as hedge fund Thunderstorm Capital and
former Bear chairman Jimmy Cayne, are reportedly teaming up with Lewis to oppose the merger. Cayne is said to have lost almost a billion dollars since Bear's
stock price peaked at $171.51 last year.

Wow, each of these guys lots a billion dollars on that deal? Talk about needing to diversify your portfolio a bit. In the meantime the stock keeps going up. It went from $3.76 to $5.90 in the past two days. This would be the scary part though if I was holding Bear Stock though. So you would either get $2 or nothing. I would have gone with selling at $5.90 and got out while I still could.
On the other hand, fighting the deal in the hopes of a better bid is a
long shot, as the merger was written to preclude counteroffers. Blocking the
deal risks bankruptcy proceedings that could put equity holders at risk of
losing everything.

Hillary Passes Obama in Latest Poll

It seems that Hillary is starting to pass him again.
The March 14-18 national survey of 1,209 Democratic and
Democratic-leaning voters gave Clinton, a New York senator, a 49 percent to 42
percent edge over Obama, an Illinois senator. The poll has an error margin of 3
percentage points.

I think it is because of those statements brought to light about the Rev. Jeremiah Wright. This kind of talk about race and the "original sin of slavery," Jim Crow, etc. just doesn't play well with color-aware Democrats.

I think the idea of having an America hating preacher as spiritual mentor to the President just doesn't sit well with Democrats. The Dems are always have trouble looking patriotic and it would be easy for McCain to exploit this perceived anti-American bent of the far left in order to beat Obama.

Wednesday, March 19, 2008

Time to go Short Oil?

As I have been thinking recently it seems that oil and other commodities are finally starting to go back to the downside.
Jeff Macke advised viewers to sell the U.S. Oil FundETF and the
streetTracks Gold Shares
Give those names a break, he said. As the Federal Reserve thinks of
other means besides lowering interest rates to solve the liquidity crisis,
commodities won't be as good of an inflation play, he said.

I was thinking that record oil prices were mostly speculation and did not reflect actual supply and demand of oil at all. It seems to be the same way in the gold market as well. They are all contingent on further dollar weakness and I don't see that happening with the FED hopefully done lowering rates for a while. We saw the dollar rise a bit against the Euro and the Yen today and I think dollar should be getting stronger as we go along.

Heather Mills is a Scumbag

The more I read about this case the more it looks like she just strait-up robbed Paul McCartney. Check out this line item in her attempted $250 million money grab.
Mills, a self-proclaimed activist, also claimed she would need $1.25 million
a year to give to charities, but admitted she would be using $985,000 of that
amount for traveling to appearances via helicopters and private jets.
Yup, she tried to get $1.25 million a year to charities and then tried to take 79% of the money to fly around in helicopters and jets to get to "appearances." Why doesn't she just give the entire amount to charities and causes and fly coach instead?

This should show you why celebrities force people to sign prenups. Greedy gold-diggers like Mills should be rightly ridiculed when when they call themselves "activists" just to fly around in helicopters and private planes. I hope she gets booed when she judges the Miss USA Pageant.

Tuesday, March 18, 2008

Visa Sets Record IPO at $17.8 billion

It looks like it will be priced at $44 a share and has the ticker symbol V.
Visa Priced the hotly anticipated offering of 406 million shares at $44 a
share, topping the previously estimated range of $37 to $42 a share. Visa shares
will trade on the New York Stock Exchange starting Wednesday, under the symbol V.

I'm hoping if it pops off of the opening it will only go to about $60 or so. Or maybe it will just stay in the $50 range for most of the day. However, anything less then $50 is going to be a steal. After all MasterCard IPOed at about $45 or so IIRC and it is now trading at $210.25. I think Visa will be even bigger then MasterCard. In Visa you still have all of the fees while the banks get to shoulder the risks.

Obama Brings Up the Race Issue

I guess this is all to deflect the venom spewed by Rev. Jeremiah Wright. I'm glad Obama was quick to condemn that sort of hate speech.
"We bombed Hiroshima, we bombed Nagasaki, and we nuked far more than the
thousands in New York and the Pentagon, and we never batted an eye," Wright
said. "We have supported state terrorism against the Palestinians and black
South Africans, and now we are indignant because the stuff we have done overseas is now brought right back to our own front yards. America's chickens are coming home to roost."

