Mubarak Concedes Defeat
So, a headline on Yahoo! Finance today read “Nokia, Microsoft in pact to rival Apple, Google.” Apparently, Nokia (NYSE:NOK) and Microsoft (Nasdaq:MSFT) are feeling the heat for missing the smartphone boom and so they are going to team up to go after the leaders in the space.
Now, to me, this is the equivalent of the Carolina Panther teaming up with the Cincinnati Bengals in order to compete with the Green Bay Packers. It’s just not going to work. Two companies that have completely failed to have any semblance of market awareness simply aren’t going to suddenly morph into a cutting edge technology giant.
I kind of feel sorry for Microsoft. The tablet computer used to be one of Bill Gates’ pet projects. Microsoft even released a version or two a few years ago. Gates wanted a touch screen, but the point was to be able to write on them with a stylus. And I think therein lies one of the big reasons Microsoft has missed out on the latest tech innovations.
Microsoft is a business oriented company. To Gates, and Steve Ballmer, computers are about doing word processing, spreadsheets and doing work. Smartphones and Apple-inspired tablets are not about work at all.
Sure you can stay in touch with an Android phone. And you can work with data on the iPad. But these devices are about posting to Facebook and Twitter, watching YouTube videos, that kind of thing. They’re fun, not useful. And I think we can all agree that Microsoft is not fun. I mean, would you rather have dinner with Steve Jobs or Bill Gates?
I would say that you should immediately short Microsoft on any enthusiasm about this deal. But it’s too late. Microsoft gapped higher to $27.81 this morning and immediately tanked to $27.25.
*****Egyptian president Hosni Mubarak seems intent on keeping his country in chaos. It’s a darn good thing the Egyptian military has some perspective. It’s clear that Mubarak can’t use the army’s muscle to get his way, because he would if he could.
The bottom line for a country is that it needs rule of law. Personal property must be protected and individual rights must be upheld. That’s the only to establish the trust that is necessary for an economy to thrive.
Corruption is absolutely anti-growth and anti-innovation.
It’s not a stretch to view the actions that led to the housing meltdown as a form of corruption. Change banking regulations all you want, but if there are no legal consequences for flouting the letter and the spirit of the law, the behavior will continue.
*****Scott G. asked a question about the debt ceiling:
It is my understanding that our national debt service is only
6.5% of our budget. Therefore, it does not seem plausible to me that a
failure to raise our debt ceiling would force us into
receivership/default or threaten the nation's credit worthiness. Failure
to raise it would prevent us from taking on large amounts of NEW debt and
force Congress to have to omit funding for some of their planned programs
and pork. (A prime candidate for this would be Obamacare, which was
recently ruled unconstitutional in its entirety.) So, what would be wrong
with this happening? Something needs to happen to force Congress to
knuckle down and act in the best interests of the whole country, not
hundreds of special interest groups, and to honor the wishes of the
majority of CITIZENS of this country.
The politicians will
wail and cry that not raising the debt ceiling will force stoppage in
necessary services. This is the same as state and local politicians who
always claim that any loss or failure to increase taxes at that level
will threaten fire, police, schools, etc. Such would not be the case if
they would bite the bullet and cut the "non-essential" services
first
This is a great question.
Scott is correct, the debt ceiling does not stop the U.S. from making
interest payments on debt. There is apparently enough cash coming in to
make these payments.
The debt ceiling would prevent the government from taking on new debt that can’t be covered by cash flow. New debt could certainly be pork and other sending. It could also be social security payments. That’s what Bill Clinton did when the government shut down in 1995-1996 because Congress refused to raise the debt ceiling. That was a savvy move by Clinton to turn the pressure back on Congress. I wouldn’t be surprised to see it get recycled.
Creditworthiness, however, would absolutely be impacted by failure to raise the debt ceiling. If you’re interested, here’s an Economist article that discusses the issue.
