Boeing Inc. (NYSE: BA) has won a tactical victory in its $35 billion competition for the Air Force's airborne refueling tanker. Bloomberg News reports that Defense Secretary Gates notified Boeing and EADS/Northrop Grumman (NYSE: NOC) that their bids would be due after the November election.

Boeing said it wanted the delay so it would have time to prepare a competitive bid. "Boeing threatened August 21 to pull out, saying that the 767-200 plane it offered more than a year ago is now too small to 'fit the bill' in clarified Air Force guidelines. The Northrop-EADS entry, based on the Airbus A330 commercial jetliner, can carry 250,000 pounds of fuel, more than Boeing's 205,000," according to Bloomberg.

This is great news for Boeing -- but it depends on who gets elected. If McCain becomes president, EADS/Northrop will probably win since his former finance Chair is Tom Loeffler, an EADS lobbyist. But if Obama wins, the competition is likely to be decided on the merits. Regardless, for the time being Boeing has won an important tactical victory which it should savor.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. Portfolio will publish his book about Boeing, You Can't Order Change: Lessons From Jim McNerney's Turnaround at Boeing, in December 2008. He has no financial interest in the securities mentioned.

Seems the world economy is growing and changing so fast that staying on top for very long will become harder. Carlos Slim of Mexico did not retain the title very long, as CNBC is reporting Meet the World's New 'Richest Person' -- For Now, a story about Mukesh Ambani. It has been reported that he is just completing a ONE BILLION DOLLAR HOME! Here's how the Indian press reports rank the world's top five richest people as of today, based on known public stock holdings:

• Mukesh Ambani - $63.2 billion
• Carlos Slim Helu - $62.2993 billion
• William (Bill) Gates - $62.29 billion
• Warren Buffett - $55.9 billion
• Lakshmi Mittal - $50.9 billion

To me, this all amounts to creating headlines, since the slight difference between one, two, and three could be altered with a single day's stock movement. Given that Ambani is on the other side of the world with great fortunes in Europe and Asia it could change back and forth depending on which stock exchanges are open at the time. In a rising market you could go to sleep as the richest person in the world and wake up to find you were overtaken, only to find by the close of the market you were on top again.

What's more important is who is taking what actions. What are these supernova rich guys doing with their wealth? In the case of Gates and Buffett, they have become the world's biggest philanthropists. Carlos Slim has expressed a desire to share his wealth as well by setting up a $10 billion foundation -- I'm not sure how far he has gone with that idea. Mittal is still busy buying up all the steel production on the planet, and is now the largest player in the market. That will increase his wealth for now. On the other hand, the Hunt Brothers of Texas thought that way in the 1970s about silver, and found out rather quickly that was not their brightest idea. Steel is likely a much better bet.

"Analogous actions by the Soviet Union, when it deployed missiles in Cuba, prompted the 'Caribbean crisis,'" Russian President Vladimir Putin said Friday, using the Russian term for the Cuban Missile Crisis, in reference to the United States' Europe-based missile defense plan.

Putin's statement that U.S. plans to put a Europe missile defense system in Poland and the Czech Republic can perhaps be best interpreted as a rhetorical overstatement before Putin negotiates new economic and political agreements with the West, particularly with Europe.

Russia's oil and natural gas resources, foreign currency reserves, commercial development and +5% annual GDP growth rate have enhanced the nation's negotiating stance, on both economic and geostrategic issues. Sensing his stronger hand, Putin has used the increased leverage to propose, among other measures, European economic/commercial agreements that would be more favorable to Russia, while also making clear that international political agreements among the U.S., Europe and Russia on such issues as the Iraq War, Iran nuclear technology -- and a potential European missile shield -- would also reflect Russia's concerns.

Volatility Index S&P 500 Options-VIX up 0.24 to 13.53

Advanced Micro Devices Inc. (NYSE:AMD) calls (quoted in Pennies) busy on chatter of private equity cash infusion. AMD is recently up $0.46 to $13.87. AMD has been frequently subject to LBO chatter; today chatter is circulating that a friendly private equity-strategic partner could surface to make cash infusion. Speculation is that AMD could announce a deal similar to the deal Sun Microsystems Inc. (NASDAQ:SUNW) announced on 1/23/07, when it received a $700 million dollar private placement from KKR. AMD call option volume of 73,560 contracts compares to put volume of 9,747 contracts. AMD April option implied volatility of 41 is below its 26-week average of 45 according to Track Data, suggesting decreasing price risks.

eBay Inc. (NASDAQ:EBAY) implied volatility is low. Meg Whitman enters ninth-year working as eBay CEO. EBAY is recently up $0.23 to $31.72. Meg Whitman has an estimated net worth of $1.2 billion according to Forbes, much of it in EBAY stock. Years ago, Whitman said she would leave EBAY after eight to ten years. Whitman joined EBAY in 1998. EBAY has a market cap of $43 billion. Microsoft Corp. (NASDAQ:MSFT) has a market cap of $270 billion. EBAY overall option implied volatility of 34 is below its 26-week average of 37 according to Track Data, indicating decreasing risks.

