Reuters:   Citigroup (NYSE:C) and the government are in a dispute over TARP re-payments

Reuters:   Japan release plans for an $81 billion stimulus package.

Reuters:   Morgan Stanley’s (NYSE:MS) new CEO will shuffle top management.

Reuters:   The US pay czar will exempt some AIG (NYSE:AIG) employees.

Reuters:   GM is in talks to sell part of Saab to China-based SAIC.

Reuters:   The labor market problems may be in their final phases.

Reuters:   Bernanke says the economy still faces “headwinds.”

WSJ:   Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) are fighting with the US over conditions for TARP payments.

WSJ:   Lending is still tight according to the Fed.

WSJ:   The airline industry appears headed for a recovery.

WSJ:   Moody’s (NYSE:MCO) says the US and UK may show they can cut debt to keep “AAA” ratings.

WSJ:   FedEx (NYSE:FDX) lifted its outlook.

WSJ:   RIM (NASDAQ:RIMM) set a distribution deal with China Mobile (NYSE:CHL)

WSJ:   Google (NASDAQ:GOOG) countered Microsoft (NASDAQ:MSFT) with new search features.

WSJ:   GM and Ford (NYSE:F) will begin big competition in the small car market.

WSJ:   Seagate is expanding beyond the storage disk business.

WSJ:   Dubai World may sell assets.

WSJ:   The FTC will review Google’s deal to buy AdMob

WSJ:   German luxury car companies have strong sales in China.

WSJ:   The EPA said greenhouse gases are dangerous.

WSJ:   The advertising market in the US will be stable next year according to one forecaster.

WSJ:   News Corp (NYSE:NWS), Time Warner Inc (NYSE:TWX), and other publishers will form an alliance to create content for tablet PCs and e-readers.

WSJ:   S&P sees dividends increasing next year.

NYT:   An overhaul of major debt rating agencies is unlikely.

NYT:   A technology used to mine natural gas make cause pollution.

NYT:   GM will spend significantly on new models.

NYT:   State labor officials and the long-term unemployed are pushing Congress to extend benefits.

NYT:   NY Attorney General Cuomo is focusing his probe of Bank of America (NYSE:BAC) on an executive who is a candidate for the CEO job.

NYT:   Universal, Sony (NYSE:SNE), and EMI will start a music video site.

NYT:   The FTC and other groups are far apart on rules for online privacy.

Bloomberg:   Obama says there is no silver bullet for job creation.

Douglas A. McIntyre

The video game sector is not improving with the economy.  It seems to not even be getting ‘less-bad’ with the other sectors that are looking ‘less-bad’ compared to earlier months.  Last night’s awful earnings and forecast from Take-Two Interactive Software (NASDAQ: TTWO) does highlight the risks or issues today in the video game sector, but the sector woes go far beyond just this one video game title publisher.  So it seems that the holiday season for 2009 may be a dud for the video game sector.  The only good news is that long-term investors may finally start getting an opportunity here to pick up depressed valuations.

Take-Two’s earnings are a disappointment and its guidance is worse.  The largest factor noted was the performance of its Major League Baseball titles cutting performance plus an impairment of capitalized software based on sales estimates for its MLB titles in fiscal 2010 and other outside inventory write-downs.  In video game publishing, inventory write-downs translates to poor demand from retailers.  After looking through the rest of the comments from the company (and at least 4 downgrades or estimate cuts from analysts), it is only of some surprise that shares are down over 30%.

Where this story gets interesting though is not on Take-Two and the woes of one company.  Most video game stocks are not getting punished with Take-Two is not an “industry representative” for the whole sector.  But the problems are running deep in the sector and that is going to create more near-term uncertainty for many of the players.  The real cracks starting coming in October when NPD showed that the price cuts helped game sales only for a brief bit.

Nintendo (NTDOY) on the hardware side has been the real dog after being the hero for two years before.  And it has implications that run deep in the sector.  Nintendo was recently reported to have such low orders even after making formal price cuts to its Wii system that its parts and chip suppliers for the popular Wii gaming system now losing money. And to make matters worse, Wal-Mart Stores Inc.(NYSE: WMT) just came out with yet more price cuts and bundled-prices for the Wii and its game titles.  That is only one gaming system of the three major systems.

Amazon.com (NYSE: AMZN) also decided to make a steady push into the video game sector for both new and used games via trade-ins.  New games is one thing.  But used games, this goes directly head to head with GameStop (NYSE: GME).  GameStop took it on the chin when Wal-Mart made its price cuts for popular game titles, and that was not just for Wii.  There have also been price cuts announced by Sony (NYSE: SNE) for its PS3 system and Microsoft Corp. (NASDAQ: MSFT) for its Xbox 360.  Despite sales prices cuts there have not been any steady growth figures in systems sales when you look for prior comparisons.  In short, the system sales look to be dwindling over time.

