Under The Radar News - Wednesday

More of a bad thing. When fissures in the housing and residential mortgage markets began to widen in early 2007, Merrill Lynch (MER) increased its dealings in complex debt securities in a misguided effort to make back its losses.

More rules on Wall Street. Banking executives say they will welcome greater regulation in the $62T credit derivatives market, which were largely responsible for about $250B (so far) of losses and writedowns in the U.S. subprime breakdown. Currently, tracking of the over-the-counter trades is spotty at best. Then again, two years ago billion dollar trades were recorded on scraps of paper in a manner described by former Fed chairman Alan Greenspan as "appalling."

Will rebate lead to rebound? History dictates consumers will spend their upcoming rebate checks, Needham says, especially with retailers such as Wal-Mart (WMT) setting up check cashers inside their stores. If so, the impact on retail sales could be dramatic. But while the rebate is double 2001's, the firm is concerned other factors (consumer confidence lows?) may mitigate its effect.

Black & Decker takeover target? Black & Decker (BDK) spiked in early trading on unconfirmed takeover chatter, perhaps by Home Depot (HD).

China Mobile BlackBerrys inch closer. China Mobile (CHL) will release or announce the official release date of Research In Motion's (RIMM) Alcatel-BlackBerry handsets around May 17. An original December 2007 release was delayed due to connectivity issues.

United to make 3G iPhone chip. United Microelectronics (UMC) will produce Infineon Technologies' (IFX) 3G baseband chip, which is to be used in the upcoming Apple (AAPL) 3G iPhone. Taiwan Semiconductor (TSM) was Infineon's partner for the iPhone's first-generation baseband chip.

iPhone price cuts. MobileOne's negotiations with Apple (AAPL) about 3G iPhones in Singapore are being held up by regulatory and technical issues. Meanwhile Carphone Warehouse and O2 slashed iPhone 4GB prices by £100 pounds ($198) to £169, sparking fresh speculation of a 3G iPhone launch this summer. T-Mobile (DT) recently cut iPhone prices in Germany to €99 with a two-year contract.

NAND rising. Production cuts and delayed expansion at major NAND flash makers (Hynix) sent prices up at least 5% in April.

Goldman shorting WaMu. In case you're wondering why Goldman's call Friday to short Washington Mutual (WM) sent shares reeling, it's because while Sell recommendations from Wall Street firms are a rarity (just 5.7% of all recommendations), advising clients to sell a stock short is so unheard of Thomson Financial doesn't even track it. Oh, and WaMu is a Goldman client. That said, hedge fund manager Whitney Tilson says even a Sell recommendation is an analyst's CLM - career limiting move. "It's much easier to put a 'hold' on it and quietly tell your best clients it's a toxic piece of dung." One-time analyst Andy Kessler notes sell-side research is becoming "increasingly irrelevant and the analysts are going to have an increasingly harder time getting paid... Hence the 'louder' calls."

Will that be jazz or hip hop with your latte? Starbucks (SBUX) will reportedly team up with Apple's (AAPL) iTunes to offer free digital music and videos to customers. Last October an AAPL/SBUX free "song of the day" download saw users grab more than 6 million tunes.

Google killer #762. Stealth start-up Cuill is seen by some as a serious contender to Google (GOOG). Founded by Tom Costello and his wife Anna Patterson, who is credited with building Google's "Recall," the largest search engine ever created. Cuill has already received €25M and $8M in funding from venture capitalists. Here I thought all Google was worried about were its weakening clickthroughs.

More Times newsroom layoffs. Having failed to attract enough voluntary buyouts, New York Times (NYT) says it will have to cut jobs.

Politician wants to age-limit energy drinks. Assemblyman Ralph R. Caputo says he's drafting legislation to prohibit New Jersey minors from buying super-caffeinated energy drinks and nutrition supplements. "The plain and simple truth is that caffeine is a drug. Disguising that fact by targeting children with marketing that chooses to glamorize it by comparing it to illegal drugs does not send the right message," he says. (KO, PEP, HANS)

Big players own half of Delta. Institutional shareholders hold about half of Delta's (DAL) outstanding shares, which may give them a substantial influence on a pending merger with Northwest (NWA).

Nymex plays hardball with CME. A group of Nymex (NMX) shareholders threaten to oppose CME Group's (CME) proposed takeover if it doesn't raise its cash-and-stock offer or do something to boost its own share price. Sources say CME plans to announce a large share repurchase closer to the deal's closing that could to boost shares ($484) to $560.

Microsoft on the move. 18-year Microsoft veteran (MSFT) Joe Belfiore was recently shifted to its Zune unit. Considering his background in Windows Media Center, Microsoft analyst Matt Rosoff thinks the move may signal Microsoft is looking to increase Zune's video capabilities.

Options traders price in dividend cuts. The options market thinks Citigroup (C) will cut its dividend for a second time this year, perhaps by as much as 45% to $0.175 from $0.32. Meanwhile Wachovia's (WB) dividend cut Monday did not touch off speculation of a similar cut at Bank of America (BAC). Other potential dividend cuts: AIG (AIG) to $0.15 from $0.20; Countrywide Financial (CFC) to $0.11 from $0.15; Fifth Third Bancorp (FITB) to $0.34 from $0.44.

Comments

[Ken Singh]

CHINA SCAM: NO BB SALE IN CHINA, new date MAY 17,2008
SCAM CONTINUES
China Mobile BlackBerrys inch closer. China Mobile (CHL) will release or announce the official release date of Research In Motion's (RIMM) Alcatel-BlackBerry handsets around May 17. An original December 2007 release was delayed due to connectivity issues.

[GregoryY]

Re Politician wants to age-limit energy drinks. That would be a first step in a right direction - legalize drugs. Just imagine positive impact on our economy if we would stop wasting billions on unnecessary law enforcement, military operations abroad, and jailing millions of people. Well, that would be too sane, never mind.