Kass: 'G Phone' and Other Street Chatter

Here's the talk on Google wireless, Hillary Clinton's big housing plan and other topics.
Author:
Publish date:

This blog post originally appeared on RealMoney Silver on Sept. 6 at 7:46 a.m. EDT.

Every few weeks, I recap 10 tidbits I've picked up from trading desks and other industry sources. These items have not been confirmed, but either have affected, or could affect, the stocks mentioned.

The first such column, in early January, proved prescient on several fronts. Here are this week's top 10.

1

. The launch of the

Google

(GOOG) - Get Report

Phone appears close at hand. The architect, Rich Miner, has already exhibited the cell phone's prototype to a group of Boston venture capitalists and entrepreneurs after completing the design work in a Cambridge, Mass.-based office in Kendall Square. The G Phone will be based on a mobile variant of Linux and will be able to run Java virtual machines.

2

. Democratic presidential aspirant Sen. Hillary Clinton (D., N.Y.) will shortly announce a broad, strategic and comprehensive $25 billion dollar bailout for U.S. homeowners, coupled with legislation geared against predatory lending. Assisted by input from Citigroup's Bob Rubin and from several senior Goldman Sachs officials, Clinton's initiative will be far greater than her

previous recommendation

, the 21st Century Housing Act, which was made early this year. (Clinton's cabal is so confident that she will win the Democratic presidential nomination that they are already considering vice presidential nominees.)

3

. The planning for the

Fox Business Network

and the acquisition of former

CNBC

reporters continues apace. The Oct. 15 debut will be positioned on Time Warner Cable Channel 43, at which time,

Fox News

will move to Channel 44. The launch appears on target, and Director of Business News Alexis Glick (who will also be on air) is expected to bag

CNBC's

Liz Claman and Eric Bolling.

Also being "courted" are David Faber and Mark Haines and a well-known

CNBC

political commentator. Attempts to engage Maria "Money Honey" Bartiromo in a multiyear, multimillion dollar deal were squashed, owing to her contractual obligations. (Her

CNBC

deal expires in 2009.) A half-hour show, "The Bear Cave," will be introduced in early 2008, featuring a well-known Kodiak. On a separate note,

CNBC

will be making some important after-market programming changes later this month.

4

. In the face of a bloated fixed-cost structure,

Countrywide Financial

(CFC)

is planning further massive personnel layoffs and branch office closures. Rollover of its paper continues to be difficult, and

Bank of America

(BAC) - Get Report

is considering an additional investment in the company (albeit at a lower exercise price than the earlier financing).

In other housing news, a large, private homebuilder is about to declare bankruptcy, and Bank of America and/or

Wachovia

(WB) - Get Report

could be on the hook for its debt. In the public arena, another homebuilder is unable to renew its credit lines and may face the same fate.

5.

The

private-equity market is at a standstill as attempts to merchandise the current paper have fallen on deaf ears. Executive decisions at the major banks and investment bankers are about to concede on pricing -- private equity is not budging much -- in an attempt to swiftly cut into the inventory of bridge loans, leading to sizable write-offs in the months ahead.

Nevertheless,

Goldman Sachs

(GS) - Get Report

will report a surprisingly healthy quarter as a massive volatility bet paid off.

Merrill Lynch

(MER)

will not be so lucky, however, nor will

JPMorgan Chase

(JPM) - Get Report

or

Citigroup

(C) - Get Report

. Goldman Sachs and

Morgan Stanley

(MS) - Get Report

are planning to launch $5 billion-plus in distress leveraged-loan funds to sop up the mess that they have helped create. A major regional bank will be cut in the fray and report sizable losses, leading to its acquisition by a major money-center bank.

6

. Despite Wall Street reports to the contrary,

Apple's

(AAPL) - Get Report

iPhone sales have been disappointing over the last 45 days. By contrast, iMac sales have dramatically beaten consensus forecasts.

7

.

Yahoo!

(YHOO)

is engaged in preliminary takeover talks with multiple media companies.

Microsoft

(MSFT) - Get Report

is considering a game-changing acquisition that would be far larger than any of its previous deals.

8

. Friday's payroll report will be surprisingly weak, and large downward revisions will be made to its prior monthly releases.

9

. China means business in its attempt to curb inflation and slow down economic growth. It will shortly, through a series of increases, raise bank reserve requirements. Other efforts to curb speculation in its stock market are in the offing as well.

10

. Back-to-school retail sales are horrible. Lower comp guidance from

Wal-Mart

(WMT) - Get Report

and others is expected over the next two weeks.

At time of publication, Kass and/or his funds had no positions in the stocks mentioned, although holdings can change at any time.

Doug Kass is founder and president of Seabreeze Partners Management, Inc., and the general partner and investment manager of Seabreeze Partners Short LP and Seabreeze Partners Short Offshore Fund, Ltd.