It was a short Holiday trading week with relatively light volume but no shortage of news stories. The headlines were dominated by European debt/bank issues, economic data from the around the globe, the Republican nomination process, hot tech news, predictions on the market and economy for 2012, and, of course, college and pro football. So let’s get to it.
“It is generally assumed that the markets are rooting for a victory by Romney both for the Republican nomination and the White House. It would be beneficial for financial stocks, especially the banks, in terms of financial regulation clarity and moving the Consumer Financial Protection Bureau along in a sensible fashion.” --noted fund manager and Forbes contributor Michael Holland (paraphrase from Bloomberg Radio interview)
“Saturday’s Republican Debate in New Hampshire Could Have Been the WORST DEBATE EVER.” --Huffington Post, citing the “softball questions” and absence of any new substantive information
“What is Yahoo? A tech company, a media company, a content company, a search company, a data mining company, a portal, or a social network company? Are they a company planning acquisitions or a company about to be acquired? Figuring this out is the greatest challenge for new CEO Scott Thompson.” --numerous media sources commenting on the appointment of Mr. Thompson from online payment processor PayPal. Silicon Valley was buzzing over the selection and the pay package, reported at $27 million, especially as rumors keep floating that Yahoo might soon be acquired, merged, or taken private.
“China cancels nearly all reality TV shows.” --the Wall Street Journal. According to the report, there is a ‘sinister element’ to this, as the China regime does not want the masses to see examples of wealthier lifestyles. The rule is officially targeted at what Chinese regulators have called "excessive entertainment and a trend toward low taste”. To us, it seems like an example of traditional Eastern wisdom, although “The Real Housewives of Shanghai” might be a must-see.
“You cannot turn around without bumping smack into another fawning analyst or tech site glowing Apple prediction for 2012, with the iPad 3, iPhone 5, and Apple TV topping the list.” --tech website blogger, on the great challenges, opportunities and heightened scrutiny facing CEO Tim Cook
“Long ridiculed as the tech industry laggard, Microsoft actually has a hit, at least to the ‘Technorati’. It’s the cellphone software called Windows Phone.” --Tech columnist Nick Wingfield in the NY Times
“Verizon Attempt FEE-ble.” --among numerous punny headlines on Verizon’s ill-fated and short-lived $2 “convenience fee” for certain bill payments, which created outrage among consumers and regulators
“Deals will come but investors are going to look much more carefully at pricing.” -- Brian Reilly of Barclay’s Capital, on the backlog of IPO’s postponed due to market conditions and the very poor record of 2011 IPO’s versus offering prices, down averagely about 15-20%.
“Meredith Whitney slashes big bank estimates, a little more bullish on small regionals.” –Online WSJ, on infamous analyst Meredith Whitney cutting 4th Qtr. estimates on GS and MS, citing poor trading conditions and “persistently weaker investment banking activity.”
“Philipp Hildebrand is under pressure to explain how he can act as guardian of the Swiss franc and allow his wife to trade it at the same time.” --Bloomberg, on the head of the Swiss National Bank and his wife, a former hedge fund employee who reportedly has been active in the currency markets
“Goodbye “Old Normal,” standby to redefine “New Normal,” and welcome to 2012’s “Paranormal.” --various news outlets on a well-publicized interview by Bill Gross of PIMCO, in a tongue in cheek reference to PIMCO’s “new normal” theories. Gross says, “This new duality – credit and zero-bound interest rate risk – is what characterizes our financial markets of 2012. It offers the fat-left-tailed possibility of unforeseen – delevering – or the fat-right-tailed possibility of central bank inflationary expansion. It's as if the Earth now has two moons instead of one and both are growing in size like a cancerous tumor that may threaten the financial tides, oceans and economic life as we have known it for the past half century. Welcome to 2012.” By the way, it was widely reported that PIMCO’s Total Return Fund had a record $5 billion in client redemptions last year as the world’s largest mutual fund trailed rivals. What does all this very strange language mean in real life terms? PIMCO is predicting “2 to 5 percent returns on investments in stocks, bonds and commodities”.
“Kathy Griffin delivers New Year’s Surprise to Anderson Cooper.” --numerous sources on comedian Griffin shocking her co-host Anderson Cooper, and breaking CNN’s "no nudity" rule, removing everything but her bra and underwear in the middle of Times Square on their New Year’s Eve show.
“The yield on Hungary's 10-year bonds continues to hover in the ten percent range, far beyond the psychologically important seven percent mark which is what toppled Greece, Ireland and Portugal in the past.” --wire reports, including Reuters. One analyst found a cute way to put it, calling Hungary’s debt, “a momentum-negative trade”. (Hungary is part of the European Union but not the Eurozone). According to Reuters. “controversial new laws that are seen as undermining central bank independence and democratic checks have put Hungary on a collision course with the European Union and the IMF, jeopardizing an aid deal.”
“Well-known forecaster declares 2012 too hard to predict.” --Reuters, on Laszlo Birinyi of Birinyi Associates, usually one of the most outspoken and bullish of forecasters. Birinyi reportedly said “he knew it would be hard to make predictions for 2012 in October, when he saw a headline suggesting that markets would rise or fall depending on whether the tiny nation of Slovakia approved a bailout plan for Europe”. (Frankly, we are a little confused since we have seen other reports where Birinyi has the S&P hitting 2854 by September 4, 2013, not Sept. 3rd or Sept. 5th, but Sept. 4th.)
“Horndog Honcho Hurd Kept ‘Abreast’ of Jodie.” --the always over-the-top New York Post on ex-HP Chairman and CEO Mark Hurd and the ongoing saga of his alleged relationship with HP marketing contractor Jodie Fisher.
“President Obama currently has 50.17% of the vote, no matter the Republican nominee. It all hinges on the economy and employment data by election time. The margin of error is so small at this time that perceptions of economic progress will likely tip the scale.” --paraphrase of article in the NY Times on Yale Economics Professor Ray Fair, well-known in political circles for modeling election outcomes off economic data and cycles, among other academic accomplishments.
“The Honey Badger Takes What it Wants.” --LSU defensive safety and Heisman Trophy finalist Tyrann Mathieu, on why he is nicknamed after the hyper-aggressive ‘Honey Badger’. Remarkably, both teams have been well-coached to keep down the “trash talk” before the National Championship game Monday night between LSU and Alabama.
"It's a tragic reality but, on your watch, more and more people have come to believe that America is becoming a deadbeat nation