The game titles are mixed out there.  Activision Blizzard (NASDAQ: ATVI) set a record and then some with the launch of “Call of Duty: Modern Warfare 2.” That launch was so large that it blew movie sales out of the water.  Activision Blizzard also has that huge World of Warcraft franchise that adds steady revenues in the MMORPG arena, and it also sells Guitar Hero and Band Hero.   Electronic Arts (NASDAQ: ERTS) did not do well with its last earnings report, not because its revenues beat estimates, but because the guidance failed to create excitement and because cost cutting via layoffs and development center closures does not exactly breed optimism that a turnaround is coming soon.

Most of the core video game players are at severe discounts to their recent highs if you go back beyond a 52-week period and into 2007.  GameStop is down almost by two-thirds.  Electronic Arts (NASDAQ: ERTS) is down over two-thirds, while Activision is now more steady and just within a long-term trading range as it is a matured and giant company after the Activision and Blizzard merger.  There is just one issue despite all this negativity and uncertainty.

It seems that the game systems will go for a next-generation platform upgrade with announcements starting in 2010.  But the industry expectation is that this will not be out until the Holiday Season for 2011… or even 2012.  If you can look out beyond the horizon of the coming days, then video game publisher valuations may start to look attractive.  Just don’t be looking for the quick buck on this sector.

There is a wild card and it is a big one.  Apple (NASDAQ: AAPL) is rumored to be wanting into the video game sector above and beyond its “App Store” games for iPhone.  It can’t cut out the game publishers in that arena, but how it prices systems and games and how it sells the games would be an open-ended question… as would be who wins and who loses.  There is also the notion that four major platforms might just be too many to go around.

Jon C. Ogg

The head of Toyota (NYSE:TM) recently said that a recall of four million cars with floor mat problems would not hurt company profits anywhere near as much as a surging yen and falling dollar. The head of Sony (NYSE:SNE) said that his company might have to do more “streamlining” due to the dollar’s falling value.

Large overseas companies, particularly those based in Japan, are beginning to signal that they will lose money in calendar 2010 when they had forecast profits.

The trouble that Sony and Toyota have is that their sales will only recover modestly as the economy in the West remains close to stagnant. These companies have already cut costs in anticipation of anemic revenue improvement. There is very little that they can do in the face of a weak dollar other than greatly increase their market share in their respective industries to move revenue up, or further cut costs to move back into the black.

Sony and Toyota are large enough so that picking up significant share against other large competitors in their industries is unlikely. That means that they will probably go through another round of significant layoffs along with other multinationals based in Japan. Most of these firms have big operations in the US so the firings will extend to their American subsidiaries.

Unemployment in the US has yet another cause–a weak dollar.

Douglas A. McIntyre

Reuters:   Goldman Sachs (NYSE:GS) may make bonus payments in stock.

Reuters:   China is worried about sticking to dollar deposits.

Reuters:   A well-known economist says housing will continue to fall.

Reuters:   Bank of America (NYSE:BAC) sold more than $19 billion in stock.

WSJ:   Raj Rajaratnam of Galleon was investigated ten years ago.

WSJ:   Chavez may nationalize banks in Venezuela.

WSJ:   TARP cash may be put toward jobs programs.

WSJ:   General Motors and SAIC will move their auto joint venture beyond China into India.

WSJ:   Write-downs hurt Toll Brothers (NYSE:TOL).

WSJ:   Cisco (NASDAQ:CSCO) missed the milestone to get 90% of the shares in Tandberg to vote for its buyout.

WSJ:   Take-Two (NASDAQ:TTWO) issued a week forecast and shares fell.

WSJ:   Activity in the services sector fell in November.

WSJ:   The Comcast (NASDAQ:CMCSA) deal to take control of NBCU from GE (NYSE:GE) faces regulatory approval.

WSJ:   GE (NYSE:GE) will invest in its industrial arm.

WSJ:   Boeing (NYSE:BA) is asking airlines to consider replacing parts on its 777.

WSJ:   Retailers are likely to have to cut prices further.

WSJ:   Sony (NYSE:SNE) may have to cut costs more to counteract the effects of a week dollar.

WSJ:   Microsoft (NASDAQ:MSFT) is upgrading Bing maps to better compete with Google (NASDAQ:GOOG).

