http://blogcritics.org/ A sinister cabal of superior bloggers on music, books, film, popular culture, politics, and technology - updated continuously. en Copyright 2005-2007 by the authors Wed, 25 Oct 2006 20:01:43 EDT http://backend.userland.com/rss Blogcritics.org custom software http://blogcritics.org/ Phillip WinnSunday, August 26, 2007, marks the switch of all Blogcritics.org article feeds from full-content to short-content. This is the result of several converging factors, and is unfortunately a permanent decision (as permanent as any decision can be on the web, that is). We are aware of all of the reasons that this is a Bad Idea, and we are aware that some of you will be quite upset about having to click on something to read the free content, and we're sorry. Unfortunately, despite great effort, full-content feeds are not currently economically viable. Two other factors are involved: full-content feeds have resulted in an unprecedented level of content theft, with BC content appearing on many websites, usually spam sites, without attribution or permission. This duplicate content causes a cascading set of problems, not the least of which is that search engines generally aren't favorable to duplicate content, and don't always guess correctly. Finally, our RSS advertising partner is strongly in favor of short-content feeds. We hope that you'll continue to subscribe to BC via RSS, and when an article grabs your eye, it's only a click away, still free on the BC website. Thank you for your understanding. Administration0@blogcritics.org Sun, 26 Aug 2007 12:00:00 EDT http://blogcritics.org/archives/2006/10/25/200143.php Daniel M. HarrisonLike everyone else, I've spent the last few days trying to work out exactly what the Dow surpassing an all-time high of 12,000 points means for the markets. My conclusion is to follow the numbers. The numbers always seemed to be pointing to a year 2012 record high for both markets, fueled by a massive second coming in tech stocks, and it's satisfying that now the numbers are starting to add up in the right direction.A lot of the skeptics are pointing out - with some justification - that it's not the Dow meeting record highs that's a key indicator, but it's when the the junior NASDAQ follows suit that we should start paying attention. In part, argue the skeptics, this is because of the misleading way in which the Dow is measured - as a total culmination of all stock prices regardless of market caps, meaning that an intrinsically smaller company with a higher stock price has more impact on the indices than a larger company with a lower price - and in part it's because the Dow is full of the heavy old industrial stuff which always grows over time anyway and that it's only when the 'New Economy' stocks start rocking and rolling that we know we're in the bull ring. Indeed, The Economist made this point only a couple of weeks ago.But all this justified skepticism misses some major points, not least historic trends. First of all, there's not a lot of real net difference between a stock price moving up and and a market cap (a company's total value according to outstanding shares) moving upwards when a) the number of outstanding shares of the company's stock issue in play is much greater than the number of privately held shares (as is the case for nearly all Dow companies), and b) when you're trying to tell whether it's buying momentum you're seeing in the markets. Let me explain the second point a little more clearly. If Company A is worth $100 a share but has a market cap of only $100 million, whereas Company B is has a price of $1 a share but is worth $1 billion, it may be easier to move the price of Company A's stock to $200 than it is to move the price of Company B's stock to $2, but this doesn't mean to say that there's not ferocious buying going on. If anything, it says buyers are becoming more speculative - and hence aggressive - with the returns they expect from their capital by courting assets with lower intrinsic valuations (assuming the comparative valuations of Companies A and B reflect to a reasonable degree their actual assets, which is the case with the Dow).Secondly, to dismiss any kind of buying of an industrial capital market as not meaningful enough to gauge whether we're entering a bull market or not is grossly ignorant of the way in which economic growth in an economy takes shape. The first companies to attract investment in China five years ago, it should be remembered, were not the fancy technology stocks and souped-up financial vehicles that get the spot light in a raging bull market, but rather the industrial companies from which productivity stems. It's only natural for capital to seek out gains in material productivity before it seeks out gains in intellectual productivity.Most importantly of all maybe, if you look at the correllations between the Dow and the NASDAQ it's impossible not to notice that the latter follow the former in almost acolytic fashion, particularly with regard to up/down swings:Look at how in particular, in this chart going back to the first trading day of the NASDAQ, the blips in the Dow in 1987, 1990/1991 and 