That's Awesome!

2010-11-03T12:33:00.000-04:00

It's the morning after and I'm seeing red all over the place. Well all over the place except for Connecticut, New York and California. Certain parts of the country will forever be blue and that's certainly for the better.

So in full upfront disclosure, I am one of those people who were glued to their teles last night toggling back and forth between all the networks that provided election coverage and hoping for massive turnover. Funnily enough, I got the turnover I was hoping for but not necessarily where I wanted it. Certain results for the Dems and the GOP left me scratching my head but when a race has a couple of mediocre horses, what can you do? Beggars can’t be choosers.

Still what happened yesterday was huge on several levels. For one, it was the largest turnover of congressional seats since the Second World War. http://www.msnbc.msn.com/id/39982780/ns/politics-decision_2010/ Republicans also gathered a majority of the Governorships and made serious gains in the Senate. Additionally, maverick Tea Party candidates had their day in the sun with victories in Kentucky and Florida although they also suffered setbacks in places like New York and Delaware.

People on both sides of the aisle and the pundits that cater to them will spend the better part of today and the rest of the week discussing the significance and cause of what took place across America yesterday. I will simply offer this. Yesterday’s results were a repudiation of the President’s legislative agenda and the Federal Government’s handling of the economy. Folks may adamantly disagree with me on this and it is only my opinion. But I will also offer that this political tsunami was party agnostic in the sense that if the controlling party was Republican, those candidates would have been tossed out just as they were in the last major election. With certain exceptions aside (see Nevada) this was simply a function of angry voters turning out and filling in the circles or pulling the levers for anybody but those who were affiliated with things like Obamacare and the Wall Street/Bank bailouts.

I happen to believe that Presidents and sitting governments get too much credit when the economy is good and too much blame when the economy is sick but that’s the nature of the beast and public officials know that when they sign up for this game. But policy decisions made over the last couple of years have done little to help those that could really benefit from government assistance. I will stay away from referring to the “middle class” as I am not certain that there exists a clear and reasonable definition for that demographic that is applicable across the entire country nor am I clear that the demographic could even really exist in a way that it used to. We are simply much more a nation of haves and have-nots, a nation of those who rely on programs and government assistance and those who have been designated responsible for paying for it. And things have gotten nasty as the gap between these two groups continues to expand under the government’s watch regardless of who is in charge.

So rather than being overly negative or overly jubilant about the election results, I thought it would make sense to come up with a wish list for what I would like to see the President and the newly elected Congress accomplish over the next couple of years. It might be a little aggressive, but I am pretty certain that both parties would be pleased with the end results and I am positive that it would lead to reelection for all those responsible.

1. Repeal the Health Care plan. Why? Because the plan doesn’t tackle the real issues that drive up health care costs. Insurance and malpractice costs need to be addressed. Insurance as a concept is problematic and does not square with the concept of public benefit. The very purpose of insurance is to collect as much money as possible while doling out as little as possible. To mandate coverage and regulations without dealing with that inherent conflict of interest is a fail right out of the gate. On so many levels, the rising costs of healthcare can be attributed to everything but the actual care itself. This is what needs to be addressed first.

2. Create a national bank or some sort of financial institution that will allow people to refinance their homes at rates reflective the current interest rate environment. Currently, the only people able to take advantage of the low interest rates are the commercial and investment banks and the hedge funds that are able to place huge wagers on instruments that benefit from the artificially low interest rate environment. Bailing out the banks was supposed to have a trickledown effect. It hasn’t. It has only enabled a few bankers and traders to buy fancier homes while the real estate market continues to crumble because of the money they made courtesy of the bailout. This will also free up traditional lending institutions so that they can get back to doing what they are supposed to do, namely lending and investing in businesses that in turn help create jobs.

3. Put an end to government supported entitlement programs. They are unaffordable going forward and there is no discussion around this point. Everybody knows it. I understand that it’s perhaps an unelectable policy platform but at some point in time our kids or our kids’ kids will pay the price for our selfishness.

4. Devote more of our federal budget to building out our solar and other alternative energy capabilities. One of our greatest resources is the vastness of our land and yet it seems we are spending more time, energy and resources paying off bills from yesterday (see entitlement spending above) than we are planning for our future.

5. Devote some of our federal budget to bringing food and water to parts of the world that really need it and do it gratis. Why? Because the world will one day suffer the gross consequence of negligence when hundreds of millions of people are without the basics for survival. Devoting a few billion dollars of federal aid to bring water desalinization capabilities to Africa would go a long way to helping a continent while improving our sphere of influence in the world. And it is certainly less dangerous than selling arms to unstable governments.

Sure there are other things that need to get done and I imagine there are major inherent flaws in each of these suggestions but the bottom line is we need to address the benefits and costs that we are faced with today while planning properly for the future utilizing what we have at our disposal. Now come on guys, let’s get it done.

2010-08-11T11:10:00.003-04:00

From the department of “This is so obvious why didn’t I think of it?” comes news of consortium (Desertec Industrial Initiative) being organized to build solar plants across the Sahara desert. Led by German physicist Gerhard Knies, and funded by the likes of Munich Re, Siemens AG and Deutsche Bank, the plan is quite simple…in concept.

Desertec plants would generate energy from the desert’s sun and then funnel that energy through power cables that would be laid under the Mediterranean Sea. Projections for the project show upwards of 15% of Europe’s future energy needs being met by energy supplied from Desertec. http://online.wsj.com/article/NA_WSJ_PUB:SB10001424052748704657504575411371922245304.htm l

Skeptics worry that attempts to raise financing for projects that would be built and managed within rogues states could be tricky if not outright unappealing. I mean why build something only to have it taken away from you in short order (Flashback to ARAMCO). http://en.wikipedia.org/wiki/Saudi_Aramco

2010-08-04T09:59:00.000-04:00

Do Saudi Arabia and the U.A.E. really need to block Blackberry services because of security concerns? I doubt it. http://www.ft.com/cms/s/0/be04d61e-9f27-11df-8732-00144feabdc0.html?ftcamp=rss Rather this smells of both countries declaring their interest in grabbing the revenue associated with data/voice usage in their respective jurisdictions. I say this only because I cannot believe that their security concerns would be any greater than those of the United States and certainly I imagine the wherewithal exists to trace and track what is being sent via RIM s and the telcos, even in the Middle East. Although, I guess there could be a situation where all things aren’t moderated with equal vigor for various reasons. But that then speaks to a larger more significant issue.

2010-06-22T13:29:00.003-04:00

And in somewhat big news today, France is officially out of the World Cup. Yes England and Italy, you are not the most disappointing European story in football. Finally done in by an inspired South African side, (http://news.bbc.co.uk/sport1/hi/football/world_cup_2010/matches/match_34) the team known affectionately as Les Bleus must now return home to France a beaten and humiliated side. I am a little annoyed as I had picked them to advance into the knock out round but what they really showed me was exactly how much of a travesty it was that the handball against Ireland was never called. http://www.youtube.com/watch?v=Vs8WWBXGiXg

France never belonged in the World Cup this year, not because they didn’t have the football talent, but because they didn’t have the desire. If you need to understand what desire is in football terms, just take a look at team USA. These guys play with a will to win that is as strong as any team in this year’s tournament.

It’s unbelievable on a certain level that France won the World Cup in 1998 and was in the finals last year. What happened? How did this side evolve into a bunch of squabbling self absorbed types that would skip training and actually consider boycotting their final game of the tournament? http://online.wsj.com/article/SB10001424052748704895204575320734155008218.html

I have little doubt that the French media will continue to take the side to task throughout the remainder of the tournament and beyond. It’s also clear that the French Football Federation will have their work cut out for them as corporations including Crédit Agricole and Adidas pull their sponsorship dollars away from the team. http://www.ft.com/cms/s/0/669bdbae-7d3d-11df-8845-00144feabdc0.html

By the way, as I mentioned England and Italy at the beginning of this “hommage”, there is an interesting read in today’s Financial Times courtesy of my favorite FT tweeter, Gideon Rachman. http://www.ft.com/cms/s/0/4d277112-7d68-11df-a0f5-00144feabdc0.html. In the piece, he highlights the difficulties facing the traditional European footballing powers as foreshadowing for deeper darker problems facing the EU as a whole. I’m not going to go into further details here though. Just click on the link and read. It’s pointed and timely, especially given how things have shaken out in South Africa thus far.

2010-06-22T12:25:00.001-04:00

In somewhat underreported news today, the Supreme Court voted 6 to 3 in favor of upholding a federal law that makes is illegal for people to provide "material support" for foreign terrorist organizations.

Originally passed as law in 1996, the language was subsequently strengthened under the Patriot Act and was meant to dissuade people from providing any assistance and/or resources to terrorist groups even if the assistance was being given towards “peaceful” initiatives undertaken by the terrorist organizations.

Now while I can get my arms around the notion of wanting to protect free speech at all cost, I’m not sure how anybody can argue with the logic and purpose of this law. And in this case, I think Chief Justice Roberts was spot on in his writing for the majority. Jess Bravin summarizes some of the writing in today’s Wall Street Journal. http://online.wsj.com/article/SB10001424052748704895204575320641631008492.html

While some terrorist groups may conduct both peaceful and violent activities, Congress found that they may be "so tainted by their criminal conduct that any contribution to such an organization facilitates their conduct," he wrote, joined by other conservatives and liberal Justice John Paul Stevens.

When considering national security and foreign-relations questions, courts should give great weight to such judgments by Congress and the executive branch, he wrote.

Even benign work like that proposed by Mr. Fertig could contribute to terrorism, Chief Justice Roberts wrote, because it "frees up other resources" for "violent ends" and "helps lend legitimacy" to terrorist groups.

U.S. citizens remain free to advocate for the political aims sought by foreign terrorist groups, as long as they didn't coordinate with them, the chief justice wrote.

The newest member of the Supreme Court, Justice Sonia Sotomayor, joined Justices Breyer and Ginsburg in the dissenting opinion.

2010-06-03T11:35:00.001-04:00

Yesterday’s post regarding BP and the oil spill inspired some heated and heartfelt replies and rightfully so. One particular fear that was shared had to do with a concern that BP would look to split itself up in attempt to shirk its responsibility and leave the citizenry for the Gulf South holding the bag.

Sure enough this morning the FT takes a look the takeover talk (http://www.ft.com/cms/s/0/3286c4f8-6e8f-11df-ad16-00144feabdc0.html) that is accompanying the swoon in British Petroleum stock and bond pricing.

We knew it was only a matter of time. Afterall, “when a whale is wounded, it does not take long for the sharks to circle. With BP floundering in the Gulf of Mexico, the market has been abuzz with talk of a takeover of the British oil major. The substantial erosion of BP’s market value – its shares have fallen 34 per cent since the Deepwater Horizon rig exploded on April 20 – means the company looks affordable to rivals for the first time in decades.”

But trying to properly forecast “the huge and indeterminate costs for clean-up, damages, fines and compensation” makes any serious conversation around acquisition extremely problematic.

“Some industry observers say BP could follow the example of some troubled financial institutions and split itself in two, creating a “bad BP” to carry all the liabilities and allowing a “good BP” to go on with its business, but this would similarly face huge political opposition in the US.”

I actually think Robert Reich is onto something with his suggestion that the US government should “take BP’s US business into receivership until the spill has been dealt with.” My one concern with his suggestion is that the US operations may not have enough revenue and earning power alone to contend with the mess and that this disaster really needs the full attention and resources of the entire BP organization.

But following along the same line of thinking, I wonder if one could achieve a similar result by temporarily freezing the trading of all BP related bonds and equity (http://news.bbc.co.uk/2/hi/business/10227478.stm). Ultimately a big concern is that BP could be absolved of obligation because of restructuring that would occur as a result of forced bankruptcy. What happens if you take the traders out of the mix and you say that until the mess is cleaned up, nobody can buy or sell BP related securities? Obviously one has to get all exchanges and governments with ties into BP to sign off on it. But this could align all parties to get the mess cleaned up and certainly BP as a company would want to get things tidied up so that their shares could flow freely again. My guess is the shares would definitely be worth more after the cleanup is complete.

I understand that this probably can’t happen. First off and most obviously there would be complications around where you mark the value of the securities today and secondly and perhaps most importantly it would set a bad precedence going forward in terms of government intervention in the free markets. But it’s an idea with some reason behind it if downward pricing pressure on BP related securities continues.

2010-06-02T17:03:00.001-04:00

It wasn’t that long ago that I commented on the President’s willingness to open up certain areas of the US coastline for drilling saying that I thought it was a good move even if the intent was to curry favor for something else. In the end, I felt that we needed to have access to our own energy resources if we ultimately didn’t want to be held captive by the Middle East, Russia or Venezuela. (http://t33mhonda.blogspot.com/2010_03_01_archive.html)

So of course fate would have it that shortly after Obama agreed to open up certain waters for drilling, we would become witness to the largest oil spill in American history. Now I am not going to use this blog as a platform for being a BP apologist or so I can rant “drill baby drill” at militant environmentalists in the face of this awful tragedy. The damage is unfortunately horrible beyond words and there can be little doubt that things will return to normal in the region for years to come if not a decade or more.

It’s only natural for people to want to attach blame and seek punishment or retribution. And in a case that is this extreme, where so many lives and livelihoods have been temprorarily if not permanently damged, the need for accountbility comes at all costs. But while the President contends with his “Katrina” moment, I think it’s probably worth noting a few things as anger continues to ferment and grow through this country.

For one thing, we have some history upon which to draw from in so far as setting expectations for problem solving and understanding the long term environmental impact of the BP rig explosion. In yesterday’s FT, Javier Bias penned a piece about a massive oil leak that took place in the Gulf some 3 decades ago. http://www.ft.com/cms/s/0/9a13b73e-6d31-11df-921a-00144feab49a,dwp_uuid=4068ae36-5447-11df-b75d-00144feab49a.html

In the article, Mr. Bias writes, “The parallels are striking. In June 1979, Petróleos Mexicanos’ exploration well Ixtoc 1 suffered a massive blowout in the Gulf of Mexico, about 600 miles south of Houston. The uncontrolled well gushed oil and gas for nine months and 22 days, spilling about 3.3m barrels of crude until it was finally capped in March 1980.

The episode sets a somber precedent because it shows that oil companies struggle with underwater blowouts. On the surface, Ixtoc 1 was an easier problem than Macondo: the Mexican well lay under just 150ft of water while BP’s oilfield is about 5,000ft down. But engineers say that, taking into account the differences in technology, Ixtoc was probably as difficult to tackle as Macondo is today.”

He goes on to say, “as with BP in the current crisis, Pemex tried everything two decades ago, from the conventional to the radical, in its effort to contain the spill. Its efforts ranged from a cap or funnel above the well, or sombrero which largely failed, to pumping mud and debris in a “top kill” and “junk shoot” manoeuvre – a partial success – to relief wells.

The failure of the blowout preventer was critical – another parallel between the two incidents. After the blowout, Pemex tried to close the BOP by pumping in seawater, drilling fluids and chunks of rubber. For three hours, the operation was a success. But shortly afterwards, there was a large rupture underneath the BOP, according to the report “Ixtoc 1, Blowout and Control Operation” by Oscar Luis Ulloa and Ignacio Osorio, of Halliburton de México and Pemex, respectively. “

“In view of this, it was decided to drill two directional wells in order to pump fluids to the formation and bring the well under control,” they wrote in their study, considered one of the best accounts of the incident.

“The drilling of the control wells Ixtoc 1-A and Ixtoc 1-B ... brought about the final plug operation.”

Accounts of the disaster 30 years ago also speak to the environmental recovery that took place following the spill. According to “Arne Jernelov, an expert on environmental catastrophes who studied Ixtoc, says that in the case of Macondo, it is a safe bet that shrimp and squid populations will suffer, as they did in the Ixtoc case, “but so is a close-to-complete recovery within a limited number of years”.

“Other scientists who studied Ixtoc concluded that the recovery of marine life was in part due to the fact that a large amount of oil evaporated, dissolved in the hot waters of the Gulf of Mexico or sunk into the seabed, forming sediment.”

I do understand that this could fall under the category of wishful thinking and revisionist history but I think it is worth mentioning if for no other reason than the fact that I had zero memory of this explosion in 1979 (in spite of being 14 at the time) and yesterday was the first day I even heard about it since the Macondo explosion.

I also think we need to give consideration to the unintended consequences of group think and one sided media coverage. It’s a mistake to think that the people working for British Petroleum and the US government that are involved in trying to plug the hole and or clean up the mess aren’t doing everything they can to put an end to the leak and contain the spill. As of Friday some 25,000 people have been assigned to the clean up. http://www.dailyfinance.com/story/oil-spill-jobs/19495921/

At this point in time it’s not clear to me that demonizing the people that are giving everything they have to fixing things is going to do anything to change or improve the current situation. And along those lines, what good does it do for the media and wall street speculators to constantly talk about how BP should be shorted and that the company could potentially go away due to bankruptcy because of the spill. http://www.guardian.co.uk/environment/2010/jun/02/gulf-oil-deepwater-sink-bp

Profitting off the swoon in stock price might help a few financial engineers get rich but British Petroleum employs some 7,000 people in Houston and 29,000 people across the US. http://bpneighbors.com/index.php?option=com_content&view=article&id=111&Itemid=108 Do we really need to put all these people on unemployement and lose the tax revenues to boot? Please note that I am not arguing against the notion of to big to fail. But with banks it was a case of being overleveraged and not solely a case of media hype and short selling that will soon be compounded by the effects of government litigation. http://www.ft.com/cms/s/0/ae859ef2-6d96-11df-b5c9-00144feabdc0,dwp_uuid=4068ae36-5447-11df-b75d-00144feab49a.html

Should BP be forced to flip the bill of this spill? Of course. And if we don’t destroy the company, they could actually make enough money from their global operations to help support the clean up and help make people whole from the catastrophe. Or we could simply force the company to go under and treat the organization like the “evil wench” we are all making it out to be. At least we could feel good about the fact that there will be some hedgefunds and lawfirms that will make a buck or two along the way.

2010-06-02T11:24:00.000-04:00

Japanese Prime Minister Yukio Hatoyama’s resignation will not garner much attention in these parts given that all of our media attention is focused on the BP oil spill in the gulf. But his resignation merits consideration given recent concerns about the shifting balance in relations between Japan, the United States and China.

Hatoyama swept into power less than a year ago ending some 50 years of unbroken rule by Japan’s Liberal Democratic Party. http://www.businessweek.com/news/2010-04-09/splintering-ldp-may-give-election-boost-to-flagging-hatoyama.html

Hatoyama wooed voters with promises “to tame the powerful Japanese bureaucracy, improve state welfare benefits, and put Japan on a more equal footing with the United States.” But today he resigned “having achieved little of this, after repeated dithering that alienated his supporters, the Japanese public and the US Government.” http://www.timesonline.co.uk/tol/news/world/asia/article7142255.ece “The controversy that did him most damage was over the southern island of Okinawa, where half of the 47,000 US troops stationed in Japan are concentrated. During his election campaign, Mr Hatoyama promised to work for a “more equal” relationship with the US, which defends Japan under a 50-year-old security treaty. He won support for a proposal to move out of Okinawa a large and unpopular US air base presently located in the busy town of Futenma. Last month, after repeatedly breaking self-imposed deadlines for a decision on where the base should go, Mr Hatoyama dismayed his supporters, but pleased the US Administration, by announcing that it would remain within Okinawa, although relocated to a quieter spot — the same plan that he had rejected as an opposition leader. “

So the question asked by Gideon Rachman this morning in the FT is whether or not the resignation of the Prime Minister will end Japan’s “tilt towards China”. http://blogs.ft.com/rachmanblog/2010/06/hatoyamas-fall-and-the-asian-balance-of-power/ And the answer is probably no.

