CA Attorney General: Evidence Exists For HP Criminal Indictments (KCBS)
In an interview on PBS late Tuesday, the California Attorney General said that he already has enough evidence to bring indictments against people on both the inside and outside HP. They haven't been issued yet, and he hasn't tipped his hand, so the guessing game now begins as to who exactly bears criminal responsibility. This is obviously going to be a "who knew what when?" sort of game, with all parties involved likely to claim maximum ignorance. Last night on TV, there was speculation that the company's general council could be in trouble. And when, really, did Hurd and Dunn know what went on? Place your bets.
U.S. July trade gap widens to record $68 bln (Reuters)
The more you listen to economists and analysts talk about the trade deficit, the sooner you'll realize that few people have any idea what they're talking about. Ostensibly, at least according to one camp, the balance of payments has to be made up by debt; in other words, if the use spent $68 bln more on foreign goods, than foreigners spent on U.S. goods, then Americans have had to go another $68 million into debt. Yet some like to see a high trade deficit, or at least see the high trade deficit as a positive sign for the economy -- that it's growing and that we're still buying a lot of stuff. And then others see China's trade surplus as a deficit -- they need to sell an extra $68 billion worth of stuff to us in order to finance their purchases of U.S. investments. And since there isn't much to go on, historically, between the trade deficit and the economy, such data feels almost useless.
IMF: risk of global crash is increasing (The Independent)
In perfect timing, alongside the new trade data, the IMF is warnings about a potential calamitous crash in the global economy, and they all revolve around the US -- which is just swell. Concerns included runaway inflation, a housing crash, a showdown with Iran causing a spike in oil prices, a virulent mutation of avian flu, and of course, the so-called "imbalances" as exemplified by our trade deficit with Asian trading partners. So how do we reconcile this dire outlook (HSBC also put out a very negative call on the economy) with the stock market, which is supposed to be a forward indicator for this type of thing? Not sure, but one of them seems like it has to be wrong.
Alexis Glick becomes Fox News Director of Business News (Wall St. Folly)
A statement out of the Fox camp declares that they've poached CNBC's Alexis Glick, who will be come Fox News' director of business news. Congrats to Glick; CNBC is already so star-studded, it's hard to develop a following. At Fox, she just has to compete with Neil Cavuto -- and everyone looks good next to Neil Cavuto (though actually, we think he's pretty sharp. Have you seen him debate O'Reilly? Not that it's too hard to make O'Reilly look like a dolt). And though we're excited for Glick, here's the line that really got us excited from Roger Ailes' welcome: I expect he (Cavuto) and Alexis will work together to create an even stronger business unit and prepare for the launch of a possible business channel. While we are not announcing the launch of such a channel, hiring Alexis enables us to be prepared if plans move forward." In the event FNC secures the distribution necessary to launch a business channel, Glick would also serve in an on-air capacity. So, that's some sort of non-announcement announcement. Essentially, she's being brought on to head the new Fox News Business Channel, or whatever it'll be called. So are there going to be conservative leaning trading rooms that switch their TVs to Fox away from CNBC?
Online Gambling Remains Risky Business (Forbes)
When Sportingbet's Peter Dicks came to the US and got arrested, he obviously hadn't learned the lesson of David Carruthers. So it's worth repeating, one more time, that being on the online gambling business can be risky. It's also a good time to dispel one of the most obnoxious cliches in the business, that the "house always wins". When BETonSports has to basically close up most of its operations, the house didn't win. When Donald Trump declared his Atlantic City casino to be bankrupt, the house didn't win. Oh sure, the actual table games, by and large, favored the house. It's true, the odds are stacked in their favor. But to say, therefore, that the casino business is a good business is just silly. And so anytime you hear anything else described as "the house", like Goldman Sachs, or the market makers on the NYSE, don't follow your thinking up with "they always win".
Journal studies show more Vioxx safety problems (MarketWatch)
The Vioxx rollercoaster is on a downslope. The company has lost some of its recent verdicts, and now new research suggests that the drug may have done more than just put patients at an increased risk for heart attack. New published material presents the evidence that Vioxx, even if taken for only a short time, could be damaging to the kidneys and cause heart arhythmia. Yet, it seems unlikely that this will hurt Merck too much. If this is really new research, then it would be hard to argue that the company's been negligent. Still, the FDA has given a green light for a limited return of Vioxx to the market, but more information like this may make the company be more hesitant than it already is.
Apple Plans to Inhabit Living Room (NYT)
Everybody pretty much new that Apple was going to announce some sort of video whatnot; it was just the specifics that were unclear. Were they going to release a wide-screen, touchless, iPod optimized for video? Would it be just another generic video download service, like the one released by Amazon last week? The answer to the first one is no, though they did release a new iPod shuffle -- only this time it's really small. As expected the company announced that you'll be able to buy movies from the iTunes store; and if you want to watch them on your TV, you can via a new set-top box that will stream movies wirelessly from your computer to your PC, and provide a handy software interface to do so. It did look pretty slick, though the box won't be out for several months. That's uncharacteristic for Apple, which typically has the items ready to go as soon as Jobs vacates the stage. Now you have to set an alert on your cell phone to remind you to run to the SoHo mac store six months from now, so that you can be the first with the box.
Spitzer rolls to primary win (Utica Observer Dispatch)
Pinch yourself baby, Eliot Spitzer is now one step closer to no longer being the Attorney General. Now instead of bringing flimsy indictments and pressuring companies to settle (or else), he can bicker about the state budget with the hacks up in Albany.
Do Hedge Funds Hold 'Trade Secrets'? (BusinessWeek) (via Dealbook)
B-dub has a pretty interesting interview with hedge fund manager Philip Goldstein, who is trying to gain an exemption from the SEC's rule 13F, which obligates any fund with over $100 million in assets to register its holdings. Goldstein claims that his holdings are a trade secret, akin to Coke's secret formula. Now, there's something a little funny about hedge fund guy talking about his stocks as a secret formula, but his case isn't ridiculous. He thinks he has a constitutional right to keep his holdings quiet, and, quite frankly, if the constitution meant anything these days, he'd be right. He says he's been in talks with the SEC to gain an exemption, but that nobody in the organization knows how to handle an objection that's based on a constitutional argument (duh!). So he's taking his case to the courts; should be interesting to see how it pans out.