Tapped-for-failure…
The weekend inevitably brought a moment of relief for some as markets had begun to look a little shaky, with profit-taking pressure following several good results days - heartening performances from the financials assisting there (even Citi able to post a (tiny) profit) and apart from a spate of suicides and other depressing developments for France Telecom in the corporate world, the spotlight was firmly “stolen” by a huge allegation of fraud at one of the world’s largest and once most respected hedge-funds – Galleon. In what must be a worrying development for hedge-fund managers the world-over, authorities made extensive use of wire-taps to bring serious charges of insider-trading against a raft of individuals with already talk of some rather “colourful” language having been caught on tape (or do they just use “digital” recorders now?) which will surely provide endless hours of fun for those late-night-talk-show-hosts in the US and endless hours of just plain sleepless-nights for the hedge-fund boys. Alongside the revelation that the world’s largest (and most expensive) science experiment - the Hadron Collider - is now colder than deepest outerspace having been frozen to an mind-bogglingly-cold-271C-below-zero, there may be a new place to send all these deviant miscreants of the financial world to alleviate concerns judicial powers are not keeping up with the times and thinking creatively – it sure is clear that the financial masterminds are always creatively thinking of new ways to profit for themselves. How much more original does it get than borrowing ideas straight out of the Gekko-script and only employing traders who “have access to info others don’t” – yeah, you never thought you’d get caught on that ingenious ruse Galleon did you?
We’ve had good markets today so far and the week is getting off to a bright start. Asia was up around 150bps across the major markets there, Europe has traded higher around 120bps and the US futures (with Apple reporting after the close) printing for a positive open at present, DJIA +43pts, S&P500 +6.2pts. The perennially weaker dollar (-1.6% on DXY last week) is sending oil higher (again), back at close to $78.5/brl as it ponders making a move towards the magic $80/brl level – this will surely bring huge smiles across the faces of the Middle Eastern exporters and help alleviate dismay that the much anticipated Grand Prix - being hosted in Abu Dhabi next week - has already had its Champion decided (last night in Brazil in fact, oops), leaving little to witness during the event, aside from gorgeous women, flashily rich older men, movie and music stars and a whole load of partying – uuummm, come to think of it, should be a great event and just like any other Grand Prix!
Gold is holding steady around its new home of $1,055/oz for a while, as some Diwali pressure has now surpassed and speculators consider the probability of a financial upset in the remaining 3mth of the trading year. Oh, and the quote of the day…what better way to increase business on your airline than to state that “people don’t like to fly, especially business people” – wow, an amazing marketing sense there at play by the CEO of British Airways – evidently not even his favourite airline, let alone the world’s - that doesn’t apparently like to fly.
Not-so-fluffy-clouds…
It’s all about clouds clouds and clouds if you read any of the increasingly frequent articles on the impending release of Microsoft’s latest operating system – imaginatively titled, wait for it, Windows 7. The uninspiring name aside, rumours surrounding this latest release have all been quite positive so far, and talk of a new battle forming under the guise of a monumental shift in how we interact with these operating systems is creating equally as great a stir in the rumour mill. Whole sections in normally technophobe publications over the weekend dedicated analysis to the “Big 3” and their attempts at setting their dominance in this new chapter of consumer tech.
Mighty-Microsoft, Apple-tisingly-cool and oh-so-ingenious-Google are all pitching up for what could be as significant a shift in the tech-world as the move away from IBM’s mainframes in the early 80s. Everyone knows that Bill Gates has (practically) single-handedly manipulated and controlled the interactive experience for 90% of the world’s computer users – could this incredible dominance be about to change as we now shit away from dominance of stand-alone hardware and dedicated (known as “shrink-wrapped” in industry speak) software, and evolve into on-demand downloadable services and programmes through a rather simple stand-alone network device?
The answer according to a great many industry observers is yes. And, er, also no. Yes. in that consumers will be using Windows 7 in new ways and continue to shift a great deal of their files and other essential software to the great ‘cloud” of servers that companies like Microsoft own and operate in great large warehouses. No that competitors like Google and Apple will win a large enough consumer base for developers to prefer their own “cloud” offering. Where Windows once dominated by sheer brute force of salesmanship and the much vaulted “networking effect” making it a self-fulfilling prophecy (where once a critical number of users had been reached the momentum of consistency would ensure the ultimate growth and success of a particular standard) the new battle is going to be based more on effective marketing and trust-building techniques.
One thing is for sure, and this is the reason for discussing this in the first place: the future for chip-makers, tech-hardware firms and any other tech-related industry is about to get a huge shot in the arm not witnessed since the boom of PCs in the mid-80s, and as many have noted in the past, it normally takes a fundamentally altering business model to generate a boom. Hoping the Hadron Collider doesn’t create another type of “boom” altogether as it powers-up to full capacity for the first time under Switzerland and Austria (we would miss those chocolates and watches, not sure what Austria offers though), the next step in Microsoft’s dominance may turn out to open more than just another Window for itself.
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