JP Morgan analyst Says Obama Infrastructure Buildout Going to be Slow

At least according to this article.

Still unanswered is how fast the stimulus program can be put in place and how much of it will be devoted to construction, JP Morgan analysts wrote in an investor note. That means the impact on companies such as construction firms, heavy machinery makers and building suppliers may not be as immediate as many investors expect.

I have to agree that the money won't be there right away but you have to admit that billions in state spending is going to funnel into these stocks. I mean the states have to get someone to build these roads and Fluor will get quite a few new projects. The analyst picks the aggregate makers as the first movers in getting the Obama money.

JP Morgan estimated the companies that will be most directly affected are construction aggregate and cement makers such as Vulcan Materials Co. and Cemex. A stimulus could also speed up a recovery for construction firms to the early part of 2010.

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GM Decides to Close Plants for January.

I think they are trying to conserve every penny of capital in order to stay alive.

The move affects most of GM's plants in the U.S., Canada and Mexico. During the shutdowns, employees will be temporarily laid off and receive a portion of their normal pay from the company. They can also apply for state unemployment benefits, Lee said.

My bet is that some of those factories might end up being shut down permanently depending on what type of car they make. That means Saturn, Pontiac or any other redundant brands. They need to go lean and do it fast or they will blow through that, now White House (the Senate of course failed to lead on this matter,) bailout money.

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Obama Team Starts to Stonewall

I mean the guy isn't even sworn in yet and this scandal has blown wide open and is sucking the air out of everything. Now the Obama camp is going to ground.

Obama's staff has declined to respond to even basic questions, like who is conducting the probe, how long it will take, what issues are being explored and whether they are working with federal investigators. Obama has promised transparency throughout his service and to divulge contacts his staff has had with Blagojevich's office in the coming days. But his staff has locked down on inquiries in the meantime.

The scary part though is that Blagojevich might turn over the hornets nest if he decides to make a deal in order to get out of jail time. I mean this guy is a nutjob and decided to auction off Obama's seat even though he knew he was under investigation at the time. Those kind of guys could be capable of anything when cornered. He might be a thorn in Obama's side for months and months depending on what he does.

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Dem Governor attacks Obama's Blagojevich Response

It seems that Obama accidentally made a one day story into a continuing saga.

�They have never been in an executive position before,� Rendell said on MSNBC�s �Morning Joe.� �The rule of thumb is whatever you did, say it and get it over with and make it a one-day story as opposed to a three-day story. Politicians are always misjudging the intelligence of the American people.�

It also seems that the Obama camp may be showing the strain as well although only a scumbag reporter would try to collar an official trying to go to his kids concert.

Emanuel turned testy and declined to talk with a reporter who approached him Thursday at Chicago City Hall, where he was watching his children perform in a concert. The Chicago Sun-Times reporter pressed him to comment about whether he was the emissary named in the criminal complaint.

�You�re wasting your time,� Emanuel said. �I�m not going to say a word to you. I�m going to do this with my children. Don�t do that. I�m a father. I have two kids. I�m not going to do it.�

When pressed for comment, he said, �I�m not as capable as you. I�m going to be a father. I�m allowed to be a father,� and he pushed the reporter�s digital recorder away.

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November Video Game Sales Near $3 Billion

It seems that people just keep scooping those video games up no matter what the economic conditions are.

U.S. retail sales of video game hardware, software and accessories jumped 10 percent last month from the year-ago period to $2.91 billion, boosted by strong sales of Nintendo Co.'s Wii, Microsoft Corp.'s Xbox 360 and the alien shooter game "Gears of War 2."

I just think that people would rather stay home and play a good game then go out and spend money on transportation, movie tickets, eating out etc. I think this "nesting" instinct may be quite a boon for many industries while being a detriment to others.

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The Credit Crisis Formed out of a Need to Gain Market Share

At least it seems that way according to findings by the House Committee on Oversight and Government Reform.

In early 2004, Freddie's executive team was engaged in a heated debate over whether to start acquiring "stated income, stated assets" mortgages. And in April of that year, David Andrukonis, the head of risk management, wrote to his colleagues, "This is not an affordable product, as I understand it, but a product necessary to recapture [market] share. . . . In 1990 we called this product 'dangerous' and eliminated it from the marketplace." Freddie went ahead anyway.

Yup these 'dangerous' products were bought to the tune of $1.6 trillion and they were the multiplier effect that blew the entire thing sky high. They may not have caused the crisis but they certainly played a part in making it go from problems in one or two industries to encompass to threaten the entire world economy.

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Atari is Back from the Dead

At least the name and logo is. Now it is attached to a French gaming company called Infogrames and they have a few interesting games in their pipeline.

"Ghostbusters: The Videogame" ships in June as the Sony Pictures film marks its 25th anniversary and plays like an interactive third film in the franchise with the cast involved.

