Friday, July 12, 2002

The Big get Bigger Is this an economic or a biological rule? From a piece in Forbes on a Merrill Lynch report about where resumed technology spending will go: Still, even in this tough environment one company is unwilling to discount the pricing of its products--Microsoft. The world's largest software company ranked dead last both domestically and internationally for its flexibility in pricing. But that isn't affecting its importance to customers. The company ranked first domestically in terms of being a key software provider over the next five years. This is truely amazing. It's not hard to argue that Microsoft is facing more competition than it has since Windows 95 debuted nearly 7 years ago. And still they have that kind of pricing power, when companies are installing Linux Servers and even desktops all over the place? Other interesting news from the report is that, yes Virginia, folks will actually start spending on IT again. And when do American IT executives expect their software spending will accelerate? The majority, 43%, said it will happen in the second half of this year, while 28% indicated the first half of 2003 and 24% said the second half of 2003 or even 2004. Internationally, 55% said spending would not pick up until the first half of 2003 at the earliest.   2:41:13 PM     Friday Notes Do we need an office of Homeland Accounting? Arguably, the accounting scandals thus far (and there have been fewer than 10, and fully half of those have direct links to people employed by the current administration) have cost investors as much as 9/11. And the administration is notably less active in pursuing the accounting problem than the terrorism problem. It's probably just more comfortable using the tools for the latter than the former. --- The administration announces another upward revision in the deficit for the current fiscal year, but promises that we'll be back in balance by 2005. Increasingly, It’s not this administration’s  fiscal deficit that I’m concerned about. --- Some market commentators have been intimating that the slide in the market can be partially attributed to the prospect of Democrats picking up a majority in the house and a bigger majority in the Senate, as a result of the continuing business scandals.  I think that this is a time when the markets themselves, to say nothing of the voters, would welcome more regulation to return confidence to American business. There can be no greater indication of that than to watch the action in the markets during and after Bush's speech on Tuesday. During the speech, the market was flat, but directly after it finished -- as it sunk in that, unlike TR, Bush chose to talk loudly and brandish a small stick-- the market tanked. For days. Verdict rendered, the market has spoken.   11:29:18 AM

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