Archive for September, 2006

  • Russian Central Banker Assassinated
    , September 14th, 2006 at 9:01 am

    From Bloomberg:

    Russian central banker Andrei Kozlov, who led a fight against corruption in the nation’s banking industry, was assassinated outside a sports stadium in Moscow.
    Kozlov, a 41-year-old deputy chairman of the central bank, was shot in the head and neck by two gunmen last night, said Svetlana Petrenko, a spokeswoman at the Moscow prosecutor’s office. He died in hospital No. 33 in Moscow this morning.
    The murder may be linked to Kozlov’s job leading the central bank’s fight against money laundering, Russian Prosecutor General Yuri Chaika, the highest-ranking law enforcement official, said in a statement on his Web site today. Kozlov was instrumental in pushing measures to regulate a banking system that almost collapsed after the government defaulted on $40 billion of debt in 1998.
    “There are people in Russia who do not want the transparent, law-abiding and rational system he was creating,” said Richard Hainsworth, chief executive officer of RusRating, an independent bank rating company in Moscow. “His reforms have pushed up the price of black money, of giving bribes.”

  • DC Mayor’s Primary by Precinct
    , September 14th, 2006 at 7:49 am

    I thought I’d be a good citizen and post the precinct results of Tuesday’s primary for Mayor of Washington. These are the unofficial results from city’s Board of Election’s page.
    I used a spreadsheet to try and make the results look a little more coherent. Unfortunately, the city doesn’t have a good map of each precinct, so I included each polling place and its address.
    Adrian Fenty won an impressive victory. He beat Linda Cropp by 26 points and managed to win all 142 of the city’s precincts.

  • Green Bay Packers Inc.
    , September 13th, 2006 at 1:06 pm

    CNBC’s Darren Rovell has a good story on the business of the Green Bay Packers. Rovell only briefly touches on this, but the Packers are one of the more interesting businesses in America today. The team is organized as a non-profit, community-owned corporation.

    There are about 4.7 million shares, but they don’t pay a dividend and they can’t be traded. Think about that. You just buy them and watch. If you want, you can sell the shares back to the team for a teeny amount of money.

    The Packer fans are so loyal that they’ve bought shares, and financially rescued the team more than once over the past 80 years.

    The team was organized as a community-owned company in 1923. To add some context, this was at the high tide as progressive movement, which found its epicenter in Wisconsin (i.e., the Wisconsin Idea).

    In 1924, Senator Robert “Fighting Bob” La Follette, Sr. of Wisconsin ran for president as a third party candidate. He won 17% of the vote and carried his home state.

    The senior La Follette died in 1925, but was succeeded by his son, Robert La Follette, Jr., who held the seat until 1946 when he was upset by Joseph McCarthy (with the help of the Communist Party).

    Milwaukee was the country’s only large city to have a socialist mayor, or at least, an admitted socialist mayor. In fact, the city had three socialist mayors over 38 years between 1910 and 1960 (would they have nationalized Arnold’s?). The last one died a few weeks ago at the age of 93.

  • Wall Street’s Ride May Go Away
    , September 13th, 2006 at 12:36 pm

    lincoln_wh_int_1_sm.jpg
    First they came for the fuzzy dice, but I was not a fuzzy dice so I don’t speak out….(via Bloomberg):

    The Lincoln Town Cars that chauffeur New York investment bankers home at the end of the day soon may be part of Wall Street history.
    Ford Motor Co. plans to close the Wixom, Michigan, plant that makes the sedan and hasn’t committed to production beyond the 2007 model year. Ford’s Mercury Grand Marquis or DaimlerChrysler AG’s Chrysler 300 may be called upon to take the Lincoln’s place.
    The Town Car, which makes up more than 80 percent of New York’s 35,000 for-hire fleet, is the “black car” of choice in every major U.S. market, said Neil Weiss, editor of industry magazine Black Car News. Without it, life wouldn’t be the same for thousands of bankers and executives who have been stretching out in the back seat since 1980, usually at company expense.
    Investor Warren Buffett is already giving up the ride. Yesterday, he offered his 2001 Town Car in a charity auction.

  • Oil’s rout deepest in 16 years
    , September 13th, 2006 at 11:03 am

    Energy stocks are doing well today, but the price of oil is flat. Reuters notes that this is oil’s deepest rout in 16 years:

    U.S. crude has dropped nearly $15 to hit a near six-month low of $63.50 a barrel on Wednesday, a fall only a hair shy of those in August-November 2005 and October-December 2004. In those cases, oil made new highs five to eight months later.
    In percentage terms there have been bigger stumbles on oil’s recent ascent, propelled steadily higher since 2002 by the war in Iraq, soaring Chinese demand, constrained oilfield and refinery production, devastating U.S. Gulf Coast hurricanes, and most recently fears of a disruption to Iran’s exports.
    But some say this latest setback — triggered by easing concerns on Iran, a weak storm season and a refocusing on healthy consumer nation inventories — may prove more lasting.
    “Even though we’ve retraced certain percentages similar to this, it definitely seems that the market is different now,” says New York-based ABN AMRO broker John Brady. “Other times I saw (the corrections) leading to great buy opportunities, but I don’t necessarily think that this time.”
    Technical analysts who study past price action for future direction, say the drop through the 200-day moving average last week and this week’s fall below a three-year trend line — intact since mid-2003 — both send worrying signals.

