Dylan Ratigan explodes on air

This is simply terrific.  Dylan Ratigan lost it on air and by lost it, I do not mean that he freaked out and blurted out gibberish like many of his colleagues do, what I mean is that he lost it when the idiotic talking heads on his panel were spouting the Republican v. Democrat rhetoric.  It was horrible and he couldn’t take it any longer. The only bad part was when he apologized to the ladies that made his blood boil.  Totally unnecessary Mr. Ratigan. That was simply awesome.

You hit on the fact that the politicians are powerless to act lest they lose their power.  Sounds silly.  To put it simply, they have been bought by the Corporatocracy!  If they make a bold move, they will be dropped. No more money. No more power. No more career that lets them act like the Romans did.

I am so sick of the narcissistic politicians spewing their rhetoric. Would someone please stand up and act?  I don’t mean stand at the pulpit and deliver a performance, I mean try to really, really, get something done!!!

Once again, Dylan Ratigan, that was awesome!

To quote the late Chris Farley:

I swear I’ve seen a lot of stuff in my life, but…that…was…….AWESOME!

Follow Dylan Ratigan on Twitter @DylanRatigan or visit his web site: http://www.dylanratigan.com/

Once oil cracked $55, it felt way overvalued, beyond $70, a bubble. This oil market that we are in comes with the support of a LOT of capital.  The capital appears to be providing an artificial prop for the price of oil and this trend doesn’t look to be changing.  That being said, if I am your contrarian indicator, now is the time to jump in and short oil.

Paul Tudor Jones on Oil

Paul Tudor Jones has this to say about the state of the Oil market:

Q: Is the price of oil high for fundamental reasons, or are hedge fund managers and Wall Street driving it up?

PTJ: It’s a very bullish supply-and-demand situation, and the peak oil theory is probably correct. But the run-up in prices is now bringing in an enormous amount of speculative, nontraditional capital such as pension funds and university endowments — principally through index products. Commodities have been the worst-performing asset class behind stocks, bonds and real estate for the past 200 years, but Wall Street doesn’t highlight that long history when selling commodity index instruments today. Instead, it shows a chart of the bull market of the past 12 years to rationalize why some pensioner should be long cattle futures in the derivatives markets as part of a basket. I am sure they were using similar logic about tulips three centuries ago. Oil is a huge mania, and it’s going to end badly. We’ve seen it play out hundreds of times over the centuries, and this is no different. It’s just the nature of a rip-roaring bull market. Fundamentals might be good for the first third or first 50 or 60 percent of a move, but the last third of a great bull market is typically a blow-off, whereas the mania runs wild and prices go parabolic.

Take it for what it is worth.  Is oil artificially inflated, I believe so.

Steve Jobs Presentation

Jobs presented the concept of the new campus yesterday at Cupertino City Hall. It seems a little odd that that he would be the one in front of the city council. My hunch is that there might be a little push back for approval of this project. The appearance of Steve Jobs at the meeting will very likely help the approval of this. Jobs seemed rather nervous at the start of his pitch. This is obviously a project that means a lot to Steve Jobs. He took the opportunity to tell a nice story of reaching out to Bill Hewlett (yes, of Hewlett-Packard) and Mr. Hewlett gave the teenage Steve Jobs a summer job.

Jobs also took the opportunity to throw a subtle dig in towards the current HP. I quote: “…as Hewlett Packard has been shrinking lately, they decided to sell that property, and we bought it.”.

Jobs states that they are using their retail experience to build the structure. He claims they “know how to make the biggest pieces of glass in the world for architectural use”.

They are converting this piece of land that is covered with structures and asphalt.  The intention is to move parking underground and create a space that is 80% landscaping rather than the 20% landscaping that it is now.

The building will include an energy center that will provide the primary source of power (cleaner and cheaper) and then will use the grid as their backup.

Jobs discusses that they put on presentations and that they have to go to San Francisco to do them.  They will include an auditorium in this complex.  I would have to assume that this would mean that Apple’s future conferences and presentations will happen on their own campus.  This will surely peek the interest of the tourism board in Cupertino.  5,000 developers at the WWDC probably provide a nice bump for any municipality.  Keep in mind, 5,000 is where they cap it. They sell out nearly instantly and could expand this.  Apple holds a number of events each year.

The video below is about 20 minutes long, but it is much more fascinating than the public access town board meetings that you might normally see.   Jobs must have had his iPhone in his pocket because there is some feedback that comes in at around the 5:08 mark.  I know this sound all too well.  I thought it was just my iPhone after being dropped 42 times.

Apple's futuristic campus

I was discussing Apple’s cash hoard with a colleague the other day.  With around $80 billion in cash and marketables, they are able to spend money on projects like this.  It is hard to question Jobs’ vision. Look what they beautiful Pixar campus puts out. Hit, after hit, after hit.

During the Q&A jobs addressed a few points.

