I was in Los Angeles for a few days last week, as chance had it, marveling at the odd disposition of things there.  I’ve been there many times over the years, but you forget how overwhelmingly weird it is. Altogether the LA metro area has the ambience of a garage the size of Rhode Island where someone happened to leave the engine running.  To say that LA is all about cars is kind of like saying the Pacific Ocean is all about water.  But one forgets the supernatural scale of the freeways, the tsunamis of vehicles, the cosmic despair of the traffic jams.  The vistas of present-day LA make the Blade Runner vision of things look quaint in comparison.

You motor out of the LAX airport – personally, I love the name “LAX” because it so beautifully describes the collective ethos of the place – and you discover quickly that the taxi cab’s windows are not that dirty, it’s the air itself colored brown like miso soup.  Going north on the 405 freeway, you see the looming Moloch of the downtown skyline through the brown miso soup. And you begin to understand why the products of the film industry are so fixated on the theme of machine apocalypse.  Downtown LA looks like just such a gigantic machine as the FX crews would dream up, as if a day will come when those gleaming mirrored office towers will pull themselves out of the ground from their roots and begin lumbering, crunch crunch crunch, north toward the Hollywood Hills seeking to exterminate the vile humanity responsible for making the place what it is.

I happened to be camping out briefly in West Hollywood, in a scene-ster hotel where tiny bubbles of show biz mega-success wafted around amidst a background odor of failure, and an impossibly thin line was drawn between being pampered and being asked to go die in the gutter, please.  The place is not without a certain decorum. I couldn’t help but imagine how lovely Hollywood must have been in, say, 1923, when 92 percent of all the hopeless crapola now on the ground there had not yet been built, when there were no freeways, and fewer cars than currently found in Lincoln, Nebraska, you could go out to the Pacific Ocean on a “Big Red” streetcar, and on a clear day you could see from La Cienga out to Mount Wilson, and the movie “industry” was like a college theater department. What a fabulous giggle it must have all been – apart from poor Fatty Arbuckle – in that romantic desert at the edge of the world.

The whole “Dream Factory” myth has become such an awful cliché, but what remains interesting now is how it utterly infected every other organ, byway, and lost corner of American life, to the degree that the life of this nation became little more than a “narrative,” a story-board, a montage of wishes superimposed over the harsher mandates of reality.  Hollywood now is a mere cartoon of what Wall Street and Washington have turned into.  We’re a civilization of fluff now, riding on a river of toxic sludge.

I found Hollywood utterly exhausting.  On morning walks down in the buzzard flats below Sunset Boulevard you almost never saw a human being outside the protective carapace of a car.  I think I was the only person who ever walked down Melrose Avenue this calendar year.  There were a lot of fresh store vacancies in the endless one-story strips, as if the retailers had just packed up and left Dodge under the cover of night.  There were obvious, if lame, attempts to pedestrianize the major surface boulevards with fancy crossing pavements, but traffic flowed on them at sixty off the rush hours, and you felt like a marmot in a buffalo stampede out there.  For solace, I listened to Bruce Molsky sing “I Ride an Old Paint” on the iPod.  The fiddle part is lovely.

The city of Los Angeles, indeed the whole state of California, seems exhausted too. Apocalypse is probably such a rich theme out there precisely because everything about that particular way of life seems to be nearing its end – whether it’s the fiscal fiasco or the water supply, or the aerospace economy, or the music industry, or the once-great university system, or the Happy Motoring fantasy of cruising for burgers in what Tom Waits called the dark, warm narcotic American night.  I went to the movies there one hot afternoon – Tarantino’s latest, Inglourius Basterds, a completely crazy but enjoyable revenge romp against Hitler & Co. – and before the feature, they showed a “trailer” for Roland Emmerich’s forthcoming apocalyptathon. 2012, in which virtually every global landmark from the Vatican to the White House is destroyed, and mankind’s last hope is John Cusack riding a spaceship to worlds unknown….  If that isn’t shooting your wad as a movie-maker, I’m not sure what is.  Maybe next time out, Roland will step back and make a movie about a puppy.

I had my fill of apocalypse by the time I left the place, only to find myself back in a real nation really dissolving into a puddle of goo.  In the strange new ether of the Web, a consensus grows that we’re in for a rocky autumn, as if the signal event will be something like a hurricane of shoes dropping – bank failures galore, repudiation of US debt instruments by America’s former patrons, foreclosures to the farthest horizon, jobs and incomes terminated, and all the good intentions of the folks in charge coming to naught in the face of historic forces.  We’re off to that kind of a start as I write this, with the Dow dropping eighty points and the news that Disney Inc (NYSE:DIS) has just paid four billion for the rights to the Marvel Comics (NYSE:MVL) posse – Spiderman and his homeys.  As if America needs more childish fantasy.

