Linked

I'm not normally one to just randomly link to other news articles but i ran across a few today that i thought are worth sharing.

First, from MSNBC.

http://www.msnbc.msn.com/id/13924780/

When are taxpayers gonna wake up? I have 0 tolerance for whinny politicians complaining about the deficit when this kind of crap is going on. $435Million on credit cards....Wow. Thats nearly half a billion dollars. If this sort of thing happened at a company in the private sector the lawsuits would be flying faster than a 1969 COPO Camaro with the all aluminum ZL1. Too detailed? Well, Fast. Elliot Spitzer, the jackass Attorney General from NY would be dragging them into court within weeks. Gee, suppose he wants to be governor.

And then this..

http://www.msnbc.msn.com/id/13929959/

I thought this was a defensive action. I'm no expert, but when you enter another country with your troops i don't think you can claim a defensive position anymore. This Lebanon situation really puts the US in a bind. It wasn't more than 4 months ago that the Lebanese leader was at the White House shaking hands with the President. GW pledged support to the new lebanese government as an example of Mid East democratic success. On one side we have Israel who the US wouldn't dare not blindly support. Then we have Lebanon, Israels current target but also the US's self proclaimed “example of mideast democracy”. Don't forget, the US supported the inclusion of Hizbullah in the Lebanese government because we knew then, as did they, that it would be the only way the government would be legitimate.

Mark my words, 50 years from now Israel and it's “conflicts” will be the biggest story as one looks back on today. Not Iraq, not North Korea, not Iran. Our parents had Vietnam, our grandparents had WW Deuce, we've got Israel.

Now some business news..

Ben Bernanke has an uphill battle. Never mind that the previous fed chairman was given far too much credit for the US economy, Bennie boy came in during a pretty tough time. The US economy is moving forward at a healthy pace but we are also approaching an election year which means up becomes down, black becomes white and reality is completely neglected. Low unemployment becomes a jobless recovery..that's one of my favorites. Economist agree that full employment is somewhere around 94-96%. We're there today (app. 4.6% unemployment). But somehow that is still labeled as a jobless recovery.

Then you have jackass's like this guy...

http://bloomberg.com/apps/news?pid=20601039&sid=aDHF_YUEljiw&refer=columnist_sperling

Gene can't even call come clean on the simple fact that yes, supply side economics work. Tax cuts do increase economic activity (hence government revenue). This is a basic economic principle like supply and demand. Hmm..maybe the fact that Gene was Bill “Bubba” Clinton's TOP economic adviser has something to do with it. I still maintain that the '90's economy had far more to do with Bill Gates actions than Bill Clinton's actions.

Caroline Baum is a great columnist over at Bloomberg and she captured the Bernanke conundrum (to use a favorite Greenspan word) much more eloquently than I can.

http://bloomberg.com/apps/news?pid=20601039&sid=ah0Na9vIqqL0&refer=columnist_baum

For any investors out there check out Neomedia. It's very speculative but has some very interesting technology patents. Long term i think its a takeover target. This is a higher risk stock than i would normally be interested in, i typically take a value approach, but at 0.15 per share its cheap to pick up a few thousand shares and just forget about it.

Lastly..a little humor to lighten the mood. Ciao!

What's your IQ?

A man enters a bar and orders a drink. The bar has a robot bartender.The robot serves him a perfectly prepared cocktail, and then asks him, "What's your IQ?" The man replies "150" and the robot proceeds to make conversation aboutglobal warming factors, quantum physics and spirituality, biomimicry, environmental interconnectedness, string theory, nano-technology, and sexual proclivities.The customer is very impressed and thinks, "This is really cool."

He decides to test the robot. He walks out of the bar, turns around, and comes back in for another drink. Again, the robot serves him the perfectly prepared drink and asks him, "What's your IQ?"The man responds, "about a 100."Immediately the robot starts talking, but this time, about football, NASCAR, baseball, super models, favorite fast foods, guns, and women's body parts.

Really impressed, the man leaves the bar and decides to give the robot one more test.He heads out and returns, the robot serves him and asks, "What's your IQ ?"The man replies, "Er, 50, I think."And the robot says... real slowly,"So... is... your... party... gonna... nominate... Hillary... for...president ? ? ?

Two Wrongs Don't Make a Right

How many times have you heard that in your life? I know i have quite often...someone needs to remind GM of this. GM-Renault-Nissan? Or would it be Nissan-Renault-GM...or Renault-GM-Nissan...doesn't matter, whatever it is its a recipe for disaster. I was rather surprised that this idea is supported by Kerkorian. I'm having a hard time seeing the benefits of such a partnership/merger and apparently allot of journalists are as well. I've yet to read an article that is very positive.

What i cant figure out is how this address's GM's problems? How does this help Nissan, or even Renault? GM has too much capacity, too many expensive employees (current and retirees) and too many boring cars and brands. There are a few winners...but not enough to support the rest of the losers. Again, i ask, how does a merger with Renault-Nissan help this situation? I can think of only two reasons to discuss such a move.

One, it changes the scope of the press on GM. By refocusing the scrutiny on GM perhaps GM thinks it can send a message to the Union and the government that the situation is serious and requires some serious actions. This is a long shot though.

Two, Carlos Ghosn. This is a more compelling reason. He did a very tough thing in turning around Nissan. If GM wants him to work his magic with GM then they shouldn't do this by adding the deadweight of Renault and Nissan to the mix. Simply hire Ghosn. The problem is he isn't keen on moving. Ford tried to lure him away and failed. Perhaps GM thinks that even with Nissan and Renault in the mix its still better to have Ghosn than not have him. Renault is fairly successful here in Europe (although mostly on the back of only 1 popular model) and theres been allot of talk about Renault reentering the US. Maybe this is also some motivation. GM can market new cars (current production Renault cars) through its existing dealership networks thereby adding new cars to the mix for relatively little cost. But does GM really need another offering? Will these new cars take sales from competitors or from current GM sales?

The partnership/merger is billed as saving money in terms of engine development and supply chain costs. Well thats just plain BS. US consumers have vastly different tastes than European or Japanese consumers. Unless GM plans on flat out replacing its small engines with those from Nissan/Renault and eliminating its V8's altogether theres no benefit. And supply chain savings. As someone who works at a tier 1 i can tell you that you can only squeeze so much money from your supply base before you drive them into the same situation as you are in. Lest we forget that it was GM, or rather J Ignacio Lopez who really put the whole supply industry on this track in the early 90's. Thanks Lopez.

Supposedly this isn't really a merger but rather a partnership. However we have only to look as far back as GM/Fiat or Daimler Benz/Chrysler to see what can happen when companies partner up. The GM/Fiat partnership was a failure, no doubt about it. No one knew why the deal was cut then or now and in the end GM wound up paying quite a bit if cash to break the deal.

The DCX deal has fared better, but not after some serious growing pains. If you look at Chrysler's recent success it has more to do with getting in a good leader (Zetsche) and pushing out some good products. Savings from a merger, which is normally why they are billed as being necessary, don't generate success.

For a partnership to be successful one has to believe that the partners will compete better than its components would have on their own. If this deal goes through this new company would create a part Japanese, part American and part French entity. 2 cultures working together is hard enough, but 3? And 3 as different as these? I'm not convinced.