6/04/2009

Thursday - June 4, 2009



Intel (INTC) is going to buy Wind River Systems Inc. (WIND) for $884 millions in cash. WIND's software technology is used by NASA, Apple (AAPL), and Hewlett-Packard (HPQ), etc. This deal is expected to close in the summer. This will diversify INTC's business. WIND jumped 47% to $11.76.
Retail sales fell in the month of May. Same store sales at Costco (COST) fell 7%, Abercrombie and Fitch (ANF) fell 28%, Nordstrom (JWN)fell 13.1%. Consumers are not willing to spend much yet. Note that two thirds of the US economy is retail.
In a commentary "Buffett Is Less Bullish on U.S. Than You Think: Alice Schroeder" written by Alice Schroeder, it says:
There’s evidence, though, that Buffett is awake to America’s problems. He says there will be no quick rebound in consumer spending, the economy has “fallen off a cliff,” and we are now “fighting a war.” Berkshire Hathaway Inc.’s real- estate arm just estimated that the backlog of unsold houses is double the official figures. ...
Once you disentangle all these strands -- the cautious Buffett who tends his reputation, Buffett the long-term optimist, Buffett the realist about economics, Buffett the hawk on inflation, and Buffett the domestic investor -- it turns out that Buffett is bullish, but not as bullish as he sounds. His optimism is long-term in nature, and inflation is his hedge.
Consider yourself warned.
I considered myself warned.

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