    Wow, it seems as if it was only two months ago that I was reading this:

    Oil’s march toward $80 a barrel seems inevitable, with multiple paths to get there.
    It could follow another flare-up of Middle East violence. Or a hurricane in the Gulf of Mexico. Or maybe a refinery snag is all it would take.
    “Mother Nature, physical disruptions and the politics of the world. All of those tell you that the risks are toward the upside,” said Larry Goldstein, president of the Petroleum Industry Research Foundation, a New York think tank financed by the industry.
    Oil prices surged Thursday to a record near $77 a barrel in world markets agitated by the escalating Israel-Lebanon conflict and the threat of supply disruptions in the Middle East and beyond.

  • Prediction Markets
    , September 13th, 2006 at 10:34 am

    The Washington Stock Exchange is the newest futures exchange market for real world events. By “real world,” I’m referring to events not on Wall Streetistan. Personally, I think these markets are for fun, and not to be taken too seriously.
    I’ve been finding some of the developments at Tradesports a bit troubling. They refuse to confirm that North Korea fired missiles, which would come as a shock to many observers. Donald Luskin has the details.
    Chris Masse, by the way, is the one-man global content provider on all things in predictions markets. I’m still very proud of my discovery of the Alito Volatility Index and Miers withdrawl contract. The latter won an award from Masse.
    Give the problems at Tradesports, I’d like to start my own futures exchange. So let’s do this: If you think the Eagles will beat the Giants this Sunday by more than three points, please send me money. If you don’t think it will happen, you too send me money.
    I’ll allocate the funds in a just and equitable manner, while keeping a modest sum for myself.
    This is in the interest of science, people.

  • Update on the Buy List
    , September 13th, 2006 at 9:31 am

    Yesterday was a very good day for our Buy List. We beat the S&P 500 by 0.86% which was our fifth largest margin of the year. This come on the heels of Monday, which was our third best day of the year, and last Wednesday which was our best day of the year against the market. In absolute terms, yesterday was our fifth best day of 2006 (up 1.91%).
    Through yesterday’s close, we’re still trailing the market for the year, 5.19% to 3.85%. But the gap has closed considerably in the past month. Since August 9, the Buy List is up 7.84% compared with 3.73% for the S&P 500. Our daily volatility is 17% greater than the market.
    Both SEI Investments (SEIC) and Harley-Davidson (HOG) reached new 52-week highs yesterday. It’s always interesting to see what the big winners are in your portfolio. I never would have though that Dell (DELL) would lose 27% this year or that SEIC would be up 45% by September.
    Of course, I also have this blog to talk about my mistakes. This year, the dumb moves were Dell (DELL), Medtronic (MDT) and UnitedHealth (UNH). The smart move was diversification, so the dumb moves haven’t overwhelmed me. December is just three months away, and that’s when I overhaul the Buy List, so I’m already thinking of what to keep and what to ditch.
    Even though Home Depot (HD) is down for the year, I still like the stock, if not its management. I’ll also have to decide what to do with Wachovia (WB) once it joins the Buy List. I’ll probably get another financial. I also should have focused on some smaller stocks. All 20 stocks have a market cap of at least $20 billion.
    BL Update.bmp

  • Business Week On Krispy Kreme
    , September 12th, 2006 at 1:31 pm

    September 4, 2001
    The Rise — and Rise — of Krispy Kreme
    The doughnut maker’s stock continues to confound the skeptics. But this sugar high can’t go on forever, can it?
    August 16, 2004
    What’s Really Inside Krispy Kreme?
    Its accounting is the target of an SEC probe — and other troubles may be in store
    August 17, 2004
    Inside the Hole at Krispy Kreme
    COO John Tate may be seen as a sacrifice to Wall Street, but his departure isn’t likely to be the end of the doughnut maker’s woes
    September 27, 2004
    Why Krispy Kreme Is Worth A Bite
    December 5, 2005
    Krispy Kreme’s Problems: Not “Fatal”
    The doughnut maker’s chief, Stephen Cooper, talks about the challenges he’s tackling in leading the chain out of a hole
    December 5, 2005
    Krispy Kreme Has That Glazed Look
    Even turnaround king Steve Cooper is having trouble reviving the chain
    March 7, 2006
    Can Krispy Kreme Rise Again?
    The announcement of a new CEO gave investors a sugar rush, but Daryl Brewster has his work cut out for him to put the dough back in doughnuts
    September 11, 2006
    Krispy Kreme sees decline in sales

  • Dell Stands Behind Rollins
    , September 12th, 2006 at 11:31 am

    The media so wanted to go for three oustings today, but no such luck.
    Patricia Dunn is out at HP. Peter Dolan is gone from Bristol-Myers. But Michael Dell has Kevin Rollins’ back: “Kevin and I run the business together, so if you want to blame him, blame me too.”
    OK, I will.

  • Bernanke’s Hippie Dictionary
    , September 12th, 2006 at 9:50 am

    Not only is Ben Bernanke the head of the Federal Reserve, but in high school he was the author of a hippie dictionary. Caroline Baum at Bloomberg lists some of its content:

    Bird — a lady as in “cute chick” or “henpecked”
    Dig — to like, to enjoy, as “The hippie undertaker digs his work.”
    Down trip — a drag
    Drag — a down trip
    Hang-up — a neurosis or fetish
    In gear — the cat’s pajamas
    Lie-In — a form of peaceful protest that often fails when demonstrators go to sleep
    Square — someone who stays home New Year’s Eve to hear Guy Lombardo play “Auld Lang Syne”
    Straight — as in “stiff” (see “dig”)
    Swing — what someone does who thinks Guy Lombardo is a football coach (see square)
    Trip — a rocket flight without the rocket