H J Mann

What concerns me about Obama does not involve his politics or his party or his tax policies or any of that. America has had its share of good and bad Presidents and economies. Whatever it ends up being, I am pretty sure we’ll survive this too.

What really concerns me is that, quite simply, Obama is in no way qualified to be President. I said as much almost a year ago to this day. A term as a state senator, and a cakewalk election to two (mostly absent) years as a US Senator does not a President make. Bill Clinton’s lack of experience began to show early on, and most of his two terms were nothing more than a protracted exercise in covering his tracks. That covering your tracks nonsense leads to things like 9/11.

And, at least as a Governor, Clinton had experience handling appointments, managing a budget process, and working with two houses of a legislature. Obama isn’t even this prepared.

I am very afraid that Obama is going to be on the job about three days and quickly realize how far over his head he is. And in that we will end up with a spin machine, just like we did with Clinton, complete with the FBI investigating when our sailors are blown up in our own warcraft in foreign ports, and ridiculous arguments over the definition of ‘is.’ 

In this, of all times in our history, it was not a time to take a flyer on newbie, no matter how historic his election or flowery his rhetoric. As a father to be, I am genuinely afraid for our country, its future and my child’s future. And though I despised Clinton (I lived in Arkansas when he was Governor), I never was worried like I am now.

One final point: I believe that the endorsement of Obama by Colin Powell may have been the single greatest exercise of Powell’s conservative values. I think Powell believes that by electing a black man to the highest office in this land that black people can no longer lay claim to being victims of whites or victims of fate or victims of anything. Powell saw Obama’s election for its true historic  and hopefully lasting value: a motivating wake-up call to people of every color, creed, background, and situation that anything is possible if you put your mind to it. That there are no handouts or freebies or guarantees in this life, but there is an abundance of opportunity for those willing to work hard. This idea used to be at the core of the values of a Republican party I no longer recognize and that I sorely miss.  

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So all the buzz in the market is the new Dream phone running the new Android OS from Google.

To properly look at the Dream phone, it must be done in two distinct parts: The Google Android Operating System, and the actual telephone hardware. 

By every demonstration I have seen and the reviews that I have read, the indications are clear that the Android software is smartly-built, innovative technology, and the Google applications on board are awesome. Other words I have heard to describe it: stable, fast, easy to use, clean, fun.

All that is great but at every step and in every way, this phone was pitched and launched as a competitor to the iPhone. So is this an answer to the iPhone? At this point, no. In fact, it isn’t even strong enough to be a serious competitor.

The devil is in the details: music from Amazon…? No Outlook or other enterprise email access (I read that Motorola has GoodMail programmers working on apps for this phone. How about putting the GoodMail programmers to work on making GoodMail for Android, and take advantage of Apple’s iPhone mis-step that I wrote about previously). And, not only there is no enterprise email, but you must have a GMail account to get any email at all to the device? This is as heavy-handed than anything Microsoft has ever done. To the Company whose motto is “Don’t Be Evil,” I would say “you first.”

No enterprise email capability is probably the best evidence that it was rushed out the door… I mean, they can’t be serious about pushing a Google Apps -only strategy on enterprise email users and think that this will fly at all, let alone be a viable long term solution. If they would have launched the phone a year ago, they could have gotten away with this, but now, with Apple and every other smartphone supporting Exchange email, it is a gaping hole as conspicuous in it’s absence as a missing nose.

As for the phone hardware itself, I am even more leary. The hardware is manufactured by Taiwanese outfit High Tech Computing, also known as HTC. In the old Fake Steve Jobs blog, Fake Steve says that HTC stands for Heavy Taiwanese Crap. Funny, and from my personal experience, true.

Two years ago I owned the HTC Cingular 8525. It was Windows Mobile, so I will grant you that some of the issues could be OS. The phone sucked battery, was slow, hesitated constantly, locked up frequently which required pulling the battery and waiting five minutes for a reboot (try that seven times a day, right in the middle of phone calls no less). In short, it was a total piece, and I found myself back to unsexy predictability of a Blackberry (actually, there is something sexy about an electronic device that works exactly as advertised).

