Apple and Verizon Team Up?

There seem to be some rumors swirling about Verizon and Apple teaming up to deliver an IPhone Lite.

Allegedly, one device would be a thinner, lighter, and lower-priced version of the iPhone--an iPhone Lite, if you will. While the other device would be something akin to the jumbo iPod Touch that we wrote about previously. BusinessWeek's anonymous source describes it as a "media pad that would let users listen to music, view photos, and watch high-definition videos."

I think the iPhone Lite is just a rumor to extend the AT&T deal at Apples terms. It gives AT&T the idea that Apple could walk-away at any time and join their competitor. I think Apple would just love to sell their iPhone to every cell phone company in the world but just can't due to the AT&T deal. Now AT&T will have to shell out big bucks or Apple will do just that in 2010.

However their new Netbook-like ITouch device looks really nice but I can't see how much margin they can squeeze out of the thing. I just have a hard time seeing this thing selling for more than $300 but I could be wrong.

Specter Leaves the GOP

I'm not so sure if this move will be much of a power change in the Senate.

Specter was facing a nearly impossible primary challenge from his conservative nemesis, Pat Toomey, whom he defeated by just 17,146 votes (or 1.6% of the vote) in 2004. Specter's unpopular vote in support of Obama's stimulus package in February drove many of Pennsylvania's diminishing Republican votes to Toomey, giving him an edge of 41%-27% in one recent poll.

So he cut his losses and crossed the aisle. He still seems to be a moderate and against such abuses as the card check that allows unions to form at Best Buy or Wal-Mart or wherever. If you want to see the power of unions they now own 55% of the nearly bankrupt Chrysler. If you can honestly say that a company that has UAW members on the board (so they will *never* get rid of their wage and benefits baggage) will actually be able to compete on costs with Nissan and Toyota then you are crazy.

If Wal-Mart or Best Buy unionized then we get stuck with the wage increases in the form of higher prices. I guess it will be a great time to go long Amazon because their pricing advantage will be enormous.

Specter might be behind Obama's "rip off the unborn grandkids" budget scheme because he supported the bailout but I'm not so sure. He seems to be a fairly moderate spender compared to some on the Dems. They sure won't be getting a far-left liberal in that job that's for sure.

Brokerage Error Crushes Dendreon Stock: But Provenge Study a Success

There might have been a mishit of some keys at a brokerage firm that went on right before trading was halted.

In a statement, Nasdaq spokesman Wayne Lee said the exchange investigated trades between 1:25 and 1:27 p.m., the same time as the plunge. He said the trades will stand and that the decision cannot be appealed. Trading in Dendreon shares remained halted until market close.

Shares fell $9.74, or 45.2 percent, to $11.81 in afternoon trading before trading was halted. Shares were rising before the study was released at the American Urological Association's annual meeting in Chicago Tuesday.

Out of all the information, this is the part that should be looked at by the FDA.

Median survival was 26 months in men given Provenge and 22 months in the others. Three-year survival rates were 32 percent for the Provenge group and 23 percent for the others -- a 38 percent improvement.

It is either this or having to take Taxotere and face all of its painful side effects. Now the next study has to be if men take Provenge earlier in their prostate cancer cycle then what will happen to the disease. You figure that since your body itself is being helped to kill the cancer then it should work even better.

Also the FDA might be facing a lawsuit from patient groups because basically they kept this thing off the market for 2 years even though they said it was safe and their own advisory panel said it was effective. Imagine all of the lost months that end-stage prostate cancer patients would have gotten to live if the FDA listened to that advisory panel.

Air Force 1 Buzzes New Yorkers

I think these people should understand that *any* low flying jet plane in Manhattan would immediately be thought of as a terrorist attack.

The White House apologized Monday after one of Barack Obama's presidential planes flew alarmingly low over New York city, sending residents into a panic and triggering fears of a new 9/11.

Of course it would have all been cool if it was to rush Obama to an emergency Swine Flu meeting of the United Nations or something. But the reason given was an absolute joke.

Sources said the chief reason for the panic-inducing flight was to create souvenir pictures of Air Force One flying over the Statue of Liberty to be given out - like a presidential tie clip - to family, friends or supporters.

Yup they scared New Yorkers and forced some to evacuate their buildings for presidential souvenir photos. I think there needs to be Congressional hearings on this and whoever is responsible for okaying this mission needs to resign.

