Takeovers and takeover rumors have been running rampant on Wall Street lately. While takeovers usually have a bad connotation, the result of the rumors and official announcements have been assisting the US stock market in staying positive for the most part. The market is set up to open higher today as reports surfaced that Alcan, Inc. refused a $26.7 billion takeover bid from Alcoa, Inc. Rumor has it that Alcan, Inc. is discussing a merger with BHP Billiton, but also stated that it may make a bid for Alcoa, Inc. This news has investors thinking that bids from other companies will soon follow. Other takeovers that seem to be moving the market include Morgan Stanley’s plans to acquire Crescent Real Estate for a reported $6.5 billion. Also, discount shoe retailer Payless ShoeSource is purchasing the children’s favorite in shoes, Stride Rite for approximately $800 million. One other purchase worth noting is Amazon.com’s announcement Wednesday morning to widen their book selection by purchasing Brilliance Audio, who is an independent publisher of audio books.

While the market is set to open higher due to takeovers and acquisitions, investors are waiting to hear about the gasoline inventory report. With Memorial Day weekend ushering in the unofficial start of summer beginning late Friday afternoon as people leave work, demands for gas will be high as people are traveling to the beach and other mini-vacation destinations. The gasoline inventory report will show whether or not US refiners have produced enough gas to meet demands for this weekend and this report will surely be one to make the market move. There are no other economic reports due out today, however, Treasury Secretary Paulson is set to report on trade talks with the Chinese officials. Thursday will see the Commerce Department’s report on durable goods. In anticipation of this report, investors may go ahead and take their trading positions a day in advance.

Tuesday saw several companies post profits. Among the companies that reported include Forest Laboratories, Inc. and Cypress Biosciences Inc. These companies reported that their study involving a late-stage Alzheimer’s drug is showing extremely promising results. Their announcement forced their stock shares to go up in after hours trading. Other market movers include, The Target Corporation who reported just before the opening bell on Wednesday. Their first quarter financial reports revealed an 18 percent increase. While this is excellent news for the second largest discount retailer in the United States, it is still shy of expectations. The 18 percent increase equates to almost $651 million dollars or 75 cents a share.

Earlier this year Target reported that same-store sales for April were down 6.1 percent. Target placed the blame for the decrease in profits on an earlier Easter. However, their February and March sales prove strong enough to curb any other profit losses. Prior to the opening bell, Target’s shares soared $1.71 per share. Ross Stores also reported before the opening bell and they too had good news to share. The discount retailer of clothes and accessories reported a .43 cent increase per share of stock. This is inline with both the company’s and analyst’s expectations. Medtronic also announced a surprising profit increase last night that left it stock shares increasing by 4% this morning. Finally Gamestop as well reported prior to the opening bell and was able to beat all estimates by .02 cents per share making their total profit increase .18 cents per share. Many other retailers are also set to report on Wednesday, including Abercrombie & Fitch as well as the Limited Company. Investors should keep in mind that the markets will be closed on Monday, May 28 in observance of Memorial Day.

On May 4, the price of gas ended the week at $3.012 cents per gallon. This price is just the latest in the surge of high gas prices and in fact, it was a 2.1 cent increase from just the day before. This increase of the per gallon price occurred despite the fact that June delivery of light, sweet crude oil dropped $1.26 per barrel to end the day at $61.93. Presently, high gas prices in the United States are being attributed to several factors. The first factor includes the shut down of some domestic refineries in order for maintenance and other improvements to take place. A limited supply of gasoline imports remains the second factor. This limited supply of gasoline is due to the switching from gasoline to the diesel productions at several European refineries and refinery interruptions and other problems have led to a 12% drop in Venezuelan imports.