Fast forward to March of this year: my wife bought a very similar Windows-based HTC, this time from TMobile. And all the same issues were still prevalent on that phone. After less than 3 months she literally threw it away and bought a Blackberry.

Even if the stability issue was the Windows OS, the new Dream phone still has all the annoying “features” of older HTC hardware. For example, the phone does not accommodate a standard 1/8″ head phone jack. Want to listen to some of that great Amazon music? Don’t forget your 3/32″ to 1/8″ adapter. This is the second best evidence that the product was rushed.

Finally, have you seen this thing? It is longer and thicker than the iPhone. And as ugly as a mud fence. This design would have been cutting edge in 2003. But compared to the iPhone? The upcoming Blackberry Storm? Talk about the ugly sister. When you add to this stingy memory, TMobile’s not-quite ready for prime time 3G network, and a price point very similar to an iPhone, an iPhone killer it is not.

Conclusion about the Dream Phone:

The Dream phone is large and clunky and the design is awful, and the product looks and feels rushed. What’s worse, they are revealing it to an audience that mostly has already found a home in the iPhone, and the sole advantage of a keyboard will not bring them over to this phone. Google is trying to poach the iPhone set with bulky, ugly, substandard equipment, an unknown, unproven OS, and second-tier providers.

As for winning over other smartphone users, remember: There is substantial overlap between mobile users whose needs demand a keyboard and users who require enterprise email access. Those who have shunned the iPhone for this reason will simply await the new Blackberry models (which are reliable and sexy).

In spite of these early issues, you really have to hand it to Google.

Google gives away this OS for free, so long as they can serve ads through it. Google understands that there are more people in this country that are between 18 and 35 than there are over 65. And this demographic wants to interact with the internet in real time, always on, at their whim and leisure. And they don’t want to carry a 13- or even 3- pound device around to do it. Google sees the potential and knows that serving this audience in the way this audience desires is the next great frontier for advertising. 

Google has built a nice OS, and the ideas around applications that take advantage of sensors and crowdsourcing are really innovative and will catch on. Google will learn and innovate more and find a significant role for themselves in the mobile space. The Android OS is designed to assure that Google will succeed as the medium for advertising moves from internet to mobile.   

Finally a thought you absolutely have not heard anywhere else: Though Google is pushing this as an OS for smartphones, the new Google internet smart search auto-complete functionality will certainly benefit users on a standard 12-button phone trying to do searches. 90+ percent of the phone market consists of those 12-button phones. And Google was recently selected as the default search provider for Verizon mobile phones.

So what about Google stock? Paid Ads and Paid Search are going down with retail sales, and for the next several months there will be little joy to report out of Google. Add to that the recent announcement to hold off their Yahoo ad partnership pending a look by the DOJ. Google recently achieved 63% of internet search– and this is primed to fall as well (how much higher can it really go? And sad to say, but even staying the same will be seen as a disappointment).

All that bad news will not be made brighter by the Google Phone version 1. With the obvious flaws, economic headwinds, and the strong competition (now even HP is getting in the smartphone game with an updated iPaq), there will be no joy from the initial sales results (my fearless prediction: less than 300,000 sold in the first 75 days, compared to 1 million iPhones over the same span). Put all this together and you get a much lower stock price. But longer term, this OS will be something special, the ad business will return, and Google is ever formidable in that they have the brains and the cash to compete in any space they choose. I would be a hard looker at anywhere under $350, and a certain but patient buyer under $300.

The Extra Rich Disclaimer: As of this writing, I am long QCOM stock and QCOM stock options. I am a QCOM employee, though I am not employed within any of the divisions that build or license phone chips, 3G technology assets, or the BREW application. The views expressed herein are mine solely and the content herein is derived entirely from publicly available news sources.

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Buffett gets massively into Goldman Sachs and GE, and the market yawns. The terms were fabulous for Berkshire, and the companies will be issuing new shares which will lead to EPS dilution, so I kind of understand why no one took it as a broader signal.

