Dem Governor attacks Obama's Blagojevich Response

It seems that Obama accidentally made a one day story into a continuing saga.

“They have never been in an executive position before,” Rendell said on MSNBC’s “Morning Joe.” “The rule of thumb is whatever you did, say it and get it over with and make it a one-day story as opposed to a three-day story. Politicians are always misjudging the intelligence of the American people.”

It also seems that the Obama camp may be showing the strain as well although only a scumbag reporter would try to collar an official trying to go to his kids concert.

Emanuel turned testy and declined to talk with a reporter who approached him Thursday at Chicago City Hall, where he was watching his children perform in a concert. The Chicago Sun-Times reporter pressed him to comment about whether he was the emissary named in the criminal complaint.

“You’re wasting your time,” Emanuel said. “I’m not going to say a word to you. I’m going to do this with my children. Don’t do that. I’m a father. I have two kids. I’m not going to do it.”

When pressed for comment, he said, “I’m not as capable as you. I’m going to be a father. I’m allowed to be a father,” and he pushed the reporter’s digital recorder away.

November Video Game Sales Near $3 Billion

It seems that people just keep scooping those video games up no matter what the economic conditions are.

U.S. retail sales of video game hardware, software and accessories jumped 10 percent last month from the year-ago period to $2.91 billion, boosted by strong sales of Nintendo Co.'s Wii, Microsoft Corp.'s Xbox 360 and the alien shooter game "Gears of War 2."

I just think that people would rather stay home and play a good game then go out and spend money on transportation, movie tickets, eating out etc. I think this "nesting" instinct may be quite a boon for many industries while being a detriment to others.

The Credit Crisis Formed out of a Need to Gain Market Share

At least it seems that way according to findings by the House Committee on Oversight and Government Reform.

In early 2004, Freddie's executive team was engaged in a heated debate over whether to start acquiring "stated income, stated assets" mortgages. And in April of that year, David Andrukonis, the head of risk management, wrote to his colleagues, "This is not an affordable product, as I understand it, but a product necessary to recapture [market] share. . . . In 1990 we called this product 'dangerous' and eliminated it from the marketplace." Freddie went ahead anyway.

Yup these 'dangerous' products were bought to the tune of $1.6 trillion and they were the multiplier effect that blew the entire thing sky high. They may not have caused the crisis but they certainly played a part in making it go from problems in one or two industries to encompass to threaten the entire world economy.

Atari is Back from the Dead

At least the name and logo is. Now it is attached to a French gaming company called Infogrames and they have a few interesting games in their pipeline.

"Ghostbusters: The Videogame" ships in June as the Sony Pictures film marks its 25th anniversary and plays like an interactive third film in the franchise with the cast involved.

Atari is bringing a virtual Vin Diesel to Xbox 360 and PlayStation 3 in the spring in "Chronicles of Riddick: Assault on Dark Athena," a shooter that further explores the back story of Riddick from the films "Pitch Black" and "Chronicles of Riddick."

I am really looking forward to the Ghostbusters game since it is supposed to be like a third film but only in video game form. They even got the original actors to do the voice over work.

Auto Bailout Halfway Home

It is strange that I keep pulling for these bailouts even though they go against my Free Market Instincts.

The legislation, approved 237-170 by the House, would provide money within days to cash-starved General Motors Corp. and Chrysler LLC. Ford Motor Co., which has said it has enough to stay afloat, would also be eligible for federal aid.
Republicans were preparing a strong fight against the aid plan in the Senate, not only taking on the Democrats but standing in open revolt against their party's lame-duck president on the measure.

I think it is just easier to go long these bailed out companies instead of betting against them. The stocks are held down by an artificial mechanism and are trading with the risk of failure baked into them. So we end up a Ford at a share price that is cheaper then a gallon of gas.

So you just need to go long and wait until there is a good chance that the bailout will be passed and then sell the rumor. It worked really well for me on the long side with Ford (I wouldn't touch a company that may still go bankrupt even with the bailout like GM.)

I just "rang the register" because the stock started to go into "wait and see" mode at about $3.25. I think that even if the bailout passes the stock won't see $8 again because it is still several quarters (or maybe even years) away from any potential turn around.

The car industry will still stay in the dumper until we are in the final innings of this recession. Also would you rather be long the #1 car maker in America like Toyota or a stock that is in debt up to its eyes and is still selling a product that people just don't want?

Obama to "Reboot" us in the Muslim World

I think that is a laudable goal.

Obama promised during his campaign that one of his top priorities would be to work to repair America's reputation worldwide, and that one element of that effort would be a speech delivered in a Muslim capital.

He pledged anew to give such a speech, though he declined to say whether it would happen during his first year in office.

My money is on a speech in Istanbul or maybe Amman, Jordan. However, If he gives a speech in Tehran then I will really give him some props.

Obama Bets Big on Broadband: Some Stocks that Might Benefit

I'm starting to love this Obama administration because it keeps the money flowing right to certain industries. In this case his stimulus package now has an ambitious goal of putting every US child on the Internet and wire every hospital.

"It is unacceptable that the United States ranks 15th in the world in broadband adoption," President-elect Obama said in the address. "Here, in the country that invented the internet, every child should have the chance to get online, and they'll get that chance when I’m President -- because that’s how we'll strengthen America’s competitiveness in the world....[and] the economic recovery plan I’m proposing will help modernize our health care system -- and that won’t just save jobs, it will save lives."

I think Cisco (CSCO), Juniper (JNPR), and Ciena (CIEN) executives need to buy Obama a big fruit basket because he just made their next few years. Business spending in networking equipment has just dropped off the table only to be potentially replaced by taxpayer spending. I wonder how much of this free cash will go just to networking equipment (the total stimulus is rumored to be $500 billion) and who will get the majority of the contracts? It could be a piecemeal thing with some companies getting some states while others handling other states.

Another big winner might by EMC corp. (EMC) who is the top player in network storage. Even though the stock has been recently downgraded to Sell due to the near term weakness in the enterprise I can see them as a long term player. I mean all those kids churning out all those reports, tests, and email will have to store that stuff someplace. If it is stored on the NAS run by the school or on the Web then EMC might get some of that cash.

The third big player will be virtualization software companies like VMWare (VMW) who will fill Obama's mandate of energy efficiency. I mean if you can cram like 10 servers on one box with virtualization technology then these schools (and the Federal Government itself) can save billions on their electricity costs. The only problem with VMWare is that Microsoft (MSFT) is hard charging in this market and already has 37% market share.

The best part about these stocks is that almost all of them are really cheap with many trading near multi-year lows. I think the dropoff in business spending might be priced into these stocks (or maybe a little over priced) while any of the "Obama Broadband Money Tree" will not be priced in until the details of the package are ironed out.

Illinois Governmor Tries to Sell Obama's Senate Seat

Here is some really staggering charges against this Blagojevich guy. (I'm sure the MSM had to make a macro for that name.) This greedy scumbag pretty much wanted to auction Obama's Senate seat off to the highest bidder.

"I've got this thing and it's (expletive) golden," the 51-year-old Democrat said of his authority to appoint Obama's replacement, "and I'm just not giving it up for (expletive) nothing. I'm not gonna do it."

Prosecutors did not accuse Obama himself of any wrongdoing or even knowing about the matter. The president-elect said: "I had no contact with the governor or his office, and so I was not aware of what was happening."

I have no idea how Obama came out of this snakepit with only a unrepentant terrorist and a dirty fundraiser staining his suit. I really hope that we don't have a slow agonizing reveal of Illinois corruption that Obama has to deny one after another.

Lee Iacocca Weighs in on the Bailout

I would really listen to this guy because his track record in making the government money at least when it came to Chrysler.

Chrysler eventually drew down $1.2 billion in loans and repaid them within three years — seven years early. Chrysler turned a profit in 1982 and the government made $311 million in the sale of stock warrants and another $25 million in loan guarantee fees.

