Filed under: International markets, Forecasts, Other issues, China, Russia, Middle East, Canada, Eastern Europe, Federal Reserve

There’s an old Wall Street adage that goes, “Sometimes the Street’s chorus is a chorus of two.”

And there’s perhaps no better example of that than the current debate over the strength of the U.S. economy. Professionals in the Concrete Canyon have been amassing on either side of two camps for months: “The U.S. economy is headed toward recession” or “The U.S. economy will continue to grow.”

Still, as history demonstrates, and contrary to the current ‘chorus’ on Wall Street, sometimes there are more than two options. For example, what if the U.S. economy is headed toward a growth recession? I.E. a protracted period of sub-trend GDP growth.

Continue reading Is the U.S. in a ‘growth recession’?

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Filed under: Products and services, Consumer experience, Internet, Google (GOOG), Technology

This post is part of our Hottest Products of 2007 feature. Also check out our other Hottest Products of 2007 posts and let us know which product you think is the greatest thing since sliced bread.

2007 may go down as the year people’s perceptions of what a map is changed forever, and proved the value of user-generated content. Much of that sea change can be credited to Google Maps.

Maps — for centuries static, analog pieces of information — have gone digital, allowing us to add layer upon layer of additional information, in a variety that strains imagination. For example:

• Maps that contain links to photographs of the noted location. If you want to know what the intersection of the Dawson and Dempster highways in Alaska looks like, you might find it on a Google Map. (Hint: There’s a big sign warning hunters that it is illegal to leave gut piles within 1 km of the road).
• Fans of the writer Patrick O’Brian (such as myself), can refer to a user-generated Google Map tracing the travels of his heroes Jack Aubrey and Stephen Maturin.
• Followers of the television show The Amazing Race can track the participants’ progress on a Google Map.
• The Los Angeles Times created a Google map for readers to track the progress of the recent outburst of wildfires.

Continue reading Hottest Products of 2007: Google Maps — an entirely new direction

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Filed under: Products and services, Tech for the rest of us, Israel

Only with Israeli ingenuity can you take a technology that was once reserved only for video games and make it functional in the real world. The news that Israel has launched the anti-hijacking pilot ID system developed by Elbit Systems(NASDAQ:ESLT) is good not just for the company, but for air travel as well.

Starting next year, Israel will require pilots who fly to its airports to use the Security Code System (SCS), a local invention designed to ensure planes that have been commandeered for al Qaeda-style attacks are spotted in time. Israel plans a trial run for the system, using a credit card-sized keypad, next month, in cooperation with five airlines from the United States, Europe and Africa. About 10,000 of the units will ultimately be issued, with Israel bearing the cost. Pilots who fail the authentication test when they approach Israeli airspace will be denied entry. Should a plane go ahead, ignoring further warnings, Israel will consider it hostile and scramble fighter planes for an interception. In the worst case, that could mean an aircraft is shot down.

Several experts familiar with Israeli methodology say the system — also known as “Code Positive” — is based on the assumption that a hijacking will take place in one of two ways. Hijackers could either kill the pilots and take control — as is believed to have been the case in the September 11 attacks on the United States. Or they could force pilots to issue a compliant response to the system in the hope of buying enough time to reach Israel and crash the planes into a target on the ground. In the first case, the hijackers would fail the security check as they entered Israeli airspace, giving military authorities about 15 minutes to launch a response. In the second, Dani Shenar, chief of security for Israel’s Transportation Ministry said, pilots would be expected to relay a “May Day” alert.

Let’s all hope that this system is never put to use, but in the event of a hijacking, this Israel system, could save hundreds of lives.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Author holds a position in ESLT as of 11/21/07.

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Filed under: Cisco Systems (CSCO), JetBlue Airways (JBLU), Israel

With the market experiencing a continued downturn and with Thanksgiving upon us, I thought we could highlight two stocks that have been turkeys so far this year (dogs maybe be more appropriate, but ’tis the season). However, unlike our favorite bird, these are poised to fly.

Radvision (NASDAQ:RVSN), which specializes in video conferencing over IP and 3G networks, has lost more than 40% YTD. It has produced successive earnings disappointments. While it has great technology, it has been struggling to execute its business plan. It’s important to note however, that it has a very close relationship with Cisco Systems Inc. (NASDAQ:CSCO), and every few months rumors surface as to a potential M&A. I think that management has taken the Cisco relationship for granted and hasn’t done enough to hustle new business.

That being said, as I mentioned the stock is down over 40% on the year. The company today received permission to purchase up to $30 million in stock. While some may see that as a PR stunt to boost the stock, more interesting was that Yehuda Zisapel, a former Chairman of the Board of RVSN and the brother of the company’s current Chairman of the Board, bought $2 million of stock. With the stock getting creamed so far this year, I would look at it as a nice turnaround play going forward.

Continue reading A couple of turkeys set to fly

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Filed under: Google (GOOG), Microsoft (MSFT)

According to a recent piece in the Wall Street Journal [a paid publication], there is some frustration among loyal Facebook users. In the web site’s search for monetization, there are some new features that do things like track user behavior off of Facebook.com. The hope is that this will help to create improved targeting for advertising messages.

But, it’s also raising some privacy concerns.

So, might this be an opening for Google (Nasdaq: GOOG) to get a bigger piece of the social networking space?

