Here is a sneak peek at some links from my weekly Weekend Reading column over at TheStreet.com.

• Email scandal over Microsoft's 'botched' dealings with Intel, HP (SiliconValley.com)
• NY Times death watch, via Marc Andreessen (Fortune)
• Why nobody in Washington wants to say recession (Slate Magazine)
• Gold and the new global gold rush (Globe & Mail)
• How the housing bubble stayed under the radar (New York Times)
• Must-read paper on the origins of the mortgage market meltdown (Brandeis)

In case folks hadn't noticed, there still extensive renovations going on here. Most things work, but some things don't, and so feel free to let me know if you notice any paintings askew or taps left on, metaphorically speaking.

In the interim I'm still posting an eclectic set of stuff on Twitter (as always, use Twhirl or you're simply deranged) and I'll be back here and more active shortly.

Here is the financial quote du jour. It comes from a hedge fund manager who is (rightly) pissed that such funds can't market their services, open a normal website, etc., and so he is suing the SEC.

“We want to be able to have a website like any other business. The only websites required to pre-qualify people are hedge funds and pornography . . . gun shops are allowed to advertise, the Massachusetts state lottery is allowed to have a website. We want to be treated like any other business.”

[via FT]

Venezuelan President Huge Chavez just can't seem to stop himself from doing stuff that gooses oil prices higher:

Tensions between the radical government of Venezuela and pro-US Colombia reached new heights on Sunday after Hugo Chávez apparently ordered the mobilisation of his air force and ordered tank battalions to move to the frontier between the two countries.

Lovely.

[via FT]

Any readers at the big ETech conference this week in San Diego? I'll be in and out, but it's always good to meet my readers, who are, of course, nothing if not people doing interesting things.

One month ago Microsoft announced its unsolicited bid for Yahoo. It pegged the bid at the then-effective price of $31, but it also put it at a specific ratio of Microsoft to Yahoo shares. If you used the ratio the current value of the bid has tumbled to $25.86, which is why Microsoft made clear again today that it is sticking to the value of the original offer, or $31 per Yahoo share.

Let's look at the spread between Yahoo's share price and the $31 pegged price offered by Microsoft. A big discount would suggest that the market doesn't think the deal will be done; while a big premium would suggest a raised bid or another bidder. A lock at $31 would make it a done deal, at least from the market's point of view.

Here you are, and it's a discount to the price, all the way:

As you can see, there is stubborn and growing deal discount out there. The market is as skeptical as it's been since the bid was announced, despite Steve Ballmer's confident noises today that his company would stick to the proposal, and make things happen at current prices. Not only that, the market has taken much solace in his confirmation that discussions between the two companies are ongoing.

Ex-CNBC guy Eric Bolling's move to Fox is now apparently official. Fox Business Network has put out a press release today trumpeting his arrival, which must mean the legal shenanigans among Fox, Bolling, and CNBC are over.

For those of you with one of those newfangled "tele-vision" things, I'm on CNBC tomorrow at 8:15am talking tech cyclicality.

As I was driving in to CNBC this morning I heard an NPR spot talking about Ben Bernanke's over-communication problem. Sometimes, the piece pointed out, we're better off knowing less about the Fed's every change of heart, waking mood, macroeconomic uncertainty, and so on.

As coincidence would have it, when I got home I found in my email a link to Ben's Twitter page. It's time for an intervention before he takes down capitalism.

The latest ComscoreHitwise [ed. my bad] data is out, and Google is still merrily stomping its supposed search competitors into the dirt. The combined share of the next three largest competitors -- Ask, Microsoft, and Yahoo -- has fallen 300 basis-points over the past year. Ouch.

Hard not to notice the carnage among the four horsemen of technology: Google, Amazon, Research in Motion, and Apple. Here is the latest "lossage" data from my friend Eric over at Barron's:

• Apple fell $4.76, or 3.8%, to $120.26.
• Google fell $15.57, or 3.3%, to $455.61.
• Amazon fell $2.46, or 3.8%, to $62.01.
• Research In Motion fell $4.23, or 4.1%, to $99.57.

Of course, this is not a one-day phenomenon. Look at the year-to-date numbers:

• Apple is down $77.82, or 39.3%. Market cap lost: $68.4 Billion
• Google is down $235.87, or 34.1%. Market cap lost: $73.9 billion
• Amazon is down $30.63, or 33.1%. Market cap lost: $12.8 billion.
• Research In Motion is down 13.83, or 12.2%. Market cap lost: $7.8 billion.