Apple is the largest taxpayer in Cupertino and would like to remain that way. He insinuated that Apple could leave Cupertino if this was not approved.  It wasn’t a threat, but he made it clear that the biggest taxpayer in town could leave.

Apple has 20 biodiesel buses running currently to help move their employees.  Affluent employees who make Cupertino their personal home.

One council member mentioned free WiFi from Apple for the people of Cupertino. In classic jobs form he threw it back stating that he is a simpleton and feels that we pay taxes and the City should do those things. That is why we pay taxes. He stated that if we could get out of paying taxes, he would be glad to provide free WiFi. “I think we bring a lot more than free WiFi”.

One of the members was a 35 year HP employee.  This project certainly hits home with him and he would like to see this former HP space put to use.

Employees at infinite loop will remain at that location.

Timeline for this building would be as follows. Breaking ground in 2012 an completion in 2015.

During the meeting, the fact that there is not an Apple store in the Cupertino community.  Jobs mentioned that the location simply doesn’t have the traffic.  You have got to love the way Jobs answers questions that he doesn’t really feel are worthy of a thorough response.

With the applause at the end of the meeting, I felt like I was watching a presentation at a conference.  A lot of fans in that room, and rightfully so.

Apple's Cupertino Campus

California Public Utilities Commission - CPUC - Commissioners

It is a sick thought that probably has a lot more truth to it than those who believe that our politicians and political appointees are in it for the greater good. Horse sh*t!

California’s Public Utilities Commission (CPUC) has decided to review the AT&T / T-Mobile deal.  AT&T’s $39 Billion T-Mobile Bid May Be Reviewed by California State Agency.  As cynical as I am, I am sure that there is motive behind this challenge.

Flexing political muscle (via regulatory authorities) is the way the political machine enforces its power to receive something in return. Perhaps they receive concessions that actually benefit the consumer. Certainly they receive campaign donations from the parties involved. And, likely they find jobs for themselves, their friends, and/or their families.  It is the way that the game is played.  Sad, but true. Want to learn more about the political power game? Watch “Casino Jack and the United States of Money“.

The number of lobbyists, former FCC employees, and political staffers that were employed (or contracted) by Comcast during their recent acquisition of NBC is staggering.  Comcast is not the only company that employs these tactics.  Perhaps AT&T isn’t “supporting” the politicians in power the way that they would like, and seeing what happened with the Comcast/NBC deal, the California Public Service Commission decided that they needed to flex a little muscle with the AT&T/T-Mobile deal.

The Comcast NBC merger is one that probably wouldn’t have passed muster if not for the lengths that Comcast went to to ensure the approval.  The recent hire of an FCC commissioner as a highly paid lobbyist (Meredith Atwell Baker) with the company that she just had a hand in approving for a major acquisition is one of the most blatant “quid pro quo” cases seen in recent years.  The commissioner thumbed her nose at the critics and took a high paying lobbying post with Comcast.  She may not have broken any laws, but she certainly abused the spirit of the law.  She will not be able to directly lobby her former agency, but indirect influence is the way Washington works.  Comcast will get their money’s worth (probably has already).

Look for the future posts of the CPUC commissioners and/or their families.  My hunch is that they will be working for AT&T in the near future.  I’ll write the press line for AT&T right now. “There is no one who understands the needs of our customers in the great state of California than former commissioner ______________________________”.

What a world we live in. Excuse me while I go get sick!

Apple Data Center, NC

The most popular notion of what the data center’s intended use will be is a cloud music service from Apple. This seems to make sense.  As Sun (remember them) said many years ago (year 2000, I think), the Internet is the computer!  Why do we have to go to the trouble of downloading to listen to our music, or podcasts?  Can we have an internet (cloud) based drive that held all of our media (music,movies,podcasts,pictures)?  Sure we can.  The most difficult part comes from the bottleneck created by a lack of sufficient bandwidth.  Once there is sufficient bandwidth, there will be fewer reasons to have local storage.  Nothing will ever go wrong with my connection, right?  (Amazon EC2, PSN Network).

As of today, Apple has reportedly hammered out deals with three of the four major record labels.  This might have been a little more difficult had it not been for Amazon and Google paving the way with the Amazon Cloud Drive / Cloud Player and the Google Music Player

In any case, this data center is being viewed as another can’t wait to see event from Apple.  With deals in place between Apple and the major labels, I have to believe that they are about ready to announce the purpose.  Apple’s World Wide Developers Conference (WWDC) is happening June 6 through June 10 (2011) and this is generally a time when Apple rolls something fresh out.  There probably isn’t an iPhone 5 in the cards.  An iPhone 4s is more likely the case. A cloud initiative at the same event would make this another blockbuster.

AT&T and Verizon, are you ready??

