Call me a tightwad. Call me un-hip. Just don’t call me a cable subscriber. I am fed up with the programming being forced into my house through that innocent-looking wire.

It is ironic my colleagues and I were discussing our issues with Comcast (NASDA:CMCSA) and its various products this morning. While not all views were negative, I revealed the seemingly anti-American news that I would no longer be a cable subscriber after tomorrow.

I am using the switch to digital TV as an opportunity to scribble out yet another monthly bill and strap up a pair of rabbit ears.

According to the company’s latest financial results, I am in the majority. A surprising number of folks are using the “DTV Transition” as an excuse to plug their TVs into Comcast’s media network.

The unemployed need something to do

After adding 247,000 digital cable customers in the fourth quarter of 2008, Comcast boosted its subscriber base by another 288,000 households during the past three months. The additional revenue stream helped the company record a 5% boost in its bottom line, a net of $778 million.

Comcast’s news comes just a day after Time Warner Cable (NYSE:TWC) revealed a surge of 121,000 customers, almost three times as many as the previous quarter.

The news gives evidence the recent downturn in subscription growth has come to an end. It is a trend that will likely last for at least the next few quarters as competition levels off and the market regains some footing.

Whether you and I believe it is right, this nation views cable as a necessity. Comcast and its competitors are selling a fairly inelastic product. As long as they can offer a product that is comparatively priced with its replacements, subscribers will be knocking on their doors.

The way I see it, the higher the nation’s unemployment rate, the higher Comcast’s subscriber roles.

Sad but true.

Source: Comcast’s Profits: Sad But True

My day did not get off to a good start. After rolling out of bed, my first stop is always the coffee pot. Then, I grab the newspaper and flick on the TV.

As usual, my newspaper (at least I hoped it was my newspaper) was tossed on my neighbor’s driveway, but when I tried to tune into the local news, the screen was black. Instead of waking up to my favorite weather girl, I was forced to listen to the pre-dawn silence.

While my troubles were trivial and caused by an overnight ice storm, the problems throughout the cable that provides my morning media fix industry continue to brew. For proof, just look at the nation’s largest media conglomerate, Time Warner (NYSE:TWX). Its share price is down by over 6% today.

Thanks in part to a $15 billion write-down of its cable spin-off, Time Warner Cable (NYSE:TWC), the company is expected to post a loss for all of 2008. It is just the first of what is sure to be many signs of an ugly earnings season for the industry.

One of the company’s larger competitors took the opportunity to leak some of its own bad news in the hopes investors would be distracted by the news from Time Warner.

A Comcast (NYSE:CMCSA) insider said the company would have to cut its balance sheet to reflect the losses in its Clearwire stake, which is down by as much as 60% over the past 12 months. Fortunately, losing out on the wireless Internet venture is far from a surprise. But the information reinforces the notion the upcoming earnings season is going to hurt.

Trouble ahead

Of course, the media industry is not alone. Intel (NASDAQ:INTC) is also dragging on the equities market today as it tells investors to expect worse-than-expected fourth-quarter results. The chipmaker now expects revenues to show a 23% drop from this time last year, to about $8.2 billion.

The news from economic-bellwether Alcoa (NYSE:AA) is just as bleak, especially if you are one of the 15,000 employees about to get a pink slip. By cutting its capital spending in half, the company’s problems are certain to spread across the broad economy.

So why I am writing about this collection of bad news? I do it in hopes that you realize the switching of our calendar did not suddenly fix the nation’s dire economic situation.

The last few trading sessions have been filled with exuberant trades. Stocks that investors dumped like mad only two weeks ago were surging in value. The turnaround allowed smart traders to bag some sizeable gains, but I caution you to do your homework before entering new positions with the Dow above 9,000.

No stimulus big enough

Even when Obama dumps a trillion dollars of taxpayer money into the economy, all will not be grand. Hundreds of thousands of consumers have recently been fired from their jobs. Consumer spending will not rebound to its historic level anytime soon. Obama may be able to stabilize the system, but a rapid rebound is nothing but a pipe dream.

