Big Bird, Bayonets, and Binders

(I promise this will be the last reference to Donald Trump until at least Halloween Eve at 5:00 PM when his “$5 million challenge” deadline for the President to reveal college and passport records expires.)

“My issues with Donald Trump go back to our childhood together in Kenya. We had constant run-ins on the soccer field. He wasn’t very good and resented it. When we finally moved to America I thought it would be over.” –President Barack Obama joking Wednesday evening on the Tonight Show (video here) with Jay Leno, when Leno asked, “What’s up with all this Trump stuff?”

It is hard to say whether Mitt Romney was cringing more this week over: A) The Donald’s actions (video here), B) the endorsement by Meat Loaf and Mr. Loaf’s unique performance “singing” ‘America The Beautiful’ at a Romney rally in Ohio (NBC video here), or C) prominent Republican Colin Powell endorsing the President. The Powell story is a whole other thing, involving accusations of racism prompted by comments from a  Romney surrogate, ex-New Hampshire Gov. John Sununu.

But there were just a few other things happening this week, not the least of which was the equity market’s definite change in tone.

AAPL’s going forward outlook, some very mixed to disappointing earnings reports and global data which had more ups and downs than the average NFL team this season all contributed to a continued market pullback. On the week, The S&P was down -1.5%, the Dow off -1.8%, and the Nasdaq Comp the strongest at a loss of -0.6% (having suffered the biggest move from the 2012 top already, down  - 6.5%).

And then of course there is the story of Hurricane Sandy, referred to by some as “FrankenStorm” for its potential size and likely destructive impact on the East Coast. (Although we are not happy to be facing this storm, at least it is a decent name for a hurricane for a change, bringing back fond memories of Olivia Newton John in Grease). But the damage reports are ominous, and at a minimum, Sandy promises more power outages than that seen in the Detroit Tigers lineup this World Series so far.

So moving right along here, what were some of the other stories and interesting quotes of the week?

Last Monday night’s debate of course seems like ancient history by now and has been parsed to death, but we will give one comment each to the Right and the Left.

“Obama has no substantive arguments and is reduced to talking about Big Bird, Bayonets, and Binders.”  –conservative talk show host Sean Hannity. This also just so happens to be a major theme of a new RNC ad (NewsMax video here). Hannity might also have added another “B” word, “Bullsh*t*er, which Obama supposedly used to describe Romney offhandedly in remarks to Rolling Stone’s editor. (Washington Examiner)

@billmaher “I’m tired of every Republican politician being a medical supergenius on vaginas. I want to hear gynecologists talk about the national debt.”  (don’t think we will touch that one, except to comment that it refers to all the truly “foot in mouth” Republican comments on reproductive rights and rape).

“Apple Talks Lower Margins Now, Ginormous Sales Later” –headline from AllThingsD.com, summarizing the AAPL earnings call following an Apple earnings report which generally disappointed. (AAPL put in what seems to be an unheard of fifth straight weekly decline, closing at $604.00, and now off 14.4% from all-time highs at $705.07). The story added:

“Apple just reported another one of those uncomfortable quarters where consumers were holding back and waiting for new stuff. And it showed. Profits on a per share basis at $8.67 were well short of the $8.75 analysts had expected, even though they were up 24 percent year on year. Sales, though ahead of the consensus, were a little light, too, at $35.97 billion.”

Speaking of earnings season, far too many companies to report on in this space, but we will share a Reuters running tally on the results of the season to date:

“S&P 500 companies suffer through their worst earnings season in three years. Just 37 percent of the 272 companies that have reported so far have exceeded revenue expectations – far short of the long-term average of 62 percent. By comparison, about 63 percent have exceeded earnings forecasts, just above the long-term average.”

Reuters added that the disparity is even greater for large companies dependent on international revenues, with projections of an earnings decline for those company types of -8.5% versus year ago.

Continuing along this theme, Sir Martin Sorrell of ad agency giant WPP dramatically explained away his company lowering its 2012 outlook yet again, blaming four “Grey Swans” (The Guardian). Sorrell remarked that grim “but relatively knowable” events and circumstances, versus the unknowable “Black Swan”, include the health of the U.S. economy/fiscal cliff and election uncertainty, the Eurozone crisis, turmoil in the MidEast, and slowing economies in the BRIC countries. All of which is leading in Sorrell’s mind to reductions in ad and promotional spending, often one of the first recessionary “canaries in the coal mine”.

Bill Gross of  PIMCO added his own outlook in a Washington Post op-ed, like Sir Martin in very colorful fashion:

“The popular TV series “Breaking Bad” may be an appropriate analogy for the U.S. “fiscal cliff” and ongoing debt crisis. In the show, a chemistry teacher is lured into producing crystal meth. As the title indicates, his middle-class life turns from a temporary high into something much worse, the conclusion of which viewers will learn next year.

Washington, it seems, has a similar story. Hooked on the temporary high of tax cuts and increased entitlements over the past several decades, the nation’s capital is approaching the end of the line traveled by most addicts: Reform, or suffer the consequences.”

But surely there had to be something uplifting this week, and away from earnings, politics and depressing economic outlooks?

The launch of Windows 8 certainly had MSFT CEO Steve Ballmer in high spirits, saying in his infectious and over the top way at the launch presentation, “What you have seen and heard no doubt shatters perceptions of what a PC can be. We have become very enamored of the term ‘Windows Reimagined’.”  (video courtesy of thetelegraph.com).

There is no doubt Microsoft has entered what many are calling “a make or break moment” for Ballmer. The new Windows 8 has something of a coolness factor Microsoft has been sorely missing, but many reviewers feel that it could be an “attractive but potentially confusing jumble”, especially regarding what is seen as possibly a great tablet system becoming unwieldy on a PC.  But certainly it will take some time for all the reviews to be completed .

TechCrunch said in part:

“In a lot of ways, with Windows 8, Microsoft got the jump on what Apple seems intent on doing with OS