Q4=Energy and Financials

They should be growing their earning like gangbusters in this upcoming quarter. According to the article we should be selling off retailers, consumer-discretionary, and materials.

Meanwhile, retailers and consumer-goods wholesalers are especially vulnerable to rising gasoline prices as consumers put more of their income into their gas tanks, leaving less to spend at stores

As for consumer-discretionary companies, they are seen posting earrings growth of just 1%. That is the second-worst performer only to the materials sector, which is expected to decline.

Still, that's better than what's expected out of the materials sector, which is projected to post and earnings decline of 5%, according to Thomson Financial. Dow Chemical, DuPont and U.S. Steel Corp. (X) will be responsible for most of the fall-off. Natural gas is the primary fuel used to run factories, and it's the most-used raw material in manufacturing.

However here is why we should be buying:

As a result, the energy sector has delivered the most substantial upward estimate revisions of any sector of the economy since the first quarter of 2003. ExxonMobil, Chevron and ConocoPhillips (COP) are the three biggest factors behind the sector's bullish profit outlook, according to Thomson data.

After the energy sector, financial firms are expected to post the second-highest growth rate, up 21%, with total earnings coming in at $45.7 billion vs. $37.1 billion in 2004.

Seems like sound advice to me. I like this company myself:

Then there's Goldman Sachs Group Inc. (GS) , which on Sept. 20 reported an 84% gain in third-quarter earnings, booking a record profit of $1.6 billion, or $3.25 a share, and greatly lifting the sector's overall prospects.

As was expected Syria put the hit on Hariri

It looks like the Syrians were the ones who killed off former Lebanese Prime Minister Rafik Hariri. At least this is what some defectors have claimed. This is something that concerns me though:

Bush's national security team is due to meet Saturday to review policy toward Syria, the officials said. Options range from tougher economic sanctions to limited military action. One official involved in the deliberations said military action is unlikely for now.

Let's not bomb them just yet. I know if the choice is between Syria which we could probably take in a few weeks and Iran (which would be a terrible Vietnam style slog) we would choose Syria any day. We can barely get the corner turned on Iraq and we are beating the war drums again. I think merely isolating them and helping internal anti-Syrian groups would be good for a start. Any protracted land war will result in another costly rebuilding process.

Maybe a few years down the line we can have Iraq attack them with our logistic and technological help. I mean we are an Empire so we can get our satellite to declare war on the enemy and come in and give them free weapons, planes, and logistical help. I may be playing too much Victoria lately. :P

Oracle to Crush Salesforce.com?

Now this is an arrogant ass. Here is what this President of Oracle says:

"In this case I think it would be much more fun to crush them," Oracle President Charles Phillips said of Salesforce.com at a press briefing in New York. "We see a lot of ways to compete with them. We will try that for a while."

I really hope Salesforce.com beat Oracles face in the areas where they compete. It sure would be nice to make this arrogant SOB eat his words. I also hope that Salesforce.com would put some kind of poison pill or something in their bylaws to prevent Oracale from ever taking them over. Or they should be acquired by SAP which as I recall is Oracle's nemesis.

Whatever the case I will never own Oracle as long as idiots like this are in charge. Well the stock has flatlined for about 3 years so it really isn't worth owning anyway. Perhaps if they got rid of arrogant jerks like Phillips here the stock will do a little better.

Yahoo Sued

It seems they poached an executive from a company called Nuance Communications and they are getting some payback via the courts. I think Yahoo should either settle or just bought the whole firm. I mean they have $3.39 billion in cash just sitting there doing nothing. Oh well I guess they could give Nuance the old MSFT treatment and smash them into the ground.

Bible to be Taught in Public School!

Here is a new course on the Bible that shouldn't draw fire by the various militant-atheists out there. I think Bible knowledge is very important to figure out quite a bit of things in society nowadays. You can see how the various religions think and get their basis from. It seems you can really understand Shakespeare better as well. I never knew this about his work:

Students may gain a more nuanced understanding of Shakespeare, with his 1,300 biblical references;

When I was going to school they only taught Bible knowledge in Advanced Placement English which I was one level too low to qualify for. I ended up watching History Channel documentaries and reading the free Bible that the Mormons gave me. I think this would have been a great thing to learn about in High School instead of much later on.