Well, I had a chance to interview Robb Hecht, who is an expert on social networking and the operator of MEDIA 2.0. Hecht — who doesn’t consult for either company — thinks that Google’s new system - called OpenSocial - has lots of promise and could be an edge in the social networking war:

Continue reading Facebook vs. Google? Advantage: Google

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Filed under: Bad news, Citigroup Inc. (C), Bank of America (BAC), Federal Natl Mtge (FNM), Wachovia Corp (WB), Housing, Federal Reserve

U.S. Treasury Secretary Henry Paulson is on the wires again, this time predicting that the number of potential home-loan defaults “will be significantly bigger” in 2008 than in 2007.

In an interview with The Wall Street Journal (subscription required), Paulson said, “The nature of the problem will be significantly bigger next year because 2006 (mortgages) had lower underwriting standards, no amortization, and no down payments. He added that “We’ll watch carefully mortgages that will be reset.”

Home prices fall

Paulson’s comments came before the National Association of Realtors announced that home prices had fallen in 51 of 150 U.S. metropolitan areas in Q3, with the median sales price falling to $220,800 in Q3 2007, compared to $225,300 in Q3 2006. The NAR also announced that home sales fell to an annualized rate of 5.42 million units, including single-family homes and condominiums, compared to a 6.29-million-unit annualized rate a year ago.

Continue reading Paulson: home-loan defaults could rise in 2008

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Filed under: Forecasts, Bad news, Rumors, Press releases, Rants and raves, Competitive strategy, Market matters, Countrywide Financial (CFC)

Although Countrywide Financial (NYSE: CFC) the bank, has gone on record as stating it is not in danger of going bankrupt and has plenty of liquidity to continue to operate and meet its current obligations, that could change. The bank is no doubt referring to the immediate future, like today or this week. Those who have expressed concern are thinking about next week, next month or six months out. I have no idea what the truth is, or if there are multiple truths, or if the company is dancing on the head of a pin.

• “Countrywide Home Loans is expected to service debt maturities beyond 2008 without additional debt issuance,” the company said. Earlier Tuesday, a Countrywide representative told The Wall Street Journal that speculation the company may file for bankruptcy is ‘absolutely false.’”

The company stock started off the year around $45 per share — shares now trade around $9 per share. Here is a point that may be lost on the average investor: Even if there was no problem whatsoever with subprime mortgages and even if not one single mortgage holder was foreclosed on, Countrywide’s business is down perhaps 80% and it is losing money — profits are not to be found.

If people are not buying homes and condos and are not seeking traditional loans or any other kind, then Countrywide has to move fast to shrink its enterprise to match the customer demand level (which it has indeed been doing), and then start growing when the market picks up again. That means it has to be lean and mean, which means in turn that the company has to have the wherewithal to survive in a tough market for several years, not just this month.

Continue reading Countrywide says bankruptcy not a threat - do you buy it?

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Filed under: Products and services, Launches, Krispy Kreme Doughnuts (KKD), US Airways Group (LCC), Japan

Just when I thought flying couldn’t become more unpleasant comes word that US Airways (NYSE:LCC) passengers will have to fly over New Mexico dry. Apparently, the airline is in a tiff with the state’s alcohol regulators, who have refused to give them a permit to serve booze while in or over the state. Apparently, the state extends into orbit.

Stuck for what to bring to that Thanksgiving potluck? I’m thinking a cheesecake would be nice, but…I wish there was a way to make it a little more fattening. Thankfully, Lisa Robertson of North Carolina showed me the way with her award-winning Krispy Kremey White-Chocolate Raspberry-Filled Cheesecake, which uses Krispy Kreme (NYSE:KKD) donuts for its crust.

Continue reading Funny bidness — US Airways passengers can’t drink over NM

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Filed under: Products and services, Consumer experience, Apple Inc (AAPL), iPhone, Smartphones, Technology

The game of tag between Apple, Inc. (NASDAQ: AAPL) and those ingenious hackers who want to turn the iPhone into the modern-day Swiss Army knife has reached a new levels of sorts. Some of those wondrous hackers are now saying that the iPhone sends information back to Apple about each iPhone owner’s habits regarding phone use, web surfing and digital media choices.

Although some of the things Apple hackers say can be construed as a little over the edge, this one may be entirely plausible. The main mantra out of this newer revelation is this: why isn’t Apple disclosing such facts to each and every iPhone user? How it collects data, when it collects it, and where does it go?

If each iPhone is collecting a decent amount of data about many of the popular facets of usage for each customer and sending that information back to Apple, a few lines in a terms of service agreement aren’t going to cut it. Apple’s apparent privacy breaches here could give the iPhone a bad rap in some circles, although I doubt it’s enough to dent sales in any measurable way.

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Filed under: Consumer experience, Internet, Technical Analysis, Technology

In a study that has dire implications for internet-dependent businesses (hey, that’s me!), Nemertes Research has concluded that traffic on the internet will soon begin to experience slowdown analogous to that of our nation’s freeways at rush hour.

The comprehensive study, including projections based on historical use patterns and interviews with market specialists about projected usage, concluded that the choking point will come in the internet access infrastructure within the next few years, especially in North America. Once through that bottleneck, however, the study found that trunk capacity and switching technology will stand up to the growth in traffic.

Nemertes concludes that $42-$55 billion of investment would be needed to build out enough to handle the increased traffic, 50-70% more than is currently planned.

Continue reading Study warns internet capacity may soon be reached

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