WSJ:   The head of the St. Louis Fed said a jobless recovery may be the norm for a long time.

WSJ:   China blamed Wall St. for derivatives losses at some of its state-owned companies.

WSJ:   Credit default swap prices on sovereign debt are rising.

NYT:   The issues of making money on web TV are at the core of the NBCU deal

NYT:   Citigroup (NYSE:C) is at several disadvantages because it has not repaid TARP funds.

NYT:   GM may give up some ownership in its China operations to cover losses in South Korea.

NYT:  Sony (NYSE:SNE) will create internet services to move premium content to its game and consumer electronics platforms.

NYT:   The AMR (NYSE:AMR) bid for aid to JAL may go as high at $1.8 billion.

FT:   S&P downgraded banks in the UAE.

Bloomberg:   Citigroup may need Treasury to sell its stake in the bank before its can repay TARP funds.

Douglas A. McIntyre

Markets in Asia were mixed.

The Nikkei was up .4% to 10,023. Honda (NYSE:HMC) and Sony (NYSE:SNE) rose but Toyota (NYSE:TM) dropped.

The Hang Seng fell .3% to 22,495. Sinopec (NYSE:SNP) fell.

The Shanghai Composite rose 1.6% to 3,317.

At the open in Europe, The FTSE fell .4% to 5,294. The Dax dropped .5% to 5,740. Deutsche Bank (NYSE:DB) dropped. The CAC 40 was off .5% to 3,781.

Data from Reuters and MarketWatch.

Douglas A. McIntyre

Nintendo (NTDOY) had a major winner on its hands with the Wii gaming system.  Yet no fad lasts forever.  It has been known for some time that the Wii gaming system was falling victim to the same trends of slowing video game console sales hurting the Microsoft Corp. (NASDAQ: MSFT) Xbox 360 and Sony (NYSE: SNE) PlayStation 3.  But now things are really slowing down here for the console maker, even to the point that it seems that Nintendo’s parts suppliers are feeling the crunch.  This spells more caution for the sector.

A report from Nikkei in Japan shows that shares in Japan of parts suppliers are taking it on the chin.  Mitsumi Electric and Hosiden Corp. have taken a hit, and the fallout has even hit semiconductor supplier NEC Electronics.  MegaChips Corp. is another likely victim according to the Nikkei report.

For some further data, we noted at the end of October how Nintendo announced that from April to September it only sold 5.75 million units of the Wii, down from 10 million in the same period the year before.  And the figure for the year down to 20 million.

There is just one problem with all of this…. Nintendo followed Sony’s PS3 and Microsoft’s Xbox 360 price cuts for the gaming console.  This spells trouble for GameStop Corp. (NYSE: GME) and other pure-play gaming retailers.  Lower new units and lower priced and discounted video game titles galore.  That creates margin pressure even if unit sales hold up.

The recession and rise in unemployment was supposed to keep video games and other stay-at-home trade stocks somewhat insulated.  When prices are lower and unit sales are lower, that does very little for anyone.

There is a cure, and you’ll probably start hearing about it by mid-2010… A whole new slate of video game consoles from the manufacturers for 2011.

JON C. OGG

The Japanese government is getting nervous, by most accounts of the financial media. The yen as hit a level where Japan’s big exporters may post large earnings losses this year in the place of modest profits. According to Bloomberg, Japan’s financial minister pushed for an international response to the rising yen.

The most likely near-term victims of the yen’s current “value” are huge exporters like Toyota (NYSE:TM) and Sony (NYSE:SNE).

The companies already suffer from lackluster sales due to weak demand for their products in the large US and EU markets. Unless the economic recovery is unexpectedly robust, their sales are not likely to rise much in 2010. The status of the yen will exacerbate that.

The recovery in the Japanese auto and consumer electronics industry may be over before it really ever got started.

Douglas A. McIntyre

Reuters:   Japan raised the idea that the G7 make a statement about the dollar.

Reuters:   Shoppers move into Black Friday with small budgets.

Reuters:   Dubai’s debt crisis raised the prospect of more trouble in the financial markets.

Reuters:   ING will make a $11 billion rights offering at a large discount.

Reuters:   One of the German states called Opel job cut plans “unacceptable”.

Reuters:   Tighter capital controls are emerging in Asia.

WSJ:   Large Wall St. firms are beginning to fund M&A deals again.

WSJ:   Sony (NYSE:SNE) is betting on 3D TV sales.

WSJ:   The Apple (NASDAQ:AAPL) iPhone will be sold in Korea.