Good time to Buy Yen

Looks like the time is ripe to switch your dollars into yen if you are going on a Japan trip like me. The yen is trading at 113 yen per dollar. If that Tankan survey is really good then the Yen price may move a few yen stronger. However this other guy thinks:

Alan Ruskin, foreign-exchange analyst with 4Cast, thinks any significant yen gain hinges on factors beyond a rosier near-term economic picture.

Ruskin says the yen needs at least two of these developments to play out before it will gain: acclerated yuan appreciation; Bank of Japan interest-rate tightening; the end of U.S. interest-rate hikes; and the end of so-called carry trades, particularly in emerging markets.

I do like how the Japanese stock market is at 4 year highs though. That is good news for people who own shares in the iShares MSCI Japan Index Fund (EWJ)

Roberts is In as Supreme

Looks like he passed the Senate and will be the nations 17th Chief Justice. He looks like a solid Justice and should be a fairly moderating force that will follow the Constitution. Much more so then some left-wing firebomber like they have in the 9th district. Whatever the case we have to get used to him because he will be on the Court for many, many years.

Gas Prices Cut into Wallets

This doesn't look good for the Credit Card Industry. It seems Americans can't pay for the high gas and keep up with their ballooning credit:

The American Bankers Association reported Wednesday that the seasonally adjusted percentage of credit card accounts 30 or more days past due rose in the April-to-June quarter to 4.81 percent. That followed a delinquency rate of 4.76 percent in the first quarter and was the highest since the association began collecting this information in 1973.

It seems that Americans are living too far beyond their means. The low savings rate provides little cushion for these people as well. Let's hope the disruptions don't give us $4 gas anytime soon. Now that will really send Americans reeling.

Deaths at Superdome Urban Myth?

It seems that they found only a handful of people dead in the Superdome.

They have no official reports of rape and no eyewitnesses to sexual assault. The state Department of Health and Hospitals counted 10 dead at the Superdome and four at the convention center. Only two of those are believed to have been murdered.

So there seems to have been only 2 real murders? The media I think is to blame for swirling all of this out of control. They needed to have had a reporter in the Superdome showing people what was really happening. But I guess the reports of:

children with slit throats, women dragged off and raped, corpses piling up in the basement —

were just to scary for reporters to brave. Ormaybee officials were keeping the reporters out of the Superdome for their own safety or something. But this is the stuff of urban legends. Here is how it will start I think. The FEMA officials or perhaps National Guardsmen dragged the bodies out of there early on. There were hundreds of dead spirited away by black painted trucks.

A week after the floodwaters poured into the city, an Arkansas National Guardsman told The Times-Picayune of New Orleans that soldiers had discovered 30 to 40 bodies inside a freezer in the convention center's food area. Guardsman Mikel Brooks told the newspaper that some of the dead appeared to have met violent ends, including "a 7-year-old with her throat cut."

So this guy started the rumor that children were getting their throat cut. I wonder if this guy was an actual eyewitness or just got this info from someone else. It would be interesting to follow up to see if this guy meets a suspicious end in the coming months. Death by hunting accident alone in some barren place with a different caliber of bullet in his back then the rifle he was carrying. Or he was found dead at the wheel of his car at a red light of an apparent heart attack. That would solidify the coverup if there was one.

In any case this incident would be great for a social scientist who studies the psychology of crowds. Finding out how the rumors were started and how they were spread would be some interesting reading.

The Japanese ditch Hollywood Stars

Seems like there will be less and less Lost in Translations out there. This is a very interesting article on how the advertising industry is changing in Japan. It seems Hollywood stars will have to shill items in the US if they want to make the big bucks. The Japanese have Asian Fever now. And this is why:

The catalyst for the change, almost everyone agrees, has been Japan's raging love affair with Korean culture that took everyone here by surprise two years ago.

The phenomenon was spearheaded by a drama series called "Winter Sonata," a tragic love story featuring Bae Yong Joon, a South Korean actor affectionately referred to as Yon-sama in Japan. With his baby face and great teeth, Yon-sama, 33, flutters the hearts of Japanese women in their 30s and older, who tell market researchers he rekindles the romantic urges they felt in their youth.

Yup, this guy is the best thing since sliced bread in Japan now and he is the kind of person that advertisers want to sell things. The article goes on to say:

It's a demographic that makes marketers swoon, too. Yon-sama is now the biggest foreign star in Japan. Bigger than Brad. Bigger than Leo. Dozens of Japanese companies are desperate to attach their brand to Yon-sama, or at least to find the next great Korean star.

