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In a move that makes all the sense in the world, The Association of National Advertisers is telling the Justice Department and anyone else who will listen that the deal for Google (NASDAQ: GOOG) to sell part of Yahoo! (NASDAQ: YHOO)'s ad inventory is a bad idea. Perhaps the ANA was paid-off by Microsoft (NASDAQ: MSFT), which also objects to the deal.

The association is pretty powerful and includes companies like Procter & Gamble (NYSE: PG) and GM (NYSE: GM). The members could cut their ads on Yahoo! in protest whether the U.S. government pays any attention to them or not. That would hurt both search companies, perhaps a lot.

According to The Wall Street Journal, Bob Liodice, chief executive of the ANA, said the group believes the "deal is, on balance, a negative" for advertisers.

It is hard to make an argument that the ANA is wrong. If Google controls inventory at both companies, it certainly has little incentive to keep ad rates low. That would obviously hurt its own margins and cut the benefits of the deal for Yahoo!. If Google is trying to keep Yahoo! out of Microsoft's hands, the better the deal is for Yahoo!, the more likely it is that the big portal company can stay independent.

The ANA objection may carry more weight than any other. Its members are the best group to make the case that the new partnership will damage them since they already spend so much money with Yahoo! and Google. Their complaint may be the one thing that keeps the tie-up from going through.

Douglas A. McIntyre is an editor at 247wallst.com.

If a company can't sell its products or services anywhere else, why not put them on eBay (NASDAQ: EBAY)? A least that will open up sales to a huge audience.

According to The Wall Street Journal, "JetBlue Airways Corp. (NASDAQ: JBLU) is auctioning off more than 300 roundtrip flights and six vacation packages this week on eBay, with opening bids set between five cents and 10 cents."

While the move may get JetBlue a lot of attention, it also reinforces the idea that air travel has become a commodity. High fuel prices has forced airlines to cut services from meals to free baggage. The public is already annoyed with the quality of the flying experience. Offering tickets on eBay is like auctioning off old lawn mowers or used cars. Airline tickets get lumped in with all the other junk. The move also fuels the perception that the number of people flying is falling which allows airlines to dump all those extra seats.

If JetBlue has any sense, it would auction off better service. People would probably pay for that. The promotion could last longer than a week. Passengers would be reminded that airlines have something to offer beyond $5 peanuts and $50 checked bags.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Washington Mutual (NYSE: WM) dumped its CEO. Oddly enough, it comes a day after Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) pushed their chief executives out. A number of big banks, brokerages, and insurance firms have axed their top people over the last few months.

According to The Wall Street Journal, "Kerry Killinger the company's long-time leader will be replaced by Alan Fishman, currently chairman of New York commercial mortgage broker Meridian Capital Group."

The move won't matter. It has not at any of the other financial companies which have changed horses. It has not stopped their stocks from falling. It has not helped their earnings. It has not kept them from having to raise money.

The core trouble with the financial services operations is that they all made the same mistake at the same time. If one CEO goes, they should all go. The problems hurting the companies are systemic. New management. Old management. What difference does it make? Housing prices fell. Mortgage-backed securities tied to the market soured.

The replacements do reflect a level of naivety on the parts of boards at all of these companies. Kicking out one or two people and replacing them with others does little or nothing. Firms like WaMu need to cut costs down to the bone, raise money, and hope to ride out the storm. No one new is going to make that any different.

Douglas A. McIntyre is an editor at 247wallst.com.

Perhaps it is because so many banks in Europe and Asia hold preferred shares in Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). Perhaps it is because the government takeover of the firms is viewed as a way to drop mortgage rates in the US and help housing. Whatever the reason, the move by the US government caused furious rallies in stocks in both Asia and Europe.

The Nikkei rose over 3% and the Hang Seng was up over 4%. Shares in big banks in mainland China which are believed to hold paper in the two US agencies rose over 4%. HSBC (NYSE: HBC) stock also had a sharp spike.

