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Stuart Saft, a partner at Dewey & LeBoef, argues over at Forbes (via SquareFeet)that judges are exacerbating the pain in commercial real estate.

In the last few weeks there have been a series of court decisions that will have repercussions in the credit markets for years to come making an already cautious lending community absolutely paranoid, and restricting credit even if available.

In Syracuse, N.Y., a state court refused to allow Citigroup to foreclose a mortgage on what was to be the second largest mall in the country even though it had no tenants. In a recent decision in the General Growth Properties bankruptcy, the court held that the special purpose entities structure was not bankruptcy-proof. The court also ignored the fact that General Properties fired the independent directors of the special purpose entities and appointed new ones without telling anyone, including the fired directors, for seven weeks. Finally, last week in the Tousa bankruptcy in Florida, the bankruptcy set aside the subsidiary’s obligations and grants of security and ignored the savings clause in the loan documents to reverse a legitimate transaction meant to save the company.

This harkens back to all the sturm und drang over judges’ forced-modification of home loans, and the fears that that would be the end of mortgage lending in America.

We think there’s something to what Saft is saying, though he then goes onto make the case for a bunch of new bailouts for a commercial real estate, including a new Fed lending facility and all kinds of favorable tax treatment.

Read the whole thing >

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See Also:

• Sam Zell Slams Wilbur Ross, Calls Him A Commercial Real Estate Wannabe
• Michael Panzner: Commercial Real Estate Is A "Tsunami Unfolding"
• The Commercial Real Estate Crash Debunks The Myth Of Predatory Lending

Filed under: Auctions, Porsche

Times are tough for the Porsche family. Amidst the merger with Volkswagen, their company just suffered a $6.6 billion loss. But we didn’t think things were this bad for the descendants of Ferdinand Porsche until Bonhams announced they would be liquidating that family’s watch collection to the highest bidder.

Okay, we’re exaggerating just a bit. The Porsche family stands to make a lot of money out of the Volkswagen merger, and the collection is being auctioned off for charity. And while we have no idea what charity that is, we have to assume it’s not the Porsche family themselves.

As it turns out, the family’s interests extend beyond the automobile. Not only does their Porsche Design Group have its own range of watches, but some fourteen years ago they bought Eterna, one of the largest independent watchmakers in Switzerland. Eterna fabricates Porsche Design watches as well as their own brand, and several of the rarest examples will be included along with others among the 49 watches crossing the auction block on December 2 in London.

Among those pieces Bonhams is highlight are included a rare 18kt gold Porsche Design prototype and an Eterna presented to family scion Ferdinand Oliver Porsche on his 40th birthday, along with rare timepieces from Rolex and Omega as well as Panerai (which makes watches for arch-rival Ferrari), Jaeger LeCoultre (which partners with Aston Martin) and Breitling (in league with Bentley). Follow the jump for further details, and check out the images in the gallery below.

[Source: Bonhams]

Continue reading Porsche family auctioning off watch collection

Porsche family auctioning off watch collection originally appeared on Autoblog on Fri, 20 Nov 2009 08:00:00 EST. Please see our terms for use of feeds.

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Modern Warfare 2 does not live up to the hype that surrounded it before the release date and to the standard set by its predecessor, which was released in late 2007. It ticks all the points on the list: there are better graphics, there’s a bigger “What the Hell?” moment, there are tougher characters, bigger firefights and more controversies. It’s a fun, quick, at times tough shooter that satisfies the urge to redeem by wielding a firearm and has superb level design.

But the soul of the experience seems not to be there anymore. Activision, a company led by someone who stated that one of his goals was taking the fun out of (making) videogames, seems to have left a print on Modern Warfare 2, a game, which might actually sell millions of copies, making videogaming one of the most active segments of entertainment, but which forgot its heart somewhere in 2007.