Job Opportunity: Pirate Killer!

It seems that shippers might have an added cost of doing business due to these stupid Somali pirates.

In response to questions from a House Appropriations subcommittee, Petraeus said defensive preparations short of armed guards "can work. You can have water hoses and others that can make it more difficult."

But in a wry tone, he added: "It's tough to be on the end of a water hose if the other guy is on the end of an RPG. So you've got to think your way through that calculation as well."

Some ports don't allow ships with armed guards to enter so what these shippers could do is use a helicopter to let the guards off on shore just before they get into port. That is a lot of extra costs but it is better then having to pay millions in ransom if your boat is hijacked.

Plus if they are Americans of Frenchmen on board there is a good chance that the pirates would execute them so guards will certainly go a long way to stopping that.

Janet Napolitano Kind of Aplogizes for Slandering Vets

At least she admitted that one of her people made a mistake:

Napolitano blamed one of her agency's analysts for prematurely sending out the intelligence assessment to law enforcement, according to Craig Roberts, an American Legion member who attended the meeting. The report says veterans returning from Iraq or Afghanistan could be susceptible to right-wing recruiters or commit lone acts of violence.

I hope that person has be reprimanded for pretty much saying that Vets risking life and limb in Iraq and Afghanistan could go nuts and commit acts of violence once they come home. That fit every Vietnam-era paranoid fantasy on the left of Vets will be crazy from war and start killing people indiscriminately.

Notice though that Napolitano didn't apologize for the actual content of the report but just that it was released early. You got to love that typical politician double-speak.

GM Forced to Shutter Pontiac Brand

Well it seems that yet another venerable car brand will be no more.

General Motors Corp., facing the threat of a bankruptcy filing if it can’t meet a June 1 U.S. deadline, will preserve the GMC truck line and drop its 83-year- old Pontiac brand as part of a government-led recalibration of its business plan, people familiar with the decision said.

This move might be able to save enough money to make GM profitable if it sells as few as 10 million cars a year. It must suck to live in a town that supports a Pontiac plant though. You can see that GM was competing against themselves for some time. I couldn't tell the difference between a Chevy and a Pontiac on their website. They had nearly identical sedans. So I guess only people that had Pontiac GTO or a Trans-Am back in the 60-70s are giving it much thought.

Obama Does the Waterboarding Two-Step

I think someone finally told him that a wide net into waterboarding will catch quite a bit of Democrats in its clutches along with the Bush people.

At the White House, spokesman Robert Gibbs sought to underscore Obama's resistance to an independent commission two days after the president himself said such an approach would be preferable to a partisan congressional investigation into the questioning techniques that critics say amount to torture.

Gibbs said that after internal White House debate, Obama determined the independent commission "concept didn't seem altogether that workable in this case."

I have to say that this "change your mind when more info comes in" Obama two-step (you could call it wishy-washy) is kind of jarring. I do think it is much preferable to not changing your mind no matter what. It goes back to the maxim of "when conditions change you change your mind" which I think is a fairly sound policy.

In this case I think someone told him that Pelosi, Jane Harman and whoever else will end up targets of the commission and could face charges by his own AG. It would also hurt CIA operations in the future because the legal leg they have to stand on might end up changing every 4 to 8 years. How can these CIA guys know what is permissible when the judges that tell them what is legal get sent to jail every few years?

It would have also created a poisonous atmosphere of partisan recrimination and questions of who knew what and when and other nonsense. The GOP will fight him on everything if they were targeted over actions that the entire Congress took to protect the country. Finally, it would also raise the specter of the new guy in office will have carte blanche in the future to prosecute the old guy in office. They do that in Chile and Myanmar but not the US.

All Obama would gain is to "get Bush" and make liberals feel all good inside. Those bad-guy "Repugs" had to resort to extreme measures so we could get actionable intel out of murderous terrorists. Now they will be punished!

This commission would make the Daily KOS and HuffPo happy but at the expense of national security, the CIA, ruining any chance of bipartisanship, and the Dems caught approving torture being run out of office. So Obama changed his mind when the situation changes.

Amazon Earnings Very Strong: Could it be that people are avoiding the Gloomy Mall?

Amazon just keeps surprising people even though consumers are supposed to be cutting back.

