Daily Archives: January 19, 2009

The Economy: A Portrait Of The 2012 Inauguration

Empire_3

"In the long history of the world, only a few generations have been granted the role of defending freedom in its hour of maximum danger".–Kennedy Inaugural Address 1961.

"We must do what no generation has had to do before."– Clinton Inaugural Address 1993.

"In the face of great perils never before encountered, our strong purpose is to protect and to perpetuate the integrity of democracy."– Roosevelt Inaugural Address 1941

It may be worth skipping the Inauguration, especially the address. No matter how good the orator, there is virtually nothing new that can be added to the speech which has not come before. The inclination to convince citizens that they face an unprecedented challenge and that it rests with them to create a solution for themselves and for the world, for this time and all time, is irresistible and repetitive.

Read More »

Posted on: January 19, 2009 – 8:16 pm in Politics

Cisco (CSCO) Moves Into One Of Tech’s Worst Sectors–Servers (VMW)(IBM)(HPQ)(JAVA)(MSFT)

Blue_hillsCheck with Sun (JAVA). The server end of the tech industry has poor margins and unforgiving competition. HP (HPQ) has a server division. It grew only .7% in the company’s last fiscal year, and the operating margins were modest. Revenue for HP as a whole was up 13.5%.

Cisco (CSCO) has decided that it wants a piece of the market where Sun and its competitors have done so poorly and will bring its own hardware to the sector.

Read More »

Posted on: January 19, 2009 – 5:45 pm in Technology Companies, , , , , ,

Why Would Fiat Want Chrysler? (TM)(HMC)(GM)(F)

Old_car_2Fiat is very near an agreement with Chrysler to take a piece of the No.3 US car company. The deal will need the blessing of the Treasury Department which is supplying Chrysler with financial aid.The question is why would the European auto firm bother?

Fiat is taking a beating in Europe, but is will probably elect to take a 35% stake in Chrysler in exchange for converting one of the US firm’s big plants to build smaller cars. Fiat will also negotiate for the right to buy a total of 55% of Chrysler at a later date.

Read More »

Posted on: January 19, 2009 – 1:57 pm in Autos, , , ,

This Coming Week’s Top Earnings Projections (JNJ, AAPL, BNI, EBAY, AMD, GOOG, MSFT, GE, SLB)

Money_stack_picThis week is the launch of earnings season, and we have outlined the companies which we believe will have the largest impact on their sector or on the overall market. Johnson & Johnson (NYSE: JNJ) is the big company reporting Tuesday.  On Wednesday, we get earnings from Apple, Inc. (NASDAQ: AAPL), Burlington Northern Santa Fe Corp. (NYSE: BNI), and eBay Inc. (NASDAQ: EBAY).  Advanced Micro Devices Inc. (NYSE: AMD), Google Inc. (NASDAQ: GOOG), and Microsoft Corporation (NASDAQ: MSFT) report on Thursday.  On Friday we get earnings from General Electric Co. (NYSE: GE) and oil field services giant Schlumbrger Limited (NYSE: SLB).

Read More »

Posted on: January 19, 2009 – 12:33 pm in Earnings, , , , , , , , ,

Fox Business: If It Can’t Sell News, It Can Peddle Junk

EmpireFox Business has been sending us PR alerts off and on for the last several business days. Usually the editors here would find them helpful. We are not allowed to watch financial TV because it is considered too mesmerizing. A tip on what is happening on television could be a benefit if you don’t have a TV.

24/7 Wall St. editors are also not allowed to go on television because the management thinks it is a waste of time. Appearing on TV apparently does not get people to come to the website. Fair enough.

A press release from one of these news channels is usually not helpful, because it often covers the content of an interview which is four hours old .

The last three e-mails from Fox covered, among other things, a fight between two people we don’t know,  Mr.Kneale and Mr. Gasparino. We can’t say anything beyond the fact that they have been fighting on CNBC. We don’t know what they do or what they look like. 

In what seems to be an independent incident Newsweek’s Dan Lyons, who was The Fake Steve Jobs, had been banned from CNBC for saying that one of the channel’s reporters Jim Goldman had been "played and punked" by Apple on the Steve Jobs’ health story. A later report said he had not been banned at all. 

Today we got another good story from the Fox Business PR department. This one was an article from the Page 6 gossip column about a CNBC reporter, Becky Quick, who married one of the channel’s executive producers. Maybe Quick gets better treatment because of her "relationship" with the management. At least that seems to be what The Post was hinting.

The queer thing about all these messages from Fox Business is that they do not have anything to do with reporting on the stock market, the economy, the credit crisis, or corporate earnings. The releases are, by their nature, scurrilous. They take away from any reasonable debate over the quality or competition within the news media.

