Well, we have something better than a self-report poll, which may or may not reflect the actual market behavior of these participants. The rise and fall of Treasury yields provides the market's real-time assessment of whether the economy is weakening or strengthening.

In the past year, many analysts have urged Pfizer to consider buying a midsized drug maker (+$10B deal) but pfizer has been reluctant to take the advice, preferring its many shots on goal strategy demonstrated by the acquisition of Coley ($164M), Encysive ($195M), Serenex and CovX (undisclosed amounts) in the last six months alone.

“Unfortunately, your letter reflects a significant misunderstanding of the facts about the Microsoft proposal and the diligence with which our board evaluated and responded to that proposal,” Bostock wrote. “A fair-minded review of the factual record leads to one conclusion: that Yahoo’s 10-member board, comprised of nine independent directors along with Yahoo CEO Jerry Yang, remains the best and most qualified group to maximize value for all Yahoo stockholders.”

Here is Les Moonves, "As you know, we're always looking for strategic acquisitions in higher growth businesses." And I thought, why? The business you're in is pretty good at generating cash.

]]> 2008-05-16T08:30:44-04:00 Felix Salmon Felix Salmon submits:

Evan Newmark has a very smart take on CBS's acquisition of CNet. The main problem with CBS (CBS), he says, is that it's a profitable but slow-growth company saddled with a public listing. Since no public company CEO is happy mapping out a future of slow yet profitable growth, Les Moonves feels forced to do silly things like pay 22x Ebitda for CNet (CNET) when his own company is trading on a ratio of less than 8x.

Here is Les Moonves, "As you know, we're always looking for strategic acquisitions in higher growth businesses." And I thought, why? The business you're in is pretty good at generating cash.

Complete Story »]]> BRK.A CBS CNET Felix Salmon http://seekingalpha.com/article/77559-samsung-apple-and-vertical-integration?source=feed http://seekingalpha.com/article/77559-samsung-apple-and-vertical-integration?source=feed We discussed Apple’s vertical integration thoughts in prior posts. I also did a Forbes column on the subject, looking into the Jobsian mind to cull what’s cooking.

The company that is perhaps the best positioned to compete in a vertically integrated convergence device world is Samsung. Let’s look at what’s going on at that camp.

]]> 2008-05-16T08:21:21-04:00 Sramana Mitra Sramana Mitra submits:

We discussed Apple’s vertical integration thoughts in prior posts. I also did a Forbes column on the subject, looking into the Jobsian mind to cull what’s cooking.

The company that is perhaps the best positioned to compete in a vertically integrated convergence device world is Samsung. Let’s look at what’s going on at that camp.

Complete Story »]]> AAPL EWY HRS Sramana Mitra http://seekingalpha.com/article/77589-5-reasons-to-own-qualcomm?source=feed http://seekingalpha.com/article/77589-5-reasons-to-own-qualcomm?source=feed Oppenheimer is out with a pretty big call on Qualcomm (NASDAQ:QCOM), saying they are bullish on the stock and see several reasons to buy the shares. Actually, there are 5 of them:

1) First, OpCo sees strong support for their FY09 estimate of $2.42 and meaningful upside as the 3G smart-phone arms race escalates with RIM and Apple joining the fray.

]]> 2008-05-16T08:15:45-04:00 Notable Calls Notable Calls submits:

Oppenheimer is out with a pretty big call on Qualcomm (NASDAQ:QCOM), saying they are bullish on the stock and see several reasons to buy the shares. Actually, there are 5 of them:

1) First, OpCo sees strong support for their FY09 estimate of $2.42 and meaningful upside as the 3G smart-phone arms race escalates with RIM and Apple joining the fray.

Complete Story »]]> QCOM Notable Calls http://seekingalpha.com/article/77588-friday-s-bond-outlook-settling-down?source=feed http://seekingalpha.com/article/77588-friday-s-bond-outlook-settling-down?source=feed Prices of Treasury coupon securities retreated in overseas trading as most major equity markets posted gains. The yield on the benchmark 2 year note has jumped 5 basis points to 2.47 percent. The yield on the benchmark 5 year note has climbed 4 basis points to 3.12 percent. The yield on the 10 year note has moved higher by 3 basis points to 3.84 percent and the Yield on the Long Bond is 2 basis points higher at 4.57 percent. The yield spread between the 2 year note and the 10 year note tightened by 2 basis points to 137 basis points.Japanese equities declined modestly as some profit taking emerged.

The Hang Seng Index in Hong Kong posted modest gains but one report I read suggested that weakness in mainland Chinese indices dampened sentiment in Hong Kong. Most European stock markets are posting solid gains as the higher price of oil tends to benefit indices laden with oil stocks.

]]> 2008-05-16T08:07:59-04:00 John Jansen John Jansen submits:

Prices of Treasury coupon securities retreated in overseas trading as most major equity markets posted gains. The yield on the benchmark 2 year note has jumped 5 basis points to 2.47 percent. The yield on the benchmark 5 year note has climbed 4 basis points to 3.12 percent. The yield on the 10 year note has moved higher by 3 basis points to 3.84 percent and the Yield on the Long Bond is 2 basis points higher at 4.57 percent. The yield spread between the 2 year note and the 10 year note tightened by 2 basis points to 137 basis points.Japanese equities declined modestly as some profit taking emerged.

The Hang Seng Index in Hong Kong posted modest gains but one report I read suggested that weakness in mainland Chinese indices dampened sentiment in Hong Kong. Most European stock markets are posting solid gains as the higher price of oil tends to benefit indices laden with oil stocks.

Complete Story »]]> John Jansen http://seekingalpha.com/article/77587-energy-pause-is-no-problem-for-canadian-trusts?source=feed http://seekingalpha.com/article/77587-energy-pause-is-no-problem-for-canadian-trusts?source=feed There has been a lot of talk lately about oil's need to pull back. With global infrastructure one of the areas we advise on, it remains my sincere impression that despite the investment world's awareness of the China/emerging markets/raw materials story, most folks still don't quite grasp its sheer immensity and its ongoing implications for raw materials.

This backdrop that has caused me to say that energy, base metals and agriculture prices had little downside risk and that most commodities would outperform gold for awhile the last couple of times I was on CNBC (watch here: May 8, March 24).