[tablec] [row] [col][/col] [col][/col] [/row] [row] [col]Undercover
[/col] [col]Don’t fight the darkside
[/col] [/row] [/tablec]

Story

The original Modern Warfare was so successful because of two things: the complex multiplayer element, which is still being played by gamers all over the world, and the finely tuned single player campaign, which delivers a lot of corridor solid shooting intertwined with off beat sequences li… (read more)

Testing the BlackBerry Bold 9700 battery has been an interesting experience. I always thought consumer electronics manufacturers embellished their battery life expectancies in order to impress the buyer. In this case, RIM has actually slightly under-stated the Bold 9700’s battery life, and really proved themselves to be an honest company when it comes to their battery life marketing. Could we say the same for Apple? I challenge TIPB to do the same with the iPhone, and see if it can play 39 hours of music off radio and last 29 hours with heavy usage. Speaking of Apple…the BlackBerry Bold 9700 lasts longer than the best iPod.

Just look for yourself, the BlackBerry Bold 9700’s battery, lasts longer than that of the best iPod available.

In Part 1 of the BlackBerry Bold 9700 battery stress test, we threw RIM a bone and checked out the music playback with the wireless connections off. For the second part, it was important to test how long the battery would last given very heavy usage. During the 29 hours that the BlackBerry was on, it went through the following:

• About an hour of voice over 8 phone calls.
• 10 SMS messages received, 7 sent.
• 13 Tweets from UberTwitter, 9 of which contained a pic.
• Google Maps running the whole time and updating Latitude.
• About 8 hours of music streaming and playing via Bluetooth.
• Received about 30 emails and replied to around 15.
• The remaining time spent with all connections on and pulling data.

This is the first BlackBerry that I have been able to run more than 1 full day of usage without charging. There are definitely updates and optimizations made to the OS that make music playback more efficient, as well as general improvements to the device that make the battery last longer than any other BlackBerry. If you’re interested, I could do similar experiments with other BlackBerry smartphones. Anyone want to know about the Storm2 battery?

This BlackBerry test proves that the Bold 9700 has a killer battery.

Special thanks goes out to Slacker for white listing my account so it can be played in Canada. Now if only the lazy bureaucrats can get their act together, Canadians would have an awesome music device.

© Kyle for BlackBerry Cool, 2009

Elecite have a new theme out called Sentient. It looks pretty cool and features an animated shield with 6 customizable icons. It’s easy to use and the navigation is pretty user friendly. As with most Elecite themes, the icons could do with a little work.

Sentient is $6.99 and available for the Storm, 8900, 9700, Bold & 9600 (OS 4.7 & 5.0).

© Matt Cameron aka W4LNUT for BlackBerry Cool, 2009

Exchange of thoughts and recommendations

Some “reflections” (PDF file) on the key themes that emerged from the conference have been developed by Simon Addison, Senior Research Officer & Policy Programme Manager at the Refugee Studies Centre.

We invite you to share your thoughts and reflections on what were for you the most relevant and innovative themes and issues presented and discussed. We would also welcome receiving your suggestions and recommendations on how to move the protection debate forward at a research, policy and practical level. Please add your thoughts, suggestions and recommendations to this page.

• Leave a Reply
• Reflections on an International Conference (PDF file)

As long as Americans perceive the economy to be weak, Obama will keep getting poll readings below 50%. It’s as simple as that.

Nate Silver:

What we have is a comparison of Barack Obama’s approval ratings on the economy to his approval ratings overall. It includes all polls in the Pollster.com database that asked about both approval of Obama on the economy and his overall job performance — a total of 109 polls dating back to the start of his term. I’ve then drawn in some LOESS curves to illustrate the trend.

The two lines track each other uncannily well. From the very start of Obama’s term, there’s been about a 5-6 point gap between approval of his performance on the economy and his performance overall, with the latter figure consistently being somewhat higher. Although Obama’s approval has declined in both departments (particularly during period between about April 1 and August 1; it may not be declining any further now), the magnitude of the gap has been exceptionally steady over time.

This is why a second stimulus is basically a sure thing. As a politician — actually, we suspect this applies to all Democratic politicians — there’s just no good reason for Obama not to try every measure avilable to pull demand forward and stimulate things right now.

It’s the reality of our system, that there’s no good reason to think long-term if you’re a politician that’s always running for re-election in some manner or other.