Amazon.com Inc. said earnings climbed 24 percent to $177 million, or 41 cents per share, compared with $143 million, or 34 cents per share, in the year-ago quarter. That easily beat the 31 cents per share that analysts polled by Thomson Reuters expected.

The company said revenue rose 18 percent to $4.89 billion, slightly higher than analysts' expectations of $4.76 billion.

So they were able to increase the top and bottom line when some companies are facing double digit drops? I think more and more people are just moving their day to day spending from the mall to Amazon and taking advantage of Amazon Prime to save a buck.

I think one factor that might be driving Amazon sales is that malls are now some of the gloomiest places you can go to buy something. I mean Ward Warehouse which is close to my workplace is like a ghost town full of closed shops and restaurants and is mostly made up of darkened hallways and furtive, scared-looking merchants.

If I wanted to pick up some clothes or something I would much rather do a few clicks on Amazon then drive down to a Fallout 3-like wasteland of a mall. Amazon is cheerful and cheap while the mall is full-priced and gloomy. It is not such a hard choice to make.

Poll Shows that 80% Think that More Debt will Hurt Future Generations

In a recent poll it seems that Obama's right direction numbers have finally edged ahead of his wrong direction numbers.

In a sign that Barack Obama has inspired hopes for a brighter future in the first 100 days of his presidency, an Associated Press-GfK poll shows that 48 percent of Americans believe the United States is headed in the right direction — compared with 44 percent who disagree.

I think he should seriously be concerned about this part though:

_While there is evidence that people feel more optimistic about the economy, 65 percent said it's difficult for them and their families to get ahead. More than one-third know of a family member who recently lost a job.

_More than 90 percent of Americans consider the economy an important issue, the highest ever in AP polling.

_Nearly 80 percent believe that the rising federal debt will hurt future generations, and Obama is getting mixed reviews at best for his handling of the issue.

This shows that missteps on the economy or a feeling that Obama is standing in the way of people getting ahead will cost him dearly. And that last number makes it seem that they took this poll at a Tea Party rally or something. It think it is a good thing that 80% of people in this poll think that *even more* federal debt will hurt future generations.

I'm glad that a large majority of Americans are finally understanding that you can't pay off your credit card bill by applying for more credit cards. People are getting the message that more and more debt will short change future generations and force them to either default on the debt or work even harder to pay the interest. Either way Obama and the Dems will be placed squarely on the blame line.

Chrysler Moves Toward Bankruptcy: It Sucks to Be Their Creditor

Well it seems that our $7 billion "investment" in Chrysler is going to be destroyed along with much of the wealth of any of their debt holders.

The only major question that remains unresolved is what happens to Chrysler’s lenders, who hold $6.9 billion in company debt. The government’s most recent offer, presented Wednesday, would give the company’s lenders about 22 cents on the dollar, or $1.5 billion, and a 5 percent equity stake in a reorganized Chrysler. Earlier this week, a steering committee of the lenders proposed that they receive 65 cents on the dollar, or $4.5 billion, and a 40 percent equity stake.

However their UAW workers get to hold onto their pensions and health care benefits.

The Treasury has an agreement in principle with the United Automobile Workers union, whose members’ pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing, said these people, who asked for anonymity because they were not authorized to discuss the case.

So basically if you loaned the company money (the taxpayers are in this camp unfortunately) you get 22 cents on the dollar and some stock in the company once it emerges from bankruptcy. But if you are a UAW member you don't have to worry about your pension or your health care expenses because I assume the taxpayer will be footing that bill.

I don't see anything about the bankruptcy voiding those UAW employment contracts so I assume those will be carried forward. So even when they leave bankruptcy they will *still* be at a salary and benefits disadvantage to the Japanese automakers.

I guess the fear of reprisal from the White House is keeping the debt holders from just forcing the company into Chapter 7 and liquidating Chrysler's assets to Fiat at a fire sale. You figure this action would net them more than a measly 22 cents on the dollar.

This whole thing tells you that if the government takes over your company for any reason then get rid of that companies debt immediately or you face getting only 22 cents on the dollar of your money back. Forget debt covenants or who is supposed to get what and when the government dictates terms. I'm sure the Cerberus Capital people must be hopping mad at this turn of events right about now.

Could the Taliban Take over Pakistan?

