Ken: I don't believe N is a "leading indicator" on the state of the economy. It's a business that has a significant cushion against a possible (IMO unlikely) recession, namely it is not a "toy" but a business tool that has cost-effective benefits for the great majority of its users. That's not to say that N will be totally immune IF a recession takes place, but it will have limited effect on its OCF if it does. Those who use N will continue to do so for the employees on payroll and would cancel the service for those no longer there ( a small % of the total). New subs would slow down as well. But, all-in-all we would continue generating enormous revenues.
NI is but a small part of the total N enterprise. Right now it has "unrealized potential" while being a drag on N's bottom line. At some point, it hopefully can generate 20%-25% of N's profits. Of course, if its spun off, we would have the benefit of the spin-off by owning NI shares, and the revenue N would receive through an "offering". At some point, it will all come together. I believe that's what CM has in mind!
Some parts of the Far East, as you point out, is in chaos, with a deep recession and pain for its people. Japan is the key here. I think we will see a bottoming some time next year for that part of the world. Some say it has happened already.
Brazil and LA are in far better shape. Brazil has a 7% deflation rate, but with the help of the IMF and an austerity budget, they should be ok. Also, if the price of oil goes up to $16-$17 a barrel, that revenue would immediately help countries like Brazil, Argentina and Mexico.
This next year IMO is the last year for N to struggle. Its infrastructure (national) will be mostly complete with reduced needs for capex, and it will have new capabilities to offer its customers.
The price of N today is the market saying, "Show me." OK. WE WILL!
BerniE
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