We asked the PR people at Fox Business who the general manager or executive producer at their channel is. 24/7 got a note back saying "I’ll give you a call to discuss. What’s your number? " When we didn’t call, Fox called us and left a message. But, it seems like an easy question to answer, Who runs your company? Which manager has nothing better to do with his or her time than to get the PR department to send out useless e-mails?

Readers may think we are doing CNBC a favor by taking this position. But, we are not allowed to go on CNBC either, and don’t watch it. Being on TV does not get any extra readers. Watching television business news can make your hair hurt.  And, we don’t have a big enough budget to pay for cable.

Douglas A. McIntyre

Posted on: January 19, 2009 – 11:56 am in Media, ,

EU Recession Gets “Official” Status

Old_carThe EU finally owned up to what everyone already knew. It will face its first recession since it was formed over ten years ago. It was nothing more than a fantasy that it could dodge the fates of the US and UK.

The forecasting arm of the European Commission said GDP within the region would drop at 1.9% this year. The number seems optimistic.

Read More »

Posted on: January 19, 2009 – 10:14 am in Economy

To Unfreeze Credit, Stop Coddling the Debtors

John Tamny, RealClearMarkets

Last fall, in an Oct. 16 interview with CNBC’s Larry Kudlow, outgoing U.S. Treasury Secretary Henry Paulson addressed the imposition of the Troubled Asset Relief Program on banks, and specifically responded to Kudlow’s query about the level of control the federal government would exercise over the recipient firms. Paulson dismissed the very idea of heavy government oversight, arguing instead that "these are passive investments."

Even at the time, it was clear that Paulson was protesting too much. Going back to last spring when Paulson asked mortgage lenders to voluntarily reduce payments for troubled debtors, the very notion of "voluntary" reductions was laughable. Given the massive subsidization of the lending and housing sectors by the federal government (think mortgage interest deductions, Fannie Mae and Freddie Mac, plus zero capital gains treatment on home sales), any "suggestion" about how lenders should conduct their business affairs from our federal minders is surely an order.

Read more…

Posted on: January 19, 2009 – 9:15 am in Economy

The Next Threat To The Financial System: Corporate Defaults (NYT)(CHTR)(LVLT)(SIRI)

Winter_2The next big threat to bank earnings may be corporate defaults on debt, much if it originally supplied by the banks themselves. The irony is that the problem could be solved by the banks, if they won’t open their vaults and provide more capital to companies who are in the process of refinancing.

But, they won’t. At least not without being forced to do so by the government. Banks don’t want to put their earnings in greater trouble by offering more risky loans on top of the ones they already have issued. As the recession deepens, they have no reasonable way to evaluate whether they will be paid back.

Read More »

Posted on: January 19, 2009 – 6:43 am in Banking, , ,

Can money alone save The New York Times (NYT)?

What is it with billionaires and newspaper publishers?

Carlos Slim, the Mexican telecommunications tycoon, is consideringincreasing his investment in the New York Times Co. (NYSE:NYT) byseveral hundred million dollars, according to The Wall Street Journal.One scenario being discussed be for the NYT to issue Slim preferredstock which carries no voting right but pays a dividend. HarbingerCapital, which waged a successful proxy battle against the company lastyear, may be another source of capital for the beleaguered newspaperpublisher.

Read More »

Posted on: January 19, 2009 – 6:17 am in Media

The UK Moves To Bailout Everything

SunsetFaced with a $42 billion loss at RBS (RBS) and credit markets which appear to become more frozen as each day passes, the UK will move its economic rescue package beyond the banks into the system of private debt.

With corporations cut off from the oxygen of lending, they are slowing dying because they cannot improve their balance sheets in what would be the normal course of business.

Read More »

Posted on: January 19, 2009 – 6:15 am in Economy

Media Digest 1/19/2009 Reuters, WSJ, NYTimes, FT, Bloomberg

WinterAccording to Reuters, there is at least some chance that the US could have to nationalize some banks.

Reuters reports that the UK launched a huge new bank rescue plan.

Reuters writes that Citigroup (C) plans to sell much of its financial interest in Japan.

Read More »

Posted on: January 19, 2009 – 5:14 am in Press Digest, , ,

Asia Markets And Europe Open 1/19/2009

Water_liliesMarkets in Asia were slightly higher

The Nikkei rose .3% to 8,257.

The Hang Seng was up .6% to 13.340.

The Shanghai Composite was higher by 1.7% to 1.987.

On news of a huge stimulus package for the UK, at the open the FTSE was up 1.8% to 4,,220. The Dax was higher by 1.4% to 4,426 and the CAC 40 was up 1.6% to 3,065.

Data from Reuters and MarketWatch

Douglas A. McIntyre

Posted on: January 19, 2009 – 4:52 am in International Markets