The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

The late breaking news doesn’t seem to stop these days:

“Comcast, the nation’s leading provider of cable, entertainment and communications products and services, is in talks to buy the entertainment giant NBC-Universal from General Electric, according to knowledgeable individuals.

Deal points were hammered out at a meeting among bankers for both sides in New York on Tuesday, executives familiar with the meeting said.

Two individuals informed about the meeting said that a deal had already been completed at a purchase price of $35 billion.”

I have no opinion if this is remotely true, but $35 billion sounds kinda rich . . .

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Source:
Exclusive: Comcast in Talks to Buy NBC-Universal from General Electric
Sharon Waxman
The Wrap, September 30, 2009

http://www.thewrap.com/article/exclusive-comcast-buy-nbc-universal-general-electric-8002

Bloomberg:

Bank of America Corp. Chief Executive Officer Kenneth D. Lewis, his credibility battered by his handling of the Merrill Lynch & Co. takeover, plans to step down at the end of this year.

No successor was named to replace Lewis, who will also retire as a director, according to a statement today from Bank of America, the biggest U.S. lender by assets and deposits. The resignation ends Lewis’s 40-year career at the Charlotte, North Carolina-based company, including the last eight as CEO.

Discuss . . .

Part I of Paul Volcker, former chairman of the Federal Reserve, one of the wisest men on the economy. In part one of this conversation, he sheds light on the global economic crisis, how we got here, where we are, and what is next for us

(If video doesn’t run, then click here for WMV player)

A musical tribute to two great men of science. Carl Sagan and his cosmologist companion Stephen Hawking present: A Glorious Dawn – Cosmos remixed. Almost all samples and footage taken from Carl Sagan’s Cosmos and Stephen Hawking’s Universe series.

Cosmos Remixed

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“Sure, it may be great for us, but its Hell on the markets . . .”

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via New Yorker Cartoon Bank

Items of note worth reading:

• Best Quarter Since ’98 for Dow (WSJ) And the Dow only had to get cut in half to make it happen!

• Should Volcker be Fired? (Brown Brothers Harriman)

• Greenspan Sees Growth Slowing as Stocks ‘Flatten Out’ (Bloomberg) Greenie Bearish? I am tempted to say this is a bullish indicator!

• Martin Wolf: Why narrow banking alone is not the finance solution (FT)

• Rebuilding Our Economic Engine (Dow Jones Market Talk)

• American history of the automobile and car salesman (The Believer)

• US giant bunker-buster bomb project rushed since Iran’s Qom site discovered (Debka)

• Newsmax Suggests Military Coup Against Obama (TPM)

What are you reading?

Bulls are beside themselves about the recent performance of the Case Shiller house-price index: Prices have risen for three straight months!

This happy (if short) string of data has given rise to the widespread belief that the housing bust is over, that buyers can safely return, that folks who want to sell their houses are smart to “rent for a year until the market has come back.”

Keep dreaming, says David Levy, of the Jerome Levy Forecasting Center. House prices have plenty further to fall.

I find this terribly amusing: I am keynote speaker at Stony Brook University homecoming this coming weekend.

Its billed as a “free lunch” but we know from Milton Friedman . . . besides, listening to me drone for an hour is hardly free . . .

Join us for the Alumni to Student Career Talks
Free Lunch and Discussions

Sunday, October 4th, 2009 * SAC – 1 PM

KEYNOTE SPEAKER Barry Ritholtz

One of the most respected independent analysts on Wall Street – regular and special guest on ABC, Bloomberg, CBS, CNBC, CNN, C/SPAN, MSNBC, Nightline, NPR, and PBS – interviews and regularly quoted in Barron’s, Forbes, Fortune, Kiplingers, NY Times, Wall Street Journal and many more!

The 8/2/09 NY Times Sunday Business Section review of Bailout Nation, wrote “Mr. Ritholtz has written an important book about a complicated subject… yet you could still read it at the beach. Here’s hoping that some policy makers in Washington take it with them on vacation this month.”

The Wall Street Journal noted “If you want to know how we got into
this mess and what might still be coming, this is the book for you.”

Bloomberg praised it as “A valuable new contribution to
our understanding of how we arrived at this sorry juncture.”

It has become the best reviewed book on the bailouts to date.

What makes this so terribly amusing is that as an undergraduate — well, let’s just say (grades aside) that I wasn’t exactly a model student.

Aside from the minor pranks I got caught for, there was a laundry list of other activities abd unsolved crimes my crew & I got away with.  And nowI am (heh heh) a keynote speaker at a homecoming weekend.

Blows the mind.

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Check website for all Talks, room numbers, and more info on speakers
www.aasquared.org/SBUAlumni/PolitySCOOPReunion09/careerlunch.html

Wolfstock 2009 is sponsored by

Complete text of Vice Chairman Donald L. Kohn’s speech:

Central Bank Exit Policies
At the Cato Institute’s Shadow Open Market Committee Meeting, Washington, D.C.
September 30, 2009

I am pleased to be on this panel on exiting from the unusual policies the Federal Reserve and other central banks have put in place to ameliorate the effects of the financial turmoil of the past two years. Chairman Bernanke has made a concerted effort to explain the thinking of the Federal Reserve in this regard, because it is so important that the public understand we have the means to meet our objectives of fostering stable prices and high employment. I will briefly underline some aspects of the Federal Reserve’s framework for exiting that I believe to be especially critical to that understanding.¹

Conditions for Exit
In its most important aspects, the decision about when to begin exiting from the unusual policies is not materially different from any decision to start tightening monetary policy. We will need to begin to remove the extraordinary degree of accommodation in its various dimensions when we judge that exiting from the current stance of policy will be necessary to preserve price stability as the economy returns to higher levels of resource utilization. Because it takes people time to adjust their spending and pricing decisions in response to a change in interest rates or other aspects of financial conditions, like other monetary policy decisions, that judgment will need to be based on a forecast of economic developments, not on current conditions. So we must begin to withdraw accommodation well before aggregate spending threatens to press against potential supply, and well before inflation as well as inflation expectations rise above levels consistent with price stability.

I cannot give you a small list of variables that will trigger an exit; as always, our forecasts will use all available sources of information. And I can’t predict how rapidly we will have to raise short-term interest rates from around zero or remove other forms of accommodation; that too depends on how the economy seems to be recovering and the outlook for inflation. Clearly, the present degree of accommodation–as gauged by nominal and real short-term interest rates and the size of our balance sheet–is extraordinary, and we will have to take account of how that is influencing spending and inflation expectations when deciding when and how fast to tighten.

Tools for Exit
We have the framework to exit from these policies when we need to do so. And the tools at our disposal will allow us to do so at the pace and in the sequence we judge will best meet our objectives.

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