Join the conversation about this story »

See Also:

• The Second Stimulus Is Now A Done Deal
• Obama’s Approval Rating Dips Below 50%
• Obama Trying To Figure Out How To Extend Bank Bailout Without Triggering More Public Outrage

Personally, I’ve never read an entire book on my BlackBerry, but I might just give it a try. Viigo is a part of my daily reading habits and if the font size were right, and the interface was clean, I could see myself going through a full eBook on my BlackBerry.

If you want to try it out, or you’re looking for another book, Fictionwise are offering BlackBerry Cool readers 25% off with the coupon code “blackberrycool25″ (sans quotes). The coupon is good until the 30th of November.

Some instructions from Fictionwise:

For Fictionwise.com customers, every MultiFormat (unencrypted) eBook and every Secure eReader eBook will work on your BlackBerry. When you log in to your Fictionwise.com account from your BlackBerry, note that you will only see listed those eBooks that work with eReader for BlackBerry. You will not be shown eBooks that don’t work, such as Secure Microsoft Reader eBooks, etc. If you see it on your BlackBerry, you can download and read it.

© Kyle for BlackBerry Cool, 2009

Location services are becoming increasingly popular and, with the right devices and tools to take advantage of, they’re also becoming more useful. Twitter has been working on location features for a couple of months now and the microblogging service has finally enabled them, but for now, only for third-party developers, meaning there are no changes to Twitter.com.

“In August we announced that we were working on a new API that would provide developers with the ability to geotag tweets. Today, the Geotagging API is officially available,” Twitter Platform Director Ryan Sarver wrote.

“This release is unique in that it’s API-only which means you won’t see any changes on twitter.com, yet. Instead, Twitter applications like Birdfeed, Seesmic Web, Foursquare, Gowalla, Twidroid, Twittelator Pro and others are already supporting this new functionality (go try them out now!) in interesting ways that include geotagging your tweets and displaying the location from where a tweet was posted,” he added.

With geolocation, Twitter can attach location information to any tweet, information which could be used in any number of ways, like searching for tweets which are nearby or focusing on the information coming from an event location. The limit is really what the developers can come up with and already a… (read more)

When Glenn Beck started discussing the dollar carry trade, we figured that this seemingly-wonky notion had gone completely mainstream.

Here’s proof: Google Trends, via Pazzomundo, confirms that everyone wants to know what the hell it is. Amazing. (via @mickwe)

Join the conversation about this story »

See Also:

• Asian Nations Threaten To Kill The Dollar Carry Trade
• Now Even Glenn Beck Is Freaking Out About The Dollar Carry Trade
• Bernanke Teams With Asian Banks To Rescue The Cratering Dollar

As various folks in the news business (and outside of it) continue to fret about how it could be possible to ever fund the production of news, some are taking more positive looks at the space. Jay Rosen has listed out 18 different sources of subsidies for funding journalism (or journalism-like) work. Some of them are better than others, but it’s a useful list to get you a thinking. Full disclosure: a part of our own business model is on the list. Along those lines, since people have been saying nice stuff about our business model, Jesse Hirsh has a way-too-nice writeup about our CwF+RtB experiment, which I still think is a bit short of a full business model, but is getting closer. Based on our experiences with it, we’re getting more and more ideas on how to fund not just journalism, but all sorts of content creation.

And, really, that’s the idea. There are lots of different ideas and experiments going on — and many of them are showing early signs of success, and I’m sure more will come along at a later date that are even more successful. Really, the only ones complaining and demanding changes to the law are those who represent the old way of doing things, and don’t want to change. They talk up all sorts of horror stories and moral panics about how “journalism” or “music” or “movies” are going to go away — despite the fact that we actually have more of all three of those things happening today than at any time in history. Based on that faulty reasoning, they demand special protection not for “journalism” “music” or “movies” but for the old business models and old institutions that produced all three.

Eventually, as these new business models and new institutions work themselves out, it’ll suddenly seem “obvious” what the right answers were, and people will forget the hundreds if not thousands of different experiments — both good and bad — that went into developing the new model. It’s a time of upheaval, for sure, but there’s no indication that there’s any real risk to the production of content. Just a few businesses that got big and don’t want to change with the times.

