D: All Things Digital, The Wall Street Journal technology conference, is in full swing in Southern California.

Netflix (NFLX) Chief Executive Reed Hastings led off the proceedings this morning talking about international expansion. The Internet movie outfit is going to launch in Toronto first, a “bold” move, going to Canada, he jested. Then, Netflix will open it’s doors in an undisclosed foreign market shortly thereafter.

The upshot: international expansion could hurt profits. “We tell investors that the better it goes, the more money we are going to lose because we are going to invest” more in expansion, Hastings says. He says it takes one to three years for Netflix to establish itself in a new country, which is relatively fast. Hastings, who is a Microsoft (MSFT) board member, would not comment about hedge fund manager David Einhorn’s call for Microsoft CEO Steve Ballmer’s ouster.

He was wiling to discuss his own open letter to short sellers to cover their negative bets, even calling short-selling “healthy” for markets.

“I’m not trying to have a battle with the shorts,” (but) if you have a friend on the short side and you think he’s losing money, and you think he’s wrong, then you want to tell him.”

The conference, now in its ninth year, got off to a rip roaring start last night when News Corp. “acting CEO” Jane Lynch, the star of the Fox Television hit Glee, recommended comic strips be added to the WSJ and other humorous mandates involving Sara Palin and talk show shock host, Glenn Beck.

Google (GOOG) Executive Chairman Eric Schmidt was the opening night keynote. The former CEO, who serves as an advisor to President Obama, says he has no intention to take a cabinet post or agency job, which had been rumored. But he will be active in the coming campaign just as he was during the President’s first election.

Note: For further ongoing coverage of D, see also former Tech Trader editor Eric Savitz’s blog at Forbes.com.

Article courtesy of Tech Trader Daily

The following post is by Dealbreaker reader and commenter Infinite Guest.

President Obama has nothing to gain by negotiating with Republicans in Congress in order to raise the debt ceiling. The Department of Treasury doesn’t need Congressional approval to issue more debt and it will be a long time before Treasury actually needs to exceed the debt ceiling.

The analyses I’ve read on the topic are nothing if not variable, but they all assume at some level an agreement by all parties on the basic necessity of raising the debt ceiling and the general wisdom of reducing the deficit. The President knows what needs to be done, the Congress knows and so does the electorate. Based on this shared understanding, it follows that those who act in the spirit of compromise will be rewarded and those who act to obstruct
progress will be punished.

Never mind the compelling absence of evidence that any such shared understanding exists; that’s just not how things work.

The President, and this President in particular, is not answerable to Congress. The President is answerable to history, to the voting public, to our allies, to business interests including bond markets and in relatively rare cases to a 2/3 majority in the Senate. When the executive branch and the legislative branch can’t work out their differences the Supreme Court acts as referree. If Congress failed to raise the debt ceiling, history would not be kind to a President who on their advice failed to honor our debts. The bond markets would not be kind, our allies would not be kind and consequentially neither would the voting public. But a President who stood up to a hostile, inexperienced Congress and continued to honor our debts would win support from all sides. There will have been sufficient turmoil and pain following Congressional failure to raise the debt ceiling that everyone on earth will understand who the heroes and villains are.

If Congress failed to raise the debt ceiling, the President could stand up to Congress on Constitutional grounds, in which case he could count on a fairly corporatist Supreme Court to eventually rule in his favor. He could stand up to Congress on National Security grounds, in which case he might even be able to secretly issue fresh debt. He could stand up to Congress on technical grounds for a very long time without provoking a Constitutional crisis or raising the debt ceiling simply by draining the Treasurys out of trust funds and replacing them with other assets. And if he had to break the law, as President, in order to stand up to Congress, then he could break the law on moral grounds, secure in the knowledge that if he is impeached, the Senate doesn’t have enough votes to convict.

What would the electorate think of a President who defies Congress on any or all of those grounds? The Democrats would rally behind him, the Republicans would still oppose him and the independents would admire him for acting independently.

Now alternatively he can compromise to avoid a direct conflict but what’s in it for him? He could give away everything his constituents like and it still wouldn’t be enough to balance the budget. By compromising he snatches defeat from the jaws of victory. Democrats will hate him. Republicans will (rightly) say that they won. Without any drama to overcome through courageous and decisive action, independents will conclude that he’s a weak leader who stands for nothing.

Politics is not about forethought, compromise and the public good. Politics is about personalities and political narratives and the balance of power. This narrative has yet to be written, but in the politics of the debt ceiling, President Obama has all the power and his opponents in Congress have none.

Article courtesy of Dealbreaker

Date: May 20, 2011 8:58 AM
Subject: A Modest Proposal Back at President Obama

A Modest Proposal Back at President Obama:

In the spirit of inherently “reasonable” historical precedent, and given the current situation is “unsustainable”, we propose rolling back the giant ever-growing socialistic regulatory liberty-crushing nanny state to its pre-1967 borders.

Article courtesy of Dealbreaker

Go HERE for more photos by Austin Roque and tag yourself and your friends!

