Market Talk

- The smart phone market is “a waltz of elephants,” making it hard for standalone players, like Palm, to succeed, Henry Blodget says. “In order to have a chance, Palm’s products had to be so obviously superior to all available alternatives that people would hear about them and seek them out,” he says. “Alas, they aren’t.”

- For AIG, a $9 billion quarterly loss looks almost graceful. “”Depending on your perspective, the results were either a significant improvement compared with the same period a year ago or quite irksome indeed, given the $100m in bonuses paid to 200 AIG staff,” FT’s Alphaville says.

- Twitter’s ad platform may come sooner than you expect, MediaMemo blogger Peter Kafka reports.

- Paul Krugman discusses core inflation.

- Jeremy Grantham’s early calls prove to be right, but also costly.’

- Lawmakers question the GMAC rescue. Gee, I wonder why. Three bailouts later, GMAC’s still the only bank where the government now owns a majority stake.

- Former BofA CEO Ken Lewis left with about $83 million in pension and insurance benefits, stock and other compensation, WSJ reports, citing a securities filing.

- “Rather than demonize the CDS market and blame it for Greece’s current woes, let’s place the blame firmly where it belongs — with Greece itself, and its profligate ways.” Reuters blogger Felix Salmon says.

- Madoff whistleblower book: Harry Markopolos claims he uncovered State Street fraud, had thoughts about killing Madoff

- This may be the best show on television.

Lawmakers slammed Bank of America (BAC) chief Ken Lewis yesterday on Capitol Hill, yet BofA shares enjoyed their biggest rally in nearly a month, and have continued the upward swing today.

Congress was looking back at Lewis’ decision to buy Merrill Lynch, but LA Times’ Money & Co. blogger Tom Petruno notes the stock market is more interested in the future than the past.

From Petruno:

New revelations about the bitter negotiations made for great theater at a House hearing. But the stock market isn’t much interested in the past. What matters now is how BofA comes through the recession and what it might be able to earn on the other side.

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US stocks rise, after jobless claims and retails sales reports give the bulls a little fuel, and an auction of 30-year bonds goes off well. But there’s a big fade late from the session highs, the kind of move that’s been evident in recent sessions, albeit in the other direction.

DJIA rises 32 to 8771, after rising as much as 139. S&P 500 gains 6 to 944.88, inching ahead to a fresh 2009 high; the previous high was 944.74 set June 2. Nasdaq Comp rises 9 to 1862. Big Board volume’s still low.

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Where are all the activist investors? Where’s the commotion surrounding the government taking large stakes in large corporations without taxpayers having any say in how the companies are run?

Former labor secretary Robert Reich notes shareholders and boards of directors are usually the ones responsible for keeping corporate executives in line. And when it comes to top politicians, voters are trusted to elect the best officials. But now that the public has committed billions to companies in the private sector, no one knows what’s going to happen next.

“We’re in a quandary,” Reich says.

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The back-and-forth squabble between BofA CEO Ken Lewis and former Merrill Lynch chief John Thain has reached new – and rather immature -levels.

It started last week when WSJ reported that Lewis, under oath, said he was forced into making the Merrill acquisition. Now, Thain has fired back at BofA, saying the bank lied about its role in the huge bonuses and losses at Merrill.

Lewis’ comments see to be “utter and shameless nonsense, an attempt to worm out of responsibility,” FusionIQ CEO Barry Ritholtz writes on his blog, noting Lewis is only making excuses for a terrible acquisition. “Its the sort of weasely responsibility evading CEO speak we have come to expect these days.”

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