Minor headlines may be the beginning of important trends. Nintendo Wii sales fell for the first time in three years during July 2009. The game console had bested the Microsoft Xbox 360 and Sony (NYSE: SNE) PS3 for so long that most analysts suspected that either the recession or a temporary interruption in the availability of supply caused the incident. Wii sales never recovered much, it turned out. The system had aged too much and Nintedo’s two competitors had added enough features and cut prices so low that the market was altered.

The risk that these ten stories here will turn out to be ill-chosen is lessened because most are based on very long-term trends in the industries in which the companies operate. The SEC was not in the habit of filing fraud charges against major financial firms. Ford’s leadership in the recovery of US car companies has occurred for three years, however. A significant event that helps mainntain that trend is likely to be long-lived.

News stories made if they made a significant impact on the media and industry when they broke and illustrated a long-term trend. Even if a selection meets both of those criteria, our choice is an educated guess.

1. Microsoft

The History: Microsoft (NASDAQ: MSFT) and Nokia (NYSE: NOK) were both badly behind in the smartphone market. Microsoft’s Windows Mobile product had fallen well behind other operating systems which were dominated by Apple’s (NASDAQ: AAPL) iPhone, Google’s (NASDAQ: GOOG) Android, the Research In Motion (NASDAQ: RIMM) BlackBerry OS, and Symbian. Nokia’s share of the global handset market had fallen from 39% less than three years ago, after it fought off a challenge from the Motorola RAZR to 32% recently. Nokia’s smartphone operation had been badly damaged by the iPhone.

The News: Nokia and Microsoft announced they would form a partnership to attack the global smartphone marketplace. Nokia will use its large platform of relationships with wireless carriers around the world and its hardware R&D. Microsoft will fashion Windows Mobile to work with next generation og Nokia smartphones.

What’s Next?: Nokia will probably lay off several thousand people as part of an anticipated restructuring. That will leave Microsoft with most of the costs to carry the partnership forward. Microsoft can easily afford the burden because of the ongoing success of its core software businesses. Microsoft came from behind in both the game console and search engine business. It needs a large handset company to do the same in the smartphone industry. Now, it has one.

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2. Verizon

The History: Verizon Wireless, owned jointly by Verizon (NYSE: VZ) and Vodafone (NYSE: VOD), has been the largest wireless carrier based on total subscribers for several years, ahead of AT&T Wireless, Sprint-Nextel (NYSE: S), and T-Mobile part of Deutsche Telekom. Verizon had done well marketing handsets from HTC, Motorola, RIM, LG, and Samsung. The most sought-after smartphone, however, was the Apple iPhone which was exclusively sold by AT&T.

The News: Verizon Wireless announced in January that it would offer its own version of the iPhone which took away the most important marketing advantage of its top competitor. The Verizon iPhone reached the market earlier this month. Pre-sales on the Verizon Wireless website were shut off after a day because the available inventory sold out.

What’s Next?: The Verizon iPhone has sold briskly by all accounts. Early research shows that many of the new subscribers are past Android and BlackBerry users and a modest number of switches from AT&T. Verizon is known for the superiority of its wireless network over AT&Ts, which should be a long-term advantage. Apple will release new versions of the iPhone, which may include a low-priced version later this year and a 4G model. Verizon is iPhone-less no longer.

The Commerzbank decision was based simply on added scale and eliminating costs. Media reports are that at least 9,000 people will be cut out of the new company. But, the action does add a level of preparedness if the credit markets get much worse.

The damage done to large US banks, especially from mortgage-related securities is far from over. Other credit debt is beginning to default and should push earnings at financial companies down further. The need to marry weak banks with stronger ones has become acute in America and the efficiencies of the Commerzbank deal makes them more plausible.

If US bank balance sheets do get worse, the weakest institutions will have to be married off with stronger ones. Wachovia (WB) is the most likely to go. Banks of America (BAC) or JP Morgan (JPM) are the most likely to pick it up. Washington Mutual (WM) will be taken out if the credit climate deteriorates. It will almost certainly get pushed together with a stronger firm as well.

Commerzbank’s deal for Dresdner is prophylactic. It protects the new entity by pulling out expenses which, in turn, makes its a better candidate for weathering an ongoing storm.

American banks would do well to take the merger as a template. The market does not need as many big banks as it has. Mergers make for stronger, more efficient companies and that is what a recession calls for.

Douglas A. McIntyre

Goldman Sachs issued a report saying US banks will have to raise as much as another $65 billion. According to Reuters, "The new capital would be on top of $120 billion already raised by the industry." The brokerage cut its price targets on sixteen banks including Wachovia (WB) and Washington Mutual (WM).

Not to be outdone, the airline industry said it would lose $10 billion this year. The Air Transport Association said total fuel costs for domestic carriers will hit $61 billion.

Douglas A. McIntyre