]]> 2008-05-16T08:05:15-04:00 Chip Hanlon Chip Hanlon submits:

There has been a lot of talk lately about oil's need to pull back. With global infrastructure one of the areas we advise on, it remains my sincere impression that despite the investment world's awareness of the China/emerging markets/raw materials story, most folks still don't quite grasp its sheer immensity and its ongoing implications for raw materials.

This backdrop that has caused me to say that energy, base metals and agriculture prices had little downside risk and that most commodities would outperform gold for awhile the last couple of times I was on CNBC (watch here: May 8, March 24).

Complete Story »]]> Chip Hanlon http://seekingalpha.com/article/77586-volatility-a-serious-drag-on-return?source=feed http://seekingalpha.com/article/77586-volatility-a-serious-drag-on-return?source=feed In my last article, I explained why volatility does not measure risk. It’s an assertion by none other than Warren Buffet himself. I hope the historical data I used convincingly illustrated the point.

If volatility doesn’t measure risk, then what can we learn from it?

]]> 2008-05-16T07:47:20-04:00 Michael Zhuang Michael Zhuang submits:

In my last article, I explained why volatility does not measure risk. It’s an assertion by none other than Warren Buffet himself. I hope the historical data I used convincingly illustrated the point.

If volatility doesn’t measure risk, then what can we learn from it?

Complete Story »]]> Michael Zhuang http://seekingalpha.com/article/77585-on-semiconductor-corporation-q1-2008-earnings-call-transcript?source=feed http://seekingalpha.com/article/77585-on-semiconductor-corporation-q1-2008-earnings-call-transcript?source=feed

ON Semiconductor Corporation (ONNN)

]]> 2008-05-16T07:38:10-04:00

ON Semiconductor Corporation (ONNN)

Complete Story »]]> ONNN http://seekingalpha.com/article/77584-don-t-believe-paulson-s-l-2-0-the-bank-failure-redux?source=feed http://seekingalpha.com/article/77584-don-t-believe-paulson-s-l-2-0-the-bank-failure-redux?source=feed I fancy myself to be a pretty good investor. While I think I'm a pretty bright guy, I know I am not at the level of the rocket scientists known to be hired by the quant funds. While I am fairly creative, I am far from an artist. While I am not a high school drop out, I don't have a PhD. So, what makes me a good investor? I have this uncanny knack of being able to smell BS a mile away!

Now, for those banking CEOs, homebuilder CEOs (ex. Mr. Hovnanian), monoline CEOs and government officials (ex. Mr. Paulson), who claim that the worst is behind us - I can smell you guys!

]]> 2008-05-16T07:37:21-04:00 Reggie Middleton Reggie Middleton submits:

I fancy myself to be a pretty good investor. While I think I'm a pretty bright guy, I know I am not at the level of the rocket scientists known to be hired by the quant funds. While I am fairly creative, I am far from an artist. While I am not a high school drop out, I don't have a PhD. So, what makes me a good investor? I have this uncanny knack of being able to smell BS a mile away!

Now, for those banking CEOs, homebuilder CEOs (ex. Mr. Hovnanian), monoline CEOs and government officials (ex. Mr. Paulson), who claim that the worst is behind us - I can smell you guys!

Complete Story »]]> Reggie Middleton http://seekingalpha.com/article/77582-wall-street-breakfast-must-know-news?source=feed http://seekingalpha.com/article/77582-wall-street-breakfast-must-know-news?source=feed

• MGM mulls Manhattan. MGM Mirage (MGM) and Dubai World may join to buy Harry Macklowe's Drake Hotel site. The partners would assume $580M in defaulted debt and interest, and probably pay another $200M for the East 56th and Park Ave. site. "A Park Avenue address is prestigious and well regarded from a global perspective, and a globally recognized brand would be a good combination," hotel investment broker Mark Gordon says.
• Can Icahn seize Yahoo? Carl Icahn unveiled his Yahoo (YHOO) proxy slate (including Dallas Mavericks owner Mark Cuban), while Yahoo defended its board and its handling of the Microsoft (MSFT) bid. Paulson & Co. hedge fund said it bought 50M shares of Yahoo during Q1, and plans to back Icahn's dissident slate. Some think the group may already control as much as 30% of the proxy vote.
• Yahoo pressing Google alliance. Yahoo (YHOO) is in a big rush to seal a search-advertising pact with Google (GOOG), in part due to the pressure of Carl Icahn's play for its board. The companies say their planned "open platform" will allow others to serve up ads tied to keyword searches (this in order to overcome regulatory issues). But some analysts think the deal's structure creates a false sense of a level playing field that will in fact be dominated by Google.
• Weak data won't go away. Thursday's economic data kept recessionary concerns on the front burner. Industrial production fell 0.7% amid a 8.2% drop in motor vehicle output. Capacity utilization at manufacturers fell to 79.7% from 80.4% a month ago. The Empire State Manufacturing Survey fell to -3.23 from +0.63, while the Philly Fed's general business-conditions index improved to -15.6 from -24.9, although it remains in contractionary territory. Initial claims fell 1,000 to 365,750. Homebuilder confidence fell to 19 from 20 the past three months.
• More scrutiny at American Airlines. The FAA wants to know why American Airlines (AMR) mechanics were told to skimp on safety checks for damage due to lightening. American seems confident the move was permissible; if it's wrong, it could face stiff fines.
• Macy's banks on child's play. Macy's will announce plans to open FAO Schwarz toy boutiques in each of the 685 stores that carry kids clothing. Macy's says the deal will drive traffic. The big question is can FAO retain its exclusive image amid such huge expansion?
• Carmakers settle with CAW. GM (GM) and Chrysler (DIA) settled with the Canadian Auto Workers union in a deal very similar to the one hammered out by Ford (F) two weeks ago -- even though the two initially said Ford got the short shrift. CAW president Buzz Hargrove says he moved quickly, because things are only going to get worse from here on.
• Libor in focus. Fed officials and London traders who play a role in setting the Libor are in contact amid concerns the ubiquitous rate is lowballing the true rate banks are borrowing at.
• Lockheed locks up $1.5B gov't deal. As had been speculated, Lockheed Martin (LMT) won a $1.4B U.S. Air Force contract to build the next-generation Global Positioning System Space System program, known as GPS III. ITT (ITT) and General Dynamics (GD) are also participating in the project.
• Bernanke urges banks to borrow. Fed Chairman Bernanke is happy banks are having an easier time of raising funds, and wants them to keep doing so to repair their balance sheets and support new economic expansion. The most recent Treasurys offered by the Fed's new program drew just $7.24B in bids on an offer of $25B.
• Rio Tinto faces China censure. Chinese steelmakers may boycott Rio Tinto (RTP) amid accusations Rio is limiting contract-supplied iron ore in order to force them to buy at higher spot-market prices. A boycott could open up the door for smaller firms to break the virtual China iron-ore monopoly of Rio, BHP Billiton (BHP) and Vale (RIO).