The equities market will remain range bound through the next earnings season. There will be opportunities to buy on dips and sell on surges, but miss the timing and you could be hurt.

As earnings season unravels, continue to look towards the safer, consumer favorites like McDonalds (NYSE:MCD) and Wal-Mart (NYSE:WMT). Remember, one of the few bright spots today was Family Dollar (NYSE:FDO).

The discounter reported a 14% jump in quarterly earnings and boosted its fiscal-year forecast. Best of all, its shares rose by more than 10%. It is proof that there is still plenty of money to be made if you pay attention.

The next few weeks are going to be critical. Volatility will rise and earnings surprises are going to rule the market. Be prepared for the action and you will survive unscathed.

Source: Be prepared for horrid quarterly reports

• Crude oil for July delivery rose $4.33 to $133.38 a barrel yesterday (Wednesday) after U.S. stockpiles showed an unexpected decline. Supplies fell 5.32 million barrels to 320.4 million last week, the biggest drop in four months, according to the Energy Department.

• Time Warner Inc. (TWC) announced yesterday (Wednesday) that it plans to spin off its cable-television unit and receive a $9.25 billion windfall in the transaction, Bloomberg reported. The move will let the company focus on its cable network, entertainment, and publishing operations rather than distribution – something investors have been clamoring for.

• The Boeing Co. (BA) said yesterday (Wednesday) that it would lay off 750 Southern California employees after losing a lucrative military satellite contract and seeing a dip in demand for the technology, the Associated Press reported. The cuts involve engineering staff at plants in El Segundo and Seal Beach.

• Swiss bank UBS AG (UBS) yesterday (Wednesday) sold subprime and other mortgage-based securities to a newly created investment fund run by U.S. asset manager BlackRock Inc. (BLK) for $15 billion, the Associated Press reported. The securities had a nominal value of $22 billion but have been listed with a book value of $15 billion as of March, according to UBS.

• American Airlines, a subsidiary of AMR Corp. (AMR), announced yesterday (Wednesday) that it was taking drastic measures in the face of escalating oil and fuel prices, Reuters reported. The world’s largest airline will cut thousands of jobs, reducing capacity by 12%. American will also charge $15 for passengers’ first checked bag. AMR stock dropped 25% with a $1.98 decline to close at $6.22.

• Shares of corporate debt rating agency Moody’s Corp. (MCO) dropped over 15% yesterday (Wednesday) after a computer glitch mistakenly issued “Aaa” ratings for Constant Proportion Debt Obligations, commonly referred to as CPDOs, Reuters reported. Moody’s stock lost $6.99 to close at $36.91 yesterday (Wednesday).

• The U.S. House of Representatives passed legislation yesterday (Wednesday) that would allow the Department of Justice to sue the Organization of Petroleum Exporting Countries (OPEC) for limiting oil supply and price-fixing, Reuters reported. The measure still needs to be approved by the Senate, but President Bush has already threatened to veto the bill.

• Inflation fears were blamed for the Bank of England’s 8-to-1 decision to hold interest rates steady yesterday (Wednesday), MarketWatch reported. “For most members, a reduction in Bank Rate this month would make it more difficult to keep inflation expectations in line with the target,” the minutes said. For April, consumer inflation clocked in at 3%, above the BOE’s preferred 2% target.

Source: Global Investing Roundups:Thursday, May 22nd, 2008

Still, a few prominent players are set to report this week led by The Walt Disney Co. (DIS) (entertainment), Cisco Systems Inc. (CSCO) (tech), and American International Group Inc. (AIG) (financial services).

The Microsoft Corp. (MSFT)/Yahoo Inc. (YHOO) (and occasionally Google Inc. (GOOG)) soap opera will be worth watching – if only to make sure that Microsoft’s withdrawal isn’t a cover ploy for a hostile run at Yahoo [For a related news story in this issue of Money Morning that details Microsoft’s decision drop its pursuit of Yahoo, please click here].