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Here are 5 “best of Craigslist” posts that have at least something to do with cars. Some important points before we continue:

1. There will not be any apologies for offensive language. If you read from this point forward and click on the links, you WILL see something offensive. Such is the beast.
2. None of the holier-than-thou “I ride a bicycle and I’m better than you” rants that are so popular on Craigslist made it on our list. Sorry. (OK, not really sorry. Screw those people.)
3. Keep the conversation going. Feel free to post a link to a best of Craigslist post that’s automotive in nature in the comments

Number 1: One BAD Personalized Plate

How can one person get 50 parking tickets, each one for a different car…the answer? They have a personalized plate that’s simply “NV.”

Number 2: Rant For Anyone Who Works In The Auto Business

If you work at a dealership, repair shop, or any sort of retail repair type business, this rant from an oven repairman will make you bust a gut. Best part:

We get 50 or more broken oven calls in the few days leading up to turkey day and santa day. We get one or two any other week. Ovens don’t collectively go on strike. Most people just admit their sh*t has been broken since the Clinton administration, but some of you think you can bullsh*t me.

Read it – seriously.

Number 3: Traffic Rants

There are dozens of rants about traffic, but a couple stand out. First, we have an introduction to rush hour traffic – “definitions and how to for beginners.” It’s profane, but it’s a nice warm up for the guide to driving in Phoenix (that’s FEE-NICKS).

Number 4: Cool Story About Redemption

Next time you think you’re having a bad day, read this story about a homeless guy getting back on his feet after a dealership took a chance on him and hired him to be a detailer.

Number 5: People Who Hate Annoying Car Ads

Craigslist is chock-full of classified ads for cars, and some of them are hilariously ridiculous. This list of the most irritating car ads hits a home run with this line:

3. The Detached-From-Reality Dipsh*t. “One owner 1986 Corolla. 234K miles. Needs a front bumper and headliner droops. Radiator leaks and needs alignment. $2300 FIRM.” Hey meatstick, one owner or 10 owners, your sh*t is old, worn-out, and worth $300.

Nice.

Finally, if you’re posting an ad on Craigslist trying to sell your car, give this list of classified car ad tips a gander (and remember a tacometer is a Mexican dish, not a gauge).

Any best of craigs ads we missed?

Read user reviews of Tundra Accessories.

Looks like Virgin Mobile Canada is ready to break its iPhone hymen. Yesterday they announced that they will be offering both the iPhone 3G, and iPhone 3GS in retail stores in “the coming months.” Oh Sir Richard, how we love thee. We suppose you want details, but we don’t have any — the press release is a blistering 31 words and 198 characters long, hell if they had been a bit more succinct they could have just tweeted it — as Virgin Canada’s website has yet to be updated with the news. We’ll continue to follow this one as it develops.

Read

The NYT brings us yet another lovely story about the FHA’s relentless drive to create a new bubble in housing, by returning to the worst of the pre-bust practices. This story takes place in San Francisco

In January, Mike Rowland was so broke that he had to raid his retirement savings to move here from Boston.

A week ago, he and a couple of buddies bought a two-unit apartment building for nearly a million dollars. They had only a little cash to bring to the table but, with the federal government insuring the transaction, a large down payment was not necessary.

“It was kind of crazy we could get this big a loan,” said Mr. Rowland, 27. “If a government official came out here, I would slap him a high-five.”

The story that the Times is getting at here is not just that the FHA is making bad loans, and it’s not just that the era of no-down payment is back, but that whereas in the past the agency’s mandate was to help the poor, now they’ll help just about anyone.

Old caps on the loans they would insure, basically kept the FHA in states like Texas, notes the times. San Francisco was unheard of. Now the FHA is doing six per week in SF, and expects to do many more.

Anyway, in the long-term this will end badly. We guarantee it. In the meantime, you have to remember that this is yet another asterisk to put on housing stats that already are pretty weak.