1998 all correspond magically with significant blips in the NASDAQ. Also look at how, after the 1998 blip a strong run can be seen on both the Dow and the NASDAQ. Lastly, and most importantly of all, notice that every time there's a pre-emptive greater spike in the Dow before the NASDAQ follows suit. This is simplistic, but the point is prescient and persistent: it would be the first time in history that the Dow makes a significant gain and the NASDAQ doesn't follow suit if the latter doesn't pick up. In a presentation I gave earlier this year, I explained the process thus (with the accompanying slide): The last two boxes, "Asset-backed securities" and "Intellectual property" represent equity, the other boxes are their own suigeneric investment catagories. The red arrows represent large-scale and sudden capital departure, wheras the blue arrows represent a timely and more rational movement of capital. Post-2003, the departure of speculative capital in real estate to the equity markets has been a capital transfer that is in part responsible for the growth in the charts above. The most serious stage in the capital markets in terms of capital departure however is represented in the smaller red arrow, where speculative investors leave commodity speculation in order to pursue higher returns in the equity markets. For some time, as the illustration shows, speculators have been toying with commodity speculation supported by a "safety net" of bond-weighted (usually government and AAA) investments. This is where hedge funds have so dramatically changed the investment platform. Because they are inextricably and comparitively performance-based, once one hedge fund leaps into the equity markets and shows gains, the rest tend to follow. But why pursue equities rather than commodities? Simply because once speculators have realised gains on a base commodity, the next obvious investment is in companies which are benefiting from the rise in these commodity prices. In investing in these companies, they are assuming more risk, naturally, but there's also a higher potential upside: just look at the comparison of the increase in the price of oil and the increases in the prices of oil companies. While oil has showed around 100% rise in price, many oil companies have shown returns of four or five, or in some cases, as much as fifteen times that. The reason technology is so popular for venture capitalists is that returns are high relative to risk. Technology is certainly risky, but it's not a volatile business with absolutely unpredictable returns, and the market rewards the sector with generally high valuations as a result. From this model, there is certainly an indication that technology is returning slowly to the forefront of the investment world, and that at some point there will be a significant influx of investment towards the sector.Eddie Elfenbein over at Crossing Wall Street exemplified stages one and two better than I can here, with charts (which you can see over at his blog):... the markets suddenly converged in mid-June. Except for a few strays, (there's) a pretty strong positive correlation (between capital exists in commodities and capital introduction into paper). This tells us that money was coming out of hard assets like gold and into paper assets.And there have been tech stocks roaring their way through the past 18 months. Akamai is one such company. Google is another. The latter's performance is worth considering for a moment. Trading at 473.99 at the time of writing, having beaten Wall Street's expectation on Q3 earnings hansomely only a week ago, it's worth putting under the microscope. This is a company which made a 90% jump in Q3 earnings on the year to $733.4 million, and a revenue increase of 70% to $2.69 billion. While that sounds impressive, the company blew $1.65 billion of those dollars on Youtube, and unknown and untested brand only weeks ago. That's another six month's record earnings at the same level to make the acquisition profitable in absolute terms, without dividends, and without re-investment in its own business. And that's if the concept succeeds. NewsCorp bought MySpace on even more tenuous terms less than three months ago. All this financing action looks very much like a replay of 1995/6, when Netscape and Yahoo! stacked up one-billion dollar plus IPO prices, except that's it happening in the form of trade sales rather than IPO's. That's predicatble enough. The tech bubble of the 1990's may not have endured, but the impression that the internet is a growth and medium catalyst for hundreds of industries didn't lose any lustre. My guess is, despite Google's precarious revenue model, the stock spikes $500 before the year end, and a few more 'social networking' sites start charging precarious valuations based on their own one year busines models. That's one billion dollars for one year of relative growth! And when these companies find they can't attract their corporate trade-buyers, the next logical thing is to find VCs looking to cast off their gains in the retail market. Or the VCs already financing this stuff will start to get bored with the lack of liquidity generally