Atari is bringing a virtual Vin Diesel to Xbox 360 and PlayStation 3 in the spring in "Chronicles of Riddick: Assault on Dark Athena," a shooter that further explores the back story of Riddick from the films "Pitch Black" and "Chronicles of Riddick."

I am really looking forward to the Ghostbusters game since it is supposed to be like a third film but only in video game form. They even got the original actors to do the voice over work.

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Auto Bailout Halfway Home

It is strange that I keep pulling for these bailouts even though they go against my Free Market Instincts.

The legislation, approved 237-170 by the House, would provide money within days to cash-starved General Motors Corp. and Chrysler LLC. Ford Motor Co., which has said it has enough to stay afloat, would also be eligible for federal aid.
Republicans were preparing a strong fight against the aid plan in the Senate, not only taking on the Democrats but standing in open revolt against their party's lame-duck president on the measure.

I think it is just easier to go long these bailed out companies instead of betting against them. The stocks are held down by an artificial mechanism and are trading with the risk of failure baked into them. So we end up a Ford at a share price that is cheaper then a gallon of gas.

So you just need to go long and wait until there is a good chance that the bailout will be passed and then sell the rumor. It worked really well for me on the long side with Ford (I wouldn't touch a company that may still go bankrupt even with the bailout like GM.)

I just "rang the register" because the stock started to go into "wait and see" mode at about $3.25. I think that even if the bailout passes the stock won't see $8 again because it is still several quarters (or maybe even years) away from any potential turn around.

The car industry will still stay in the dumper until we are in the final innings of this recession. Also would you rather be long the #1 car maker in America like Toyota or a stock that is in debt up to its eyes and is still selling a product that people just don't want?

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Obama to "Reboot" us in the Muslim World

I think that is a laudable goal.

Obama promised during his campaign that one of his top priorities would be to work to repair America's reputation worldwide, and that one element of that effort would be a speech delivered in a Muslim capital.

He pledged anew to give such a speech, though he declined to say whether it would happen during his first year in office.

My money is on a speech in Istanbul or maybe Amman, Jordan. However, If he gives a speech in Tehran then I will really give him some props.

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Obama Bets Big on Broadband: Some Stocks that Might Benefit

I'm starting to love this Obama administration because it keeps the money flowing right to certain industries. In this case his stimulus package now has an ambitious goal of putting every US child on the Internet and wire every hospital.

"It is unacceptable that the United States ranks 15th in the world in broadband adoption," President-elect Obama said in the address. "Here, in the country that invented the internet, every child should have the chance to get online, and they'll get that chance when I�m President -- because that�s how we'll strengthen America�s competitiveness in the world....[and] the economic recovery plan I�m proposing will help modernize our health care system -- and that won�t just save jobs, it will save lives."

I think Cisco (CSCO), Juniper (JNPR), and Ciena (CIEN) executives need to buy Obama a big fruit basket because he just made their next few years. Business spending in networking equipment has just dropped off the table only to be potentially replaced by taxpayer spending. I wonder how much of this free cash will go just to networking equipment (the total stimulus is rumored to be $500 billion) and who will get the majority of the contracts? It could be a piecemeal thing with some companies getting some states while others handling other states.

Another big winner might by EMC corp. (EMC) who is the top player in network storage. Even though the stock has been recently downgraded to Sell due to the near term weakness in the enterprise I can see them as a long term player. I mean all those kids churning out all those reports, tests, and email will have to store that stuff someplace. If it is stored on the NAS run by the school or on the Web then EMC might get some of that cash.

The third big player will be virtualization software companies like VMWare (VMW) who will fill Obama's mandate of energy efficiency. I mean if you can cram like 10 servers on one box with virtualization technology then these schools (and the Federal Government itself) can save billions on their electricity costs. The only problem with VMWare is that Microsoft (MSFT) is hard charging in this market and already has 37% market share.

The best part about these stocks is that almost all of them are really cheap with many trading near multi-year lows. I think the dropoff in business spending might be priced into these stocks (or maybe a little over priced) while any of the "Obama Broadband Money Tree" will not be priced in until the details of the package are ironed out.

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Illinois Governmor Tries to Sell Obama's Senate Seat

Here is some really staggering charges against this Blagojevich guy. (I'm sure the MSM had to make a macro for that name.) This greedy scumbag pretty much wanted to auction Obama's Senate seat off to the highest bidder.

"I've got this thing and it's (expletive) golden," the 51-year-old Democrat said of his authority to appoint Obama's replacement, "and I'm just not giving it up for (expletive) nothing. I'm not gonna do it."

Prosecutors did not accuse Obama himself of any wrongdoing or even knowing about the matter. The president-elect said: "I had no contact with the governor or his office, and so I was not aware of what was happening."

