Saturday, January 26, 2008

Fred Thompson

Watching the Democrat primary in SC, I'll still disappointed that Fred dropped out. While he staked too much on SC, and I'm sure the campaign war chest was empty, so is Huckabee's, and likely McCain's as well. So, he might have made a dent in FL, where I sense Giuliani's campaign is sinking.

My guess: two man race between McCain and Romney after FL.

If Fred is interested (after all, Law and Order probably pays much better than government service) he could be Secretary of State, or head of Homeland Security. Of course Giuliani would be a strong Homeland Security head as well.

Bank of America - preferred stock

Bank of America joined the group of banks hosing existing shareholders with a mammoth - $12 billion- preferred stock issuance. With one $6 billion tranche paying a dividend effectively yielding 8% and the other $6 billion yielding 7.25% and some conversion features, us long-time common holders should expect slower dividend growth.

I actually think Ken Lewis is a good CEO and generally has done a good job. However, somewhere B of A started lowering its standards, or holding paper with poorly evaluated risk. We can only hope that a market eventually develops for the CDO's, CLO's or whatever toxic paper is on their balance sheet, and they reverse some of the write-offs.

Sunday, January 20, 2008

Romney/Thompson dream ticket?

The role of Fred Thompson in yesterday's SC primary is as murky as his next step.

Did he divide the religious vote and thereby hand Huckabee a loss? Or would those votes, had he not been there, have gone elsewhere? My instinct is that more of those votes would have gone to Romney or McCain than to Huckabee. Fred comes across to me as the thinking person's conservative: thoughtful on positions, a sense of history, a Federalist, serious about the war on terror and prepared to take the long view on it. His addresses have content, not sound bites - which may, unfortunately, be a drawback in 2008.

Mitt is quickly seizing the stage as the most knowledgeable in the field on economics, growth and job creation. With a war still consuming dozens of billions, it isn't clear that the race will be won on voters' views of candidates job creation prowess. However, he gives off as much energy as Fred seems to absorb - Mitt's electron shell could power Fred.

So, Mitt may be drawing professional class, Fred the fiscal conservatives and those concerned about immigration, as well as being acceptable to the religious voters.

Assume that I'm right for a moment, i.e. that most of Thompson's supporters would have otherwise gone to Mitt - then it would have been a tight three person race (despite Sunday morning talking heads commentary to the contrary, McCain didn't crush Huckabee).

Given that Thompson hasn't won a race, and funds must be running tight, could a Romney/Thompson ticket be crafted? Thompson as the Cheney for Romney - the insider who knows the beaucracy, the key players, the staffers, potential cabinet members and so on? Even though I don't believe anyone ever votes for the VP, parties nonetheless look for "balance" - e.g. Northern and Southern candidates, or East and West. This would be a Northern Governor and a Southern Senator...

I don't know that their egos would allow it, and I doubt that Mitt would want to tie himself down early, but both need something going into Florida and Super Tuesday.....

Saturday, January 19, 2008

Breeden Partners, Zale Corporation

This just in - Richard Breeden and one other exec from Breeden Partners (Breeden Capital Management) are joining the Zale board of directors.

Mr. Breeden - you should meet Don Zale the next time you are in Dallas for a Zale board meeting...

Zale Corp Update

The new CEO Neil Goldsmith at Zale must be wondering if he made the right decision. Richard Breeden's hedge fund Breeden Partners has amassed ownership of almost 18% of the company. Despite that buying supporting the stock, the price has dropped so severly I'm having a hard time drawing support lines on the chart ( click here for the Zale stock chart ).

I have felt that the company has been badly undermanaged for years and the board somewhere between asleep and derelict. With the collapse of the debt markets, the private equity guys are temporarily on the sidelines (but lenders will eventually emerge just like robins in the spring, but it may be a few years before they write many "covenant lite" commercial loans...). So, only strategic buyers and hedgies with a lot of cash are in the game - so they may get ZLC on the cheap....

South Carolina Primary

I just looked at the poll summary at RealClearPolitics . For those of us who think Fred Thompson is a strong candidate, the news isn't good. In every poll they list he is third or fourth. It is an interesting situation, and points out the difficulty in attempting serious dialog in an MTV environment. Mr. Thompson has been a strong voice in the war on terror, has a generally conservative record on spending, learned the risks of hubris and importance of keeping government small as a member of the Watergate team, and has a states' rights bent.

