Getting Sirius

Now that the XM/Sirius merger is complete, CEO Mel Karmazin has big plans.

The NY Post quotes Karmazin :

"We're going to be the most successful company in radio," Karmazin said in an interview with The Post. "We're going to be bigger than Clear Channel because we're growing and they're going the other way."

Sure they're growing, but while they have clearly laid out the next round of cost savings, but they're nowhere near profitable and it's not clear to me how they're going to finance the continued operation.

Or the wild card. If you really had designs on being the largest radio operator, wouldn't you be looking at an acquisition of a traditional radio property? The problem is that with the common at $1.30, there's not a lot of currency there, and the balance sheet needs less debt, not more.

I think it's more likely that another media outlet buys them.

Is This Really Happening?

CARACAS, Venezuela (AP) -- At least 38 Warao Indians have died in remote villages in Venezuela, and medical experts suspect an outbreak of rabies spread by bites from vampire bats.

From CNN.com

It's like a bad horror movie.

This Market May Be OK

The S&P 500 rose almost 3% this week amid more bad news from the financials.

We probably aren't out of the woods, especially with the big banks and brokers, but there are two very important things going on.

The first is that oil has backed off from $147 to $115. There is simply less demand above $4/gallon.

The second is that McCain has been gaining on Obama. I'm not sure whether McCain will be a good president, but I am sure that Obama's tax policies as he has pitched them to date would be a disaster for U.S. business.

Stay Tuned.

Citi and Now Merrill

Citi and Merrill are making the buyers of auction rate securities whole, even though the product was in no way guaranteed. This whole mess is, well, a mess.

The financials are clearly in the crosshairs as the regulators are breathing down their necks. They sold a too-good-to-be-true deal and the buyers are getting off the hook. Cash is cash. ARS's are not, were not.

The fact that the financials are willing to roll over on this is sad. My view is that the regulators are taking way too much liberty. If it turns out that the brokers lied when selling this paper, then that's another story but I was at one of these firms for years and they never rolled over on anything.



Long MER

Brett Favre

In one of the greatest sports PR moves in a while, Favre signs with the NY Jets. Ding ding ding. It's a slow news week with the Olympics about to kick off so his timing is impeccable.

The Big Apple is going to love him if he can produce.

Whither the Fed

The Fed left rates unchanged yesterday and shifted to a neutral bias, i.e. they are no longer inclined to raise rates the next time they move. So goes consensus after yesterday's decision.

I think the Fed is in a no-huddle offense whereas a "neutral bias" would imply that the Fed is playing defense. Bernanke wants to get this right and there is a lot of bad stuff still in the system. The market is self-correcting in the long term but the Fed Chairman is likely to do anything he can in the short term to avoid further damage to the financials and/or the economy.

Absent a better market, I wouldn't be surprised to see lower rates ahead. Could be bad news for the U.S. dollar though.