Monday, November 30, 2009

Vertical Integration

We have the new buzzwords. No longer disintegration, but integration. From the WSJ:

Mr. Ellison is among the executives reviving "vertical integration," a 100-year-old strategy in which a company controls materials, manufacturing and distribution. Others moving recently in this direction include ArcelorMittal, PepsiCo Inc., General Motors Co. and Boeing Co.

The reasons vary. Arcelor, the world's largest steelmaker, wants more control over its raw materials. Pepsi wants more authority over distribution. GM and Boeing are moving by necessity, to assure quantity and quality of vital parts from troubled suppliers. Some are repurchasing businesses they only recently shed.

Vertical integration gets voted up on Wall Street while minarets get voted down in Switzerland!

The monetary slush fund

Today we tout online buying of merchandise while in Iraq, satellite TV now touts the "Saddam Channel."

So where's the "Ahmadinejad Channel" in Dubai?

They move money from their buddies as well as Bernanke!

Goldman upgrades steel sector, and raises US Steel to conviction buy

Two months ago Goldman said the sector was a sell. Now it's a buy, and US Steel is a conviction buy with a target of $54.

I think the whole world finally recognizes China's lies about steel. Or maybe, the stocks have just been beat down enough, that they can finally be touted by Goldman!

Meanwhile, steel gets touted, while the economy is touted as sub-par.

Settling Into Subpar Recovery Mode                                                                                                                                                       

Sunday, November 29, 2009

AOL--Finally a buy

AOL when issued is trading at $23, and Barron's had a piece on it that made sense. AOL bought back it's stake from GOOG for $283 million--which equates to $53 a share.

Current market cap is $2.4 billion, with cash flow of almost $1 billion. On December 9, the shares trade regular way.AOL still has properties that would be interesting to anothe rparty--Mapquest, ICQ, Bebo and it's dial-up business.

The stock is a buy.

Russian wedding dress!

"Ohh, they make such a lovely pair!"

This is airline safety?

American Airlines said: "At this time American Airlines is unable to confirm whether or not the image referred to was taken by a member of flight crew but will investigate the situation internally to determine if any of the airline's strict policies were not correctly applied.

"American Airlines’ primary concern is for the safety and comfort of its passengers and crews and consequently passengers are advised to book two seats if they are concerned that they will require them. If a flight is not full, however, passengers' needs would be accommodated without charge wherever possible."

Tiger's statement

As you all know, I had a single-car accident earlier this week, and sustained some injuries. I have some cuts, bruising and right now I'm pretty sore.

This situation is my fault, and it's obviously embarrassing to my family and me. I'm human and I'm not perfect. I will certainly make sure this doesn't happen again.

This is a private matter and I want to keep it that way. Although I understand there is curiosity, the many false, unfounded and malicious rumors that are currently circulating about my family and me are irresponsible.

The only person responsible for the accident is me. My wife, Elin, acted courageously when she saw I was hurt and in trouble. She was the first person to help me. Any other assertion is absolutely false.

This incident has been stressful and very difficult for Elin, our family and me. I appreciate all the concern and well wishes that we have received. But, I would also ask for some understanding that my family and I deserve some privacy no matter how intrusive some people can be.
The 911 call is right here.

End of story!!!!!!

Because Rachel Uchitel just took off to an unknown designation. And look at the smile on her face  at the airport.

That's a smile that only money can buy!

U.A.E. to stand behind banks

It said this in a Statement: "Central Bank has issued a notice to UAE banks and branches of foreign banks operating in the UAE, making available to them a special additional liquidity facility linked to their current accounts at the central bank, at the rate of 50 basis points above the 3 months EIBOR (Emirates interbank offered rate)."

Tiger needs a "Kobe Special"

According to TMZ Tiger told his friend, "I have to run to Zales to get a 'Kobe Special.'" The person on the other end of the phone asked Tiger what a "Kobe Special" was. The reply -- "A house on a finger."

A "Kobe Special" at Zales. Too funny!

Here's the Kobe Special sported by his wife, Vanessa.

He won't be able to pick that up at Zales!

And he better stay "sleeping" until his cuts heal before he has an interview with the FHP!

But what's with all the moralizing saying Tiger's career is over? Check out Lupica's hatchet job on Tiger at the NY Daily News. He wants Tiger to come clean and quit the cover-up:

No one is suggesting for one minute that Tiger Woods' marriage is some kind of national security issue. Neither is a minor traffic accident in which he was the only person injured. But it is a police matter, has been from start, from the time they were called to his home and the most famous athlete on the planet, and the richest, ended up in the hospital because of whatever happened in his insulated Isleworth neighborhood at a time of the night when nothing good ever happens, and you can look that up. If this was a "minor" accident, Mr. and Mrs. Woods could have explained it by now, no problem.