Iacocca basically says that Dodd is an idiot yet again and wants the automaker CEOs to be kept on since they know how their business works.

Dodd said in a Sunday television interview that Wagoner "has to move on" as part of a government-run restructuring. President-elect Barack Obama, without naming names, said current auto industry management should be ousted if it doesn't understand the need to make changes. Dodd didn't name Ford Motor Co. CEO Alan Mulally or Chrysler LLC's Bob Nardelli.

Yeah, Dodd really wanted to remove the CEO and have the company waste time on a recruitment process for a new CEO when the company is fighting for dear life. I can see the GM Board of Directors (not Congress, not Dodd, and not Obama) giving him his walking papers only after the crisis has passed.

Broadcom Offers the New BCM4329

It is really getting cool what these chipmakers can stick onto one die.

Broadcom on Monday announced a chip integrating 802.11n Wi-Fi, Bluetooth, and FM radio into a single silicon die, a move designed to expand the range of features available in mid-range mobile-phone handsets.

I will be willing to bet that we will see this chip in any new IPhones and IPod Touchs going forward.

Jay Leno Comes to Prime Time

I'm sure this doesn't sit well with Conan but it seems that the 10PM (9PM in Hawaii) hour will now belong to the Jay Leno Show. I'm not sure what NBS does with Law and Order but since ER is ending then this may be the reason.

Securing Leno for the ER/Law & Order/many-a-canceled-drama slot kills multiple birds with one stone: It stops Leno from taking his late-night schtick—and his built-in audience—to a rival network at a time when NBC can ill afford to lose any viewers at any time, and it will likely save the network a pretty penny, cutting its number of fillable prime-time hours from 22 to 17.

I'm sure all of those cancelled dramas and Law & Order end up costing far more then it would by keeping Jay Leno at NBC. Also advertisers might want to put their money on a established money maker like Leno instead of some crap like My Own Worst Enemy.

Free Wireless Broadband for the Masses Losers: Analysis Flawed

Now lets look at the Free Internet Losers per Motley Fool.

Earthlink: Yup I have to agree here unless they change their business model in order to take advantage of the Free Internet. I can see them changing to a more GoDaddy ISP based system that provides web hosting, storage, and Akamai-like speed services (this will be a big deal with all this new blood fighting for bandwidth) for Hulu and YouTube. If they do nothing then they will be out of business in 5-10 years.

Comcast: I think they will be hurt by Free Internet for sure because not too many people will keep their wired broadband if they can get WiMax internet for free. You would also have to add Sprint and Clearwire to the potential dead-list as well since the government will be giving their service away for free.

GameStop: Now this is what prompted me to write this post. He talks about lower-priced ad sponsored games that are digitally distributed and I immediately thought of PopCap games. I can see this Free Internet being massive for puzzle games like Diner Dash.

The problem I see is that the vast majority of console games are large and usually take up quite a bit of space on a hard drive. So there will be a finite limit to the amount of games and add-ons one can put onto a consoles storage. I mean a Blue-Ray DVD holds 50 GBs so it would take just 3 games to fill up the largest PS3 Hard drive. This storage and graphics complexity scale will get even worse when the next generation of consoles come out.

I will agree with this part as soon as I see a major game company put a full-game sequel to a major franchise like FarCry, Call of Duty, or Halo only on digital distribution. I think quite a few retailers like Wal-Mart and Best Buy will have something to say about that. Also I have to say that add-ons or episodic content does not count as full-game sequels.

AT&T: They will be hurt on the wireless broadband front and I agree that even more landlines will be cut. But can Skype truly replace the cell phone? Will this Free Internet be faster and more reliable then AT&Ts 3G Network? And will this Free Internet be safer than the AT&T 3G network? If your phone gets a Trojan that steals your phone book or records your cell conversations or adware that makes your phone not work you will be sorry that that you gave up your AT&T service. There is a reason why Apple controls the App Store.

Blockbuster: I agree that Free Internet might spell the death of the brick and mortar Blockbuster. They will probably hold on for dear life as they transform into a digital download Netflix competitor that mostly sells and rents video games. I can see them reduce the size of their stores and maybe even start more web-kiosks where you can download movies to a DVD instead of full stores.

Liberals Already Compaining About Obama

It would suck to have to be beholden to these people. I mean Obama has not even taken the oath of office and they have already started to complain about his cabinet picks and him being pragmatic on some issues.

Liberals are growing increasingly nervous – and some just flat-out angry – that President-elect Barack Obama seems to be stiffing them on Cabinet jobs and policy choices.

Obama has reversed pledges to immediately repeal tax cuts for the wealthy and take on Big Oil. He’s hedged his call for a quick drawdown in Iraq. And he’s stocking his White House with anything but stalwarts of the left.

Why would he repeal tax cuts when the economy is in a recession? Herbet Hoover was great at that. Also how can you go after Big Oil now that oil prices are $45 a barrel? The "windfall profits tax" only works when there are "windfall profits."

I just don't understand the "progressive" agenda. Why do they want to throw us into another great depression and tax companies for something that they have almost no control over? It can't be to "get Bush" so I guess they just want Obama to have a harder time trying to right the economic ship.We also have a status of forces agreement that gets us out of Iraq no matter what. A "responsible" drawdown is what the generals want and Obama knows that. Do they really want to lose the war that badly at this point?

I found this part especially funny:

“At his announcement of an economic team there was no secretary of labor. If you don’t think the labor secretary is on the same level as treasury secretary, that gives me pause,” said Jonathan Tasini, who runs the website workinglife.org. “The president-elect wouldn't be president-elect without labor."

I think someone should tell this guy that the Big 3 Automakers would not need a bailout if they were non-Union like the Japanese automakers. The job bank paying people not to work and that $2000 markup on each US car is the direct result of the power of American labor unions run amok.

The Secretary of Labor is a joke compared to a guy that controls $700 billion in bailout money, the fate of millions of 401Ks, and the fate of the world economy. A bunch of union elections can wait until the world credit markets are off of life support and we have sorted our own economy out. Hell, Obama is already giving a huge sop to the heavily unionized construction industry in the form of the 2nd stimulus package.

Solar Industry in 2009

There seems to be a glut of polysilicon going into 2009 and that should hurt the solar cell makers and poly suppliers.

Wang downgraded Chinese solar giant Suntech (STP) and set a price target of $4.50 - down sharply from HSBC’s earlier target of $55. Suntech was trading at near $10 Monday afternoon but still nearly 90% off its 2008 high. (SunPower (SPWRA), First Solar (FSLR) and other solar cell makers have also seen their share prices nose-dive.) “High portion of polysilicon based on contract prices will hurt Suntech,” writes Wang, who estimated that 80% of Suntech’s polysilicon supply is locked into contracts “on less favorable fixed prices.”

This might be a next positive for companies that are making their own solar panels like SunPower and First Solar since one of their input costs will be much cheaper next year. That means some pretty decent margin expansion and will allow for bigger projects installed at a cheaper price.

It just depends on how much prices are locked in. SunPower for instance has $421 million in non cancelable purchase orders coming up in 2009. The bad part is that even if polysilicon prices fall to new lows SunPower will still be forced to pay this amount during the coming year no matter what. They can still negotiate any spot market purchases if solar demand is high enough. I guess that part is really up to Obama.

Free Wireless Broadband for the Masses Winners: Analysis Flawed

I was recently looking at these two articles from Motley Fool about the 5 Winners and 5 Losers of these potential changes by the FCC.

In two weeks, the FCC will vote on rules behind the sale of a sought-after chunk of airwaves. Chairman Kevin Martin wants to include the stipulation that the winning bidder must set aside 25% of the spectrum to roll out free Internet access to 95% of the country.

First the Winners:

Google: I agree here. The more people with broadband the more total web searches will go right to Google. They will clean up.