Cumulative Four Horsemen losses are touching $163-billion, which, to put in context, is right around the GDP of Chile.

Interesting data out on the first decline in recent history in "official" calling minutes between China and Taiwan.

There were 282.2 million voice communication calls from China to Taiwan with a total use time of 784.8 million minutes in 2007, dropping by 21.37% and 10.41%, respectively, from 2006, according to statistics by Taiwan's National Communications Commission (NCC). This is the first decrease since 1997 (NCC statistics began in 1996), according to industry sources.

Hard not imagine that some of this isn't due to people using tools like Skype to avoid being part of the easily-tracked Chinese communications grid.

[via Digitimes]

I get emails all the time telling me that I'm #1 in this list of financial blogs, #3 in that one, and so on. My response is always the same: That's nice, but I'd rather you bought me. But no-one does. Buy me, that is.

Why not? There are oodles of reasons, not least of which is my traffic, while large among financial blogs, is vanishingly small compared to the big dogs in blog land, like Huffington Post, TechCrunch, etc. But even those folks aren't being bought, which can seem baffling given their success, influence and growth.

The folks at Breakingviews have put up a provocative take on the question, arguing that blogs don't deserve high prices because business is all ads, because they are too tied to founders, and because there are no barriers to entry. I don't entirely buy the argument -- the media business in general has low barriers, but they are being schmeissed because of over-reliance on classified ads -- but it's still worth reading. Check it out.

Catching up and emptying my burgeoning browser tabs and inbox:

• Google and the Case of the Missing Clicks (Many Niches)
• Using Star Language to Connect AT&T’s Call to a Hollywood/Silicon Valley Venture (Wall Street Weather)
• Foreclosure-proof Homeowners (The Big Picture)
• Pequot spins out VC unit (Businesswire)

From a new paper in an upcoming issue of the Journal of Finance Economics. It's doubly funny because of the dry way in which these loopy findings are reported about public company board composition:

First, when commercial bankers enter boards, external funding increases and investment-cash flow sensitivity diminishes. However, the increased financing benefits mostly firms with good credit but poor investment opportunities. Commercial bankers appear to offer loans to increase bank profits rather than shareholder value. Second, investment bankers are associated with larger bond issues and worse acquisitions. They appear to maximize the fees accruing to their investment banks. Third, we find little evidence that financial expertise matters for corporate decisions when conflicts of interest are absent.

Get that? Put commercial bankers on your board and they drive project loans without regard for project quality; put i-bankers on your board and they do deals for the sake of doing deals. Such fun!

I'm on CNBC Power Lunch today at 1:20 EST. Talking tech stocks -- Apple, Google, and Intel, specifically -- so feel free to remind me here why things are completely other than what they seem on these tickers.

The Twitter-ing Bernanke has this to say today about Henry Paulson's House testimony this morning:

benbernanke alright, paulson's back to burning me up today. i need to put a bell on him, like a runaway cow.

Ha!

Earlier today Cisco's John Chambers delivered one of his usual up-with-us sweet nothings, saying that he is increasingly comfortable with Cisco's long-term growth rate. That's nice. Too bad that we're paying 18x earnings for 11% year-over-year growth.

The WSJ has a piece today talking about mounting insider selling at Google. No surprise, given the company's status as a bubble baby that employees are selling in droves at the first major downturn in the company's stock.

Google insiders have sold stock in every month since November 2004, often through prearranged stock-trading plans and sometimes combining stock sales with the exercise of stock options. Insiders have sold a combined $10.1 billion worth of Google shares since the end of 2004, according to data-provider Washington Service.

... Mr. Moreland said sales by the company's founders, Sergey Brin and Larry Page, are to be expected and aren't worrisome because they still hold large stakes in the company. He said he was more interested in sales by lower-level executives, and the lack of insider purchases.

"So many of these insiders have been so anxious to sell or exercise their options, and so unwilling to hold much of anything long, and that's a particular red flag to me," he said.

This settlement today in the longstanding litigation involving payment for order flow at Fidelity in the Peter Lynch era is great fun to read. You don't see as many stories about dwarf tossing, uber-investors, and strip clubs as you should.

More here.

With news this morning that mega-investor Carlyle Group got a margin call -- it had to put up more capital -- on its bond fund, that doesn't leave much room on the even larger side for funds that will get such calls. Maybe Pimco is next, or at least God.

Carlyle Capital Corp. missed four of seven margin calls yesterday totaling more than $37 million, the Guernsey, U.K.- based fund said today in a statement. The fund expects to get at least one more notice of default related to the margin calls.