In Europe, Reuters reports that the FTSE and Daxx indexes were up over 3% and shares in UBS (NYSE: UBS) moved up 11%. Stocks in other major banks were up over 5%.

Watch for a tremendous rally at the open of US markets, whether the government's moves on Fannie and Freddie will help the US housing market long-term or not.

Douglas A. McIntyre is an editor at 247wallst.com.

It now appears almost certain that the federal government will takeover Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). The amount of money the Treasury will have to put into the companies to improve their balance sheets will probably wipe out common shareholders.

The news may foreshadow what will happen to Lehman Brothers (NYSE: LEH) if its gets into more trouble The value of its commercial loan portfolio and mortgage-back securities is bound to fall as the real estate market gets worse.

Several outside investors, including Japanese broker Nomura and the Korea Development Bank, may pump money into Lehman. It is not good news that no one has pulled the trigger on putting up cash. All of the interested parties are probably waiting for Lehman's next quarterly earnings report. If the numbers are bad the value of Lehman's stock, which has gone from a 52-week high almost $68 to $16, could fall further.

The lesson from Freddie and Fannie (and, to some extent, Bear Stearns) is that the Fed and Treasury do not care about common shareholders. They get to go down with the ship.

Douglas A. McIntyre is an editor at 247wallst.com.

With oil prices falling, some members of OPEC would like to see price cuts to put upward pressure on crude. That would make sense. It would bring members of the cartel more money and stretch out the pace at which they need to ship their current reserves.

Venezuela, where the head of state Hugo Chavez seems to have no love for the U.S., has lobbied fellow OPEC members hard to dial back oil shipments. The Arab states may not be so eager. According to Bloomberg, "Saudi Arabia, the world's biggest producer and de facto leader of the 13-member Organization of Petroleum Exporting Countries, the United Arab Emirates, Qatar, and Kuwait may reject calls from Venezuela and Iran to trim supplies at its Sept. 9 meeting in Vienna."

Increased cash flowing into the Middle East is feeding sharp increases in inflation, but that may only be a small part of the reason behind the motivation to do nothing with fuel supplies.

Saudi Arabia and its neighbors know that extremism continues to grow in the region. They are also not geographically far removed from the trouble in Georgia. The nation, which is at "war" with Russia, is close to the norther border of Iran. In other words, there is more than one threat to stability in the region.

The United States keeps a tremendous military force in and around Saudi Arabia. The kingdom may not want to go any further than it has to alienate America.

Douglas A. McIntyre is an editor at 247wallst.com.

As late as yesterday, forecasters believed that powerful Hurricane Ike would hit south Florida. Projections from the weather man now put its path straight over Cuba and into the Gulf of Mexico. The would make its U.S. landfall in either Texas or New Orleans. It would also bring it close to refineries and oil platforms that where threatened by weaker storms that ended up doing very little damage.

Ike, on the other hand, is a Category 4 storm, and that means the its damage could be exponentially greater than any storm that has hit the Gulf in three years. That leaves the potential of a real interruption in oil production and an increase in crude and gas costs.

So far, the price of oil has been immune to the weather, but OPEC may lower production and, combined with a big storm, crude begin to move back up toward $120.

The prevailing wisdom is that oil is on its way to under $100. But, prevailing wisdom has been wrong before.

Douglas A. McIntyre is an editor at 247wallst.com.

That fact that John McCain's son served on the board of the Silver State Bank until recently should not matter much to customers. The bank is gone.

According to The Wall Street Journal, "The lender, the 11th bank to fail in the U.S. this year, was overexposed to risky real-estate loans, a problem that's vexing many banks amid the worst financial crisis in a generation." Silver State had $1.7 billion in deposits the shut-down will cost the FDIC several hundred million dollars.

The FDIC has already indicated that it may need to go to the U.S. Treasury for more capital. Some experts think that dozens of banks will fail. At the pessimistic end of the spectrum economists believe that number could go into the hundreds, if housing prices stay in a free-fall.

The problems at FDIC-insured banks raises the question of how much capital Treasury has to spread around. In theory that amount is nearly unlimited. That is, off course, because U.S. tax-payers send the U.S. government so much money every year.