Logitech: His argument is that more Internet access means more webcams and headsets for Skype. Logitech will see larger sales but people currently use cellphones to communicate. Wireless broadband will probably be more useful for Android handsets that will connect to Skype and not computer headsets. If you have to boot up a laptop to use Skype then it will not have the same penetration as reaching into your pocket.

Amazon.com: I agree here since Amazon will get quite a few new buyers depending on how many new people embrace Free WiFi. Still there is like a 90% broadband penetration in places like Korea and Japan and they still have thriving shopping malls (well, when there isn't a recession.) The idea of people going to the store and trying on clothes, seeing an item up close, and having it the same day will probably stay with us no matter how deep the broadband penetration. However we will get more hybrid store/web-presence combos in the future. Kind of like how Circuit City has the web-order service that you can pick up at a nearby store in 24 minutes.

Ebay: He says that Skype and Paypal will dwarf the actual auction site in the future. I think Skype is only as good as its "always-on" access to mobile phones. If Skype has deep penetration into the mobile handset market then I will believe this. Also there needs to be a Skype enabled IPhone but AT&T would fight it tooth-and-nail. However, the first time your Skype enabled phone drops when you are in the middle of nowhere (i.e. where Free WiFi doesn't reach) you will be wishing for Verizon again.

Nintendo: I'm not sure about this one since free WiFi will probably help Xbox Live games more because there is just more network multi-player games for that console. Also digital distribution sound good on paper but Wired Broadband is barely fast enough to support very large downloads. Imagine having to download an entire Blue-Ray DVD game over a Wireless N or WiMax connection and then holding them on your fairly tiny Xbox 360 hard drive. Digital Distribution for consoles will only take off when you get that 10 Terabyte Drive add-on for the new Xbox 720.

Also in the Winners column but not mentioned in this article (for some unfathomable reason) is Cisco and other companies that make the routers that will channel all of this new bandwidth to 95% of the country. Everyone that wants to take advantage of this Free Wifi needs an N or WiMax enabled device that is conveniently sold by by Cisco and other network gear makers. I think Cisco will reap massive profits since in a way they will be selling the infrastructure that all of this Free Wifi will need to travel across.

GameStop Buys Woolworth Stores: Whoops Not So Fast!

I think the SEC needs to look into what happened here.

In an article on its website, MCV quoted an unnamed "well-placed source" as saying GameStop had made a bid for about half of Woolworths' stores in a move that would step up competition to UK market leader Game Group (GMG.L: Quote, Profile, Research, Stock Buzz).

However, a GameStop spokesman denied the story.

"GameStop Corp has made no bid for stores being sold by the administrator of British retail chain Woolworths. Claims originating from games industry publication MCV hold no merit and are completely inaccurate," spokesman Chris Olivera said.

I think MCV may have been taken in by some well-heeled investor trying to manipulate the stock price. He could have been short the stock or maybe was trying to pull some sort of volatility play or something. There wasn't any funny options trades as far as I can tell.

The stock dipped briefly to 19 on the news of the GameStop has lost their mind; and decided to buy a bunch of stores from a near bankrupt company that is selling things in an unrelated business for pretty much no reason at all. It would be like Home Depot trying to buy out the Gap or something. In any case the SEC needs to investigate.

OJ Will Now Die in Prison

It seems that his feeling of invincibility has disappeared in a Las Vegas courtroom instead of a Los Angeles one.

A broken O.J. Simpson was sentenced Friday to as many as 33 years in prison for a hotel armed robbery after a judge rejected his apology and said, "It was much more than stupidity." The 61-year-old football Hall of Famer stood shackled and stone-faced as Judge Jackie Glass rattled off the punishment. Moments before, Simpson made a rambling, five-minute plea for leniency, simultaneously apologizing for the holdup as a foolish mistake and trying to justify his actions.

That means potentially OJ will be in prison until he is 94. I think there is some karma at work when someone beats a double murder rap only to be convicted of armed robbery and kidnapping only 13 years later. I think the worst part for OJ is that he will have to be kept in solitary or some Las Vegas inmate will shank him to get on the news.

What the Automakers Want

This is a nice rounddown of exactly what the automakers are asking for and what they are going to do to restructure their business.

General Motors: Term loans of up to $12 billion through end-2009; $6 billion line of cred
Ford: $9 billion line of credit
Chrysler: $7 billion loan by end-2008

This is when they will be profitable (and when they would be able to pay back the US taxpayer) again:

General Motors: Trying to cut $30 billion from its debt load; dividend will remain suspended during the life of loans. Expects North America to break even by 2012
Ford: Expects a return to profitability in 2011.
Chrysler: Expects a return to profitability by the end of 2009.

I think Americans believe they are throwing good money after bad when it comes to these companies.

What the Automakers Drove to Washington

Sigh, more stagecraft and stupidity from the Big 3 Automakers.

So, we know Ford’s Alan Mullaly is driving from Detroit to DC in an Escape Hybrid, and GM’s Rick Wagoner is pushing a Malibu Hybrid from Motown and exchanging it for a Cruze/Volt mule to drive (carefully!) the final two miles to the capitol. We even know that UAW Boss Ron Gettelfinger will be *gasp* flying to the hearings, thanks to the fine reporting at Jalopnik.

The Ford guy is actually driving the whole way in an Escape Hybrid. While the GM guy is driving a Malibu and then switching to a Volt for the last two miles? Of course the UAW guy is choosing to fly like the A in UAW stands for airline. You figure the head of the United AUTO Workers would drive an auto to a meeting where he will be begging for money. This part is the most funny.

Since Chrysler currently sells only two hybrids, the nearly identical Chrysler Aspen and Dodge Durango SUVs, it’s a safe bet that he will be rolling up to Capitol Hill in one of them, and so can you, if you hurry.

You see, just a week after the vehicles were launched this past October, Chrysler announced that it would be shutting down the Newark, Del., factory where they are made at the end of the year, discontinuing the entire Aspen/Durango lineup in the process.

Yes the Chrysler guy is driving to the begging session in a car that has been recently discontinued. Now that is case-in-point why this industry is going to be taken over by foreign carmakers. Toyota actually makes Hybrids that people are willing to pay money for.

Impatient Dems Want to Shift Automaker Bailout to Obama

More finger pointing from the clueless Dems in the Senate when it comes to economic issues. They just can't wait for Obama to come in there and take some leadership which means take some of the blame if (more likely when) they fail.

"At a time of great crisis with mortgage foreclosures and autos, he says we only have one president at a time," Frank said. "I'm afraid that overstates the number of presidents we have. He's got to remedy that situation."

Obama will remedy the situation on January 20 when he is sworn in as President, Congressman Frank. Until then Bush is still President and Paulson is Finance Secretary whether they like it or not. Of course a pea-brain like Dodd can't wait that long:

"The Obama team has to step up," Sen. Christopher Dodd, chairman of the Senate Banking Committee and one of the lead negotiators, said Nov. 21 in Hartford, Conn. "In the minds of the people, this is the Obama administration. I don't think we can wait until January 20."

The Constitution of the United States dictates that they wait that long Sen. Dodd. If the Dems fail to save GM and it pulls the other two automakers under then it is 100% on their heads. All the Congress has to do is figure out where the money will come from and what strings they need to attach and the problem will be solved. They should just drain it from that Fuel Efficiency loan that is already on the books. I mean GM won't be able to make *any* cars (fuel efficient or not) if they are closing their factories and showrooms.

I mean the automakers have submitted their plans even though Dodd probably can't read a balance sheet to save his life. In fact the automakers seem open to almost any strings that the Congress wants to attach to the money.

Following the marathon hearing, one auto executive said he was encouraged that some Republicans who seemed not to listen at all to their requests for government help last month were "more rational" on Thursday about the impact on the broader economy. "I think we can save the industry in the next month, but it will be a very different-looking Detroit Three in a few months, and probably will be the Detroit Two."

