Filed under: Other issues, Products and services, Industry, Commodities, Headline news, Technology

At the current pace of usage, there exists a real threat of depletion of current domestic helium supplies. So say managers of our only national helium stockpile near Amarillo Texas. A report from Kim McGuire at the St Louis Dispatch makes clear that this reality concerns more than the just attendees of children’s birthday celebrations and a few Donald Duck impersonators.

Scientist claim that helium reserves could be depleted in as little as ten years, a reality which worries experts in the fields of medicine, microchip manufacture, nuclear science, and Garfield balloons. Helium, which is abundant in our universe yet relatively scarce here on earth, plays a major role in many facets of industrial production. It is reported that dwindling helium supplies have driven helium prices up by as much as 50% over the past twelve months, deeply affecting companies such as Praxair, Inc. (NYSE: PX). It is also worthy of note that NASA uses big amounts of helium annually to pressurize fuel tanks for shuttle missions.

Lee Sobotka, a chemistry and physics professor at Washington University said “…it’s incumbent upon us to have a vision, and tell it care about it is, (helium is) a resource that is more strictly nonrenewable than either oil or gas.”

Presently, efforts are successfully under way to make helium use more efficient and to recapture helium at it’s points of use. Helium as an element can be captured as a by product of natural gas extraction but intensity in those efforts needs to be redoubled. Adding to the supply concerns currently faced are the facts that two off shore helium producers have faltered in their efforts to bring helium plants on line, and several domestic producers have shuttered domestic helium plants in recent years.

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Filed under: Products and services, Management, Competitive strategy, Krispy Kreme Doughnuts (KKD)

State what you want about the tasty warmth of its fresh-from-the-fryers glazed confections, Krispy Kreme Doughnuts (NYSE: KKD) hasn’t been leading the sweet life of late. Beleaguered and beaten down in the midst of what CNN Money calls a “sputtering turnaround effort,” the company remains challenged with an anemic share price, struggling sales, and folding franchise locations.

Today, Chief Executive Daryl Brewster, who took the reins in March 2006, announced plans to retire for personal reasons. Brewster will leave his post at the end of this month. The board swiftly named James Morgan, board member since 2000 and chairman of the board since 2005, to take the vacated seat.

In other news, Krispy Kreme has followed the lead of many fast-food concerns to announce that all products sold in the U.S. are now free of trans fats. KKD officials stated it has been introducing zero-grams trans fat products across the country during the past several months.

Investors are cheering this combination of news, as the stock has spiked 9.5% in today’s trading. Of course, given the stock’s current price (around the $3 level), this represents an absolute increase of 27 cents per share.

Beth Gaston Moon is an analyst at Schaeffer’s Investment Research.

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Filed under: Products and services, Launches, Competitive strategy, Microsoft (MSFT), Sony Corp ADR (SNE)

Sony (NYSE: SNE) said that sales of its troubled PS3 picked up over the holidays, selling 1.3 million units in North America. According to The Associated Press, this increased “the strength of the company’s Blu-ray video format because the console also works as a Blu-ray player.”

Perhaps that is part of the reason that the PS3 has not done superior than its rivals, the Nintendo Wii and Microsoft (NASDAQ: MSFT)’s Xbox 360. Is the PS3 a Trojan Horse for Sony’s HD video strategy or is it a game platform?

Part of the problem in selling the PS3 has been what the consumer had to pay to play. Until the current price cuts, it was more high-priced than the Xbox 360 and twice as costly as the Wii. This nearly certainly undermined unit sales. Without a Blu-ray player as part of the hardware, the game console could probably have had a cost base which was much lower.

Sony might have hurt the ongoing marketing of its gaming product by “mixing” it with the company’s plans to dominate high-definition content playback. The PlayStation was once the consumer electronics company’s flagship and was highly profitable. Now the game unit loses money.

Sometimes two goals from one company put into a single product just creates a mess.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Products and services, Microsoft (MSFT), Marketing and advertising

With the Consumer Electronics Show (CES) in full swing this morning, yesterday’s cream of the crop kickoff event featured a keynote speech from CES long-time keynoter Bill Gates, the founder of Microsoft Corp. (NASDAQ: MSFT). In his final keynote speech at the CES show before he drops his full-time gig with the world’s largest software company, Gates introduced a prototype navigation device that stores photos, music and videos while also suggesting options for shopping and dining. Sounds pretty un-revolutionary for Gates’ swan song, eh?