I think Wright forgot that the Democratic Truman Administration was the ones that decided to drop the bomb that ended WW2. Also the same Truman administration recognized Israel as well and advocated their right of self-defence against terror. Also it was the Reagan Administration that imposed economic sanctions on South Africa in a bid to end Apartheid.

Finally, all of these things (the support of Israel was just an Al-Quida scapegoat) had nothing to do with 9/11 at all. In fact I hope someone tells Rev. Wright that it wasn't Japanese, or Palestinians or Black South Africans that flew those planes into those buildings.

Monday, March 17, 2008

How to Turn $825,000 into $138 Million in 4 days

At least that is what one canny trader managed to pull off on Bear Stearns meltdown.
This past Tuesday, when Bear Stearns(BSC - Cramer's Take - Stockpickr)
was trading around $65 a share, there was huge put volume in the March $30

Over 55,000 contracts traded that day at an average price of
15 cents a contract. This is an extremely unusual trade in terms of the number
of contracts and how far out-of-the money those options were at the time. This
begs the question of why someone would execute such a transaction.

Those March $30 Puts are now worth $25.10 each. I think someone with a handle on how bad things were at Bear was able to put on some serious insurance. Or it could have been one of their counterparties who was getting ready to pull the plug on their trades and then rode the stock right down.

Too bad I didn't catch this trade because if I jumped on for a reasonable 10 contracts ($150) I could have made a cool $25,100. Of course you could have also taken billionaire currency trader Joe Lewis' side of the trade and took a $1 billion dollar smack in the chops as well.

JP Morgan's Bear Buyout a Reward for Canny Risk Management

Hmm, this article makes a lot of sense.

You can't accuse the government of bailing out Bear Stearns in any
traditional sense here. This is much more nuanced and, in the end, interesting.
Can you accuse the government, by contrast, of picking sides? Of siding with a
stronger, more conservative player against a weak and reckless one? Certainly.
They are punishing Bear while trying to salvage a bit of it not to mention
stability in the financial markets. And they are rewarding a better player.
That's the interesting aspect to the non-bailout nature of the 2 bucks and what
renders recycled story lines worth even less than Bear Stearns itself.

JP Morgan got the bargain price because they were shrewd and avoided the risks that Bear was taking on. They managed their risks like a investment bank is supposed to do. So they came out of it without any CDO dirt on their books. Then the government tosses JPM a bone and the firm accepts the offer only if that toxic debt doesn't come onto JPMs balance sheet.

If it was JPM taking big risks for big yields like Bear did then someone else would be buying JPM out instead. I mean JPM paid $236.2 million for a company whose headquarters building itself is worth more then $1.2 billion. JPM has some real risk-adverse deal makers in house. I think JPM may turn out to be a pretty good long once this credit mess blows over.

Visa IPO Wednesday 3/19

I hope I get a chance to pick up Visa on the cheap. I'm hoping for a down day to drive the price down so I can load up big. I think this might be one of those rare IPOs that goes ape in a few years like Google or MasterCard.
Visa has filed to sell 406 million Class A common shares at $37 to $42
apiece, for proceeds of $15 billion to $17 billion.
If demand is strong, an
additional 40 million shares could sell, pushing proceeds as high as $19
billion. Even at the low end of expectations, the IPO would set a record in the
United States, beating out AT&T's $10.6 billion deal in 2000.

Thursday, March 13, 2008

Dems Stick it to the Middle Class Again

Don't the Dems know that it is the Middle Class that is losing their houses and can barely afford to send their kids to college?
Under both Democratic plans, tax rates would increase by 3 percentage points
for each of the 25%, 28% and 33% brackets. At present, the 25% bracket begins at $31,850 for individuals and $63,700 for married couples. The 35% bracket on
incomes over $349,700 would jump to 39.6%.