Regards,
James Howard Kunstler

Source: Cars, Wishes and the Apocalypse

Investment News Briefs Tuesday, September 1, 2009

Merger Mondays are back. But the markets don’t like the news. Even though a handful of the nation’s most economically sensitive firms are pulling their heads from the sand and shelling out big bucks in the name of growth, the markets started the week deep in the red thanks to a disastrous end-of-the-month selloff in Asia.

As investors across the globe wonder if revenue growth is necessary to prop up current share prices, China’s market dipped by more than 6% on Monday. The bears trounced their way across the globe, taking European markets down by about 1% and the S&P down an equal proportion so far today.

But there is good news, especially if you are a fan of comic books. Word is quickly spreading that Disney (NYSE:DIS) has worked out a $4 billion deal to purchase Marvel Entertainment (NYSE:MVL).

Now Mickey and Donald will have to fight with the likes of Spider Man and Iron Man for the attention of Minnie and Cinderella.

This is an interesting deal for several reasons. First, the move shows Disney needs to find growth any way it can find it. With a nasty recession hurting its theme park sales and its media business, the easiest path towards top-line growth is by purchasing it.

The fact that nearly half of the $4 billion deal will come in the form of Disney shares helps to illustrate Disney top brass feels share price is heading towards overpriced territory.

While the deal will add to Disney’s revenue stream, the news will likely be detrimental to share price over the next few weeks and months. So far today, however, shares are down by just 1.25%, only slightly worse than the overall market.

Cartoons and chemicals

About as far removed from the fast-action world of comic book characters and theme parks is the competitive and rather boring chemical industry.

The nation’s top titanium-dioxide pigment manufacturers may not be a conversation during a Saturday-night date, but come Monday morning, with word of a major acquisition, it is worth checking out, especially for us finance geeks.

Earlier today, Huntsman (NYSE:HUN) announced its $145 million bid for Tronox (PINK:TRXAQ), a bankrupt company with loads of debt but over a billion in annual revenues.

The offer, while agreed on by both sides is anything but final. It still has to be approved by a bankruptcy court, and as a “stalking horse” contract can be outbid by another party, like the industry leader Dupont (NYSE:DD).

Although Huntsman will have to pay for the acquisition through added debt, the move will almost immediately benefit Huntsman’s balance sheet and cash flow.

Shares of Huntsman are down by just over 5% so far today (after tripling since March), but don’t expect the bearishness to persist. Once this deal comes closer to finalization, share price will change direction.

Investors that get in over the next week or so will likely get a bargain.

While both stories are creating trading opportunities, the best news is for the overall markets. Increased M&A activity is a sign of a recovering market and a strengthening economy. The more cash we see put on the line, the higher stock prices will go.

I am already looking forward to next Monday.

Source: Let the Buying Begin: Merger Mondays are Back!

The times, they are a-changin’! These days, you could become 51% owner of Playboy Enterprises, Inc. (NYSE:PLA) for less than $50 million. I’m not sure what you’d do with half of Hef’s robe or half of his harem of nubile blondes. But it sure has a certain ring to it!

If you wanted to become half-owner of Marvel Entertainment, Inc. (NYSE:MVL), however, you’d have to shell out $1.35 billion! Comic books are now worth 27 times as much as the well-written articles and witty cartoons that I hear are the sales engine of Playboy magazine.

The interesting part of this is that the demographic both businesses used to appeal to are nearly identical: Adolescent and post-adolescent male virgins.

Only that Playboy’s original audience apparently has outgrown the franchise. While Marvel’s demographics steadfastly refuses to grow up.

Of course, it’s never too late to have a happy childhood.

But there’s a lesson in it regarding what’s shaping up to be the most titillating IPO this year: After dragging their feet for over a year, “adult” social networking company FriendFinder Networks—which absorbed Playboy’s competitor Penthouse a while ago—filed it’s Form S1 with the SEC
on May 18.

The company remains heavily loss-making as free networking and porn sites are eroding what’s left of its market share. Whatever fizz there will be in the actual offering will be media-generated.

The proposed ticker for this stock is NYSE:FFN, which unfortunately remains taken by an unrelated company, the initial amount of the offering (filed last December) was $460 million.

It looks like a prime candidate to shorting the day after the IPO is launched.

Source: Playboy’s (NYSE:PLA) Numbers Don’t Add Up to Much in Regard to the FriendFinder IPO