Many of Microsoft’s CES introductions since 2000 have fallen flat in the real world, which isn’t surprising. By trying to keep customers entrenched in its proprietary Windows Computer operating system, Ol’ Softie puts millions of savvy consumers off its products. Now, there are several other companies guilty of this as well, but they’re way superior marketers — Apple, Inc. (NASDAQ: AAPL) is the best example.

Microsoft, though, is realizing that Windows on the PC, along with its Office software franchise, can’t sustain it forever. Gates told the audience that consumers want to “interact with digital devices in new ways, such as getting directions from their phones and speaking to their cars.” This is true, and it’s a reason why Microsoft’s Sync has become a hit in some new Ford Motor Corp. (NYSE: F) automobiles. Now that Apple iPhone owners are interacting with data on their portable devices more than ever, Microsoft — of course — wants to ensure that functionality lends itself to devices that feature . . . wait for it . . . software from Microsoft as well. This really is not a new fight for the software giant. It’s hard, though, to tell what is different with this version of it.

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Filed under: Other issues, Federal Natl Mtge (FNM), Politics, Housing

U.S. Treasury Secretary Henry Paulson in a speech delivered Monday said the Bush Administration was weighing how to provide stimulus to the U.S. economy - - including a possible fiscal stimulus package - - but added that the administration does not want to rush a package.

Paulson, talking at an event sponsored by the New York Society of Securities Analysts, stated the administration’s immediate goal is to minimize the impact of the housing correction on the U.S. economy.

Paulson said the nation was facing an “unprecedented wave” of 1.8 million subprime mortgages scheduled to reset to sharply higher rates, and underscored that the administration’s negotiated deal with the mortgage industry to freeze selected mortgage rate five years will help the housing market recover, and avert a possible market failure.

A housing focus

Paulson said the administration’s mortgage assistance plan, called HOPE NOW, would remain its focus, even as it begins to weigh fiscal stimulus options in light of the slowing U.S. economy. Numerous current economic data points, including December 2007’s very low 18,000 jobs created, advocate that the U.S. economy is growing at a very low rate; some economists argue that the economy has already entered a recession.

“Let me be clear that no single policy or action will undo the excesses of the last few years,” Paulson said, Reuters reported. He added that administration officials “recognize the risks we face” and will try to keep the economy “as strong as possible as we weather this housing correction,” Reuters reported.

The administration’s HOPE NOW mortgage assistance plan has drawn criticism from Congressional representatives, particularly from Democrats. Democrats say it does not help moderate-income borrowers enough, has a too-high credit rating cut-off, and fails to reform other mortgage lending practices that these Congressional members state take advantage of potential borrowers, among other criticisms. The HOPE NOW plan, while not stalled in Congress, has not received the immediate action that the administration had sought.

Paulson: Congress should act

Paulson Monday underscored the need for Congress to act on the administration’s assistance package, saying it should speed-up reforms that would enable government-sponsored enterprises such as Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) to temporarily package jumbo mortgages into securities. The reforms would enable jumbo mortgages to achieve “conforming” status, which will lower interest rates banks charge for these mortgages and also free-up capital for new mortgages when banks sell these loans to FNM and FRE.

Economic Analysis: As Secretary Paulson’s speech suggested, looked for the Bush Administration to maintain its focus on getting the housing sector assistance package passed, even as it composes a fiscal stimulus package proposal. With slow growth in-place and a recession possible, the administration will try to jump-start the economy to avert a pricey political environment: a recession in an election year.

Historically, American voters blame the party in power in the White Home for a recession, regardless of what factors are ultimately responsible. Hence, a recession would hurt the Republican Party nominee’s chance of winning the presidency in 2008: the Bush Administration will do what it’s capable of to avert that scenario.

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Filed under: Other issues, Federal Natl Mtge (FNM), Politics, Housing

U.S. Treasury Secretary Henry Paulson in a speech delivered Monday stated the Bush Administration was weighing how to provide stimulus to the U.S. economy - - including a possible fiscal stimulus package - - but added that the administration does not want to rush a package.

Paulson, speaking at an event sponsored by the New York Society of Securities Analysts, said the administration’s immediate goal is to minimize the impact of the housing correction on the U.S. economy.

Paulson said the nation was facing an “unprecedented wave” of 1.8 million subprime mortgages scheduled to reset to sharply higher rates, and underscored that the administration’s negotiated deal with the mortgage industry to freeze selected mortgage rate five years will help the housing market recover, and avert a possible market failure.

