Mattson (MTSN) sheds some guidance

Mattson, a semicap supplying too many memory customers, cut guidance last night to 35mm from prior 40-42mm. Street was at 45mm. They cited ongoing cutbacks from memory manufacturers.

The second leg of the cutbacks is NAND. Memory remains a historically unsustainable percentage of semicap orders. NAND is starting to look like a horror show heading into the back half of the year with deteriorating contract and spot pricing, capacity ramps ongoing and retail pricing somewhere between bad and terrible.

Expect LRCX to remove the recovery in Q4 from their forecast when they report. You can kind of throw a dart to find a semicap with too much memory exposure but the heaviest are FORM, VSEA, MTSN, LRCX.

Blackberry subsidies should get here soon

According to this article, T-Mobile will be offering the clamshell "Kickstart" Blackberry for $49. The article refers to this as an unheralded smartphone price point. I'm not sure that's entirely accurate as this phone is a cross between a souped up RAZR and a Blackberry with its legs cut off. I'm not that enthusiastic about it.

What will make me enthusiastic is to see "free" Blackberries from non AT&T carriers. I think it's inevitable. The other carriers have to do something to keep their smartphone user additions from collapsing to the mighty iPhone.

Microsoft (MSFT) is the greatest chess player of all time

I never really knew this about them but wow, can they play those pawns.

The company is now saying they'd talk to a board ex-Yang and co. This will help Icahn's slate greatly in the upcoming board elections.

People will start to assume that Microsoft buying the company is a done deal. And Microsoft will likely get a board that will serve their needs and need their serves -- a motley crew of henchmen that have only one business plan -- sell to Microsoft.

This will be great for Microsoft in that they'll get to pick and choose which parts of Yahoo they want. The board will be stuck and subject to Microsoft's whims. The new board also will not likely be able to value the business properly.

This might be good for Yahoo stock but it's terrible for the company. They don't seem to see the checkmate looming in the next few moves.

Google (GOOG): Buy your own damn M&Ms

An interesting article on Google and their much revered daycare program. They jacked prices 75% on employees. Really smart parents openly wept when the price increases were announced. Seems like Google's losing some of that youthful exuberance and devil may care attitude.

I wanted to talk about this quote:

At a T.G.I.F. in June, the Google co-founder Sergey Brin said he had no sympathy for the parents, and that he was tired of “Googlers” who felt entitled to perks like “bottled water and M&Ms,” according to several people in the meeting. (A Google spokesman denies that Mr. Brin made that comment.)

I've heard rumors Google is clamping down on spending. I think that comment from Brin, heard by "several people" and denied by a spokesman, suggests nervousness. If it wasn't getting harder to hit targets, he wouldn't be thinking about nickel and dime things like that. When a company is doing well and perks like that make people happy, you leave it alone.

Maybe Brin's kind of a jerk. Maybe he's on a no m&m diet and it's made him a bitter man. Maybe he pragmatically realizes that Google is a pretty good place to work regardless of whether you have to bring your own bottle of water. It could be a lot of things. Currency was a big factor in Google's last upside surprise -- the core business started to flatten out somewhat. Some kind of stress is showing.

SOX chart

The next level?

Nvidia (NVDA) chart

Bought a little at 12.80

Nvidia (NVDA) probably won't stay down here

The stock is takeover bait under $14. Expect to hear the recurring rumor that Intel is planning to acquire them. And Intel should be considering it down here... though I wonder if it would pass regulatory muster. Nvidia remains the market share leader in notebook graphics chips. It is likely that AMD will wrestle with liquidity problems over the next year -- this may put further pressure on pricing for the next several quarters. Intel will also be stepping up their low end graphics chips offerings, assuming they get them working correctly.

The chart is a mess. I don't see anything down here at all. And the story sounds horrible. Yet I think the franchise is undervalued at this level. We'll see.

Nvidia (NVDA) lowers guidance

So there was an inventory issue in graphics cards and I suggested shorting Nvidia into Goldman's upgrade.

The company just preannounced significantly lower sales than forecast -- consensus is close to 1.1 billion and they're saying 875-950 mil. They cite the delay of Intel's Montevina, a lousy worldwide economy and lower pricing assumptions to fend off competitive threats. I do think the worldwide economy is a great excuse but I think Nvidia was stuck on a growth trajectory it couldn't maintain. They were overproducing and it bit them in the ass.

They're also taking a massive $200 million dollar charge against products failing at unusual rates in the field due to what appear to be heat issues from the description of the problem.

A real STEC in the mud

What a pig.

I don't even know why its going down anymore.

An interesting opinion article from the chief strategy officer of EMC's Symmetrix division. He says Zeus drives rock.

STEC also took out a credit line with Wachovia. They're buying a mcmansion. I jest!

STEC intends to use the proceeds from the credit facility to fund its working capital requirements, including the increasing inventory and accounts receivables of its growing SSD business. The Company believes the new credit facility together with its existing cash-on-hand, which was approximately $74 million at the end of the first quarter of 2008, will provide adequate liquidity to support expected accelerated growth in future quarters.

Expected accelerated growth sounds good, no?

I would think lower NAND prices would be good for them -- it will drive adoption of SSD drives.

I also think I'm a goddamn moron paying $13. Ahh, hindsight. I love it when I can be right when I'm wrong.

Still long but not so strong.

How many bailouts does it take to screw in a lightbulb?

Banks. Airlines. Autos. Brokers. All of these industries are grappling with structural issues that are unlikely to improve over the near-term and all are likely heading toward catastrophic failure if something doesn't change soon.

The government in the past has had to bail out the first three industries. Besides being vital symbols of America, the country probably won't run particularly well without airlines and banks. Autos, well... I'm not sure the country runs better with the american auto industry but it does employ an awful lot of people.

That bailout money is going to have to come from somewhere. Iraq would be the most logical choice -- at a cost of $500 billion and counting, our efforts to de-stabilize and then re-stabilize the region on a war of false-pretense seem morally unsound. But yet, the region seems to be destabilizing around us. The higher oil goes, the more brazen Iran becomes. Though we probably don't belong there in the first place, I'm not sure we can leave right now.

It's tough to paint a really positive picture for the economy, particularly for the dollar. I don't know what turns this situation. Lower oil prices would help but that's a bandaid. The wound to the financial system is much deeper than that. We need a massive reduction of risk and leverage. And that's just going to take time and pain. There's no quick fix for it.

I wouldn't want to be President next year. Talk about your disasters. Me. President. Oh, man. Look on the bright side... I guess it could be worse.