Then today, Wells goes in for Wachovia, saying that they will take it all on without any federal bailout help. This is a brilliant move for Wells, as the Wachovia retail branch footprint and cash-cow brokerage business has long been coveted by ALL of the larger players.

More importantly for everyone out there, lightning has struck, and this bold move is a solid indication that things are not as bad as they seem. Stop watching TV and start watching the big-boy investors who are placing their bets now. I am not saying mimic them; just be aware that they are laying their money down.

At this point do you buy WFC? Not until after the new shares are floated and they have an actual handle on how bad the bad stuff that sunk Wachovia really is. This way you go in eyes wide open.

If you are trading, here are stocks to watch for the next two weeks: CHK (own some, disgustingly beat down, buying more Monday first thing if the broad market futures are up or even), GS, BAC, MOS (oversold to the point of ridiculous), and QCOM (beaten down; dominant position, cash rich at a time when cash is king).

If you are investing, you have heard this from me before: This market is not coming back until the mess in financials is over. The bailout signed today should help get things moving. For now, sit on your cash, as the turnaround in this market is still aways off, and will be telegraphed way in advance, so you will have all the time you need to get reinvested. And, in my opinion, the DOW has not yet put in a bottom.

Disclosure: As of publication I am long CHK and QCOM, but positions can change at any time. I am not a professional, but I am trying this at home. It is highly recommended that you consult a licensed financial advisor or broker before making any and all investment decisions.

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Michael Bloomberg is seeking a repeal of the NYC term limits law in order to run for a third term as the Mayor of NYC in 2009.

The repeal of the term limits law would not only repeal it for the Mayor’s post, but dozens of other elected posts.

It begs the question: why would he (selfishly) do so something so drastic?

The only answer I can come up with: he wants to stay relevant and top-of-mind as he gears up for a 2012 Presidential run. And leaving office in 2009, it is just too much time off the stage.

Fearless prediction: Bloomberg is the farthest left of any elected Republican (he is currently an Independent– but is smart enough to pick a major party for a bigger run). By comparison, He makes McCain look like Jesse Helms. If he decides to run, he will do so as a Democrat (he is a former Democrat).

And the Democrat bench is almost as weak as the Republican bench, so they will greet the well-heeled, well-spoken billionaire with open arms. 

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Mark Cuban suggests that we should tax stock trades 10 cents per share. My reply below:

Mark,

This is not as well thought-out as most of your posts are. And it’s a lousy idea.

At a macro level, if you are so unconcerned about the amount taxes cost, then I am sure you will be publishing your 2007 tax return, wherein we will find that you have waived every deduction and simply paid the full amount of taxes.

We both know that won’t happen. You don’t manage your money this way, so why should you expect anyone else to?

When people speak of “limousine liberals” they are talking about people who behave exactly this way. Al Gore who screams about the environment and has a swimming pool that costs $2000 a month to heat; George Clooney who drives his Prius to the airport and then boards a private jet which then spews pollution and burns way more fuel; people like you who are so wealthy taxes would have very minimal impact prescribing tax increases for everyone.

At a micro level, 401k accounts are made up of mutual funds which are made up of stocks. I already pay 1% per year management fee for 401k account. Many people pay more. This will certainly drive up that cost at a time when almost no one can afford any further impact to their account.

And, when you are talking about a stock below $10, and this is where most small investors first look, this is more than a 1% tax… on top of the 15%-20% people already pay in cap gains.

A horrible idea. Sorry Mark.

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See here. The polls say Obama won the debate. Are you surprised? Well you shouldn’t be.

Can someone tell me the last time any poll indicated that a Republican Presidential Candidate won a debate? Reagan vs. Carter? And yet the Republican nominee has won 7 of the last 9 presidential elections.

In fact, other than that debate– highlighted with Reagan’s legendary “there you go again…,” a parry steeped with the perfect balance of pity and disdain– I cannot recall a single time in my lifetime that polls revealed that a Republican won a debate.

An ice cream to anyone who can tell me if it has ever happened any other time in the in the history of Presidential polling.

Disclosure: I am a neo-conservative who is fed up with McCain and never liked Obama to begin with.

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A new website helps to answer the question.