Investors and consumers alike are worried about the sudden increase in gas prices since summer, the peak season for gas consumption, has not even begun yet. Of course, the summer pricing depends on two things; 1) the amount of gas the refineries will produce and 2) how much consumers are truly willing to spend on gas. Unfortunately, immediately following the summer months, Americans will have to wait with baited breath to see if any hurricanes strike the Gulf coast and if so, how much damage the refineries in the Gulf area receive. There is not much leeway in the industry so if the refineries experience any disruption in the chain of supply and delivery, consumers could see higher prices that top the summer gas prices.

The increase in gas prices originally affected mainly the blue-collared workers, but now industry experts are beginning to see the gas prices affect more and more white-collared workers. As a way to save gas and therefore save money, many people have chosen to stay home more, trade in their present vehicle for a more gas-efficient model and/or find a job that has a closer commute. For those that are currently jobless, the area in which many people can look for a job has diminished.

Those looking for employment have now begun to take into account the driving distance prior to applying or taking on a job. Furthermore, some experts believe that the high price of gas will further force the jobless rate to increase. The April jobless rate which was reported to be 4.5% is up from the 5-year low of 4.4% in March. While these figures indicate that the economy is a little weak and not in trouble, experts fear the price of gas will force the cost of goods to increase, thereby leaving less money for businesses to hire aggressively. This lag in hiring new employees will cause the jobless rate to increase over the summer and experts predict that it could perhaps end the year around five percent. While this may seem like a high jobless percentage, it is still low when compared to other historical jobless rates.

Consumer advocate groups have begun to urge politicians to try and force refineries to produce more gasoline; however, the ultimate decision on gasoline prices will fall on the shoulders of consumers. Consumers will have to ultimately decide how much they want to travel and if paying the price at the pump is actually worth it.

Numbers might not lie, but there is a tendency to view them in the surrounding light. What does that mean? It means that your view and my view of the numbers are dependent upon the world that we view them from. An example, totally unrelated: I remember early in the 2nd US invasion of Iraq. While US tanks were driving through parts of Baghdad, the Iraqi Minister of Information was holding press conferences claiming that the Iraqi Army was turning back the US attack. In one outdoor interview, a US tank is seen driving in the distant background. Regardless as to whether the “minister” was just knowlingly lying or really believed his side was winning, his perspective wasn’t shared by most of the world. These events became so comical, that even 2 years after his last moments on the air, he lives on in cyberspace: CNN article on Iraqi Minister

This issue of perspective, is the whole point of this article. The price of oil is up to records high, gold is gaing fast, etc. Depending on where you live and what year it is you’ll hear about how fast a price is rising or falling on some commodity. In 2005, the US and the world were obsessed with the rapidily rising price of crude oil. Early in 2006, that role seems to be gold, with the price recently exceeding $550. Most of us see the world and the world economy in terms of our local media, that is americans see the price of gold, oil and currency exchange rates in terms of US dollars and US cost of living. This perspective leaves us all thinking that others in the western industrial countries, say UK, Japan and Germany are living thru the same pricing trends, but because commodity prices are tide to local currency, that sometime isn’t the case.

I’ve researched the price of gold and currency exchange rate ( a once yearly sample in late january) since 2001 and it illustrates my point. Since 2001 Euro based investors have seen a 157% gain in gold, the UK based pound investor only gained 75% for the same period of time. Interestingly, 2/3 of all Gold gains in the UK occured since janaury 2005! What a difference between investors in England vs those in Germany. US Dollar and Yen investors gained 104% during that time, over 35% more than Pound investors but more than 30% less of gain than Euro investors. We’ve used this Gold Price Chart from kitco.com and Currencies from Yahoo Currency

So I’ve been thinking about the rise in certain commodity prices, most notably, oil, gas and gold. Much of the financial news centers around the effect of rising energy prices on consumers, the transport and travel industries, etc. The price of gold is often used as a surrogate for inflation or currency devaluation. It occurs that to me that if you were to track the price of these commodities, in the major currencies, USD, Sterling, Euros and Yen you’ll see how a great year for gold in one country, might be a mediocre year in a different currency/country. I’m gathering the data, you’ll see it here soon.

