GoldenShale wrote a follow up to last week’s discussion about Lessig running for congress. He writes “Larry Lessig has created a Lessig08 website, and it looks like he is getting serious about running for congress. In his introduction video he proposes the creation of a national “Change Congress” movement which would try to limit the influence of money in the electoral and legislative processes. Having a technologically savvy representative and a clear intellectual leader to head this kind of movement is exactly what we need to counter the last 8 years of corporate dominance in government.”

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An anonymous reader writes “French scientists have developed a new rubber that can heal itself after being cut or broken. If two broken ends of the material are pushed together, and left for an hour, they join to become just as stretchy as before. There is even a video of the supposed creation in action. ‘Regular rubber gets its strength from the fact that long chains of polymer molecules are coupled, or “crosslinked,” in three different ways: through covalent, ionic, and hydrogen bonding between molecules. Of these three bond types, only the hydrogen bonds can be remade once a material is fractured, even though normally there are not enough hydrogen bonds for the rubber to re-couple in this way. The solution devised by Leibler and colleagues is to simply get rid of the ionic and covalent bonds. They developed a transparent, yellowy-brown rubber in which crosslinking is performed only by hydrogen bonds.’”

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stoolpigeon writes “The O’Reilly School of Technology is teaming up with Wolfram Research to provide on-line math courses using an AJAX version of Mathematica. O’Reilly has posted an and interview with Scott Gray, the director of OST, that has more details on the program (named Hilbert after David Hilbert) itself as well as the classes they will be offering.”

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coondoggie writes to mention that a new optical technique for sensing small amounts of molecules in a persons breath has been developed by a researcher for the National Institute of Standards and Technology. The goal is to create a fast, low-cost method for detecting disease. “In this approach, NIST researchers examine human breath with ‘frequency combs,’ which are generated by a laser specially designed to produce a series of very short, equally spaced pulses of light. Each pulse may be only a few million billionths of a second long. The laser generates light as a series of very narrow frequency peaks equally spaced, like the teeth of a comb, across a broad spectrum.”

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anonymous_echidna writes “Florida has voted to accept the new K-12 science curriculum standards amidst a storm of controversy around the teaching of evolution, which had up until now been the scientific concept that dare not speak its name. There was a compromise made at the last minute, which was to call evolution a ’scientific theory’, rather than a fact. While some lament that the change displays the woeful ignorance of science and scientific terminology, the good news is that the new curriculum emphasizes teaching the meaning of scientific terms and the scientific method in earlier grades.”

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Filed under: Bad news, Industry, Federal Natl Mtge (FNM), Options, Technical Analysis, Economic data, Housing

Fannie Mae (NYSE: FNM) stock is declining this morning on news that mortgage application volume tumbled 22.6% during the week ending February 15, according to the Mortgage Bankers Association’s weekly application survey. However, housing starts improved, which is helping to offset the sting of lower applications with the hope that future numbers will be superior. If you think this stock won’t be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on FNM.

After hitting a one-year high of $70.57 in August, the stock hit a one-year low of $26.38 in November. This morning, FNM opened at $28.53. So far this day the stock has hit a low of $28.05 and a high of $28.99. As of 11:00, FNM is trading at $28.80, down $0.18 (-0.6%). The chart for FNM looks bullish but deteriorating, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would think about a June bear-call credit spread above the $45 range. A bear-call credit spread is an options position that combines the buy and sale of call options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in four months as long as FNM is below $45 at June expiration. Fannie Mae would have to rise by more than 57% before we would start to lose money.

FNM hasn’t been above $45 since it dropped sharply in November and has shown resistance around $35 recently. This trade could be risky if the economy makes a swift comeback, but even if that happens, this position could be protected by resistance FNM might find around $40, where it topped out back in December.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in FNM.

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Filed under: Bad news, Economic data, Housing, Recession

Housing starts posted a small gain in January 2008, but remained near two-decade lows, a sign the nation’s worst housing slump is far from over.

Housing starts increased 0.8% in January 2008 to a seasonally-adjusted annual rate of 1.01 million, in-line with the consensus estimate, the U.S. Commerce Department announced Wednesday. In December 2007, starts declined by a revised 14.8% to an annual rate of 1 million.

In January 2008, building permits declined 3.0%, single family housing starts fell 5.2%, and multi-unit housing starts plunged 22.3%.

Economist Steve Affinito told BloggingStocks Wednesday the January 2008 housing report still shows a housing sector in deep recession.

“The most telling stats in today’s report are the substantial drops in both building permits and single family housing starts, and they reflect the large inventory conditions in the housing sector,” Affinito said. “We have a large inventory of homes — roughly a nine-month supply — that’ll continue to weigh on house prices and the economy for at least all of 2008, and most likely into 2009.”

During 2007, construction started on 1.355 million housing units, the lowest total since 1993, and down 25% from the previous year. Home builders are unlikely to increase building until they see the big inventory of unsold homes decline for several months, and home foreclosures decline as well, Affinito stated.

By region, housing starts rose in the Northeast, up 18.9%, and in the Midwest, up 12%. They fell in the South, -2.9%, and in the West, -6.2%.

Affinito added that he now anticipates the slumping housing sector to lower 2008 U.S. GDP by about 1.0-1.2 percentage points from what the nation’s GDP growth rate would be if the housing sector was healthy.