Earnings: Thursday After Close

• Advance Auto Parts (AAP): Q1 EPS of $0.86 beats consensus of $0.78. Revenue of $1.53B in-line. Announces $250M share repurchase program to replace a $500M program which had $105M remaining. Shares: +8.75%.
• Autodesk (ADSK): Q1 EPS of $0.50 beats consensus of $0.48. Revenue of $599M vs. consensus of $589M. Sees Q2 EPS of $0.52-0.54 vs. consensus of $0.52. Shares: -0.4%.
• Beazer Homes (BZH): Q1 EPS of -$3.59 misses consensus of -$2.05. Revenue of $503M vs. consensus of $528M. Sees Q2 EPS of -$5.93, short of consensus of -$1.01, and revenue of $405M vs. consensus of $483M. Shares: -5.2%.
• BMC Software (BMC): FQ4 EPS of $0.63 beats consensus of $0.51. Revenue of $467M vs. consensus of $460M. Sees full-year 2009 EPS of $2.10-2.20, better than consensus of $2.09. Shares: +4.3%.
• Compuware (CPWR): FQ4 EPS of $0.23 beats consensus of $0.21. Revenue of $339M vs. consensus of $332M. Shares: -2.7%.
• General Steel (GSI): Q1 EPS of $0.06 misses consensus of $0.13. Revenue of $292M vs. consensus of $282M. Shares: -21.8%.
• Giant Interactive (GA): Q1 EPS of $0.20 beats consensus of $0.16. Revenue of $67.3M vs. consensus of $63.1M. Shares: -3.9%.
• Kohl's (KSS): Q1 EPS of $0.49 beats consensus of $0.44. Revenue of $3.6B in-line. Sees Q2 EPS of $0.70-0.74, in-line, and full-year EPS of $2.95-3.15, short of consensus of $3.11. Shares: -1%.
• Nordstrom (JWN): Q1 EPS of $0.54 beats consensus of $0.49. Revenue of $1.88B in-line. Sees full-year EPS of $2.65-2.80, short of consensus of $2.76 and down from a previous $2.75-2.90. Shares: +1.2%
• Quantum (QTM): FQ4 EPS of -$0.08 misses consensus of $0.04. Revenue of $229M vs. consensus of $241M. Shares: -10.1%.
• UTStarcom (UTSI): Q1 EPS of $0.21 beats consensus of -$0.10. Revenue of $586M vs. consensus of $550M. Shares: +4.6%.

Earnings: Friday Before Open

• Abercrombie & Fitch (ANF): Q1 EPS of $0.69 beats consensus of $0.65. Revenue of $800M vs. consensus of $808M. Same-store sales were down 3% from a year ago.
• Fairpoint (FRP): Q1 EPS of $0.19 beats consensus of $0.00. Revenue of $282M vs. consensus $143M.

Today's Markets

• In Asia Friday: Nikkei -0.23% to 14,219. Hang Seng +0.41% to 25,619. Shanghai -0.36% to 3,624. BSE Sensex +0.47% to 17,435.
• European markets are broadly higher at midday. FTSE +1.43% to 6,341. CAC +0.74% to 5,095. DAX +1.79% to 7,202.
• U.S. futures are up slightly from Thursday's close. Dow +0.11% to 13,009. S&P +0.18% to 1,427. Nasdaq +0.14% to 2,038.50.
• Gold is 0.98% higher to $888.40. Oil is up 1.78% to $126.35.

Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.]]> 2008-05-16T07:19:16-04:00 SA Editor Eli Hoffmann

• MGM mulls Manhattan. MGM Mirage (MGM) and Dubai World may join to buy Harry Macklowe's Drake Hotel site. The partners would assume $580M in defaulted debt and interest, and probably pay another $200M for the East 56th and Park Ave. site. "A Park Avenue address is prestigious and well regarded from a global perspective, and a globally recognized brand would be a good combination," hotel investment broker Mark Gordon says.
• Can Icahn seize Yahoo? Carl Icahn unveiled his Yahoo (YHOO) proxy slate (including Dallas Mavericks owner Mark Cuban), while Yahoo defended its board and its handling of the Microsoft (MSFT) bid. Paulson & Co. hedge fund said it bought 50M shares of Yahoo during Q1, and plans to back Icahn's dissident slate. Some think the group may already control as much as 30% of the proxy vote.
• Yahoo pressing Google alliance. Yahoo (YHOO) is in a big rush to seal a search-advertising pact with Google (GOOG), in part due to the pressure of Carl Icahn's play for its board. The companies say their planned "open platform" will allow others to serve up ads tied to keyword searches (this in order to overcome regulatory issues). But some analysts think the deal's structure creates a false sense of a level playing field that will in fact be dominated by Google.
• Weak data won't go away. Thursday's economic data kept recessionary concerns on the front burner. Industrial production fell 0.7% amid a 8.2% drop in motor vehicle output. Capacity utilization at manufacturers fell to 79.7% from 80.4% a month ago. The Empire State Manufacturing Survey fell to -3.23 from +0.63, while the Philly Fed's general business-conditions index improved to -15.6 from -24.9, although it remains in contractionary territory. Initial claims fell 1,000 to 365,750. Homebuilder confidence fell to 19 from 20 the past three months.
• More scrutiny at American Airlines. The FAA wants to know why American Airlines (AMR) mechanics were told to skimp on safety checks for damage due to lightening. American seems confident the move was permissible; if it's wrong, it could face stiff fines.
• Macy's banks on child's play. Macy's will announce plans to open FAO Schwarz toy boutiques in each of the 685 stores that carry kids clothing. Macy's says the deal will drive traffic. The big question is can FAO retain its exclusive image amid such huge expansion?
• Carmakers settle with CAW. GM (GM) and Chrysler (DIA) settled with the Canadian Auto Workers union in a deal very similar to the one hammered out by Ford (F) two weeks ago -- even though the two initially said Ford got the short shrift. CAW president Buzz Hargrove says he moved quickly, because things are only going to get worse from here on.
• Libor in focus. Fed officials and London traders who play a role in setting the Libor are in contact amid concerns the ubiquitous rate is lowballing the true rate banks are borrowing at.
• Lockheed locks up $1.5B gov't deal. As had been speculated, Lockheed Martin (LMT) won a $1.4B U.S. Air Force contract to build the next-generation Global Positioning System Space System program, known as GPS III. ITT (ITT) and General Dynamics (GD) are also participating in the project.
• Bernanke urges banks to borrow. Fed Chairman Bernanke is happy banks are having an easier time of raising funds, and wants them to keep doing so to repair their balance sheets and support new economic expansion. The most recent Treasurys offered by the Fed's new program drew just $7.24B in bids on an offer of $25B.
• Rio Tinto faces China censure. Chinese steelmakers may boycott Rio Tinto (RTP) amid accusations Rio is limiting contract-supplied iron ore in order to force them to buy at higher spot-market prices. A boycott could open up the door for smaller firms to break the virtual China iron-ore monopoly of Rio, BHP Billiton (BHP) and Vale (RIO).

