Quotable Quotes and Notable Notes -- July 15, 2012

An interesting week to say the least, although the big news movers were relegated to Thursday night and Friday morning.

Six consecutive days of lower intraday lows, only to see the SPX end the week with a 2-point gain or increase of 0.2%. On the strength of Friday’s action the Dow closed the week +0.4%, although the Nasdaq Comp was off a full -1.0% for the week, with names like AAPL, GOOG, AMZN AND MSFT and others all down on the week. Some earnings warnings from tech names, especially AMD, possibly led to the tech softness this week, along with somewhat typical weaker seasonality.

Next week is chock full of big tech name earnings releases with the following names among the many coming out: INTC, EBAY, IBM, QCOM, GOOG, MSFT, NOK and SNDK. So a very critical week for tech, and many other non-tech big name earnings.

So what were they saying this week? Let’s lead with Jim Cramer’s assessment of Friday’s action which we thought pretty interesting:

“We saw a different kind of fear on display today entirely. it was the fear of actually missing a rally, or worse, betting against one. What created such a frenzy of buying after six straight days of hideous decline? China did it. The possibility and whisper that the Chinese government will take action this Sunday night to stem the deceleration in their economy.” --Cramer on his show Friday evening. (Now we had heard much speculation that the China GDP report would open the door to more China easing or QE of some form, but had not heard anything so specific as this Sunday night. I guess we will see).

“The recently discovered information raises questions about the integrity of trader marks.” --from JPM’s statement Friday regarding the London “whale” loss. (Ostensibly this provided some of the cover for the salary/bonus “clawbacks” which were announced). That said, the market felt some sense of relief over Jamie Dimon’s reassurances on the worst case loss and applauded the overall earnings report with a jump of nearly 6% in the stock Friday. Dimon said in effect, “We made a mistake, dealt with it, and are moving forward stronger than ever.”

“Our mortgage business generated record applications in the second quarter of $208 billion, up over 90% from a year ago and up 11% from last quarter. Obviously, the low-rate environment is driving strong refi application volume. But purchase volume was up over $19 billion or 43% from the first quarter, indicating increased strength in the overall housing market where we've seen increases in sales and pricing in markets throughout the country, even in some of the hardest hit areas during the downturn.” --Wells Fargo’s (WFC) John G. Stumpf – Chairman and CEO during Friday’s earnings conference call.

Mr. Stumpf also gave some celebratory remarks on WFC’s anniversary which happened to fall on Friday, “I want to take a moment to recognize that 160 years ago today, on July 13 in 1852, Wells Fargo first opened its doors for business right here in San Francisco. So it's our birthday today. It's been quite a remarkable ride for the stagecoach.” Warren Buffett, whose Berkshire Hathaway is the largest WFC shareholder, said “Wells Fargo has a sensational mortgage operation”. (We did not hear Mr. Stumpf nor Mr. Buffett mention WFC’s settlement last week of a $175 million in a discrimination action involving minority mortgage borrowers, but hey, who wants to wreck a birthday party?).

“Activist investor William Ackman has turned his attention toward Procter & Gamble Co. amid talk that the company's board is discussing the future of CEO Robert McDonald.” --The Deal and other wire reports. Ackman’s Pershing Square Capital received FTC clearance to take a major stake, rumored to be as high as $2 billion, which still would be a relatively small 1% of market cap. Berkshire Hathaway is also a large shareholder in PG. PG share performance has been significantly lagging major competitors and the stock was down about 8% YTD prior to the news of Ackman’s interest. It was up almost 6% on the week. (In a somewhat related thought, some bearish cynics are calling this the “bathroom, kitchen, band-aid and cereal rally” so far this year, as consumer defensive stocks and healthcare have been some of the leading sectors, along with tech. P&G unfortunately has been an exception, which might be why Mr. Ackman is attempting to “unlock value”.)

“Accompanying a heavy slate of economic indicators, Fed Chairman Ben Bernanke makes his semi-annual congressional testimony on monetary policy and economic outlook Tuesday and Wednesday. Given the discouraging economic signals in the past few weeks, the chairman's remarks will be parsed for any signs of increased willingness to deliver more cheap-money stimulus.” --Morningstar

“COMIC-COM 2012 BADGES ARE SOLD-OUT” –Comic-Con’s website. The San Diego annual fanfest of sci-fi, comics, movies, TV shows, gaming, and other “popular arts” is having another bang-up session, with the Batman, Twilight and Iron Man franchises some of the biggest hits. Apparently the big buzzword at the convention was “Reboot”, as many older movies were rumored to be in various stages of remakes, including: Superman, Carrie, Highlander, Judge Dredd, Ghostbusters, Daredevil, RoboCop, and others. We were happy to see the notice of the San Diego Convention Center policy: “No functional weapons allowed at Comic-Con. If you do not want to have your costume weapons inspected or tagged, or if you are not willing to comply with these policies, please do not bring your costume weapons.” (Shades of Leonard, Sheldon, Howard and Raj).e

“We have seen a highly alien culture creep into all these big banks.” --The NY Times, quoting Mr. Alexander Hoare, Partner at family-controlled very traditional bank Hoare &Co. on the unseemly and ungentlemanly changes in London’s banking landscape and the Barclay’s scandal. (Cheerio, stiff upper lip, God Save the Queen, and please pass the teapot...…).

“Has China’s economic slowdown finally caught up with the luxury sector?” --Financial times, WSJ and others this week. The WSJ reported, “China's voracious appetite for luxury goods is starting to wane as wealthy buyers succumb to nervousness about the country's slowing economy and the government cracks down on corruption that often takes the form of pricey gifts.”

We were listening to a Bloomberg radio interview Friday with noted fund manager Mike Holland who raised an interesting point on this and other matters pertinent to China. Holland’s main point was that with a new PRC government coming into power in the Fall in a well-choreographed transition which happens just once every 10 years, the current government may not wish to stimulate too much, allowing the new leaders to “save the day” in 2013-14.)

Bloomberg was reporting today:

China’s Premier Wen Jiabao warned the momentum for a recovery in economic growth isn’t yet in place and that “difficulties” may persist for a while, the official Xinhua News Agency reported. “It should be clearly understood that the momentum for a stable