(Image is of Jordan Kurland, one of the buyers in the story, via his Facebook)

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See Also:

• Bob Toll: FHA Lending Is A "Train Wreck"
• Audit: FHA Reserves Collapse Much Faster Than Feared
• Edward Pinto: Ending The FHA’s Continuing Nightmare Of Foreclosures

The psychological rollercoaster continues.  After reaching 8 month lows just a few weeks ago sentiment is swinging wildly in the opposite direction.  David Rosenberg notes the latest Barron’s Big Money Poll which found that the most bullish positions also highly correlate to the highest net speculative futures positions:

Chart 2 highlights the latest Barron’s consensus on the various asset classes — percent bullish and bearish. Equities followed by oil and credit would seem to be the most crowded trades right now. In fact, we can confirm that when it comes to the net speculative long positions on at least S&P 500 futures and oil, not to mention non-U.S. currencies, the specs are hugely long. This could lead to some reversal near-term if either the economy relapses or the U.S. dollar reverses course. It’s always hard to identify what the catalyst will be.

Rosenberg also notes the large net speculative position in gold, but points out that the position is not accompanied by overly bullish money managers:

Gold has a huge net speculative long position on the Chicago Mercantile Exchange (CME) but portfolio managers don’t seem too enamoured so that is at least good news from a contrary standpoint.  Only Treasuries are despised — the Barron’s fall 2009 poll showed 4% bulls and 65% bears, so it would stand to reason that this would be the asset class to be in if we were to see anything reverse the crowded pro-risk trade on so many tables right now.

A recent reading from the Investors Intelligence newsletter survey found that bearish sentiment has fallen the most since late 2003 after the sharp rally:

           This Week   Prior Week    Comments
Bullish      46.1%        44.4%      First gain in four weeks
Bearish      21.3%        26.7%      Steepest drop since 2003
Correction   32.6%        28.9%      Matched the highest since
                                     September 1997

     Note: When bullishness sank to 22.2 percent in October 2008, it was the lowest since
November 1988.The bearish reading of 54.4 percent that month was the highest since December 1994.

Finally, the latest AAII poll for stocks showed another sharp increase in bulls to 46.1%.  Bears fell at the fastest pace in 6 years to 21.3%.

 

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See Also:

• Global Fund Flows Sputter
• Fund Flows Continue To Flee Stocks
• Meredith Whitney: "I Haven’t Been This Bearish In A Year" (XLF)

Stocks have jumped 65% from the March lows.  They have also blasted past fair value, which is about 900 on the S&P 500 on a cyclically-adjusted price-earnings ratio (see professor Robert Shiller’s chart below).  So, unless it’s different this time, they’re now more than 20% overvalued.

(Jeremy Grantham puts fair value at 880 on the S&P 500.  That seems a bit precise.  Let’s call it 900).

Of course, today’s overvaluation doesn’t tell you much about what stocks will do next week, next year, or even the next 5-10 years.  As the chart above shows, before the 2007 market crash, stocks were overvalued for the better part of 20 years–and observing that didn’t help you make money.  On the contrary, it usually got you fired.

What today’s valuation does suggest is that stocks are priced to return a bit less than average over the next decade, perhaps 3%-4% real per year (inflation adjusted), as compared to the 6%-7% average.

Today’s valuations also suggest that stocks may have gotten way ahead of themselves, especially in light of the structural problems that will continue to bog down the economy.

As the chart above illustrates, every one of the prior mega-busts in the past century has been followed by a “trough” in which the cyclically adjusted PE ratio hit the high single-digits.  We didn’t quite make it there in March (the P/E bottomed around 12X), although we did get close.

This, combined with what is likely to be a decade of deleveraging, consumer retrenchment, and sluggish growth as we work off our debt binge, suggests that we still yet might hit that single-digit low before we take off on another secular bull market again.  This could be achieved either through another market crash, or a prolonged period of backing and filling as earnings growth gradually reduces the long-term PE ratio (this is what happened in the 1970s).

On the other hand, it is possible that that enormous stimulus and zero interest rates over the past two years will produce that “v-shaped” recovery.   At this point, given the extent of the recent rally, it would presumably have to be one heck of a “V” to send stocks soaring from here.  But the last eight months have already made idiots out of almost everyone.