A housing focus

Paulson stated the administration’s mortgage assistance plan, called HOPE NOW, would remain its focus, even as it begins to weigh fiscal stimulus options in light of the slowing U.S. economy. Numerous current economic data points, including December 2007’s very low 18,000 jobs created, suggest that the U.S. economy is growing at a very low rate; some economists argue that the economy has already entered a recession.

“Let me be clear that no single policy or action will undo the excesses of the last few years,” Paulson stated, Reuters reported. He added that administration officials “recognize the risks we face” and will try to keep the economy “as strong as possible as we weather this housing correction,” Reuters reported.

The administration’s HOPE NOW mortgage assistance plan has drawn criticism from Congressional representatives, particularly from Democrats. Democrats state it does not help moderate-income borrowers enough, has a too-high credit rating cut-off, and fails to reform other mortgage lending practices that these Congressional members state take advantage of potential borrowers, among other criticisms. The HOPE NOW plan, while not stalled in Congress, has not received the immediate action that the administration had sought.

Paulson: Congress should act

Paulson Monday underscored the need for Congress to act on the administration’s assistance package, saying it should speed-up reforms that would enable government-sponsored enterprises such as Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) to temporarily package jumbo mortgages into securities. The reforms would enable jumbo mortgages to achieve “conforming” status, which will lower interest rates banks charge for these mortgages and also free-up capital for new mortgages when banks sell these loans to FNM and FRE.

Economic Analysis: As Secretary Paulson’s speech recommended, looked for the Bush Administration to maintain its focus on getting the housing sector assistance package passed, even as it composes a fiscal stimulus package proposal. With slow growth in-place and a recession possible, the administration will try to jump-start the economy to avert a high-priced political environment: a recession in an election year.

Historically, American voters blame the party in power in the White Home for a recession, regardless of what factors are ultimately responsible. Hence, a recession would injured the Republican Celebration nominee’s chance of winning the presidency in 2008: the Bush Administration will do what it’s capable of to avert that scenario.

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Filed under: Before the bell, International markets, Earnings reports, Analyst upgrades and downgrades, Conventions and conferences, Apple Inc (AAPL), Hewlett-Packard (HPQ), Motorola (MOT), Market matters, International Business Machines (IBM), Alcoa Inc (AA), Ideal Purchase (BBY), Economic data, Housing, Federal Reserve

Stock futures were higher this morning, indicating U.S. stocks could start this first week’s session with gains, trying to stage a comeback of sorts from Friday’s selloff. Now that the recession option has all but been digested and accepted, especially after the economists conference over the weekend, bargain hunters feel able to look for deals keeping that in mind. A higher chance for a Federal Reserve easing move could also be affecting markets now as well as lower oil prices.

On Friday, stocks dropped sharply after non-farm paryroll report showed very few job additions and a jump in the unemployment rate. The Dow industrials dropped 256 points, or 1.96%, the Nasdaq Composite lost 98 points, or 3.77%, and the S&P 500 fell 35 points, or 2.46%.

While there are no economic data due out this day, more housing data is due out Tuesday.
Also on Tuesday, Alcoa Inc. (NYSE: AA) will be the first of the 30 Dow Jones industrials to report fourth-quarter results, kicking off fourth quarter earnings season.

Analysts at the American Economic Association gathered for a two-day annual meeting, saying a recession is almost a given at this stage and apt to be a serious one.

Meanwhile, as the Fed struggles to figure out the appropriate monetary policy giving the slowing growth and rising inflation, help might come in the form of fiscal policy changes. According to CNN, “President Bush might propose new measures to boost the economy by the time he gives his State of the Union address later this month.” Both Bush and Treasury Secretary Paulson are scheduled to talk later today.

Overseas, Asian markets completed lower. European markets are higher by midday trading.

In corporate news:

The consumer-electronics sector will be in focus this day as the annual Consumer Electronics Show continues in Las Vegas.

There were a few downgrades this morning:

• International Business Machines (NYSE: IBM) and Network Appliance (NASDAQ: NTAP) were both downgraded to Neutral from Purchase at UBS. UBS likes Apple (NASDAQ: AAPL) and Hewlett Packard (NYSE: HPQ).
• Best Purchase (NYSE: BBY) was downgraded to Underperform from Outperform at Bear Stearns, due to the slowdown in the product cycle.
• Motorola Inc. (NYSE: MOT) was downgraded at RBC Capital Mkts from Outperform to Sector Perform. Motorola also announced Friday more layoffs and a charge in the fourth quarter.

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