WSJ:   Data show that the sharp recession may not, in the current case, be followed by a sharp recovery.

WSJ:   Big retailers like Target (NYSE:TGT), Best Buy (NYSE:BBY) and JC Penney (NYSE:JCP) have put sales online early to simulate traffic.

WSJ:   Video game sales are running out of momentum as holiday begin.

WSJ:   China is facing a protectionist backlash next year according to one organization.

FT:   Black Friday retail marketing is turning to social networks.

Bloomberg:   RBS (NYSE:RBS) has large exposure to Dubai debt.

Bloomberg:   Shipping prices could drop another year.

Douglas A. McIntyre

Markets in Asia were higher.

The Nikkei rose .4% to 9,442. Mitsubishi UFJ (NYSE:MTU) was down. Sony (NYSE:SNE), Toyota (NYSE:TM), and Honda (NYSE:HMC) rose.

The Hang Seng was up .7% to 22,590.

The Shanghai Composite was up 2.1% to 3,291.

At the open in Europe, the FTSE was up .8% to 5,366. The Dax rose .9% to 5,824. The CAC 40 was up .9%.

Data from Reuters and MarketWatch.

Douglas A. McIntyre

Reuters:   The Senate is near its first vote on healthcare.

Reuters:   Dell (NASDAQ:DELL) is betting on corporate spending for its recovery.

Reuters:   Time Warner’s (NYSE:TWX) AOL showed that the worst is not over for media job cuts.

Reuters:   China cyber-spying against the US will probably grow.

Reuters:   Oprah will end her talk show in September 2011.

WSJ:   Large shareholders are asking Goldman Sachs (NYSE:GS) to cut bonuses.

Reuters:   GE (NYSE:GE) and Vivendi are $1 billion apart on the value of NBCU.

Reuters:   Ferrero may want the Cadbury gum and candy unit.

Reuters:   The bank bill is delayed in the House and the Senate is divided over the legislation.

Reuters:   The Fed sees little risk in inflation in a weak economy.

Reuters:   Chrysler may close another 100 dealerships.

Reuters:   PricewaterhouseCoopers says corporate accounting fraud is rising around the world.

WSJ:   Gap’s (NYSE:GPS) profits rose 25%.

WSJ:   Microsoft (NASDAQ:MSFT) says Windows 7 is selling well.

WSJ:   VW’s board approved its merger with Porsche.

WSJ:   The chairman of GM is pushing for higher quality cars.

WSJ:   Google (NASDAQ:GOOG) announced plans for its Chrome operating system.

WSJ:   The Administration’s estimate of stimulus job gains is being attacked.

WSJ:   GE (NYSE:GE) is focusing on industrial and infrastructure businesses.

WSJ:   Retailers are cutting prices on the Palm (NASDAQ:PALM) Pixi.

WSJ:   China Mobile (NASDAQ:CHL) is counting on 3G for growth.

WSJ:   Sony (NASDAQ:SNE) will focus more on moving its businesses online.

WSJ:   More homeowners are falling behind in mortgage payments.

WSJ:   Private equity firm Carlyle will put money into three Chinese high growth firms.

WSJ:   The EU is speeding up an antitrust investigation into the McGraw-Hill (NYSE:MHP) S&P group.

WSJ:   Harbinger cut its stock holdings in The New York Times (NYSE:NYT).

WSJ:   A joint venture between BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RTP) makes a merger more likely.

WSJ:   Dell (NASDAQ:DELL) is falling behind rivals in sales.

WSJ:   Sears (NASDAQ:SHLD) cut its losses with cost controls.

NYT:   An FHA effort to prop up mortgages is putting taxpayers at risk.

NYT:   Private equity firms are trying to raise money in China.

NYT:   Geithner hope to end the TARP program.

NYT:   The Treasury will auction off some of the warrants it received as part of the bank bailout

NYT:   The OECD was cautious on its forecast for the global economy.

NYT:   France may issue $52 billion in bonds.

NYT:   JPMorgan (NYSE:JPM) will buy the part of its British banking partner that it does not own.

FT:   US short-term interest rates are turning negative as banks move toward safer investments.

FT:   Many retailers are pushing smartphone products for the holidays.

FT:   The difference in the value that GE and Vivendi put on NBCU could kill a merger with Comcast (NASDAQ:CMCSA).

Bloomberg:   Morgan Stanley (NYSE:MS) says China stocks could rise 30% on liquidity and valuations.

You can join our open email distribution list to hear more news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, key analyst calls, and more.

Douglas A. McIntyre

Markets in Asia fell.