Ah the gunshot marriage of Chrysler and GM? The government is getting pretty good at these forced pair-ups so what will make them stop in the future?

Mumbai Terror Plot Begins to Take Shape

It sure is a tangled mess that the Indians, FBI and Scotland Yard needs to sift through.

The surviving gunman, Ajmal Amir Kasab, 21, told interrogators he had been sent by the banned Pakistani militant group Lashkar-e-Taiba and identified two of the plot's masterminds, according to two Indian government officials familiar with the inquiry.

Kasab told police that one of them, Zaki-ur-Rehman Lakhvi, Lashkar's operations chief, recruited him for the attack, and the assailants called another senior leader, Yusuf Muzammil, on a satellite phone after hijacking an Indian vessel en route to Mumbai.

I am just wondering if any of these guys have some ties to Al-Quida and its various offshoots?

Firefox Debutes Open Source T-Shirt Store

I am really liking some of these Firefox T-Shirts which have been created by their users. This one is really pretty cool looking. The only problem I see is that Mars should be redder.

Ford CEO to Travel to Washington Via Car

A day late and a dollar short but at least the Ford CEO is going to actually drive one of his products to beg for taxpayer money. I hope he drives a Hybrid or something in order to save some gas.

When the Big Three automakers come back to Washington for hearings later this week on the proposed auto bailout, Ford CEO Alan Mulally will be making the more than eight-hour trip from Detroit to the Capitol by car, the company said today. The company won’t say yet, however, what kind of car Mulally will take (a Ford F-150 pickup truck or a Ford Focus compact car?), whether he will be behind the wheel, or when he will arrive: “It depends on traffic,” says a spokesperson.

Birinyi Associates Head Says Stocks Have Bottomed

This guy predicted the fall so he should be smart enough to predict the bottom as well. He mainly sites the low number of stocks rated "Buy" and the high negative investor sentiment as indicators that the bottom has been put in.

“The market will not again visit 750 on the S&P,” Laszlo Birinyi, who predicted the rout in financial stocks, wrote in a report today titled “The Stock Market Has Bottomed.” While he said that doesn’t mean the benchmark index for American equities is poised to rally, researchers at Bespoke and UBS said it may.

The S&P 500 might climb 17 percent in the next three months, based on the eight five-day rallies that were bigger than the 19 percent advance completed on Nov. 28, Bespoke wrote in a report. The S&P 500 rose 5.6 percent on average in the next month and 17 percent in the next three months, according to Bespoke, whose founders, Justin Walters and Paul Hickey, once worked at Birinyi.

Stocks will post “higher double-digit returns” in 2009, UBS AG’s global strategist forecast.

House Stimulus Now at $500 billion

Well, it seems like there is now more spending coming down the pike as this stimulus bill is nearly 5 times larger then the last one.

The aide, who asked not to be identified, said the legislation would include a middle-class tax cut, billions of dollars for road, bridge and mass transit construction, expanded aid to states and investments in renewable energy.

I just need to see the actual bill before I can make any comments on it. In any case it will be a nice to be in construction in 2009.

CNN Accidentally Reveals Mumbai Hostage Whereabouts

It seems that CNN just reports the news in some sort of bubble and doesn't think that terrorists watch cable news. At least CNN did not cause the death of these two Wales residents and other Westerners hiding in Taj Mahal Palace Hotel due to their loose lips.

From her home in Penarth yesterday, Mrs Shaw said: “We have been asked by the British terror police not to talk to the press.

“But the reason I would not want to talk to anyone is because our safety was actually compromised by CNN, which broadcast where we were.

“The terrorists were watching CNN and they came down from where they were in a lift after hearing about us on television. For that reason I would appeal to the media to be very careful about what they broadcast.

“When we left Mumbai there were still around 100 people trapped there.”

She added: “People talk to one another on mobile phones and that gets broadcast and the terrorists knew from that.”

After a Long Courtship Obama Picks Clinton for State

The dance is finally over and Obama has his Secretary of State:

He introduced Clinton first, saying of his former presidential rival, "She possesses an extraordinary intelligence and toughness, and a remarkable work ethic. ... She is an American of tremendous stature who will have my complete confidence, who knows many of the world's leaders, who will command respect in every capital and who will clearly have the ability to advance our interests around the world."

Some High Expectations for Obama: The Media Love Affair Edition

I did know that the media was in the tank for Obama in the runup to the election but they seem to be getting out of hand now with the Obama-mania.

Whew! Are journalists fostering the notion that Obama is invincible, the leader of what the New York Times dubbed "Generation O"?

Each writer, each publication, seems to reach for more eye-popping superlatives. "OBAMAISM -- It's a Kind of Religion," says New York magazine. "Those of us too young to have known JFK's Camelot are going to have our own giddy Camelot II to enrapture and entertain us," Kurt Andersen writes. The New York Post has already christened it "BAM-A-LOT."

I guess I kind of like how Obama has cured the Bush-derangement disorder and the anti-American bias that goes along with it. The problem is that I'm afraid the media might be setting the bar so high that if he doesn't clear it it might be disastrous. I mean the hopes and dreams of so many people are tied up in a guy who is described as Lincoln, FDR, JFK and Ronald Reagan all at once.

So if he falters, is shown to be a crass politician, or badly bungles something like all Presidents eventually do (Lincoln got rid of Habeas Corpus, FDR tried to pack the Supreme Court, JFK had the Bay of Pigs, and Reagan had Iran/Contra) then the jaded backlash might damage his Presidency. Sometimes the worst enemies are the true-believers that think he has "sold-out" or somehow "betrayed them."

This is where I hope that the media stays in his corner for the duration just like they did for FDR. I mean the media pretty much hid the fact that FDR was in poor health at the end and could not walk-unaided because they knew that that information would hurt America. So maybe the media will gloss over any deficiencies Obama has and cut him some slack if he screws up. Maybe we will have less stories that damage America because they will damage the Obama Administration. Positive public perception is one of the key ingredients in a recovery.

Who Are the Mumbai Terrorists?

This is a great article on who could be behind the recent terror in Mumbai. It seems to be about 4 different Islamist groups that are loosely behind the troubles in Kashmir. This part is especially harrowing though:

None of the India-based operatives would most likely know one another, nor for the most part would even meet. Contact with the handler woould always be through a public call center to make it difficult to trace calls. If an operative were picked up by police, there would be no way for him to identify fellow plotters. "It assures total anonymity," Sahni told TIME last year. "The handler is in Bangladesh or Pakistan, and the people here don't know each other. It's the most significant tactical shift in the near past and is a model for international terrorism in the future."

These groups working as a team all from command and control facilities that are fairly anonymous could make ferreting out these terrorist cells pretty difficult. I think this Sahni guy needs to mention that these groups are probably using some anonymous Internet communication as well. That means they might be able to have up to the moment communication that is very hard to track.

The Obama Administration better use some of that technocat power that won them the election to keep tabs on these guys. I think this Indian model could work very well with any US based terrorist groups.

Wal-Mart Worker Dies for Savings

This is a pretty sad statement when it comes to consumers in the US.

Dozens of store employees trying to fight their way out to help the man were also getting trampled by the crowd, Fleming said. Witnesses said that even as the worker lay on the ground, shoppers streamed into the store, stepping over him.

Kimberly Cribbs, who witnessed the stampede, said shoppers were acting like "savages."

"When they were saying they had to leave, that an employee got killed, people were yelling 'I've been on line since yesterday morning,'" she said. "They kept shopping."

Yes, these scum actually stepped over a dying man and were angry they had to leave the store due to this mans death. So basically this employee died so people can get cheap flat screen TVs and DVD players. I hope they study the security camera footage and charge everyone that knocked the guy down and stomped on him with capital murder.