At least we know what is giving Tiger his problems. His putter!

Saturday, November 28, 2009

Tebow's awesome finale in the Swamp


3 TD passes and 2 rushing TDs--and a 37-10 victory over FSU in front of 90,907 fans--with half of them wearing eye black! Gator haters must of just been dying today!

FHP official press release on Tiger Woods

This time Tiger didn't break the club!

Tiger's yacht--"Privacy"

Barrons: The contagion effect from Dubai is the end of the risk trade

(Dubai in 1990, and then in 2007)

THE IMPACT OF THE UPHEAVALS in Dubai extends far beyond the middle eastern emirate. Indeed, it may be the beginning of the end of the global risk trade, if it isn't over already....

But with liquidity shut off from the real economy, it has flowed into asset markets and into the so-called carry trade -- borrowing at the near-zero interest rate resulting from the Fed's federal-funds target of 0-0.25% to invest in anything else that provides a higher return. And with the dollar losing value steadily against foreign currencies, it has literally paid to borrow to invest in anything else, with the key exception of the Japanese yen. Since it became cheaper to borrow in dollars than yen, greenbacks have become the key funding currency for carry trades.

The cracks have not been all papered over from the output from government printing presses in the U.S. and elsewhere. While that liquidity did stanch the bleeding that followed last year's crisis, it also helped levitate U.S. equity markets nearly 60% from their lows. And the riskier the asset, the greater the gains, from small-cap stocks to junk bonds to emerging markets.

But those trillions have not cured the underlying debt deflation at the root of the economic crisis. In past cycles, the reliquefication by central banks could be counted on to pump-prime the economy. Borrowing and lending would resume after having been restrained by tight monetary policy, and a new cycle would start.

After the bursting of the debt bubble, the process isn't working. It may have stoked a speculative binge in commodities, currencies and risky securities, but the real economy continues to labor.

As it does, grandiose projects such as Dubai World collapse under the weight of their huge debts. Risk, previously suppressed successfully by policy actions, begins to increase.

That, in turn, forces the curtailment of risk positions, from hedge funds to Wall Street proprietary trading desks. Hedging costs rise, forcing further reductions of positions in a vicious circle. As year-end approaches, the willingness to hold risk positions is reduced still further, exacerbating the process.

Even with the U.S. on holiday, this train of events is proceeding. Stocks shed upwards of 3% Thursday and continued to fall Friday in Asia. The yen and dollar are higher while short-term Treasury yields are setting new lows.

It appears the end game for this market phase has begun.

The NY Times is in on it also:

Now that the boom has gone bust, both in Dubai and in the United States, Dubai is stuck with a glut of real estate that no one wants to buy or rent. Creditors and markets had always assumed that when push came to shove, its oil-rich neighbor Abu Dhabi would bail out Dubai. But that assumption was called into question this week, and the resulting fear that Dubai might not be able to pay its bills sent a wave of uncertainty rippling through markets just as investors thought the worst of the global financial instability was over.

In a worst-case contagion, Bank of America analysts wrote Friday, “One cannot rule out — as a tail-risk — a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way that Argentina did in the early 2000s or Russia in the late 1990s.”

And not just emerging markets. “Dubai shows us that what we are now facing is a solvency issue, not a liquidity issue,” said Jonathan Tepper, a partner at Variant Perception, a research house in London that has been outspoken on the debt problems facing European economies.

Now, just as Bear Stearns was a harbinger of a string of failures of overly leveraged investment banks, the concern is that Dubai could be the canary in the coal mine for heavily indebted countries. The debts of everyone, including Japan and the United States, not to mention emerging markets, have risen greatly as the countries have fought the ravages of the global recession.

What Dubai did is just put this fact on the table. Capitalism needs Dubai, more than Dubai needs to pay its bankers. We built casinos, while they built dreams.

Friday, November 27, 2009

Tiger's drive in the rough

Tiger's early morning car wreck in the rough was supposedly over Rachel Uchitel, who according to the National Enquirer, he's been having an affair with.

He banged a tree, and a hydrant at his house in the wee hours of the morning, because he supposedly was spending too much time playing with her dogs!

But check out the ring on her left hand. It's the same one that Michaele Salahi, the White House crasher wore!

And this time, they're both going to kiss and tell. 