Granted, Carlyle missing margin calls isn't like you are I missing the same thing. It isn't, in other words, because Carlyle can't make payments; it's because it chooses not to. As one fund exec there said in nicely opaque words, the calls were not "representative of the underlying recoverable value" of the agency bonds in question.

Yeah, I remember saying the same thing about my 1987 Toyota Corolla.

Investor Peter Lynch has issued a statement on the whole dwarf-tossing settlement at Fidelity:

"Today I settled an administrative proceeding with the SEC. In asking the Fidelity equity trading desk for occasional help locating tickets, I never intended to do anything inappropriate, and I regret having made those requests. I want the public to know that I have never worked on the trading desk, and, since retiring from investment management at Fidelity over 17 years ago, I have not placed any trades on behalf of Fidelity with any brokerage firm. As many people know, over the past 17 years, I have spent most of my time on community service."

In other words, Damn traders!

So much for my $100 bid for The Weather Channel. Looks like there are more people than me that want it, with the NY Times reporting today a lengthy list of better-capitalized companies than me who are in the bidding queue.

Darn. As a weather geek with oodles of programming ideas for a redone Weather Channel, I was really looking forward to my $100 bid sticking.

Extracting data from the web was a major theme at my Money:Tech 2008 conference in New York -- the web is the largest and most interesting database of financial information out there -- so itwas  interesting to see that web scraping company (they say "mashup") Kapow today announced a $11.5-million Series C financing.

Contributing to the enterprise mashup and web intelligence trends, Kapow Technologies is the only company that provides enterprise-class server software that enables the harvesting of mashable public and private web intelligence. As the number one solution in its class for three years running, the Kapow Mashup Server is installed at more than 300 companies worldwide, and routinely delivers strategic business and IT results on budgets and timelines that were once thought impossible.

Fine, call it what you want, but it's web scraping -- and I'm fine with that. Congrats guys.

Not bad financial returns for seven years of being a former vice-president:

Former U.S. Vice President Al Gore left the White House seven years ago with less than $2 million in assets, including a Virginia home and the family farm in Tennessee. Now he's making enough to put $35 million in hedge funds and other private partnerships.

Gore invested the money with Capricorn Investment Group LLC, a Palo Alto, California, firm that selects the private funds for clients and invests in makers of environmentally friendly products, according to a Feb. 1 securities filing.

[via Bloomberg]

With the Apple iPhone SDK press briefing coming up in in 15 minutes, does BBC have the first native iPhone app in the wild? Visiting BBC's site via an iPhone today produces the following (screenshot).

With the content not playable on an iPhone, it kinda makes you think there's a BBC player coming today, doesn't it?

[via MacRumors]

Marc Faber is always good fun to read and listen to, but he is kind of misnamed. The author of the Gloom, Boom, and Doom Report is mostly gloom and doom, very little boom, at least not recently. Anywhere, heeeeeeere's Marc on why the U.S. dollar is going to zero.

Obvious from the live updates at Apple SDK event today that Apple is making major push into RIMM's face. Cited market share data showing it is already at nearly half of RIMM's share of market since year-ago launch, and it is launching RIMM-style push email, etc.

RIMM stock is off 0.83.8%.

In case no-one's paying attention, Google hit new a 52-week low today. It traded down to $432.7, or off 3.3%, which makes for a whopping 41% decline from the November 6th stock peak. Stunning stuff.

Most unnerving article I have read in some time on the current turmoil in credit markets.

The difference in yields, or spread, on the Bloomberg index for Fannie Mae's current-coupon, 30-year fixed-rate mortgage bonds and 10-year government notes widened about 21 basis points, to 237 basis points, the highest since 1986 and 103 basis points higher than on Jan. 15. The spread helps determine the interest rate homeowners pay on new prime mortgages of $417,000 or less.

The markets have become "utterly unhinged,'' William O'Donnell, a UBS AG government bond strategist in Stamford, Connecticut, wrote in a note to clients today. A lack of liquidity has "led to stunning air-pockets in price levels.''

Investors are realizing that banks have little room to make new investments amid rising losses and a flood of unwanted assets, said Scott Simon, head of mortgage-backed bonds at Pacific Investment Management Co. The world's top banks have reported more than $181 billion in asset writedowns and losses, been stuck with $160 billion of leveraged buyout loans, and bailed out $159 billion of structured investment vehicles.