Option volume leaders today are: SanDisk Corp. (NASDAQ:SNDK), AtheroGenics Inc. (NASDAQ:AGIX), Halliburton Co. (NYSE:HAL) and Qualcomm Inc. (NASDAQ:QCOM).

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

What impact will last Tuesday's election results have on the US economy? Not much. With the economy heading south -- led by a deflating housing market -- there is little that Congress will be able to do to help. But history suggests that the economy would be better off with a Democrat as the victor of the just begun 2008 presidential race.

After my posts last week on the relatively weak performance of the Bush stock market and the investment implications of nominating Robert Gates as Secretary of Defense, several radio stations contacted me for my views on how a Democratic Congress would influence the economy. To prepare for these interviews, I've updated an analysis produced two years ago by Forbes -- not a liberal magazine -- which I used during a TV appearance on Wall $treet Week in July 2004. And I've tried to analyze the current forces likely to drive politics in the next two years along with interviews regarding the Democratic agenda.

Although Democrats will control Congress, they lack sufficient power for a Democratic agenda to take hold now. If the Democrats propose legislation which he doesn't like, Bush can veto it and Congress might not muster the two-thirds majority needed to override the veto. Moreover, with Bush trying to salvage his legacy and politicians from both sides of the aisle preparing for 2008 presidential runs, there is little -- beyond a possible increase in the minimum wage -- that is likely to change. Finally, GDP growth has been slowing throughout 2006, from 5.6% to 2.6% to 1.6% between the first and third quarters. This slowing trend will likely continue -- overpowering any policy initiatives that might emerge from Washington.

To put the current situation in a broader historical context, an analysis of post-war presidents and prosperity suggests that Democrats are better for the economy than Republicans. How so?

Yesterday's Microsoft analyst meeting was a momentous day, not so much for key announcements and speakers but rather for a much more notable absence.

Namely that of William H. Gates III, who since he founded the company in 1975 has been synonymous with Microsoft and its identity. Despite the naysayers throughout the years who decried Microsoft for being the "Evil Empire," Bill Gates was the focus and ultimately it was he who steered Microsoft to the leadership position it still retains in the digital revolution.

What Bill's absence yesterday signals is Bill Gates' continued withdrawal from the business aspects of Microsoft. Since January 2000, Bill has been stepping away from the operational portion of Microsoft's business but has remained a key figure in strategic decisions and company direction.

The result is that as CEO Steve Ballmer and CFO Chris Liddell desperately try to assure analysts and investors that all is well despite April's less than ecstatic results, Bill Gates is on a seven-week vacation in Africa.

Microsoft's direction is murkier than it has been in quite some time. The next-gen versions of Microsoft's core products, Windows Vista and Office 2007 have been facing steady scrutiny on the back of continued release date delays. Concurrently with its core products being delayed, Google and Yahoo! have been maintaining strong leads over Microsoft's MSN in the net arena and muscling into the desktop space with software/application launches to whittle away further at Microsoft's core. Apple's recent switch to an Intel processor could herald further competition at the base PC market level (especially with speculation that Apple's new Power Mac will feature both an Intel processor and sport a Blu-Ray drive).

Based on the fourth quarter 2005 reorganization, Microsoft's three main divisions and products are:
1) Microsoft Platform Products and Services: core product - Windows, MSN
2) Microsoft Business Divison: core product - Office
3) Microsoft Entertainment and Devices Division: core product - XBox

With pressure on two out of three business lines to deliver and the MEDD division not out of the clear until Sony's PS3 launches, Microsoft is finding itself in the hotseat.

While Zune (purported iPod killer) and other new Microsoft initiatives sound intriguing, is Microsoft's future assured enough for Bill to take a backseat?

[Photo via Microsoft]

Via Computerworld Blogs Bill Gates stumbled into admitting in a WSJ interview that, yes, he too -- of all people -- has consumed copyrighted content that has not been paid for. Makes you feel a tad bit better about "borrowing" that Flight program back in college, doesn't it?