See: The Stock Market Rally That Turned Gurus Into Fools

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See Also:

• Stocks Back To Fair Value!
• DOW 5000, Revisited
• The Idiot-Maker Rally

The governments of India, South Korea, and Indonesia are threatening potential capital controls as a tool to limit ‘hot money’ entering their economies in search of higher returns and non-dollar currency appreciation.

While such actions may help keep a lid on Asian currency appreciation, they could be bad news for each nation’s local stock market.

Bloomberg: Officials from India, South Korea and Indonesia are among those expressing concern over overseas capital stoking stock and real estate prices. Indonesia’s central bank is “seriously” studying a limit on inflows to short-term bills, Senior Deputy Governor Darmin Nasution said yesterday. Taiwan last week banned international investors from placing funds in time deposits.

Read more here.

Join the conversation about this story »

See Also:

• JPMorgan: Keep Shorting The Dollar, And Keep Betting On High-Beta, Risky Stocks
• Now Even Glenn Beck Is Freaking Out About The Dollar Carry Trade
• Goldman Sachs: Roubini’s Dollar Carry Trade Theory Is WRONG

Morgan Stanley reads the tea-leaves post-Bernanke’s speech on Monday, and basically says there’s nothing to worry about.

Intervention not imminent.  We believe that a key reason why policymakers have not translated their talk into action is that the USD decline has been orderly and backed by fundamentals.  In Bernanke’s speech, he characterizes the USD moves as a ‘retracement’ from abnormal levels. Indeed, in the big picture, the USD’s current decline (15% from the March 2009 high) has not even offset the surge in the US TWI seen in late 2008 (25% from March 2008 to March 2009, see Exhibit 1).  As Bernanke suggests, that surge was largely sparked by the safe haven bid during the financial crisis.  Since then, USD depreciation has been persistent but orderly.  Amid shifting market dynamics, it is rare for policymakers to intervene unless moves become extreme or unjustified. 

According to our proprietary FX intervention model, the risk of intervention is still elevated at 28%, but has receded significantly since the start of the year when the reading was 53% (see Exhibit 2).  Also, the factor in our model that is contributing to the elevated  intervention risk stems from divergences in growth differentials. Importantly, the indicators of momentum and  positioning are not at extremes.

Despite the growing verbal pushback, our central case is that the USD trough is not in place yet.  Official jawboning may slow the downward momentum, but fundamentals warrant further currency weakness.  Until growth and rate differentials move in favor of the US, the USD will have difficulty putting in a bottom, in our view. Going into next year, we forecast another 4% depreciation in
the US TWI before a reversal in late 2010. 

This is consistent with 1.60 in EUR/USD and 1.01 in USD/CAD (see FX Forecasts on page 22).  Notably, we do not anticipate a USD crash and also judge the bulk of decline to be behind us.  In a
recent note, we outlined four factors that would make us bullish on the USD — (1) sooner than expected hikes by the Fed; (2) faltering in the global economy; (3) a rekindling of risk aversion; and (4) steps by the government to reduce future deficits (see USD: What Would Make Us Bullish? 1 October
2009).  We continue to monitor these risks but judge them to be low probability events for now.

Join the conversation about this story »

See Also:

• JPMorgan: Keep Shorting The Dollar, And Keep Betting On High-Beta, Risky Stocks
• Now Even Glenn Beck Is Freaking Out About The Dollar Carry Trade
• Goldman Sachs: Roubini’s Dollar Carry Trade Theory Is WRONG

	Greenlings: What’s the difference between kW and kWh? The h makes all the difference.		Japan EV Club creams Tesla range record with Tokyo to Osaka run How long will this one stand?
	Government bailout does not = EV mandates for GM, Chrysler Obama defers to management for product choices.	Other news: Smart ED production kicks off at Hambach plant Electric Rolls-Royce Phantom could arrive within a year Ecos Motors Harbinger debuts in Vegas, now taking orders

AutoblogGreen for 11.20.09 originally appeared on Autoblog on Fri, 20 Nov 2009 05:55:00 EST. Please see our terms for use of feeds.

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Big Game is here.