Earnings: Thursday After Close

• Advance Auto Parts (AAP): Q1 EPS of $0.86 beats consensus of $0.78. Revenue of $1.53B in-line. Announces $250M share repurchase program to replace a $500M program which had $105M remaining. Shares: +8.75%.
• Autodesk (ADSK): Q1 EPS of $0.50 beats consensus of $0.48. Revenue of $599M vs. consensus of $589M. Sees Q2 EPS of $0.52-0.54 vs. consensus of $0.52. Shares: -0.4%.
• Beazer Homes (BZH): Q1 EPS of -$3.59 misses consensus of -$2.05. Revenue of $503M vs. consensus of $528M. Sees Q2 EPS of -$5.93, short of consensus of -$1.01, and revenue of $405M vs. consensus of $483M. Shares: -5.2%.
• BMC Software (BMC): FQ4 EPS of $0.63 beats consensus of $0.51. Revenue of $467M vs. consensus of $460M. Sees full-year 2009 EPS of $2.10-2.20, better than consensus of $2.09. Shares: +4.3%.
• Compuware (CPWR): FQ4 EPS of $0.23 beats consensus of $0.21. Revenue of $339M vs. consensus of $332M. Shares: -2.7%.
• General Steel (GSI): Q1 EPS of $0.06 misses consensus of $0.13. Revenue of $292M vs. consensus of $282M. Shares: -21.8%.
• Giant Interactive (GA): Q1 EPS of $0.20 beats consensus of $0.16. Revenue of $67.3M vs. consensus of $63.1M. Shares: -3.9%.
• Kohl's (KSS): Q1 EPS of $0.49 beats consensus of $0.44. Revenue of $3.6B in-line. Sees Q2 EPS of $0.70-0.74, in-line, and full-year EPS of $2.95-3.15, short of consensus of $3.11. Shares: -1%.
• Nordstrom (JWN): Q1 EPS of $0.54 beats consensus of $0.49. Revenue of $1.88B in-line. Sees full-year EPS of $2.65-2.80, short of consensus of $2.76 and down from a previous $2.75-2.90. Shares: +1.2%
• Quantum (QTM): FQ4 EPS of -$0.08 misses consensus of $0.04. Revenue of $229M vs. consensus of $241M. Shares: -10.1%.
• UTStarcom (UTSI): Q1 EPS of $0.21 beats consensus of -$0.10. Revenue of $586M vs. consensus of $550M. Shares: +4.6%.

Earnings: Friday Before Open

• Abercrombie & Fitch (ANF): Q1 EPS of $0.69 beats consensus of $0.65. Revenue of $800M vs. consensus of $808M. Same-store sales were down 3% from a year ago.
• Fairpoint (FRP): Q1 EPS of $0.19 beats consensus of $0.00. Revenue of $282M vs. consensus $143M.

Today's Markets

• In Asia Friday: Nikkei -0.23% to 14,219. Hang Seng +0.41% to 25,619. Shanghai -0.36% to 3,624. BSE Sensex +0.47% to 17,435.
• European markets are broadly higher at midday. FTSE +1.43% to 6,341. CAC +0.74% to 5,095. DAX +1.79% to 7,202.
• U.S. futures are up slightly from Thursday's close. Dow +0.11% to 13,009. S&P +0.18% to 1,427. Nasdaq +0.14% to 2,038.50.
• Gold is 0.98% higher to $888.40. Oil is up 1.78% to $126.35.

Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.
Complete Story »]]> AAP ADSK AMR ANF BMC BZH CPWR DIA F FRP GA GD GM GOOG GSI ITT JWN KSS LMT MGM MSFT QTM UTSI YHOO SPY QQQQ RTP BHB RIO SA Editor Eli Hoffmann http://seekingalpha.com/article/77583-intermec-inc-q1-2008-earnings-call-transcript?source=feed http://seekingalpha.com/article/77583-intermec-inc-q1-2008-earnings-call-transcript?source=feed

Intermec, Inc. (IN)

]]> 2008-05-16T07:18:52-04:00

Intermec, Inc. (IN)

Complete Story »]]> IN http://seekingalpha.com/article/77581-tal-international-group-inc-q1-2008-earnings-call-transcript?source=feed http://seekingalpha.com/article/77581-tal-international-group-inc-q1-2008-earnings-call-transcript?source=feed

TAL International Group, Inc. (TAL)

]]> 2008-05-16T07:18:34-04:00

TAL International Group, Inc. (TAL)

Complete Story »]]> TAL http://seekingalpha.com/article/77580-rf-micro-devices-inc-q4-2008-earnings-call-transcript?source=feed http://seekingalpha.com/article/77580-rf-micro-devices-inc-q4-2008-earnings-call-transcript?source=feed