available in a trade sale. Or they'll just look for higher gains, from greater fools. Ridiculous or not, it's the trend of the market. Last time round the argument was that rates had so far to fall that it couldn't possibly be a bubble. This time round the same argument is construable with commodity prices and lack of inflation. Whichever way you see, if you want to argue a five-year bull, the stats are there to make it believable, at least for a cyclical five-year term. Let the games begin. Culture54855@blogcritics.org Wed, 25 Oct 2006 20:01:43 EDT http://blogcritics.org/archives/2006/08/18/192128.php Daniel M. HarrisonNot content with covering just the earth, search engine giant Google has launched a specially created site for Star Trek fans, the company announced yesterday.The launch is in connection with the 40th anniversary of the Star Trek convention, to be hosted later this year in Las Vegas by Creation Entertainment, where Google will be joining more than 15,000 fans from around the world. "Wherever and whenever science fiction fans gather, an appreciation of technology – and alien visitations – can't be far behind," the company said in a press release. "While in Las Vegas to help celebrate Star Trek's 40th anniversary, the Google booth will showcase these science fiction scenes and structures, created by users, highlighting intergalactic life."Google took the opportunity to announce it has also developed mobile KML (keyhole markup language), a device which will allow developers to display destinations on Google Earth and Google Maps on cell phones."Throughout deep space, fans will be able to view alien outposts on Earth directly from their handheld devices. For those who prefer to stay on planet Earth, or end up in Las Vegas, mobile KML offers mobile phone users a bird's-eye view of the 24-hour playground," the company added.While on the way to Vegas, Star Trek fans may be able to get discount hamburgers, too, now. The announcements come in the same week Google unveiled its latest corporate gimmick: printable coupons from the Google Maps service, which can be redeemed at participating businesses across the country. However, weary travellers will have to be careful about the way they phrase their language. Google has issued a statement discouraging people from using the phrase “to google”, which infringes its key asset – its brand name. Instead, the company prefers people use its name as a proper noun, by saying “I used Google to search for Star Trek,” for example. Sci/Tech51736@blogcritics.org Fri, 18 Aug 2006 19:21:28 EDT http://blogcritics.org/archives/2006/08/13/182745.php Daniel M. HarrisonFor CEOs of the pre-www world, July 10, 1985 was a terrifying example of how trying to fly too close to the sun could leave even the mightiest corporate wings up in smoke. It's a day that, up until April 2006 - when an obscure young search engine called Yahoo! debuted on the NASDAQ and commanded with it a $1 billion plus valuation - few forgot. But like all history, it's one that might serve the CEOs of today's web giants well if they revisited it.On April 23, 1985, Coca-Cola, beaten for the decade in sales by rival Pepsi, decided to meddle with the formula of the world's then second-favourite drink and launch a sweeter, more hip-tasting replacement called New Coke. In every blind taste test, where consumers were asked for their favourite opinion without knowing the brands they were tasting, New Coke had won over both Pepsi and the traditional Coca-Cola formula. Coca-Cola had never been more confident.What ensued was a three-month rebellion to bring back the old soda, of the likes only usually seen in political rallies. Demonstrations, marches, and campaigns took place all over America; a cry from the consumer heart against corporate strategy. Finally, on July 10, Coca-Cola relented. Asked by critics whether this had been a deliberate ploy to regenerate interest in Coke, Donald Keough, then chief operating officer, replied, "We're not that smart, and we're not that dumb."So now we turn to Google. "Smart, iconclastic, arrogant, ambitious and rich," writes Richard Waters in this weekend's Financial Times. "With no allegiances to the powers that be and an apparent disregard for the enemies it makes along the way, Google has struck fear into the established media industry." By pondering the fate of Coca-Cola, there are two questions that might occur to CEOs of new media enterprises as they go about their zealous mission changing the world: if they got rid of their traditional product tomorrow, are people likely to stage a revolution over it? And, perhaps more poignantly, if they get rid of old media institutuions tomorrow, how will people react?Mr. Waters is critical of Google's brand value, especially against competitors YouTube and MySpace - "Anyone searching for videos ... is likely to start with YouTube, not Google Video ... (and) if (MySpace) were (sic) to try to keep (Google's) audience to itself by building a better web search engine into its own pages, what would that do to Google's audience?" - but his opening adjectives about Google, could, in all truth, be applied to any of these