Sure “Japan’s public (ultimately) did not support altering the military alliance with the United States at a time when neighboring North Korea was testing nuclear weapons, and an increasingly assertive China was sending warships on training exercises near Japanese islands.” http://www.nytimes.com/2010/06/02/world/asia/02japan.html?partner=rss&emc=rss

And it could be fair to point at the sinking of the South Korean naval vessel by the North Koreans as the final nail in the coffin for Hatoyama. http://www.washingtonpost.com/wp-dyn/content/article/2010/06/02/AR2010060201249.html

But as Rachman said in his blog this morning, “while Hatoyama was sometimes naive in his ideas - and crass in the way he expressed them - he reflected an important strand in Japanese thinking, which will not go away. The American military presence is not universally popular - which is why Hatoyama made his promise in the first place. And there are many Japanese opinion-formers - particularly in the Democratic Party, but also in the LDP - who think that Japan must adapt to the rise of China, by striving harder to build a good relationship with Beijing, even if that comes partly at the expense of traditional ties with the US. That school of thought will not disappear with the fall of Yukio Hatoyama.”

2010-05-12T14:21:00.000-04:00

Is Foursquare really worth $100 million or possibly more? Clearly if there is a willing buyer at that price point, (ie. Yahoo) then the answer is yes. http://www.businessinsider.com/why-vcs-think-foursquare-is-worth-100-million-2010-4. But this really only makes sense to me if one firmly believes that somebody else is going to be willing to pay more for it in the somewhat near term going forward because it is not clear to me that the mobile check in advertising model is going to help substantiate future valuations.

Let me explain that this is not a knee jerk reaction to the absurd hype around Twitter’s supposed $1 billion valuation and their recently announced “retweet” advertising model. (http://mashable.com/2010/04/14/twitter-advertising-strategies/) In fact, in full disclosure, I am somewhat of a foursquare junkie. Well perhaps that’s wrong. Let’s say that I have been an active Foursquare user who has enjoyed checking into different establishments while trying to accumulate badges. It has been a fun game. But the truth is that I am slowly getting bored of the game. Yes I am mayor of way too many places and I have certainly chuckled while entertaining others with announcements over Twitter and Facebook about my random night shenanigans.

But like any fun game, it is beginning to grow long in the tooth for me. And this happens with all forms of online games. Just thinking of all the stuffed Webkinz animals that were accumulated by my kids back when that game was hot makes me shudder. (http://www.webkinz.com/us_en/). But I digress.

As far as Foursquare is concerned, I have slowly begun to lose my desire to try and uncover new badges. Sure, there are plenty of people that have yet to max out on their enjoyment and it wouldn’t surprise me if the site continued to grow for some time but unless they come up with another “game” I am not certain what it is that will keep people signing in on foursquare versus just making announcements of their location directly on Facebook.

Plenty of tech scribes are suggesting that Facebook’s new location based software app is not intended to be a foursquare killer and that in fact their Open Graph API is actually being designed so that it can properly integrate into various location based social networks including Loopt, Gowalla and Foursquare. http://www.businessinsider.com/why-facebooks-foursquare-killer-wont-kill-foursquare-2010-5#comments But I don’t think the argument is about where people will sign in. I think the argument is more about when the trend/desire to sign into places gets old. Then what happens? You have a location based game that nobody is interested in playing. When that happens, how are you going to sell advertising? That is the question an investor needs to wrestle with.

2010-05-10T13:39:00.000-04:00

As this weekend brought to a close the 2009/2010 EPL season, one thing can be said about Chelsea Boss Roman Abramovich’s decision to hire Carlo Ancelotti to be the head coach of of the Blues at the beginning of the season. It worked. Chelsea took its first league title since the "Special One" roamed the sidelines for them back in 2006. And on Saturday, Chelsea should secure its second piece of silverware as it faces a relegated and bankrupt Pompey side in the FA Cup final.

But Chelsea isn't the only club to find success with a new coach this year. Gabrielle Marcotti points out in this morning's Wall Street Journal that "of the 20 managers who finished first or second in the top 10 European leagues, no fewer than 13 were in their first season in charge" http://online.wsj.com/article/SB20001424052748703674704575234501394166486.html

2010-05-07T16:55:00.000-04:00

Cheryl Cole (or is it Cheryl Tweedy again) holds her #1 position as FHM's sexiest woman of the year for the second year in a row and who would argue? http://bit.ly/9yq1K9 Actually, the funny thing about this year's list is that I think the prettier looking women save for #1 are on the bottom half of the table but I guess you get extra bonus points for fame and or notoriety.

2010-04-30T11:29:00.000-04:00

When was the last time that you sat down and read a 1,300 page novel? In the sense of really reading it, understanding every page, and conducting an intelligent debate on the contents later?

That question is posed this morning by Gillian Tett in the Financial Times (http://www.ft.com/cms/s/0/5c8b517e-53f0-11df-aba0-00144feab49a.html ) and given the debate around financial reform; I might suggest that it is one we all consider as we look for causes and scapegoats.

The game of beating up bankers is absolutely the sport du jour these days as senators, congressmen and media folks fueled by their hatred of the well to do take their turns at chastising the financial industry. And look, I am certainly not a fan of get rich quick financial engineers who rig things for a quick profit while contributing nothing to the overall food chain but I nonetheless found yesterday’s march on Wall Street to be pathetic on multiple levels. Sure I understand the fact that people are angry and that many people are just sick and tired of the machine that is Goldman Sachs. But organizers hell bent on their mission to kill the goose that lays the golden egg are not only misguided, they are dangerous in terms of the tone and temperament that they establish.

What’s more, they encourage legislators to create more rules and funding mechanisms that nobody really understands or cares to understand save the folks that create them or get paid to exploit them.

Does anyone remember TARP? Well I do. The program was established with the well intentioned purpose of preventing the financial collapse of America. The only problem was that the hundreds of billions of dollars that were allocated to the program were allocated by government consent only the government didn’t really know what they were consenting to. I am most certain that the vast majority of the elected officials that voted in favor of or against TARP did so without fully understanding the program and its mechanics because they were unable to fully read the bill in the 24 or 48 hours that they had to digest it before voting on it. And honestly, even if they had a month to read it, I doubt they would have been able to churn their way through the documentation line item by line item.

Still the vote took place. Did TARP work? I’m not sure. Certainly it did some things but it did not free up credit for the average American although it did create money making opportunities for hedge funds and bankers alike able to exploit the benefits wrought by the bill.

Now anger is fueling another bill. This time Congress will give consideration to a 1,300 page bill containing more than 300 pages on derivatives alone. It is a bill that is being contemplated not because legislators truly understand what is going on. It is being contemplated because elections are coming up, people are pissed off and folks want to pin the tail on the proverbial donkey. But just as was the case with TARP, it is not clear to me that this bill will accomplish much more than to simply create more rules and regulations that can be exploited by those in the business of exploitation.

To Tett’s point, “it is a truly intimidating volume of paper, even before you start trying to talk about how centralised clearing houses, say, might actually work.

Such complexity has two important implications. First, it makes the future outlook for regulation in America extraordinarily uncertain. For, quite apart from the unpredictable nature of the current strand of political populism, even if a bill is finally passed it is going to take most investors and bankers a very long time to work out what exactly has been turned into law. Buried in those 1,300 pages are numerous clauses and sub-clauses, many of which have been largely ignored until now (partly because they strike most non-financiers as pretty dull). Yet, the fine print could turn out to be crucial in the coming years in terms of shaping how banking is done. Or as one senior central banker recently confessed: "We keep tripping over things that even we barely knew were there." This is not comforting.

The second point is that there is a good chance that the complexity will end up playing into the hands of the banks. After all, if anybody has sufficient resources to hire enough lawyers to analyse 1,300 pages of dense text, it will be them. And banks are supremely skilled at exploiting any loopholes in the law. After all, that is what they have done during much of the past decade, amid the financial innovation boom. There is little reason to think that will change now, courtesy of a 1,300 page bill. On the contrary, the more complex the bill, the more potential there will be for future legal arbitrage - not least because so few people understand it.

The financial engine that powers the US economy is an extremely complicated machine with many moving pieces and participants. And it is clear that those who work in the machine are not always aware of the consequences of their actions but it is also clear that those outside of the industry are even more unaware of the consequences of their actions simply because it is outside of the their wheelhouse of knowledge and interest.

I am not suggesting that there is no need for financial regulation and reform. Clearly there is. But I think I might jump on the bandwagon of legislation simplicity. I wouldn’t want to vote on a bill that I didn’t fully understand and I certainly wouldn’t want my elected officials to vote on one on my behalf either.

2010-04-29T11:39:00.000-04:00

Let me start with H-P and Palm. What was H-P thinking? http://online.wsj.com/article/SB10001424052748704423504575212503407087936.html?mod=WSJ_hpp_sections_business

Hewlett-Packard’s decision to bet over a billion dollars on a struggling hand set maker that has been steadily losing market share since it first invented the market place (Palm phone users currently make up only 1.5% of the global smart phone market place) makes little sense to me as an outside observer. In fact when I first heard the news, I thought to myself it’s Time Warner and AOL all over again. Serious kudos should be extended to the bankers and senior brass at Palm who were able to successfully apply lipstick and dress this opportunity up.

Obviously I know that Mobile is hot right now and everything that touches Mobile, whether it be applications or advertising is being viewed with great affection by the financial community. But what does HP have that RIM, Apple and Google don’t. Forget for a moment that Palm’s stock is down 53%. The business isn’t making money, isn’t gaining market share and doesn’t seem to have an offering that is any better than anything else on the market place.

And the fact that H-P is big doesn’t necessarily mean that Palm will now be better equipped to improve its perception with the consumer and in turn expand its position in the market place.

The Wall Street Journal article cited above does point out that “The purchase also gives H-P control of Palm's WebOS operating system for smartphones, which has struggled to win developers. The move comes at a time that other PC makers, including Dell Inc., are entering the phone market by building on Google's free Android software. In addition to powering phones, H-P's Mr. Robison said he believes WebOS could be used in touchscreen "tablets," a market that H-P has said it plans to enter in the wake of Apple's iPad device. A tablet device that H-P said it will sell this year is based on Microsoft's Windows software.”

And maybe this is how one has to view the deal. Perhaps they are less interested in the phone and more interested in the next generation of gadgets…a trail which ironically enough is being blazed by Apple.

2010-04-29T10:58:00.000-04:00

Hello all! I know it's been a long while since I tossed my contemplations out to the public in long form but I haven’t been off surfing on some exotic beach in a foreign land. The fact is that I have become hopelessly addicted to short form posting on Twitter (you can follow @t33mhonda on Twitter). Sure, I can't really go deep into where my head is on things but I can nonetheless point and make the occasional comments on multiple issues and events plus the short form layout required by Twitter means that less time is required of people to get a sense of where my head is on certain things. I also find it fun to follow lots of people with less effort. And if I want to dive more into something, I can always click on a link. It’s simple and fun…that’s all. But sometimes it still feels good to push out the long form content (or at least relatively long form content). So today I think I will throw some pictures and thoughts up on the wall just because...because it's been a while and I feel like it.

2010-03-31T12:39:00.000-04:00

Well done Mr. President. I know your decision to open up certain coastlines for drilling will absolutely throw environmentalists into a panic frenzy and it will be viewed simply as your olive branch to Republicans (and their big oil backers) so that they will support your climate change bill. But I like the idea of harvesting our own resources so as to reduce our dependence on others, especially when those others are not necessarily very fond of us. http://www.msnbc.msn.com/id/36110038/ns/business-oil_and_energy/

I actually don't believe that opening these coastlines for drilling will yield enough supply to fully or even substantially wean us of our foreign energy dependence but I am also not sure that we can bank our future on the availability of foreign oil/gas given where everything stands in the world geopolitically. Couple that with the fact that our alternative energy resources will not be fully developed and in use in place of oil/gas any time in the near future means that we should be buying ourselves time and protection. Also, from what I have read and heard, all of the proposed drilling is taking place at least 50 miles off shore in the case of Virginia and 125 miles in the case of Florida which means that barring major accidents, the coastlines should remain preserved and protected.

By the way and speaking of protection (not that I wish to be a protectionist…I really don’t), our reliance on foreign steel will be hurting us in the wallet soon enough. According to this morning FT, “Global steel prices are set to rise by up to a third, pushing up the cost of everyday goods from cars to domestic appliances, after miners and steelmakers yesterday agreed a ground-breaking change in the iron ore price system. The deal by Vale of Brazil and Anglo-Australian BHP Billiton with Japanese and Chinese mills marks the end of the 40-year-old benchmark system of annual contracts and lengthy price negotiations. The industry instead agreed to move to quarterly contracts linked to the nascent iron ore spot market.” http://www.ft.com/cms/s/0/507adfc6-3c5d-11df-b316-00144feabdc0.html I’m thinking to myself, was it really that long ago that Bethlehem Steel was a major player? Well, yeah, it really was...

2010-03-31T10:27:00.001-04:00

I post this picture not because I think it’s cool or because I desperately want to be the guy getting tatted. In fact I find both dudes to be a little over the top in terms of their body art as far as my tastes are concerned. But if you are a fan of body art and you live in Ohio, your ink habit may start to get more expensive. http://news.google.com/newspapers?nid=894&dat=20030413&id=BzQLAAAAIBAJ&sjid=4lIDAAAAIBAJ&pg=6780,2262921 Why is this? It is because state governments are bleeding cash and they have to come up with a way to cover all the various entitlement programs that they have instituted over the years.

And it’s not just tattoos. Haircuts, bowling, private garbage pickup, even online dating services are all being reviewed as possible sources for additional state revenue via new service taxes. http://www.nytimes.com/2010/03/28/us/28taxes.html

“This is born out of necessity,” said Gov. Edward G. Rendell of Pennsylvania, a Democrat. His proposed budget, being debated in Harrisburg, would tax services including accounting, advertising and data processing. Mr. Rendell argues that the state’s current sales tax system makes no sense. (Why, he asks, is the popcorn in his state’s movie theaters taxed, but the candy is not?) “Look, I’m not a crazy tax guy,” Mr. Rendell said, reflecting on recent trims to the budget. “I know what we’ve cut the last two years, and I know how deep and painful the cuts have been. So I know that in the future there’s going to have to be a revenue increase, and this is the best of the alternatives, obviously none of which we’re happy about.”

The sad thing is that Governor Rendell is right. Additionally, state governments don’t have the same ability as the federal government to just ask the treasury to print new money. So they have to devise new ways of taking money from citizens to cover the handouts, pensions, debt on borrowed capital and other long term liabilities that they have inherited courtesy of our ever expanding governments.

And unfortunately for Americans, this is an irreversible trend. The Ponzi schemes that government officials have devised over the years are coming home to roost as people live longer and the economy swoons.

But what gets me is that the government and the media are not being honest with the citizenry about what is going on here. Health care passes the same week that social security goes into the red and nobody says woah. Instead folks like Frank Rich choose to blame any anger towards the health care bill on some sort of right wing fringe element that America needs to be afraid of. http://www.nytimes.com/2010/03/28/opinion/28rich.html?src=me&ref=general

But these folks are wrong. I get upset because of the lies and deceit. All businesses pay taxes on their revenues. Some businesses might choose to pass taxes on to consumers while others bake it into their costs of doing business. This idea that we should tax businesses that are not being taxed twice is a little bit of a play on definition. Another thing is just because certain service businesses are being taxed doesn’t mean that we should go ahead and tax all services. And if we are going to go down the path of flat taxing everything, then let’s go ahead and do that and let’s get rid of the current state and federal taxation system as we know it. But we won’t do that because such moves will never get passed and no politicians will ever get elected running on such reform platforms.

On the other hand, it’s easy to go ahead and tax a service here and there, especially services that are not viewed in a positive light by the “family values” sector of our country. Most people don’t pay attention to these subtle increases as they happen on a piecemeal basis and never really hurt a large portion of the population’s wallet all at once. But these are in fact real flat tax increases and they cause real cost of living increases that will not go away.

We can go ahead and talk all day long about how we need to do these things to right the ship and cover costs that we are obliged to cover but itemized tax increases and health care reform do not address the real problems with our system. We have it embedded in our minds that entitlements are the norm and it is government’s role to safeguard these entitlements. Couple this with the fact that officials get elected because of what they give away, not what they take away and you have yourself a program that is destined for failure in the long term. I would rather see us slowly do away with social security and government backed pension programs as we know it. And I would certainly like to find a way that we could redesign the way insurance, litigation, science and healthcare intersect. Big issues, sure, but long term we need to be there and not worrying about how we can extract an extra percentage point from the public here and there when nobody is looking.

2010-03-16T11:27:00.000-04:00

At least when it comes to curbing lobbyist influences inside the Beltway, this administration’s claims that is changing the way things are done in Washington should be taken with a grain of salt. When the President came to office, he promised America that he would “end Washington’s corrupt ways” by going after the folks that pay to play.

But an analysis of special interest efforts and spending in this morning’s FT shows that despite attempts by the president to institute reform in the executive branch, lobbyists are spending more than ever to push their agenda on Capitol Hill. In 2009 the industry spent more than $3bn, breaking all records. http://www.ft.com/cms/s/0/dbb420c0-3069-11df-bc4a-00144feabdc0.html And unfortunately for the President, the impact of this spending has played a significant role in hampering his efforts to pass legislation aimed at reforming healthcare and insurance.

By the end of 2009, the sums spent lobbying lawmakers on healthcare and insurance reform – roughly $430m, according to the Center for Responsive Politics – outpaced lobbying on any issue in the history of Congress. Indeed, total lobbying figures for 2009 increased by 5 per cent year-on-year to an unprecedented $3.47bn. In an interview last weekend on ABC News, David Axelrod, Mr Obama’s chief strategist, compared insurance industry lobbyists to “locusts” descending on Capitol Hill to put lawmakers under pressure to vote against the upcoming healthcare reform bill.

But Norman Eisen, the White House’s senior ethics adviser, sees a silver lining in those figures. “If you look at the numbers, typically there are double-digit increases year-on-year. We had a year in ’09 that was one of the most extraordinarily active in the government, moving historic legislation to help the American people – you would have expected double-digit growth,” he says.

Mr Eisen credits his boss for “the most sweeping and toughest ethics and lobbying and transparency rules ever launched”, including “revolving door” bans that have kept most in the industry from taking jobs in the administration, and bar White House staff from lobbying the administration when they leave.

He also sees the decline in the total number of registered lobbyists, from 14,446 in 2008 to 13,779 in 2009, as a sign that the rules are having a marked impact.

But those involved in the industry interviewed by the Financial Times, who asked not to be named, said the numbers were deceptive. By law, an individual must register as a lobbyist if they spend 20 per cent or more of their time directly lobbying members of Congress. Instead of encouraging greater disclosure, says one industry veteran, the administration is unintentionally encouraging the practice to thrive “under the radar”. People who might have called themselves lobbyists two years ago are increasingly calling themselves “strategists”.

The reality is that lobbying efforts will never go away any sooner than politicians will look to curb their spheres of influence or aspirations for heightened power. And maybe this is a good thing. While I am completely annoyed by the strength and influence of lobbyist groups that support trial lawyers and the insurance industry, I do appreciate it when successful efforts are made to thwart retarded government theft initiatives like the “soda tax” before public official grandstanders get a chance to lie about the worthiness of such endeavors. I can only imagine what our consumption tax basis would look like if we didn’t have lobbyists in Washington.

2010-03-16T10:34:00.000-04:00

In last Tuesday’s Financial Times, Gideon Rachman mused about the challenges facing the current Japanese administration as they contemplate their ongoing relationships with both the United States and China. In particular, Rachman noted the historical inclination of the Japanese to align themselves with countries they deemed to be most powerful.

In this morning’s FT, Rachman calls to question whether or not the US should be concerned with China’s economic rise. http://www.ft.com/cms/s/0/0b38f1ea-309c-11df-a24b-00144feabdc0.html

Is China like the US in 1890? Or is it more like Japan in 1980? If the parallel with America is right, China is likely to be the dominant power of the next century. If the Japanese comparison is more accurate, then the Chinese challenge to American hegemony could prove ephemeral.

Rachman refers to a book by Paul Kennedy entitled “The Rise and Fall of the Great Powers” to help frame comparisons between Japan at the height of their economic boom in the 1980’s and China today.

Re-reading the book, more than 20 years after its publication, it seems strikingly prescient in some ways - and strikingly wrong in others. The argument that America's share of the global economy will inevitably decline - and that this will have knock-on effects on global politics - still looks spot on.

Rachman goes on to discuss the key similarities and differences that exist between the two Asian powers. In the end though, the most important difference between Japan of the 80’s and China of today lies in the population. This massive population will require that growth in infrastructure and the underlying economy continue if China is to hold itself together.

