Opening Bell:4.20.06

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Apple Earnings, All iPod All The Time (AP)
Despite the promise of the iPod spillover, and the switch to Intel chips, Apple's computer sales continue to grow anemically. That's ok, according to pundits, just wait until next quarter. Then, there will be versions of Photoshop available for the Intel-based Macs, and everything will be ok. Like Yahoo!'s shares, the day before, the stock jumped sharply, after hours, on disappointing revenue and guidance.
Wal-Mart boss: Changes no publicity stunt (Bloomberg News)
Don't let your coffee hit the monitor after you read this, but some are complaining that Wal-Mart's latest move to expand health care coverage to more of their employees is just a publicity stunt. How dare they do anything that benefits their employees... it's obviously a cynical ploy to improve the company's public image. So, it would be better if they didn't do anything at all? Hmm, are the unions looking out for workers, or are they looking out for themselves? Happier workers won't make it very easy to gain a foothold in the company. As CEO Lee Scott put it, "We did not become one of the most successful companies in the world by doing things the same way for 44 years. We have succeeded by sticking to our core values while always looking to improve." Meh... he should have just told the unions where they can shove it.
Senator urges inquiry as gas prices increase (Albany Times Union)
Let's drop the suspense right now. The senator in the headline is Chuck Schumer. Yes, he's unhappy with the current state of supply & demand and wants an investigation. If only we had a nickel for each time he uttered those words. Apparently, he hasn't been watching the international oil exchanges, and thinks that the domestic oil companies are manipulating prices. In fact, he has a novel explanation, In a conference call with reporters Tuesday, Schumer, D-N.Y., said big oil companies were artificially propping up the price of gas by taking more time than is normal to switch their refineries to making summer blends of gas that cut down on smog. He claimed that just a few weeks ago, U.S. refiners were at just 85 percent capacity compared to the typical 90 percent. Schumer shared a letter with reporters that he said was sent Tuesday to the Federal Trade Commission, asking the agency to investigate refining capacity. No snark needed, just let it all sink in.

Pallet Maker Target in Immigration Raids (AP)

In Texas, the goons at the Texas Alcoholic Beverage Commission have been going into bars, in full SWAT gear, and arresting people for being drunk... in a bar. Good to see that logic applied elsewhere, as the government is raiding factories and business to see if they can bust people for working... at work. Granted, these workers are so-called illegals, or illegal immigrants, but is it worth punishing a pallet maker (yes, pallet pallets), by hampering their production? What about the decline of our manufacturers? Apparently that takes a backseat to reducing the working population. Well done.


Skilling Tired After 7th Day of Testifying (AP)
Perhaps you thought that the Enron trial was about some fraud or lying or something. Actually, it turns out that the prosecution just doesn't like Enron's business model. Here's how it went down between a "tired" Jeff Skilling and prosecutor Sean Berkowitz, courtesy of the AP -- The government's specific allegations include that Skilling and Lay pointedly characterized Enron as a stable company with predictable growth rather than a trading company vulnerable to market volatility because Wall Street would be more bullish on the former. Skilling maintained Wednesday his oft-repeated stance that Enron was indifferent to wild swings in commodity prices because it was an intermediary that packaged services for commodity buyers and sellers. "I didn't think 'trading company' reflected, in my view, what Enron was," Skilling said. "And you were communicating that to the marketplace, correct?" Berkowitz asked. "That's correct," the ex-CEO replied. Whoa, got that? Skilling has to deny that they were a trading company... even though, last we checked, that wasn't illegal. So, is this trial about punishing fraud or punishing failure? It's looking more and more like the latter.
The Late Cyclicals Surge Higher (CrossingWallStreet)
You should always be wary about analysis that relies on historical patterns, but CrossingWallStreet points out some interesting stuff about the divergence between the late cyclicals and the early cyclicals. Lately, the late cyclicals have moved sharply higher, leaving the early cyclicals in the dust -- which could mean we're late in "the cycle" (not sure what that means). Also, while you're there, you should check out this piece on gold, entitled A Rally For Rocks: Remember that gold is simply a rock (or element, I suppose). It doesn’t do anything. In 10,000 years, gold will still be a rock. Stocks, on the other hand, are part ownership of a corporation. They really do something—they create wealth. A company is individuals coming together to use things, like rocks, to make things that people need. This is a huge difference, and it's why stocks always outperform any other asset class given enough time. It’s the same thing with real estate. A house doesn’t do anything by itself. It just sits there.
Survival of the Richest (MIT Technology Review)
Cool interview with professor and hedge fund manager Andrew Lo. He's on something of an odd kick. In his quest to understand how his understanding of biology can help him in the financial markets, he actually placed a trader into an MRI machine and measuring their brain activity. He's also a believer in the adaptive markets hypothesis (read: efficient markets are unhip). He claims that investor psychology is the same as many Animal's survival instincts, and he claims that this idea, "explain(s) pretty much everything. In the last five or six years I've used this paradigm to explain one anomaly after another. And at this point I really feel like there isn't a single anomaly that financial market participants have documented that I cannot explain with this framework." Wow, though when you explain every single anomaly with a single theory, there's a good chance that you've come up with sufficiently flexible idea that you can mold it to your liking.
Where Have All The Pipeline's Gone (In The Pipeline)
Pharmaceutical researcher Derek Lowe offers some simple explanations for the vanishing pharmaceutical pipelines. His excuses range from financial mistakes, to picking all the low-hanging fruit from the trees. A good read, as always, from Lowe, to help get a handle on how the industry always works.
No Stop Sign Yet: Inflation Revs Up (Washington Post)
Party over; hope you didn't have too much punch. Don't let the door hit you on the way out. Just when it looked like the tightening cycle was coming to a close, Iran had to start talking about nuclear bombs, and our gas bill jumped. Wait, back up. Iran is talking about nukes, so that means the fed has to keep tightening? Don't remember that one from Macro 101.

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