Obama's White House Changes: To be the "Green" House and Homework in the Lincoln Bedroom

Hmm, it seems this may be a Presidency for "Change" at least when it comes to the White House itself. The first daughters will not be waited on hand and foot and will have chores in the White House. I guess that means no maids to pick up their toys and put away their books. Also one of the girls will be doing her homework at Lincoln's Emancipation Proclamation desk.

Obama, who is known to be an avid reader of Lincoln history, said his daughter told him "I'm going to sit at that desk, because I'm thinking that will inspire big thoughts."

Maybe the Ghost of Lincoln will help her with her civics homework. This part will be an interesting change I think.

Obama will be sworn in on Jan. 20, and he said he wants to work quickly to make the White House "green."

The president-elect said he plans to sit down with the chief usher for the presidential mansion and do an evaluation of its energy efficiency.

I think he should put a big Solar Panel on the roof of the White House to show more adoption of the technology. Even if they use it to heat water I still think it would be a nice gesture to show Americans how easy it would be to adopt that technology. He can even spend the tax rebate check on something nice for the family.

I think getting rid of the t-ball field that Bush put in and putting in a nice vegetable and fruit garden would be an interesting touch as well. It would be a nod to sustainable living and organically grown produce. It would be cool for the President to say "I grew these squash myself" when a foreign dignitary or a Congressman visits.

Memristors May be a Boon for HP Stock in the Next few years

It seems that HP (HPQ) is working on a new type of transistor that can remember what resistance it was in even if the juice is turned off.

After rediscovering Chua's work, researchers at HP Labs built the first working memristor in May of this year. And last week, at the first ever Memristor and Memristor Systems Symposium, in Berkeley, CA, the same team showed how memristors can be integrated into functioning circuits. Their circuits require fewer transistors, allowing more components (and more computing power) to be packed into the same physical space while also using less power to function.

The idea is that if they can get these things to increase the computing power of HP chips as well as reducing the amount of electricity that they use it could be great for their bottom line. Also these memristor/transistor chips may be used in future HP computers. This should lead to costs savings since HPs supply chain will be vertically integrated.

HP might even become a big player in the semiconductor market even if they don't build the chips themselves (I'm not sure they would want to get into the serious manufacturing side of the business.) They might just farm out the manufacture of the chips to Taiwan Semi or someone like that on the Fab side.

This also provides some real high margin business on the licencing side of things. I can see Intel using some of these things in future netbook CPUs since they seem to seriously sip power and may lead to an instantly bootable machine. HP can also licence this technology to Flash memory makers who can use it to reduce their costs as well. I think this memristor breakthrough might provide a lucrative revenue stream for HP in the years ahead.

Obama Third Press Conference in as Many Days: Strikes an FDR tone

Well I guess him showing up with the "Office of the President-Elect" seal day after day is reassuring someone since the market is rallying quite nicely.

"Help is on the way," he proclaimed at his third news briefing on the economy this week. Fifty-five days away from taking office, he declared he would have an economic plan ready for action "starting day one."

Investors' improved spirits kept pace. The Dow Jones industrials were up about 200 points near the end of the trading day.

I guess that is the Obama jawbone effect. I do like his talk on the stimulus package since it is helping the stock of construction companies like Fluor (FLR) and Jacobs Engineering (JEC.) Also it would help Caterpillar (CAT) at a time when Chinese equipment spending seems to be slowing. I think these companies are cheap but will reap the lions share of the billions in government cashola to fix broken streets and upgrade our energy infrastructure.

The FED Starting to Nationalize Some Mortgages

I think some rappers need to take a page out of the FEDs book. They are just throwing massive piles of money around and seeing what happens.

Rolling out powerful new weapons against the financial meltdown, the Bush administration and the Federal Reserve pledged $800 billion Tuesday to blast through blockades on credit cards, auto loans, mortgages and other borrowing. Total bailout commitments, loans and pledges of backing neared a staggering $7 trillion.

Yeah that is trillion with a T. They also seem to be diamonds out of the trash when it comes to loans they are plucking from the corpse of Fannie and Freddie.

As for Tuesday's actions, the mortgage-backed securities the Fed will buy will be investment-grade assets — not the toxic mortgage-related assets that the administration initially had said the $700 billion financial rescue program would buy.

By focusing on investment-grade securities, the Fed will be able to help provide a functioning secondary market. It will pay the prices for these securities that are being set by the market. Had the Fed needed to buy bad assets, it would have had to develop a mechanism to properly price assets that weren't being traded.

So they are able to nationalize the good loans and leave the bad stuff on the books of the GSEs. They are also making a market in these securities and setting the price as well. I guess the "Lender of Last Resort" has just become the "Mortgage Bank of Last Resort." Now they can slowly destroy the bad debt at the GSEs and take over these foreclosed homes if they want. Perhaps they can then sell the houses or use them to house low income families or something.

Obama Keeps Gates at Defence

It seems that Obama is really trying to fashion a Lincoln-like government by keeping Gates on at Defence for at least a year or more.

Gates and retired Gen. James Jones would bring decades of experience to the administration of a 47-year-old commander in chief who campaigned on a pledge to redeploy combat troops in Iraq within 16 months while simultaneously ramping up the U.S. military presence in Afghanistan.

Obama is picking the right man for the job over and over again in his Cabinet. Even Joe Lieberman agrees.

"Everything that President-elect Obama has done since election night has been just about perfect, both in terms of a tone and also in terms of the strength of the names that have either been announced or are being discussed to fill his administration," Lieberman said during a visit to Hartford.

A Solar Investors Primer from Forbes

It seems that the Solar Industry has some interesting trends starting to develop in it. I'm convinced that solar will be the best growth industry going forward once things shake out a bit. Here are some key points from the article.

1.) Thin film versus crystalline silicon-based cells-based cells. Some companies are staking their money on one technology or the other. First Solar (FSLR) is the thin film leader while SunPower (SPWRA) leads in home and utility installation of crystalline silicon. Thin film takes up less materials to build and thus should be cheaper

2.) New solar technology called organic solar cells which are being developed by companies like Konarka. (which isn't publically traded)

These solar cells are made of carbon molecules that figure to be cheaper, more flexible, lighter and more customizable than silicon or thin-film. In some cases they might even be disposable.

They could be the game changing technology that could conceivably get the cost closer to parity with other forms of energy. If we have an office building made with windows that double as solar cells then this organic solar cell technology will be what they use. There might be a time when every window in your house will double as sun harvesting device.

3.) A new business model is being developed to securitize the solar power system into a fixed income security. This defrays the high upfront costs and spreads the project risk to multiple investors. I think they do this through securitizing the solar incentive tax credit but the article doesn't say.

4.) Solar companies are starting to become vertically integrated. They are basically making the solar cells, designing the setup, and then building the solar plants using this securitization model mentioned in 3. This would be quite lucrative if they can sell their electricity at a cost basis that can compete dollar for dollar with a coal/oil power plant.

Here government intervention from Obama will really be a boon. If he put caps on carbon that raises the costs for oil/coal plants ,or provides incentives for utilities to use solar generated energy, then these vertically integrated solar companies will really take off. In the meantime they can control costs and receive a steady income from selling the electricity into the grid at market rates. This could be the so-called "Solar Utility" model going forward.

Cisco to Shut Down for 5 Days

It seems that companies are cutting back on tech buying this quarter and into next year.

"In particular, this will help lower payroll and facility expenses," wrote Nikos Theodosopoulos, analyst with UBS, in a research note Tuesday. "We believe it is prudent for Cisco's management team to plan for cushion in the event of weaker than expected revenues."

That seems like a pretty extreme measure in order to lower their expenses. I guess capital spending on networking equipment is being deferred to quarters where the buyer can afford it. I mean most companies can get by with their old equipment for a few years long before they need to upgrade anything.

