Posts Tagged ‘CNBC’

Does Microsoft Have its Mojo Back?

October 23, 2009

Here is a clip of my appearance on CNBC Power Lunch today in which I hash over the state of Microsoft with CNBC anchors Dennis Kneale and Sue Herrera and VC-basher Paul Kedrosky.

We had a spirited debate and came to a consensus that Windows 7 is reviving the Microsoft franchise. I also think investors are starting to give Microsoft some credit for the recent progress the company has been making in the Internet ad business. However, Kedrosky is less bullish on that, and said he does not like the Bing story.

I couldn’t disagree more. If Microsoft is able to continue to gain market share on Google in the Internet search business that would be a major advancement for the company that would really help lift the stock out of the sideways trading pattern its been stuck in the last nine years.

Why Dell Chose Google Over Microsoft for its New Cell Phone

October 8, 2009

Today, I appeared on CNBC’s Power Lunch to discuss the news reports that Dell is teaming up with Google’s Android mobile operating system to release a smart phone in early 2010.

Check out the video segment here where I mix it up with host Dennis Kneale.

The World’s Hardest Problem: Harvard Prof’s Plan for Saving the Financial System

February 14, 2009

Now that Obama has pushed through a stimulus package, his administration has to crack a much tougher nut: Putting the banking system on sound financial footing and re-opening the credit markets.

We all know that TARP I has not worked out as planned. Yes, it averted a total catastrophe. But the banks are still not lending that much and the credit markets remain closed to all but the most stable companies. Our capitalist system remains a giant clogged artery in need of major bypass surgery.

So far, I have not heard any great ideas that could help solve this incredibly complex challenge. And there is no consensus emerging around how to get the banks to sell off the hundreds in billions in toxic assets clogging their balance sheets–unlike the stimulus program, which was a far easier problem. CNBC’s Dennis Kneale just floated an idea from an unnamed stock trader to turn the toxic assets into exchange traded funds.

But yesterday I got an email from Harvard touting a new plan and paper from Harvard Law School professor Lucian Bebchuck. His proposal to establish a “significant number of competing funds that will be privately managed and dedicated to buying troubled assets – not on creating one, large public-private aggregator bank” is the best idea I have yet to hear.

I think it has a shot at working because it designed to introduce much more competition in the market for these distressed securities–unlike one single “bad bank” that would only inject a limited amount of competition.

One myth about the current financial crisis is that there is no market for these troubled assets. That is just not true. Some of the smartest hedge fund managers in the world are trawling through these assets and scooping them up for super-cheap prices. Hedge fund kingpin John Paulson, for example, believes some of the best investment opportunities in 2009 and 2010 are in distressed mortgages.

So there is a market. It just needs to be far far bigger and more active and liquid so the majority of these assets can be bought and taken off the balance sheets of the banks. Bebchuck’s plan to use public money to create 25 or so new subsidized but privately run and financed funds designed to purchase these assets just might be able to spur the creation of that market.

“Establishing competing funds, I show, is necessary both to securing a well-functioning market for troubled assets and to keeping costs to taxpayers at a minimum,” writes Bebchuck.

“Each new fund will be partly financed with private capital, with the rest coming (say, in the form of non-recourse debt financing) from the government’s Investment Fund planned by the Treasury. One important element of the proposed design is a competitive process in which private managers seeking to establish a fund participating in the program will submit bids as to what fraction of the fund’s capital will be funded privately.

The government will set the fraction of each participating fund’s capital that must be financed with private money at the highest level that, given the received bids, will still enable establishing new funds with aggregate capital equal to the program’s target level. Overall, I show that the proposed design will leverage private capital to the fullest extent possible and will provide the most effective and least costly mechanism for restarting the market for troubled assets.”

Click here to read the entire paper.

Apple Update: Is Steve Jobs Sick?

September 9, 2008

Today, I was invited to appear on CNBC’s Power Lunch around 1:15pm to talk about the health of Apple CEO Steve Jobs, along with Portfolio.com managing editor Dan Colarusso.

Given that Jobs looked no more thin or gaunt today at the Apple music conference than he did this summer, and that he joked about his health (a slide flashed on the screen behind him saying “Reports of My Death Are Greatly Exaggerated”), I think we can probably conclude that he’s doing fine, or at least he’s healthy enough to handle the job.

But still, without the company directly addressing the issue it’s impossible to know for sure. Execs have hidden serious illnesses before. In my segment I talk about how in 1995 Intel chief exec Andy Grove was diagnosed with prostate cancer. He told the board. But the company did not disclose the illness to the public at tha time. (Grove later revealed the cancer when he wrote about it the following year.) Grove now says that because the cancer never impaired his ability to do the job, there was no reason to inform shareholders.

I’m not sure everyone would agree with that, but it just proves the point that there are no hard and fast rules when it comes to the issue of disclosing health matters of corporate executives.

Check out part one of the video here.

And here’s part two where we shift gears and talk about the big news of the week–the bailout of Fannie Mae and Freddie Mac.