And in somber closing, Rachman states that if China has another 20 years of rapid growth in it, then the likelihood is that it will indeed take the title of "the world's largest economy" some time in the 2020s. America probably achieved this status in the late 19th century. It took half a century and two wars for raw American economic power to translate into geopolitical dominance. I'm not sure whether that is a comforting thought, or not.

How about not…Seriously, I need to stop reading these doom and gloom op-ed pieces.

2010-03-09T10:24:00.000-05:00

The chatter volume around the changing tides in the relationships between Japan and the United States and Japan and China continues to rise. This morning Gideon Rachman from the FT chimes in on the matter and points to history and politics to show why Japan may ultimately find a new “bff”. http://www.ft.com/cms/s/0/4a7c23a2-2aef-11df-886b-00144feabdc0.html?nclick_check=1

Rachman first discusses the crisis in confidence that is growing in Japan. Between the national embarrassment that is being felt courtesy of Toyota’s problems and the fact that Japan is about to be overtaken as the world’s second largest economy by its historically less than favorite neighbor, the newly elected government is eager to find a way to stem their sinking approval ratings and their shrinking economy.

When Prime Minister Yukio Hatoyama won office last year, it put an end to over 50 years of governance by the Liberal Democratic Party, a party that had been extremely loyal to the U.S. Now the Prime Minister and his Democratic Party of Japan want to make their own mark on Japanese influence and power in the Far East.

Rachman observes:

Some western observers in Tokyo muse that perhaps Japan is once again following its historic policy of adapting to shifts in global politics by aligning itself with great powers. Before the first world war the country had a special relationship with Britain. In the inter-war period Japan allied itself with Germany. Since 1945, it has stuck closely to America. Perhaps the ground is being prepared for a new “special relationship” with China?

The DPJ is keen to differentiate itself from the LDP in almost every respect, and foreign policy is no exception. In an interview last week, Katsuya Okada, Japan’s foreign minister, said that the LDP followed US foreign policy “too closely”. “From now onwards,” says Mr Okada, “this will be the age of Asia.” The foreign minister adds that talk of Japan choosing between China and the US is meaningless, and that Japan’s friendship with America will remain “qualitatively different” from its relations with China.

But while it’s clear that U.S. influence in the region will continue to change as China continues to grow and Rachman is probably correct in stating Japan will be forced to make some tough strategic political and economic choices going forward, it is not clear to me at this point in time that the thinking which has governed Japan’s relationships with various European powers over the last 100 years is the same thinking that would go into their relationship with China.

2010-03-07T20:11:00.000-05:00

It looks like the corporate leadership at Cablevision and Disney have decided that it would be cool to stick it to New York area customers on Oscar night. http://www.businessinsider.com/wabc-goes-dark-disney-yanks-network-after-cablevision-fight-flunks-2010-3 I guess the financial engineers on both sides are in need of a stock price boost. It is a shame though that they need to play dirty on such a big television night.

I get that the executives are looking to protect their earnings and I get that they need to spin their sides of the story. But seriously, the official posturing is kind of gross; especially on the part of Cablevision. On the public apology message that is currently playing on WABC New York, Cablevision has the gall to say that they should not be forced to pay for programming rate increases since network stations like WABC offer their programming for free over the air to homes that use antenna televisions. As if anyone has seen one of those in 20 years. Then they try and compare the costs of providing telephone service to those associated with of providing television programming. And if that’s not enough, they mention John Kerry’s view of the negotiations as if that somehow or another strengthens their case. http://www.reuters.com/article/idUSTRE6260GC20100307?feedType=RSS&feedName=topNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F+US+%2F+Top+News%29&utm_content=Google+Feedfetcher

Both sides are dirty in this matter. And unfortunately, the customers really don’t have any leverage. They lost that 30 years ago when they decided to buy into the concept that it made sense to pay a monthly fee for programming that they used to get for free. Here’s hoping the same sad fate doesn’t occur for radio listeners courtesy of satellite radio.

2010-02-10T19:58:00.000-05:00

It might seem that I am a little late to be posting about the Saints given that the Superbowl is now 3 days behind us but this post isn’t about the Saints per se. It’s about how much the Saints mean to the city of New Orleans and how this outsider (who has actually spent some time on the inside) truly appreciates the bond that exists between the city and its football team.

In case you missed, the city of New Orleans threw the Saints a victory P-rade yesterday only it wasn’t your ordinary celebratory affair. This Mardi Gras styled 3.7 mile long parade had an estimated attendance of 800,000 people. To put that in perspective, the Pittsburgh Steelers, who are much more of a national franchise such as the Cowboys, Yankees and Lakers, drew 350,000 fans to their victory celebration following last year’s Super Bowl win over the Cardinals. http://www.nola.com/superbowl/index.ssf/2010/02/new_orleans_saints_super_bowl_9.html

One could say that perhaps more folks turn up to the Canyon of Heroes for the Yankees or Mets, (some estimates put the last year’s Yankee parade at 2MM http://wiki.answers.com/Q/What_was_the_2009_Yankees_World_Series_parade_attendance ) but that is New York City whose metropolitan area is comprised of almost 19 million people. The Crescent City metro area is just under 1.2 million people. In other words basically two thirds of the entire New Orleans metro area was on hand to cheer on their heroes.

Actually, the fact that so many people turned up doesn’t surprise me one iota. New Orleans has always been a football town and a one team town (sorry to the occasional NBA team passing through). And even though the team usually lost, citizens would always proudly sport the gold and black all year long. After all, being a Saints fan wasn’t about winning or losing, it was about being from New Orleans. You were from New Orleans, you were a Saints fan and dat is dat.

Was it a surprise that this was the most lopsided Super Bowl ever in terms of crowd support? (Phil Simms told Mike Francesa on WFAN that he barely see any Colts jerseys in the stands and that at least 80% of the seats in Miami were cheering for the Saints http://multimedia.wfan.com/m/audio/28930058/phil-simms.htm?pageid=26762 ) I don’t think so. In fact I imagine that most of New Orleans did everything they could to get a ticket to the big game and for that one night; the Saints were truly America’s team.

2010-02-10T18:10:00.000-05:00

It should be little surprise that Danica Patrick would open her NASCAR career at Daytona. Sure, she will effectively be running in a Sprint Cup race disguised as a Nationwide Series race but if you saw her save to finish 6th in last week’s ARCA event, you know she can handle being spun around. http://sports.espn.go.com/rpm/nascar/nationwide/news/story?id=4895771

And forget about all the gibberish that she was pushed into Daytona as a gimmick to make money and boost ratings. I doubt she was pushed at all. And of course it’s about making money and boosting ratings. Everybody involved wants to make money and NASCAR certainly wants to boost its ticket sales and television ratings. It wasn’t that long ago when you couldn’t dream of getting a ticket to the Daytona 500 weekend. Now track owners can’t sell out the event. http://sports.espn.go.com/rpm/nascar/nationwide/columns/story?columnist=newton_david&id=4897681 But Danica’s entry changes everything.

Think of it almost like the Tiger Woods phenomenon. Not because she is to racing as Tiger is to golf in terms of wins but because people are more inclined to pay attention to a race where she is involved. And if Daytona is racing’s biggest stage, then it’s only appropriate that racing’s brightest and hottest star be involved. Will she win…probably not…but you can be certain that GoDaddy.com, Dale Earnhardt, Jr., DIS and ESPN2 are all perfectly happy if she starts and finishes in one piece and I think those odds are pretty good. I know I will be pulling for the GoDaddy.com team.

2010-02-04T09:50:00.000-05:00

The recent loss of the super majority in the Senate and the subsequent kibosh that has been put on the healthcare reform movement has left many speculating as to the cause of this administration’s inability to make good on any of the President’s campaign promises. It is easy of course to point fingers at Washington, DC itself and the way that it is built and operated. It is also often opined that the President was actually never elected with a mandate to bring socialism to America but rather was elected with the purpose of simply cleaning house and starting over.

Edward Luce gives a more intriguing analysis of what has failed the President in his first year of office in this morning Financial Times. http://www.ft.com/cms/s/0/b6b4700a-10fb-11df-9a9e-00144feab49a.html In his mind, following extensive interviews with confidants, friends and allies, Obama suffers from relying too heavily on a closed inner circle of advisors consisting of senior advisors David Axelrod and Valerie Jarrett, Communication’s Chief Robert Gibbs and Chief of Staff Rahm Emanuel.

“It is a very tightly knit group,” says a prominent Obama backer who has visited the White House more than 40 times in the past year. “This is a kind of ‘we few’ group ... that achieved the improbable in the most unlikely election victory anyone can remember and, unsurprisingly, their bond is very deep.”

And according to those close to the administration, it is this “deep” bond prevents the President from using a broader circle of advisors effectively.

Luce refers to comments from former Clinton Chief of Staff John Podesta who says that while he believes Mr Obama does hear a range of views, including dissenting advice, problems can arise from the narrow composition of the group itself…Clearly this kind of core management approach worked for the election campaign and President Obama has extended it to the White House,” says Mr Podesta, who managed Mr Obama’s widely praised post-election transition. “It is a very tight inner circle and that has its advantages. But I would like to see the president make more use of other people in his administration, particularly his cabinet.”

This reliance on the inner circle has prevented the President from effectively transitioning out of the “me against the world” campaigning mindset and into a “we are all in this together” governing mindset. Only the inner circle has the complete trust and confidence of the President and as such, those not part of the “fearsome foursome” are on the outside staring in during many critical diplomatic and legislative engagements.

Luce cites several examples of people who have been left out in the cold on purpose by the inner circle including many folks that supposedly instrumental in getting this administration in office. And they are less than pleased.

“We are treated as though we are children,” says the head of a large organisation that raised millions of dollars for Mr Obama’s campaign. “Our advice is never sought. We are only told: ‘This is the message, please get it out.’ I am not sure whether the president fully realises that when the chief of staff speaks, people assume he is speaking for the president.”

Much of the anger by outsiders is aimed squarely at the Chief of Staff. Viewed as abusive and demeaning by his detractors, Emanuel is nonetheless held in close regard by the President. And while many suggest that the administration would do well by shaking up the guard, it seems as though there is little interest from within to do so. And depending on your point of view, this could be a good or bad thing.

2010-02-02T14:07:00.002-05:00

I was staying in the Japantown section of San Francisco when I first heard of the $6.4 billion arms sale that was agreed upon between the US and Taiwan. http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/01/29/national/w104514S69.DTL

Although perhaps not relevant, the potential significance of the timing of the announcement was not lost on me, especially given all the news that I have been seeing in terms of censorship, Google and doing business in China.

What was also not lost on me was that while this was going down, Japanese Prime Minister Yukio Hatoyama was also making pledges to reassess the deal that allows for U.S. military troops to be stationed on Okinawa. http://links.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/01/24/international/i013843S00.DTL&type=printable

Anyway, these events led to some serious discussion amongst friends as we contemplated the current U.S. economy, the international land grab for resources that is currently occurring amongst nations looking to secure supplies for the future and the rising tensions and time frames for more serious global conflict. It was certainly not the sort of conversation one would expect during a weekend of frivolous misbehavior and hi jinx. But I think the fact that we spent so much time and emotional energy on the matter shows how close to home these conflicts are beginning to feel.

I am not interested in starting a major thesis on all the various issues I have with the chess game that is the Sino-American relations. But without me sounding too much like a whiny limousine liberal, I will just say that it slays me to think about how we might march down a path of irreparable harm courtesy of both corporate greed and public ambitions.

The fact is that the world is so much more intertwined today than it ever was courtesy of international trade and commerce. Sure we talk about how America is powered by small business but it’s the large corporations that make the global economic infrastructure work. Yet this infrastructure is rapidly becoming endangered as governments begin to implement their muscle to get what they want whether it’s for internal purposes as we are witnessing with governments going after banks or it’s for external purposes as we saw when Russia went after big oil or when China went after Google.

Now it looks as though Boeing Co., United Technologies Corp., Lockheed Martin Corp. and Raytheon Co. will get their wrists slapped because of their involvement in the deal with Taiwan. http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/02/02/international/i010941S45.DTL And to think it wasn’t that long ago when Boeing’s then chief executive Alan Mulally was (singing China’s praises as their government was placing huge orders with Boeing). At the end of the public event, he pumped his fist and shouted: "China rocks”. http://www.ft.com/cms/s/0/2111669a-0ed3-11df-bd79-00144feabdc0.html

During our discussion one of my friends smartly pointed out that the issues surrounding our relationship with China and the rest of the East Asian hemisphere are so much more complicated than just the Taiwanese or Tibetan right to self govern. http://www.reuters.com/article/idUSTRE61111C20100202?feedType=RSS&feedName=topNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F+US+%2F+Top+News%29&utm_content=Google+Feedfetcher Territorial disputes that fall the wrong way could have a significant impact on important trade routes which would seriously impact commerce. Allowing one brick to fall could send a signal that it is OK for other dominoes to tumble. And all of this may be true, but this just means that we are ultimately really relying on détente to hold things together.

And the fact is that Eastern Asian nations including Taiwan and Japan are eager to be business partners with China. And maybe there lies part of the problem. They want Chinese dollars but they also want American protection and rights. At some point in time, it might be difficult to have both. It just sucks to think about the human sacrifice that will come with resolving that conflict.

2010-01-28T11:48:00.002-05:00

Never underestimate a human being’s desire to live. Darlene Etienne, the Haitian 17 year old girl that was pulled yesterday by French rescuers from the rubble of a school destroyed by the earthquake a couple of weeks ago is a perfect case in point. For 2 weeks she sustained herself in cramped quarters on nothing but toilet water while waiting for anyone to come and save her.

The fact that she was found five days after the government had called an end to all search and rescue missions is nothing short of miraculous. http://www.thesun.co.uk/sol/homepage/news/2828504/Girl-17-rescued-from-Haiti-rubble.html

But as I was watching footage of the rescue this morning, I was left thinking about the disgusting behavior and rhetoric that has been aimed at the United States over its role in Haiti by certain mean spirited and ill-intentioned parties. Take the French Minister who opined that the U.S. ought to help the country rather than occupy it. http://current.com/13md44c Then there was the posturing by the governments of Venezuela, Bolivia and Nicaragua. http://www1.voanews.com/english/news/politics/Clinton-Defends-US-Military-Role-Haiti--82605677.html. Even if the purpose of the rhetoric was to saber rattle for the benefit of their respective citizens, it was in complete bad form and the global media outlets should be blasting those nations for their retarded behavior. The fact is the amazing outpouring of compassion including physical assistance, emergency supplies and cash that has come from this country as well as from Israel and Europe has been nothing short of amazing.

What is also disgusting and needs to be better highlighted is the fact that so much aid is actually failing to get to where it needs to go because of blockades and politics. Frankly, the stories I have been hearing are very similar to what I heard from locals in New Orleans following Katrina (such as supplies being held up at parish lines if bribes weren’t paid). In any case, it is going to be a long recovery process for this very poor nation.

2010-01-28T10:51:00.000-05:00

My wife asked me this morning if I had 3 or 4 words to summarize the State of the Union speech last night and after thinking about it for a couple of seconds, I said “not really”. It was really a sort of non event as far as I was concerned. There were no real strong declarations to come out of left field. Standard calls for putting an end to the partisan ways of Washington were…how do you say...standard. Pledges to rein in spending and promote job growth had the ring and sincerity of the teacher in the Charlie Brown television specials (“wahwah wahwah wah”).

But seriously, what could you expect. On one level, the President had to come out swinging but at the same time he had to do what he could to keep tempers at bay because the democrats no longer have the super majority (Thank you Massachusetts!) and the health care initiative is hanging in balance. So President Obama addressed both sides of the aisle. http://www.nytimes.com/2010/01/28/us/politics/28obama.html?hp

“To Democrats, I would remind you that we still have the largest majority in decades, and the people expect us to solve some problems, not run for the hills,” Mr. Obama said in his nationally televised speech. “And if the Republican leadership is going to insist that 60 votes in the Senate are required to do any business at all in this town — a supermajority — then the responsibility to govern is now yours as well. Just saying no to everything may be good short-term politics, but it’s not leadership.”

Ah yes…good short term politics…change we can believe in. Reality is though that Washington will never change. The design of our system coupled with human nature and the desire of those in power to acquire yet more power makes it basically impossible for anything to get done that doesn’t somehow or another create yet more expenses and/or restrictions on how we do things. That’s not me being cynical or defeatist. It just is…

But here’s the deal. The nationalized health care plan is garbage. I am not saying the goal of enabling everybody to afford health care is wrong or not noble. I am just saying the plan is wrong and it doesn’t address the real problem (insurance companies & litigation) thanks to the strength of lobbyists. The bailout of the banks is garbage. The artificially low interest rates are not helping everyday consumers. They are simply helping banks and hedge funds put on trades that make a few folks even more money all while regular folks are prevented from doing any refinancing due to “credit risk” It’s complete and utter thievery and people are calling “bullshit”. And in this case, the people are right in calling out the government and voting out people in control.

Unfortunately though, the next group of elected officials, whether they are republicans or democrats, will suffer the same plight. That is the system we live in whether we like it or not.

2010-01-27T18:36:00.000-05:00

It’s almost incomprehensible that we are nearing the end of January and I am only now getting to my first post of the year. And believe you me; it has nothing to do with lack of material. Between Scott Brown and the collapse of the super majority, the earth quake in Haiti, the Detroit bomber and Google pulling out and then staying put in China, I have been dying to find some time to mouth off on things. And unfortunately I won’t get to it all now.

But let me open 2010 with a comment about my J-E-T-S Jets Jets jets. It actually only took me a day and half or so to get over the pain of the AFC Finals loss to Peyton and the Colts. Probably that was because the better team won and deservedly so. It was a glorious run by the first year coach, rookie quarterback and the rest of Gang Green and I hope that this is the beginning of a nice run of playoff winning seasons and I hope they will raise a Super Bowl trophy in the not too distant future. The team is young and Sanchez looks to be the real deal.

I must admit though, I am finding it hard to get excited about the upcoming Super Sunday even though the story line is brilliant. Fact is the air has been taken out of this football fan’s balloon. But I do wish my friends who are “true” die hard Saints fans the best of luck. I can only imagine how I would feel right now if the Jets were going to Miami.

2009-12-31T13:12:00.000-05:00

It's my last post of the year and I'll keep it short...

Happy New Year!

2009-12-30T13:19:00.000-05:00

Generally I find much of the doom and gloom reporting by hedge fund managers on the state of the economy to be completely self-serving and rightly so for obvious reasons. And because of this, I find myself discounting comments made by numerous authorities when it comes to pontificating on the failures of our monetary policy and the demise of our nation’s fiscal well being. Clearly it behooves players with massive short bets to get on their soap boxes and talk about how 2010 is going to bring about a credit and US Dollar crisis the likes of which we have never seen before.

But I have mused in the past that I never liked the government bailout strategy and I have suggested that the intervention along with the artificially low interest rates have done little if anything to actually help everyday Americans although it has done plenty to line the pockets of traders and bankers who have benefitted from market plays tied to the intervention.

But political and social commentary aside for a moment, I think we need to be mindful of what all of this government intervention will mean for us in the coming years, especially as we get ready to applaud the current administration for a job well done on creating another massive government spending package in the name “healthcare”.

Benn Steil, Director of International Economics at the Council on Foreign Relations, suggests in yesterday’s Wall Street Journal that we need to prepare ourselves for a “Keynesian Hangover”. http://online.wsj.com/article/SB10001424052748703278604574624151582763912.html

In 2008, as the U.S. economy teetered under the weight of years of reckless credit expansion, the Bush administration decided against proposals to sweep out the bad debts from the banking system and then fix the regulatory structure—an approach based on tried and tested models from the S&L crisis and other financial crises.

We will pay the price for this decision in 2010. That's because the Obama administration and the Federal Reserve are plowing forward with Plan B: Nationalize credit creation and "stimulate" the private sector by spending in its stead.

He goes on to draw comparisons between our economic policy and that of third world borrowers whom we used to chastise for inappropriate lending habits.

They’ve (the banks) funneled significant new funds into nonbank financial institutions—which have not lent them on. What's happening is that U.S. banks have been behaving exactly like developing country banks during earlier crises, such as Indonesian banks in the late 1990s—raising lending to their worst borrowers to keep them alive, lest the banks themselves collapse from their borrowers' defaults.