other new media companies. Only this month, Digg.com founder Kevin Rose posed on the front of Business Week under the headline: "How this kid made $60 million in 18 months."AltaVista, Yahoo and AskJeeves - all have had their 15 minutes as the world's favourite search engines. The difference between Google and its competitors is that it has had an hour instead, but this is not enough to assure it a place in the consumer's heart. MySpace may be where 8 million people go to get their daily fill of technology stories in tabloid format, but does that mean people would rebel if News Corp. decided to abandon it? Or are they more likely to go somewhere else instead? The argument becomes particularly contentious when new media brands begin to take on the old. This has been most prominent in the issue of the news. Google has promised a revolution of the news, as Business Week this month reported that "(Digg.com) is now the 24th-most popular Web site in the U.S., nipping at the The New York Times' (No. 19) and easily beating Fox News (No. 62), according to industry tracker Alexa.com. More than 1 million people flock to Digg daily, reading, submitting, or "digging" some 4,000 stories." Mr. Keough said when handing back the original formula of Coke to the consumer: "The simple fact is that all the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people."Sometimes it's not just a question of trends. Just as Pepsi was a cooler, younger, hipper drink than Coca-Cola when the latter was pulled from the shelves, people are still much more likely to stage a protest if their beloved New York Times stopped production than if Digg.com was not up and running tomorrow. "I wonder how many failure-of-trust scandals newspapers can survive, though, and that goes beyond newspapers vs. Google," says Instapundit's Glenn Reynolds, hinting at the alleged political bias and plagiarism scandals in the mainstream media. The problem however is that despite the scandals, new media companies are still largely dependant upon the old for their services to add value. Digg.com is full of stories by the traditional press, as is Google News, and still by far the majority of MySpace artists would choose a three-line promo in Rolling Stone over 5,000 of the site's "friends". Indeed, it is precisely when they do attract mainstream publicity that they attract so many other MySpace devotees. The same is true for bloggers; one mention in a mainstream daily and thousands of visitors flood in. Much of this is because 100-year-old brands have a stronger place in consumer's hearts than 10 year-old ones.Most of all, CEOs in the online world are operating in contentious space: one dictated by the user. As soon as their site falls foul of the favour of the surfer, the waves will stop rolling. While this may be true for any product, it is slightly different in the online sphere. Media companies - like News Corp - which fail to keep their egos in check are still going to keep broadcasting Monday Night Football, and as much as people hate Rupert Murdoch, they probably love the Yankees more. Kevin Rose cannot say the same for his product.The answer may lie in more co-operation and less arrogance. Otherwise, for quite the opposite reasons, these young CEOs may find out what the executives at Coke learned only too well 20 years back: that while they aren't dumb, they aren't that smart, either. Sci/Tech51533@blogcritics.org Sun, 13 Aug 2006 18:27:45 EDT http://blogcritics.org/archives/2006/05/26/085418.php Daniel M. HarrisonHaving just come back from an extended trip to Shanghai and Bangkok, some questions linger in my mind about the future of industry, and specifically the future of the technology industry. Much has been written about emerging economies, and much too has been written about emerging technologies, and there are some strong parallels in the analysis of both. Both require, as far as management and operations are concerned, a highly specific attention to certain details -- be they cultural or technological -- a need for tracking up-to-date information, which can change the competitive landscape of both at any given moment, and most of all, a level of risk assumption which is unparalleled in other industry segments. The parallels are strong, and while analysis dervied from these fundamental principles might give us a contemporary snapshot of what's going on today, they don't tell us a great deal about where either industry segment is headed in the future.Consider then the following scenario. The Far East -- and China in particular -- is experiencing a boom on an enormous scale, which is leading speculators to determine when the bubble is going to burst. Shanghai is a fairly spectacular city which has been the recipient of an even more spectacular degree of growth in the last five years; most of the enormous skyscrapers that overshadow the smaller 18th-century maisons built by the British at the turn of the century were only erected in this small time span. One night, sitting on the 48th floor of a rooftop bar, facing this enormous collection of skyscrapers, I began to count the number of companies that in some way must have been involved