FED Now Buying Bad Debt

The FED is still spending like a drunken sailor.

Under the new mortgage program, the Fed will buy up to $100 billion of debt issued by government-sponsored mortgage enterprises Fannie Mae, Freddie Mac and the Federal Home Loan Banks. It will also buy up to $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae.

I must be nice to just print more money when you have a need for it. I guess this is just more US debt that China gets to hold.

Public Utility Spending Should Carry Solar

I like how public utilities may be what carries solar companies like Sunpower through the next few quarters.

"In our view, SunPower's track record for successfully developing and executing some of the world's largest photovoltaic projects gives it a major edge when competing for utility contracts," he said, adding that he reaffirms SunPower's rating of "Strong Buy."

Now we need Obama to offer some higher tax incentives that get utilities to switch over from oil power plants to natural gas and solar. I am envisioning a time when the worlds deserts blossom with millions of solar panels that go right into the power grid. I mean the sun is simply baking the sand there now and should be harnessed to power our electric cars.

Obama and Bush Work Together in Transition

It seems that Bush and Obama are really working together quite well now that the hand-over of power is assured. It seems that Bush made a decision on the Citigroup bailout Obama was informed soon afterward.

His statement took only two minutes, but it included this paean to his successor: "I talked to Obama about the decision we made. I told the American people, and I told the president-elect when I first met him, that anytime we were to make a big decision during this transition, he will be informed, as will his team."

About an hour and a half later, Obama unveiled his economic team at a Chicago news conference and mentioned that he'd spoken to Bush and Federal Reserve Chairman Ben Bernanke earlier Monday.

I really like the dignified hand-over of power from Bush to Obama. I'm pretty sure all of the keyboard keys will stay on the keyboards (not like the vandalism that occurred when Clinton handed over power to Bush) once Obama takes control in January. I like this new dignified, principled politics instead of the "Pit-Viper, kill-or-be-killed" Bush/Clinton derangement disorder politics of the last 16 years.

The USA is Now Long CitiGroup?

I guess it is one bad stock after another that the US government keeps buying in order to keep these sad companies afloat. They better break up Citi and unlock some of the value in that company.

ClusterStock's John Carney lays out terms of the $306 billion in loans:

• The first $29 billion of losses from the portfolio will be absorbed by Citi entirely.
• The Treasury Department will take 90% of the next $5 billion of losses, with Citi taking the rest.
• The FDIC will step in and take 90% of the next $10 billion of losses while Citi absorbs the balance.
• Losses beyond that will be taken by the Federal Reserve in the 90% government role. "Note that Citi is still supposed to take the remaining 10% at this stage but it's hard to believe that anyone really thinks Citi would be able to take any more losses once it had written down $40 billion more in this portfolio," Carney writes.

Automakers Plan Stunt at their next begging Session

I guess cheap theatrics will be replacing sound business plans when the Automakers shake their tin cups next month. I guess you can call it the "Million Poorly Made Car" March:

The Detroit area's auto industry, whose livelihood depends on the health of Chrysler LLC, Ford Motor Co. and General Motors Corp. spent the weekend e-mailing and discussing how to set up a giant car caravan to seek help from Congress.

I think the idea of them flying to the begging session in separate corporate jets shows how messed up these guys were. It made the car makers look like they are going to panhandle in a Rolls Royce. If even one of them showed up in a car made by their company then they would have looked a lot better then they had. Like if the GM CEO drove a Chevy Volt there then it would have looked like they were serious about electric cars. Instead they looked like clueless plutocrats.

Carbon Dioxide Found on Planet 65 Light Years Away

Great, now we have the gas that causes global warming on HD 189733b just like we have on earth. It is cool to find out all sorts of new things about these planets though.

"This is the first detection of carbon dioxide in the atmosphere of an extrasolar planet, which means that three of the Big Four biomarkers for habitable/inhabited worlds have now been seen: water, methane, and now carbon dioxide," explained Alan Boss, a planet-formation theorist at the Carnegie Institution of Washington who was not involved in the finding. "The only one that has not yet been detected is oxygen/ozone."

What GM needs to Do to Survive

This is a great rundown on what GM and Chrysler needs to do in order to save their miserable hides since Congress is not going to help them.

Lawmakers also rapped the automakers' high labor costs and particularly the jobs bank, in which laid-off workers get 95 percent of their pay plus benefits even though they aren't working.

The United Auto Workers said it has cut the jobs bank and placed time limits on it in new contracts signed with the companies last year. Still, more than 3,500 workers are getting paid for not working, and that number is sure to rise as the companies continue to cut jobs.

Yes only in the auto industry do you get paid to not work. Plus the number of these unpaid, unproductive workers will suddenly grow as they start to close plants to save money. Talk about a case-in-point on the power of unions in American industry. Plus I found this just mind boggling:

Initially the UAW said it already gave up a lot in the new contracts, agreeing to lower wages for new hires and to shift the companies' huge retiree health care costs to a union-administered trust.

That means GM is currently paying into a trust that their own Union runs? So they have no control over their own health care payouts? So in other words they need Union permission to cut the contributions into the trust, try to shrink its size, or even collect fees from running the thing.

I figured that they cut contributions into this trust as soon as they started to take those multi-billion dollar losses earlier in the year. I think GM needs to go into Chapter 11 simply to rewrite these contracts in order for them to compete with the Japanese. I'm pretty sure Toyota dosen't have the UAW running any part of their business.

Geithner for Treasury: Thank you Obama!

It seems that Obama is picking a real titan of global finance for Treasury.

President-elect Barack Obama intends to name Timothy Geithner, president of the New York Federal Reserve, as his treasury secretary to confront the nation's intense economic turmoil, senior Democratic officials said Friday. The stock market soared on the news.

The market cheered its encouragement to the tune of 494 points on the Dow. I think this might be one of Obama's best picks for any cabinet post. It is the most important one as well with the problems we are facing now. I think this guy could be one of the best guys at the helm of the bailout money and our economy going forward. He is a tried-and-true "world crisis warrior" as well helping in the South Korea and Brazil debt crisis's before he helped out with our crisis.

Also I am getting pretty tired of the long, slow dance that Hillary is doing to get the State job. Just announce the damn thing and get it over with. Either that or give the job to someone else. He can't mess around getting his team into place. He needs to hit the ground running as fast as possible.

Unlike Geithner's reported selection, the Clinton saga was proving to be one of the longest-running and more public of the secrecy-shrouded search for an Obama Cabinet.

A week ago, the New York senator flew unannounced to Chicago to meet with the president-elect. That gave way to days of negotiations in which her husband, former President Bill Clinton, agreed to disclose the names of donors to his library and charitable foundation in anticipation of the close scrutiny her nomination would be sure to face.

GE Facing some Hard Times

I was wondering if GE at $12.84 was a good buy and I came across this article and took some pause. It seems that their GE Capital arm might pull the rest of their fairly profitable businesses underwater.

GE is a bank disguised as an industrial conglomerate. GE Capital is a division of GE, which truly dominates the results of this company. GE Capital has three subdivisions (GE Commercial Finance, GE Money, and GE Consumer Finance). In 2003, GE Capital generated $5.9 billion of GE’s $17 billion of profits, or 35%. By 2007, GE Capital was generating $12.2 billion of their $29 billion of profits, or 42%. Being a bank during the boom years of 2004 to 2007 did wonders for GE’s bottom line. Being a bank now is a rocky path to destruction.

This part seems pretty scary too judging from the amount of insane debt that they have on their books.

GE has $43 billion of long-term debt maturing by June 30, 2009, with another $38 billion due by December 31, 2009. The terms for refinancing this debt will be much worse than the previous terms.

Will they be able to pay the new interest expenses on this debt? Also what happens if they get put on the Credit Watch list by Moody's or one of those other ratings agencies? If GE should lose their AAA credit rating then they are a dead duck. I wonder what the debt covenants and capital requirements due to a ratings cut is on that debt?