RF Micro Devices, Inc. (RFMD)

]]> 2008-05-16T07:18:08-04:00

RF Micro Devices, Inc. (RFMD)

Complete Story »]]> RFMD http://seekingalpha.com/article/77579-china-no-but-this-time-really-is-different?source=feed http://seekingalpha.com/article/77579-china-no-but-this-time-really-is-different?source=feed Today is relatively quiet on the China-financial-news front (the SSE Composite was down 36 bps, but not much else happened), so rather than discuss the most recent numbers and events and their possible implications for financial policy, I want to write about something a tad more theoretical. For the past two months there has been a big buzz about a paper (.pdf) by Carmen Reinhart and Kenneth Rogoff (which I will refer to as R/R) called “This Time is Different: A Panoramic View of Eight Centuries of Financial Crises.” As the title implies, the authors examine the historical evidence of financial crises over a long time frame in an effort to develop an understanding of the causes and consequences of financial crises.

As someone who has been interested for a long time by the history of international capital flows and financial crises (a big part of my book The Volatility Machine was an examination of developing country crises over the past 200 years), it was a dead certainty that I would read the R/R piece, and sure enough I have just finished it. It was a great pleasure to see so many references to some of the classic and obscure books on financial history that I have read so often that I feel almost as if they were old friends.

]]> 2008-05-16T06:52:00-04:00 Michael Pettis Michael Pettis submits:

Today is relatively quiet on the China-financial-news front (the SSE Composite was down 36 bps, but not much else happened), so rather than discuss the most recent numbers and events and their possible implications for financial policy, I want to write about something a tad more theoretical. For the past two months there has been a big buzz about a paper (.pdf) by Carmen Reinhart and Kenneth Rogoff (which I will refer to as R/R) called “This Time is Different: A Panoramic View of Eight Centuries of Financial Crises.” As the title implies, the authors examine the historical evidence of financial crises over a long time frame in an effort to develop an understanding of the causes and consequences of financial crises.

As someone who has been interested for a long time by the history of international capital flows and financial crises (a big part of my book The Volatility Machine was an examination of developing country crises over the past 200 years), it was a dead certainty that I would read the R/R piece, and sure enough I have just finished it. It was a great pleasure to see so many references to some of the classic and obscure books on financial history that I have read so often that I feel almost as if they were old friends.

Complete Story »]]> FXI PGJ Michael Pettis http://seekingalpha.com/article/77578-buffett-reflects-on-great-businesses-raising-prices?source=feed http://seekingalpha.com/article/77578-buffett-reflects-on-great-businesses-raising-prices?source=feed Warren Buffett regularly points out that a business with pricing power will reign supreme over the long run. He reflected on this theme (among others) in one of his 3 lectures at Notre Dame in 1991:

I’ll try this on the students later: What’s the highest price of a daily newspaper in the United States? [Pause] [This is what he said to the students later: Most of you are familiar with it. The highest priced daily newspaper in the United States, with any circulation at all, is the Daily Racing Form. It sells about 150,000 copies a day, and it has for about 50 years, and it’s either $2.00 or $2.25 (they keep raising prices) and it’s essential. If you’re heading to the racetrack and you’ve got a choice between betting on your wife’s birthday, and Joe’s Little Green Sheet, and the Daily Racing Form, if you’re a serious racing handicapper, you want The Form.

]]> 2008-05-16T06:47:40-04:00 Shai Dardashti Shai Dardashti submits:

Warren Buffett regularly points out that a business with pricing power will reign supreme over the long run. He reflected on this theme (among others) in one of his 3 lectures at Notre Dame in 1991:

I’ll try this on the students later: What’s the highest price of a daily newspaper in the United States? [Pause] [This is what he said to the students later: Most of you are familiar with it. The highest priced daily newspaper in the United States, with any circulation at all, is the Daily Racing Form. It sells about 150,000 copies a day, and it has for about 50 years, and it’s either $2.00 or $2.25 (they keep raising prices) and it’s essential. If you’re heading to the racetrack and you’ve got a choice between betting on your wife’s birthday, and Joe’s Little Green Sheet, and the Daily Racing Form, if you’re a serious racing handicapper, you want The Form.

Complete Story »]]> BRK.A BRK.B Shai Dardashti http://seekingalpha.com/article/77577-agriculture-is-still-growing-fast-money-recap-5-15-08?source=feed http://seekingalpha.com/article/77577-agriculture-is-still-growing-fast-money-recap-5-15-08?source=feed Recap of CNBC's Fast Money, Thursday May 15.

Oil Rolling Over

On oil’s rollover, Tim Seymour discussed Congress’ plan to curtail the buying practices of speculators, but thinks this news will have little effect on oil. With options expiration, there should be selloff in oil, and Seymour cites demand as a large factor. Pete Najarian says oil is being traded like a currency and while it finished flat, the oil services sector was strong. Jeff Macke expected a much bigger drop in oil on Thursday.

]]> 2008-05-16T06:46:03-04:00 SA Editor Miriam Metzinger Recap of CNBC's Fast Money, Thursday May 15.

Oil Rolling Over

On oil’s rollover, Tim Seymour discussed Congress’ plan to curtail the buying practices of speculators, but thinks this news will have little effect on oil. With options expiration, there should be selloff in oil, and Seymour cites demand as a large factor. Pete Najarian says oil is being traded like a currency and while it finished flat, the oil services sector was strong. Jeff Macke expected a much bigger drop in oil on Thursday.

Complete Story »]]> POT DE MOS MON AGU BG DRYS BNI KFT AMLN ISIS YHOO MSFT RIMM AAPL CSCO JNPR T TIF JCP KSS WMT CVS TIN KO PEP CLX TAP BUD CELG DNA MDRX GLW DIS BHP INTC SOHU IMAX DOG C SSL SA Editor Miriam Metzinger http://seekingalpha.com/article/77576-berkshire-hathaway-assurance-corp-an-royalty-on-stabilty?source=feed http://seekingalpha.com/article/77576-berkshire-hathaway-assurance-corp-an-royalty-on-stabilty?source=feed The Forest:

Some Personal Reflections from 20,000 Feet...