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Filed under: Before the bell, International markets, Earnings reports, Hewlett-Packard (HPQ), Market matters, Economic data, KKR Financial (KFN), Housing, Federal Reserve

U.S. stock futures were significantly lower this morning, indicating U.S. stocks could have a rough start as investors await data on inflation and housing. Despite solid results from Hewlett-Packard after the closing bell Tuesday, renewed concerns about the credit market, oil climbing above $100 a barrel and the uncertainty about the upcoming data pulled futures lower.

Like seemed what was going to be a healthy gains day Tuesday, ended on a down note after oil futures reached the $100 a barrel. The Dow industrials fell almost 11 points, or 0.09%, the S&P 500 lost over 1 point, or 0.09%, and the Nasdaq Composite dropped 15 points, or 0.67%.

Meanwhile, around 10:30 a.m., weekly crude inventories will be reported. Oil shut for the first time above $100 a barrel Tuesday, but prices retreated somewhat Wednesday to around $99 a barrel. Concerns over a refinery explosion and the possibility that OPEC might cut its output caused oil prices to spike with several other factors remaining in the background.

Overseas, stocks fell in Europe and Asia following oil’s price spike. Stocks in Asia fell sharply with Japan’s Nikkei 225 Stock Average sinking 3.3%, and Hong Kong’s Hang Seng Index slipping 2.2%.
In Europe, Germany’s DAX declined 1.9%, France’s CAC 40 lost 1.8% and the U.K.’s FTSE 100 also slid 1.8%.

Fresh credit fears were brought forth when KKR Financial Holdings (NYSE: KFN) has postponed repayment of billions of commercial paper and is restructuring talks with creditors. KKR Holdings is the listed affiliate of private-equity firm Kohlberg Kravis Roberts & Co.

On a good note, though, Hewlett-Packard (NYSE: HPQ) stated it earned $2.13 billion, or 80 cents per share, for the three months ended in January. That compared with net income of $1.55 billion, or 55 cents per share, in the same period a year earlier. Excluding one-time items, HP said it would have earned 86 cents per share, exceeding the 81 cents analysts have been expecting. Revenue for the period increased 13% to $28.5 billion. H-P shares are up over 4.2% in premarket trading and the good news will likely help boost the tech sector.

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Filed under: Products and services, Launches, Marketing and advertising

Whoever invited the Wii Fit, a virtual gym that can be used in conjunction with the gaming console, deserves a medal. Heck, he or she deserves a raise because it’s going to be a huge seller for Nintendo Co. (OTC: NTDOY).

This game is perfect for someone like me who doesn’t exercise as much as he should, which in my case means hardly ever. The Wii Fit, which will be available Might 19, also will be useful for parents trying to get their kids to exercise more. “Wii Fit is all about breaking the definition of video-gaming, about something that keeps you and your family fit and engaged,” stated Reggie Fils-Aime, president of Nintendo’s U.S. division, in an interview with The Wall Street Journal.

The company has sold 1.4 million duplicates of Wii Fit since it went on sale in Japan in December, according to the paper, which stated the game will sell for less than $100 in the U.S. Already the media is gushing over the product. Here’s a sample from theU.K.’s Guardian:

The games console, which plugs into any TV, comes with a balance board, about the size of a pair of restroom scales. Once stepped on, this board calculates a player’s bodymass index based on their weight, height and age. The player then carries out a few basic balance exercises on the board to gauge their rough level of fitness.

Using a number of on-screen games and a digitized fitness teacher, the Wii Fit then takes the player through over 40 different muscle, stretching, aerobic and balance exercises from downhill skiing and football to yoga and press-ups. Players can set their own targets, whether to reduce their body mass index or improve their flexibility and agility.

The only question I how the digital fitness teacher will motivate people to “feel the burn” when they start to slack off.

Freelance writer Jonathan Berr edits the blog Ketchup and Eggs.

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Filed under: Products and services, Competitive strategy, Wal-Mart (WMT)

When Wal-Mart Stores, Inc. (NYSE: WMT) reported it had reached its first $100 billion quarter in the company’s history Tuesday, it was probably a time to celebrate at its Bentonville headquarters. But even a $100 billion quarter doesn’t make for good feelings sometimes, as much of that growth came from the company’s international division. Yes, that’s the one I’ve lamented over frequently in the past. This time, it was shining brightly.

Wal-Mart’s Q4 sales came in showing a 19% international growth rate that pushed those sales to $27 billion for the just completed quarter. At the same time, the retailer’s U.S. sales rose only 5%. Is international becoming the company’s growth engine enjoy it has frequently wanted to happen? This quarter proved it — yes, it has. Wal-Mart’s Asda grocery chain in the UK even showed same-store sales growth in the “mid-single digits” for all of 2007. Wal-Mart indicated that its Asda operation was the fastest growing food retailer in Europe, ahead of competitors Tesco and Sainsbury.

Is “Everyday Low Prices” winning over customer groups outside the U.S. now? That was the reason given behind Asda’s growth, as customers seeking out the lowest prices more frequently shopped at Asda. Is this the beginning of the “Wal-Martization” of all its global markets? Commodity and energy prices aren’t doing anything to help, but it’s too early to make that call. Give four quarters of outstanding international growth, and finally, Wal-Mart investors may have something to cheer about.

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