"Five years ago, two years ago even, I could never have imagined this happening," said Tomoko Kamiguchi of Dentsu Casting & Entertainment, which negotiates with talent agencies to get stars for its clients' ads.

So is seems that American stars aren't such a big deal anymore in Japan. They have wan Koreans to fawn over nowadays. I mean this guy isn't the most manly looking guy on block but
he moves the product in Japan. I wonder if the reason for this guy popularity is his non-threatening and metrosexual look? This could be the reason why Richard Gere is still making money in Japan. He seems anything but manly nowadays. He's more of a peaceful Buddahman. Even that Nick Cage ad mentioned in this article was 4 years ago before this Yon-sama burst (well crept preciously) onto the scene.

When BoSox Win Emergency can Wait

I guess when the BoSox are winning people go to the emergency room 15% less. I guess it is because they are sitting at home watching the game and not doing something that they would have to go to the emergency room for. Sitting on ones couch watching the ballgame is probably one of the safest pursuits a person could engage in. Well the people could have heart attacks or something once Boston finally one the World Series. I mean the people that remember them winning their last one are quite frail I would assume.

These Oil Guys Don't fool Around

Wow I don't think the refineries are going to be hit as hard as people think from Rita. These guys are really ahead of the game. Transocean a company whos shares I owned last year is doing this:

installed hotlines out of affected areas and ordered satellite phones for people who support its operations in the Gulf of Mexico, said Guy Cantwell, company spokesman.

"We also learned it could be a 15-hour drive to get the phones to someone in Houston, so we had them sent in by chopper," he said.

While Valero is:

"We are about two or three days ahead of where we were with Katrina," said Mary Rose Brown, spokeswoman for San Antonio-based Valero.

"RVs are rented and ready to go; trucks are packed and ready; we have generators ready; and we've sent refinery managers cash that way we can get it to employees affected," she said.

I think their refineries have to take a direct hit to not be up and running the day after the storm hits. It seems that gas prices shouldn't be affected as much by the storm as people think.

Buying songs on your cell phone?

It seems Wireless carriers are trying to get people to buy songs on to listen to on their cell phones now. I'm very skeptical that this will take off. I can see people put songs onto their cell from their desktops depending on how easy it is. They would just need a USB connector and they are all set. I would be willing to bet that some wireless providers like Verizon will cripple their phones to force you to use their service. I think this approach is the wrong one though:

Published reports suggest that Sprint plans to charge around $2 for its full-length song downloads, which would be double the desktop price. Although Nancy Beaton, Sprint's director of entertainment and personalization, declined to discuss details, she said "customers will put a premium on the convenience."

I'm not sure they will if they already bought the song on the desktop. If they paid $1 for the song already they might not want to pay $2 just to listen to that same song on their phone. I can see people paying for ringtones since it takes some work to make a ringtone on a PC and then get it to work on a phone. Paying double for a song that doesn't sound as good just so you can listen to it on a phone is not something that people will run out and do. This may be the same sort of growth white elephant that watching TV or DVDs on your phone will be.

The Germans sure like their Beer

And I sure like these Germans.

Global Warming to Create Social Unrest?

This is quite a jump according to this report by the Australian Medical Association (AMA) and the Australian Conservation Foundation. Here is what could come of global warming in the by 2100:

"As stresses increase there is likely to be a shift toward authoritarian governments," the report said.

"At the worst case, large scale state failure and major conflict may generate hundreds of millions of displaced people in the Asia-Pacific region, a widespread collapse of law, and numerous abuses of human rights."

Well at least the authoritarian governments will be done in by the collapse of law and the major conflicts. So global warming may be a bad thing and a good thing at the same time.

The thing that this report doesn't take in is that by 2100 we probably won't be burning too much fossil fuel because we will have used it all up by then. Even the Saudis may start having declining oil pumping rates before too long. Eventually, oil prices will get so high they won't be economically sustainable and people will move on to fuel cell, methane, or even steam power if it becomes a cheaper alternative. There is no way to project global warming to 2100 without taking into consideration all of the things that will have happened in that 100 years time.

Interesting Article about the possible AOL/MSFT merger

Hmm this article is very interesting regarding this possible merger. The Bullish guy raises some very good points. While the Bearish guy has thinks MSFT should undercut its rivals in paid search (since they have money to burn) instead of merging with AOL.