I have no idea how Obama came out of this snakepit with only a unrepentant terrorist and a dirty fundraiser staining his suit. I really hope that we don't have a slow agonizing reveal of Illinois corruption that Obama has to deny one after another.

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Lee Iacocca Weighs in on the Bailout

I would really listen to this guy because his track record in making the government money at least when it came to Chrysler.

Chrysler eventually drew down $1.2 billion in loans and repaid them within three years � seven years early. Chrysler turned a profit in 1982 and the government made $311 million in the sale of stock warrants and another $25 million in loan guarantee fees.

Iacocca basically says that Dodd is an idiot yet again and wants the automaker CEOs to be kept on since they know how their business works.

Dodd said in a Sunday television interview that Wagoner "has to move on" as part of a government-run restructuring. President-elect Barack Obama, without naming names, said current auto industry management should be ousted if it doesn't understand the need to make changes. Dodd didn't name Ford Motor Co. CEO Alan Mulally or Chrysler LLC's Bob Nardelli.

Yeah, Dodd really wanted to remove the CEO and have the company waste time on a recruitment process for a new CEO when the company is fighting for dear life. I can see the GM Board of Directors (not Congress, not Dodd, and not Obama) giving him his walking papers only after the crisis has passed.

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Broadcom Offers the New BCM4329

It is really getting cool what these chipmakers can stick onto one die.

Broadcom on Monday announced a chip integrating 802.11n Wi-Fi, Bluetooth, and FM radio into a single silicon die, a move designed to expand the range of features available in mid-range mobile-phone handsets.

I will be willing to bet that we will see this chip in any new IPhones and IPod Touchs going forward.

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Jay Leno Comes to Prime Time

I'm sure this doesn't sit well with Conan but it seems that the 10PM (9PM in Hawaii) hour will now belong to the Jay Leno Show. I'm not sure what NBS does with Law and Order but since ER is ending then this may be the reason.

Securing Leno for the ER/Law & Order/many-a-canceled-drama slot kills multiple birds with one stone: It stops Leno from taking his late-night schtick�and his built-in audience�to a rival network at a time when NBC can ill afford to lose any viewers at any time, and it will likely save the network a pretty penny, cutting its number of fillable prime-time hours from 22 to 17.

I'm sure all of those cancelled dramas and Law & Order end up costing far more then it would by keeping Jay Leno at NBC. Also advertisers might want to put their money on a established money maker like Leno instead of some crap like My Own Worst Enemy.

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Free Wireless Broadband for the Masses Losers: Analysis Flawed

Now lets look at the Free Internet Losers per Motley Fool.

Earthlink: Yup I have to agree here unless they change their business model in order to take advantage of the Free Internet. I can see them changing to a more GoDaddy ISP based system that provides web hosting, storage, and Akamai-like speed services (this will be a big deal with all this new blood fighting for bandwidth) for Hulu and YouTube. If they do nothing then they will be out of business in 5-10 years.

Comcast: I think they will be hurt by Free Internet for sure because not too many people will keep their wired broadband if they can get WiMax internet for free. You would also have to add Sprint and Clearwire to the potential dead-list as well since the government will be giving their service away for free.

GameStop: Now this is what prompted me to write this post. He talks about lower-priced ad sponsored games that are digitally distributed and I immediately thought of PopCap games. I can see this Free Internet being massive for puzzle games like Diner Dash.

The problem I see is that the vast majority of console games are large and usually take up quite a bit of space on a hard drive. So there will be a finite limit to the amount of games and add-ons one can put onto a consoles storage. I mean a Blue-Ray DVD holds 50 GBs so it would take just 3 games to fill up the largest PS3 Hard drive. This storage and graphics complexity scale will get even worse when the next generation of consoles come out.

I will agree with this part as soon as I see a major game company put a full-game sequel to a major franchise like FarCry, Call of Duty, or Halo only on digital distribution. I think quite a few retailers like Wal-Mart and Best Buy will have something to say about that. Also I have to say that add-ons or episodic content does not count as full-game sequels.

AT&T: They will be hurt on the wireless broadband front and I agree that even more landlines will be cut. But can Skype truly replace the cell phone? Will this Free Internet be faster and more reliable then AT&Ts 3G Network? And will this Free Internet be safer than the AT&T 3G network? If your phone gets a Trojan that steals your phone book or records your cell conversations or adware that makes your phone not work you will be sorry that that you gave up your AT&T service. There is a reason why Apple controls the App Store.

Blockbuster: I agree that Free Internet might spell the death of the brick and mortar Blockbuster. They will probably hold on for dear life as they transform into a digital download Netflix competitor that mostly sells and rents video games. I can see them reduce the size of their stores and maybe even start more web-kiosks where you can download movies to a DVD instead of full stores.

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