The Nikkei was down .5% to 9,498. Sony NYSE:SNE) fell after its investor meeting. Mitsubishi UFJ (NYSE:MTU) gained back some losses.

The Hang Seng fell .7% to 22,451.

The Shanghai Composite was down .4% to 3,308.

At the open in Europe, the FTSE was up .3% to 5,281. The Dax rose .5% to 5,727. The CAC 40 rose .4% to 3,775.

Data from Reuters and MarketWatch.

Douglas A. McIntyre

Reuters:   Senate Democrats unveiled their healthcare plan.

Reuters:   Hedge fund manage Griffin has rebounded from losses.

Reuters:   GM must pay its debt and become profitable before an IPO.

Reuters:   Kraft (NYSE:KFT) is still considered the front-runner to buy Cadbury.

Reuters:   GE (NYSE:GE) expects slow growth in its huge technology infrastructure group in 2010.

Reuters:   A member of the Fed said the agency should not tackle energy price issues.

Reuters:   The World Gold Council said gold demand fell 34% in Q3.

Reuters:   Private bankers are expected to help the wealthiest Chinese invest $7.6 trillion by 2013.

WSJ:   Blackstone (NYSE:BX) will buy Birds Eye.

WSJ:   Merit increases should make a comeback in 2010.

WSJ:   Bond yields are turning against life insurance companies.

WSJ:   Sony (NYSE:SNE) expects to be back to normal profit levels in 2012.

WSJ:   Conde Nast is preparing content for a new e-reader.

WSJ:   Dell (NASDAQ:DELL) is still playing catch-up with HP (NYSE:HPQ).

WSJ:   A fight is emerging over a new jobs bill.

WSJ:   California still faces a $21 billion budget gap over the next year-and-a-half.

WSJ:   California is legislating for more energy-efficient TVs.

WSJ:   American Express (NYSE:AXP) bought an online payment firm for $300 million.

WSJ:   Ambac (NYSE:ABK) announced a capital surplus increase.

WSJ:   The government will find it hard to bail out the commercial real estate business.

WSJ:   The House Financial Services Committee passed a measure to allow banks to issue government-back debt during tough financial periods.

WSJ:   Delta (NYSE:DAL) said it would put over $1 billion into Japan Air.

WSJ:   AMD (NYSE:AMD) will cut its debt with cash from a settlement with Intel (NASDAQ:INTC).

NYT:   Luxury stores are raising the prices of many items.

NYT:   Banks engaged in risky behavior before the credit crisis even though regulators were aware of their actions.

NYT:   The rising price of drugs is causing House leaders to call for a review.

NYT:   Wells Fargo (NYSE:WFC) will buy $1.4 billion in auction rate securities.

NYT:   The European ombudsman said that the EC made some mistakes in its Intel (NASDAQ:INTC) antitrust probe.

NYT:   Nearly one million people will see jobless benefits end in January if Congress does not act.

FT:   Obama said the US debt could cause double dip recession.

FT:   There are renewed fears of a China property bubble.

FT:   Vivendi may seek more cash from GE (NYSE:GE) for its piece of NBCU.

You can join our open email distribution list to hear more news on key analyst calls, top day trader alerts, mergers and acquisitions, Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

Douglas A. McIntyre

Markets in Asis were mixed.

The Nikkei fell 1.3% to 9,549. Mitsubishi UFJ (NYSE:MTU) fell. Honda (NYSE:HMC) and Toyota (NYSE:TM) fell. Sony (NYSE:SNE) was also off.

The Hang Seng dropped 1% to 22,643. China Mobile (NYSE:CHL) ticked up.

The Shanghai Composite rose .5% to 3,321.

At the open in Europe, the FTSE dropped .2%. The Dax was off .2% to 5,777. The CAC 40 dipped .2% to 3,320.

Data from Reuters and MarketWatch.

Douglas A. McIntyre

The management at Sony (NYSE:SNE) looks more and more like “The Gang That Couldn’t Shot Straight.” Its TV screen business is losing money. Most months, sales of the PS3 fall behind those of the Microsoft (NYSE:MSFT) Xbox 360 and Nintendo Wii.

Sony appears to have a promising new product in its Daily Edition Reader, the company’s e-reader offering. The device puts it into competition with market leader Amazon (NASDAQ:AMZN) and its popular Kindle, but Sony still have the consumer electronics brand power to give it a reasonable change to be a force in the e-book industry.

It would be nice if Sony could get its product out for the holidays.

The Wall Street Journal suggested that readers who look at the Sony e-reader section of SonyStyle.com will find that the product can be preordered but will not ship until some time between December 18 and January 8 and even then “actual delivery date cannot be guaranteed.”