For U.S. banks, these zombie borrowers are their affiliated financial entities set up to manage so-called off-balance-sheet activities—such as the famous SIVs (structured investment vehicles) created by Citigroup and others during the boom. Thus, the massive fiscal and monetary bailouts of the banks have served to worsen the credit misallocation that led to the general economic collapse in 2008.

Unfortunately, the path that we might consider taking (bankruptcy) is viewed as too “politically toxic”. The power of the banking lobby is just too strong. This, of course ties back into my concern with the health care initiative, which is that we are not really addressing the problems with insurance coverage in this country because of the strength of the Insurance lobby. Without sounding too flippant on such an important manner, I guess it just is what it is. One day the lobbyists will lose their influence, but in the meantime I think it is fair to say that we need to hang on tight because things might not necessarily get better before they get worse.

2009-12-24T15:09:00.000-05:00

This is a shot of Broadway looking north last night as finished up some last minute shopping. l love Manhattan during this time of the year.

And with that I give you t33mhonda's top 20 of 2009...in no particular order:

Single / Artist

Bulletproof / La Roux

Watch The Sun Come Up / Example

When Love Takes Over David / Guetta Feat. Kelly Rowland

Empire State Of Mind / Jay-Z Feat Alicia Keys

If Today Was Your Last Day / Nickelback

Tiny Dancer (Hold me Closer) / Ironik

Waking Up In Vegas / Katy Perry

Brick By Boring Brick / Paramore

Good Girls Go Bad (feat. Leighton Meester) / Cobra Starship

I Gotta Feeling / Black Eyed Peas

21 Guns / Green Day

Don't Trust Me / 3OH!3

This Love Is Fucking Right! / The Pains Of Being Pure At Heart

Daylight / Matt & Kim

Sparxxx / The Love Language

The Fear / Lily Allen

Walking On A Dream / Empire Of The Sun

You've Got The Love / Florence And The Machine

People Say / Portugal. The Man

Fire / Kasabian

2009-12-01T14:14:00.003-05:00

The Wall Street Journal is reporting this morning that online radio audiences are growing but advertising dollars are slow to follow the traffic. http://online.wsj.com/article/SB10001424052748704498804574561540796890018.html?mod=WSJ_hpp_sections_tech

According to the Journal’s Sarah McBride, “radio has been slowest among the media industry to turn its Internet audience into cash. Gordon Borrell, who runs consultancy Borrell Associates Inc., calls radio the "C" student of the Internet. Radio gets only an estimated 2.4% of its revenue from online, while TV gets 3.4% and newspapers 7%.”

She goes on to point out that “One of the big problems is that the market for Internet radio is bifurcated between listeners who tune in to streamed versions of existing, terrestrial radio stations and people who listen to Internet-only radio startups. Of the 42 million people who listen to Internet radio, 24 million are tuning in to Web-only radio. In addition, the number of Web radio listeners pales next to traditional radio listeners, who total an estimated 234 million. Stations generally draw only a fraction of their broadcast audience to Web sites—between 3% and 5%. That hasn't been enough to attract many online advertisers. Online spots end up getting thrown in as a sweetener for advertisers who were buying time on a station's regular broadcast.”

This reads eerily similar to the circumstances and conditions faced by print publishers and media buyers in the early stages of online publishing as they struggled with understanding the impact of the transition that was occurring as readers moved from print to online. My guess is that online radio buying will increase as planners become further educated on the ability to target messaging online. But the opportunity for online radio is much bigger than just targeting local or specific IP addresses. I anticipate tremendous growth in online listenership just as we have witnessed with online readership. For one thing, I am certain that internet radio will be coming to automobiles within the next 18 months and that will lead to a tremendous spike in listeners.

I also believe that internet radio helps bring together shared interests in a way that is far more powerful than traditional local radio. And it will be the marketers that understand how to target audiences based on shared interests that will reap the benefits. And taking content format into consideration, there will be plenty of opportunity to think creatively about multi-tiered ways to tap a national if not international market.

For example, think about how BBC One engages their listeners via texting and email. Their audience is completely dialed in. And while BBC is a state owned station that is not advertising supported, that doesn’t mean that marketers couldn’t learn a thing or two from their methods of engagement.

And they will need to because as I have said, the online radio audience will only snowball in size as the internet further intertwines itself into everything we touch. And as it does radio, will be able to shed its reputation as the “c” student of the internet.

2009-12-01T12:03:00.000-05:00

Who dat?...Nuff said...

Well, OK, maybe not enough said. In case you missed it last night, the Drew Brees pitched a perfect game in the football sense of the phrase as the New Orleans Saints dismantled the Brady Bunch on Monday Night Football. http://www.cbssports.com/nfl/story/12597764/who-dat-nobody-saints-playing-above-beyond-rest-of-league/rss How perfect was Brees? His quarterback rating was the highest I have ever seen although Peyton manning supposedly did the same thing a couple of years ago. http://knucklesunited.com/2009/12/drew-brees-perfect-night-the-nfl-passer-rating-explained/ All I know is that the Pats looked like the Saints of old last night and the Saints looked like the Pats of old. Now enough has been said.

And while I am on the topic of “throwball”, who could really be surprised by the sacking of Charlie Weiss exactly 5 years to the day Notre Dame canned their last football coach? http://sports.espn.go.com/ncf/news/story?id=4700891&campaign=rss&source=ESPNHeadlines I was actually surprised it took this long. The shine has long been missing from this franchise for a variety of reasons, none of which I will get into here. But let’s just say that I am experiencing a little bit of schadenfreude with the program’s demise, not the least because I thought their national television contract with NBC years ago gave them such an unfair recruiting advantage. Thankfully climate, location and facilities (and a few other items I shall leave out) trump network coverage.

I was a little surprised by the apparent nudge given to Bobby Bowden yesterday. http://sports.espn.go.com/ncf/news/story?id=4701625&campaign=rss&source=ESPNHeadlines At 80 years old and with the second most wins ever amassed by a division one coach (second only to JoPa) and 2 national championships under his belt, Bowden certainly had nothing left to prove. But having lost six games in 3 of the last 4 seasons while playing in the ACC, he was not cutting it anymore. Getting blown out by the Gators certainly helped send the final message that FSU was going to have a tough time recruiting in state if they didn’t change their course. Still, on every level, he was the face of FSU and the type of coach you loved rooting for or against on Saturdays. He will certainly always remind me of why I love watching college football.

2009-11-25T14:07:00.001-05:00

Normally when my mother-in-law and I swap articles in the mail, they have to do with politics and editorial. Republicans did this or Democrats supported that or can you believe that “such and such” organization got behind “whatever” legislation. But on this Thanksgiving Eve, I opened up her mail and read an article by NY Times Op-Ed columnist Nicholas D. Kristof that has nothing to do with politics or the economy. Instead it is a story about personal triumph over the harshest of adversities. http://www.nytimes.com/2009/11/15/opinion/15kristof.html It is a story that's well worth reading as we get set to give thanks tomorrow for all we that have on this most American of holidays.

It’s a feel good tale about Tererai Trent, a lady from a depressed rural village in Zimbabwe who manages to defy all odds and escape what might normally seem like a foregone conclusion of a life to go on and earn multiple advanced degrees in the United States with the help of various aid organizations and people associated with universities where she studied.

A cynical observer of the New York Times might gripe that this editorial was in fact just political fodder in support of agencies doing work in the third world and that the soon to be Dr. Trent is not the typical byproduct of such agency initiatives but rather a very special human being that comes along once in a blue moon and just happened to be in the right place at the right time.

But I think I am going to pass on the cynicism this go around. Instead I am going to look at her story as an example of why we need to sometimes stop and take a look around. What do we have that we can be grateful for and what else do we want out of life? I imagine we are all somewhat guilty of thinking “woe is me” and there is no way I can ever achieve this or achieve that. And certainly there are certain limitations that all of us face. But the ability to rise from nothing to accomplish something is more than an American dream; it’s an American opportunity that’s out there for the taking. And certainly one person's nothing is another person's something but the takeaway is that we can all aspire and achieve on one level or another. And that's something I will be thankful for tomorrow.

2009-11-16T15:33:00.000-05:00

The big story on talk radio in New York over the weekend and this morning had to do with the decision made by US Attorney General Eric Holder to move the trials of Khalid Sheikh Mohammed and four other al Qaeda members accused of organizing the 9/11 attacks on America from a military courtroom in Guantanamo Bay to a civilian courtroom in downtown Manhattan. http://twurl.nl/22krsm

The questions being raised are certainly logical if not to be expected. How political is this decision and why New York? Are the surviving victims of 9/11 prepared to have their old wounds reopened as a result of the constant media coverage that will certainly be part of the trial? Is the country prepared for the political backlash that will ensue should this trial turn into a circus? And why would one afford civilian privileges and protections to militants who are conducting a war to destroy the very foundations that afford them such privileges and protections?

It’s probably fair to say that the decision to bring the trial back to the scene of the crime is politically motivated. And to suggest that the decision was hastily made or not thought out is probably erroneous. But it doesn’t mean that it was well thought out or that it was the right decision.

For one thing, a jury trial would involve assembling an impartial jury. How on earth could you ever begin to think that there are people living in New York City that are impartial in their views about what happened on September 11th?

NPR took to the streets over the weekend to see who might be impartial. http://twurl.nl/l0vhbv

Larry Corban passes by ground zero in a rush to get to band practice. The jazz guitarist was in the same sort of hurry on the morning of Sept. 11, 2001. He was down in the World Trade Center concourse, about to get on a subway train, when the first plane hit.

"All I could think was, get to work, time to get to work. I didn't realize that the world was going to change as we know it," he says.

It would be hard to find a New Yorker who didn't feel their world change that day. That's why Corban is so surprised that Mohammed, who has admitted to being the mastermind of the attacks, would be sent here for a fair trial.

"I personally think tarred, feathered, strung up and have people decimate the corpse — that's what they should do with that guy," he says. Doesn't sound like Corban will be able to serve on the jury. "No, definitely not," he agrees.

But how will the city find enough New Yorkers to form an impartial jury?

Then there is the question around what is admissible in a military court versus a civilian court. On the Take Away, John Hockenberry discusses problems with evidence obtained through tactics that may have included water boarding. http://twurl.nl/3bexft Of course, that begs the question of why evidence should be helpful and allowable in one situation but completely forbidden in another. I mean if lives were protected with information obtained via certain coercive means, then why would we disregard it?

But regardless of these questions and questions around whether or not a civilian court could properly conduct a trial of KSM and his co-conspirators, I am left wondering where the real benefit of this decision falls. I am reading and listening but I have yet to see or hear anything that tells me this is the right way to go.

2009-11-06T12:22:00.000-05:00

Philip Stephens is right about the fact that President Obama, or any President for that matter, should never rush to make decisions that can and will affect hundreds of millions of Americans unless of course it’s a matter of our country being directly attacked. But I think he is off the mark with his column today in terms of evaluating the economic and political landscape facing the administration today. http://www.ft.com/cms/s/0/e6c4a18a-ca41-11de-a3a3-00144feabdc0.html?nclick_check=1

I perhaps take biggest the exception to the concept that the administration has “put through a successful economic stimulus package.” As I have written previously on these pages, I believe strongly that the blend our weak dollar policy, low interest rate environment and government support for failing institutions is going to come back and bite us in the proverbial pants in good time. It’s also not clear to me that we are three quarters of the way towards offering government controlled health care. If anything, last week’s elections showed that that there are some major fears amongst our citizenry around how we will pay for socialized medicine in this country given where everything else stands.

And lastly, it is not clear to me that our seemingly rudderless conduct in Afghanistan is a function of our military and diplomatic evaluative prowess. Rather I imagine that there are some real economic considerations taking place around how one finances the effort and what the implications are for businesses that benefit from the war machine. And as I have pointed to previously, our allies in this war against terrorists will continue to display caution around their commitments as long as we are displaying caution. And to that I ask, where is the benefit?

It’s perfectly clear to me that the “damn the torpedoes” approach towards international diplomacy exercised by the previous administration was not the answer and it never helps to piss off all your friends when you are fighting your enemies. But it is also clear to me that you can’t please everybody all the time and sometimes one has to take a stand.

But in the end, I agree with Stephens underlying opinion. The administration shouldn’t feel hurried by the media, legislators or advocacy groups looking to shove through their agendas. I certainly don’t want rush decisions to emanate from the oval office and out of the halls of Congress. I just don’t necessarily think that we are in the best place we could be right now because we have been taking our time trying to be smart.

2009-11-04T18:58:00.000-05:00

I have a couple of final thoughts on yesterday’s election results as I marvel at the quality thickness of the paper that Linda McMahon (a Republican Senatorial candidate for Connecticut in 2010) used in her most recent direct mail. Contrary to the spin being offered by Democratic strategists and certain liberal wonks, I believe the results in Virginia and New Jersey were clear statements by voters that the current administration was not armed with a mandate to deliver massive social spending initiatives whether they be in the form of government supported healthcare or Detroit bailouts. Last year’s sweep of all things Republican was simply a referendum on the previous 8 years. The country said “No mas”. But the country did not say, “Government, expand yourself and run up a massive tab while you’re at it.” Americans fired a shot across the bow of the current incumbents and signaled that they will apply the broom to them as well if they keep things up. I just wonder if they will listen.

And one more thing, if the Republicans think that yesterday’s results are a signal that they should push ahead with a strong socially conservative agenda for 2010, they will be sorely mistaken. http://www.nytimes.com/2009/11/05/nyregion/05elect.html?partner=rss&emc=rss I know that conservatives are feeling emboldened by yesterday’s absurd vote to repeal the gay marriage law in Maine http://abcnews.go.com/Politics/maine-gay-marriage-law-repealed/story?id=8992720 but I think that result will prove to be a false positive for social conservatives in the long run.

2009-11-04T16:47:00.000-05:00

Mike Bloomberg spent a heck of a lot of money to get reelected Mayor but I guess it was money well spent as he defeated his Democratic rival, Bill Thompson, by 5%. The Daily News calculated that Bloomberg spent somewhere in the neighborhood of $157.27 per vote versus Thompson’s $13.12. http://www.nydailynews.com/news/election_2009/2009/11/04/2009-11-04_mayor_michael_bloomberg_crows_like_big_winner_in_victory_speech_despite_thin_win.html

Of course, given the results that occurred with the gubernatorial elections in Virginia and New Jersey there is much scuttlebutt about what the election returns in the city really represent. I am loathe, however, to view New York City results through the same lens that I would use to analyze the victories by McDonald and Christie. I don’t think this election was so much about voting for or against Obama, healthcare, Wall Street or city schools. I think the debate in this election was around entitlement versus the well being of the city.

It was a very close race given the money spent and the expectations that were set accordingly. I am not sure if the seemingly low voter turnout helped or hindered Bloomberg but I am pretty sure that one of the biggest obstacles the Mayor had to overcome was the animosity some voters felt towards his ability to dodge the term limits and then effectively “buy” the election. The city didn’t like it when Rudy Giuliani contemplated a third term as Mayor, http://www.nytimes.com/2001/10/04/nyregion/giuliani-says-he-won-t-seek-a-third-term.html and the same thinking applies here. Mika Brzezinski was right in sharing her frustration with the mayor’s power play on today’s Morning Joe. http://www.msnbc.msn.com/id/3036789/#33617773

I would have voted for Bloomberg if I still lived in the city but I would have done so holding my nose because I really believe strongly in term limits. I actually think we might be better off in this country across the board if we had mandatory term limits for all public offices.

2009-11-03T11:45:00.001-05:00

One may or may not agree with the premise that Abdullah Abdullah’s withdrawal from the runoff with President Hamid Karzai means that Karzai is the fair and square legitimate leader of Afghanistan but I think one has to give respectful nod to the Journal’s Op-ed this morning. http://online.wsj.com/article/SB10001424052748703932904574511683136001624.html

In short, the current administration is facing a challenge. Do they want to increase America’s engagement in Afghanistan with a beefed up military presence to win what they have previously dubbed as a “necessary war” or are they contemplating a different strategy that involves less of a commitment? Asking NATO countries like Germany to step up their commitment against the Taliban and other antiwestern militants becomes difficult when they aren’t sure where we stand.

Everything is summed up perfectly at the end of the article.

The main problem now isn't Afghanistan's President. It is that no one in Washington or around the world is sure whether America's President is committed to his own strategy—or even if he'll stick with that strategy if he reaffirms it.

As long as those doubts persist, everyone in this conflict will hedge their bets: the NATO allies, on the number of troops they'll commit and the fighting they will do; Mr. Karzai, in his dealings with Afghan's regional kingpins and drug lords; and the Pakistanis, in their own battles with the Taliban.

Most important, the American people will quickly lose faith in a war that they conclude their Commander in Chief is ambivalent about fighting. Reports of puzzled commanders and troops in the field are already multiplying as they wonder why they're risking death by IED if Mr. Obama isn't sure about the mission.

For purely domestic political reasons, Mr. Obama may be tempted to split the difference between General McChrystal's request and the 68,000 troops now on the ground. This could well be the worst option: A reaffirmation of the same goals in Afghanistan without the troops and resources that the military brass believes are needed to succeed.

Our view is that you should never start wars you don't intend to win, and if Mr. Obama recommits to Afghanistan only because he doesn't want to be seen to lose, he should tell everyone now and not waste another American life.

Again, and as I have said before, this is not about advocating war. If anything, its about putting an end to the war. Finish it or finish it. It's the waffling that hurts the most.

2009-11-03T10:50:00.000-05:00

Yesterday 7.5 tons of steel that had been destroyed during the attacks on America and the World Trade Center back on 9/11 made a remarkable return to the Big Apple in the shape and form of the U.S.S. New York. The amphibious transport dock, whose motto is “Strength Forged through Sacrifice, Never Forget”, will be used to transport marines and combat equipment to conflicts around the globe. http://www.nytimes.com/2009/11/03/nyregion/03ship.html

Following a 21 gun salute by the site of the attacks, the ship made its way to pier 88 where Mayor Bloomberg was on hand to welcome the latest addition to the US Naval fleet.

According to the Mayor, the USS New York could not have a more fitting name, representing freedom, courage and resilience.

"This ship is actually a physical representation of that spirit with steel from the World Trade Center built into its bow so every friend that sets foot on it and every foe that dares challenge it will feel its power and know that it is literally made from the heart and soul of the city that has scarified so much," the mayor said.

http://www.telegraph.co.uk/news/worldnews/northamerica/usa/6488226/USS-New-York-ship-made-of-World-Trade-Center-steel-docks-in-New-York.html

Of the 361 sailors serving aboard the ship, around 13 per cent are from New York state, which is higher than would normally be the case. There were many requests from Navy personnel to serve on the ship, which will carry some 250 marines.

The ship will be docked right by the Intrepid through Veterans Day and then it will head off to Norfolk, Virginia for a year’s worth of crew training and exercises.

2009-11-02T10:06:00.000-05:00

NYU Stern School of Business professor Nouriel Roubini sounds out a warning to all investors in this morning’s FT that the combination of low interest rates and the falling dollar has facilitated a rapid and unsustainable rise of risky asset prices thus creating the mother of all asset bubbles. http://www.ft.com/cms/s/0/9a5b3216-c70b-11de-bb6f-00144feab49a.html?nclick_check=1

Roubini points out that "the US dollar has become the major funding currency of carry trades as the Fed has kept interest rates on hold and is expected to do so for a long time. Investors who are shorting the US dollar to buy on a highly leveraged basis higher-yielding assets and other global assets are not just borrowing at zero interest rates in dollar terms; they are borrowing at very negative interest rates – as low as negative 10 or 20 per cent annualised – as the fall in the US dollar leads to massive capital gains on short dollar positions."

And as these investors then turn around and invest this borrowed capital that they are already earning interest on via their negative borrowing rates into global assets whose prices are climbing partly due to this phenomenon, they have been able to realize total returns in the neighborhood of 50-70% since March.

But Roubini warns that this carry trade cannot last forever.

