Archive for August 18th, 2008
Filed under: Products and services, Consumer experience, Competitive strategy, Intuitive Surgical Inc (ISRG), Technology
 During my various commutes over the past week I have been hearing a new radio commercial about Intuitive Surgical Inc. (NASDAQ: ISRG). The City of Hope Hospital in Los Angeles is advertising their Di Vinci robotic surgical procedures to attract patients.
They use the catch phrase “The science of saving lives” while promoting less invasive surgical procedures, shorter hospital stays, and faster recovery. These are well-known themes among the medical profession and investors but it is the first time I’ve heard the story promoted for a competitive advantage among hospitals. I am sure it won’t be the last.
Certainly this will raise the bar among other hospitals competing for similar business and simply to keep their Di Vinci operating rooms productive, cost effective, and profitable. It also means that any hospital without the equipment will soon be deemed second rate, if they are not already.
Perhaps we will soon be hearing competing hospitals bragging about having multiple Di Vinci’s or more trained physicians or the highest number of procedures or new procedures. Where will it end? When it is general place and every hospital is using the system.
Have you heard any radio advertising from hospitals in your city? Fans of Elvis Costello can check out Radio, Radio” at Last fm. here.
ISRG shut last Friday at $299.17 and is trading down slightly this morning. It has been hovering around $300 for the past two weeks.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of ISRG and have no relationship whatsoever with “Last fm” ,but I was reminded of the song and it is way cool.
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Filed under: Products and services, Best Buy (BBY)
 Ideal Purchase, Inc. (NYSE: BBY), after announcing it was going to come on strong in the United Kingdom, is now setting its sights on Russia to further its international expansion plans. This according to scattered media reports about the largest consumer electronics retailer in the U.S.
Proof comes in the form of Ideal Buy’s registration of the Future Shop trademark in Russia. The Future Shop trademark is the name for Best Buy’s Canadian subsidiary. It filed the license for trademark a few years ago and has been allowed the trademark recently. Would Ideal Purchase really try to enter a country where recent political strife has caused growing international concern? Sure — if profits are to be made.
With Best Buy on record saying that it wants to reach $80 billion in annual sales within five years, much of that growth won’t be sitting inside its U.S. stores, but from international sales. Of course, the retailer continues to open stores inside the U.S. and won’t stop that type of expansion as long as it makes business sense. For the last 18 months, Best Purchase has ramped up its dominance in retail electronics and has crushed former rival Circuit City stores, Inc. (NYSE: CC). It’s showing no signs of slowing down anytime soon.
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Anti-Globalism writes “In an age of digital manipulation, many people believe that snapshots and family photos need no longer stand as a definitive record of what was, but instead, of what they wish it was. It used to be that photographs provided documentary evidence, and there was something sacrosanct about that, stated Chris Johnson, a photography professor at California College of the Arts in the Bay Area. If you wanted to remove an ex from an old snapshot, you had to use a Bic pen or pinking shears. But in the digital age, people treat pics like mash-ups in music, combining various elements to form a more pleasing whole. What were doing, Mr. Johnson said, is fulfilling the wish that all of us have to make reality to our liking. And he’s no exception. When he photographed a wedding for his girlfriends family in upstate New York a few years ago, he left a space at the end of a massive group shot for one member who was unable to attend. They caught up with him months later, snapped a head shot, and Mr. Johnson used Photoshop to paste him into the wedding photo. Now, he said, everyone knows it is phony, but this faked photograph actually created the assumption people kind of remember him as there.”
Read more of this story at Slashdot.
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mknewman writes “The Houston Chronicle is reporting a change in Obama’s stance on NASA, saying his position on space exploration continued to evolve Sunday as the Illinois Democrat endorsed a congressional plan to add $2 billion to NASA’s budget and concurred to back at least one more space shuttle mission.”
Read more of this story at Slashdot.
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Posted by: in Housing
Filed under: Forecasts, Housing, Federal Reserve, Recession
 There are a few developments that gladden the heart of nearly every business executive. Rising retail sales. Rising real incomes. Sustained job growth and household formation. And lower interest rates from the Fed.
U.S. business executives, investors, and typical citizens alike might have to wait a while for a constructive dynamic to emerge regarding the first four, but there may be some good news regarding interest rates. We’re headed back down to 1.5% - - or perhaps even lower - - regarding the Federal Funds rate, so states economist David H. Wang.