Those are the same tax-payers who are losing jobs and can't make their own mortgage payments.

Douglas A. McIntyre is an editor at 247wallst.com.

Ford's (NYSE: F) latest PR push is based around the idea that the company can make money on smaller cars. Traditionally the big margins in the car industry have been on pick-ups and SUVs. But consumers don't want those anymore.

According to The Wall Street Journal (subscription required), "Ford Motor Co. is expressing new confidence about the auto maker's ability to sell new small cars at a profit in the U.S. market, citing new data about how Americans are beginning to value premium features and dynamic design over vehicles desired simply for their size." That assumption is based on two factors, neither of which is likely to be true.

Ford believes that it can cut its cost base low enough to make money on cars that retail for $20,000 or less. Chopping production expenses may lower overall costs, but it also cripples the company's ability to "turn on the juice" if car sales make a sharp rebound. Fewer factories with fewer workers puts some brake on the company's ability to quickly push out more vehicles in a short period of time. Cars that can't be made can't be sold.

The other challenge to Ford's assumption is that it can get a large market share in a part of the industry that is already dominated by Toyota (NYSE: TM), Honda (NYSE: HMC), and Nissan. As Ford ramps up, the Japanese car makers are moving into hybrids and improving their own small cars. Most consumer satisfaction surveys put Ford behind the Japanese in terms of the quality of their products.

Aside from those few small details, Ford's plans should work just fine.

Douglas A. McIntyre is an editor at 247wallst.com.

An analyst who follows Citigroup (NYSE: C) believes that the financial services company will sell it Primerica division. The operation provides customer life insurance and investment products including mutual funds.

According to Reuters, Ladenburg Thalmann analyst Richard Bove said, "Primerica does not fit into Citigroup Chief Executive Vikram Pandit's goals of making the bank an international company across business lines." Bove thinks that Primerica could bring in over $7 billion.

Pushing Primerica out the door does not address Citi's core problems. Pandit has said he will cut costs across the company by 20%. If selling off revenue reduces those costs, it hardly helps the bank's margins. It's really not expense reduction at all.

At the center of Citi's troubles are its mortgage-related securities portfolios, LBO debt, credit card business, and slowing revenue into its investment banking operation. There has been no clear sign that Pandit plans to take tremendous costs out of these operations that are critical to the bank's recovery.

Fixing Citi does not involve selling a life insurance company.

Douglas A. McIntyre is an editor at 247wallst.com.

While a number of other banks and brokerages have settled charges that they improperly marketed auction-rate securities, Bank of America (NYSE: BAC) has been a bit of a hold out. Pressure from government legal authorities is charging that the NY State Attorney General has been especially forceful in trying to bring the big financial services firm to its knees.

The question is why BAC has taken so long. A number of other companies got this issue behind them weeks ago. According to Reuters, most firms in the industry "agreed to buy back a total of at least $44 billion of the securities from individuals, nonprofits and small businesses."

Regulators love making "examples" of corporations who move slowly on big industry settlement talks and Bank of America is risking penalties and sanctions by being one of the last to the negotiating table. It is not likely to do shareholders any good if the firm gets to be the poster boy for a government crackdown on auction-rate bad behavior.

Bank of America should have settled when its peers did.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Yahoo! (NASDAQ: YHOO) yesterday posted its lowest price in nearly five years. The stock moved to $17.75, down from a 52-week high of $34.08.

The Wall Street Journal pushed the idea that this was an options play. "Trading in Yahoo options leapt to four times the normal level as investors picked up 168,000 calls that allow them to buy the company's stock." In other words, some traders are willing to gamble that the shares will go up.

But, they won't go up. There is growing evidence that marketers prefer search internet ads to display advertising. Yahoo! sells a great deal of display inventory and is a distant second to Google (NASDAQ: GOOG) in search. Some of that may change as Yahoo! begins to use the Google system to create its search results.That may not offset the fact that Yahoo! probably has as much display advertising availability as any company in the world.