I sure hope not. But there seems to be just 65 miles separating the Taliban from Islamabad.

On Wednesday a local Taliban militia crossed from the Swat Valley - where a February cease-fire allowed the implementation of strict Islamic, or Shari'a, law - into the neighboring Buner district, which is just a few hours drive from Islamabad (65 miles, separated by a mountain range, as the crow flies).

So you could say that a mountain range (and not a vast army or even a river) now separates the capital of a nuclear armed nation from falling to Islamic hardliners. Forget about Iranian nukes because Pakistani nukes will be much scarier in the hands of the Taliban. Especially if they are aimed at our troops in Afghanistan.

One medium ranged missile fired by Taliban militiaman could wipe out an entire NATO division or sink an entire carrier group. Just having a few warheads slip out of the country will be enough to give the world a headache for decades to come.

At the same time Pakistan seems more afraid that Baluchistan might declare independence with the help of India.

Also on Wednesday, a top adviser to Pakistan Prime Minister Yousuf Raza Gilani made an explosive announcement accusing a long-simmering separatist movement in the province of Baluchistan of being sponsored by archenemy India and Afghanistan. The mysterious deaths of several Baluch leaders over the past few weeks have renewed demands for Baluch independence from the nation of Pakistan.

This might be paranoia but I can see the Pakistani point of view. Historically buffer states are very important when two nations are arch-enemies. That is why Poland kept getting taken over and built up in the course of European history. There seems to be no hard evidence that India is doing this though.

However I can see the advantage India would get from creating an allied buffer state out of part of Pakistan. That is especially true if Islamabad falls to the Taliban and Baluchistan declares independence. This would give India a chance to surge troops into Baluchistan as a "peacekeeping" force and maybe even invade Pakistan in the same vein.

Hell, even the US would gain from the creation of an Indian-allied Baluchistan because India would probably let us pour troops and material into the region to hunt for Al-Quida scumbags. Plus the Indian Army might be more willing to pair up with the US to fight against the Taliban as well. The Indians don't have that long association and aid of the Taliban that Pakistan has had in the past. The Indians might not have any objections with us flying Predators deep into Baluchistan to help them kill off Taliban leaders. In any case, Hillary's job has just gotten *much* harder.

Obama Backs Columbian Trade Pact: First Foreign Policy Homerun!

Here is some credit where credit is due.

The president announced that his team must find a way to pass the agreement. With world trade down 80%, the pact opens new markets to the U.S. He demanded immediate action, asking Colombia's trade minister to fly to Washington this week.

Then it got even better: Obama invited Uribe to the White House and promised to visit Colombia himself, allowing the Colombians to lay out for him their vast economic and social progress, and their desire to integrate into global trade.

The best part about any agreement with Colombia is that it improves the quality of life of the average Colombian. The more access this person has to American markets the better chance they have of succeeding in the world economy. Plus this is the reward for Pres. Uribe for reforming his country and turning it into a stable, pro-US Democracy.

GM to Close US Factories This Summer

I guess they are trying to save money in any way that they can and that means not making as many cars as they did in previous years.

General Motors Corp. is planning to temporarily close most of its U.S. factories for up to nine weeks this summer because of slumping sales and growing inventories of unsold vehicles, two people briefed on the plan said Wednesday.

Too bad they don't get a chance to furlough the workers during that period and make the UAW pay their salaries during the time that the factories are shut down. That could give GM a breather in which they can build up some cash for the long haul.

VMWare Dissapoints on Revenue Numbers

Their revenue seems to have missed the mark this past quarter. This number would worry me if I was long the stock:

VMware said the quarter's service revenue grew 48 percent to $213.3 million. The company added that its business mix continues to shift, with service revenue becoming a larger proportion of total sales. License revenue fell 13 percent during the quarter to $257 million.

That means for the time being people are sitting still and paying their service charges but are not ordering as many new copies of VMWare's Software. I think this may be because companies are trying to conserve cash by making due with what they have. So that means they are not looking to grow (and thus carry more virtual servers) for several quarters into the future. I think the stock might revisit lows and rebound once server software sales start to pick back up.

Miss California Against Bailouts Too? A New Conservative Star is Born

I was watching this clip of the Miss USA runner-up Carrie Prejean on Neil Cavuto and judging by her screen presence and her no-nonsense take on issues she could easily be a conservative star.