Japanese Schoolgirl Signed to Major League Contract

Women are breaking the glass ceiling everywhere. First Sarah Palin now Eri Yoshida was signed by the Kobe 9 Cruise of an independent Japanese baseball league.

Yoshida, a right-hander who is 5 feet and 114 pounds, throws a sidearm knuckleball and wants to emulate Boston Red Sox knuckleballer Tim Wakefield.

Yoshida threw a hitless inning against male batters during a tryout this month and was among 33 players picked in the draft.

A sidearm knuckleball sounds like a pretty scary pitch to hit as well. This is a perfect pitch for a 5 foot tall, 16 year girl because you don't need to overpower anyone with a knuckler. She can throw it at like 40 miles per hour and guys will fall out of their shoes swinging at it. If she can pick up a slider or a fastball (or any kind of consistent change of pace pitch) then she would be a scary reliever. She's cute as a bugs ear too.

These Automakers have some Stones!

You have to hand it to these automakers when they are begging for money.

In sometimes contentious testimony, Wagoner was pressed on when GM would run out of money if the loans weren't extended.

He said he couldn't say precisely, but that the company now was burning through "$5 billion each month."

Still, with the $25 billion emergency package, "We think we have a good shot to make it through this," Wagoner said. He said he anticipated that, if the package is approved, GM would qualify for about $10 billion to $12 billion of the money.

They are burning through $5 billion per month? Then that means this bailout will only keep them afloat until May of next year. So they have about a quarter and a half to turn things around or they will be back in Congress with their begging bowl out by Memorial Day. I think GM needs to go into Chapter 11 and hopefully emerge stronger and more able to compete like UAL did. Union concessions is the only thing that will save them now but no one seems to be talking about that.

The Author of Liars Poker On the Economic Crisis

Now this is some very good journalism on how this economic mess started and some of the people that were involved and actually made money from it. I hope this Michael Lewis guy writes more books because this was an outstanding article. This part is especially prescient:

No investment bank owned by its employees would have levered itself 35 to 1 or bought and held $50 billion in mezzanine C.D.O.’s. I doubt any partnership would have sought to game the rating agencies or leap into bed with loan sharks or even allow mezzanine C.D.O.’s to be sold to its customers. The hoped-for short-term gain would not have justified the long-term hit.

Any business owner that leveraged his company 35 to 1 would be seen as a lunatic and would have his credit lines pulled. These investment banks did this as a way to inflate their massive bonus structures. Too bad they did it with other people's money.

The Youth Vote Won it for Obama

I have damned the youth vote for years. But I finally got a chance to look at the election numbers and how things were broken down and I think the youth may have strait up won the election for Obama.

Between 22 and 24 million young Americans ages 18–29 voted, resulting in an estimated youth voter turnout (the percentage of eligible voters who actually cast a vote) of between 49.3 and 54.5 percent, according to an exit poll analysis released Nov. 4 by CIRCLE, a nonpartisan research center at Tufts University. This is an increase of 1 to 6 percentage points over the estimated youth turnout in 2004, and an increase of between 8 and 13 percentage points over the turnout in the 2000 election. The all-time highest youth turnout was 55.4 percent in 1972, the first year that 18-year-olds could vote in a presidential election.

And 66% of that turnout was for Obama. That means that 14.52 million young voters picked Obama over McCain. Obama won the popular vote by 7.2 million. So you can say that all the Text messaging the VP candidate, the YouTube debates, and college outreach by the Obama campaign swayed this fickle of all voters his way.

It will be very interesting to see what this "what have you done for me lately" generation does when Obama fails to deliver his change message due to the bad economy. Hopefully they can stay with him through this difficult period because this generation has just elected their first President.

Yang is Out at Yahoo

At last it might even be safe to own the stock again.

Yahoo Inc. co-founder Jerry Yang is stepping down as chief executive, ending a rocky reign marked by his refusal to sell the Internet company to Microsoft Corp. for $47.5 billion -- more than triple Yahoo's current market value.

Too bad there is currently a slowdown in online advertising spending but I think MSFT may come sniffing around the carcass now that they have an "Under New Management" sign up. Too bad they will probably get quite a discount on their new offer. You can forget $31 a share but maybe they could get $15-20 a share.

Car Company Bailout May Not be a Sure Thing

It seems that the government might not be so quick to bailout these poorly run businesses after all.

Behind the logjam is a troubling reality for the car companies: Bailout fatigue has set in at the White House and on Capitol Hill, where many in both parties have spent the past few weeks being berated by constituents for agreeing to the $700 billion Wall Street rescue.

I still think any bailout needs to come with an automatic renegotiation of UAW contracts so salaries can be set at competitive rates with Japanese automakers. Anything else will just result in another bailout when the automakers blow this $25 billion in a couple of quarters.

Gadget Users Hardly Use Tech Support

I was kind of surprised by the numbers from this recent survey.

However, for all the talk about online communities, the Pew survey showed only about 2 percent of people solved their technology problem online.

About 38 percent of respondents called customer service, 28 percent fixed the problem themselves and 15 percent got help from friends or relatives.

The rest — about 15 percent — gave up.

15% is a pretty high percentage that just threw the thing in a box and forgot about the problem. I would be willing to bet you that those people might never use a product from a company that they gave up on again.

I can also tell you that the 38% that called customer service probably dreaded the experience. I think the outsourcing of tech help has gone a long way toward making these numbers so low. Most gadget owners figure that they could fix the problem themselves or get a tech savvy person to do it rather then talk to some guy named "James" from Mumbai.

GMs Collapse May Cost $200 Billion?

Great, now we have systemic risk from a company that has nothing to due with the credit crisis and everything to do with being poorly run. Their income statement is an absolute joke. What kind of company has a Cost of Revenue that is $5 billion higher then the actual Revenue? That means it costs more to build the cars and trucks then they get from selling them. It is like paying $2.22 to make a lemonade and getting $2.00 for each cup. However the devastation that GMs bankruptcy would cause is scary as well.

The projected expense of $100 billion to $200 billion covers funds for existing programs, such as unemployment insurance, and new measures that would be needed to revive economic growth after millions of auto-related job losses.

Such a sum would be an eightfold increase over the $25 billion bailout package that will be debated in Congress next week to help prop up Detroit-based GM, Ford Motor Co. and Chrysler LLC amid the industry's worst sales year since 1991.

Plus the US Government would be on the hook for GMs outrageous pension plan. The government would suddenly be forced to pay for an extra $11 billion dollars so that retired UAW members can get a pension.

One of the biggest fears in Washington is how a bankruptcy filing by one or all of the auto makers would affect the federal agency that insures the retirement savings of almost 44 million Americans. The Pension Benefit Guaranty Corp. ended 2007 with a $14 billion deficit, though that shortfall was expected to shrink to about $11 billion. Were GM to place its pension burden on PBGC, it would more than double the agency's current shortfall.

I think any GM bailout needs to come with strings attached like the removal of the CEO and upper management. The bailout must also force GM to renegotiate their labor contracts so that they can get that Cost of Revenue number down to something manageable.

Anything else would just keep the company going for another 3 quarters or so and if Revenue doesn't improve in that time (it might not due to a multi-quarter recession) they will simply ask for another $25 billion next year or they will go bankrupt then instead.

Consumer Spending Way Down

It seems that Americans just aren't buying things as fast as they used to. Hopefully they are saving that money that will not go to buying a new car or some crappy thing or another. The raw numbers look pretty dreary if you are selling autos (-9.3%,) auto parts (-7.5%,) gasoline (-10.2%,) or sporting goods, hobby, books & music (-6.8%.)