One day this bubble will burst, leading to the biggest co-ordinated asset bust ever: if factors lead the dollar to reverse and suddenly appreciate – as was seen in previous reversals, such as the yen-funded carry trade – the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. A stampede will occur as closing long leveraged risky asset positions across all asset classes funded by dollar shorts triggers a co-ordinated collapse of all those risky assets – equities, commodities, emerging market asset classes and credit instruments.

Why will these carry trades unravel? First, the dollar cannot fall to zero and at some point it will stabilise; when that happens the cost of borrowing in dollars will suddenly become zero, rather than highly negative, and the riskiness of a reversal of dollar movements would induce many to cover their shorts. Second, the Fed cannot suppress volatility forever – its $1,800bn purchase plan will be over by next spring. Third, if US growth surprises on the upside in the third and fourth quarters, markets may start to expect a Fed tightening to come sooner, not later. Fourth, there could be a flight from risk prompted by fear of a double dip recession or geopolitical risks, such as a military confrontation between the US/Israel and Iran. As in 2008, when such a rise in risk aversion was associated with a sharp appreciation of the dollar, as investors sought the safety of US Treasuries, this renewed risk aversion would trigger a dollar rally at a time when huge short dollar positions will have to be closed.

2009-10-30T10:49:00.000-04:00

Sometimes you just have to love our Secretary of State…seriously. She makes a trip over to Pakistan to work on improving relations with the country and then holds court with newspaper editors in Lahore and laments the fact that the Pakistani government has to know where senior al-Qaeda leaders were hiding out saying, “I find it hard to believe that nobody in your government knows where they are and couldn’t get them if they really wanted to…Maybe they are not ‘get-at-able’. I don’t know.” http://www.ft.com/cms/s/0/1dab7fdc-c4a4-11de-8d54-00144feab49a.html (Sincere golf clap please...that was very funny)

I mean bluntly, she’s probably correct in her assessment. Is the timing ill-advised? I don’t know. I mean sometimes I feel as though our efforts to be diplomatically smooth end up achieving nothing. Take for instance Iran’s decision to punt on a uranium stockpile deal that its negotiators had agreed to last week. The deal simply called for Iran to ship three quarters of its low-enriched uranium to Russia for processing that would allow it to be used for medical purposes. http://www.nytimes.com/2009/10/30/world/middleeast/30nuke.html?partner=rss&emc=rss

The idea behind this deal was that it would leave Iran with too little fuel to manufacture nuclear weapons. So of course they will say yes to buy them some time until they decide to say no. And I see where they are coming from and I totally get why they don’t wish to bow to western interests but it is not clear to me why is we continue to play the appeasement game with their government. Is there really a middle ground in this debate? Is this chess match significantly more complicated than it appears to be? Doesn’t one either make a move to remove their abilities or let them be? I certainly am not advocating preemptive military action as that's not my modus operandi but I do not see what we achieve by publicly scolding them when there is little we are able or willing to do in order to contain their enrichment program.

2009-10-29T11:23:00.002-04:00

I found Victor Hanson’s piece on Harry Truman and his foreign policy learning curve (http://online.wsj.com/article/SB20001424052748704335904574495141362744118.html) to be particularly pointed and timely given yesterday’s blast that killed some 100 people in a Peshawar bazaar. (http://www.msnbc.msn.com/id/33503576/ns/world_news-south_and_central_asia/ )

In his opinion piece, Hanson, who is a senior fellow in classics and military history at Stanford University’s Hoover Institution, frames the international diplomatic challenges facing our current administration by drawing comparison to the world that was inherited by Truman following the passing of President Roosevelt.

Hanson points out that in many ways the challenges facing Truman when he took over the White House were far greater in both number and complexity.

All at once Truman had to finish the struggle against Hitler, occupy Europe, and deal with a nominally allied but increasingly bellicose and ascendant Soviet Union. Within months of taking office he had to make the awful decision to drop atomic bombs on Imperial Japan.

At war's end, Truman was faced with a global propaganda nightmare. Stalin's victorious Soviet Union—soon to be nuclear—cynically posed as the egalitarian leader for millions of war-impoverished and newly liberated colonial peoples. In contrast, America accepted the difficult responsibility and expense of rebuilding the destitute former European colonial powers and rehabilitating ex-Axis Japan and Germany.

Hanson goes on to discuss how Truman made many a blunder during his early days in office, but that he learned from his mistakes and eventually he was credited with formulating a foreign policy doctrine that would be embraced by many democrats long after he left office.

Truman's no-nonsense Secretary of State Dean Acheson summed up the president's doctrines: "Released from the acceptance of a dogma that builders and wreckers of a new world order could and should work happily and successfully together, he was free to combine our power and coordinate our action with those who did have a common purpose."

Ever since, most Democrats have embraced Truman's "common purpose." That means containing rival anti-Western ideologies, establishing alliances of similarly-minded democratic allies, and periodically standing up to regional thugs.

Hanson then proceeds to point out how the Carter administration chose to break away from the Truman doctrine in its foreign policy dealings and failed miserably because of their willingness to alienate long time friends and their inability to properly manage the nuances and complexities that came with playing the diplomatic chess against foes that really could care less about what the United States thought.

In this context Hanson suggests that the current administration should take notice of history.

Will an inexperienced Barack Obama, in the fashion of Harry Truman, learn quickly that the world is chaotic and unstable—best dealt with through strength and unabashed confidence in America's historic role galvanizing democratic allies to confront illiberal aggressors?

Or will a sermonizing Mr. Obama follow the aberrant Democratic path of the sanctimonious Jimmy Carter: finger-wagging at allies, appeasing enemies, publicly faulting his less than perfect predecessors, and hectoring the American people to evolve beyond their supposed prejudices? America awaits the president's choice.

The world's safety hinges upon it.

Let’s just hope that our Secretary of State is right when she pronounces that the militants behind the Peshawar bombings “are on the losing side of history”. (http://www.nytimes.com/2009/10/29/world/asia/29pstan.html) My gut tells me though that we must first stop being apologists to the world while playing the role of police man. Either we need to fight to win, or we need to not fight. It might be a bit of a playground philosophy but it makes sense. To sort of borrow from Yogi Berra type language, the only way you stop a bully is by stopping the bully. In this case there is no middle ground and western soldiers should not be deployed to engage in a fight they are not allowed to win.

What do you think?

2009-10-28T09:37:00.000-04:00

Things must not be too rosy over at CNBC given that Nielsen has reported their viewership is off by 50% year over year in October. http://www.zerohedge.com/article/cnbc-viewership-plunges-50-october And with the Comcast takeover looming, changes are most likely in the making.

I agree with Zero Hedge that the network can reverse the tide if ceases with its agenda programming. I for one find that I more often than not have to turn the volume off on the TV just so I don’t have to hear certain morning and afternoon blowhards preach their extreme left of center business philosophies on air while others use the channel as a pimping tool for their market bets.

CNBC was never a place to get educated on a particular sector or industry. It was always more of a thermometer that measured the temperature of the investment community. In fact, the more you knew about any one sector, the more you realized how off or tainted CNBC was in their coverage of that space.

But the purpose/focus seemed to changed over the last few years, especially as the economy worsened. The network left the reporting space and went into the commentary/opinion space, frankly much in the same way as its sister network, MSNBC, did during the last major election cycle. And this has been a mistake.

Hopefully, the producers will figure it out and retire some of those names that make the station unwatchable. It’s really not that complicated. And I’m pretty sure the ratings will return when that happens.

2009-10-27T10:19:00.000-04:00

With Halloween only 4 days away, the time is ripe for Americans to express their outrage with public officials who are advocating a national sin tax on candy similar to the government pick-pocketing that is taking place in Illinois. http://www.nbcchicago.com/news/local-beat/Chicago-Braces-For-Candy-and-alcohol-tax-hike56339472.html .

I got particularly fired up this morning while watching Morning Joe (I really need to stop watching those guys) because of comments made by Mika Brzezinski. She had the outrageous insolence to suggest that America would be a healthier place if we implemented a “Candy Tax” and that Halloween would survive such legislation.

OK…fair enough. Halloween would survive the tax but it is positively absurd to think that we will eat demonstrably less candy as a nation if we apply a sin tax to sweets. What would happen is that we would create another ledger of available capital for politicians to spend on projects that enhance their power base at the expense of the nation as a whole.

Again, I suggest that we need to be careful about advocating micro taxation policies. While we do pay attention to federal and state tax rates, we fail to pay attention to smaller taxes that eat away at our living wages. Whether it be hotel taxes, parking garage taxes, fast food restaurant service taxes, airport surcharge taxes or gasoline taxes, we are continuously getting nickel and dimed by these minimal charges that are getting attached to much of what we do and or use every day. And these taxes never seem to go away.

America will not get slimmer if we tax the Great Pumpkin holiday but our wallets will continue to get slimmer if we are not careful about paying attention to the indirect taxation that is taking place all around us.

2009-10-26T19:24:00.000-04:00

I had to laugh this morning when Joe Scarborough and Chuck Todd were contemplating how the President’s 2012 re-election campaign bumper stickers that might carry the slogan “Obama…addicted to compromise”. It was particularly amusing to me because I have felt that his desire and need to find middle ground on various issues has been and would continue to be challenged or “compromised” by the liberal wing of the Democratic Party from where he drew his original and most hearty support when he first ran for office.

But as the crew on Morning Joe pointed out this morning, the President is maintaining the position that he doesn’t want to serve up a health care plan that alienates moderate Republicans including Senator Olympia Snowe from Maine. http://www.msnbc.msn.com/id/3036789/vp/33478422#33478422

But as they also suggested, this position was not going to fly with Senator Majority Leader Harry Reid, who is currently in his own battle to regain the support of the liberal wing of his party as well as his caucus in Nevada.

So Harry Reid made his own announcement this afternoon about the health care program he was going to be willing to support. http://www.msnbc.msn.com/id/21134540/vp/33484188#33483595 The plan, as he described would effectively merge the Senate Help and Senate Finance bills and would include an “opt out” public option that would effectively allow States to make their own decisions as to whether or not they wanted to offer a public health care option to their citizens. Funnily enough, the Senator would not answer any questions following his statement regarding why the bill couldn’t have an “opt in” feature as opposed to an “opt out” feature. Could it be because of the costs associated with implementing the program? He also side stepped questions around whether he felt he could get the 60 votes necessary to pass his bill if it included the public option. But he did acknowledge that Senator Snowe would not support any bill that included a public option.

And so the battle lines are drawn. I just wonder how many elected officials will actually read the bill and all of its accompanying paper work prior to casting their votes.

2009-10-26T10:43:00.001-04:00

Finland wins....Finland wins!

According to the latest Prosperity Index as compiled by the Legatum Institute, Finland is the world’s most prosperous nation. http://www.prosperity.com/rankings.aspx

Compiled on an annual basis, this index promotes itself as the world’s only assessment of wealth and well being. http://www.prosperity.com/report.aspx The index measures and ranks 104 different countries in 9 different categories including economic fundamentals, social capital, education and entrepreneurship.

Other countries in the top 10 include the rest of Scandinavia and our very own USA.

The bottom 10 include such favorite destinations as Sudan, Yemen, Algeria and Pakistan.

2009-10-22T13:04:00.000-04:00

Only in America can you run a hedge fund that that loses $4.6 Billion in less than 4 months and causes a financial collapse that requires a government bailout ( http://en.wikipedia.org/wiki/Long-Term_Capital_Management ), then launch another fund vehicle that proceeds to lose 44% of its value during the current financial crisis ( http://cachef.ft.com/cms/s/0/21a6bbee-6c00-11de-9320-00144feabdc0.html ) and three months later still be able to go out and raise yet more funds on the basis of your great investment strategy.

But reports this morning say "John Meriwether, the hedge fund manager and arbitrageur behind Long-Term Capital Management, is in the process of setting up his third fund". http://www.ft.com/cms/s/0/331bae80-be93-11de-b4ab-00144feab49a.html?nclick_check=1
According to the Financial Times, The fund is expected use the same strategy as both LTCM and JWM to make money: so-called relative value arbitrage, a quantitative investment strategy Mr Meriwether pioneered when he led the hugely successful bond arbitrage group at Salomon Brothers in the 1980s. The strategy, described by the Nobel Prize-winning economist Myron Scholes as being akin to a giant vacuum cleaner “sucking up nickels from all over the world”, can be highly successful in periods following market dislocations. Relative value trades profit by betting on unusual pricing relationships between securities, anticipating a return to a historically modeled “normal” state between them.

So I wonder, will the desire to invest in his third fund be rooted in the success of the first two funds? Is this something whereby you can get involved for a year or two and then punt before it blows up? I am quite certain that this next fund will be managed by a team of financial/trading geniuses. But that does not impress me nearly as much as the marketing acumen that is required to be able to sell this story for yet a third time. Again, as I said earlier, only in America.

2009-10-22T11:08:00.002-04:00

Owen Van Natta, the CEO of MySpace, is finally whistling the tune I have been singing for well over a year. According to the FT's Matthew Garrahan, "the new chief executive of MySpace has told the Financial Times that the company is no longer interested in competing with Facebook, in effect conceding defeat in the race to become the largest online social network." http://www.ft.com/cms/s/0/79054d72-be73-11de-b4ab-00144feab49a.html

The former Facebook executive, who replaced Chris DeWolfe as chief executive of MySpace six months ago, said the company instead aimed to become an online hub for music and entertainment. Garrahan goes on to say that “Mr Van Natta wants to capitalise on MySpace’s status as a leading online music destination and used a presentation at the Web 2.0 conference in San Francisco on Wednesday to unveil new features that enhance its music credentials.”

The company has struck a deal with Apple’s iTunes store to allow its users to buy tracks without having to leave the MySpace site. It has integrated iLike, a music application company, and launched Dashboard, an interactive tool for bands and musicians, as well as compiling the largest catalogue of music videos on the web.

But here’s the thing. Outside of any announcements regarding new features on MySpace, none of Mr. Van Natta’s announcements pertaining to strategy are earth shattering or even really news. I have long believed that MySpace served a completely different purpose from Facebook and I have for a long time viewed the site as a reference source for music information rather than a social network. All the bands and DJs that flocked to the site over the years made it that way. Sometimes you are what your users say you are and in this case, what Newscorp owns is a music hub. It is a place for musicians to post and fans to read/listen/bond. And thankfully for them, this is very different from what Facebook does.

Yes, Facebook offers fan pages and abilities to connect to music downloads but Facebook is a much more personal site. Facebook is about “me”. Myspace is about "them", the bands and music that I follow. It’s about “what’s happening with the band” and not about self promotion. And given how both Facebook and Twitter seem to have worked their way from personal life into professional life, having Myspace operate on a totally different plane might not be such a bad thing.

2009-10-22T09:59:00.000-04:00

And so the battle of the New Jersey Turnpike is ostensibly one Yankee win away. This is because the Phillies showed MLB fans across America that the baseball gods really didn't want a "Joe Torre versus the Evil Empire" World Series. Instead, last night, ( http://www.cbssports.com/mlb/gamecenter/recap/MLB_20091021_LA@PHI/rss ) Charlie Manuel and his American League looking lineup put a smashing hurt on LA's National League team much in the same way the Yankees destroyed LA's American League team the night before.

The Yankees should dispose of the Halos later tonight and then we will have to painfully wait till Wednesday for game one of the WS. But once it starts, I am sure it will not disappoint and perhaps, this time around, Girardi will allow Rivera to hit.

2009-10-21T15:30:00.001-04:00

Does America need its own version of the BBC? Leonard Downie of the Washington Post surmises that the answer is "Yes" in this morning's Financial Times. http://www.ft.com/cms/s/0/a0184d8a-bda9-11de-9f6a-00144feab49a.html

Downie goes so far as to draw comparison of the importance of and need for public funding for journalism with our need for government supported education and healthcare.

"American society must now take responsibility for supporting news reporting, especially local news – as it has, at much greater cost, for services such as education and healthcare."

Downie also believes that public support of such journalism could come from new taxes on "American telecom users, broadcast licensees or internet service providers".

The logic behind this thinking rests on the notion that “independent, credible news reporting” is being lost as the newspaper industry is dying, There is a belief that the new digital channels of communication that are being staffed by former newspaper reporters, bloggers and freelance journalists are not providing the “News reporting, especially the sort that holds accountable those with power and influence throughout the nation, (that had previously) been a vital part of American democratic life”

But I am not certain that I fully subscribe to Downie’s thinking. I find it hard to fathom that any news source funded by our government would not feel pressure to report on events in a manner that is more often than not friendly to any administration’s interests at large. And while I realize that the BBC does a phenomenal job of reporting on the world while being a state funded institution, it is not clear to me that we in this country (in today’s day and age) could create such an autonomous news gathering organization. It is also not clear to me that the quality of our news gathering and reporting would necessarily improve if we started taxing people more for supposed better information.

The digital age caught the old world media off guard in spite of all the canaries in the coal mine. And old world publishers continue to get it wrong as they do everything under the sun to devalue the worth of their content.

But what this country doesn’t need is a state owned news gathering organization to cure our journalism woes. It just strikes me as another way of maintaining/supporting the status quo. What we really need are leaders at the top of our news gathering organizations (as opposed to management consultants and investment bankers) that understand the digital landscape, understand the value of unique content and get how people use the internet for information and entertainment purposes. It will happen. But like everything else, it just takes a little longer than we would prefer.

2009-10-13T12:43:00.000-04:00

Gideon Rachman suggests in this morning's FT ( http://www.ft.com/cms/s/0/940c78c8-b763-11de-9812-00144feab49a.html ) that President Obama must land a "punch" with some authority and score himself a "knockout" victory with one of his initiatives if he is to stave off the criticism being hurled at him from both the left and the right that he is no better than "Obama the false Messiah; Obama, the president who apologises for America; Obama, the man who is more loved abroad than at home; Obama, the man who never gets anything done; Obama the hesitant; Obama the weak."

But I feel like this will be easier said than done for the current President. For a variety of reasons, I actually think Rachman’s reference to Bill Clinton and the early years of his administration is noteworthy because I don’t really believe the two Presidents are ideologically or philosophically completely aligned. While both men are democrats that publically fight for the common man and support causes embraced by the left, Bill Clinton seemed much more moderate in both his tone and his approach while in office. Sure he had ambitions and beliefs but he also seemed eager to make things happen and he seemed to understand the role that compromise plays in Washington. And I think his willingness to pitch and play from the middle at the very onset helped him get through the early let downs of his administration.

President Obama, on the other hand, did not come to office playing from the middle. He came pitching from the far left and he could get away with it because the country was sick and tired of the previous administration and folks were willing to pull the lever for anything but the GOP. But as I have previously written, this did not mean that the country as a whole really wanted to embrace the politics of the “very” left. His election wasn’t the mandate that many advocates like to claim. And now he is faced with the fact that the world as viewed from the Oval office is a very different place from the world that was viewed from some campaign head quarters in Chicago.

The SNL skit poking fun at the lack of accomplishments by the President ( http://www.youtube.com/watch?v=RYnMYZDsrJM ) is hilarious, no doubt, but it also points directly to how complicated these issues challenging the President really are. It’s easy enough to say “shut down Guantanamo Bay”. It’s way more difficult to figure out what to do with all the “unwanted prisoners” that are locked up there. It’s easy to say “we’re going to pull out of Iraq within 180 days or whatever”. It’s altogether a completely different thing when you are briefed on why everything is the way it is and you come to realize the various outcomes previously not thought of will now occur with every troop withdrawal.

If President Obama were coming from the middle, I feel the odds for a major win would be much better but because he has run on the positions he has run on and because he is trying to affect change in ways that the country as a whole may not prepared to stomach, it may prove tough for him to get the real support he needs on key issues without completely offending either his base or the middle. And chances are he needs the middle more than he needs his base.

2009-10-09T11:07:00.000-04:00

Never before have I heard and read so many opinions around the announcement of a Nobel Peace Prize recipient. http://twurl.nl/8hh4go But this morning's news that President Obama would be receiving the award in Oslo (did you know the Peace Prize is the only Nobel Award not handed out in Stockholm http://twurl.nl/enj3n7 ?) definitely has the world a buzzing.