]]> 2008-05-16T06:42:50-04:00 Shai Dardashti Shai Dardashti submits:

The Forest:

Some Personal Reflections from 20,000 Feet...

Complete Story »]]> BRK.A BRK.B Shai Dardashti http://seekingalpha.com/article/77575-clear-channel-are-the-banks-a-clear-winner?source=feed http://seekingalpha.com/article/77575-clear-channel-are-the-banks-a-clear-winner?source=feed Daniel Primack over at PE Hub, in his post sizing up the Clear Channel (CCU) settlement, said it was difficult to determine if the banks were winners or losers. Given the failure of the banks to present a united front, as described by Deal Journal, having John Mack’s top bankers step up to work out a solution was just about the best outcome the banks could have hoped for.

After going to court, the banks cannot compare the outcome to just paying the break-up fee not to do the deal. They traded a lower loss on this debt to improve their reputations and cap the losses that could have been enormous if the court case went forward. Yet, it is worth noting that the court case may have been an exercise in futility for the sponsors if their damages got capped at $600mn by the courts. If this settlement makes the sponsors give up more on BCE (BCE), then clearly the banks are winners here.

]]> 2008-05-16T06:37:44-04:00 Prince of Wall Street Prince of Wall Street submits:

Daniel Primack over at PE Hub, in his post sizing up the Clear Channel (CCU) settlement, said it was difficult to determine if the banks were winners or losers. Given the failure of the banks to present a united front, as described by Deal Journal, having John Mack’s top bankers step up to work out a solution was just about the best outcome the banks could have hoped for.

After going to court, the banks cannot compare the outcome to just paying the break-up fee not to do the deal. They traded a lower loss on this debt to improve their reputations and cap the losses that could have been enormous if the court case went forward. Yet, it is worth noting that the court case may have been an exercise in futility for the sponsors if their damages got capped at $600mn by the courts. If this settlement makes the sponsors give up more on BCE (BCE), then clearly the banks are winners here.

Complete Story »]]> CCU Prince of Wall Street http://seekingalpha.com/article/77574-pe-may-get-more-rope-to-hang-itself?source=feed http://seekingalpha.com/article/77574-pe-may-get-more-rope-to-hang-itself?source=feed The Prince will not be taking Tony James’ tongue and cheek advice to go forth and tell the people that covenant-lite and PIK Toggle financing is good for society. The covenants that were attached to LBO debt in Spring 2007 and 2006 were so wide on cash-flow and operation requirements that you could drive a semi-tractor trailer through them and not trip a covenant. "I think everyone here should go out and tell everyone they know that PIK toggles and covenant-lite debt structures are good for society at large," James joked at The Deal’s Private Capital Symposium.

Even though Tony’s call for the attendees to go out a tell the people about the benefits of covenant-lite and PIK toggle debt was a joke, he did put up a valiant PR/charm offensive to try to defend these kinds of financing. Basically, his argument amounted to an argument about the damage done to companies by debt holders through a company into a bankruptcy and getting DIP financing. James argued that in most cases a liquidation of a struggling sponsored owned company is not the right move. By having more flexibility to not trip covenants and toggle to interest payments tacked onto principle allows companies to continue to operate, not fire employees, and fix themselves.

]]> 2008-05-16T06:32:27-04:00 Prince of Wall Street Prince of Wall Street submits:

The Prince will not be taking Tony James’ tongue and cheek advice to go forth and tell the people that covenant-lite and PIK Toggle financing is good for society. The covenants that were attached to LBO debt in Spring 2007 and 2006 were so wide on cash-flow and operation requirements that you could drive a semi-tractor trailer through them and not trip a covenant. "I think everyone here should go out and tell everyone they know that PIK toggles and covenant-lite debt structures are good for society at large," James joked at The Deal’s Private Capital Symposium.

Even though Tony’s call for the attendees to go out a tell the people about the benefits of covenant-lite and PIK toggle debt was a joke, he did put up a valiant PR/charm offensive to try to defend these kinds of financing. Basically, his argument amounted to an argument about the damage done to companies by debt holders through a company into a bankruptcy and getting DIP financing. James argued that in most cases a liquidation of a struggling sponsored owned company is not the right move. By having more flexibility to not trip covenants and toggle to interest payments tacked onto principle allows companies to continue to operate, not fire employees, and fix themselves.

Complete Story »]]> GS BX Prince of Wall Street http://seekingalpha.com/article/77573-going-with-the-wind-cramer-s-stop-trading-5-15-08?source=feed http://seekingalpha.com/article/77573-going-with-the-wind-cramer-s-stop-trading-5-15-08?source=feed

Recap of Jim Cramer’s comments on Stop Trading! Thursday May 15. Click on a stock ticker for more analysis.

KB Home (KBH), J.C. Penney (JCP), Cadbury (CSG), Heinz (HNZ), Pepsico (PEP), Coca-Cola (KO): Cramer said Thursday was an “outright bullish day” across the board and even mining, retail and tech were strong. KBH showed signs of a bottom, and CSG’s comment that margins weren’t so bad is good news for HNZ, PEP and KO.

Trinity (TRN), Woodward Governor (WGOV), Owens Corning (OC): Cramer says wind is he hottest sector right now and is getting a boost from Warren Buffett and T. Boone Pickens. Cramer insists wind is bigger than solar and would buy TRN, WGOV and OC.

SPX (SPW) and Emerson Electric (EMR): Sales equipment manufacturer SPX is Cramer’s idea of a “new tech” stock. Of SPX and Emerson Electric, Cramer said, “These are heartland companies that are making things that everyone wants”

Seeking Alpha publishes a summary of Jim Cramer's stock picks every day including: Mad Money Recap, Lightning Round, Stop Trading and his Wall Street Confidential Picks.

]]> 2008-05-16T06:20:25-04:00 SA Editor Miriam Metzinger

Recap of Jim Cramer’s comments on Stop Trading! Thursday May 15. Click on a stock ticker for more analysis.

KB Home (KBH), J.C. Penney (JCP), Cadbury (CSG), Heinz (HNZ), Pepsico (PEP), Coca-Cola (KO): Cramer said Thursday was an “outright bullish day” across the board and even mining, retail and tech were strong. KBH showed signs of a bottom, and CSG’s comment that margins weren’t so bad is good news for HNZ, PEP and KO.

