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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.

August was yet another tough month for American auto maker Ford Motor Company (NYSE: F) as the company reported today that during the month, U.S. sales were off by a mind boggling 26.5%.

During the month, Ford was able to sell a total of 155,172 light vehicles, which was 3.6% below July's figures of 160,990, which was the worst month for U.S. car sales in the past 16 years.

As expected, truck sales really took a beating last month for the company. With consumers dealing with record high gasoline prices, truck sales have been weak for some time now, and last month the company saw truck off by more than 32%. Its car sales fell by nearly 9%.

It has been five weeks since I posted Serious Money: Tempting fate with 10 financials. The results of buying into the following pool of financial stocks at a time when the "hate 'em" factor was at a peak has been tremendous. The over all return has has been 26.3% with eight stocks up and two down.

For investors this might have been too speculative; for traders, they are probably grinning from ear to ear. For me -- we will see where we stand next year. As one of my colleagues reminded me, this is the real test, although I think there is reason for optimism.

The leader of the pack was MBIA Inc (NYSE: MBI), up 228%. In the absence of that gain the appreciation would have only been 3.5%. That beats all the indices but is not as dramatic.

• Citigroup Inc. (NYSE: C) -- $18.45 down 63% from its 52 week high of $49.90; closed yesterday at $19.11, UP 3.57%
  
• Lehman Br Holdings (NYSE: LEH) -- $16.88 down 75% from its 52 week high of $67.73; closed yesterday at $16.13, down 4.44%
• Merrill Lynch (NYSE: MER) -- $26.25 down 67% from its 52 week high of $79.72; closed yesterday at $27.75, UP 5.7%.
• MBIA Inc (NYSE: MBI) -- $4.92 down 93% from its 52 week high of $68.98; closed yesterday at $16.14, UP 228%.
• E*TRADE (NASDAQ: ETFC) -- $3.06 down 84% from its 52 week high of $19.39; closed yesterday at $3.25, UP 6.2.
• East West Bancorp (NASDAQ: EWBC) -- $12.46 down 67% from its 52 week high of $20.88; closed yesterday at $13.01, UP 4.4%.
• Gramercy Capital (NYSE: GKK) -- $6.72 down 77% from its 52 week high of $29.45; closed yesterday at $6.80, UP 1.2%.
• Newcastle Investment (NYSE: NCT) -- $5.88 down 72% from its 52 week high of $20.88; closed yesterday at $6.89, UP 17.18%.
• Wachovia Corp. (NYSE: WB) -- $15.70 down 70% from its 52 week high of $53.10; closed yesterday at $16.65, UP 6%.
• Washington Mutual (NYSE: WM) -- $4.43 down 89% from its 52 week high of $39.48; closed yesterday at $4.24, down 4.29%

In my original post I emphasized that you had to buy the pool for safety. During the last month, we have seen many stories about Lehman Brothers' demise or the collapse of a major bank like WaMu or Wachovia, and if that had happened the gains in MBIA would have made up for the total and complete collapse of any one of them. I have no reason to believe this is immanent. I do have reason to believe the opposite. During the last month I bought additional shares of WaMu, one of the two down stocks at $3.50 per share.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of MBI, NCT & WM.

Google (NASDAQ: GOOG) will offer its own internet browser to compete with Microsoft's (NASDAQ: MSFT) Internet Explorer and the Mozilla Firefox product.

The software may be plagued by the law of unintended consequences, doing more damage to Firefox than to Microsoft. According to The Wall Street Journal, Google says the "software is designed to make it faster to browse the Web and easier to run applications without downloading software to a computer."

Most PCs come loaded with Internet Explorer as part of Microsoft Windows. That leaves Google with the challenge of getting consumers to download its new browser. Firefox is also software which must be downloaded. Google may end up competing more with Firefox, a product it has supported in the past, than with IE.