Sony has a history of disappointing investors which may be caused by its history of disappointing customers. The battle for e-reader market share will not be entirely won or lost this holiday, but the efforts by Amazon and Barnes & Noble (NYSE:BKS) to gain customers during the high point of the annual retail season  are already considerable. The Kindle is being promoted on the home page of Amazon.com and the Barnes & Noble “Nook” is the featured product at the barnesandnoble.com site.

Research firm Forrester recently raised its forecast of holiday e-reader sales to three million from two million. Sony is risking what could be as many as a few hundred thousand sales by not being able to guarantee shipment of its product before Christmas.

This holiday might have offered Sony a chance to improve its reputation which is now one of being a consumer electronics “also ran”. Instead, it will only add to its own history of disappointing customers.

Get more on Sony and Amazon at the 24/7 Wall St. 500

Douglas A. Mcintyre

For more 24/7 Wall St. TV visit us here.

Executive Producer: Philip MacDonald

Reuters:   Thain regrets nothing he did at Merrill Lynch and during its merger with Bank of America (NYSE:BAC).

Reuters:   Trump put his support to the bondholders of his casino business.

FT:   A Chinese court ruled against Microsoft (NASDAQ:MSFT) in an intellectual property case.

Reuters:   Almost 15,000 Americans admitted to offshore tax cheating.

Reuters:   Hershey (NYSE:HSY) and Ferrero are in talks about buying Cadbury.

Reuters:   House Democrats are advancing their “too big to fail” legislation.

Reuters:   Fed officials differ on the recovery’s pace.

Reuters:   Citigroup (NYSE:C) upped the base salaries of some executives.

Reuters:   RIM (NASDAQ:RIMM), maker of the Blackberry, will stick to its current strategy.

Reuters:   The CEO of Goldman Sachs (NYSE:GS) apologized for the firm’s role in the credit crisis.

Reuters:   US consumers expect deep holiday discounts.

Reuters:   Microsoft announced it new cloud computing plans.

WSJ:   Freddie Mac (NYSE:FRE) and Fannie Mae (NYSE:FNM) are being hurt by commercial loan defaults affecting transactions for apartment buildings.

WSJ:   Goldman Sachs and Buffett have put together a program to help small businesses.

WSJ:   Federal regulators are putting together plans to get cheap broadband to all Americans.

WSJ:   The head of the IMF said a stronger yuan would help global economics.

WSJ:   Delta (NYSE:DAL) and its alliance of airlines will offer JAL over $1 billion in funding.

WSJ:   Mitsubishi UFJ (NYSE:MTU) will $11 billion in stock.

WSJ:   Vivendi and GE (NYSE:GE) are setting terms for the buyout of the European company’s piece of NBCU.

WSJ:   GM’s plan of Opel is still not set.

WSJ:   Applied Materials (NASDAQ:AMAT) will buy Semitool.

WSJ:   The FBI thinks terrorist are planning cyber attacks.

WSJ:   There are still too many houses in the US to support a market recovery.

WSJ:   A government report says Goldman Sachs would have suffered massive losses if AIG (NYSE:AIG) had not honored financial commitments backed by the government.

WSJ:   Pimco will set up a business to help assess bond risk.

WSJ:   New ETFs offer investors the chance to put money into the market like hedge funds do.

WSJ:   S.C. Johnson may bid against P&G (NYSE:PG) for Sara Lee’s (NYSE:SLE) air freshener business.

WSJ:   CEOs say access to credit is key to job growth.

WSJ:   US power companies are teaming with Chinese operations to get access to new technology.

WSJ:   Barnes & Noble (NYSE:BKS) put a poison pill into effect.

NYT:   The NY State comptroller said Wall St. is on track for record profits.

NYT:   Congress is pushing medical schools on the ghost writing of research.

NYT:   A-Power Energy of China and the U.S. Renewable Energy Group are changing a wind farm deal because of political pressure.

FT:   Apollo is preparing an NYSE listing.

FT:   Sony (NYSE:SNE) is reworking its $5 billion ad budget.

FT:   Banks face ratings downgrades on their bonds.

FT:   A US task force will be set up to fight fraud.

Bloomberg:  Private equity funding is dropping sharply.

Bloomberg:   There are new warnings that China faces asset bubbles.

Douglas A. McIntyre

Markets in Asia were mixed.

The Nikkei fell .6% to 9,730. Sony (NYSE:SNE) dropped.

The Hang Seng was down .1% to 22,914.