So this would catch millions of Americans and force them to shell out another $1911 per family per year while they are incurring piles of debt. I guess that Obama middle class tax cut of $500 for singles and $1000 for families is the same thing as a store having a $100 off sale and then raising their prices by $300. One step forward and three steps back.

An extra $159.25 a month paid out in taxes might be a back breaker for many families. I thought they were supposed to be getting rid of so-called "tax cuts for the rich." I guess rich in the Democratic mind starts at $31,850 a year.

Yankee's Try out Crystal at DH

Now they are trying some untested 59 year old named Billy Crystal at DH? He worked a 3-1 count before being struck out by a Pittsburgh lefty.
Yet despite the knockout, Crystal can walk into his next film shoot with
a couple of things to brag about. For one, he fouled off the second pitch
down the first base line. For another, he made guys like me now wonder if we
could do the same thing. Yeah, that's jealousy talking. Anyone else feeling
a little green after watching him take a few hacks?

Man, if you can foul off a MLB pitchers fastball at 59 then you really are something special. If it was me though I would have crowded the plate and try to get plunked. At least I would have gotten the chance to run the bases. With my luck though I would probably get hit in the head and then taken off the field on a stretcher.

The Strange Thing About Retail Sales Numbers

I was looking at the Retail Sales being off by .6 percent and decided to dive into the numbers a bit. It is true that Retail Sales are off by .6 percent from January to February but if you go from year to year the 2 month sales are actually up 5.8% and if you put Auto Sales in there they are up 7.4%.

From this time last year the only patches of retail spending that are actually down year to year are cars and car parts, furniture, building materials and garden supplies, and department stores. You can chalk furniture and building materials to the housing slowdown. While on the other hand some stuff is up quite a bit. Grocery Stores are up 7.7%. Health and Personal Care stores are up 6.3%, sporting goods/hobby/books/music stores are up 8.2%.

While Gas Stations are up a whopping 25% year to year they actually dropped from January 08 to February 08. Could this mean that high gas prices are starting the crimp demand? Too bad there isn't an advanced look at March numbers because I really want to see if gas station sales start to drop off or not due to the even higher gasoline prices.

Dendreon Loss Greater and they Amended Provenge SPA

It seems they lost a little more then Wall Street Expected but beat on the revenue line.
The company reported a fourth-quarter loss of $27 million, or 32 cents a
share, swelled from $21.5 million, or 28 cents a share, in the comparable 2006
period. Quarterly revenue fell to $28,000 from $86,000 a year earlier.
Analysts surveyed by Thomson Financial had predicted a narrower loss of 25
cents a share, with revenue of $12,000.

They also made some changes to the IMPACT study:
Under the new conditions, the interim analysis is still scheduled for
the second half of 2008 but it will require a greater number of events (deaths)
and will have higher statistical powering.

I hate how the FDA terms deaths as "events." Just call them deaths and don't invent a neutral term for them like this. If the FDA appoved Provenge like their advisory committee recommended in March then more people will have had their "events" pushed back for a few months or even years.

I think the Dollar Has Hit Bottom

You always get these kinds of stories when something has hit bottom and is on the way back up.
In Manhattan's Bowery district, Billy LeRoy, the owner of Billy's Antiques
& Props, prefers payment in euros so he can stockpile the currency for his
annual antique buying trip to Paris."Whip out dollars at the French flea
market now, and they'll shoo you away," he said at his store near apartment
buildings where Europeans are snapping up units because they've become dirt
cheap. "Before it was like the second coming of Christ, but now they don't want
it or if they do take dollars, they're going to take their pound of flesh."

What about just converting your dollars into Euros and buying the antiques in the currency that the French use? If he is so afraid of currency risk then he should hedge his currency like any other businessman who takes "trips to Paris flea markets" has to do. Instead he just wants his customers to foot the bill and take the risks for him.

Tuesday, March 11, 2008

Obama Wins Mississippi: Reuters Points out Obvious

I think the media also pushes the idea that since Obama is black and he has strong black support that is the only reason why he is still winning. This Reuters article is a case in point:
Obama, who would be the first black U.S. president, rode a wave of
heavy black support to victory and extended his lead over Clinton in pledged
delegates to the August nominating convention. The Illinois senator also won on
Saturday in Wyoming.