The Stanford-Cal rivalry commenced with the first Big Game on March 19, 1892 in San Francisco’s Haight Street Grounds. Stanford holds a slight lead in the series, 55-45-11. In recent years, however, the rivalry has been dominated by Cal: the Golden Bears have won six of the past seven Big Games, including a resounding 37-16 win last year.

This year’s Stanford team, however, is not the Stanford team of years past.

No. 14 Stanford (7-3, 6-2 Pac-10) is bowl eligible and ranked in the top 15 for the first time since 2001. Additionally, the team is coming off a trio of huge wins: against Arizona State, following a pair of momentum-halting losses against Oregon State and Arizona; against then-No. 7 Oregon, making Stanford bowl-eligible for the first time since 2001 and keeping the Cardinal in the race for a Rose Bowl appearance; and finally, against then-No. 11 USC, racking up the most points ever scored against the Trojans in a 55-21 massacre at the Los Angeles Coliseum.

Stanford, however, is not ready to bask in its past achievements.

“We know who we are,” said Head Coach Jim Harbaugh at Monday’s pre-Big Game press conference. “We’re a blue collar team that’s gotta prepare, gotta study, gotta practice with great intensity . . . [O]ur guys, they have the ability to handle tough times and they have the ability to handle more rewarding times . . . We’re already back to work.”

The Cardinal will need to be on its game, as Cal has been gaining some momentum of its own. Cal (7-3, 4-3 Pac-10) was ranked No. 12 in both the AP and USA Today polls in the preseason, and after starting off the season with a series of decisive wins, jumped to No. 6 in both polls. A pair of losses to Oregon and USC in the following weeks dropped the Golden Bears out of the top 25 in both polls, but they have recovered, winning four of their past five games.

Last week, the Golden Bears defeated then-No. 18 Arizona, 24-16. Shane Vereen, playing in place of star tailback Jahvid Best, who is recovering from a serious concussion he sustained against Oregon State, posted a career-high 159 rushing yards on 30 carries and a touchdown. The Cal defense held the Wildcats to 274 yards of total offense, an average of only four yards per play and intercepted Arizona sophomore quarterback Nick Foles twice.

Overall, Cal is ranked first in the Pac-10 in rush defense, allowing only 3.1 yards per carry. Junior linebacker Mike Mohamed leads the conference in tackles.

“Right now it looks like we’re gonna have our hands full and a great challenge with this Cal team,” Harbaugh said. “They have an identity on both sides of the ball, offensively and defensively, special teams, they’re very impressive to watch. It will be a big challenge for our offense.”

“I think Cal has got the best defensive front that we’ve faced all year,” he added. “Tyson Alualu is the best defensive lineman in the Pac-10, they’ve got great linebackers, [Devin] Bishop, [Mike] Mohamed, [Mychal] Kendrix — all those guys, they’ve got an identity defensively.”

The Cal defense will have a tough test when it faces Stanford’s prolific offense, which leads the Pac-10 with almost 450 total yards per game. Much of that success is due to senior tailback Toby Gerhart, who is currently third in the nation in rushing yards with 1,395 yards in 10 games. He averages 5.3 yards per carry and leads all running backs with 19 rushing touchdowns.

“I personally think that not only should he be in the [Heisman] discussion,” Harbaugh said, “but based on what he’s accomplishing and what he’s accomplished up until this point, he should win it.”

Luck is ranked 13th in the nation in passing efficiency with a rating of 151.84 and fourth in the nation in yards per attempt with 9.3. On top of that, he’s Stanford’s second-leading rusher with 288 rushing yards, 5.6 yards per carry and 2 rushing touchdowns.

“There have been some really good quarterbacks at Stanford since John Elway,” ESPN broadcaster David Norrie told the San Jose Mercury News. “But this is the first Stanford quarterback since Elway where you go, ‘Wow.’”

A win would keep the Cardinal alive in the race for the Pac-10 title and a Rose Bowl berth, not to mention bringing the Axe back to Stanford. The Cardinal knows the Golden Bears will provide a steep challenge, though.

“In a rivalry game,” Gerhart warns, “teams bring their A-game. Everything’s above and beyond records, or what’s happened in the past. For that one weekend, anything goes.”

“This week, this game, is huge.”