Skype

Microsoft’s purchase of Skype for $8.5 billion is a high premium to pay for a product/service that is falling behind its rivals.  The purchase is a big move and many would argue that Microsoft is now in a position where it needs to make a big bold move.  Let’s all recall how well it worked out for Ebay.

Actually, it worked out well for Ebay… when they sold it.  Ebay retained about 1/3 of the company.  The $8.5 billion dollar price puts the value of Ebay’s stake at approximately $2.95 billion.  Ebay paid $3.1 billion for Skype in 2005.  After a poor integration attempt, Ebay sold Skype for $1.9 billion to an investor group that included Andreesen Horowitz, Silver Lake, Index Ventures, and the Canadian Pension Plan Investment Board (seriously).  If you combine the amount received for the stake with the recent sale (assuming the deal closes), Ebay walks away with $4.85 billion.  Let’s not forget the tax benefit received from the $1.4 billion dollar charge Ebay incurred in early 2007.

Rumor had it that Skype had some tire kickers buzzing around.  The usual suspects (Google and Facebook) were said to be in the mix.  Apparently the competition was in the $4-$5 billion dollar range.   Once the Google deal fell apart (due, in part, to the ill fitting technology) Skype appeared to be headed toward an IPO.  The final suitor (Microsoft) had to step and and was forced to a pay a premium for Skype’s massive user base. The user base is too large to ignore.  Skype is the largest international calling service in the world and has approximately 600 million registered users.  Skype’s 2010 revenue came in at about $860 million.

This deal really makes Google’s $50 million dollar acquisition of Grand Central look fantastic (June 2007).

How can you make money on this deal?  Is it time to short MSFT?  Hard to say, but a big acquisition can be a huge distraction.  With the cloud taking over, perhaps it is time to play the MSFT short.  I would expect that further changes are in the wings.  The government considered breaking MSFT into parts back at the height of the antitrust furor.  Now, Microsoft might just do the break up on its own. OS / Applications / Services.

Microsoft

Further Reading:

Skype was reading itself for an IPO.
Google didn’t want to do a deal due to the ill fitting technology.

Failed Banks 2011

One of the more popular topics at BobandScott.com is any post that discusses failed banks.  The FDIC has a fairly orderly process for bringing in banks that are failing for one reason or another. Typical failures are due to reserve requirements not being met.

During this latest budget crunch, we heard that the government site data.gov might be shut down. We jumped over to take a look and noticed that there is a nice dataset for the failed banks since October, 2000.   The data includes the failed bank along with the acquiring bank, and date of closure.

Click on the image to download the 2011 failed bank list (CSV format)

2011 Failed Bank List (updated 04/14/2011)

Bank Name,City,State,CERT #,Acquiring Institution,Closing Date,Updated Date

This office campus is comprised of 57 acres with 11 buildings and 1 million square feet of space. This complex should accomodate about 3,600 Facebook employees.

New Facebook Campus - Thank for being early on the NetPC, Sun

Facebook clearly has non-stop expansion in mind since they have purchased to adjacent parcels located at 312 and 314 Constitution Drive.

Moving day is coming soon. Who’s in?

As I write about this and realize that Sun has been swallowed up by Oracle, I am reminded about how early Sun was to the thin client, networked PC, game.  ”The network is the computer”!

Facebook makes it official: Its moving to Sun campus in Menlo Park – San Jose Mercury News.

Google Office Building NYC

It is interesting to see that Verizon and Sprint also have offices in the location.  They must feel even more threatened by the push by Google into their space (literally this time).

In the biggest real estate deal of the year, Google signed a contract on Thursday to buy one of the largest office buildings in Manhattan for more than $1.8 billion, according to two real estate executives who have been briefed on the deal.

Taconic and its partners bought the property in 1998 and began stocking the building with telecom companies like Verizon and Sprint

via Google Signs Deal to Buy Manhattan Office Building – CNBC.

Housing Meltdown - Aftermath

More and more issues creep up in the aftermath of the great housing meltdown.  Tighter mortgage money is now followed by Title insurance companies looking for a guarantee that the title the are issuing is in fact that the lender represents it to be.  Common sense underwriting…go figure!

Fidelity National Financial Inc., the largest U.S. title insurer by market share, will require lenders to sign a warranty assuring their paperwork is sound before backing sales of foreclosed homes.

An indemnity covering “incompetent or erroneous affidavit testimony or documentation” must be signed for all foreclosure sales closing on or after Nov. 1, the Jacksonville, Florida- based company said in a memorandum to employees today. The agreement was prepared in consultation with the American Land Title Association and mortgage finance companies Fannie Mae and Freddie Mac, Fidelity National said.

“It’s just the prudent thing to do,” Peter Sadowski, executive vice president and chief legal officer for Fidelity National, said in an interview. “It is important for the servicers and the lenders to represent to us and to the people we are going to be insuring that there are no problems.”

via Fidelity National to Require Banks to Sign Foreclosure Warranty – Bloomberg.