Yesterday LACMA’s Costume Council played host to a very special event honoring legendary handbag designer Judith Leiber for Judith Leiber: The Style, Legacy, and Story of an American Icon, an exhibition of her creations, panel discussion moderated by the fashion aficionado and Decades founder Cameron Silver, and champagne luncheon with some of L.A.’s top fashion figures and Leiber devotees. Read the full story

Hewlett-Packard (HPQ) CEO Leo Apotheker had more tough news for investors and analysts this morning on the conference call to discuss the company’s fiscal Q2 results and a reduced year outlook, reported this morning.

Not only is the PC division struggling from lower consumer sales, but the services business is not where it should be, Apotheker suggested.

“As I have been digging into our services business in joining HP and diving even deeper over the past couple of months, I have concluded that we had a solid strategy for Services, but we didn’t invest in the path to support the strategy,” said Apotheker.

“Instead, HP focused on maximizing its shorter-term margins. We have over-executed operationally and underinvested strategically. As a result, our short-term margin expectations have been too high. This has impacted our ability to create sustainable growth for the long term.”

HP has so far failed to get its services business into the “higher value, higher-margin and higher-growth categories,” he said. There’s too much focus on IT outsourcing deals, Apotheker said, bringing down profit margin.

To remedy the situation, Apotheker said the company will look to recruit an executive Vice President for enterprise services, and that the current Enterprise division head, Ann Livermore, will be in that role in an interim fashion. Also, the company will “enhance our services offerings in emerging areas, such as cloud services and consulting, application modernization, business analytics and mobility.”

Regarding the weakness in PCs, where consumer-oriented shipments were down 23% from the prior-year quarter, Apotheker said that the “steepness of our Q2 decline is greater than what we had anticipated.” Although the company is cautious, he said the introduction of HP’s “TouchPad” tablet computer, expected this summer, would be “exciting.”

HP shares are currently down $2.15, or 5.4%, at $37.65.

Article courtesy of Tech Trader Daily

“I was eating souffle at Rise Restaurant with Laura and two buddies,” Bush said on Wednesday at the SALT Conference in Vegas, when asked what he was doing when he received the call from President Obama. “I excused myself and went home to take the call,” Bush said. “Obama simply said ‘Osama Bin Laden is dead.’” [ABC]

Article courtesy of Dealbreaker

Paulson Plays the Lehman Bust (WSJ)
Mr. Paulson’s fund has been snatching up Lehman debt at steep discounts since the day the investment bank collapsed, betting prices would rise while panicked investors fled. Now, as Lehman’s estate prepares to wind down, Mr. Paulson’s fund could reap profits between $350 million and $726 million on the Lehman trades…Over two and a half years, Mr. Paulson’s fund, Paulson & Co., purchased more than $7 billion worth of Lehman bonds in about 1,800 transactions. The average cost of those trades was just 13 cents on the dollar, according to the Journal’s analysis.

PIMCO raises bet against U.S. government debt (Reuters)
PIMCO’s Bill Gross, the manager of the world’s largest bond fund, raised his bet against U.S. government-related debt in April to 4 percent from 3 percent, according to the company’s website on Monday.

Morgan Stanley Trading Gains Topped $100 Million on 10 Days (Bloomberg)
The firm’s trading division lost money on 3 days during the period, compared with 13 days in the fourth quarter, New York- based Morgan Stanley said in a filing with the U.S. Securities and Exchange Commission.

BofA to cut $850bn bad loan book in half (FT)
Bank of America plans to shrink its $850bn portfolio of troubled home loans by about half over the next three years as it seeks to quicken the pace with which it resolves problems related to the housing crisis and its disastrous purchase of Countrywide Financial. Terry Laughlin, who is spearheading BofA’s mortgage modification and foreclosure programmes, told the Financial Times he had been given leeway to act quickly to tackle the growing number of bad loans that threaten to overwhelm the bank’s overall performance and tarnish the reputation of Brian Moynihan, its chief executive.

Microsoft Said to Discuss Buying Internet-Call Provider Skype (Bloomberg)
A deal would value Skype at about $8.5 billion and may be announced as early as today, said one of the people, who asked not to be identified because the talks are private.

Alan Simpson Attacks AARP, Says Social Security Is ‘Not A Retirement Program’ (HuffPo)
At an event hosted by the Investment Company Institute, Simpson delighted the finance industry audience members by aiming a rude gesture at the leading lobby for senior citizens.

CME raises crude futures margins 4th time since Feb (Reuters)
Margins will climb by 25 percent as of the close of business on May 10, boosting the cost of holding positions for hedgers and speculators, a factor some traders said helped bring oil prices down by as much as 2 percent on Tuesday following a $5 a barrel spike a day earlier…The cumulative increase in margins on U.S. crude benchmark West Texas Intermediate CLc1 positions since February is 67 percent, from $3,750 to $6,250 per contract.

China Has Bigger-Than-Forecast Surplus on Record Exports (Bloomberg)
China reported a trade surplus that was more than three times larger than forecast in April as exports surged to a record, bolstering the U.S. case for faster yuan gains as officials from both nations meet for annual talks in Washington. The surplus widened to $11.4 billion and exceeded the forecasts of all 27 economists in a Bloomberg News survey. Exports climbed 30 percent to $156 billion while import growth slowed to 22 percent, the customs bureau said today.