I think it is common knowledge that he would be the first black President and that Mississippi like any other Southern state has a large amount of blacks but Reuters must point it out again and again. Maybe the media draws this conclusion in order to make sense of why Hillary went from shoo-in to "fighting for her life" so quickly.

They need to foster the myth that if Obama was white then Hillary would have sewn it all up and the media would be correct in their assumptions. They can't admit that Obama is winning because he is a different, articulate, charismatic, and hopeful choice so they need to pin it on his race.

Ferraro Says Obama Being Black Got Him This Far

It seems that the Obama campaign wants to force her to resign because of what she said:
Ferraro, who sits on Clinton's finance committee and has spoken at her
rallies, sparked the firestorm when she was quoted by a California newspaper
as saying: "If Obama was a white man, he would not be in this

That is one of the main problems with the Democrats it seems. Everything seems to stem from race in their thinking. Obama got to this position because he is a good speaker, he actually inspires people, and he might actually win the Presidency because he is a fresh face and not just more of the same like Hillary.

I have to agree with her though when she says that if Obama was a generic white male candidate (John Edwards) then he wouldn't have gotten the *Democratic* nod over Hillary. The Dems have always been the "color-conscious party" instead of the "color-blind" party.

The Dems always seem to make race and issue by repeatedly calling Obama the "black candidate" over and over again. I can tell by looking at a picture of him that he might be a "black candidate" the Dems do not need to point it out over-and-over again. Americans have seen a black person run for other sorts of office before.

However, I would be willing to bet even-money that only the media would be talking about their race if Condoleezza Rice or Colin Powell ran on the Republican ticket. Republicans would be talking about Rice and Powells conservative bonafides and whether they would be electable with the "Bush-deficit" hanging over them. Race would be about the last thing on Republican's minds in a discussion of a Rice or Powell candidacy.

After all, the Republican party has been a pro-black party since its inception in 1854. It was the Democrats who were the Segregationists (George Wallace,) the Klu Klux Klan members (Robert Byrd,) and voted in the Jim Crow laws (Plessy v. Ferguson.) If not for Nixon's "Southern Strategy" blacks would still have a Republican majority to this day.

Mary Ann Caught with Mary Jane?

I think she may have been growing some "medicinal herbs" on Gilligan Island. I love this series of fake-sounding excuses as well:
Wells said she'd just given a ride to three hitchhikers and had dropped them
off when they began smoking something. Gutierrez found half-smoked joints and
two small cases used to store marijuana.
Then she claimed:
Wells' lawyer, Ron Swafford, said that a friend of Wells' testified
that he'd left a small amount of marijuana in the vehicle after using it that
day, and that Wells was unaware of it. Swafford also said several witnesses were
prepared to testify that Wells had very little to drink at the party and was not
intoxicated when she left. He said she was swerving on the road because she was
trying to find the heater controls in her new car.

So her lawyer, some hitchhikers, and and the heater all conspired to get her pinched on a drugs charge? She should just admit that they caught her red-handed and just do the time. This mug-shot is going to be a classic as well:

GoogleClick a Reality

Well, Google finally closed the deal on DoubleClick so now they can start integrating the two companies at long last. It seems like a great new revenue driver for Google.
Even if an explicit integration doesn’t happen, a Wall Street analyst
estimates that Google will instantly gain a huge share of the graphical ad
market, which will reach an expected $28.6 billion by 2010. “Google will now
have behavioral data from search, e-mail, video, and web usage on network
sites,” JP Morgan analyst Imran Khan wrote in a report. “We believe this will
allow the company to provide much better ad targeting, leading to increased CPMs on DoubleClick sites.”

This idea of getting the total picture when it comes to data is very intriguing as well. They can leverage this information advantage for all sorts of interesting applications. I think this information would have great interest to historians as well. We could see how peoples internet usage could change over time and what people were actually interested in over the years. I think Google may be a great historical record going forward.