And the scuttlebutt exists for good reason. The timing of the announcement happens to coincide with cabinet level discussions around how many additional troops need to be sent to Afghanistan to help quell the recent surge in violence. http://twurl.nl/reovg3 Detractors also point to the fact that the President has yet to really accomplish anything and that he is still way too early into his first term in office to be awarded such a huge accolade. http://twurl.nl/1ib0r2 But I think I agree with Lech Lech Walesa, who won the prize in 1983, and questioned whether Obama deserved it now. "This is probably an encouragement for him to act. Let's see if he perseveres. Let's give him time to act,"

My guess is that the committee may have felt that bestowing this award upon the President now would give him additional clout necessary to advance certain peaceful initiatives. And if one believes that the value of this award is really about recognizing and encouraging peace amongst people, then one could certainly argue that proactive recognition in hopes of advancing a cause makes good sense. It’s as if the Nobel committee was actively getting involved in the global peace plan as well. I get why traditionalists may not like this announcement, but I also get why it makes good sense.

2009-10-07T09:49:00.000-04:00

And this, my friends, is a classic example of why our legal system is such a mess and why class action suits are really a total scam in so many ways. So what am I ranting about?

Yesterday, a US judge approved a settlement that was agreed upon between certain Wall Street investment banks and plaintiff lawyers representing some 7 million investors who "lost" money in the "dotcom" bubble. http://www.ft.com/cms/s/0/43c3f156-b2cd-11de-b7d2-00144feab49a.html

What does the settlement provide? Well it calls for $340 million to be divided up between the 7 million investors or less than $50 on average per investor. Additionally the banks do not have to admit any wrong doing. But it gets better. The plaintiffs' attorneys are collecting $217 million dollars for their efforts and I promise you there weren't 7 million of them. Frankly, this is disgusting on so many levels but I guess there is nothing one can do.

2009-10-07T09:28:00.000-04:00

In an effort to combat our government's continued efforts to tax anything and everything that they can substantiate taxing, Coke has decided to partner with the American Academy of Family Physicians and commit funds to a new "consumer alliance venture" that would focus on educating folks on the perils of eating and drinking "junk".

http://www.ft.com/cms/s/0/6d7bd566-b2d9-11de-b7d2-00144feab49a.html

While I certainly applaud Coca-cola for helping us fight off the long reach of certain publicly elected income redistributors, I find this action reminds a little of certain tobacco company efforts aimed at helping the public understand the dangers of smoking. I mean come on already. Coke is carbonated sugar water that tastes great. It's not supposed to be part of a healthy diet. It's supposed to be consumed for pleasure.

2009-10-05T20:32:00.000-04:00

Clive Crook’s piece in this morning’s FT on how anger and hatred are negatively impacting any political discussions both inside and outside the beltway is both pointed and spot on the money. http://www.ft.com/cms/s/0/2ca5e1e4-b112-11de-b06b-00144feabdc0.html?nclick_check=1

In his piece he echoes a sentiment felt by many Americans. That is that politics has become so mean spirited and partisan that folks in the middle seem to no longer have a voice because compromise has been completely tossed out the window in favor of a winner take all strategy.

“Increasingly, rage is the dominant mood of US politics – but the feeling is not confined to the far right. Committed partisans on both sides question their opponents’ legitimacy. It is one thing for an adversary to be mistaken, quite another to be a liar or traitor. You do not argue with an opponent like that, or seek an accommodation. You silence him, you shout him down, you impeach.”

Crook goes on to explain why give and take leads to better policy making and how it was the basis for much of America’s policy making. But then he poses a less than appealing view of where things could be heading.

But one wonders whether even more may be at stake than the capacity to form sound and steady policy. So inflamed are the US political classes that a deeper breakdown begins to be imaginable. Historically, the US has both accommodated and benefited from a remarkable degree of cultural pluralism – with sufficient civic tolerance, mutual (if sometimes grudging) respect and unashamed patriotism to bind the whole together. Now, more than ever, the instinct of politicians and their energised supporters is to divide. Mr Obama seemed to promise a corrective, but that hope is fading. Old and new media, obsessed with gladiatorial politics, offer no remedy. They either take sides or act as fight promoters; in any event they worsen the polarisation and leave the centre unserved. The internet’s echo chambers stir brainless anger and push the poles still further apart.

In the coming years, the US has enormous challenges to face – not least, like Britain before it, the trauma of relative economic decline. Right now, its polity looks unfit to cope. “A house divided against itself”, said Abraham Lincoln, “cannot stand.”

In other words Crook rightly fears that unless there is some serious soul searching done by the power brokers on the left and the right, America the beautiful may end up feeling more like America the Ugly.

2009-10-05T19:56:00.000-04:00

The New York Times columnist, Stephanie Clifford announced in her Media Decoder column this morning that “Condé Nast will close Gourmet magazine, a magazine of almost biblical status in the food world.” http://mediadecoder.blogs.nytimes.com/2009/10/05/conde-nast-to-close-gourmet-magazine/ In publication since January 1941, Gourmet was “long considered the dean of culinary publishing.” Clifford points to “a three-month study by McKinsey & Company which conducted analysis of Condé Nast’s costs ” as the basis for the shut down

“Condé Nast (of course) blamed the tough economic climate Monday when it told its staff it was closing the stalwart of the food media world.” http://www.msnbc.msn.com/id/33177867/ns/entertainment-arts_books_more/ But I also believe that the print publishers can shoulder a small piece of the blame. Ever since the publishing world first started to feel the impact of this perfect storm on their advertising business, they have failed to deal honestly with their subscribers and potential subscribers. In fact they have been extremely deceptive in their conduct.

I have personally had several subscriptions cancel on me shortly after renewals only to be replaced by magazines of zero interest to me but nonetheless owned by the same publisher. In other words, publishers continued to go after people’s cash even though they knew that there was a good chance they weren’t going to make it. In other industries, this might be viewed as little “ponzi” like. Well after getting duped a few times, I became gun shy and had little interest in subscribing to anything because I felt that at any given point in time, the publishers would happily take cash today to pay down critical payables before pulling the plug. And I’m sure I am not the only that felt that way. This is not to suggest that print was not coming to an end anyway. But I am comfortable in suggesting that print’s demise occurred faster because people didn’t trust that they would get what they paid for…and they were right in feeling that way.

2009-10-01T14:17:00.000-04:00

In case you missed it, China celebrated its 60th anniversary today and they spared no resource to show the world how far they have come since the birth of their modern republic.

I caught some great footage of the military show on Euronews this morning. You can catch it here. http://www.euronews.net/2009/10/01/china-puts-on-a-show-of-military-might/

What was particularly comical/typical was the fact that ordinary citizens were prevented from witnessing the parade as military personnel kept pedestrian traffic away from the event. Of course we must be careful about throwing stones as it seems that both of our parties seem to do a pretty good job of screening and cleaning before major televised events and public appearances. Still the fact that the Chinese can put on such a display for the world while keeping their own at bay is pretty impressive/scary.

2009-10-01T13:32:00.000-04:00

The Penske Automotive Group was supposed to close on a deal today to purchase the Saturn division from GM but instead the deal blew up because Penske "was ultimately unable to conclude a follow-up deal with another manufacturer" according to a report in this morning's FT. http://www.ft.com/cms/s/0/64726956-ae17-11de-87e7-00144feabdc0.html

This raises a question in my mind about the brand. Supposedly the cars were extremely reliable and good value. Likewise both customers and employees were supposedly strong advocates of the company and its products. Yet their sales suffered perhaps more than other divisions/brands within the GM family. So should one lay blame with the messenger in the case of Saturn’s demise? In other words, were the folks responsible for cultivating the brand image and getting the message out to the public guilty of failing to properly communicate what Saturn represented or was it simply a case of wrong product for the wrong time.

I wonder about how wrong the product could have been given that Saturn cars were generally smaller and less expensive which I would think would be perfect for this climate. That makes me think that there may have been an issue around the public perception of quality and therein lays a problem with the message/messenger (unless the quality really wasn’t there).

2009-09-28T10:39:00.000-04:00

Did the Detroit Lions get a hand out from government as well? I mean how do you explain the fact that they now hold a one game winning streak?

Honestly the Lions win over the Redskins yesterday did not receive much air on New York talk radio either last night or this morning because of the Yankees sweep of the Sawks and the continued winning ways of the New York Football Giants and the J E T S Jets Jets Jets.

Oh, and also going against the Lions was the fact that Brett Favre threw a bomb strike with 2 seconds left against the Niners to rescue victory from the jaws of defeat and Peyton Manning threw for what seemed like 5,000 yards in last night’s dismantling of the Cardinals.

But first round draft pick and rookie QB Matthew Stafford delivered a much needed win for a franchise that had not seen a W since December 23rd, 2007. http://www.cbssports.com/nfl/gamecenter/recap/NFL_20090927_WAS@DET Too bad for the franchise and Lion fan(s) that the game was blocked out on local television. But who knows, maybe the win will spark interest in buying some tickets.

2009-09-28T10:04:00.000-04:00

Looks like George Gillet Jr. and Tom Hicks may finally get out of their ownership stake in Liverpool. The Wall Street Journal is reporting this morning that Saudi Prince Faisal Bin Fahad Al Saud is looking to pay upwards of $560M for a 50% ownership stake in the Reds.

Middle Eastern investors have rather fancied English football clubs as of late. According to the Journal, "Recent deals have included the £210 million purchase in September 2008 of most of the Manchester City Football Club by Abu Dhabi royal Sheik Mansour bin Zayed Al Nahyan. The injection of Arab cash helped the club pay £120 million to bolster the squad with new players over the summer. Abu Dhabi billionaire Suleiman Fahim, who initially brokered the takeover of Manchester City, bought the Portsmouth Football Club last month. Mr. Fahim said in July the deal would cost him about £80 million."

2009-09-25T10:56:00.000-04:00

I am a huge fan of Twitter. I might even be occasionally guilty of overtweeting. The truth is I just love the microblogging service and how it allows me to dump my thoughts into the public arena as well as onto my facebook page with so little effort. It's fun, it's easy and everybody's doing it. But is Twitter really worth a billion dollars?

Several major private equity investors including Insight Venture Partners, T.Rowe Price and Spark Capital seem to think so and have reportedly agreed to commit $100M in new funding to a company that has yet to earn any real revenues and really wasn't even in immediate need of additional cash according to a report in this morning's Financial Times. http://www.ft.com/cms/s/0/97945bbe-a96c-11de-9b7f-00144feabdc0.html

According to Business Week, "The bet, quite simply, is that Twitter can become enormous—a rich new source of business intelligence, a channel to reach targeted consumers around the world, and a hothouse for marketing and news startups." http://www.businessweek.com/technology/content/sep2009/tc20090924_956402.htm?chan=technology_technology+index+page_top+stories "Even though Twitter has only one-tenth the population of Facebook, Twitter Search is becoming a vital source for a minute-to-minute read on what people are thinking about, and how they're responding to products and messages. As Twitter expands, it could provide increasingly detailed analytics about what different groups of people are saying and doing, industry by industry. "There's a perception that Twitter will have a grip on the real-time Web, which connects customers to brands," says Eric Porres, co-founding partner at New York's Underscore Marketing.”

Still, even if Twitter is fundamentally shifting how the world thinks about real time publishing, I am a little loathe to pile onto the hype bandwagon and say that I agree with the valuation. Obviously at the end of the day, the valuation lays where the last seller sold and last buyer bought. But to paraphrase from an artist formerly and currently known as Prince, today it seems as though VC’s are partying like its 1999.

2009-09-24T12:12:00.001-04:00

I usually don't pay much attention when somebody says they are retiring because they almost always come out of retirement as soon as they get bored or start missing the adulation that comes with being a star. But in the case of Lily Allen, I could really see her kissing the record industry good-bye. http://www.clashmusic.com/news/lily-allen-quitting-music It bummed me out to read about her wanting to retire from making music as her songs and recordings have only gotten better with each effort. Anyway, here's to hoping it's just like every other retirement announcement we hear about.

2009-09-04T12:06:00.000-04:00

I have to chuckle at the New York Times and their ability to find the post a silver lining in headline related to a worse than expected unemployment figure. http://www.nytimes.com/2009/09/05/business/economy/05jobs.html?partner=rss&emc=rss

If you just read the headline which read “Unemployment Hits 9.7%, but Job Loss Slows in August” you might think that we were nearing a bottoming of things and that job growth was set to make a comeback. After all, employment figures (or unemployment figures) are lagging indicators. But I am convinced that that we are still in the throes of a two tiered recovery. And until credit frees up for consumers and small businesses, all of this talk about recovery and growth is a little premature for me.

The fact that the government is continuing to find ways to spend money that we don’t have should concern everybody (check out the subsidies they are offering out to backers of wind farms here… http://online.wsj.com/article/SB125167463443070949.html?mod=googlenews_wsj) and we definitely need to be careful with what we wish for in the healthcare debate. The Facebook postings that declare “No one should die because they cannot afford health care, and no one should go broke because they get sick,” tug effectively on our hearts and certainly the premise seems “obvious” on the face of it. But like with everything else today, nothing is purely black and white except for the fact that officials that dole out today at the expense of tomorrow are more likely to get reelected than those who look to take away benefits in the name of balancing budgets.

And speaking of spending that which we don’t have, I was amused the other morning when I listened to a report on NPR that discussed the comeback of the “Layaway”. http://www.npr.org/templates/story/story.php?storyId=112407220 Here’s the short version. Stores that are suffering because of the fact that consumers have maxed out their credit cards and or have had their credit lines cut by the very institutions that are getting money basically for free from the government are turning to an old fashioned way of getting people back into the aisles. Stores such as Kmart and Marshalls are offering customers a layaway program that effectively gives people with limited resources an opportunity to fill up their shopping carts and then leave their “purchases” behind while they make periodic installments on the goods up until they have been completely paid for. “No credit, no problem” for the consumer except of course if they fail to keep up with payments in which case they risk losing everything including all the money they had already paid towards their purchases.

2009-09-04T10:55:00.000-04:00

I am completely in awe as to how a forensic study of this massive fire on the outskirts of LA can lead officials to ascertain that the blaze was intentionally set.

According to the AP, (http://www.npr.org/templates/story/story.php?storyId=112541113)...

Investigators launched a homicide investigation Thursday into the wildfire north of Los Angeles after determining that the gigantic blaze — which has killed two firefighters, scorched 226 square miles and destroyed dozens of homes — was set intentionally. "We believe that this was caused by someone intending to set a fire," sheriff's spokesman Steve Whitmore said at an afternoon briefing. Officials said forensic evidence at the fire's point of origin revealed that the wildfire — among the largest in Southern California's history — was an act of arson. Whitmore declined to elaborate on the evidence due to the ongoing investigation.

2009-09-04T09:54:00.000-04:00

The I-dude is back again...on TV that is. According to the Post, Don Imus is set to return to the airwaves this October 5th courtesy of Murdoch's Fox Business Network. http://www.nypost.com/seven/09042009/business/imus_debut_on_fox_set_for_october_187995.htm

Will Imus in the Morning have enough lure to draw viewers away from Morning Joe or Squawk Box? I think it will hinge on whether or not he freshens up his programming big time. The few times that I have been listening to him on 77 WABC in the morning, I have found myself quickly switching the dial because his overemphasis on all things country music related bores me and I think the program tries too hard to fall in line with the PC police while using writers who fail to be funny. But hopefully this deal will energize Imus and he will be motivated to find his A-game again.

2009-09-03T11:38:00.000-04:00

As I walked past Citi Field yesterday en route to the Billy Jean King National Tennis Center to catch some US Open action, a friend of mine asked me if I had been to see the Mets yet this year. Aghast at such a question, I let my friend know that I have been boycotting this franchise for 2 years now and that I won’t spend a dime on anything Mets related until they are under new ownership.

Funnily enough, I also read in the morning about how a bankruptcy judge had approved the sale of 95% of the Chicago Cubs to Tom Ricketts for the amount of $845 million. http://www.chicagotribune.com/news/local/wire/chi-ap-us-tribunebankruptcy,0,6315051.story

This of course left me pondering a bunch of wishful “what ifs”. For instance, what if the comments made by Erin Arvedlund, author of a new book on Bernie Madoff, to Market Watch’s Jon Friedman were true? According to NBCNewYork.com’s Josh Alper, Arvedlund thinks the only question regarding the Wilpons and the Mets pertains to when the Mets might get sold. http://www.nbcnewyork.com/news/local-beat/Author-of-Madoff-Book-Says-Wilpons-Will-Sell-Mets-55802767.html

"You can quote me," Arvedlund said of a possible sale of the Mets. "It's a matter of when. It could be as soon as next year." Arvedlund estimates the Wilpon family may have lost as much as $700 million on Madoff-related investments that went awry. ... "As I understood it, they knew each other from way back when," Arvedlund told Friedman. "Wilpon was one of the big real-estate magnates who was a Madoff investor."

Of course when I first heard of this quote, the Mets were quick to issue word that the Wilpons were in no way shape or form looking to unload the franchise. On CNBC, their denial of needing to sell the team due to financial hardship was breaking news that flashed across the bottom of the television screen. That was bad news/good news to me. It was bad news because I was so hoping that the early reports were true and that I would finally be getting my beloved team back. But then after further pondering I decided that such news was probably good news and that their immediate denials of such reports meant that there was probably some fire behind that smoke.

Afterall, as Alper posted in his coverage of the hoopla, “ it's been a perfect storm for the Wilpons. Their main business, real estate, has taken a hit from the economy. That makes it harder to placate their own investors and ride out a rough patch, even if it is less of a loss than Arvedlund speculates. On top of that, the Mets might not fetch as much in a bad climate despite Forbes valuing the franchise at $912 million.”

I can only hope and dream that an investment bank has been hired to explore such a transaction because it is the only way this franchise can be saved. I actually find it hard to believe that Mets, even with their SNY network and new ball park could be worth as much as the Cubs. So much good will has been destroyed under the current regime and with little in the minor leagues to help support the little that exists in the major leagues, it is going to be a long time before fans of the Amazin’s ever have anything really legitimate to root for.

But in the spirit of Tug McGraw and the Mets of old, “Ya gotta believe”. Maybe by spring training we will see a new look Mets and it won’t be just because of some silly new baseball jersey color scheme.

2009-09-02T10:38:00.000-04:00

Disney's purchase of Marvel Entertainment for $4 billion might seem like a lot given the price of Marvel's stock preannouncement and the fact that we have had such a run up in the stock market during 2009. http://online.wsj.com/article/SB125172509349072393.html

But this deal makes all the sense in the world to me. One only needs to take into consideration the amount of money that comic book movies make and then consider the fact that Disney will be able to retain a larger percentage of the royalties on such films once they begin making the movies and distributing them. The other big get for Disney is that they will now be able to go after advertising dollars earmarked for young males. Historically, most of Disney’s clout has been with reaching females. This is effectively helping them double their reach.

2009-08-19T09:30:00.002-04:00

William McGurn had a funny piece in yesterday's WSJ and it is certainly worth reading and mentioning. http://twurl.nl/o5tq6f

In it, McGurn mentions how Dems and Bush haters alike used to think it was pretty funny when W used to refer to certain countries as being part of the "Axis of Evil". In a similar vein, Dems, limo libs and urban intellectuals alike used to snicker at Reagan when he spoke of the "Evil Russian Empire". But now the Left has found reason to use the "Evil" moniker.

The only problem is that the enemies Harry Reid refers to as “evil” are simply Americans that disagree with his position on healthcare reform. Not that the Pravda on the Hudson or Keith Olbermann would pick up on this. After all, he is part of their own.

2009-08-14T11:25:00.002-04:00

As I most recently said regarding Britney Spears and her 8 nominations for MTV's music awards, America loves the comeback and today we have news of another comeback in the making courtesy of onetime dog criminal, Michael Vick and his new employer, the Philadelphia Eagles. http://www.cbssports.com/nfl/story/12062398/rss

Vick will be now be a bird of a different feather in more ways than one as he is given a second chance at the NFL and a shot at personal redemption. But will fans and teammates embrace his return. Goli and Greenberg mentioned on Mike & Mike this morning that he will be called on to be more than a QB and that the Eagles will try and utilize his versatility in a few different ways.

There will be a lot of folks that express their discontent with the Cheese Steaks for the signing. There will be people that use this incident to prove their argument that the NFL is a league of thugs. And I am not certain that I would be inclined to sign him if I were a GM given the baggage and my own personal feelings about what transpired. But here is the thing to keep in mind. Vick served his time. If that time was not enough then he shouldn't have been left out of jail. Who are we to say that he can't find work. It wasn't like he was trying to get a job on Wall Street after being found guilty of insider trading. His crime had nothing to do with the NFL itself.