About the only thing looking good are nonstore retailers which is +3.4% from August. You can chalk this up to consumers buying stuff with free shipping and a 30% discount from places Amazon. I think they may be the only non-discount retailer that will be doing okay this Christmas. I mean people will still buy gifts but it will be a DVD from Amazon with a 30% discount instead of a big screen TV from Best Buy.

Obama Brings White House into the Internet Age

No matter what your opinion on Obama you have to agree that he might have the most wired Presidency of all time.

In addition to regularly videotaping the radio address, officials at the transition office say the Obama White House will also conduct online Q&As and video interviews. The goal, officials say, is to put a face on government. In the following weeks, for example, senior members of the transition team, various policy experts and choices for the Cabinet, among others, will record videos for Change.gov.

Hillary to Head State Department?

It seems that this is her reward for not standing in the way of an Obama Presidency.

Sen. Hillary Clinton emerged on Thursday as a candidate to be U.S. secretary of state for Barack Obama, months after he defeated her in an intense contest for the Democratic presidential nomination.

I have to say that she has the foreign policy bonifides and I can see her staring down the table at Russian Foreign Minister Lavrov or Iranian Foreign Minister Mottaki and giving them all they can get. She will also be up at 3 AM wondering where Bill is so she can answer that crisis call.

Video Games Still Recession Proof

It seems that the wider economy still hasn't dented the market for video games according to October sales. It goes to show you that gamers know that paying $60 for hours and hours of entertainment is good value in a down economy.

According to data from the NPD Group late Thursday, U.S. sales of video game software totaled just under $700 million for the month - up 35% from the same period last year.

Analysts were expecting sales growth between 20%-25% for the month. The numbers were a pleasant surprise after a disappointing month in September, which suffered in part from tough comparisons to the previous year's release of the mega-blockbuster "Halo 3." Analysts were also worried that a dramatic slowdown in the national economy would finally begin to be felt in the sector, which had been on track to set a new record for the year.

Yahoo at $10: Time for CEO Yang to Leave

Well it looks like instead of getting $31 a share from MSFT Jerry Yang decided to hold out for $10.34 per share instead.

If Yahoo shares drop below $10 a share (remember the halcyon days only a few months ago, when the $20-a-share Rubicon was scary?), it creates a very ironic situation.

That being that the company is a true bargain for a buyer interested in scooping up one of the Internet’s still most-trafficked properties, except that not many have the wherewithal in this financial meltdown to pay up.

The problem is that Microsoft will *never* come back to the table with Yang as CEO. MSFT looked like fools having to wine and dine the company and even raised their offer and then Yahoo still rebuffed them. MSFT seemed embarrassed by the whole ordeal and might rather see Yahoo go belly up instead of buying them out.

The thing is, Yang could have sold for 3x what the stock is currently worth and would have actually done right by shareholders. Instead due to his deep, irrational hatred of MSFT he cost his shareholders and employees billions of dollars and -$21 a share loss. I think the Board needs to remove him and get a real turn around expert to either shop them around again, sell off search, or reposition the company for growth. If not we might see things get even worse for Yahoo as ad spending starts to sour in 2009.

Oil Prices at 21 month low at $56.16

As I suspected all that talk of an "oil superboom" or whatever Morgan Stanley predicted back in June has just been thrown right out the window.

"The extent of the retreat in demand has caught many people by surprise," said John Kingston, director of oil at Platts, the energy information arm of McGraw-Hill Cos. "Demand destruction is due to higher [gas] prices, which have caused U.S. drivers to change habits."

I think the slowing world economy and the Chinese going back to normal consumption after the Olympics has put supply and demand back into equilibrium again. Also the stronger dollar and hedge fund selling were all part of this drop as well. It is interesting to note if we will see big trucks and SUV sales start to creep up now that gas is affordable again?

Hedge Funds Lose $100 billion in October

I wonder if some of these investors that paid some of these guys 2% management fee and 20% performance fees are regretting their decisions? I mean $100 billion loss in one month sounds pretty bad for money that is supposedly "hedged." Also this deleveraging and redemption from Hedge funds tanked the overall market in October.

Hedge fund selling has been widely cited as one of the reasons for the increase in volatility in equity and bond markets during October. The Dow Jones industrial average fell 14% during the month, while the Standard & Poor's 500 index declined 17%.

It is also the reason that we will see everything knocked down right up until this Friday when quite a few funds have a deadline set for redemptions for the rest of the year. I have a feeling that there may be a slight Santa Claus rally as these funds purchase some of the winners back that they were forced to sell to satisfy redemptions. I mean there are some quality stocks out there that are selling for values at just a little higher then their cash hoards.

Iran Now Has Europe Under its Missile Cloud

I swear if Iran gets the bomb on Obama's watch his Presidency is going to be a miserable failure in terms of world security.

The Sajjil is a solid fuel high-speed missile with a range of about 1,200 miles, Defense Minister Mostafa Mohammed Najjar said on state television. At that range, it could easily strike Iran's arch-foe Israel and go as far as southeastern Europe.

Think of how scary this thing will be if it is tipped with a nuclear payload.

Now the Government Wants to Go Long the Auto Industry?

It seems that the Dems are cooking up a plan for the Federal Government to now own stock in the US auto industry.

Congressional Democrats are pushing legislation to send $25 billion in emergency loans to the beleaguered auto industry in exchange for a government ownership stake in the Big Three car companies.

At least the banks have okay balance sheets and have decent cashflows from fees and deposits. They can easily afford to pay the dividend on that premium stock that the government now owns. The US auto industry however is in simply in the crapper and are just looking for a place to die. You know they will be back at the federal loan window when this batch of money runs out. This industry is being smashed by Japanese competitors, have billions in debt on their books, and actually sell a product that no one currently wants.

This investment is the ultimate example of throwing good money after bad. The problem with the auto industry is that the UAW has guaranteed pensions and high wages for their members and it is killing these companies. It now costs billions of extra dollars just to build the exact same thing that a competitor does. I mean there really isn't much difference between a Chevy Cobalt and a Toyota Camry other than the price. So there there is no reason to buy a Cobalt in the first place if it costs a few thousand more.

What these companies may need to do is go bankrupt so that they can renegotiate these wage and pension plans and sell some of their US plants off to the Japanese. They should also reduce the ridiculous amounts of car models they currently make. GM has like 5 different Camry clones on their website and all of their cars look squat and boring other then the Cadillacs. A leaner and meaner GM and Ford coming out of bankruptcy would be much better prepared to take on the Japanese and compete on price and quality without having a wage and pension anchor tied around their neck.

Obama's White House Visit

I love this scene of peaceful handover of power. That is why no matter what a President does it will only take a few years and his time in the White House is over. There is no President for life like Putin or Castro. If you don't like the guy in this office then just wait a few years and you can vote him and his party out.

Starbucks Profit Slumps; Offers Decent Expectations

It seems that closing stores has hit Starbucks right in the bottom line to the tune of a 97% drop in profits since last year. However this data seems pretty positive though:

Revenue rose 3 percent to $2.52 billion from $2.44 billion. Same-store sales dropped 8 percent in the U.S.

Starbucks expects adjusted profit between 71 cents and 90 cents per share depending on sales. Analysts see 87 cents per share.

Circuit City Files for Bankruptcy

I guess they could not sell the company before they were forced to pull the plug.

The company said it decided to file for bankruptcy protection because it was facing pressure from vendors who threatened to withhold products during the holiday period. The company also said it cut 700 more jobs at its headquarters, after announcing a week ago that it would close 20 percent of its stores and lay off thousands of workers.

They now have the chance to reorganize and perhaps come out of bankruptcy that much stronger. My money is more on Best Buy dominating the electronics sales industry.

Earring Found under Jerusalem Parking Lot

It must really be interesting to know that under every parking lot you could find a treasure like this. It would be cool to get some genetic information off of those pearls so we can tell what part of the world they came from. You would be able to trace ancient gem trade patterns that way.