"Everything is telling you the financial system is broken,'' Simon, whose Newport Beach, California-based unit of Allianz SE manages the world's largest bond fund, said in a telephone interview today. "Everybody's in de-levering mode.''  [Emphasis mine]

And when everyone is in de-levering mode, only two things can happen: Either markets stop working, or prices drop like rocks -- or both, of course.

[via Bloomberg]

Interesting new paper out showing how stock picks made money from analysts who attended the same school as the CEO of the firm they were following. Social networks in the stock market were a big subject at Money:Tech, and so I unsurprisingly love this stuff:

We study the impact of social networks on agents' ability to gather superior information about firms. Exploiting novel data on the educational backgrounds of sell-side equity analysts and senior officers of firms, we test the hypothesis that analysts' school ties to senior officers impart comparative information advantages in the production of analyst research. We find evidence that analysts outperform on their stock recommendations when they have an educational link to the company. A simple portfolio strategy of going long the buy recommendations with school ties and going short buy recommendations without ties earns returns of 5.40% per year.

Awesome, right? Not so fast Mr. would-be Jim Simons. because there is a huge caveat:

We test whether Regulation FD, targeted at impeding selective disclosure, constrained the use of direct access to senior management. We find a large effect: pre-Reg FD the return premium from school ties was 8.16% per year, while post-Reg FD the return premium is nearly zero and insignificant.

Damn those SEC trouble-makers.

Just for fun, here is the live performance (as converted to equity) of various high-profile sovereign wealth fund investments over the last twelve months:

One of the more controversial talks at TED last week turned out to be Craig Venter's about the creation of synthetic life, and its applications. I was absolutely fascinated, but you can judge for yourself:

Quote du jour is this Pavlov-ian entry from a London hedge fund manager quoted in the FT today:

“Every time you buy anything it is worth less the next day,” said one London credit hedge fund manager. “Eventually you stop buying.”

C-Span is running a live feed of Henry Waxman's Oversight Committee flogging of various financial services CEOs. Good market bottom amusement from typically over-wrought politicians.

As a related note, Eleanor Norton (D.) really needs to stop confusing Countrywide CEO Angelo Mozilo and academic theorist Abraham Maslow. Two different people. Really.

On the one hand you have politicians beating up CEOs over on C-Span, and on the other hand you have Republic and Democrat Presidential contenders chattering non-stop about the economy. Politicians have rediscovered the economy. Oh-oh.

Here, from the fascinating new Dow Jones Insights blog, is a breakdown of media mentions, by candidate, of top subjects.

I'm sure there will be better photo versions of this moment soon, but this sure felt like instant history. We have financial services CEOs Chuck Prince (Citi), Stan O'Neal (Merrill), Angelo Mozilo (Countrywide), and others all swearing to tell the truth before the House Oversight Committee as the mortgage market pile-on is underway.

You know, as much as I want to enjoy this beat-down of financial services CEOs, Oversight Committee Chairman Henry Waxman is driving me nuts. Demanding that Countrywide CEO Angelo Mozilo explain each of his stock sales, when said stock sales are part of a stock-selling program, and asking each time "How was that good for shareholders?", just makes Waxman look like a clueless, chest-thumping, pandering, proselytizing, and utterly adrift nitwit.

The preceding said, Republicans on the panel aren't much better. For example, pointing out that ex-CEOs still hold stock in their respective companies is a hopelessly dumb exercise. It's not about what shares they hold, or held, it's about how much they made themselves, and how much they lost shareholders, and whether any of it was avoidable.

Then again, I'm not the audience here. Consider the following headline ABC News is running on the ongoing testimony:

Subprime CEOs Explain Why They Made Millions While Americans Lost Homes
Three CEOs Testify About the Subprime Mortgage Collapse and Their Pay Packages

Oye.

Here is a day in the life of a financial services CEO, courtesy of my friend Dick Costolo:

9am  Private jet to DC

10am-11am  Get yelled at by Henry Waxman

1pm  Mmmm, steak!

4pm  Martinis with other CEOs

6pm  Private jet to NY

Just for fun:

Number of large-cap tech stocks at or near 52-week lows: 11

    MSFT DELL EBAY GOOG IFX SNDK BRCM VMW TI EXPE IACI

Number of large-cap tech stocks at or near 52-week highs: 0

Ran across this Money:Tech 2008 photo tonight of my friend Jim (Cramer) and I working out a few things on-stage.