Trinity (TRN), Woodward Governor (WGOV), Owens Corning (OC): Cramer says wind is he hottest sector right now and is getting a boost from Warren Buffett and T. Boone Pickens. Cramer insists wind is bigger than solar and would buy TRN, WGOV and OC.

SPX (SPW) and Emerson Electric (EMR): Sales equipment manufacturer SPX is Cramer’s idea of a “new tech” stock. Of SPX and Emerson Electric, Cramer said, “These are heartland companies that are making things that everyone wants”

Seeking Alpha publishes a summary of Jim Cramer's stock picks every day including: Mad Money Recap, Lightning Round, Stop Trading and his Wall Street Confidential Picks.

Complete Story »]]> KBH JCP CSG HNZ PEP KO TRN WGOV OC SPW EMR SA Editor Miriam Metzinger http://seekingalpha.com/article/77571-pnc-financial-services-facing-the-heat?source=feed http://seekingalpha.com/article/77571-pnc-financial-services-facing-the-heat?source=feed To begin with, I would like to remind all that I am a private investor - not an analyst, nor a reporter or media professional. Hence, expect me to be short anything that I am bearish on and long on anything that I am bullish on. Very strong investment results are my goals, with the blog being a hobby.

With that being said, I am bearish on the regional banking sector with large concentrations of commercial real estate, consumer finance and 2nd lien residential real estate risk. I screened about 330 S&Ls, regional and small/mid-cap banks and the finalist of this contest was PNC (PNC). Below is my (textual) take on PNC. Later, I will post some other banks that I have looked at along with additional info on the state of the industry that emboldens me to hold short positions during this bear rally. I will also be posting updates on the homebuilders.

]]> 2008-05-16T06:20:10-04:00 Reggie Middleton Reggie Middleton submits:

To begin with, I would like to remind all that I am a private investor - not an analyst, nor a reporter or media professional. Hence, expect me to be short anything that I am bearish on and long on anything that I am bullish on. Very strong investment results are my goals, with the blog being a hobby.

With that being said, I am bearish on the regional banking sector with large concentrations of commercial real estate, consumer finance and 2nd lien residential real estate risk. I screened about 330 S&Ls, regional and small/mid-cap banks and the finalist of this contest was PNC (PNC). Below is my (textual) take on PNC. Later, I will post some other banks that I have looked at along with additional info on the state of the industry that emboldens me to hold short positions during this bear rally. I will also be posting updates on the homebuilders.

Complete Story »]]> PNC Reggie Middleton http://seekingalpha.com/article/77572-cure-for-the-bad-ceo-blues-sue-your-shareholders?source=feed http://seekingalpha.com/article/77572-cure-for-the-bad-ceo-blues-sue-your-shareholders?source=feed Stephen Taub has an intriguing brief article in CFO.com on the latest hot new trend among blame-shifting CEOs: Suing unruly shareholders.

Vaalco Energy is trying an unsual tactic to stave off a proxy fight: suing its shareholders.

The independent oil producer filed an action against New York City-based hedge fund Nanes Delorme Partners I L.P., and Pilatus Energy SA, of Zug, Switzerland, in federal court, alleging they violated securities laws by sending misleading information to shareholders in an effort to install three of their nominees on Vaalco's board, according to the Associated Press.

One of the targets of this imbecilic junk lawsuit responded as follows:

]]> 2008-05-16T06:17:04-04:00 Gary Weiss Gary Weiss submits:

Stephen Taub has an intriguing brief article in CFO.com on the latest hot new trend among blame-shifting CEOs: Suing unruly shareholders.

Vaalco Energy is trying an unsual tactic to stave off a proxy fight: suing its shareholders.

The independent oil producer filed an action against New York City-based hedge fund Nanes Delorme Partners I L.P., and Pilatus Energy SA, of Zug, Switzerland, in federal court, alleging they violated securities laws by sending misleading information to shareholders in an effort to install three of their nominees on Vaalco's board, according to the Associated Press.

One of the targets of this imbecilic junk lawsuit responded as follows:

Complete Story »]]> EGY ALD Gary Weiss http://seekingalpha.com/article/77570-cramer-the-tin-man-cramer-s-lightning-round-5-15-08?source=feed http://seekingalpha.com/article/77570-cramer-the-tin-man-cramer-s-lightning-round-5-15-08?source=feed

Stocks discussed in the lightning round session of Jim Cramer’s Mad Money TV program, Thursday May 15. Click on a stock ticker for more analysis:

Bullish calls:

Merck (MRK): “MRK is going to be stuck at $40. That said, I think MRK is cheap. I think MRK is going to surprise to the upside, because of Vytorin scripts.”

]]> 2008-05-16T06:14:35-04:00 SA Editor Miriam Metzinger

Stocks discussed in the lightning round session of Jim Cramer’s Mad Money TV program, Thursday May 15. Click on a stock ticker for more analysis:

Bullish calls:

Merck (MRK): “MRK is going to be stuck at $40. That said, I think MRK is cheap. I think MRK is going to surprise to the upside, because of Vytorin scripts.”

Complete Story »]]> MRK SGP TIN EGY WFMI CNX ABMD CHDX PCG FMCN CENT SA Editor Miriam Metzinger http://seekingalpha.com/article/77569-google-overtakes-yahoo-as-most-visited-web-property?source=feed http://seekingalpha.com/article/77569-google-overtakes-yahoo-as-most-visited-web-property?source=feed As if Yahoo CEO Jerry Yang didn’t have enough to worry about, Google (NASDAQ: GOOG) has now overtaken Yahoo (NYSE: YHOO) as the most-visited website property, according to comScore.

April saw Google Sites attain the number one spot in the Top 50 U.S. Properties ranking for the first time in its history with a total audience of more than 141 million visitors.

]]> 2008-05-16T06:13:37-04:00 Research Recap Research Recap submits:

As if Yahoo CEO Jerry Yang didn’t have enough to worry about, Google (NASDAQ: GOOG) has now overtaken Yahoo (NYSE: YHOO) as the most-visited website property, according to comScore.

April saw Google Sites attain the number one spot in the Top 50 U.S. Properties ranking for the first time in its history with a total audience of more than 141 million visitors.