This brings to mind a serious issue, what is "fair" in fair use, and is what I consider fair for MY use, the same thing I consider fair when OTHERS use content of mine?

Bill Gates' true genius lies in his business sense, and the MSFT chairman's Open Letter to Hobbyists is arguably one of the defining documents  of the digital age. If Gates didn't figure out a way to start getting paid in the '70's the economic imperative might have been slower to overtake computer programming, and we might all be poorer for it today. On the other hand, any company, any "maker," should beware of alienating the very groups it wishes to market too by overzealous pursuit of copyright protection. Nobody roots for Javert and he did end up throwing himself into the Seine.  "Stolen", really is a strong word, as Gates says, for this stuff, and maybe a little good will is cheaper than a lot of resentment.

For more info on "copyfighting", broadcast flags, censorship and many other significant issues yet to be worked out visit the Electronic Frontier Foundation: Defending Freedom in the Digital Age.

Microsoft spends a lot of time in the hallowed halls of academia, and according to an article today from the AP,  more than most companies of its ilk. The company sponsors contests, research centers, and academic chairs, as well as giving deep discounts to students and faculty.

Sure, Bill Gates & wife are big on education through their foundation. But the AP warns this may not be all about altruism (and really? is anyone surprised here? oldest trick in the book, right?), but about persuading "young minds to become loyal to Microsoft products." The AP interviewed Bill, who told them that putting money into colleges and universities is "an investment" and there is a "commercial element ... [a] benefit to us that people have this exposure" while they're still impressionable. After all, he says, the idea of creating the next version of Microsoft Office or the Xbox console is way more fun than the idea of inventing the next, um, hamburger.

I predict that, for the rest of the summer, all news of Microsoft, Inc. will be tinged by the impending departure of Bill Gates from day-to-day operations. Who will take his mantle? Who else will leave? And, grandly, what will be his legacy?

Steve Hamm of BusinessWeek wonders, will Gates be remembered for his innovations and good works, or for his anti-competitive "bare-knuckle tactics"? Hamm's conclusion seems to be that Gates deserves the Carnegie legacy (as opposed to Rockefeller) thanks to the thousands of millionaires he minted and the great works he's already begun to do with his foundation.

Evidently, the legacy didn't look great to investors (or maybe they're just still smarting over Google's success in capturing Adobe's heart, an obvious snub of Microsoft in favor of the company's oogly rival), as the stock was down 20 cents to $22.88.

On a day when everyone was reacting to Bill Gates' announcement that he'll be retiring (Peter Cohan was happy, while Michael Rogers told us it was part of a plan), the Street buzzed about how Ray Ozzie and Craig Mundie would inherit Gates' mantle, with strong leadership from J Allard, Steven Sinofsky and Bob Muglia, and rumors of a Microsoft iPod killer resurfaced, Microsoft stock moved hardly at all. It ticked up three cents to close at $22.10, still very near its three-year low. Volume, however, was extreme at 50% better than average.

So investors are paying attention, and they're acting on the news. But I'm starting to agree with Michael: Microsoft is a widow-and-orphan stock, owned far and wide but not as much by technical, analytical investors. It's safe, and whether Bill Gates is at the helm; whether the company's video players are better than the iPod, or not; whether it spends $2 or $3 billion on operating expenses this quarter, generally, we can bet that Microsoft will continue to rake in the cash and conquer the mass market with its ubiquitous software and services.

After a significant two-day run, could it be profit-taking time?

Asian markets posted considerable gains over night, but European markets are more subdued with their gains. Stock futures are currently down pointing indeed to an expected mild profit-taking today.

While Fed Chairman Bernanke already said yesterday (Thursday) that the recent pickup in inflation and inflation expectation could be due to energy and commodity prices, St. Louis Federal Reserve Bank President William Poole continued on the same line. He warned that we may not see yet in the current inflation data the pressure from the rising gasoline and oil prices, suggesting the Fed may have to keep raising rates.

The biggest after-hours news came from the software sector: Microsoft Corp. Chairman Bill Gates announced he would give up day to day operations at Microsoft, Oracle Corp. increased its earnings outlook and Adobe Systems lowered its profit forecast.

Here's a look at some key Blogging Stocks:

Google (GOOG) is down $0.41 in pre-market trading to $390.59 as of 8:38 a.m. At the heel of Google's launch of its Government search site, the question investors are asking is whether Gate's leaving day to day operation at Microsoft could have any impact on competitors?

Microsoft (MSFT) is down 10 cents to $21.97 as of 8:38 a.m. MSN collaborates with LivePlanet to produce next-generation original online content, but the big news after the trade yesterday was undoubtedly Bill Gates, Microsoft Corp. Chairman, stepping back from day-to-day operations.