The Shanghai Composite rose .2% to 3,283.

At the open in Europe, the FTSE fell .5% to 5,357. The Dax dropped .3% to 5,789. The CAC 40 fell .4% to 3,648.

Data from Reuters and MarketWatch.

Douglas A. McIntyre

Sony (NYSE:SNE) expects its holiday sales to be poor. That is terrible news for the consumer electronics and PC industries. Sony is a nearly perfect proxy for those sectors. It sells PCs, video games, TV screens, and digital cameras. Many of Sony’s competitors will have to gird for another harsh holiday selling season, unless the forecast from the big Japanese firm is based on a large drop in market share across most of its businesses.

Sir Howard Stringer, Sony’s CEO, was quoted by Reuters as saying “There hasn’t been that turning point that many had hoped for. We are waiting for a signal that hasn’t arrived.”

If Stringer is a canary in the coal mine of holiday electronics sales, it means that companies from Best Buy (NYSE:BBY) to Microsoft (NYSE:MSFT) and Nintendo to Dell (NASDAQ:DELL) may post worse-than-expected fourth quarter revenue. Analysts are guessing that American holiday retail sales will be flat to slightly down this year. High unemployment and tight credit could make those figures stunningly optimistic. Christmas numbers for 2009 could be as bad has they have been in decades.

Sony has done worse than many of its competitors over the last two years. It is still large enough and its product line is large enough that its predictions are a warning to a sector of the business world that has not begun to recover and may lag well behind much of the general economy.

Douglas A. McIntyre

September sales for video game consoles were relatively good given the economy. Price cuts on the Nintendo Wii, Sony (NYSE:SNE) PS3, and Microsoft (NASDAQ:MSFT) Xbox stimulated activity. It appears that the initial surge in sales that those discounts caused is already over.

Video game sales, including consoles and games, fell 18% in October.

Console sales fell 23%. The Nintendo Wii was able to prevail against the trend. Will sales were up to 506,900 compared to 462,800 in the September. Sales of PS3 dropped to 320,600 from 491,800. Xbox 360 sales fell to 249,700 from 352,600.

Some games including “Borderlands”, “NBA 2K10.” and “FIFA Soccer 10″ sold well.

If anything resurrects sales in November it will be “Call to Duty: Modern Warfare 2″ which brought in $310 million in sales in its first day on the market.

Douglas A. McIntyre

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The Holy Grail of consumer electronics is still a smashing success in the video game industry. Tens and tens of millions of Sony (NYSE:SNE) PS2s and PS3s were sold over the last decade. Microsoft (NASDAQ:MSFT) has turned its game console business into a real success. Nintendo has become the darling of the Japanese consumer electronics market because of huge sales of its portable DS and Wii consoles.

Apple (NASDAQ:AAPL) has done remarkably well in the computer, handset, and multimedia player sectors of electronics, but its has little or no place in the gaming industry.

Steve Jobs means to upgrade his status in the video game field. According to The Wall Street Journal, “Apple has made clear that it intends to go after Nintendo’s turf.” Among the Big Three members of the game industry, Nintendo is by far the most successful. The company is expected to sell 30 million of its DS units this year.

Analysts expect Apple to be succesful as it moves rapidly into video games. Research firm DFC predicts that revenue from Apple game sales will rise  from $46 million in 2008 to more than $2.8 billion in 2014. The forecast for 2014 seems improbably high. And, forecasts of consumer electronics activity five years from now are bound to be little more than guesses.

Apple does have some significant advantages as it moves into games inclusing its brand. The Apple name certainly helped adoption of the iPhone. A company that did not have the Mac and iPod as established products would have had a much harder time breaking into the handset field.

Apple also has the edge in its success with product design. It would be nearly impossible to name a company that has come to market with more electronics product that have become instantly popular in part because they were so well suited to consumer tastes.

Apple’s last and not insignificant advantage is its growing relationship with cellular carriers around the world, something that Nintendo lacks. Multi-player games can work on wireless 3G networks giving them many of the capabilities of larger consoles hooked up to landline broadband. 3G systems also make the download of new games relatively easy.

Apple is moving into the video game industry and it is likely that the companies already in the sector will have the same trouble handset firms had with the introduction of the iPhone

Douglas A. McIntyre

Reuters:   Markets hit their 2009 highs.

Reuters:   Dodd is set to unveil his financial reform bill which calls for merging many bank regulators.

Reuters:   Kraft’s (NYSE:KFT) bid for Cadbury turned hostile.

Reuters:   A survey of economists predicted strong GDP growth in 2010.