One thing MSFT should try is to make all of AOLs customers into broadband subscribers by any means necessary. They should try to make the dialup connection obsolete. They can work with local broadband suppliers to create a MSFT branded broadband service that they can provide to AOL customers on the cheap. They could even make this the default setting in Vista. It could mean that more people will be going to Google and Yahoo but they will be paying MSFT $19.99 to do it.

Microsoft Reorganizes

This seems like a great idea for MSFT. They seemed to be having all sorts of communication problems and were losing people to Google due to bureaucracy. Here is what they are doing:

One of the three new divisions, Microsoft Platform Products and Services, will include the company's Windows, server and tools, and MSN online divisions. It will be led by Kevin Johnson, formerly in charge of worldwide sales and marketing, and Jim Allchin.

The other two units are Microsoft Business division, which will include its Office products and products for small- and mid-sized businesses, and Microsoft Entertainment and Devices Division, which will include its Xbox game console, other games, mobile phone and handheld devices products.

I like how they are joining the all of those items in the MSFT Platform Products and Services together since they all pretty much work in concert with one another. Now they can seriously integrate things so they work together well. Let's hope we'll see the end to those weird server side errors that you have to be an MCSE to fix.

It also seems they had a WWII German army system going before:

"There's a whole set of decisions that might have had to percolate to Bill Gates' and I because they crossed the seven ... Business groups that are now contained in these three divisions, and I think that ought to lead to crisper, faster actions on certain kinds of decisions we need to make," Ballmer said.

So there seems to be lots of decisions that Gates and Ballmer had to work on personally. Just like Hitler had to personally okay almost everything army related. So they couldn't commit the Panzers on D-day because they didn't want to wake him up.

It looks like they are switching to a more Napoleonic Army system of thinking instead. The French allowed the Marshals to maneuver on their own initiative but were answerable to the Corsican if things went badly. So maybe the Marshals of the three new departments will get to do their own things without having Gates or Ballmer around to okay everything. That seems to be the aim:

The company's reorganization will merge seven business units into three divisions. That is aimed at helping the company become more nimble and giving executives broader power to make decisions without bringing in top leaders.

FED Raised Rates Again

Yup they pulled the trigger. I guess they think that the Hurricaine's impact will not be felt for too much longer. I hope they know that gas prices are starting to crimp peoples buying habits out there. The gas cap here is making people delay purchases hoping that prices will go down. They also seem to be buying less cars as well. If that is happening in the rest of the nation then that can't be very good for the economy.

Maybe that is the FEDs gambit. They are thinking that much of the high prices are because of speculation and should drop before too long. So they are just moving along at their measured pace hoping gas prices don't hurt the consumer too much. It seems that any threat to supply however tenous is driving prices strait up. That seems like bubble behavior to me.

I Agree with Jobs when it comes to Online Music

I think Jobs is right on the money when it comes to raising music downloading prices. I think ITunes may have saved the music industry from a death spiral and now they want to try to crash the plane again. Even with the low price of $.99 cents per song people are still pirating music. I think an even larger number will go back to pirating if they are charged more.

It seems that $.99 is the absolute ceiling per song. People are finally being conditioned to think that free is not the default price of music. They are now thinking the default price is $.99 or lower. The hassle of piracy will look better each cent charged over what they have been conditioned to pay. I mean free is much better then $1.50 or whatever they jack the price to. This guy is totally clueless:

Sony BMG CEO Andrew Lack said at a Reuters gathering earlier this year that Apple is benefiting from two revenue streams, sales of both the iPod devices and song downloads, while the music industry has only one.

"I'm not making any money on this," he said. "I've got one revenue stream that a proctologist would have a hard time analyzing. It's not pretty."

Umm, then get your parent company to make an IPod killer then. If they don't know how then you will have to make due with that one revenue stream. They have already cranked album prices to such a level that it is cheaper to buy the songs from ITunes. Now they want to choke off the only profitable revenue stream they have left. I think these guys just want to be the next airline industry. Just counting the days until they all go bankrupt.

That's how Kate Moss stays so thin

I guess being like a supermodel means snorting some coke every now and then. At least the Mirror got some real photographic proof this time. I wonder if she is going to give back her settlement because is seems that the story was true. This is the funniest part though:

After she agreed in writing to abide by H&M's policy that its models be "healthy, wholesome and sound," the company decided to keep her on, spokeswoman Liv Asarnoj said

Hmm I wonder if sniffing coke makes one healthy, wholesome and sound? Maybe this is the 2000s version of early to bed, early to wise, makes one healthy, wealthy, and wise.