Further, Wang believes an interest easing is up ahead, although that stance would seem to fly in the face of the Dow’s recent rise/signs of life, and a July U.S. consumer price statistic of 0.8%, that indicated that inflation rose at its fastest pace in 17 years.
“The July inflation number was high, but the core inflation gain of 0.3% means the U.S. Federal Reserve has some breathing room on inflation, some leeway to cut interest rates, and they’re going to need it,” Wang stated. Wang sees the Federal Funds rate, currently at 2%, falling to 1.5% by January 2009.
Bearish on U.S. stocks, economy through early 2009
As one might sense, Wang isn’t bullish on the U.S. stock market or U.S. economy over the next six to nine months. Here’s why: “First, the U.S. housing market has not reached a bottom. We’re not even close,” Wang said. “People are watching the U.S. median home price [currently about $206,500], when what they need to scrutinize is inventory levels. We’re still at nine-month and ten-month inventories levels in most regions, and a healthy market has only a three-four month inventory level. So don’t look for any economic stimulus from the housing sector.”
Second, and equally significant in Wang’s interpretation, is job growth. Or should one state lack of job growth. “We have lost more than 400,000 jobs since November 2007, and the losses are likely to continue for at least two more quarters [Q3 and Q4], probably longer,” Wang stated. “Even with adequate export activity, it’s almost impossible for the U.S. economy to grow at or near capacity without job growth. This workforce contraction will be a major factor in the Fed’s decision to lower interest rates more.”
Finally, even though the slowdown is still young, the U.S. economy has not identified a growth catalyst. “All recessions and expansions start for a reason. During an expansion it frequently is a new sector, like technology, or a social trend, such as U.S. Veterans coming back from World War II ready to marry, begin families, purchase homes, and spend,” Wang stated. “Thus far, I don’t see a catalyst for the next expansion, this will also weigh on the Fed, which will further tip the scales in favor of lower rates.”
The earliest the U.S. recovery could start, in Wang’s view? “Possibly in Q2 2009, if we’re lucky, but most likely, not until Q3 2009,” Wang stated.
Economic Analysis: Not the rosiest economic forecast for the next 6-12 months, but economist Wang makes a strong argument. Further, Wang isn’t the biggest interest rate dove. Keep in mind that investor Mark Mobius, chairman of Templeton Asset Management Ltd., told Bloomberg News earlier this month the Fed should eventually cut interest rates to 1% to stimulate demand.
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Posted by: in Housing
Filed under: Federal Natl Mtge (FNM), Housing, Recession
 Wilbur Ross knows how to spot megatrends. For example, he built a steel empire - by purchasing bankrupt companies - and made billions. Oh, and he also predicted the current credit crisis.
Well, this day Ross was on CNBC and provided some sage advice on the current economic morass. In fact, he discussed his straightforward plan on dealing with the credit crunch (which has been effect for about a year so far).
His proposal is called the “good bank, bad bank” approach. Essentially, it means setting up a third-party entity to take bad loans from Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). Interesting enough, this was the strategy to deal with the S&L implosion during the early 1990s. And, for the most part, it worked.
According to Ross, the US financial system needs to focus on the good loans - which should stabilize things and lead to more lending. Ultimately, this should spark economic growth and get things back on track again.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the web Guide to Decoding Financial Statements . He also operates MergerBook.com.
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Posted by: in Housing
Filed under: Earnings reports, Bad news, Merrill Lynch (MER), Lehman Br Holdings (LEH), Blackstone Group L.P (BX), Housing
 Lehman Brothers Holdings Inc. (NYSE: LEH) is poised to lose $2.6 billion and it’s trying to dump $40 billion worth of real estate from its books. The Wall Street Journal reports that Guy Moszkowski, a Merrill Lynch & Co., Inc. (NYSE: MER) analyst thinks Lehman could lose $2.6 billion — while others anticipate a mere $1.6 billion loss. Lehman normally reports in mid-September but it might pre-announce earnings this month.