Unless you’ve been living in a cave for the past few years, you’ve probably noticed a huge increase in the interest in poker and in particular, Texas Holdem poker. This boom has occurred online with sites like party poker, on TV with the World Poker Tour and of course the first name in poker: The World Series of poker. The 2005 World Series, was the largest poker event in history. The No Limit Hold’em Final had 5619 entries that generated over $52 million in prize money and $5.2 million in fees and untold publicity to Harrahs. Joseph Hachem, was the winner of $7.5 million grand prize. Overall 45 world series events from June 2nd to July 13th generated roughly $100 million in prize money.

Even more impressive than than the boom in casino poker, is the huge size of the online poker market. It is expected to generate over $3 billion in revenues. At any moment of time, 10’s of thousands of people, mainly males, from all parts of the worlds at rooms including Party Poker, Poker Stars, and others. What’s even more interesting is that most of the money, upto 80% comes from US players; while the US Attorney General (and most state counterparts) have declared online gambling illegal. Unlike casino games or bingo, Poker is considered a game of skill in many state. But we’re not hear to talk about poker or it’s legality, so if you want more on poker and online poker in particular, i found this site helpful All Poker Rooms. In particular you might want to read The rules of Texas Holdem or if you’re like me, and can’t ever remember whether flush beats straights, check out Winning Poker Hands, if you are unfamiliar with the game of Texas Holdem.

Now, that you’ve got the big picture, the real question becomes, what is the impact of poker or more generally gambling on an economy. It was years ago that i heard one TV talking heads, labeled the US culture “the casino economy”. I don’t think their entire theory was exponded in the sound bite, but for me, it was a great description of the stock market/Internet hype bubble that popped in 2000 and the executives that scammed shareholders of Worldcom, Enron, Tyco and many others, steal the jackpot for themselves. This casino mentality has transferred to the current, now slowing, real estate boom. The US culture and economy has become a world of nods and winks, were thieves steel by falsifing info, lying on appraisals and wild conflicts of interest around every corner. While this may not be unique to the USA, it was “The Story” in the US, after the “Internet Bubble” and before the most recent story “Outsourcing”.

In particular, what is the effect of offshore operators, attracting players that might otherwise play locally at state licensed and taxed casinos? Just using the figures (i got them from Marketing Sherpa) the figures i quoted earlier, the online gambling industry is generating $8 billion to $10 billion in revenues each year. Probably drawing away US gamblers who might otherwise play at casinos that pay local taxes. Let’s assume that at least $2 Billion to $3 Billion would have paid taxes in the country where the player live. That’s $10 for every american. Given that the online industry, employs people offshore, it’s really the equivalent of outsource our gambling to lower cost offshore providers. This year alone, rapidly growing India will supply nearly $20 Billion of services for a number countries in wealthier/industrialized world.

I guess my point is that market forces generate an advantage in “Offshoring”, whether it be outsourced-offshore IT services or offshore gambling, because the offshore operator has some combination of cost or regulatory advantage. For IT and Accounting services their advantage is nearly all based on price. Online gambling benefits from both the regulatory advantages of being offshore and the cost advantage being virtual. It is this cost advantage ( being VIRTUAL ) that Las Vegas and the US Indians cannot overcome, without a change in the political climae. While most US business being outsourced is being outsourced based soley on wage differencial, online gambling is being “outsourced” offshore, because the US government refused to allow online gaming or even to allow each state to make it’s choice.

Is there anything wrong with gaming going online or offshore? I’m not really seeking to identify right and wrong, but the same governments that have refused to allow licensed online gambling also lose tax revenues to Offshore/Online operators, every day. So as US gamblers send their money offshore, states lose millions a day in taxes while the US gambling industry loses even more revenue and customers. The best way to stem the tide of online gambling taking money offshore is to all US based/regulated gaming online (each state should decide) and US operators compete with there trusted brands against the offshore operators.