[via Joseph]

Three great, interlocking reads on the changing role of the Fed as lender of last resort:

• What's Ben doing? (Krugman)
• Fed repurchase agreement and the Fed as pawnbroker (Waldman)
• How the Fed is conducting monetary policy on the asset side of the balance sheet (Hamilton)

Much of my family lives in Ottawa, Canada, and so now and then I like to check a live webcam across the street from Parliament Hill. Mid-winter it can be lovely, with snow all around and the Canadian flag streaming with the Gatineau hills behind; mid-summer it's even nicer, with a verdant lawn on a gorgeous cliff overlooking the Ottawa River.

Today, however, it's March 8th, and there is a walloping snow storm going on in Ottawa, one that produced the following view of the Peace Tower, as if through a contracting lens:

Not to make people there feel bad, but it's a lovely day here in La Jolla, as you can see from the live webcam at the top of nearby Mount Soledad:

There has been lots of cringing in the northeastern U.S. and in eastern Canada this year about the amount of snow that has fallen. So, is the current snow cover -- the amount of snow remaining on the ground -- anomalous by historical standards?

Well, one way to answer that question is to to go to the Rutgers University Climate Lab, which maintains a nifty map that shows a graphical "diff" of current snow cover from satellite-based norms. And here is the answer as of yesterday, with purple areas denoting surplus snow. Looks like there is an area in the eastern U.S. with more snow on the ground than normal, but, that's about it -- other than a few areas in the Rockies (and lots in Europe) with less snow than usual.

Here is a sneak peek at some links from my weekly Weekend Reading column over TheStreet.com.

• Solar energy firms leave waste behind in China (washingtonpost.com)
• Oil demand is drying up - slightly (S.F. Chronicle)
• Bill Miller is betting on Countrywide and Yahoo (Fortune)
• Attempts at beating the market costing investors $100-billion (NYT)
• A modest forecast for 2008 national ad spending (Advertising Age)
• In search of the perfect battery (Economist.com)

My financial quote du jour:

Rich people as a business model are sensational.

    - Russ Prince, quoted in Bloomberg

Lots of chatter this weekend about where a bottom might be for Google. After all, the stock has weakened largely in anticipation of poor upcoming results, not because it has drastically underformed expectations yet.

Let's say, however, the search company is set to perform less well, at least for a couple of quarters. That seems a reasonable assumption, as I've written here a number of times recently. After being a Google bull for a long time here -- and I'm still a long-term fan -- I pulled in my horns late last year, partly because of how belated financial services companies were being in slowing spending, and partly because of the company's miss (and poor explanation) on its last quarterly numbers.

So, where could Google stock go from here? Well, it all depends, of course, on how bad things get. If the company makes or beats its first quarter numbers, which are likely to be announced around the end of April, then the stock will recover straight away, burning the shorts. If it misses mildly, then the stock's performance will depend on the guidance. Good, and it maybe losses a few percentage points; bad and it goes down 10% or more.

If we miss materially -- say by 5% or more -- then we could, however, easily a major Google air pocket. How much of a fall in the latter case? If the stock were to fall to low-20s-times trailing earnings, basically giving Google credit for industry growth and then treating the earnings outlook as a crap shoot, we could see GOOG back to $350 or so. Not a pleasant worst case scenario, but such scenarios never are.

A few people have asked, but I'm not taken captive by aliens. Instead I am in Sao Paulo and Rio de Janeiro through Friday, so posting will likely be slow. Or not. You never really know.

Yeesh, it never ceases to amaze me how little people know about the securities they hold. We have had the auction-rate securities issue building for a couple of weeks -- with some VCs not realizing that some of their portfolio companies had put their money in now-illiquid auction-rate securities -- and today we have another reminder that banks still don't know what they own -- Fed governor Kroszner said in a speech that many banks would "restrict information" about such complex securities.

Some quick links to empty my burgeoning browser tabs:

• Is the stock market too high? (Nick Gogerty)
• Michael Lewis Exposed (Falkenblog)
• Spitzer's Targets Laughing Silently (Dealbreaker)
• Amazing Climate Predictions Revealed—Climate Models Reviled (Reason)

Granted, the following Google layoffs news is because of the DoubleClick acquisition, but in all the corporate-speak there is something that feels like a kind of augury:

As with most mergers, there may be reductions in headcount. We expect these to take place in the U.S. and possibly in other regions as well. We know that DoubleClick is built on the strength of its people. For this reason we’ll strive to minimize the impact of this process on all of our clients and employees.

Translation: We're letting people go. And a bunch of 'em, at that.