Most consumers don't care what browser they use as long as they have access to the internet. Microsoft's largest advantage is that it is part of the PC software package that people use without any thought as to how it might be changed.

Google will end up hurting an ally without doing any damage to its primary rival.

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

New York Times columnist Thomas Friedman, who perhaps most-accurately conceptualized the revolutionary production shifts implied by globalization in The World Is Flat, has a 'radical' economic prescription for the United States, as it moves toward the second decade in what is quickly becoming the century of change.

Friedman suggests that the United States try nation-building....at home.

Moreover, Friedman makes the case for nation-building as good for U.S. business - - a much-needed shot-in-the-arm for the U.S. economy.

U.S.: inadequate infrastructures for a major power

Friedman's main concern: the U.S.'s inadequate infrastructure (electric grid, roads/bridges/rail network, air travel system, hospitals, among others), which is antiquated compared to the infrastructure of the U.S.'s chief economic rival, China. Friedman has just attended the 2008 Olympics in Beijing and its clear China's public investments - - better airports, roads, parks, to go along with the sports venues - - have impressed him.

It's also clear to Friedman that the U.S.'s period of underinvestment is holding the nation back economically, and that has to change if the U.S. expects to remain commercially competitive on the global stage. Economist David H. Wang told BloggingStocks he agrees, for the most part, with Friedman's analysis, but adds that the journey to a better infrastructure is not a strictly an economic equation.

The new Apple (NASDAQ:AAPL) 3G iPhone is becoming more popular for all the wrong reasons. It drops calls and has trouble connecting to some cell carrier's high-speed wireless network.

All sorts of analysts are out in the field trying to discover what is wrong with the new product. No one has come up with an answer. But AT&T's (NYSE:T) rivals have decided to use the opportunity to attack its products and services. According to The New York Times, "A phone is only as good as the network it's on," said a full-page Verizon Wireless newspaper ad."

Even if the iPhone is only a brick with a dial pad, the challenges are off the mark. Wireless systems, including those from Verizon Communications (NYSE: VZ) and Sprint (NYSE:S), are full of dead spots. A set of tests of almost any cell network in the U.S. or abroad would show that dropped calls are not rare.

Verizon has decided to use something that is common to go after its competition, which is fine until someone goes out and tests its network.

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

'Tis the election season of 2008 and any industry in a mess has exactly two months to make its case and claims to a beneficent US Congress. Who, after all, wants to harm or neglect the already struggling US auto industry.? With General Motors (NYSE: GM) and Ford (NYSE: F) having reached their lowest market valuation in more than a generation, why not ask for the bailout...ah, sorry, assistance...ah, sorry again...low interest loans to re-tool their respective factories for future fuel efficient vehicles.

What's the deal here? The energy bill from 2007 allows for low interest loans to create next generation technologies for energy efficiency. The auto makers want to press Congress hard for their share when the summer recess is over...and certainly before the election. The auto makers say they need $50 billion to be competitive again.The rub as some see it is the desire of the auto makers asking for twice the amount that has been earmarked for such projects. Why not, asking for twice the amount right now is opportunistic as politicians are running for re-election and want to hang their hats on any good issue that will save jobs and create goodwill.

My very first post on bloggingstocks was Microsoft: What are you thinking about? where I ranted that Microsoft Inc. (NASDAQ: MSFT) stock was going nowhere. Over the last 29, months that is exactly what it has done. It closed yesterday at $27.62.

This is not to say it has not had it's moments rising at one time to a 52-week high of $37.50 on a lot of hopes and prayers. Nevertheless, I felt then and do now that MSFT would be better off in pieces Micro'soft' vs Micro'hard' -- Break it up fellas!

If Microsoft wants to compete against Google Inc. (NASDAQ: GOOG) and be a dominant player on the web, it should split out its web services as a separate company. That new company would be the right merger partner for Yahoo! (NASDAQ: YHOO). There is no reason to tie the web services business to the future of the Zune (if it has one) or the XBOX entertainment game player and other equally unrelated business.