Morgan Stanley's take on Dubai and the UAE


The cigarette butt economy

Check out these butts---Every cigarette is smoked down to the filter. There is even productivity in smoking, as smokers make do with less!

Which must mean there is productivity even at the volleyball courts!

Abu Dhabi and Dubai

Maybe their support is going elsewhere....

"My biggest one-off job was with three Arab businessmen at the Emirates Palace Hotel in Abu Dhabi," she said. "It's a seven-star hotel and everything is decked out in gold leaf. They paid me £20,000 for one night with all of them. By morning I was exhausted.

"Arab men are fascinated by Western women. We're almost like status symbols to them. I've met girls working in Abu Dhabi, Dubai and Bahrain who've made a million out of escorting."

Her worst bookings with her new agency have been in Britain - with MPs. She said: "My job has taken me right to the heart of Westminster. I've had sex with about a dozen MPs at different times, all of them Conservatives and all what I'd term upper-class.

"They seem to think they're being naughty by spending £5,000 to have a night with me. They're rubbish in bed - all fingers and fumbling. I find them pretty distasteful.

"Funnily enough, since the expenses scandal broke I haven't met any."

Maybe Abu Dhabi was just blowing bubbles or getting blown!

I'm forever blowing bubbles
Property bubbles in the sand
They grow so fast, obviously can't last
But why do I care, I still own the land
People keep on buying
I take all their cash
Oh, I'm forever blowing bubbles
And bubbles always crash

"Nowadays, ten months after the financial crisis came crashing in on the United Arab Emirates (UAE), nearly destroying its shiniest component, Dubai, hundreds of cranes and dredgers have yet to resume work. The Queen Elizabeth II, once the world’s smartest liner, due to become yet another posh Dubai hotel, is a sleeping quayside hulk. Nothing is happening on three of the most recently man-made islands shaped like palm trees off Dubai’s coast that were the latest flashy projects of Nakheel, the emirate’s shaky real-estate developer."

But worldwide contagion because of a bubble in Dubai? You'll get all your contagion in one day. After all, how do lower oil prices hurt the economy?

And only on Wall Street can the bears sell the derivative affects of Dubai to the world!

Sock the banks with the bad loans, and start again!

The Black Friday sale got just a little bit bigger!

Why is Wall Street having such a Jekyll and Hyde reaction? Like the movie, it's about money, and no-one knows for sure what problems Dubai has hidden.

The street thinks there is some cockroaches in Dubai.

Thursday, November 26, 2009

Dubai's Debt Binge

Dubai World  the builder of the Palm Jumeirah has asked for a standstill agreement on it's debt. The debt--$59 billion--by it and its subsidiary Nakheel is now teetering on default.

Here's how things look from a helicopter.

And here's how they look from a ground level.

$59 billion of sub-prime real estate in the middle of a desert--with money lent by the prime banks!

Goldman Sachs was the mandated lead arranger on the $5.5 billion Dubai World term loan in June of 2008, but of course, they had no exposure!

But the question remains--Is Dubai the UAE's Lehman?

The Thanksgiving Day Parade

Today, the newest mega balloon entrant in the 83rd annual Macy's Thanksgiving Parade the Pillsbury Doughboy coming in at 46 feet.

But what happens if you are afraid of the Pillsbury Dough Boy? You get a Freak Show!

As a teenager, I loved carnivals. When they came into town, I set up the tents and the stands, and then took them down when the left. But my favorite part was when a carnival had the "Freak Shows."

I always managed to hang around and talk to them. I always thought they were just really cool people, and not freaks.

A long time ago, I bought this original charcoal drawing by Paul Colin which hangs in my office--"Freak Show."

He's the French Poster artist most famous for banana wrapped Josephine Baker. But everyone can have that poster.

No-one else can have what I have. And I think mine tells a way cooler story.

But what do you draw if you are afraid of the Pillsbury Dough Boy?

How about photo-realism paintings? Above is Greg Allen's Land of Broken Dreams.

His mother, was terrified of the Pillsbury Doughboy.  She suffered from acute phobia in her pregnancy, and scientists speculate that that trauma created a maternal impression, causing her baby, Greg Allen, to be born with congenital lymphedima. He has the Pillsbury Doughboy right hand. But with that, he has been given the gift of ambidextrous ability with his hands which has contributed to his phenomenal photo realist paintings.

And he's part of the "Freak Show" at 999eyes. Which shows that these "freaks" are just people with their own very cool talents.


So maybe the Pillsbury Doughboy will create some more artists in NYC today.