The other thing is that he can probably still play football. He may make the Eagles a better team and if the Eagles go on to finally get past the NFC Championship game and actually win a Superbowl, there will be a huge amount of credit thrown upon this preseason signing.
On many levels, I think this makes perfect sense for Philadelphia. McNabb was recently awarded a nice extension and he is the QB of the team without question. That means there is less pressure on McNabb to have to prove himself as a QB again. He can focus on being a great all around football player. Think about Vick as a slot back or wide out who will have to keep all dbacks honest all game because of his arm. Philadelphia could indeed be a very scary offensive team this year.

2009-08-13T11:49:00.002-04:00

I imagine that the Secretary of State is more than ready to return from her trip to Africa. It seems as though every time I hear a sound bite from the trip, there is some controversy surrounding the quip.

Take for instance her visit to Nigeria yesterday. Turns out that in an effort to try and relate to the voters in that country, Hillary decided to draw comparisons between their corrupt elections and what took place in the United States back in the 2000 elections when George W. Bush won the White House after a supposed "flawed result" in the state of Florida. http://abcnews.go.com/Politics/story?id=8315671&page=1

According to ABC News, she told a gathering at a town hall meeting that, "Our democracy is still evolving. You know we've had all kinds of problems in some of our past elections as you might remember. In 2000, our presidential election came down to one state where the brother of the man running for president was the governor of the state, so we have our problems, too."

I had to laugh at Wonkette's take on that gaffe. http://wonkette.com/410478/clinton-competing-with-biden-for-gaffiest-obama-official Acknowledging that there might be some truth in claiming issue with the 2000 election it was none the less funny to hear such a comment "coming out of the mouth of the wife of a former president who wanted to be president herself but settled for secretary of state after serving as a senator of a state she barely lived in."

Equally amusing was the exchange that took place during a town hall meeting in the Republic of Congo. http://abcnews.go.com/GMA/Politics/story?id=8297962&page=1 You have to watch the video of the exchange where the former First Lady gets her feathers ruffled when she thinks that a student is asking her how her husband feels about a certain issue. She may have been tired and things may have been misconstrued or lost in translation but Secretary Clinton was clearly feeling prickly

ABC News' Kirit Radia observed that the http://blogs.abcnews.com/politicalpunch/2009/08/lost-in-translation-clinton-says-she-not-bill-is-the-secretary-of-state.html "deference to her husband clearly touched a nerve...Just a week ago the former President stole his wife's thunder when he appeared in North Korea to rescue two American journalists detained there. His trip came just as Secretary Clinton embarked on a swing through Africa she hoped would shine light on the plight of the continent."

2009-08-13T10:15:00.002-04:00

The man sometimes referred to in an unflattering manner as "Lord Vader" is busy at work on his new memoir and word has it that he wants to set the record straight on a few issues, particularly those where he was at complete odds with the former President under which he served.

In this morning's Washington Post, Barton Gellman reports on Cheney's public airing of his "frustration" with "W" and the resentment he feels for certain actions that were taken against close friends of the former administration including Scooter Libby and Donald Rumsfeld. http://twurl.nl/zo1wft

According to Gellman: The former vice president remains convinced of mortal dangers that few other leaders, in his view, face squarely. That fixed belief does much to explain the conduct that so many critics find baffling. He gives no weight, close associates said, to his low approval ratings, to the tradition of statesmanlike White House exits or to the grumbling of Republicans about his effect on the party brand.

John P. Hannah, Cheney's second-term national security adviser, said the former vice president is driven, now as before, by the nightmare of a hostile state acquiring nuclear weapons and passing them to terrorists. Aaron Friedberg, another of Cheney's foreign policy advisers, said Cheney believes "that many people find it very difficult to hold that idea in their head, really, and conjure with it, and see what it implies."

What is new, Hannah said, is Cheney's readiness to acknowledge "doubts about the main channels of American policy during the last few years," a period encompassing most of Bush's second term. "These are not small issues," Hannah said. "They cut to the very core of who Cheney is," and "he really feels he has an obligation" to save the country from danger.

His dour view of the world, which I am sure he will wax poetically on in his memoir, will not be new news to most and it is unlikely to change the minds of those who felt his clandestine actions were wrong if not illegal. But it is interesting that the man who built his career on loyalty and secrecy might now opt to go “people magazine” on us. We will have to wait and see but either way I am certain the book will have some tasty insight into what went down during his eight years as America’s second in command.

2009-08-12T11:19:00.002-04:00

As Mr. Met continues praying for regime change following last night's typical loss, here is some further fodder for why a complete over hall of the Queens based ball club starting from the top is in order. http://www.nypost.com/seven/08112009/sports/mets/biggest_but_ever_184053.htm

According to the New York Post staff, the New York Metropolitans are "on their way to becoming the biggest financial bust in baseball history."

Citing some research from Monday’s WSJ (http://online.wsj.com/article/SB10001424052970204251404574342662481820106.html) the post points out that injuries aside, the Wilpons and Minaya gave Oliver Perez a $36 million, three-year contract this offseason, and he pitches tomorrow with a 2-3 record and 6.38 ERA. Additionally, Francisco Rodriguez ($9.1 million) has a career-high 3.24 ERA, has blown five saves, and has walked more and struck out less per inning than he ever has. And $5 million starting catcher Brian Schneider (!) is batting .197.

Should the Mets finish out their season at their current pace, they would have a .464 winning percentage giving the franchise two of the three worst spending teams of all time. The 2003 Mets, with 66 wins and a $117 million payroll, cost $1.77 million per win. The 1992 Mets, so much a symbol of bad spending they inspired a book entitled "The Worst Team Money Can Buy," won 72 games with a then-record payroll of $45 million (a meager $625,000 per win). Adjusted for inflation, that's approximately $950,000.

2009-08-12T10:17:00.002-04:00

The car pictured here is the Chevy Volt. It is GM's green play and according to their CEO, Fritz Henderson, it's success is essential to their efforts to burnish the carmaker’s image and win back customers since its emergence from a court-supervised restructuring early last month. http://www.ft.com/cms/s/0/bcd92bfc-867b-11de-9e8e-00144feabdc0.html

According to the FT's Bernard Simon, the battery powered hybird will boast a 230mpg rating, retail for around $40,000.00 and be available for purchase in late 2010. On the the surface, this caught my attention and GM hasn't caught my attention for anything positive in forever.

But reading further about this model and GM's going forward plans, I am still left somewhat perplexed by their efforts. For instance, why, after slashing so many brands and models, would GM have plans to launch 25 new models by 2011? Can the market really absorb in any meaningful manner so many new cars from this troubled automaker? Also it turns out that Nissan and China will also be turning out cars that have even better mileage and will cost less. http://twurl.nl/2yltyo

So if Americans were previously unwilling to pay less for "Made in America" versus the import, what makes GM think they will pay more for less on a going forward basis? Things such as pricing and consumer preferences can all change over the next year but in this new global community that we operate in, it seems unlikely to me that we will see a substantive return to GM fandom unless they offer something product wise that is a must have and that is substantially superior in both design and cost to what is being offered by Japan's big 3 or Germany's big 3.

2009-08-11T09:53:00.002-04:00

Niall Ferguson brings me down cartoon memory lane as he compares President Obama to Felix the Cat in this morning's FT. http://www.ft.com/cms/s/0/c24385ce-85ef-11de-98de-00144feabdc0.html

Felix the Cat, the wonderful, wonderful cat! Whenever he gets in a fix, he reaches into his bag of tricks!

Why the comparison to Felix? Well Ferguson essentially makes the argument that our President has had some good luck behind him during the first six month of his term. Observant of the notion that luck can be viewed as the edifice of careful table setting, he is not saying that Obama operated without good strategy or intention but he does point to circumstances that aided in positive outcomes. But then Ferguson goes on to ponder how booming deficits and voter discontent with out of control government spending might put an end to Obama's string of good luck.

According to the polls, voters disapprove of Congress by 61 per cent to 31 per cent. What’s more, the two parties would be neck and neck if the midterm elections were held today. The reason is clear. While the stimulus package had a sound macroeconomic rationale, the growing structural imbalance between federal revenue and spending scares the hell out of voters. A recent USA Today/Gallup poll showed that 59 per cent of Americans think government spending is excessive. Mr Obama receives his lowest approval ratings for his handling of the federal budget deficit.

Voters have good reason to disapprove. The deficit this year is likely to be $1,800bn (€1,270bn, £1,090bn). The gross federal debt is just about to bust the $12,100bn limit set by Congress. According to the Congressional Budget Office’s alternative fiscal scenario, public debt could rise from 44 per cent of GDP last year to 87 per cent by 2020. Spending on healthcare alone could rise from 16 to 22 per cent of GDP. The gap between spending and revenue in the latest House healthcare bill would be $65bn in just over a decade. The administration itself has no plan to balance the budget. Its own budget forecasts a trillion-dollar deficit as far ahead as 2019.

Ferguson also goes on to discuss how the economic crisis is of a global nature and the actions taken by other nations can cause things to change rapidly on our end which in turn could easily destabilize any sort of recovery that we may be currently enjoying. And with the mega deficits we are currently inheriting, there is little room for further error. It is here where luck could eventually run out for the President.

2009-08-06T11:18:00.002-04:00

It's no longer a matter of "if" but a matter of "when" Rupert Murdoch starts charging for online content across all his properties. According to the BBC (http://news.bbc.co.uk/2/hi/business/8186701.stm) Murdoch is of the opinion that the advertising market has seen the worst of the current down cycle pass by but he is not convinced that there is enough of an upward trend in ad spend to offset the need to charge consumers for access to content.

Mr. Murdoch told the BBC that "The digital revolution has opened many new and inexpensive methods of distribution, but it has not made content free. Accordingly, we intend to charge for all our news websites. I believe that if we are successful, we will be followed by other media. Quality journalism is not cheap, and an industry that gives away its content is simply cannibalizing its ability to produce good reporting."

In order to stop readers from moving to the huge number of free news websites, Mr Murdoch said News Corp would simply make its content "better and differentiate it from other people". Of course that in and of itself won’t be an easy task or will it be easy to prevent others from posting it elsewhere. Additionally, it is unlikely to change the trend in consumption whereby readers are happy to simply take snippets of news through secondary channels that have been referred to them. In other words, readers are less concerned about detailed information derived from original sources. They want headlines and then opinion from trusted sources. And so in the end, Mr. Murdoch may still ultimately change his mind just like NPR did (http://www.radioworld.com/article/84496) lest he lose real advertising dollars.

2009-08-04T11:28:00.002-04:00

Although this picture looks like a bad attempt at photoshop, former President Bill Clinton did actually fly to Pyongyang to negotiate the release of two journalists who were sentenced to twelve years in North Korean prison camp for “committing hostilities against the Korean nation and illegal entry.” http://www.nytimes.com/2009/08/05/world/asia/05korea.html?hp

But what I found of particular interest was the fact that this was supposedly a private initiative by the former President and yet he met directly with Kim Jong-il. Also interesting was the fact that North Korean television reported that Clinton delivered a verbal message from President Obama to Jong-il yet White House Press Secretary Robert Gibbs denied that such an exchange ever occurred. You have to love the positioning that constantly takes place with high stakes international diplomacy. So which Clinton will get credit for opening talks with “axis of evil” member state?

2009-08-04T11:06:00.002-04:00

Ahh...the more things change the more they stay the same. We all know that in politics it is often more about when you say something rather than what you say. Case in point gets highlighted in this morning's New York Times. http://www.nytimes.com/2009/08/04/us/politics/04immig.html?_r=1&hp

According to the Times' Julia Preston, Homeland Security Janet Napolitano and other Obama administration officials are busily enforcing procedures aimed at cracking down on illegal immigration. That they are being "aggressive" in this process and relying "significantly on programs started by his predecessor" is of particular interest given how the president campaigned on the immigration issue leading up to the elections.

Ms. Napolitano and other administration officials argue that no-nonsense immigration enforcement is necessary to persuade American voters to accept legislation that would give legal status to millions of illegal immigrants, a measure they say Mr. Obama still hopes to advance late this year or early next.

That approach brings Mr. Obama around to the position that his Republican rival, Senator John McCain of Arizona, espoused during last year’s presidential campaign, a stance Mr. Obama rejected then as too hard on Latino and immigrant communities. (Mr. McCain did not respond to requests for comment.) Now the enforcement strategy has opened a political rift with some immigrant advocacy and Hispanic groups whose voters were crucial to the Obama victory.

2009-08-04T10:39:00.002-04:00

And speaking of big spenders ruining the party, it looks as though Man City has succeeded in muddying the waters at Goodison Park. It appears as though Jolean Lescott wants out of Everton. http://news.bbc.co.uk/sport2/hi/football/teams/e/everton/8183638.stm Ican't say I fault Lescott for wanting to cash in on some big oil bucks. I just hope the Toffees are able to replace him.

2009-08-04T10:18:00.002-04:00

Remember these guys? It was not too long ago that they played in the Champion's League semi finals...2001 to be exact. Where are they today? They have been relegated to the third tier of English football and have basically lost everything including their stadium and training facilities. http://news.bbc.co.uk/sport2/hi/football/eng_prem/8182662.stm

So why bother bringing them up? It seems as though Uefa is scared that the crazy spending that has taken place at various European side this offseason will lead to another Leeds. Fearing that Man City and Real Madrid are setting a tone that cannot be maintained by other clubs that wish to remain financially viable, Uefa general secretary David Taylor shares his concern saying, "I would say in this financial climate, it is surprising, a little bit destabilising of the market...It is certainly raising the ante in terms of the player costs, in terms of the general market place, which is not a thing that gives us a great deal of comfort in these difficult times...There is certainly disquiet in the corridors of power here."

2009-07-31T10:31:00.002-04:00

Nothing like washing down a little controversy with some frosty brews. So here's a question for you. Can you guess which brands each of these gentlemen are knocking back?

Ok, I don't really have anywhere to hide the answers so here they are.

President Obama - Bud Light

Vice President Biden - Bucklers (that's N.A. i believe)

Sergeant Crowley - Blue Moon

Professor Gates - Sam Adams Light

I wonder if the Whitehouse actually keeps all these brands in a big presidential beer cooler or if they asked the table what they would prefer in advance. Thanks to the NY times for the picture http://thecaucus.blogs.nytimes.com/2009/07/30/what-a-white-house-beer-says-about-race-and-politics/?hp and the WSJ for the beer tip http://online.wsj.com/article/SB124899365578295227.html .

2009-07-29T14:31:00.002-04:00

It was never a matter of "if" rather it was a matter of "when" the tie up between Microsoft and Yahoo would officially take place once Jerry Yang gave up the reigns of the company he helped found back in the prehistoric days of search.

And so when the announcement was made this morning, (http://www.reuters.com/article/topNews/idUSTRE56R6VY20090729?feedType=RSS&feedName=topNews) it was almost rather anticlimactic. OK, great...they finally did a search deal. Of course Yahoo CEO Carol Bartz described it as a “game changer,” saying it would allow the company “to keep a healthy revenue stream” while investing in areas “critical to our future,” such as display advertising, mobile experiences, and audience properties. (http://paidcontent.org/article/419-bartz-deal-with-microsoft-will-allow-yahoo-to-invest-in-areas-critical-/)

But I personally enjoyed reading Jason Calacanis' take on the whole "deal" in his post this morning entitled "Yahoo committed seppuku today" (http://calacanis.com/2009/07/29/yahoo-committed-seppuku-today/)

"The once proud warrior of the internet space laid down its sword, knelt at the feet of Microsoft and gutted itself today. There was no honor in this death, it was one brought by the shame of losing to Google and a lack of faith in one’s ability to compete in the space they created. To be clear, Yahoo didn’t need to do this deal, Microsoft did. Ultimately Yahoo will look back at this moment as the second–and perhaps fatal–mistake in their epic history."

His take on this might be self serving as he is busy building his own search engine with Mahalo.com http://www.thedeal.com/dealscape/2009/07/jason_calacanis_yahoo_committe.php
Certainly his comment regarding opportunity for other search engines certainly shows where his intent is. "That’s the silver lining for startups in all of this. As Google and Microsoft lock into a dog fight for revenue and market share, leaving the Yahoo carcass on the side of the road, the bevy of crafty startups will get their chance to take the third, fourth and fifth positions in this very important race." But regardless of ambition, I think his take is pretty spot on.

2009-07-28T11:01:00.002-04:00

Anyone who knows me knows that the last thing I am is a socialist robin hood styled anti-capitalist thug but I nonetheless think Verizon deserves a special golf clap this morning on the heels of their announcement that they need to lay of 8,000 workers. http://www.ft.com/cms/s/0/753f0d76-7b0d-11de-8c34-00144feabdc0.html

Here is a company that pays it's chief executive over $18 million in total compensation last year according to Forbes (http://people.forbes.com/profile/ivan-g-seidenberg/84094) and managed to earn $3.2 billion net last quarter. With all that money, you would think they could figure out a way how to cross train people. It just doesn't smell right. I'm not saying that government should step in and tell them how to do things. They are a private company and should be allowed to do as they please. I'm just not impressed.

2009-07-27T10:13:00.002-04:00

According to this morning's WSJ, NPD Group is reporting that video games sales have plunged 29% year over year. Additionally, sales of the Xbox 360 and Wii are off 38%. http://online.wsj.com/article/SB124865158612682399.html

The financial press loves to talk about how the gamer recession is a function of consumers tightening their wallets but I also think that reductions in sales have something to do with capacity and choices much in the way that capacity and choices have affected music sales. Clearly we have seen that the used games market as supported by such outlets as GameStop can have a direct impact on publisher sales figures and secondary sales do not trickle down to the bottom line of the publisher.

But the other factor that gets left out of the equation is the fact that the release dates of many titles have been pushed back deep into the 4th quarter of this year if not 1st quarter of next year. As such, when there's not much quality to offer, there is not that much to be sold.

Also, it is fair to say that not everyone has an Xbox or Wii but lots of folks do and they might not be ready to upgrade to newer model quite yet. In the end, a slowdown is a slowdown no matter what. The numbers don't lie but the tales behind the numbers can be misleading. I am quite certain that once some awesome titles hit the shelves again this holiday season, game sales will once again pop up and people will again be talking about how the games industry is different and that everyone plays games no matter what the status of the Dow.

2009-07-27T09:34:00.002-04:00

According to this morning's FT, "Apple is working with EMI, Sony Music, Warner Music and Universal Music Group...on a project to stimulate digital sales of albums by bundling a new interactive booklet, sleeve notes and other interactive features with music downloads, in a move it hopes will change buying trends on its online iTunes store."http://www.ft.com/cms/s/0/28129982-7a18-11de-b86f-00144feabdc0.html

Codenamed “Cocktail”, the initiative is slated to launch in September. Apparently the smart brass at Apple and within the record labels still believe that consumers would be interested in purchasing full albums if those digital records came with additional exclusive content. I would not bet the ranch, however, that such additional offerings will do much to induce consumers to purchase records over singles. Several trends continue to work against Apple and the labels in so far as their strategy is concerned.

There is already a vast array of sources for lyrics, pictures, live footage and other sorts of goodies laid out but bands and fans alike all over the internet. Apple might have some unique footage not available elsewhere but that in and of itself is not likely to get people to buy a record that has only one or two good tracks on it. Also, music production is changing in the sense that more and more artists see the value in releasing fewer tracks on a more regular basis than spending lots of time trying to put together an imperfect full length record. In other words, solid EPs are more attractive than less than perfect LPs. And ultimately, the largest purchasers of music tend to be younger folks that are more price concious and they are totally less than likely to want to spend more for less.

Record sales as we know them might not ever go back to the way that that they were 20 or 30 years ago because the user/listening culture has changed but that doesn't mean that an artist can't sell a full length album. It just means that the record itself has to offer a value proposition. Or in plain speak, the record has to be good. Fans will always purchase a good record. They don't need digital artwork or a couple of live clips to spur them on.