in the construction of these edificial monoliths; everything from within the hotel -- bartops, light fittings, waiter uniforms, elevators, chairs, tables -- and then outside gradually -- windows, curtains, paints, neon signs...and the sheer number of them began to multiply at an uncountable rate. This is one hotel we're talking about, too, not an entire city or even an entire conglomerate! Let's take a guess too that the hotel's market value is around $100 million.Now venture three years back, to just after the turn of the millenium, at the time of the IPO of Google. Let's look at this $100 billion goliath under a microscope, and ask how many companies are involved in the same way. There's advertisers of course, of all sorts, and components suppliers, but the latter are mostly single-sourced for cost efficiency. There are human resources staff, and engineers, and web designers, too. The point is, add the total together, and it's pretty quantifiable.What I have been describing above is commonly referred to as a "supply chain"; it's the chain of supplies responsible for the manufacturing or production process of a company (or a company's product/service). This is where the parallels between emerging economies and emerging technologies diverge, and it tells us something significant about the future of both. The reason the dot-com bubble crashed is arguably the reason technology is vulnerable where emerging economies are now not -- that is, there is a distinct shallowness in the supply chains of the former. My suggestion is that in order for new technology giants like Google, Linux, and AOL to become invaluable to economic growth, work has to be done on deepening the supply chain. The problem technology faces is that there is very little procurement from outside industries involved in the construction of the industry, and this leaves it open and vulnerable. Value can only be created at the rawest level of base materials, after all -- service is an extension of value but in itself is easily copied and stolen.The future of technology may depend on where technology titans can place their services, and how interdependent they can get them to be. Sci/Tech48348@blogcritics.org Fri, 26 May 2006 08:54:18 EDT http://blogcritics.org/archives/2006/03/29/090715.php Daniel M. HarrisonFor the first time since Steve Jobs resumed top place at technology giant Apple Computers, the company is experiencing a round of investigations and lawsuits that are putting its equity price under pressure. In the past 12 months, Apple has gone from trading at just under $35 a share to a high of $85 in Juanuary, 2006. Most of this success has been as a result of Apple's deliberate self-styled re-invention from a software and computer manufacturer to a leading player in the music industry which has so far resulted in an unprecedented growth in sales of its iPod and iTunes brands.Like many U.S. technology giants, however, Apple is beginning to find that success comes at a price. The first signs of trouble came from the technology community itself, with complaints about the inoperability of Apple's products with outside systems. There have been attempts to overcome this, with most recently a competition aimed at hackers to install Windows on Apple's Macintosh computer, which was cracked twice in less than 24 hours. French lawmakers recently voted overwhelmingly to force Apple to open its digital music format used by iPod and iTunes to competitors, a move that endangers the crucial franchise Apple holds over the disruptive technology: in a recent survey, over 80% of participants identified an MP3 player as an iPod first, rather than by its generic term or the brand names of any of its competitors' products.Last month the European commission announced it was investigating Apple's pricing of music sold via its online music store, iTunes, alleging that price discrepancies between the U.K., Europe, and the United States may be unfair to those who are paying with British pounds. If legislation is passed as a result of the investigation, it is likely to have a wide-ranging impact on Apple's currently cushy pricing autonomy, which has enabled it so far to show profit growth significant to Wall Street analysts' and traders' evaluation of the company's stock.Then CEO Steve Jobs was forced to dispose of $296 million of Apple stock last week in order to cover a tax bill for the stock which has more than doubled since the firm split its stock last year, leaving Apple stock trading down just below 1% on the day.And now, the technology giant faces the UK-based Apple Corps Ltd., which represents the Beatles' music interests in court later this week over the use of the iconic Apple logo. Apple Corps claims Apple Computer Inc. is violating a 1991 agreement barring the latter from using the Apple logo in the marketing of its music products. This is the third time Apple Computer has come up prominently against former Beatle Paul McCartney over copywright issues, and a verdict in favour of Apple Corp may cost Apple Computer tens of millions of dollars in lost music sales. Over seventy percent of current music downloads are sold through Apple's