One of the most appalling and fascinating aspects of Sao Paulo and Rio de Janeiro here in Brazil are the so-called "favelas". The Brazilian equivalent of a shanty town, these have generally grown up on public land right alongside much more affluent areas. While mired in poverty, they are also hotbeds of entrepreneurs, with highly localized economies, creative solutions to infrastructure problems, and even profit-making tours offered of some of the larger favelas.

Here is a view of Favela Morumbi, one of the largest such zones here in Sao Paulo. Something like 19% of the population of Rio de Janeiro lives in favelas, and a smaller number here in Sao Paulo.

More here in the NYT on the "poor-ism" and the controversies around organized favela tours

For anyone who missed it this weekend, the 60 Minutes profile of Carl Icahn was interesting stuff. Check it here.

Jim Rogers' CNBC interview today is a classic of its kind. A combative and voluble Rogers goes after the Fed in a major way, arguing that our aversion to recessions, willingness to bail out banks, and general over-confidence in the Fed's ability to use rates and the money supply to micro-manage the economy are creating massive problems ahead.

Agree or disagree, it's provocative stuff. Check it here (and I really wish CNBC made it easier to embed such videos in blogs).

A longer and more ruminative post later, but in all my discussions here in Brazil the thing that comes through most clearly is of a country in a convincing and continuing economic break-out. A transition to a stable democracy combined with a more entrepreneurial economy and more sophisticated investors, plus an increasingly enlightened and business-friendly regulatory structure, not to mention a more functional capital market and clean tech boom, and slowing inflation, have laid the ground work for continuing expansion.

It has been a remarkable ride, as the MSCI Brazil ETF shows over the last five years. While it won't be free from bumps, there is much to be optimistic about what is happening here.

Eye-popping picture of the Alberta tar sands from space. Truly a scar on the face of planet.

Emptying my burgeoning browser tabs of some of my recent economic reading while here in Brazil:

• Brazil inflation slows for second straight month (Bloomberg.com)
• Brazil posts record Jan primary budget surplus (Reuters)
• Brazil unemployment rises for first time in eight months (International Herald Tribune)
• Brazil GDP grows more than expected in fourth quarter (Bloomberg.com)

After hitting 52-week lows in what was becoming a predictable pattern, Google has bounded higher in the last two trading sessions. Trading at $445.90, GOOG is now 8% above its low set intrasession on Monday. Nice move.

So, is it time for GOOG gloom or boom, or what?

Well, the current move is largely technical, with the stock and tech sector having been over-pounded of late. I said as much here and over on Twitter, so I can't say I'm surprised, because I'm not. The preceding said, is Google out of the woods on the quarter? Far from it. While this is likely to be Google's weakest quarter this year, there remains a considerably higher probability of a miss this quarter than the consensus on the stock would suggest.

Anecdotally, by the way, I'm heading from various people in the ad business in the last few weeks that ad buying (and quality/CPMs) are down. I'm not seeing this yet on my own site, but I have heard it from a number of people whose ad inventories are much, much larger than my own.

I've had some fascinating discussions with entrepreneurs, academics and investors here in Brazil. Among the more interesting things that keeps coming up is that outsiders have generally been much more optimistic than Brazilians about Brazil over the last five years -- and the Brazilians have been wrong. Despite their self-skepticism, their economy is growing nicely, inflation is under increasingly better control, they're running a budget surplus, and the employment picture is improving.

Granted, all is is not milk and honey (or the Brazilian equivalent) here. Some of the biggest issues for Brazil: Interest rates that remain stubbornly high (11.25%), poor matriculation rates at universities (less than 14% of high school graduates go on to complete university), and a huge (16%-ish) wage gap between the public and private sectors. Further, bureaucracy and corruption are improving, but both are far from where they should be.

All of the preceding said, the Brazilian economy has done fantastically well over the last few years, and the insiders and experts have largely been wrong. Why? Lots of reasons, but I increasingly think that history can be a prison in fast-changing markets & economies. Old Brazilian hands will tell you about all the times policy "X" or "Y" or "Z" has been tried in the past, didn't work, or made things worse, and that things will be no better this time. Those views are admittedly rational, appropriately skeptical, and informed by history (which can be an able guide), but tjhey were wrong this time. Why?

We quant types talk about regime changes  -- world shifts in the things that were causally related or at least correlated in the past but that aren't necessarily the same in the future. Recent history could be a blip in Brazil, and there will undoubtedly be rocks ahead -- not least because almost 20% of Brazil's exports are destined for the struggling U.S. economy -- but is it not also possible that we have seen a statistical regime change in a fast-developing economy? And could it be one that longtimers are much less equipped to recognize these changes than others?