Google's (NASDAQ: GOOG) success over the next decade depends, to some extent, on moving its search products from PCs to the new generation of mobile devices. It will go a long way toward getting a head start on that in a deal with Verizon (NYSE: VZ).

According to The Wall Street Journal, "The deal under discussion, which would make Google the default search provider on Verizon devices and give it a share of ad revenue, is aimed at dramatically simplifying what is now a confusing set of search options for cellphone users."

The news is not good for Microsoft (NASDAQ: MSFT) or Yahoo! (NASDAQ: YHOO). After losing the PC search battle, their next, and perhaps last, option to pick up substantial business is on mobile handsets. Because Verizon has about 70 million subscribers in the U.S., a large opportunity to gain share from Google is gone.

Deals with cellular carriers are overrated. Even if the default search engine is on a handset, users can still access any other search company through the phone's web browser.

If PC habits carry over to the wireless world, Google has already won the new war. Few people are likely to change search preferences from device to device.

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

Boeing (NYSE: BA) lost its bid for the new Air Force tanker to Northrop Grumman (NYSE: NOC). The aircraft builder was able to get the process re-opened and now has a shot at getting the business that was awarded to Northrop.

Winning another chance at the big contract is not enough. According to The Wall Street Journal, "Boeing Co. said it is inclined to bail out of its effort to win a $40 billion contract to build aerial refueling tankers for the U.S. Air Force unless the Pentagon agrees to give it a total of six months to submit a new bid."

Boeing claims that it will take a long time to figure out how to configure one of its airplanes to haul the amount of jet fuel required by the Air Force.

The request is bogus. Boeing has been through the bidding process for the tanker once before. The idea that the company did not understand the specifications is remarkable.

Boeing may be trying to gain time to shave some of its costs off the project so that it can bring the price of its bid down. It should have done that in the first round. There is no reason it should get that additional time.

It is no wonder Northrop got the original approval, and it is likely to get it again in this round.

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

General Motors (NYSE: GM) has just announced that it will extend warranties on may of it used cars. According to Reuters, "GM said it would begin offering a 12-month, 12,000-mile "bumper-to-bumper" warranty on all used cars and trucks certified as eligible for the repair coverage by participating GM dealers." The firm has already said it will return to the extensive use of incentives to clear out new car inventory.

GM should have a better solution than to lose more money on each new car it sells and add costs to market its used products. It turns out that is not the case. Vehicle sales in the U.S. are just too awful and Toyota (NYSE: TM) and Honda (NYSE: HMC) take more market share each month.The talk of GM doing into Chapter 11 rings a bit more true as the time passes.

GM is now out of options. It still makes money overseas, but that is overwhelmed but its North American deficit. GM says it will stick to supporting all of its brands except the Hummer. That may end up not being true. GM did say it was moving away from incentives. It did not work out terribly well.

GM has a couple of brands that still sell only a modest number of cars. Saab is one. Saturn in another. Saab could be sold. Saturn could be closed. Saturn might not even be missed.

If GM has to continue using incentives, it will get to the point where it cannot support the marketing and product development costs of all of its brands. That point is probably coming in the next quarter.

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

Palm (NASDAQ: PALM) is dead. That has been written before, but now the company needs an official funeral mass. According to The New York Times, "Palm's chief executive, will announce the debut of a new smartphone primarily for business customers - the Treo Pro." The company also has several other handsets in development.

Palm is now up against smartphone products from much larger companies like Samsung and Nokia (NYSE: NOK). Not to mention the Apple (NASDAQ: AAPL) iPhone.

In the last year, Palm had an operating loss of $105 million on a shrinking revenue base that fell to $1.32 billion. The company has $398 million in current and long-term debt.

Palm is not going to make it as an operating company, but it might be a good licensing entity. That would involve cutting almost all of the company's staff and licensing its brand and product designs to another company, perhaps Samsung or LG. The Palm name still carries some modest weight in the U.S.

