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/

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.

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.

Uncle Sam wants his taxes

…his tax dollars.

The White House doesn’t want to let this happen. There are hundreds of billions that could be brought back into the US and provide a healthy tax boost.  The White House wants to get their hands on the tax dollars generated. This is a figure that could exceed $100 billion.

Look for a lot of lobbying, and a few political trips to far off lands, while our politicians do some cattle trading over a tax “holiday” for the companies looking to bring the money back without a hit to their cash stash.

Companies push for tax amnesty. U.S. multinational firms, such as GE (GE) and Cisco (CSCO), are pushing for a tax holiday in order to repatriate billions of dollars “trapped” overseas but have been rebuffed by the White House. Research suggests that 30-40% of the nearly $1T in cash held by non-financial S&P 500 companies is being held abroad; for some companies, the trapped cash accounts for more than 75% of their cash balances, but bringing the money back to the U.S. for domestic use would force the firms to pay tax on the money, usually of 25-35%. Corporations say bringing the money back would be good for the U.S. economy, but the White House feels it would raise expectations of future tax holidays, that the repatriated money might be paid to shareholders instead of used for job creation and that a lack of investment is not the most pressing economic problem.

via Wall Street Breakfast: Must-Know News — Seeking Alpha.

AOL buying Yahoo?

According to WSJ.com AOL may be looking to acquire Yahoo (whatever is left of Yahoo at this point).  AOL is on the acquisition trail.  Last week they made a small deal/big move in acquiring Techcrunch (Michael Arrington is reported to be staying on, $$).  There seems to be a ton of faith in AOL’s CEO, Tim Armstrong.  Private Equity is behind him.  Perhaps AOL can really become the content behemoth that Terry Semel dreamed of.  Terry was early (and according to former employees, not too engaged).

Yahoo has a massive user base via its Yahoo mail, Flickr photo sharing sites and many other properties. Exposing those users to some of the unique content created by the AOL owned sites such as Engadget and Techcrunch could provide some synergy (AHHH, not that word).  The idea behind “synergy” is what got Time Warner into the whole AOL mess back in the day.

AOL Inc. and several private-equity firms are exploring making an offer to buy Yahoo Inc., according to people familiar with the matter, devising a bold plan to marry two big Internet brands facing steep challenges.AOL and private-equity firms are exploring a bid for Yahoo, devising plans to marry two big Internet brands that both face steep challenges. The discussions are preliminary and dont include Yahoo. Jessica Vascellaro discusses. Also, John McKinnon discusses the Estate Tax as it grows as a hot-button election issue.Silver Lake Partners and Blackstone Group LP are among the firms that have expressed interest in teaming up with AOL to buy Yahoo or trying to take it private on their own, these people said. They added that at least two or three other firms could be interested in participating if a formal buyout proposal is drawn up.

via AOL, Private-Equity Firms Explore Bid for Yahoo – WSJ.com.

Housing crisis continues in new ways

This mortgage mess will certainly be with us for many more years.  Not only do we have to contend with banks that still don’t want to lend, but there are many banks that are cleaning up the mess in questionable ways.  It seems that there are a lot of dishonest folks in the mortgage game and when you give them an incentive that is directly tied to their pay they tend to find a way to fudge something for their own gain.  I think that the whole idea that, in the end, someone else pays (taxpayers via Fannie and Freddie), makes it feel like a “I won’t have to deal with it when it goes bad”.

Good old accountability needs to come back into the game.  If a bad mortgage is written, someone gets in trouble or loses their job.

The cover it up, dress it up, and get rid of it mentality has to stop.

Two big mortgage lenders are reviewing foreclosures as public officials heighten pressure on the industry over allegations that they made errors in documents used to evict homeowners. GMAC Mortgage, a unit of Ally Financial Inc., said Tuesday that it has enlisted legal and accounting firms to conduct independent reviews of its foreclosure procedures in all 50 states.

GMAC has already halted foreclosures in 23 states.Separately, Wells Fargo & Co. said it would review pending foreclosures for potential defects in response to requests from lawmakers and public officials. The San Francisco-based company says it has not turned up any evidence of problems.

via GMAC, Wells Fargo to review foreclosures – Yahoo! Finance.

Greece

In the same conversation as the Dubai meltdown, Greece has been mentioned by many as the economy on the least stable footing.   However, Greece does not have a family member willing to pony up billions to keep things in tact.  It appears that much of their hope lies with the IMF. However, the IMF might not have the financial wherewithal to do so.

The idea that they might be in trouble is one thing, the fact that they are falsifying data is an entirely different deal.

In a damning report published as the eurozone grapples with its worst financial crisis since the euro’s launch in 1999, the Commission said figures from Greece’s were so unreliable that its budget deficit and public debt might be even higher thangovernment had claimed last October.

FT.com / Europe – Greece condemned for falsifying data.