Speaking of stocks doing big runs from lows earlier this week, Google isn't alone. Fave of all GPS fan boys, Garmin is up 16% from its lows, and 7.2% today alone.

Not bad. And there is new data out today too, showing Garmin's continuing and striking dominance of the standalone GPS category. The company has 55%-plus of both the consumer and commercial GPS market, a truly impressive show of force.

But where does Garmin go from here? The bulls argue that the GPS show is barely beginning, and we will see them utterly ubiquitous, which will benefit Garmin disproportionately. Bears argue that standalone GPS's halcyon days are ending, that while location electronics will be ubiquitous, it will not be a via a standalone device, more likely via cellphones, laptops, etc.

And where am I? While Garmin's go-go days aren't yet over, I tilt strongly to the latter view. This is a classic example of where integrated devices supplant discrete devices -- with Garmin's belated foray into cellphones not doing anything to change things.

Just a quick snapshot of some site stats here: Since inception, according to Movable Type, I have posted 6,348 entries, and there has been a little over 25,000 comments.

On the entries front, assuming 4 minutes per post, which isn't a bad average, that is a total of 504 hours, or 8.5 days spent writing blog posts since 2003. Insert you-need-to-spend-your-time-better joke here.

The massive Blackstone IPO last year was an epochal moment along at least three dimensions. First, it was a gigantic IPO, the sixth largest in U.S. history. Second, it represented a near-term market top in private equity. And third, the stock collapsed post-IPO, falling by half since, turning this biggest IPO into a big headache for investors.

The good folks at Breakingviews were appropritely skeptical at the outset, and have done a nice of covering Blackstone's becoming "Blackstone-d) in realtime. They've now wrapped the whole package up in a book-like format, which you can check out here.

For my money the best talk at this year's TED conference was Jill Bolte Taylor on what it was like to experience a stroke from the inside as a brain scientist. It was riveting, personal, passionate and deeply moving, truly one of a kind stuff.

It's now up on the TED site, so here you go. Enjoy.

Proud Dad moment, so feel free to skip over it. My 6-year-old son is newly infatuated with Encyclopedia Brown books -- which his Dad loved as a child too -- and he spontaneously made the following sign this week which is newly posted on the exterior of our house. (The smudging is my own for privacy.)

Makes me absurdly proud.

My friends at Altos Research have out some great new data on the current trends in the real estate market:

The Altos 10-City Composite showed a decline in asking prices of 1.6% over the past three months and continued that decline in February with a decrease of 0.4% for the month. Prices of properties listed for sale fell in 15 of 22 major markets according to the Real-Time Real Estate Report, jointly published by Altos Research, the premier source for real-time real estate research, and market analysis consultancy Real IQ™.

Asking prices fell at the fastest rate in San Diego, down 3.0% during February and 5.2% for the most recent three-month period. Prices also fell by more than two percent in the Detroit, Los Angeles and Las Vegas markets during February. Prices increased in Chicago, Charlotte, New York, Dallas, Phoenix and Houston during February and were flat in Seattle.

"We are seeing some stability in asking prices as a result of seasonal reductions in inventory during the past winter months," said Stephen Bedikian, partner and research director for Real IQ. "Unfortunately we also saw an increase in listed property inventories this month which is atypical this early in the year. Only a sustained reduction in inventory will arrest the market's fall nationally."

For sale property inventories increased in 19 of 22 markets during February. The Altos 10-City Composite showed a supply increase of 2.5% for the month. Property inventories declined in only three markets: Chicago, Indianapolis and San Francisco.

Data in the Real-Time Real Estate Report is based on analysis of over one million homes currently listed for-sale in 22 metropolitan markets across the country. The report is the most timely source of real estate data available.

"Inventory growth combined with the recent rise in mortgage rates and reported job losses does not bode well for future price stability," said Michael Simonsen, CEO and co-founder of Altos Research. "We expect housing price declines to resume in earnest during the next several months."

The Real-Time Real Estate Report also found that time-on-market remained high. Miami and Detroit experienced the longest time-on-market spans with an average days-on-market of 146 and Minneapolis was close behind at 145 in February. Seventeen of 22 markets had an average days-on-market of over 100. Denver led all markets with the fastest rate of inventory turnover at an average of 77 days-on-market, followed by Dallas at 79 days.

The report examines housing pricing, inventory levels and market conditions in 22 major U.S. metropolitan statistical areas (MSAs): Atlanta, Austin, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, and Washington, DC. The Real-Time Real Estate Report is released every month.

