Notable Notes and Quotable Quotes From The Week That Was

In what is becoming something of a regular feature, we look again at some notable quotes and comments concerning some of the big news stories of the week, primarily related to the financial markets but not exclusively. Once again this week, the news did not lend itself much to the “lighter side”, unfortunately. But here goes anyway.

“The youth of the world riot at great personal risk to overthrow dictatorships, our youth riot to protest the firing of a football coach.” --Michael Kaye, NYC radio host, speaking of the Penn State “riots” when it was announced that Joe Paterno would step down in the face of the child abuse scandal. (In fairness to Penn St. students, a candlelight vigil in support of the abuse victims was held Friday night.)

“I worry that Apple no longer has the benefit of the ‘Steve Jobs put’. Apple appears to no longer be at the top of the ‘going higher’ cohort.” --Jim Cramer, on the price action of AAPL this week after some discouraging analyst reports on supply chain issues and sales estimates. (Other commentators attribute the sell-off to hedge fund distribution sales to meet year-end redemptions and others consider it a fairly predictable seasonal move down with a ramp back up into Thanksgiving and Christmas).

“MF you, Jon Corzine!” --New York Post headline reporting on the layoff of 1,066 MF Global employees without severance or benefits before the holidays. Employees who were fired in the court-mandated action were apparently not cheered by the fact Mr. Corzine reportedly said he would not pursue his own $9 million severance package.

“Green Mountain shareholders get roasted.” --Several different media outlets and blogs, commenting on the 38% plunge in GMCR shares this week on accounting transparency issues, the short thesis of hedge fund manager David Einhorn, and a revenue miss (despite higher profits).

“Structural reforms are the sine qua non for restoring confidence in the Italian economy.” --Olli Rehn, EU Economics Commissioner, speaking somewhat pessimistically on the growth outlook for 2012 for the Eurozone and specifically on how Italy must immediately undertake much more significant economic reforms with more detailed action plans and timelines. (We had to look it up also, ‘sine qua non’ means essential condition or action).

The Italian economic situation has created a small cottage industry in pundit quips this week, everything from “The Italian economic solution is like Alitalia, late on take-off and late on arrival,” to “Italians now appear ready to put the ‘Full Monti’ on their problems.” (Of course referring to the likely new government to be formed by European Union Commissioner Mario Monti).

“Our customers would rather stay up late to shop than have to get up early.” --Duncan MacNaughton of Wal-Mart, on the retail chain joining other merchandisers with Thanksgiving Day sales starting at 10 PM prior to Black Friday.

"We only have one goal, that is to bring about a stabilization of the euro zone in its current form." --German Chancellor Angela Merkel, denying reports that Germany and France were in serious discussions about a Eurozone reshaping

“The third quarter is one that Goldman Sachs and Morgan Stanley would rather forget.” --New York Times and Wall Street Journal, on the 21 days of GS trading losses during the period and MS 31 days, triple the number from the year ago period. (hmm, at least we were not alone in thinking trading was a bit challenging since July).

“Starbucks latest concoction is juice.” --WSJ referring to Starbucks’ acquisition of Evolution Fresh, a high-end juice company, with reported plans for both grocery store and ‘juice bar’ distribution.

“The financial markets have become more of a betting mechanism similar to a gambling casino than a place where legitimate price discovery of valuations and efficient allocation of capital takes place.” --Sallie Krawcheck, ex-head of Bank of America global wealth management, in her first public speaking appearance after her multi-million dollar severance ouster

“French say ‘en garde’ after S&P faux pas.” --Another NY Post headline, referring to furious French regulators after the S&P erroneous report of a French credit rating downgrade, which brought markets down for a couple hours last week.

“For too long, Washington has operated on the 'something for nothing' principle. Both parties have promised their constituents the world — and given them debt and a sluggish economy and anemic job growth." --New York Mayor Michael Bloomberg, in urging Budget Super Committee Democrats to accept larger spending cuts and Republicans to agree to revenue hikes.

“You win some, you lose some.” --Interactive Brokers Group CEO Thomas Peterffy on his personal purchase of 8 million shares of MF Global prior to its bankruptcy. (IB had been in serious negotiations to buy MF Global).

“Activision blows up competition.” --several media sources, referring to the gamemaker’s record sales launch of Call of Duty: Modern Warfare 3. “We believe this is the biggest entertainment launch of all time in any medium, and we achieved this record with sales from only two territories,” said Bobby Kotick, the chief executive of Activision Blizzard.

“Speculation in energy futures is costing Americans $200 billion per year in unnecessary fuel costs.” --Consumer Federation of America, saying oil prices are not consistent with true global demand

“Oops.” --Texas Governor and Republican Presidential contender Rick Perry, during latest debate brain freeze

We’ll try and end here on a somewhat positive note…(and thanks again to our go-to source this week, the NY Post)

“Disney earnings Happy not Grumpy.” (But even Disney’s revenue and earnings beat and 6% share gains on Friday came with a caveat, as GS keeps the stock at neutral and questions park revenue forecasts going forward).

(Final Note: We spent a fair amount of time this weekend reviewing everything we could get our hands on regarding the current state of the Eurozone crisis. The analyst outlook continues to range all over the place, from the dire predictions of “2008-09 style worldwide contagion” to “the worst case priced in already, providing a great year-end equity buying opportunity”. We like best the quote this weekend from PIMCO’s Mohamed El-Erian, “Be generally defensive and selectively offensive.”

Good Trading!
David W. (aka The Underground Trader)

 

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