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  • Google's (GOOG) unnerving spending spike prompts a rare downgrade, as Citigroup drops shares to Hold and cuts its price target to $650 from $750. No less than eight brokerages lower price targets. BofA Merrill Lynch is more forgiving, maintaining its $750 target based partly on anticipation of a "strong Android Christmas" for new mobile devices. GOOG -5.5% premarket.   [View news story]
    I drop Citigroup from Sell to Fecal Material.
    Apr 15, 2011. 09:12 AM | 1 Like Like |Link to Comment
  • Spending cuts not expected to dent $1.5T deficit 
    I remember, from last year's coverage, that teabaggers were decidedly an older demographic. They held up nonsensical signs about who knows what and demanded that the government get its hands off their Medicare. Hmmm.

    I hope that one day, I'll see them put their money where their ignorant mouths are and really do something to help the deficit. Let's see them hold a Medicare card burning party. Let's see them refuse Social Security for the good of their grandchildren. I'm not holding my breath. They are too selfish and hypocritical to do anything that truly makes a difference.
    Apr 12, 2011. 10:56 PM | Likes Like
  • Don't Worry About the Potential Closure of the Federal Government  [View article]
    I do not absolve Clinton for signing the repeal, and that remains a black mark on his record. I only highlight your (un)intentional exclusion of any Republicans from the repeal effort. Clinton signed the repeal, but the genesis of such a wholesale breakdown of regulatory structure could only have originated from a Reagan Republican.

    You already made the tired Community Reinvestment Act argument in your with your McDonald's comment. What do you say to the fact that the majority of the subprime loans were written by unregulated independent mortgage lenders--not entities regulated under the CRA?

    No one forced lenders to make bad loans. Lenders wrote loans, collected the fees, and passed on the risk by selling the loans to investors who believed that real estate prices would never fall again. They were more than happy to make bad loans--no government arm twisting necessary.

    I did not give anyone a free pass. I merely stated the fact that Libya is small beans compared with Iraq. Care to dispute it?
    Apr 8, 2011. 03:43 PM | 3 Likes Like |Link to Comment
  • Don't Worry About the Potential Closure of the Federal Government  [View article]
    1. Clinton repealed Glass-Steagal, but Gramm wrote the bill. Regardless, your comment shows why some people consider Clinton to be the best Republican president since Eisenhower.

    2. The sophisticated party in a loan trasaction is the lender. Anyone can apply for a loan--the lender is responsible for separating the wheat from the chaff. No one forced WaMu to lend to hand out money to anyone with a pulse. One cannot blame the government for a complete abdication of corporate responsibility.

    3. I assume you use quotation marks around "war" because Congress never issued a formal declaration. Anyway, Libya is small beans compared with Iraq.
    Apr 8, 2011. 02:12 PM | 2 Likes Like |Link to Comment
  • Merger Mania: The Hidden Risks in Cheap Blue Chip Technology Stocks  [View article]
    "High priced, but inexpensive" is not an oxymoron. "High priced" refers to price per share, while "inexpensive" refers to the P/E ratio. Conversely, a $5 stock with a P/E of 100 would be low priced and expensive.
    Apr 7, 2011. 03:57 PM | 1 Like Like |Link to Comment
  • Chinese Government Going After Google?  [View article]
    The idea that a company needs to succeed in China in order to thrive is ridiculous. In fact, given the utter lack of intellectual property protection (more likely state-sponsored corporate espionage), why would any company want to do business there? There are five billion other people in the world to whom it can sell its products.

    Let's see Baidu do anything meaningful outside of China.
    Apr 5, 2011. 03:08 AM | 1 Like Like |Link to Comment
  • Brazil's push to oust VALE CEO Agnelli reflects a troubling trend in which developing countries try to reassert control and get their hands on the massive profits of formerly state-owned commodity producers. Petrobas (PBR) has been a target of government meddling as well.   [View news story]
    Brazil's government has to balance making Brazil attractive for foreign investment with ensuring that a portion of profits generated by the country's mineral wealth benefits the local population. Much of the wealth redistributed from commodity companies will help 1) industrial companies as Brazil continues to build and modernize and 2) consumer-based companies as the rapidly-growing middle class spends more. Don't feel too sorry for Vale and Petrobras--they, and their shareholders, will continue to make money hand over fist.

    If you do not like what is happening to Vale and Petrobras, feel free to sell your shares or to not purchase them at all. The government would appreciate you helping to reduce the flood of investment dollars into Brazil, which has driven up inflation and the value of the Real.

    Anyway, regardless of government intervention, Petrobras will, one day, be larger and more important than Exxon and Chevron combined.

    Flame away.
    Mar 25, 2011. 12:58 PM | Likes Like |Link to Comment
  • Comparing Heavyweight Tech Titans: Why Intel Is a Better Investment Than IBM  [View article]
    1. PCs (and servers) are not going away. Mobile devices are more convenient for simple tasks, but there are many things that they are simply not equipped to do. I like using my iPad a lot more than my PC, but I still need the PC.

    2. There are legions of people around the world who do not have PCs. Growth in PCs will likely be slower than growth in mobile devices, but there will be growth.