2009-07-24T10:38:00.002-04:00

Philip Stephens pens a thoughtful piece on Europe's lethargic approach to strengthening the influence the E.U. and the role that it could play in determining the future of the global political economy in this morning's FT. http://www.ft.com/cms/s/0/abb78426-77bd-11de-9713-00144feabdc0.html

Granted, this is the sort of piece that would only appeal to continental Europe fanboys (guilty as charged) and political science junkies (guilty as charged). But it is nonetheless important to take not of the fact that America does benefit from a strong and healthy Europe on several levels.

We, as a nation, would be hard pressed to handle all the obstacles that could be hurled at us by the governments (note i don't mean the people themselves) of Russia and China on our own. A stable Europe that acts as one provides additional support in collective western thinking and certainly a Europe that acts as one can be a strong ally in terms of keeping the peace.

But the E.U. of today is facing challenges. Mr. Stephens likens Europe to "a greater Switzerland of the 21st century: comfortable, complacent and unwilling to venture abroad...European governments are much more concerned to hold on to the totems of power – a gross over-allocation of seats in the various global institutions – than to help design the architecture of a new order."

While I am not completely sure I agree with the dour view espoused in this editorial, I do think that it is in the best interests of Europe and the west as a whole if the member states of the E.U. support the broad initiatives of Brussels. If nothing else, the power of collective action will be worth more to the group as a whole and probably more to any one nation state as well. In this regard, Stephens is right when he says " I cannot think of a moment in recent history when it has been more important for Europeans to demonstrate their ambitions for the world. Comfortable though it may seem now, Europe will discover that a future in the slow lane promises anything but an easy ride."

2009-07-23T11:59:00.002-04:00

Looks like PepsiCo's brand management team may have gone a little too far with all their packaging redesigns. I guess they figured once they had redesigned the actual Pepsi logo, all brands were fair game. According to the Wall Street Journal's Valerie Bauerlein, Pepsi executives made their first blunder when they altered the Tropicana Orange Juice containers and turned them into generic looking cartons. http://online.wsj.com/article/SB124825804221871367.html Then they opted to redesign the Gatorade bottles with a fancy new "G" logo. So what does Pepsi’s CEO Indra Nooyi get to show for her teams efforts...volume slippage of 17.5% and a 4.5% market share loss.

It does point to how difficult it is to determine when it is the right time to redesign a logo or packaging. Clearly brands have to do it if they are strong enough to last through several generations of customers. But it is a slippery slope that managers must navigate when they opt to go down the change path. Often it seems the changes that work best are the ones that customers notice the least...subtle changes that come across as freshen-uppers more than complete renovations.

2009-07-23T10:58:00.003-04:00

Looks like the ratings agencies will continue to wield their influence and operate in a business as usual manner. Why? I imagine because investors and the government decided that the "issuer pays" model is the better than the "investor pays" model.

According to the FT, "Credit rating agencies would face a raft of new disclosure rules and restrictions but would not be forced to overhaul their business models under proposed US legislation sent to Congress on Tuesday." http://www.ft.com/cms/s/0/ad5625dc-764e-11de-9e59-00144feabdc0.html

The problem with these new suggestions for bringing clarity and honesty to the ratings process is that they do not address the underlying problem with how agencies are paid and how their ratings so severely impact the cost of doing business.

"The combination of government sanctioning and “issuer-pays” business models in effect makes credit rating a for-profit regulatory oligopoly. http://www.ft.com/cms/s/0/8e49e8d8-7700-11de-b23c-00144feabdc0.html Rules on risk and capital mean investors need high-rated assets to increase their leverage or to meet fiduciary duties, giving the agencies a gatekeeper role in capital markets, tying their profits to the number of higher-rated issues."

"Like many others, they failed to predict the house price collapse. More seriously, they ignored their own contribution to the bubble. These intellectual failures may not have been caused by the incentives they faced; but those incentives made it harder to address them. The current regulatory plans will not prevent this from happening again. That is not an argument against them – but it is one for more fundamental reform."

"The agencies are resisting bans on the issuer-pays model, in spite of the perverse incentives that model presents as long as issuers have a greater need for good ratings than for accurate ones. Investor-pays would at least benefit those investors who care about rating accuracy – but since some investors want to maximise leverage, it would at best only weaken perverse incentives to overrate."

And while Barney Frank, head of the chairman of the House financial services committee, has offered that he will move to "overturn requirements that require the use of the credit ratings agencies," my guess is that lenders will still use ratings in their analysis. If such is the case, the only cure save eliminating rating agency requirements all together is to shift the burden of the cost of evaluating credit worthiness from the issuer to the investor. Alas, this will never occur though as the revenue model for the agencies would take a severe hit and investors in those companies are certainly not going to back that. Also my guess is that issuers are happy to pay the freight if they know that they are more inclined to get a better rating if they are paying versus if the investor is paying. Those are after all real borrowing dollars that are affected by the ratings. So I guess the more things seem destined for change, the more they actually just remain the same...and so the problem that hit us hard in the first place remains unsolved.

2009-07-23T09:37:00.002-04:00

Is America in danger of losing its closest ally in the Pacific Asia region when the leadership changes hands in Japan? The FT's David Pilling takes an appropriate look at what might happen if/when the centre-left Democratic Party of Japan takes over control of the government from the Liberal Democratic Party following next month's elections. http://www.ft.com/cms/s/0/b74b3e26-770a-11de-b23c-00144feabdc0.html?nclick_check=1

According to Pilling, "the question (about the strength of the alliance) is worth asking even though the alliance is made of stronger stuff than a mere political party, however enduring. In a dangerous region still echoing with wartime rancour and groaning under the strain of shifting economic and military fortunes, it will be in the interest of both countries to hold their postwar clinch for years, if not decades, to come."

But Pilling points to multiple gaffes made by members of the U.S. government in recent years. "Even under the alliance-friendly LDP, Japan’s US friends have struggled to keep Japan in the frame. Hillary Clinton, now secretary of state, deeply offended Tokyo when, in a 2007 article in Foreign Affairs, she stated baldly that the Sino-US relationship was the world’s single most important. The remarks evoked painful memories of her husband’s notorious “Japan passing”, symbolized by his diplomatic no-no of skipping Tokyo on his way to Beijing. Washington has also rattled Japan by allowing North Korea to tiptoe to nuclear status."

It is likely that there will be minimal short term changes in policy regardless of who comes out on top next month but tensions with North Korea coupled with the continued growing influence of China as a global power will have the Japanese thinking more and more about what's best for them and it could come at the expense of things that we have long come to expect from our post war relationship with the land of the rising sun.

2009-07-21T10:05:00.002-04:00

I did not know this but apparently the 3 men that piloted Apollo 11's mission to the moon 40 years ago yesterday visit the White House to meet with the President every 5 years.http://www.wthitv.com/dpp/news/politics/whitehouse/nat_ap_dc_obama_honors_first_men_to_land_on_moon_200907201511_2661602

I was watching highlights of the President Obama's comments as he commemorated "One small step for man, one giant step for mankind" hoping that he would give signals for increased support of NASA programming. Alas, the signals were not really there. http://www.ksbw.com/technology/20112945/detail.html

You might ask why on earth I would want to commit funds that we don't have to pie in the sky missions including dreams of colonizing Mars when we can't figure out how to implement a TARP program or fund a nationalized health care program. It is for certain a fair question.

But allow me to point out the article "10 Reasons the Apollo 11 Moon Landing was Awesome" by Curtis Silver in Wired Magazine. http://www.wired.com/geekdad/2009/07/10-reasons-the-apollo-11-moon-landing-was-awesome/ . There are some parallels in place between 1960's America and the environment in which we live today. Like with Vietnam back then, we are currently involved in some unpopular conflicts. Like Russia back then, China is currently flexing their might. And like back in the 60's, we are currently undergoing a period of national reflection and we could use a reason to feel a little good about things. But perhaps most importantly, we need to advance technology and give our children things to aspire towards and look forward to beyond our legacy spending programs, overly intrusive government legislation and crippling tort practices.

2009-07-17T09:50:00.004-04:00

It was not too long ago that the California AG decided that it was in the best interest of society to go after Miller Coors in order to get them to halt production of Sparks, a caffeinated malt beverage that was a popular choice for preclubbing glugging. http://foodbeast.com/content/2009/01/02/sparks-alcoholic-energy-drink-ban/

Well it looks like New York and Connecticut are interested in saving humanity as well and with the blessing Anheuser and MillerCoors, the states have begun to move against United Brands (makers of Joose branded drinks) and Phusion Projects (makers of Four Loko and Four Maxed). http://online.wsj.com/article/SB124779531662955515.html

I guess there is only one thing to do. Stock up before it's all taken away from you. I wonder what the shelf life is on this stuff. And if you're looking for other options besides GG&RB check out http://wesewcool.blogspot.com/2008/12/goodbye-sparks-let-caffeinated.html .

2009-07-16T11:47:00.002-04:00

How does one value the NHL in so far as television rights are concerned? From this seat the NHL looks like a struggling upstart business that is lucky to have anybody interested in entering into a partnership with them. I mean how else can one explain the fact that NBC has been able to extend by 2 years their rights to show games solely in exchange for a share of advertising revenues? http://news.yahoo.com/s/ap/20090715/ap_on_sp_ho_ne/hkn_nhl_nbc

According to AP writer Jimmy Golen:
Bettman said the deal was "basically" the same as the previous agreement, which started in January 2006 and called for the league and the network to share revenue. NBC spokesman Brian Walker said the network would broadcast nine regular season games, weekend games during the playoffs and up to five games of the Stanley Cup finals.

"We are both very happy with the relationship we have," Bettman said. "We're delighted with the coverage NBC has given us, and we know that NBC is happy to have us in their stable of sports properties."

That's all fine and dandy corporate speak but according to Media Post's David Goetzl, "the three other major broadcasters did not have interest in carrying the NHL, preventing the league from being able to sign the type of lucrative rights-fee-based deal other sports leagues enjoy." http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=109716

2009-07-16T10:54:00.002-04:00

Was yesterday a good day or a bad day for Gannett? I guess it depends on who you ask and what your agenda is. On one hand, the publisher of USA Today reported a horrid 32% drop in newspaper advertising revenues and an overall revenue decline of 18% across all business lines. http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=109871

On the other hand, their stock closed up almost 31% on the day due to a positive net earnings per share report and positive comments by the publisher that they had seen “some small encouraging signs" over the past three months. Short covering also helped to accelerate the rally in the stock. http://www.ft.com/cms/s/0/ce8d0aea-7162-11de-a821-00144feabdc0.html

But stock price aside, I suspect one of the data points people should be paying attention to is how their digital operations are doing. On this front, the last quarter was not a win. According to Media Post's Erik Sass, "digital revenues -- previously a bright spot for Gannett -- are currently just another problem area. Total digital revenues fell 18.5%, mostly due to the steep downturn in online employment classifieds at CareerBuilder.com."

Furthemore, Sass reports that "Gannett's management has been swinging the ax in an effort to contain costs, laying off thousands of employees from the newspaper division in 2007-2008 and instituting two unpaid weeklong furloughs this year. Two weeks ago, the company announced yet another round of layoffs. In 2000, the newspaper division employed 41,000 people; after the newest round of cuts, it will probably have 27,000-28,000 -- meaning that it has shrunk about one-third. However, the vast majority of these were cut in the last two years, including almost 5,000 in 2007 and 4,000 or more in 2008."

One time charges, axe wielding and shrinking revenues on the digital side tells me one should beware of the rally and tread very lightly when considering the equity.

2009-07-15T15:44:00.001-04:00

Let's be honest here. Mark Kriegel’s dubbing of Carl Crawford’s catch in the seventh inning of yesterday’s “All Star” game as “iconic” in his Foxsports.com column this morning was probably a tad generous. http://msn.foxsports.com/mlb/story/9809882/Crawford/'s-iconic-catch-keeps-AL-streak-alive

I mean it would have made the plays of the day highlight reel on ESPN, but “iconic” is a phrase I would bestow upon people, things or actions that define a generation or a demographic but not a snore of an all-star game. I mean this was such a boring 2 days of baseball that I am just glad it’s over…except for the fact that I have to tune into the Mets again. Let’s see, what’s more painful, following the Mets for an entire baseball season or watching Albert Pujols go 0-for on his home field and then begrudgingly talk about what an honor it wass to be there. I mean please…Snoring! Really, who cares if the NL hasn’t won an all star game since Dallas Green helmed the Mutts and Rey Ordonez wore the crown of most over rated shortstop in NYC.

On a certain level the NL deserves what it gets. I couldn’t believe my eyes when I saw Trevor Hoffman almost give up 2 home runs in the 6th inning. Haven’t we seen this play before?

And speaking of the snooze button, what were the Phillies thinking by signing Pedro for $1 million for less than half of a baseball season? http://sports.espn.go.com/mlb/news/story?id=4328568&campaign=rss&source=ESPNHeadlines I had to do the double take when I saw that they signed him and then put him on the 15 day disabled list before they get ready to send him to the minors. I just don’t get it.

When does the NHL start again?

2009-07-15T10:45:00.002-04:00

The radio landscape in New York is set to change again as Univision, WNYC Radio and the New York Times work out a 3 way transaction that will effectively mark the end of The New York Times' sponsorship of Classical Music in the Tri-state area. http://www.crainsnewyork.com/article/20090714/FREE/907149965

The deal, worth $45 million all in, will see Univision move its Spanish speaking programming down the dial to the 96.3 frequency where it will be better able to reach a larger audience with a stronger signal. Meanwhile, WNYC will pick up the classical programming as part of its public radio offering but fewer folks will be able to tune in as the signal will now emanate from 105.9FM. http://www.wnyc.org/news/articles/136533

2009-07-15T08:59:00.002-04:00

China's global ambitions are well known and often discussed ad nauseum, so most news about Chinese trade and influence begins to sound like white noise to me. But Peter Garnham caught my attention this morning when he discussed China's plans to "internationalize the renminbi" in the FT. http://www.ft.com/cms/s/0/e161ea5c-70a2-11de-9717-00144feabdc0,dwp_uuid=f6e7043e-6d68-11da-a4df-0000779e2340.html

“China is beginning an ambitious scheme to raise the role of the renminbi in international trade and finance and to reduce reliance on the US dollar,” said Qu Hongbin, China chief economist at HSBC.

The Chinese government wants to make the Yuan one of the top 3 trading currencies in the world. It can do this by moving to settle more trade with emerging market countries using the renminbi. Their goal would be to up Yuan transactions from 10% of their total trade volume to nearly $2,000 billion worth of trade or 50% of their total volume by 2012.

As to how much pressure this may put on both the Dollar and the Euro will remain to be seen. It’s only natural that China would want to increase the international dependency on its currency. The question is are we ready for the unintended consequences?

2009-07-14T10:52:00.002-04:00

Looks like "Hot Growth" is a phrase that does not apply to Business Week in the minds of McGraw-Hill executives who are reportedly looking to unload the business weekly for as little as $1 in the face of ever growing losses. http://www.ft.com/cms/s/0/bd68cdc6-6fdc-11de-b835-00144feabdc0.html?nclick_check=1

Likely buyers aside, what is it that an OpenGate (who recently bought TV Guide for a reported $1) or Bloomberg would want with the loss ridden publication? It would seem to me that they would be better off picking off pieces of the print rag rather than assume the expenses that would come with trying to wind down the print side while shifting to digital. I guess there has to be some financial engineering in place that would allow for matching losses and gains on the part of any buyer but given where advertising dollars are going on the print side of things, I am not sure I would even pay $1 for the magazine.

2009-07-14T09:54:00.004-04:00

"An estimated 110 million people in the U.S. -- or 36% of the total population -- are regular social networking users."

This is according to the latest report issued by Tom Anderson of Anderson Analytics. Gavin O'Malley of MediaPost gives readers the skinny on the latest stats pertaining to social networking as compiled in the report here: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=109657

Key takeaways include:

Facebook dominates (the social networking universe) with 78 million regular users -- defined as those logging on at least once a month –
MySpace has 67 million regular users.
Twitter has 17 million regular users.
LinkedIn has 11 million regular users.

While much attention has been paid to the graying of social networks, most users -- 61% -- remain under 35.

MySpace remains the most youthful -- the average age of its users being 29 -- while the average age of Facebook users is 34, and 33 for Twitter.

While it varies by network, the majority of social networkers are now women by a margin of 55% to 45%.

LinkedIn skews the most toward male users -- 57% to 43% -- while Facebook tends a bit toward women -- 56% to 44%.

Men have an average of 140 friends on Facebook, 53 Twitter followers and 71 LinkedIn connections; the comparable averages for women are 110, 18 and 36.

2009-07-10T08:44:00.002-04:00

The Financial Times is reporting that The New York Times is 3 to 4 weeks away from decision as to whether or not they will begin charging readers as much as $5.00 a month for access to their news on line. http://www.ft.com/cms/s/0/7aa2c17c-6cda-11de-af56-00144feabdc0.html?nclick_check=1

The significance of course is that they would be the first major publisher to block nonsubscribers altogether from having access to their website. A previous attempt by The New York Times to collect subscription dollars failed and was aborted in attempt to save advertising dollars but it appears as though they are readying themselves for another try at it.

The question of course will be whether other large news publishers join the rally or will they use the opportunity to steal readers from Sulzberger's group in attempt to boost their own advertising dollars. The other question will involve how they plan of preventing their content from being distributed via other channels. If they nail it though, it could mean a new dawn for old world publishers and it might even lead new age publishers to consider charging for what they offer. Still, I am of the opinion that publishers will ultimately rely on ad dollars to survive and loyal consistent readership will be the bait that media buyers chomp on.

2009-07-09T10:24:00.002-04:00

Wall Street Journal Economic's Editor, David Wessel, takes a look at arguments for and against incentive based pay for doctors and teachers as well as the White House's efforts to change the way we pay professionals in healthcare and education in this morning's Capital section of the paper. http://online.wsj.com/article/SB124709710389815145.html

Of particular interest in this article is the contemplation around the law of unintended (economic) consequences, something that I have previously addressed in this blog as it relates to the constitutional law and the Supreme Court.

Wessel points out that regardless of how incentive based pay is structured, systems can be gamed for the benefit of those being measured. He writes, “…recent history illustrates the potential for unintended consequences. In the business realm, chief executives during the 1980s and '90s were seen as so eager to hold on to their empires that they resisted takeovers that would benefit shareholders. So companies were pushed to pay CEOs with stock options, instead of cash. That gave the executives reason to do whatever they could (including fudging the books) to run up stock prices in the short term, cash in their options and walk away before stock prices plunged.”

But the Obama team believes strongly that teachers and doctors are at least partially motivated by cash and that systematic and meaningful improvement in education and healthcare can be delivered on a nationwide basis if we dispel with the belief that “being a teacher or a doctor (is) a calling, not a job.” Yet there is a major challenge around establishing incentives that matter or would yield a sought after benefit.

"In health, evidence abounds that doctors do more of what insurance covers. The issue isn't whether incentives matter, but which incentives are offered. In education, the status quo is clearly broken, and existing pay schemes and union contracts too often protect the worst teachers and discourage the best… The stronger argument is that quality measures remain crude and pay-for-performance schemes don't work as intended, despite advances in information technology that make collecting and analyzing data far easier."

Thinking further through the discussion, I would also offer to Mr. Wessel that I think it's a little difficult for this administration to have a debate about performance based pay for teachers and doctors in the same room as there are factors besides cash that are hugely different (besides unions and insurance) between the two professions when discussing forces that impact performance "cause and effect".

2009-07-08T10:36:00.003-04:00

Webcasters can breathe a sigh of relief now that an agreement on royalty fees has been hashed out with SoundExchange. http://online.wsj.com/article/SB124701322006609071.html?mod=googlenews_wsj

According to the Wall Street Journal the basic arrangement looks like this:

Under the new rate scheme, hashed out with Webcasters and SoundExchange, the royalty organization, larger services earning more than $1.25 million in revenue must pay the greater of 25% of gross revenue or 0.093 cent per listener, per song. The rates rise each year until they hit 0.14 cent per listener, per song, by 2015.

Webcasters taking in less than $1.25 million per year must pay the higher of 7% of expenses, or a percentage of revenue, starting this year at 12% for the first $250,000.

Subscription services, where people pay a monthly fee to hear music online, must pay rates starting at 0.15 cent per song per subscriber this year, rising to 0.25 cent by 2015.