After three months of blissful indifference to the rest of the world, U.S. investors woke up Wednesday to find out that the rest of the world still existed. It is odd how annoying the intrusion of reality can be, isn’t it? And though the market rallied nicely in the early afternoon Wednesday, it tumbled again Thursday, its fall actually speeding up when the impeachment hearings were gaveled open. (If one does “gavel open” hearings.) Still, there was plenty of more hopeful news from corporate America this week, including blowout quarters from Intel and Apple, a huge deal in the networking business, and excellent numbers from the auto industry. We may not, as Greenspan once said, be able to be an island of prosperity. But damned if we aren’t doing our best. Anyway, eat, drink, and be merry, for tomorrow Venezuela may fall.
1. “The Japanese government had to intervene in the currency markets Tuesday, buying dollars in order to drive down the price of the yen, which is now up 31 percent since August. Let’s see: the Japanese economy is mired in recession, interest rates are near historic lows, and the Japanese government is running a massive deficit. Shouldn’t the government have to be propping up the yen instead of beating it down?”
2. “Brazil’s Bovespa stock-market index fell 10 percent in the first half hour of trading Wednesday. That’s the equivalent of the Dow falling almost a thousand points. Do all those people who think they can get out if this stock market turns south really think they can get out before 30 minutes pass?”
3. “Garth Drabinsky, who founded theater company Livent and then ran that company into the ground, was charged yesterday with criminal fraud and conspiracy. Every article ever written about Drabinsky refers to him as a ‘theater impresario.’ Who knew that ‘impresario’ was Italian for ‘bumbling crook’?”
4. “Advanced Micro Devices, Intel’s leading competitor and a company with an uninterrupted history of failing to meet expectations, announced its fourth-quarter earnings Wednesday. AMD missed analysts’ estimates by three cents. Intel, by contrast, had announced earnings the day before that crushed estimates. But investors reacted to AMD’s news by driving down Intel’s stock price (and AMD’s). That makes sense. After a boxer knocks out his opponent, isn’t it traditional to give him a standing eight count? (Hint: It’s not.)”
5. “The government announced that the producer-price index rose an unexpected 0.4 percent in December, but then said that number was skewed by a sharp rise in the price of cigarettes. Soon we’ll have entirely new chapters in business strategy textbooks entitled, ’Addiction: The Only Remaining Route to Pricing Power.’ “
6. “Broadcast.com, whose stock price soared at the end of last week on what amounted to essentially no news, has watched its stock tumble almost 40 percent in the last three days on what amounted to, yes, essentially no news. ‘Hey,’ you can almost hear the day traders say, ‘we love you. We’re just not in love with you.’ “
7. “Brazil’s central bank insisted on Thursday that it would not allow the real to float, and that it would keep the currency’s value within the existing band. Of course, the central bank of every country that’s devalued in the last two years has said the very same thing. ’But we believe you. No, honest we do. Now, please excuse us while we go sell the real short.’”