iTunes, and iPod sales accounted for roughly the same in market share of MP3 players sold last year.Such are the headaches of running a business that is treading hard over the toes of long-established business practices. The headaches are crucial to the continuity of Apple's success however, because if the radical New Economy/NewMedia giant can sustain a sufficiently high equity price and snub combative parties in the courtroom over the next few months, it will send a clear signal to the market and to traditional competitors such as the ailing EMI that the franchise over the music industry has now changed hands. Sci/Tech45620@blogcritics.org Wed, 29 Mar 2006 09:07:15 EST http://blogcritics.org/archives/2006/03/28/072452.php Daniel M. HarrisonAlcatel SA is due to meet with senior executives from the former dot-com era star Lucent Technology later this week to further discuss the possibility of a merger between the two telecom giants, the company announced on Monday.Although the deal is largely seen as a defensive move, since telecom giants have been under pressure over the last decade with the arrival of VOIP and increasing competition brought about by de-regulation, analysts think the combination would make a great deal. "They go together like chocolate and peanut butter," said analyst Paul Sagawa of Sanford C. Bernstein & Co. LLC, according to a report by Chron.com.Although Alcatel's share price is about 40% higher than Lucent's, the potential deal is still being billed as a merger, confirming previous speculation by a minority of powerful Wall Street analysts' speculation that the telecom's giant is vastly undervalued. In a research note published yesterday Lehman Brothers analyst Jiong Shao re-iterated his "overweight" forecast for Lucent equity, citing the increasing likelihood of IMS contract wins at Verizon later this year. The combined Alcatel-Lucent would be the first pan-American European telecom company to have significant contracts in place with major companies on both sides of the Atlantic. The trans-Atlantic deal is fraught with complexities, however, not least because it may raise potentially large security issues for the U.S. government. Because of Alcatel's higher valuation, the deal is being seen by government officials as a takeover rather than a merger, comprising confidential national security information which Lucent may be privy to. "With a long history of contributing to military efforts like ballistic missile technology and submarine sonar, the famed Bell Labs unit of Lucent is widely expected to become a focal point when the deal is presented to regulators in Washington for approval," wrote Vikas Bajaj and Andrew Ross Sorkin in the New York Times today. Sci/Tech45576@blogcritics.org Tue, 28 Mar 2006 07:24:52 EST http://blogcritics.org/archives/2006/03/27/170734.php Daniel M. HarrisonGoogle is up nearly one percent today on the back of news that it has set a date for trading on the S&P 500 Index. The Standard & Poors 500 Index is the United States' -- and arguably the world's -- most prestigious index, composed of publicly held giants selected for liquidity and as representative of the main U.S. industries. An announcement by AFP states that Google will be set to join the index after March 31st."The listing of a company on Standard and Poor's 500 index usually increases the value of that company's shares," writes Niladri Sekhar Nath, a TMC contributing editor. "According to AFP, the announcement has enhanced Google share prices in electronic trading after the market closed. Google shares gained 7.4 percent to $367.11."The announcement lends credibility to recent claims by Wall Street analyst Mark Stahlman that Google may have something more ambitious in mind than their current status as an online search engine and seek to enter financial services and/or healthcare, as the kind of ongoing revenue growth that is familiar to S&P 500 companies will be difficult to sustain given the current business model, which is based purely around online advertising. It may also signal that Google is serious about making a large acquisition or entering a merger with a similar-sized company.The S&P 500 has been rampant with M&A activity since BellSouth merged with AT&T in a $67 billion deal, and Lucent Technology is currently the subject of buyout speculation by Alcatel.A web-based docu-film prediction, called EPICis gaining widespread popularity amidst the current Google furore: the documentary claims, amongst other things, that Google will have acquired TiVO and sent the New York Times offline by the year 2014. Culture45573@blogcritics.org Mon, 27 Mar 2006 17:07:34 EST http://blogcritics.org/archives/2006/03/21/062158.php Daniel M. HarrisonThe documentary filmmaker and blogger Hao Wu has been arrested and is being detained by Chinese officials for unknown reasons, allegedly in connection with information he has that may be pertinent to the national Communist Party. "A number of China-related bloggers have been sitting on this story for several days, fearful that saying anything might make the dilemma of Hao Wu ... worse than it already is," reports Richard on his popular Far