Monday, March 10, 2008

Zicasso Offers up Travel 2.0

Now this sounds like a very interesting way to sign up for a vacation.
During the Web's evolution, though, the good ol'-fashioned practice of
enlisting a travel agent to build the perfect, well-informed trip has been left
behind. This lack of personal travel assistance is exactly what the new Web
2.0-powered travel service
Zicasso is targeting.

So this is a travel agent listing service with a web 2.0 front end. You put in where you want to go, how you want to get there, then what you want to to see when you get there, and finally what activities you want to participate in and the site serves up a few targeted responses to choose from.

So if you want to go on a Civil War tour, with a side order of hiking, but stay in a 5 star hotel then the site serves up a few targeted choices for you. It sounds like a great idea because the travel agencies are reviewed only by people that used that agency in the past. It would be like reviews on Amazon only being open to people that already own the object.

It would be cool to book a trip to Germany for instance and be able to pick from several different agencies all with different options and prices based on my recommendations and have it all reviewed by people who have actually used the service in the past.

Cable Companies Provide Ad Clearinghouse

It seems like a pretty interesting idea and I cautiously applaud it.
It's easy to envision a future where STBs are fully addressable and custom
ads are served up based on what channels you watch at home. This could easily
get more sophisticated, selling different ads during times or days when a
household tends to watch "female" TV shows and times when "male" shows are tuned in. Will consumers welcome more relevant ads as a benefit?

I actually don't mind seeing ads on channels like G4 or Spike about video games or action movies. If I have to see an ad I don't mind seeing it for an item that I would actually be willing to buy. Hopefully, this same fine tuned control will make it so I don't have to see the same stupid Direct TV ad over and over during a sporting event.

Google Execs Talk About Paid Click "Shortfall"

These guys at Google need to come forward quicker to avoid this kind of thing.
But speaking at the Bear Stearns Media Conference in Florida, Tim
Armstrong, Google's president of North America advertising and commerce, said
that the recent slowing in paid clicks "was intentional on our part" and will
result in "a long-term benefit for our business."

That's because recent quality initiatives at the company have
resulted in fewer unintentional clicks and a higher number of "conversions," or
revenue generated by intentional clicks, according to Armstrong.

"Conversions actually go up for advertisers, which is positive, but
there are less clicks overall," he said.

So as many speculated they did this on purpose to provide a better value overall for advertisers. It wasn't some "economy-in-the-toilet and advertisers are running for the exits" type of thing after all. In any case I still think Google is a steal below its 52-week range and I'm going to double up on this thing before too long.

19 Year Old Female Medic Wins Silver Star

It seems that women performing poorly in combat is another myth that has just been forgotten.

After the explosion, which wounded five soldiers in her unit, Brown ran
through insurgent gunfire and used her body to shield wounded comrades as
mortars fell less than 100 yards away, the military said.

"I did not really think about anything except for getting the guys to a safer location and getting them taken care of and getting them out of there," Brown told The Associated Press on Saturday at a U.S. base in the eastern province of Khost.

Of course groups like the NOW doesn't have a single thing praising (or even mentioning) the accomplishments of this heroic 19 year old girl. I hope this Spc. Brown can get some celebrity and maybe a movie deal out of this experience. Get that Olivia Thirlby (the friend in Juno) to play her. They actually look kind of similar if you give Thirlby blue contacts and dye her hair blond:

Tuesday, March 04, 2008

Interesting Story on Steve Jobs

This article really makes him out to be a tyrant CEO with a cult-like following.
Jobs' personal abuses are also legend: He parks his Mercedes in handicapped
spaces, periodically reduces subordinates to tears, and fires employees in angry
tantrums. Yet many of his top deputies at Apple have worked with him for years,
and even some of those who have departed say that although it's often brutal and
Jobs hogs the credit, they've never done better work.

I guess you can use the words temperamental genius when you talk about him since he did turn a company on the verge of bankruptcy into one of the great consumer products companies of our age. And from reading this article he made just about every decision good or bad at the company (or at least took the credit for it.) out of the Search Game?

Now this is a very interesting development that I thought was a joke at first.
In a dramatic about-face, is abandoning its effort to outshine
Internet search leader Google Inc. and will instead focus on a narrower market
consisting of married women looking for help managing their lives.