My answer: Over four years, I will pay $9500 more in taxes under Obama than I would if McCain were President. Let me know how you fare.

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See below… At this point this is just an overly-reported rumor. 

But unrelated to this story, Barron’s reported this morning that the pricing for Wachovia to insure certain credit instruments went up 350% literally overnight. I don’t understand the finer details of how these instruments work, but what is clear is this: What it costs Wachovia to acquire lendable capital far exceeds the profit they can make lending that capital out. 

This situation is the exact inverse of what a bank does to make money. When you hear about a bank “seizing up” this is what they’re talking about. 

Wachovia is going to need a find a way out soon, or their collapse is coming. 

Both articles here and here.

Disclosure: No positions.

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In one of my very first posts, I wrote about a woman who was sued by the Recording Industry Association of America (RIAA) for loading some songs onto Kazaa. A jury in Minnesota ordered her to pay $222,000 in damages.

At the conclusion of my post, I said the following:

“Oh yeah, and that ridiculous award amount? Won’t hold up in a million years. I don’t know what the hell these people were smoking, but how in God’s name can they divine that much damage by a lousy 24 songs sitting on Kazaa… with no actual proof anyone downloaded them or that any actual ”sharing” occurred?”  

Well forget a million, because it took less than one year for an appeals judge to overturn the verdict. Money quote: “Her status as a consumer who was not seeking to harm her competitors or make a profit does not excuse her behavior. But it does make the award of hundreds of thousands of dollars in damages unprecedented and oppressive.” 

His further conclusions mirror my thoughts as well. He concludes that just placing the files on a server that others access does not constitute ‘distribution,’ blowing one of the major contentions of the RIAA out of the water. Quoting again: “The Court’s examination of the use of the term ‘distribution’ in other provisions of the Copyright Act, as well as the evolution of liability for offers to sell in the analogous Patent Act, lead to the conclusion that the plain meaning of the term ‘distribution’ does not include making available and, instead, requires actual dissemination,”

Interesting. Now if the RIAA will do as I previously suggested and focus their time and effort putting out a better product and working on a decent price point, and less time chasing people around the block, we’d all be better off for it.

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Again, Mark Cuban writes, and asks a very important question:

“I dont know why anybody thinks that the Bankers who got us into this mess are going to take 700B of taxpayer money and  know how to loan us out of this mess. It makes no sense at all. We need to set standards for how the money will be used by banks”

My reply is below:

Hi Mark,

A few points to consider:

First, remember it was the Congress who mandated to Fannie and Freddie that a) their loans be 50% to minorities and the poor, and 2) that food stamps, unemployment and other transfer payments must be considered as income on the applications (NO, I AM NOT KIDDING. LOOK IT UP). So what makes you think they are smart enough to know exactly what to do to fix this? Have you met your Congressman? Like most of them are, he’s probably a moron just trying to hang onto the best job he’s ever had or ever gonna have. Not much incentive to drive real change, even if he was smart enough to do so, which he likely isn’t.

Second, while these clowns debate where and how to place the pump, the boat is taking on ever more water. Whatever they do, they better do it damn quick before the boat sinks and no amount of money will fix the problem.

Remember: the heart of this wasn’t lack of intelligence, but lack of due diligence. When these guys saw the AAA rating on these securities, they bought and sold them all over the world (foolishly as it turns out) expecting that the paper was in fact AAA. The rating agencies failed at due diligence. The banks who bought and sold these failed at due diligence. And the insurance companies who insured these (think: AIG) failed at due diligence.

Final point: It is more than possible… dare I say likely… that if managed correctly, the Feds could make alot of money on this deal. The government’s power is the length of their time horizon, and it probably would not take more than 8 or 10 years to work this completely out.

The problem the last time with the RTC? An S&L would fail and go into the Fed’s hands, and the same guys who handed the failed institution over to the feds–literally– would form another corporation, and buy back from the Fed the identical assets at pennies on the dollar. Disgusting.

Want to focus on something? Focus on who in the hell is going to manage these assets on behalf of the American people and do so in a way that gets us the maximum profit, even if it takes 10 years or more to work it all out.

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