Everyone talks about thinking outside the box but in my experience no one does it. 

This writer suggests the networks would do better to just eliminate the evening news.   After all it is just a highly paid person who sits and reads a teleprompter.  Journalist, give me a break, they read the news someone else writes.  News is on 24/7 on cable tv and multiple web sites, and much more up to the minute. The model has changed, there are a lot more than three networks just like there are a lot more than three car makers in the US.  Come to think of it, that is not a bad analogy.  As the writer says, Entertainment tonite for an hour would probably make more money. 

I bring this up to spotlight the importance of ‘new’ thinking.  Two weeks ago I distributed an article from CFO suggesting the FASB was going to eliminate the concept of net income. Apple eliminated the necessity of buying 12 songs on a CD to get the two you actually want, no one ever listened to the other ten tracks unless it was a Best of Album anyway, did we?  Digital media and McLuhan’s Global Village are a reality and real time is just that. Thinking needs to be focused on the increase in the speed of delivery of information. And that is why there is not need for a once a day evening news, especially at $15 M an anchor…..

Word is that Chrysler will make pickups for NR and NR will make cars for Cerebus Chrylser.

Chrysle is no stranger to deals with other companies. They bought British maker Rootes back in the 1960s and imported Simcas from France now that I think about it. Their partnership with Mitsubishi led to the highly successful 2.2 motors, why did they ever quit making those I wonder?  Then of course Mercedes bought Chrysler, and ending up paying Cerebus to take it off their hands.  Reading the article you will see what others have said, Chrysler is not exactly a complete company with the power to achieve low cost parts buying.  And clearly none of these other deals ever worked out, will this one?  Well, Carlos Goshun at NR kows what he is doing but then Mercedes supposedly did too. I would say all Chrysler brings to the party is pickup expertise. That is pretty much in the old pushrod V 8 engines, the bodies have never been anything to crow about. I am not aware of Chrysler plants outside the unionized North so it is hard to see what Nissan would get in terms of US manufacturing. And all Chrylser has is a third place gas guzzling pickup, with high oil prices it is hard to see that is a big winner.  Dodge RAM is pretty much the equivalent of Nissan Titan. Dodge trails Ford and Chevy in PUs and Titan trails Tundra.   And it sounds like Cerebus, like Mercedes, is wondering just what it bought….as I said about Blockbuster Circuit City, mergers rarely work out well.

Wachovia the fourth biggest bank in the US is the latest to join the write down, slash the dividend parade.  Clearly there was a lot more bad paper out there than anyone wanted to admit to.  So now they must raise more capital and shore up cash by cutting the dividend. We are studying the equity side of the balance sheet in Intermed II, this is a good example of how this affects equity.

Do you think there should be a change in the reporting of the statement? for shareholders the realization that assets were impaired is a bit late, the stock is down sharply and capital still has to be raised.

Blockbuster is offering a 54% premium for Circuit City CC.   There is someone always going into the electronics retail business as someone else goes bust.  CC was $19  a year ago, today just $3.90.  Blockbuster is not in the best of shape  as they compete with sales and downloads of movies.  Read this article to get a feel for how ‘takeovers’ proceed.  Typically the existing management has put the ox in the ditch so to speak. The hostile buyer points this out but offers more than the current stock price.  The Board of CC in this case then says no we have great ideas and you are ignoring our core values.  Typically the scramble to find  buyer that they believe will not fire the lot of them.  And so it goes.  Remember MSFT is trying to buy YAHOO now also. Blockbuster and a losing electronics chain, I don’t see it frankly, do you? Since I made that comment, here are some analysts in an article posted the next day that feel the same way.   Note the parallel with Apple does not equate, this is true of most mergers, the products and cultures simply don’t mate.

Speaking of takeovers and shake ups, is anyoone following the Katie Couric CBS saga?  You will recall CBS paid Katie $15 M to be the new night anchor. Whoops no one wants to watch the former Today Show anchor at night. Will Katie move to CNN to take Larry King’s show, will Anderson Cooper move from CNN to CBS to take Katie’s slot?  Have you noticed how many folks CNN let go that are doing just fine thank you on Fox like Greta? Trying to figure out how emotes on tv is rather like the first round NFL picks don’t you think?  Eveyrone claimes they picked the winner but only one can win!

On Fox News last night it was reported that the GAO used statistical sampling to test internal control over US Govt Credit Card expense. It seems 45% of the expenditures over $2500 were questionable. Here is a perfect example of what we study in intermed and audit.  Mgt is charged with safeguarding assets. Auditors use stat sampling to verify expected outcomes, When the results vary enough from expectations, the hypothesis, more data is gathered. Read the report to get beyond these ‘dry stats’ on how govt employees splurged at Ruth Chris, on line dating services, and well, read the article remembering that your tax return in due April 15. Where are the candidates on this?

Paul Volcker, past FED Chair, held forth to the new York Economics Club.   Like yours truly, he warns of letting inflationary expectations and a weak dollar continue. Greenspan meanwhile continues to speak denying that he had anything to do with the current problems.

Do you know about CIFUS?  At a time when Merrill and CITI are going begging round the world for capital, this may not be the time to Just Say Not to foreign investment.

The IMF will sell 14 M ounces of gold. Let’s see, gold is worth more than ever at $900 per ounce. So let’s sell the gold to make a short term profit and then we can lend more money to dictators in African countries who perpetuate worthless currencies and hostile economic policies. If the IMF is selling, I am buying gold.

Steve Forbes on why the US Stopck Market is underperforming the rest of the world.

on If supply meets demand at $100 oil,what happens when demand exceeds supply? Read this article about

Peak Oil.  The Far East will only demand more oil.  As the article suggests, I suspect we won’t be producing more than 100 M barrels a day of the stuff. Here is the link to the article on Peak Oil in widipedia.   In short, production is toping out while demand is accelerating.

Moving right along here is an article on Core Inflation.   Core inflation is inflation, the real problem, sanitized to make you think there is not inflation.  Core inflation might be inflation minus food and energy.  so if you don’t eat, heat or cool, or drive, you do not have inflation.  Srip the insane increase in college tuition out of your budget, along with eating and driving, and whooppee, no inflation. Thi is absurd but also official US Policy. The author points out the same group pushing it here is pushing it on the Chinese. As Jim Rogers says, the Chinese Communists are the world’s best capitalists, I don’t think they will put up with earning less than the rate of inflation much longer.

Here is an explanation of why Commodity Prices fell this past two weeks. Futures traders were forced to liquidate commodity positions to cover financial positions.  More sellers than buyers in futures but not in the physical underlying commodity.  This is whyI have assigned readings on derivatives and options.  The latter article is typicaly academic which is to say nearly impossible to decipher, I will be posting my own version shortly on WEB CT. 

Barons reports that the SEC website last Friday apparently let everyone off the hook as to valuing Level Three Assets. In short you can declare that the values in a distress sale are not real values therefore one does not have to use them. Did this bring a rally in otherwise depressed financial shares?  Very interesting to students of accounting and markets, is this a get out of transparency free card?

Okay who is third behind Gates and Buffet, do you know Sheldon Adelson?   Bill Harrah did well by understanding America’s fascination with gaming, Adelson has done really well.  Please read the article and notice just how much income is generated by just a few gamblers. This is clear in the movie Casino. But Adelson really understands it. You might say this is a great application of Managerial Accounting, where do we make our money? Note the expansion in Macao?

Check out The Palazzo.