Reuters:   The Fed says that 9 out of 10 of the largest banks that needed to raise capital have done so.

Reuters:   The EC objected to the Oracle (NASDAQ:ORCL) deal to buy Sun (NASDAQ:JAVA).

Reuters:   Energy construction companies reported diverging results with Flour (NYSE:FLR) doing poorly and McDermott (NYSE:MDR) doing well.

Reuters:   The Activition (NADAQ:ATVI) “Call to Duty” video game is expected to have a huge debut.

Reuters:   Pfizer (NYSE:PFE) will close an R&D facility and lay off more people.

WSJ:   Investors are putting more money into commodities and junk bonds.

WSJ:   Barclays (NYSE:BCS) was hit with an impairment charge.

WSJ:   Congress is considering a bill to limit the size and scope of some of the largest banks.

WSJ:   Buffett will sell his stake in Union Pacific (NYSE:UNP) and Norfolk Southern (NYSE:NCS) now that he is buying Burlington Northern (NYSE:BNI).

WSJ:   Google (NASDAQ:GOOG) will buy mobile ad company AdMob.

WSJ:   New data show that few banks are tightening credit.

WSJ:   Sprint (NYSE:S) will cut 2,500 jobs.

WSJ:   Google (NYSE:GOOG) and Verizon (NYSE:VZ) are deepening their ties to fight Apple (NASDAQ:AAPL) and AT&T (NYSE:T).

WSJ:   EA (NASDAQ:EA) will cut 17% of its staff and buy online game company Playfish.

WSJ:   Big pay bonuses at banks could help the New York economy.

WSJ:   China’s economy could be hurt by a credit crisis.

WSJ:   A World Bank chief is against letting the yuan rise.

WSJ:   Sony (NYSE:SNE) will break ranks with studios by allowing early rental of one of its films over the internet.

WSJ:   Rising demand in China and Brazil is helping BMW and Mercedes.

NYT   Even good customers are seeing credit card interest rates rise as banks try to make money on consumers.

NYT:   Fuel from dismantled nuclear bombs including some from Russia provide about 10% of American electricity.

NYT:   Renault-Nissan plan to release a low-cost car in India.

NYT:   Obama said he will raise the yaun issue with China.

FT:  Banks around the world are facing $7 trillion in short-term funding that will expire in the next three years.

FT:   Murdoch of News Corp (NYSE:NWS) says he will sue the BBC and Google (NASDAQ:GOOG) over copyright.

Douglas A. McIntyre

Activision Blizzard (NASDAQ:ATVI) is about to release its “Call of Duty: Modern Warfare II: video game. Sales are expected to be half a billion dollars in the first week. That would make it the biggest entertainment product release of all time, topping even the most successful blockbuster movies.

According to the LA Times, “Activision is working with retailers to plan more than 10,000 midnight openings in the United States, including most of the 4,300 GameStop stores around the country.”

The video game industry needs a big catalyst for the holiday season. Sales of Microsoft (NASDAQ:MSFT) Xbox 360, Sony’s (NYSE:SNE) PS3, and Nintendo’s Wii have been severely weakened because of the recession. The three game console makers recently cut prices, but that may not be enough to sharply improve sales during a period when shoppers are expected to be especially frugal. An unusally popular game might be a game changer for the console business.

The video game industry used to be one of the leading sectors of the consumer electronics business. Retailers like Best Buy (NYSE:BBY) counted on console sales as a significant contributor to their revenue. That has been less true as sales of video games have fallen and sales of smartphones and flat screen TVs have picked up. “Call of Duty” will probably reverse that trend.

Douglas A. McIntyre

Markets in Asia rose.

The Nikkei was up .7% to 9,790. Mitsubishi UFJ (NYSE:MTU) was down. Honda (NYSE:HMC) and Sony (NYSE:SNE) both gained.

The Hang Seng rose 1.6% to 21,830.

The Shanghai Composite was up .3% to 3,164.

Data from Reuters and MarketWatch.

Douglas A. McIntyre

Markets in Asia were mixed.

The Nikkei fell 1.3% to 9,747. Sony (NYSE:SNE) fell.

The Hang Seng was down .6% to 21,479.

The Shanghai Composite rose .7% to 3,156.

At the open in Europe, the FTSE was down .9% to 5,059. The Dax dropped 1.2% to 5,381. Deutsche Telekom (NYSE:DT) rose. The CAC 40 was off 1.1% to 3,631. BNP Paribas (NYSE:BNP) was up.

Data from Reuters and MarketWatch.

Douglas A. McIntyre