- Cisco (CSCO) reportedly makes an offer to acquire Skype before it completes its IPO, Michael Arrington reports at TechCrunch. He cites one of his “more reliable sources,” but hasn’t been able to confirm rumor. “If true this would be one very big acquisition,” Arrington says, as Skype’s hoping for $5B valuation. “Presumably Cisco would have to bid in that range to make it interesting.” Additionally, he notes Google (GOOG) was considering a bid, but antitrust concerns nixed that plan.
- Intel’s (INTC) deal to buy Infineon’s wireless business for about $1.4B “gives Intel a strong foothold in the market for smartphone chips, netting it a customer list that includes the likes of Research In Motion (RIMM), Samsung, Nokia (NOK) and Apple (AAPL),” Digital Daily blogger John Paczkowski says. “The irony, of course, is that Intel was in something close to this position four years ago, but gave it up by selling off its mobile chip business to Marvell.”
- The answer to a true housing recovery is simple — lower prices, the Pragmatic Capitalism blog says. “It should be plain as day at this juncture that the government cannot fix the housing market with their incessant fidgeting,” blog notes. “The market needs to correct further before reaching a sustainable bottom.”
- Analyst community has turned more bearish than usual, Bloomberg reports. But “as we have noted so many times previously, following the Wall Street crowd of analysts is rarely the way to make money,” Barry Ritholtz writes at The Big Picture. “Ultimately, excess pessimism amongst the analyst crowd may be a bullish contrary signal,” he says. “It should make dedicated bears nervous.”
- Fed Chairman Bernanke has repeatedly overestimated the strength of the recovery, so what’s to say he wasn’t being overly optimistic in last week’s speech, Mark Thoma ponders. “The Fed should drop its relatively rosy forecast for the recovery and take more account of the downside risks.”
- Former labor secretary Robert Reich argues Fed can’t save economy by making money cheaper than it already is. “The sad reality is cheaper money won’t work,” he says on his blog, as individuals still face huge debt loads and small businesses aren’t borrowing because they’re afraid to expand in this uncertain environment. “That leaves large corporations,” Reich adds. “They’ll be happy to borrow more at even lower rates than now…But this big-business borrowing won’t create new jobs.”
- “The bottom line for housing is that the bottom will be long — perhaps very long — and bumpy,” John Curran writes at Time’s Curious Capitalist blog. “What’s more, we haven’t yet seen the legions of Baby Boomers who are planning to unload their McMansions in favor of some cute bungalow by the beach. They, of course, are just waiting for the market to improve.”
- Obama administration says it’s too early to say whether homebuyer tax credit will be revived, but Calculated Risk blogger Bill McBride says that’s a discussion that shouldn’t even be taking place. “The problem in housing is there is too much supply,” he says. “Incentivizing people to buy existing homes just shuffles households around — it does NOT reduce the overall supply unless the buyer is moving out of their parent’s basement.”
- Minyanville’s Todd Harrison still sees S&P 500 headed back down to 860 at some point, but it won’t happen in a straight line. “I still believe we have years to go to flush the system and set a stable foundation for future growth,” he says. “I’m just open-minded that a rally (such as we saw Friday) could litter the landscape with false hope and empty promises before the cumulative comeuppance comes home to roost.”
- WSJ’s Ben Levisohn reports on the diminishing value of the P/E ratio.