Euro wobbles, haunted by commodities and debt worries (Reuters)
The common currency, which hit a six-week low against the Japanese yen and a one-month low against the British pound, was also hobbled by fears of a commodities rout after oil prices fell in the wake of the CME Group’s hike in trading margins for U.S. crude futures.

BNP Paribas chairman to retire (FT)
Michel Pébereau, France’s most influential banker, is retiring as chairman of BNP Paribas, the domestic bank he helped transform over two decades.

Reports of Mortgage Fraud Reach Record Level (WSJ)
Reports of mortgage fraud, which have been increasing since the housing boom, rose to their highest level on record in 2010, Treasury Department figures showed. The Financial Crimes Enforcement Network, a Treasury agency, reported 70,472 “suspicious activity reports” related to suspected mortgage fraud, up from 67,507 in 2009, or a 5% increase. That’s the highest number recorded by the government since tracking began in 1996.

A Venture-Capital Newbie Shakes Up Silicon Valley (WSJ)
As a newly minted venture capitalist, Marc Andreessen, co-founder of Netscape, aimed for nothing less than big… Like other investors here, he’d been eying Web companies with explosive growth and global star power. But acquiring shares in tech titans like Facebook is tricky…So Mr. Andreessen set out to make his own rules—maneuvering his way into hot private deals at huge cost.

U.S. Braced for Fights With Pakistanis in Bin Laden Raid (NYT)
President Obama insisted that the assault force hunting down Osama bin Laden last week be large enough to fight its way out of Pakistan if confronted by hostile local police officers and troops, senior administration and military officials said Monday. In revealing additional details about planning for the mission, senior officials also said that two teams of specialists were on standby: One to bury Bin Laden if he was killed, and a second composed of lawyers, interrogators and translators in case he was captured alive.

Arnold Schwarzenegger, Maria Shriver announce separation (LA Times)
Shriver has been residing apart from the actor-turned-politician for the last few weeks. The former first couple confirmed the separation in a joint statement released Monday after questions from The Times…Over the years, the marriage between the international celebrity and the daughter of the Kennedy dynasty has come under close scrutiny, especially during the 2003 recall of Gov. Gray Davis, when The Times reported on Schwarzenegger’s lengthy history of groping women. At the time, Shriver defended her husband, helping lift him to victory in the free-for-all contest.

Article courtesy of Dealbreaker

Boehner wants to be “talking about cuts of trillions, not just billions.”

Speaker John Boehner will call on Congress to offset a debt ceiling hike with spending cuts of a greater amount, an ambitious proposal that puts House Republicans on a collision course with Democrats who want much more modest spending restrictions attached to the vote. “Without significant spending cuts and reforms to reduce our debt, there will be no debt limit increase,” Boehner plans to tell the Economic Club of New York here this evening, according to remarks obtained by POLITICO. “And the cuts should be greater than the accompanying increase in debt authority the president is given. We should be talking about cuts of trillions, not just billions.”

Under Boehner’s vision, for example, Republicans would have to find more than $2 trillion in cuts if they wanted to raise the debt ceiling by that amount through 2012 — which is in line with Treasury’s estimates on the debt limit. But Republicans could also go for a more incremental increase in the debt ceiling, coupling that with a smaller offsetting cut in spending. Boehner’s preference is for immediate cuts, not promises to pare back spending in the future.

[Politico]

Article courtesy of Dealbreaker

• After a judge reduces the Lindsay Lohan and the case of that freaking necklace charge from felony to misdemeanor, D.A. drops the case, hands over to L.A. city attorney’s office. [LATimes]
• The Dodgers might not have enough money to pay their players this month and will likely be broke by July. [WSJ]
• Whether or not you’ve gotten enough Dubya in your life, Will Ferrell does a really great Bush address to the nation live from Sizzler. [PE]
• My life is complete now that Mike “The Situation” Sorrentino has a “series development deal” with MTV for his own show set to air in 2012. [Variety]
• That bin Laden thing really did wonders for President Obama’s approval ratings of his handling of terrorism, the Afghanistan War, and overall performance. [HuffPo]

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• The details of the high risk, potentially disastrous plan to kill Osama bin Laden and play-by-play account of how it all went down. [LATimes]
• Dwayne “The Rock” Johnson was one of the first people outside the operation to know about the death of Osama bin Laden, tweets news 45 minutes before any media outlets. Yeah, I don’t get it either… [KTLA]
• Sarah Palin delivers a speech thanking former President Bush, not current President Obama, for the death of bin Laden. Not even kidding. [HuffPo]
• Are we to take Miley Cyrus’ rendition of Nirvana’s “Smells Like Teen Spirit” at her concert last week as an unequivocal sign the apocalypse is fast-approaching? [TMZ]
• For those who care to make a difference in the world, starting today you can vote online for the 2011 MTV Movie Awards Best Movie category from the list of nominees. [PE]

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