East blog Peking Duck. "Hao's editing equipment and several videotapes were removed from the apartment where he had been staying", according to another report.The news spread last night after Glenn Reynolds of Instapundit linked to several stories about the blogger, who was formerly senior product manager for Atlanta-based Earthlink Inc.It is believed that the arrest may be in connection with Hao's knowledge of "underground churches" in China, a phenomenon offiials at the PRC have been trying to crack down on for some time now. ""China's new generation of leaders are trying to consolidate control of the country as it goes through rapid social and economic changes," said Wilfred Wong, a parliamentary officer for the Jubilee Campaign," in a recent BBC Online report. ""The Communists feel threatened by any popular ideology which is different from their own," he said.Many high-profile bloggers are encouraging readers to get in touch with China's embassy in Washington to protest the arrest. It is likely to put extra pressure on Google, given its recent decision to self-censor in its commercially expedient move into China. Wal Mart is another American corporate giant receiving wide-spread criticism in the blogosphere: only having just recovered from a recent attack by Michael Barbaro in the New York Times over the use of aggressive PR tactics aimed at bloggers, the company's planned entrance into the People's Republic is now being seen unfavourably again by the community in light of Hao's plight.Hao is the writer of Beijing or Bust, a blog that often flirts with the fine lines between Chinese state censorship and the U.S. Fifth Amendment, a habit he may have picked up from his education in the United States: the self-proclaimed "biologist-turned-capitalist-turned-writer & filmmaker wannabe" has an MBA degree from University of Michigan Business School and earned a Master of Science in molecular and cell biology in July, 1995 from Brandeis University, where he was awarded a full merit-based scholarship. Comments one reader on Peking Duck blog: "Hao is a good friend of mine. He is an all-around great guy - talented, passionate and brave. The kind of person that China is lucky to have, contributing his talent and intelligence. This is beyond outrageous. It's absolutely sickening." Culture45307@blogcritics.org Tue, 21 Mar 2006 06:21:58 EST http://blogcritics.org/archives/2006/03/18/052747.php Daniel M. HarrisonFrom CNN:WASHINGTON (AP) -- The Senate voted Thursday to allow the national debt to swell to nearly $9 trillion, preventing a first-ever default on U.S. Treasury notes. The bill passed by a 52-48 vote. The increase to $9 trillion represents about $30,000 for every man, woman and child in the United States. The bill now goes to President Bush for his signature...The debt limit will increase by $781 billion. It's the fourth such move -- increasing the debt limit by a total of $3 trillion -- since Bush took office five years ago. The vote came a day after Treasury Secretary John Snow warned lawmakers that action was "critical to provide certainty to financial markets that the integrity of the obligations of the United States will not be compromised."Several things always seem to follow increases in the U.S. deficit. First of all, everyone speculates that the United States will no longer be the global superpower for very much longer, and that this is a sure sign that some "emerging economy" is going to take over instead. Money then floods into these emerging market economies in the desperate attempt to find the next goldrush, as the investors mistakenly see their capital as "investment" rather than "leverage" propping up largely unsustainable growth. All the capital from this growth is stored, naturally, in U.S. T-Bills. Emerging economies then open derivatives markets to all possible national financial instruments: stocks, commodities, even their own currency, in order to provide further liquidity for all this capital "investment". At the realisation that all this "growth" is not going to materialise, investors quickly divest all their savings, which usually do not amount to much, as a few savvy macro hedge fund managers cash in enormous futures contracts against the local currencies (enabled by the recent opening of the derivatives markets), ending up as the only ones to have made anything near the promised billions in profits.THEN comes retaliation time: U.S. politicians negotiate large financing packages usually disguised with creative names like "hybrid loan payments" to "help" these poor countries, which in turn helps finance their own large deficit (remember, of course, that reserves -- cold cash -- are stored in U.S. government bonds anyway). Capital pours back into U.S. markets, so dollar-denominated commodities such as oil come off in price: subsequently there is a giantic swell in equity prices, and all looks good until they explode again.Rinse and repeat, over and over and over again. Compare today's situation with the scenario just over ten years ago, and China looks like Japan and Thailand used to. With the recent opening of their derivatives markets, and the loosening of investment