    3. I'm betting that Intel will eventually figure it out either through R&D or by acquisition. Once it does, it will eventually command an outsized, if not dominant share in the market. Why? That's just what Intel does.

    4. Cloud computing is supposed to be a high-growth area, which would increase demand for servers. Intel is dominant here, and will remain dominant even as IBM and HP take share.

    In conclusion, Intel will definitely be part of the future. Meanwhile, enjoy the high dividend yield and low PEG ratio.
    Feb 23, 2011. 01:42 PM | 1 Like Like |Link to Comment
  • Comparing Heavyweight Tech Titans: Why Intel Is a Better Investment Than IBM  [View article]
    Wyeth cost 9X more than McAfee. Pfizer buying Wyeth would be like Intel buying Qualcomm.
    Feb 22, 2011. 09:37 AM | 5 Likes Like |Link to Comment
  • Visa: Netflix's Future  [View article]
    Can't Comcast "magically" go directly to the comsumer? Before it split itself into two companies, Time Warner could go directly to the consumer as well. Disney and Apple are natural allies due to Jobs' influence at DIS.

    I see two scenarios, which other commenters have touched upon:

    1. Streaming isn't difficult, and Netflix does not have any special claim to the infrastructure. If Netflix is making so much money, why are the content generators signing their profits away to Netflix on the cheap? Just because Starz signed a bad deal does not mean that Disney, Time Warner, Sony, Comcast, Discovery, NewsCorp, etc., etc. will follow suit. Consumers may get angry if the content producers cut Netflix out, as it is a convenient aggregator. However, consumers will continue watch what they want to watch, and if they like their shows enough, they will even sign up with multiple content producers if something like Hulu does not work out. Content generators saw what Apple did to the recording industry, and they are loathe to let Netflix dominate their industry. Basically, to survive, Netflix would have beg the content generators to let them play. Good luck with that one.

    2. If, for some reason, the content producers do not stream themselves, companies like Apple, Microsoft, Google, and Amazon are sure to (eventually) defeat Netflix. These companies have the financial wherewithal to 1) offer content generators deals that make Netflix's "huge checks" look like pocket change and 2) undercut Netflix's prices. In other words, they have the ability to be better middlemen than Netflix. Apple and Google are Netflix partners now, but I doubt these partnerships will last forever (or even a few years).

    Can you make an argument as to why either one of these scenarios will not happen?
    Feb 7, 2011. 04:54 PM | 2 Likes Like |Link to Comment
  • The yuan is fixed to the dollar, but floats against most other currencies. Citing the real's 37% gain against the yuan as causing a surge in Chinese imports, Brazil nearly doubles tariffs against China on several different toys.   [View news story]
    Next year, Brazil will report a sharp drop in lead poisoning from toys.
    Dec 29, 2010. 09:07 AM | 1 Like Like |Link to Comment
  • Latin America: Education as an Economic Indicator  [View article]
    I read that Uruguay is the first country in the world to provide a laptop and wireless Internet to every newborn.
    Dec 27, 2010. 11:47 AM | Likes Like |Link to Comment
  • "We are completely able to control the overall level of prices." Ben Bernanke? No. It's Chinese Premier Wen Jiabao, who, while acknowledging that price increases have "made life more difficult" for the average Chinese, is confident that Beijing has the matter under control.   [View news story]
    Despite the fact that the Chinese economy is still run by the Communist Party, it has too many capitalist characteristics for Beijing to completely control prices. I look forward to seeing it blow up in Wen's face.
    Dec 27, 2010. 11:44 AM | 2 Likes Like |Link to Comment
  • Outlook 2011: Is the Smart Money Right About China?  [View article]
    "Germany would be a powere house in Europe if they stood on the DM rather than the currency of the EU."

    That's false. Germany's economy lives and dies by its exports. If there was no Euro, then recent events would have caused the DM to strengthen dramatically relative to its neighbors. Also, at least among the major currencies, the DM would have shared the burden with the yen as the dollar weakened. Strong DM = weak exports = pain for Germany.

    The Germans' recent complaint about QEII should tell you all you need to know.
    Dec 27, 2010. 11:40 AM | 4 Likes Like |Link to Comment
  • Most of what Wall Street does is socially worthless, so what good is it really, John Cassidy writes. "Big banks are forever trying to invent new financial products that they can sell but that their competitors, at least for the moment, cannot," he says. Most of these "innovations... serve little purpose or... blew up and caused a lot of collateral damage."   [View news story]
    Perhaps the Fed created the environment, but there's something to be said for personal responsibility and decency. No one made people borrow more than they can afford. No one made WaMu and Countrywide approve loan applications without doing due diligence. No one made Moody's plaster AAA on pile after pile of garbage. No one made AIG bet that property values will never ever drop. No one made Bear Stearns lever up to the point that they were betting the entire company every day.

    Sure, Greenspan's policies were strange. However, the ultimately responsibility is on the plethora of bad actors teeming in the cesspool known as Wall Street.
    Nov 22, 2010. 11:42 PM | 4 Likes Like |Link to Comment
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