The Buzz – 21

Financials

Intels tug of war

There are two things we know about Intel. For starters, it is being hurt by encroachment from Advanced Micro Devices. And Wall Street isnt a big fan—Intel has been one of the worst performing stocks in the Dow Jones Industrial Average this year.

According to some prognosticators, the companys woes are a great reason to buy Intel shares. There is an interesting tug of war brewing over the chip maker, which reports its third-quarter earnings July 19.

On one side are analysts who say Intel is struggling big time. On the other stand analysts who think CEO Paul Otellini and company can get it together and show improvement against AMD.

On June 19, UBS analyst Thomas Thornhill, in San Francisco, upgraded Intel to a “buy” from a “neutral.” Thornhill said Intels road map, led by the “Woodcrest” chip, is solid; the company is restructuring to boost profit margins; and Intel should benefit from the Microsoft Windows Vista rollout.

Christopher Danely, a JP Morgan analyst, in San Francisco, lowered his earnings estimates for both Intel and AMD.

In a research note titled “Asia Trip Review—World War III in Microprocessors,” Danely said that Intel has cut chip prices 50 to 60 percent and still has “generated no elasticity in demand.”

While Danely agreed that Intel may be poised to gain share on AMD, PC makers are cutting chip orders.

Disaster Recovery

FEMAs fraud risk

During hurricanes Katrina and Rita in 2005, the Federal Emergency Management Agency expedited assistance for victims, who received debit cards and checks for $2,000 in aid.

The issue: FEMA, which is a part of the Department of Homeland Security, didnt have any controls to prevent fraud and abuse, according to a Government Accountability Office report.

The GAO said that, for Internet applications, FEMA had “limited automated controls” to verify a registrants identity. For those asking for aid via phone, there wasnt any independent identity verification. The result: The GAO showed an image of a check it got by calling in a claim using “falsified identities, bogus addresses, and fabricated disaster stories.”

The bottom line: FEMAs combination of manual processes and information systems werent good enough to validate damaged property addresses and nonexistent Social Security numbers. The GAO recommended that the DHS require FEMA to establish an identity and address verification system, enter agreements with other agencies to verify data, create procedures to collect double payments, and include instructions on how the money should be spent.

BlogWatch

Are résumés passé?

Robert Scoble, who left his post as Microsofts most famous blogger to go to PodTech.net, muses on the need for a résumé:

“Im trying to clean out my email (about 700 to go, but at least I got them all triaged into folders). One of the emails is from a Yahoo recruiter who has been talking with me on and off for the past few months. He keeps bugging me to send him a resume. He told me why a resume is needed, cause itll help him find me a job thats a good fit for both of us. I just wrote him back and said I just took a job that didnt require a resume, sorry. Oh, I can be such a snarky jerk sometimes. Sorry. Update: it gets even funnier. He just asked where are you going? Um, not to Yahoo!”

Scoble apparently tapped a vein. Among the responses:

• “Next time tell them you will not agree to a physical face to face interview either.”

• “Im sure things will change a lot in the coming days. Resumes will no longer be important—blogs will be.”

• “Dude, a resume is part of a conversation. Why would you be reticent about giving yours to someone?”

—Compiled by Larry Dignan