Because Yahoo! has shown it is unwilling to make major cost cuts, a flattening of its revenue growth would be a disaster for its investors. The firm's year-over-year sales improvement is already barely above 10%. What had been a growth stock three or four years ago has now become a buyout gamble. Investors still hang on to some hope that Microsoft (NASDAQ: MSFT) or a large media company will make an offer for the portal company.

That means that Yahoo! still carries a "takeover" premium, which begs the question of where the shares might trade at the end of the year, if there are no offers. Investors are gambling that there is a 30% chance that Yahoo! will be bought, if it is not, the stock heads toward $13.

Douglas A. McIntyre is an editor at 247wallst.com.

Bill Gross of Pimco, one of the most respected bond investors in the world, thinks the credit crisis is about to get much, much worse. He also believes that the federal government is the only entity that can save the markets.

Gross's biggest concern is that financial companies will have to keep selling assets to raise cash. With home prices falling, he does not see an early end to this, and that troubles him. According to Reuters, Gross wrote "Unchecked, it can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami."

Gross may be right, but his suggested solution is wrong. He wants the U.S. Treasury to start buying distressed assets to help build a floor for their values. Of course, the funding source for Treasury is the U.S. taxpayer.

Solving one problem by creating a larger one is rarely a good program. There is a great deal of evidence supporting the fact that taxpayers are already stretched to the limit. Job losses are up. Easy credit is gone. Gas, oil, and food cost much more than they did a year ago. The average person, who may already be unable to handle his own financial burdens, can hardly be asked to help support the purchase of assets being sold by large financial institutions.

If Gross's vision about the future of the credit markets is right, the financial system is only at the beginning of a growing disaster. But, turning to the U.S. citizen for cash is like looking through a man's pockets for a spare change. All the more valuable paper money has been spent.

Douglas A. McIntyre is an editor at 247wallst.com.

Dell (NASDAQ: DELL) wants out of the business of owning factories that make PCs. According to The Wall Street Journal, "Dell has approached contract computer manufacturers with offers to sell the plants." Owning the manufacturing facilities cuts Dell's margins.

Analysts believe that in the current environment, where laptops have taken the lead in PC market share, owning facilities that pump out massive numbers of desktops is no longer practical.

Dell could be making a huge mistake in the name of short-term profitability. The company is particularly good at delivering "custom-made" computers quickly. Dell customers can configure the PCs with a large number of special features.

More importantly, Dell will lose some level of quality control if its manufacturing is owned by outside interests. Dell cannot afford to fall behind Hewlett-Packard (NASDAQ: HPQ) and Apple (NASDAQ: AAPL) in terms of the consumer's perception of product quality. Owning factories may hurt profits a bit, but Dell's reputation as a first class provider of PCs is priceless.

Douglas A. McIntyre is an editor at 247wallst.com.

New evidence shows that online advertisers are building their search engine marketing and moving away from big display ad investments. According to The Wall Street Journal, "Faced with a slowing economy, advertisers are sticking to what they view as the safest way to reach online customers directly: the plain text ads that appear on search-result pages."

To state the obvious, the news seems to be bad for Yahoo! (NASDAQ: YHOO), Microsoft (NASDAQ: MSFT), and AOL. These portals rely heavily on display ads for their revenue and have modest search income.

The data is much, much worse for newspapers. Companies like The New York Times (NYSE: NYT) are counting on online advertising to take the place of falling print revenue. A great deal of the advertising that runs at newspaper sites is retail and national display. Total ad revenue at The New York Times dropped more than 16% in July. Internet advertising was up less than 1%. Clearly, at that rate, online ads can do little to help that nation's big dailies.

The portals will struggle to keep their display growth intact. They have the lion's share of the market, so scale is on their side. They will almost certainly have the best chance of picking up the marketing dollars from the largest online advertisers. Even if the market keep slowing, their sales should be steady to modestly up.

Newspapers will not be so lucky.

Douglas A. McIntyre is an editor at 247wallst.com.