Quotable Quotes and Notable Notes From The Week That Was

Once again, we will be taking a look at some quotes related to the biggest business news stories of the week, and some not so big and some not so business-related.

“We are seeing IBM through a different lens. They treat their stock and shareholders with reverence, which is unusual for large companies.” --Warren Buffett on Berkshire’s over $10 billion investment in IBM stock, roughly a 5.4% stake. IBM has been the biggest gainer in the DOW this year, up over 25%.

“They are guilty until proven innocent.” --Wall Street Journal, quoting banking analyst after the Fitch Ratings “bombshell” on U.S. bank exposure to Europe, which contained little new information and was essentially a “warning of a warning”, yet knocked the S&P down 30 points in about an hour. Bank stocks slid over 5% on the announcement.

“Losing credibility can happen quickly -- and history shows that regaining it has huge economic and social costs,” new ECB chief Mario Draghi, in explaining why the ECB should not step outside its mandate to become the bond buyer of last resort for troubled Euro sovereign debt.

“The rank and file at Target, Wal-Mart and other large chains are ready to revolt over Thanksgiving Day openings, with online protest petitions collecting over 30,000 signatures.” --Bloomberg, on the mixed feelings of both customers and employees over the Thanksgiving Day openings of many retailers this year, largely in response to what is being forecast as a tepid Holiday shopping season, with a sales increase of +2.8%, half of last year’s rise.

"The malaise in U.S. bank stocks is because everyone is now looking at 'gross' Eurozone exposure, not net, and the results are gross." --analyst quoted in the Wall Street Journal

“The cost-cutting is now reaching the top ranks of Goldman Sachs, with an unusually high number of partner ‘retirements’ this year and far fewer new managing directors.” --NYT’s Dealbook, on the relatively rough year GS is having and the company-wide cost control efforts.

“Republican Presidential candidates this year have more baggage than a JFK skycap during the Christmas holiday rush.” --a somewhat biased commentator on MSNBC

“To be on the street carrying a sign out here is so unheard of.” -BusinessWeek, quoting an anonymous Occupy Wall Street protestor in a lonely vigil in the ritzy Long Island NY Hamptons

“Nothing says, ‘My firm collapsed because of excessive leverage, exposure to subprime mortgages, shady accounting practices and/or mismanaged bets on European sovereign debt’ like corrugated cardboard boxes filled with office supplies being taken home.” --New York Times on photos of MF Global employees leaving their office building with possessions in hand.

"Jersey Shore star Michael "The Situation" Sorrentino on Tuesday sued retailer Abercrombie & Fitch over what he claims was a publicity stunt to sell clothes using phrases associated with the reality TV actor.” --Reuters on the possible backfiring of an A&F publicity stunt where the retailer claimed to have offered the stars of “Jersey Shore” compensation for NOT wearing A&F clothing on their show, yet sold T-shirts emblazoned with thinly veiled references to the show such as ‘The Fitchuation’.

“The odds are greater than 50% that we will experience a recession sometime early in 2012, but the odds peak toward the end of 2011 and if we navigate the storm through mid-year 2012, the dangers will recede rapidly.” --Federal Reserve of San Francisco report this week

“Tiger Woods and Steve Williams exchanged a cool, businesslike handshake.” --NBC Sports, on the first public meeting of the famed golfer and want-to-be famous ex-caddie as they were grouped in a match together at this week’s President’s Cup in Australia. Williams has made many disparaging remarks about Woods since being fired.

“Graphic pornography was among the shocking fare Facebook users found themselves subjected to earlier this week when the world's largest social network battled hacking attacks.” –various news reports. Facebook said this was “a coordinated spam attack that exploited browser vulnerability.” (makes you wonder if they can hack Facebook, what can they do to visitors of Facebook?)

And finally, there are any number of quotes coming out of this weekend’s tense situation over the Congressional Budget Super-Committee negotiations, with several media sources saying, “they are moving further apart as the Monday deadline approaches”, “if this attitude on both sides continues, this is not going to happen,” and an anonymous Congressional aide saying , “we are not seeing any sense of urgency.”

We like best the commentary this weekend by Larry Kudlow, who said the best thing which could happen would be to avoid the drama, the handwringing and the spectacle of a Congressional floor fight and “just let the sequestration process take place,” referring to the automatic budget cuts which would go into effect in 2013 if no formal agreement reached and voted on.

(Editorial comment: We personally thought the timing and market blindsiding by the Fitch Ratings bank “warning” this week was pretty irresponsible in a time of market fragility. They certainly have the right and even the responsibility to issue reports as they see fit, but how about a little advance notice so financial markets could treat it as an upcoming news event? S&P, despite their many recent blunders, has at least come to some sense of awareness of their actions regarding the markets, giving advance notice that within the next three weeks they will issue new credit ratings for the world’s 30 largest banks.)

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

 

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