A slow schedule on this week’s economic calendar will prompt a much greater focus on the dollar as investors speculate on whether the price run-up in commodities – and oil – is at, or near its end. Gold prices will help make that determination [For a related news analysis of gold prices in this issue of Money Morning, please click here].

U.S. Federal Reserve Chairman Ben S. Bernanke is scheduled to address the Columbia Business School on mortgage issues, though he’ll surely also be asked about central bank policies by a rapt audience whose members will hang on his every word. [Wasn’t he supposed to be on vacation?]

Last week’s earnings saw some energy companies that were benefiting from the most recent surge in energy prices. Though Exxon Mobil Corp. (XOM) only claimed the second-highest profit ever (it also holds the title for the single best quarter ever), the results nevertheless disappointed Wall Street, which was obviously pulling for a new record.

Likewise, Chevron Corp. (CVX) and BP PLC (BP) reported favorable periods. In the wake of the recent initial public offering (IPO) of credit-card processor Visa Inc. (V), rival MasterCard Inc. (MA) doubled its earnings last quarter as its international business helped overcome domestic weakness. Consumer-products giant The Procter & Gamble Co. (PG) also received good news from overseas with higher sales of consumer goods like diapers (Pampers), razors (Gillette), and shampoo (Head & Shoulders) from certain emerging markets.

Not all was rosy, however, as Sun Microsystems Inc. (JAVA) and food giants Kellogg Co. (K) and new Warren Buffet favorite Kraft Foods Inc. (KFT) each fell prey to the continued economic “challenges” in the U.S. market.

On the transactional front, investor Kirk Kerkorian will boost his stake in Ford Motor Co. (F), in turn a nice boost for the domestic auto industry. Time Warner Inc. (TWX) will be spinning off its 84% stake in its cable operation, Time Warner Cable Inc. (TWC).

And privately held M&M’s-maker Mars Inc. will buy Wm. Wrigley Jr. Co. (WWY) for over $20 billion in cash with financing help from famed sweet-tooth junkie, Warren Buffett.

Market Matters

Recession? What recession? For days, weeks, even months now, naysayers had been predicting the emergence of that dreaded “R” word with the release of 1st quarter GDP. Additionally, they claimed that the labor picture would continue to worsen, gas prices would hit $4 a gallon by summer, the dollar would be worth next to nothing, corporate earnings would signal more “gloom and doom,” and high-net-worth investors would be making dramatic allocation shifts from the “risky” equity markets.

Not so fast … the data released last week appeared to portray an economy closer to a rebound – far from the dire business climate the gloom-and-doomers had been predicting. A stronger dollar that may have placed a ceiling on oil (and other commodities) prices, and rich folks seemed to be looking for bargains in stocks.

Do we here at Money Morning buy into that totally bullish scenario?

Not necessarily.

But we do agree that the next few days, weeks, and months are going to get more interesting.

The latest Fidelity Investment’s Millionaire Outlook reported (mildly) bullish findings among its surveyed investors who have average investable assets topping $4 million. Instead of decreasing their equity allocations, 27% of these millionaires plan to add stock positions during the next 12 months. Only 7% expect to sell out of equities, which logically deduces 66% will be staying the course. Real estate seems to be another “favored” asset class, as 14% of respondents say they will increase exposure to related investments. That doesn’t quite sound like “gloom and doom” at once.

Oil flirted with the $120 a barrel level before sliding on a stronger dollar and news that the Fed may play the “wait and see” game (see below). Equity investors again took a “things could have been worse” approach and sought out value in the aftermath of last week’s economic and earnings reports. Some analysts believe that a stronger dollar will mean the end to the rally in commodities, and investors (hedge funds) will take some related profits and move back into stocks.

Despite all the recent negativity, the Dow Jones Industrial Average surged more than 500 points in April, and the Standard & Poor’s 500 Index and Nasdaq Composite Index both rose about 5% – hardly the recessionary results many had been anticipating.