He clearly didn't leverage his early poll advantage, but that shouldn't be a fatal error. His speeches aren't in sound bites, and his gravitas shows on the campaign. But, the voters seem to prefer conservatism light....

I'll be watching the election results tonight to see if anything changes. I fear anything less than a second place finish might signal the end of his campaign.

Sunday, January 13, 2008

The Canon

I just completed The Canon by Natalie Angier . It is a wide-ranging report on the developments in science, including molecular biology, geology, astronomy, chemistry and evolutionary biology, with some additional chapters on statistics and the scientific method.

It is excellent and I recommend it unconditionally. Her use of words, clever puns and phraseology is delightful, and bring humor and a spark to what could be dull subject matter. And she works at making the information understandable, if not to everyman, at least to the reasonably educated reader.

Her defense of evolution is a little lengthy and pedantic, presumably as a felt need to respond to the Creationist movement. Other than that one complaint, it is a fun read in addition to be highly informative. Grab yourself a copy and catch up on everything you've missed since your last science class.

Sunday, January 06, 2008

Primary calendar

For you political junkies, the NH primary is Jan. 8, Michigan is Jan. 15, Nevada and SC (Repbulican) is the 19th. Note that the Democratic SC primary is the 29th. Also on the 29th is FL. On Feb 5th, there are 16 joint - e.g. Democratic and Republican - primaries as well as a handfull of primaries that are one or the other.

I'm hoping that the contest is serious a least until Feb 5. Having this thing wrapped after three or four relatively small states makes no sense.

FD: Pam and I made contributions today to two candidates (each of us could support the other if our first choice doesn't make it).

I encourage you to give to the candidate of your choice - particularly if it is one of the lesser funded ones-so they can get their message out.

Thursday, January 03, 2008

John Edwards update

The talking heads are concluding that the Edwards campaign is over - projecting the Iowa results and saying that he bet everything on Iowa, lost and is out of funds.

While, or probably since, I think of Edwards as the most dangerous candidate, this isn't too disappointing to me. However, never underestimate the wealth of the trial lawyer community. After all, they have bankrupted over 50 companies with asbestos claims. Throwing in a couple of hundred mil wouldn't be a challenge for that crowd....

Iowa Caucuses

CNN has called Iowa for Obama and Huckabee. Thereby the Iowans have selected the two least qualified candidates running.

Let's hope that the election isn't over by the time NH is in, so that some states with larger populations get a chance to weigh in.

Tuesday, January 01, 2008

ZLC update

Betsy Burton is (apparently unceremoniously) out at Zale, while Neil Goldsmith, formerly of Children's Place, is in. Clearly Zale needs major help (see stock chart link below). Whether Mr. Goldsmith is up to the task remains to be seen. His resume' has too much department stores (the business of the past) and just a little specialty biz. In addition to a $925K base, Goldsmith got a tidy $800K signing bonus. Surprisingly, I can't find anything on Burton's package - I'm sure she got something as a going away present...

One must say, however, that the Zale board finally realized it had to do something as it watched steady deterioration in performance, earnings and shareholder value.

Presidential candidate John Edwards

In the January issue of Conde Nast Portfolio, writer Matthew Cooper takes the position that former Senator and Presidential candidate John Edwards is actually less liberal and more accomodating to business than his speeches would indicate.

Sorry Matt, I don't buy it.

He has repeated the "two Americas" speech too often to retreat if elected, and he'll be too beholden to his trial lawyer confrere's to give any breaks to business.

I say take the man at his word.

Benazir Bhutto

In a particularly astonishing bit of news, we've learned that no autopsy was performed on Ms. Bhutto's remains.

In a world of conspiracy theories, I would have thought that the investigation of any assasination would learn from America's experience with President Kennedy, and be painstakingly thorough, with thousands of photographs and peer reveiws by the world's best pathologists.

Instead, no autopsy. Weird, shocking, astonishing. In an area of the world where grudges are kept for centuries, this sets up 500 years of mistrust, suspicion, martrydom, coups, and revenge.