I always find it interesting when analysts — particularly those who work for banks with their own problems — offer bearish earnings outlooks for their competitors. But I have met Moszkowski and I found him to be both very smart and a straight shooter. The Journal reports that he “more than doubled his loss projection to $2.6 billion and predicts that Lehman will take a $4.5 billion hit from write-downs.” It quotes him as saying that an additional markdown up to 20% related to Lehman’s remaining $64 billion in mortgage and commercial real-estate exposure “seems like a lot but can’t be ruled out.” If that were to happen, Lehman might need to raise more capital.
Talking of that real estate, FT.com reports that Lehman is in speaks to dump $40 billion worth of commercial real estate assets and securities. FT.com reports that there is a wide gap in what the potential buyers — Blackstone Group (NYSE: BX) and BlackRock (NYSE: BLK) — and Lehman think those assets are worth. It also reports that the assets in question consist of mortgages and mortgage-backed securities that Lehman valued at $29.4 billion at the end of Might and real estate assets then valued at $10.4 billion.
Lehman’s stock is down 72% in the last year. The assets it’s hoping to sell represent 357% and 152% of its market capitalization and shareholders’ equity, respectively. I find it hard to see this deal going through at a good price for Lehman.
With $8 billion in writedowns and losses and $13 billion in capital raised, the race for survival goes on between capital raising and real-estate write-downs.
I’m not confident that Lehman can win that race.
Peter Cohan is President of Peter S. Cohan & Associates. He also instructs management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.
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Posted by: in Housing
Filed under: Before the bell, Earnings reports, Analyst reports, Analyst upgrades and downgrades, Deals, Market matters, Hershey Co (HSY), Federal Natl Mtge (FNM), Lowe’s Cos (LOW), Economic data, BHP Billiton Ltd ADR (BHP), Qwest Communications Intl (Q), Oil, Lehman Br Holdings (LEH), Housing
 U.S. stock futures turned higher Monday morning despite a dip in the dollar and oil prices rising somewhat. Investors might focus on the financial sector again following some news while they await housing data later today. More inflation data is due Tuesday.
UnionBanCal (NYSE: UB) accepted a sweetened bid from Mitsubishi UFJ Financial Group (NYSE: MTU). After rejecting two previous offers, UB accepted MTU’s offer to pay $3.5 billion, or $73.50 a share, for the remaining 35% portion of the California bank that it doesn’t already own. UB shares are trading 11.85% higher in premarket action.
Staying in financials, Lehman Brothers (NYSE: LEH) might see some action after The Wall Street Journal stated some analysts believe it could lose $1.8 billion during the quarter. LEH shares are 2% lower in premarket trading. Meanwhile, Barron’s stated a government recapitalization of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) is almost inevitable, wiping out investors — and management. Shares are 2% and 6% lower respectively in premarket trading.
Lowe’s (NYSE: LOW), the home improvement retail chain, reported results this morning. Lowe’s profit fell for the fourth straight quarter as the biggest U.S. housing slump since the Great Depression slowed spending. Net income declined 7.9% to $938 million, or 64 cents a share, exceeding analysts’ estimates by 8 cents. Sales rose to $14.5 billion from $14.2 billion. Lowe’s raised guidance, but stayed within estimates.
Mining giant BHP Billiton (NYSE: BHP) reported Monday a record annual profit and stated it expects demand for commodities to remain strong. Net profit for the year ended June 30 climbed 14.7% to $15.39 billion,in line with analysts’ forecasts. “The continuing massive industrialization in China is providing solid support to the global economy,” the company said in a statement.
Shares in Hershey Co. (NYSE: HSY) narrowed its 2008 earnings and revenue guidance and said t would raise wholesale prices by around 11% to offset the impact of soaring commodities costs. Citigroup also downgraded HSY from Buy to Hold. Shares could come under pressure.
Quest (NYSE: Q), the telecommunications carrier, reached a tentative deal with two unions early Monday, averting a possible strike that might have affected the services it is to provide to the Democratic National Convention in Denver next week and the Republican National Convention that begins Sept. 1 in St. Paul, Minn.
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Posted by: admin in Today News
Husband of slain woman denies money charge - San Jose Mercury News
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Posted by: in Politics News
mknewman writes “The Houston Chronicle is reporting a change in Obama’s stance on NASA, saying his position on space exploration continued to evolve Sunday as the Illinois Democrat endorsed a congressional plan to add $2 billion to NASA’s budget and concurred to back at least one more space shuttle mission.”
Read more of this story at Slashdot.
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