Now here is something to not be proud of: Aided by tumbling tax receipts in a weakening economy, the U.S. government just set an all-time record for its monthly deficit:

The U.S. government turned in a $175.56 billion budget deficit for February, a record for any month, as federal spending grew but a slowing economy caused receipts to fall 12.1 percent from a year earlier, the U.S. Treasury said on Wednesday.

The February deficit soundly beat the previous all-time single-month deficit of $119.99 billion in February 2007 and also exceeded Wall Street economists' consensus estimate of a $160.0 billion deficit in a Reuters poll.

For those of you keeping score at home, that is a $56-billion beat of the record in February, or about $1.9-billion in surplus (all puns intended) deficit per day.

[via Reuters]

Good stuff in a new report from Beverage Digest. A fairly remarkable downturn in the soft drink market is accelerating. Total U.S. sales fell 2.3 percent in 2007, which was worse than the 0.6 percent drop in 2006, which was, in turn, worse than the 0.2 percent decline in 2005. Ugly stuff.

The carbonated soft drink industry has moved from roughly 3 percent growth in the 1990's to increasing rates of decline in the last three years.

Then again, the U.S. is doing its best to keep Coke afloat:

Even with the recent declines, the U.S. still has the highest carbonated soft drink per capita (consumption) in the world.

Ahhh, that's so darn helpful to both beverage companies and Britesmile.

[Beverage Digest via Reuters]

In the news tonight that the $670m Carlyle Capital fund -- appropriately-named CCC -- is going down under the weight of creditors, there was this helpful quote in a WSJ story:

The secret to making money was borrowing massive sums.

Oh, now you tell me.

I often cite in presentations statistics about share of ad spending by medium, as well as related stats about how people spend time by medium. Turning to the former first, the following figure nicely lays out the ad spending part of the media landscape:

In (a hot and humid) Rio de Janeiro and out at meetings for most of the day, so postings will likely be light. Try to be nice to each other, and to the markets.

Mike over at TechCrunch has a partial list of what he says will be Microsoft's proposed nominees to Yahoo's board. They follow:

• Edward H. Meyer - former CEO, Grey Advertising
• John Chapple - CEO, Nextel Partners
• Tom Freston - former President, Viacom
• Jaynie Studenmund - Former CEO of eHarmony

It's a plausibly eclectic list.

[via TC]

I visited the Brazilian equivalent of the SEC today in Rio de Janeiro, and here are some things I learned:

• There has been a thirty-fold increase in trading volume in the last eight years
• There were 64 IPOs in the last two years, albeit only four of which see reasonable post-offering liquidity
• More than three-quarters of most initial public offerings are offered to European investors, which was highly surprising/amusing
• The former floor of the now-electronic Brazilian exchange is a room that is rented out for samba parties

Most provocative financial research I have read in ages goes to Ken French's much-discussed working paper, available as of today at SSRN, on the costs of active investing.

How much do investors spend trying to beat the market? I compare the fees, expenses, and trading costs paid to invest in the U.S. stock market with an estimate of what would be paid if everyone invested passively. Averaging over 1980 to 2006, I find investors spend 0.67% of the aggregate value of the market each year searching for superior returns. If the expected real return on U.S. equity is roughly 6.7% and we assume these costs will not continue to grow with the market, society’s capitalized cost of price discovery is about 10% of the current market cap. Under reasonable assumptions, the typical investor would increase his average annual return by 67 basis points over the 1980 to 2006 period if he switched to a passive market portfolio. [Emphasis mine]

Read the whole thing.

"We're safe," [Ford] said.
"Oh good," said Arthur.
"We're in a small galley cabin," said Ford, "in one of the spaceships of the Vogon Constructor Fleet."
"Ah," said Arthur, "this is obviously some strange usage of the word 'safe' that I wasn't previously aware of."
       - From Hitchhiker's Guide to the Galaxy

Good news. S&P, who missed most -- okay, a lot -- of the trouble in subprime now says it's (nearly) safe to get back in the subprime pool. Given all the surprises in this unwinding, the headline today from S&P put me in mind of the above HHGTG quote, to be honest.

More Subprime Write-Downs To Come, But The End Is Now In Sight For Large Financial Institutions

It's also kind of an unfortunately ill-constructed headline, when you think about it.

[S&P via FT]

As recently as Monday of this week something like one-third of the tech stocks I actively track here were within 5% of their 52-week lows. Today, not so much. Only two stocks -- Expedia and Infineon -- are still circling the drain, with the former exactly 5% off its lows, and Infineon sitting right at 'em.