Palm's revenue might drop to $100 million, but its costs would be negligible. It would, at least, make a profit, which is something that is out of the question with the company in its current form.

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

In a move that the company wisely decided not to announce via a press release to investors, eBay (NASDAQ: EBAY) has lowered the listing fee for fixed-price items on its site to 35 cents, down from as high as $4, depending on the price. The listing duration will also jump from 7 days to 30; those changes will be at least partially offset by an increase in the commission on sold items but eBay did not break down any details on that.

According (subscription required) to The Wall Street Journal, "The company is playing catch-up to other Web sites that have focused on fixed-price sales."

That may be true for now but the fact that eBay feels a need to court that market with aggressive price cuts indicates that the company recognizes the many sellers are opting for that over its own flagship auction business. Almost since inception, eBay has miraculously managed to avoid a price battle with competitors, and has been able to steadily increase its fees while much-hyped and well-funded imitators like Auction Universe fell by the wayside. It may be that sites like Amazon (NASDAQ: AMZN) are finally posing a serious threat.

It also may be that eBay is just messing with people's minds. Back in February when eBay announced its last "fee cut", sellers protested, alleging that the increase in the commission more than offset the decrease and accused eBay of fuzzy math.

Details of the new fee structure will tell us whether eBay is desperate of just manipulative.

The stock market was down yesterday and it is down again today. Bearish sentiment is roaming through Wall Street right now, so I thought I would look back on another occasion when the market was going through similar turmoil and I wrote about the following eight stocks, which I thought would be "safe havens" in such a storm.

Six of the eight did well and two did not, and of course one of those two was a disaster. Among the losers, I do not think anyone is fretting about UPS, which is still one of the few triple-A rated companies along with Berkshire Hathaway. It has been well reported that the slowing economy and higher fuel prices have been the major culprits affecting UPS's earnings. In the case of WaMu, it's demise has also been well reported, but at the time I recommended it WaMu had a stellar reputation of growth and high yield for over two decades. There is no hiding, it turned out to be a lousy pick and an ANTI-SAFE Haven

NOT SAFE:

United Parcel Service (NYSE: UPS) closed Monday at $65.30 down from $78.40; a 16.71% loss

Washington Mutual (NYSE: WM) closed Monday at $4.21 down from $45.50; a 98% loss.

Fortunately the remaining six picks have done very, very well. If you had bought the pool, the average gain over the last two years would have been 7.14%. Adding the dividends over the two years would have raised this to 13.14%.

A recent article about one of Apple, Inc.'s (NASDAQ: AAPL) former engineering executives left me laughing quite a bit. Tim Bucher, who recently left Apple for Dell, Inc. (NASDAQ: DELL) after being accused by Apple CEO of being "manic depressive," is trying to throw a spear at his former company by trying to find a challenger to Apple's iTunes service with a quite-ambitious plan at Dell.

Instead of trying to create yet another online music and video ecosystem that syncs seamlessly with another round of boring Dell music devices, he's trying to create an industry-wide team of competitors to seriously challenge Apple's dominance in the iPod/iTunes marketplace. Notice I did not say "MP3/Music service" marketplace. Right now, it's all Apple in the digital music scene and has been for some time.

Consultant Rob Enderle says that Apple "locks you in" while Dell "locks you into choice." While opening up choice is great for consumers, history says that products and services become so fragmented and hard to use that they never reach critical mass. What Apple did with the iPod was to make the service that goes with it -- iTunes -- so easy to use that it quickly became the market leader. One brand, one service, simple to use.

It's true that many customers want freedom and choice in their music players and music download services so they can "mix and match" to their heart's content. Everyone else (yes, the majority) wants a solution as simple as a light switch. Flip it, and everything "just works." Good luck, Bucher and Dell, but to even come close to challenging Apple, your solution better be out of this world.