After all, this one is 46 feet tall!

Lincoln proclaims the first Thanksgiving

During the midst of the Civil War in 1863, Lincoln issued a Proclamation of Thanksgiving.

Compare that to Time magazine yesterday who said the last ten years were the decade of hell.

So toast Lincoln today with your bird. And save one for Time!

By the President of the United States of America.

A Proclamation.

The year that is drawing towards its close, has been filled with the blessings of fruitful fields and healthful skies. To these bounties, which are so constantly enjoyed that we are prone to forget the source from which they come, others have been added, which are of so extraordinary a nature, that they cannot fail to penetrate and soften even the heart which is habitually insensible to the ever watchful providence of Almighty God. In the midst of a civil war of unequaled magnitude and severity, which has sometimes seemed to foreign States to invite and to provoke their aggression, peace has been preserved with all nations, order has been maintained, the laws have been respected and obeyed, and harmony has prevailed everywhere except in the theatre of military conflict; while that theatre has been greatly contracted by the advancing armies and navies of the Union. Needful diversions of wealth and of strength from the fields of peaceful industry to the national defence, have not arrested the plough, the shuttle or the ship; the axe has enlarged the borders of our settlements, and the mines, as well of iron and coal as of the precious metals, have yielded even more abundantly than heretofore. Population has steadily increased, notwithstanding the waste that has been made in the camp, the siege and the battle-field; and the country, rejoicing in the consiousness of augmented strength and vigor, is permitted to expect continuance of years with large increase of freedom. No human counsel hath devised nor hath any mortal hand worked out these great things. They are the gracious gifts of the Most High God, who, while dealing with us in anger for our sins, hath nevertheless remembered mercy. It has seemed to me fit and proper that they should be solemnly, reverently and gratefully acknowledged as with one heart and one voice by the whole American People. I do therefore invite my fellow citizens in every part of the United States, and also those who are at sea and those who are sojourning in foreign lands, to set apart and observe the last Thursday of November next, as a day of Thanksgiving and Praise to our beneficent Father who dwelleth in the Heavens. And I recommend to them that while offering up the ascriptions justly due to Him for such singular deliverances and blessings, they do also, with humble penitence for our national perverseness and disobedience, commend to His tender care all those who have become widows, orphans, mourners or sufferers in the lamentable civil strife in which we are unavoidably engaged, and fervently implore the interposition of the Almighty Hand to heal the wounds of the nation and to restore it as soon as may be consistent with the Divine purposes to the full enjoyment of peace, harmony, tranquillity and Union.

In testimony whereof, I have hereunto set my hand and caused the Seal of the United States to be affixed.

Done at the City of Washington, this Third day of October, in the year of our Lord one thousand eight hundred and sixty-three, and of the Independence of the Unites States the Eighty-eighth.

By the President: Abraham Lincoln

William H. Seward,
Secretary of State

Is it even Demi Moore?

So we heard about Demi-Moore's photo-shopped hip. Maybe it's a photoshopped body! Check out Anja Rubik. So let's do some detective work, so we can vote thumbs down, or thumbs up!

Maybe we could ask Susan Boyle. Or Megan Fox! Here is Susan Boyle at the Rockefeller Center.

And here is everyone's favorite hottie, Megan Fox. What do they have in common?


Telltale thumbs!

So here is Demi Moore, not on a magazine cover.

Maybe when Demi Moore said that her hip was not photo-shopped, she was telling the truth.

It may not of even been her hip.

Wedding crashers? How about State Dinner crashers!

Houston, we have a problem!

Security details promises to do a better job next time!

At least Biden got in a cheap squeeze on Michaele Salahi, Tareq Salahi's wife, who were the uninvited guests that crashed the party!

Meanwhile, security is so tight in the NFL that they put out these three paragraphs because it looked like a ref high fived Vince Young after the Titans beat Houston!

Maybe the NFL needs to lighten up, and the White House needs to tighten up!
"It was not Jerome Boger's intent to exchange a high-five with the player. It began with the referee making the proper administrative signal and resulted in the appearance of an inappropriate action.
"As Vince Young took a knee on the game's final play, Jerome Boger jogged in with his right arm in the air to signify the play was over. That is the proper administrative signal for the referee.
"As Young turned around, he saw Boger approaching the line of scrimmage with his arm raised. As Boger moved toward the line of scrimmage, he started to bring his arm down. However, before he lowered his arm, Young, moving towards the referee, raised his own arm and the two exchanged what appeared to be a quick high-five."