Complete Story »]]> GOOG YHOO Research Recap http://seekingalpha.com/article/77566-central-sun-mining-when-the-dust-settles-juniors-will-shine?source=feed http://seekingalpha.com/article/77566-central-sun-mining-when-the-dust-settles-juniors-will-shine?source=feed The previous months have been a challenging time for mining stock investors, at least for these who invest in the junior sector. Since the credit crisis stroke, junior stocks suffered a great deal.

In retrospect, there are some reasons behind this underperformance of junior mining stocks, as they had attributes which most investors were avoiding since early August 2007: big appetite for capital, high beta, comparably low trading volume, very long development time and high dependency on investors’ ability to take risks. The far more important question for now is, will the junior sector recover and is the story still the same? The answer is: yes, but the game will be different this time.

]]> 2008-05-16T06:11:58-04:00 Daniel Gschwend Daniel Gschwend submits:

The previous months have been a challenging time for mining stock investors, at least for these who invest in the junior sector. Since the credit crisis stroke, junior stocks suffered a great deal.

In retrospect, there are some reasons behind this underperformance of junior mining stocks, as they had attributes which most investors were avoiding since early August 2007: big appetite for capital, high beta, comparably low trading volume, very long development time and high dependency on investors’ ability to take risks. The far more important question for now is, will the junior sector recover and is the story still the same? The answer is: yes, but the game will be different this time.

Complete Story »]]> SMC Daniel Gschwend http://seekingalpha.com/article/77568-xm-sirius-draw-merger-lines?source=feed http://seekingalpha.com/article/77568-xm-sirius-draw-merger-lines?source=feed You have to read between the lines to see it, but it seems even more clear now than it ever has. Sirius (SIRI) and XM (XMSR) are not going to give up spectrum to facilitate the merger. Mel Karmazin and David Frear both stated in strong terms that they are not going to do anything that is not in the best interest of shareholders and subscribers, and that they would walk away from the deal if it came to that. Giving back spectrum would harm both shareholders as well as existing subscribers.

Consider that Sirius and XM have promised that existing radios would work, and that existing subscribers would still have access to the quantity and quality of programming that exists today. If Primospere were to get 30% of the spectrum, how could Sirius and XM keep their promise? The same is the case for the Georgetown Partners proposal seeking 20%. In either situation, both subscribers and shareholders absorb the pain.

]]> 2008-05-16T06:09:40-04:00 Tyler Savery Tyler Savery submits:

You have to read between the lines to see it, but it seems even more clear now than it ever has. Sirius (SIRI) and XM (XMSR) are not going to give up spectrum to facilitate the merger. Mel Karmazin and David Frear both stated in strong terms that they are not going to do anything that is not in the best interest of shareholders and subscribers, and that they would walk away from the deal if it came to that. Giving back spectrum would harm both shareholders as well as existing subscribers.

Consider that Sirius and XM have promised that existing radios would work, and that existing subscribers would still have access to the quantity and quality of programming that exists today. If Primospere were to get 30% of the spectrum, how could Sirius and XM keep their promise? The same is the case for the Georgetown Partners proposal seeking 20%. In either situation, both subscribers and shareholders absorb the pain.

Complete Story »]]> SIRI XMSR Tyler Savery http://seekingalpha.com/article/77565-cbs-is-cnet-purchase-a-good-move?source=feed http://seekingalpha.com/article/77565-cbs-is-cnet-purchase-a-good-move?source=feed CBS Corp. (CBS) CEO Les Moonves is serious about making his company an online powerhouse. Yesterday, CBS announced it's buying CNET Networks for $1.8 billion dollars, paying $11.50 a share, a 45 percent premium over Wednesday's closing price.

CNET (CNET) owns a slew of websites, including CNET.com, which specializes in tech and gadget news (a couple CNET writers are regular CNBC contributors), plus Gamespot.com and MP3.com, to name a few.

]]> 2008-05-16T06:07:56-04:00 Julia Boorstin Julia Boorstin submits:

CBS Corp. (CBS) CEO Les Moonves is serious about making his company an online powerhouse. Yesterday, CBS announced it's buying CNET Networks for $1.8 billion dollars, paying $11.50 a share, a 45 percent premium over Wednesday's closing price.

CNET (CNET) owns a slew of websites, including CNET.com, which specializes in tech and gadget news (a couple CNET writers are regular CNBC contributors), plus Gamespot.com and MP3.com, to name a few.

Complete Story »]]> CBS CNET Julia Boorstin http://seekingalpha.com/article/77567-hot-chile-cramer-s-in-depth-5-15-08?source=feed http://seekingalpha.com/article/77567-hot-chile-cramer-s-in-depth-5-15-08?source=feed Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Thursday May 15.

Banco Santander (SAN)

Even though Chile’s economy is cooling off, it is still hotter than that of the U.S., commented Cramer who is bullish on SAN, the Chilean bank which smart money uses as a proxy for exposure to Chile. Cramer called SAN a stealth play in China, and as China grows, so will Chile. SAN has the highest credit rating of any South American company and is the most successful bank in Chile. SAN saw an asset growth of 24% in 2007, the stock is up 20% and offers a 4.5 % dividend. Regulation works in SAN’s favor, because the high barriers to entry reduce competition and allow Chile’s five largest banks to control 80% of the market. Cramer says the stock is cheap at 11 times next year’s earnings and a 13% growth rate.

]]> 2008-05-16T06:06:58-04:00 SA Editor Miriam Metzinger Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Thursday May 15.

Banco Santander (SAN)

Even though Chile’s economy is cooling off, it is still hotter than that of the U.S., commented Cramer who is bullish on SAN, the Chilean bank which smart money uses as a proxy for exposure to Chile. Cramer called SAN a stealth play in China, and as China grows, so will Chile. SAN has the highest credit rating of any South American company and is the most successful bank in Chile. SAN saw an asset growth of 24% in 2007, the stock is up 20% and offers a 4.5 % dividend. Regulation works in SAN’s favor, because the high barriers to entry reduce competition and allow Chile’s five largest banks to control 80% of the market. Cramer says the stock is cheap at 11 times next year’s earnings and a 13% growth rate.

Complete Story »]]> SAN ENI IMB SPF AUY SA Editor Miriam Metzinger