in equity, real estate, and the yuan, another round of boom-bust cycles does not look so unlikely. Culture45105@blogcritics.org Sat, 18 Mar 2006 05:27:47 EST http://blogcritics.org/archives/2006/03/16/032943.php Daniel M. HarrisonNow The New York Times' Deal Book has picked up on my Google-Sun analysis:The prospects that search engine giant Google is due to buy the U.S.'s most sophisticated hardware company "have been swirling around trading floors and Silicon Valley for more than a week," reports the credible periodical in the Deal Book's blog. "Shares of Sun, which has a partnership with Google to develop and distribute each other's technology, spiked up about 4 percent last week as a result of the rumors."The analysis is making a serious impact upon the market, and now I have received an e-mail from an inside source in corporate finance who wishes to remains anonymous for the time being.First though, a re-cap and more information on the analysis:Is Google About To Buy Sun Microsystems?: this article originally appeared on Iowa Voice, the U.S.'s largest Republican blog where I am a Guest Author, and started all the speculation.Will Google Buy Sun Microsystems Part II: a further look at the increasing liklihood that Google will buy Sun MicrosystemsDoes personal e-mail from Sun exec reveal Google is about to buy Sun Microsystems?: this, on the Biz/Tech watch Featured Column here at Blogcritics, was the ultimate clincher, drawing in thousands of readers, and moving the price of Sun Microsystems up by $500 million in four days.The prices of Sun and Google are moving further and further apart, too, as the market is realising what may be truth in the rumour: at close of trading yesterday, Sun was up and Google was down again, a rare phenomenon by any standards.The New York Times' Dealbook blog is the most authoritative source of financial information on Wall Street, and the very fact that my comments -- name attributed -- have appeared there adds a phenomenal sign of credibility.And there is more food for contemplation. Last weekend I had an intense conference call with analyst Mark Stahlman. Stahlman is brash, arrogant, hard-hitting and strangely compelling in his convictions; he has the voice of a converting zealot, and you can hear the persuasive overtones of that conviction even as he listens acutely to what you say. Stahlam is Wall Street's largest tech analyst: this is the man who introduced Eric Schmidt to Wall Street deal-makers when Schmidt was a mid-level hardware manager working late nights over a plasma screen, Starbucks in hand. He was also the one who put out the financial projection for Google, famously adopted by the company itself that it would "one day become a $100 billion company". The analysis confused many -- as Google currently stands at that valuation anyway -- but the reason was simply because it did not come from them: it came from the zealot. A man who regularly wines and dines with Schmidt -- Stahlman is closer to the action than any."Google is going into Financial Services and Healthcare!" he exclaimed over the lengthy conversation. "This is the last stage of the Java project!" If Stahlman's consensus that Google's foray is indeed into "last stage of the Java project", then the company is going to need massive hardware storage to develop this capability -- financial services and healthcare is no small-time show. The logic is obvious when one considers where the highest consumer cost burdens and pending technological disruptions currently lie -- with a huge round of technology combining software and hardware, the scenario of practically free financial services and healthcare all delivered to the front door looks suddenly feasable. (E-mail me if you want a copy of the analysis). In a strange twist, such moves are totally consistent with Bernstein's political analysis in his excellent and radical new book The Capitalist Manifesto.The move is not right for Google as it stands alone, but is perfect when one considers hardware to provide the engine for the G-drive platform. Here is a leaked powerpoint surreptitiously embezzled by Google moments after they realised they had made the mistake of releasing it. I have located a copy. (Again, E-mail me if you want a copy).A corporate finance executive close to the action who wishes to remain anonymous e-mailed me shortly afterwards with the revelation that the takeover will probably involve 35 shares of Sun for 1 of Google's and that my analysis was "spot on". At this point I am not at liberty to share any more of the e-mail, but by all accounts, Google is Sunny.GoogleOS may be coming sooner than we think.*UPDATE Important Disclosure*: i do not have a license to promote stock, and am in no way promoting anything. I do not personally own any shares in Google or Sun Microsystems, neither am I acting in concert with anyone who does. The article is intended as investigative journalism only and is in no way a solicitation to buy or sell securities or even a publicity campaign for certain securities. In other words, just read, blog and comment about it: that is all! Sci/Tech45042@blogcritics.org Thu, 16 Mar 2006 03:29:43 EST