Yahoo! (YHOO) is up 1 cent to $30.80 as of yesterday, 7:46 p.m. Yahoo unveiled the new features of Yahoo! 360, and is planning a Hack Day starting noon today - I wonder what can they come up with.

eBay (EBAY) is up 9.45 cents to $30.83 as of 8:40 a.m. While Google claims its web buying system, dubbed GBuy, is nothing like PayPal, there is also news of UBS starting eBay at neutral with a target price of $35.

I am not a Microsoft shareholder but I think shareholders should welcome the announcement that he will retire in 2008 from daily operations.

Microsoft stock is down 61% from its 1999 high and it has been dead money for years. If Gates has confidence in Ray Ozzie, he could become the next CEO. Whether he can break up and rejuvenate the rather moribund IT conglomerate which is Microsoft, I don't know.

But I do know that Gates's oversight of the company has not helped shareholders much in this millennium. The one concern shareholders should have is that Gates may accelerate the rate at which he sells his Microsoft shares as he phases out of the company.

Moreover, unless his sidekick Steve Ballmer gets a vote of confidence from the board, he too could be gone. And with two major shareholders seeking to diversify their holdings, smaller shareholders could suffer.

Today, Microsoft announced that Bill Gates will be stepping back from his day-to-day role at Microsoft (effective July 2008 ... talk about your advance notice!) to spend more time with his foundation. It's not retirement, he said, but "a reordering of my priorities." The market seems suspicious of his new values (five years ago could you ever have imagined Bill Gates, the man excoriated by so many for his heavy-handed competitive behavior, saying "with great wealth comes great responsibility"?). The stock had been up 19 cents on the day, to $22.07, but had already lost half of that gain in after hours trading by 5 p.m.

In other news, Microsoft is using our fear -- of identity theft, phishing, viruses and the bane of everyone's existence, adware -- to hype its Vista operating system. Fear sells. Microsoft SVP Bob Muglia told a group at the TechEd conference in Boston that Vista will be the most secure operating system, ever, and Nate Mook and Tim Conneally from BetaNews evaluate the statement and provide a variety of points that backup Muglia's strong statement (and maybe that fear will be the operating principle of Web 3.0).

I remember when I first got my hands on a copy of Microsoft Word. After years on WordPerfect, the creative soul in me was drunk on the pretty way you could view pages as pages, not words separated by dotted lines, the user-friendly layout, and oh, the fonts. But now, I get my kicks off in-line editing and next-gen blog software and AJAX (it's the wave of the future, dontcha know).

According to Jason Calacanis, CEO of Weblogs, Inc. and attendee at the D conference, Bill Gates is still in love with his software product. Jason writes that Bill "demoed a very cool version of Office that had a very clean -- but still packed -- GUI. One thing I noticed while the demo was going on was  that Gates was smiling like a kid on Christmas. As the audience oooed and ahhhhed you could see him get more excited and smile more. I thought to myself, 'wow, this guys been building the same pieces of software for over 20 years and he is still excited about it -- that's pretty cool.' "

Jason's other big takeaway: Microsoft is about to create "storage in the sky" for your MS documents. Now that would be truly useful and a worthy rival to Gmail and, if it wasn't imitated by Steve Jobs in a hurry, an Apple killer. In the world where everyone's mobile, you can't keep your data on one machine.

Last week Microsoft's Bill Gates expressed regret about being the world's richest man. When I read this, I was reminded of the expression, "be careful what you wish for, you might get it."

Before launching into an analysis of how Gates could be toppled from his throne, it's worth noting that I've admired Microsoft and wondered whether it's lost its elbow room. I praised Microsoft's ability to adapt to change in two of my books, The Technology Leaders and Value Leadership. But in the last several years, Microsoft seems to have lost its mojo as I noted in these interviews by Red Herring and The Washington Post.

Here's a surprise. The biggest threat to Gates's top rank on the Forbes 400 comes not from the number two on the list, but from numbers 15 and 16. According to that September 2005 list, Gates's net worth totaled $51 billion. Berkshire Hathaway's Warren Buffett came in second at $49 billion. And he was followed by Microsoft co-founder Paul Allen ($22.5B), Dell's Michael Dell ($18B) and Oracle's Larry Ellison ($17B). Spots six through 12 were occupied by descendants of Wal-Mart founder Sam Walton, Microsoft CEO, Steve Ballmer, and heiresses from Cox Enterprises and Fidelity.