As part of the new direction outlined Tuesday, Ask will lay off about 40 employees, or 8 percent of its work force.

So is becoming a married woman's Q&A portal (I guess) instead of going for Googles scraps as the number 5 search engine. It does make sense since a married woman make alot of household purchasing decisions. This may be an interesting way to run a search company in general as well.

I always wished there was a TechSearch, a GamingSearch, a StockSearch, etc. type of site that specialized its searches to only that subject. The problem with Google is that you always end u sorting through alot of garbage in order to find what you wanted.

With a TechSearch site you would have links to online forums, white papers, tech company websites, driver information etc. So you would do a search for Laserjet Hp 4300 and you would get the link to the driver as the first hit, then troubleshooting information, and finally some links to CDW to buy the item if you want. I think some smart person at Google should come up with this as an ad-on to their search site to provide some built-in targeting to their searches. A TechGoogle, a GamerGoogle, a WomansGoogle, MensGoogle etc. would be really cool way to break their searches up.

Monday, March 03, 2008

Ebay Growth Slows to Trickle

Things are looking bleak at Ebay. In their case you get a triple hit:

1. Online auction leader eBay Inc warned in an annual report Friday that it faces difficulty getting former customers to return, adding to the normal challenge of attracting new users to its sites.
-First they can't get old users to come back as well as get new users to try the site. I think there are quite a few people out there that have 4-5 year old accounts and have maybe bought one or two things and then left. There is really no reason to come back to the site only to get sniped a few seconds before they are about to win a bid.

2.Adding to the risks in the coming year is expected weaker consumer spending in each of these three major markets, it said. At the same time, overall growth in the e-commerce market is expected to continue to decelerate, the company cautioned.
-I think that weaker consumer spending will hit Ebay right in the face. I don't think a consumer would go all out to buy a Hopalong Cassidy lunchbox when they can barely pay their mortgage. I also don't think e-commerce in general will weaken as much as they think. Thrifty people will still purchase things online if they can get free shipping or a 30% discount like on Amazon, Big Lots, etc. Consumers will still want to buy things and e-commerce will save that person on gas from going to the mall and provides them savings all in one.

3. Jeffries & Co analyst Youssef Squali said the pessimistic language eBay uses to describe its business prospects reflect a growing awareness that eBay is no longer the only game in town for merchants. Rivals such as are enjoying surging growth in its merchant business as eBay slows.
This one is the scariest things if you were long Ebay. When merchants leave your site they will probably not be coming back anytime soon. That is unless you cut your fees drastically. So you end up losing that person and have to cut margins to bring them back. These merchants may not even come back depending on what Amazon does to counter your fee cuts. I mean AMZN has a retail business to fall back on so they can afford to loss-lead while fees are Ebay's lifeblood.

The worst thing about Ebay is that the stock still seems to be overvalued. You end up paying a 102.17 P/E for 26% revenue growth that will keep dropping year over year unless they cut margin (or buy some non-core e-commerce growth) to compete. Also they end up losing buyers and have a hard time bringing in new ones as well. Add a further drop off in consumer spending and this stock might be in the mid-teens later this year.

The Bush Recession?

More anti-Bush ranting this time from
Last week Bush told reporters: "I don't think we're headed to
recession." But when one tried to puncture the denial, mentioning that America's
energy analysts were predicting $4 gas, our oil-man president stopped him:
"Wait, what did you just say? You're predicting $4-a-gallon gasoline?" No, Mr.
President, experts are. "That's interesting. I hadn't heard that."

Once again, as in a classic tragedy, crucial facts never
quite make it to the king's chambers in time, setting the stage for a fateful
turn of events, propelling the plot to its tragic climax.

No matter how badly Mr. Farrell wants these predictions to be "facts" they are not. I can predict $.20 or $10 a gallon gas but it doesn't make these predictions facts. When gas prices do reach $4 a gallon (it probably won't since demand is starting to slow) then lets call them facts.

These anti-Bush people will try anything to get a dig in on him. They will even resort to calling predictions facts. In any case I bet there will be tears running down their faces when they finally see him go. Once your hate is gone what do you have left?