She is even against the bailouts and says that no government money should be given to private companies. She does need to clarify her view on welfare. Hell, she is far to the right of me as well. I think targeted bailouts saved us from another Great Depression and Welfare is a very important as a safety net as long as people are moving toward work.

I can see conservatives tuning in to watch an O'Reilly-style show hosted by Carrie Prejean. She has poise, charisma, and is a very good looking as well. The religious establishment would flock to an openly Christian person on the Fox airwaves. She will also face unmerciful criticism by the anti-religious types like Bill Maher and gay groups will brand her as a bigot for practicing her religious beliefs.

She says in her piece that she is thinking of going into politics. This move may or may not be a good idea. On one hand the media wolves would tear her apart because she would be immediately classed as a brainless bimbo.

However she is head-and-shoulders above Sarah Palin in her speaking style. She doesn't seem overly folksy with the "You Betchas" like Palin did. She also wears her religion on her sleeve and can very easily be a really good looking version of Mike Huckabee. In any case you will be seeing a lot more of Carrie Prejean that's for sure.

Chinese Break Ground on Next Generation Nuclear Reactor

At last we may soon see a Westinghouse AP1000 nuclear reactor going up in Sanmen, China. The Chinese are so far ahead of us on this sort of thing that it is mind blowing. We should have at least a dozen of these things going up if Congress actually cares about weening this country off of coal and oil power plants.

According to Westinghouse, 'The AP1000 is the safest and most economical nuclear power plant available in the worldwide commercial marketplace, and is the only Generation III+ reactor to receive Design Certification from the US Nuclear Regulatory Commission.'

Interesting Tax Fact About Soaking the Rich

Buried in a pretty good piece about the Tax Day Tea Parties from some economists at Forbes is a little tidbit that I did not know about soaking the rich.

Here is an interesting set of facts. If the government increased the top tax rate from the current rate of 35% to 100% (yes, that's right 100%), it would only collect an extra $400 billion this year. In other words, confiscating all the income that is currently taxed at 35% would not raise enough revenue to cover any of the annual deficits projected in the next 10 years. There is no way that tax hikes on the rich alone can pay for proposed spending in the current budget.

So raising to top tax rate from 35% to 100% will only net an extra $400 billion? You can't even pay for half a bailout with that money. Plus Obama's plan calls for reducing the amount of people that actually pay taxes as well. It looks more and more likely that we will either have tax hikes for everyone or monster debt service to be looking forward to in 2010 and beyond.

Could the Stress Tests Hurt Regional Banks?

It seems that the upcoming "stress tests" could favor big national banks over smaller regional players.

Under one scenario, the test assumes banks will see "no further losses" on these complex securities at the heart of the credit crisis. By contrast, it estimates that the banks' individual loans will lose up to 20 percent of their value.

The methodology "certainly penalizes those banks that are more involved in traditional banking, which frankly have been performing better in recent months," said Wayne Abernathy, a former Treasury Department official now with the American Bankers Association.

He said banks' loan portfolios have lost only about 5 percent of their value so far, whereas the value of complex securities are down 30 to 40 percent.

It makes sense thought that since complex securities are down 30-40% they will probably not fall much further. However since loans are only down 5% so far they could have further to drop. So a "stress test" will have to make that scenario more probable then a further 20% drop in complex securities. It is bad for regional banks since most of their balance sheets are made up of loans and the "stress test" will see if they can absorb a full 25% loss on their portfolio.

However, if these complex securities were valued at only 40% to 50% of their initial value then you could call just about any large holder of them insolvent. I think the Treasury is setting these assets up to be just toxic enough for the banks to get rid of them with that toxic asset removal plan. But they don't want the assets so toxic that the bank will hold onto them rather then take them off their books. It's quite a balancing act with lots of moving parts. My guess, however, is that regional and national banks will pass the "stress tests" with no problems.

Possible Water World Found

This is an interesting development in the search for exoplanets.

Gliese 581 d is probably too large to be made only of rocky material, fellow astronomer and team member Stephane Udry said, adding it was possible the planet had a "large and deep" ocean.

"It is the first serious 'water-world' candidate," Udry said.

Plus this solar system is only 20.5 light years away from earth. A long term mission could actually be launched to this solar system and could get there in a single generation. In the meantime we could aim radio waves at this planet and see if we get any response.