• Goldman Sachs Runs Italy?
    Posted by on June 5th, 2007 at 10:57 am

    Some Italians aren’t pleased that their prime minister, head of the central bank and deputy treasury head are all former Goldman Sachers.
    I understand, but look at it this way: Who has a better government track record over the last 100 years, Italy or Goldman?

  • Avaya To Be Taken Private
    Posted by on June 5th, 2007 at 10:53 am

    Another stock is leaving the public market. This time, it’s Avaya (AV), which is one of the spin-offs of the spin-offs of AT&T.
    It’s been 25 years since Judge Greene ordered AT&T to be broken up, and the pieces are now all over the place. One of the rules of the breakup order is that the new companies had to have worse and worse sounding names. This started with Nynex and continued through with Lucent, Avaya and Agere.
    In 2000, Avaya was spun-off from Lucent which isn’t even Lucent anymore, it’s Alcatel-Lucent (ALU). Although I doubt the hyphen will stay around much longer. In 1996, AT&T spun-off Lucent. I remember I sold my shares almost immediately and the stock shot up from there.
    If you’re old enough to remember those old-style rotary phones, those phones weren’t owned by customers, they were leased from Ma Bell. Well, that business still exists and Lucent runs it. If you’ve ever wondered why New York City’s area code is 212, it’s because it’s fast on a rotary phone.
    According to Lucent, they lease about 750,000 phones today.

  • June 5 in History
    Posted by on June 5th, 2007 at 10:26 am

    From Gary Alexander’s “This Day in Market History.”
    Adam Smith was born in Scotland on June 5, 1723.
    John Maynard Keynes was born in Cambridge on June 5, 1883, exactly 160 years after Smith.
    On June 5, 1933, the U.S. Congress officially took America off of the gold standard. Gold’s price was raised by governmental fiat, from $20.67 to $35 per ounce. Gold was forbidden for Americans to own, but the gold mining stocks were fair game and were among the best performers in the 1930s.

  • Market Sees 41% Chance of a Rate Hike
    Posted by on June 5th, 2007 at 10:04 am

    Ben Bernanke predicts that the economy will rebound later this year. That’s good to hear. Of course, in February he was expecting 2.5% to 3% growth this year — not the 0.6% we have.
    More importantly, however, is what the market says. The markets’ odds for a Fed rate cut has dropped to 29% from 83% since the beginning of May. There’s now a 41% chance of a rate increase.

  • Bed Bath & Beyond Warns on Q1
    Posted by on June 5th, 2007 at 9:44 am

    After the bell yesterday, Bed Bath & Beyond (BBBY) said its first-quarter earnings will be between 36 cents a share and 38 cents a share. Wall Street was looking for 39 cents a share. Frankly, this is upsetting, but it’s not that bad.
    As usual, housing is to blame. Steven Temares, the CEO, said “the overall retailing environment, especially sales of merchandise related to the home, has been challenging.”
    Last year, BBBY reported earnings of 35 cents a share. The company is due to report on June 27. The stock opened trading today at $37.93.

  • Executive Fascinated By Electrician’s Lunch
    Posted by on June 4th, 2007 at 1:59 pm

    The Onion reports on Chuck Prince:

    While waiting for an elevator en route to a lunch meeting at Central Park’s Tavern on the Green restaurant Monday, Citibank CEO Chuck Prince said he became “spellbound” by the meal being consumed by an electrician working in the area.
    “First, he opened some sort of tiny, metal, barn-looking object, and then he took out and ate one of those sandwich things, you know, the kind with bologna and two slices of mushy white bread,” said Prince, who was equally amazed that the electrician’s snack-cake dessert wasn’t set ablaze before consumption. “I had heard of this sort of meal before, but never actually seen it. My goodness, his thermos contained soup!”
    Prince added that he was even more stunned when he realized that the electrician must have prepared his meal at home.

  • Biomet Trades Over $44
    Posted by on June 4th, 2007 at 10:42 am

    For a company that makes spinal implants, you’d think Biomet‘s (BMET) board would have a backbone. Apparently not.
    The good news is that shares of BMET are now trading above private equity’s $44 offer price. I hope this means the market expects a higher bid. Shareholders will vote on the offer this Friday.

  • Canadian Dollar Close to Parity of U.S.
    Posted by on June 4th, 2007 at 10:41 am

    This is embarrassing. The U.S. dollar is in such bad shape, it just hit a 30-year low against the Canadian dollar. Who knew Canada even had its own currency? Apparently, it does and if this keeps up, it’ll soon reach parity. That means you could exchange one Canadian dollar for one real dollar.
    Sheesh, sometimes I think our monetary policy is being run by a bunch of 13th graders….
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  • Sign of a Top?
    Posted by on June 4th, 2007 at 8:32 am

    There’s a shortage of butlers.
    Egad! I’ll have to pour my own sherry. No!

  • News from Last Week
    Posted by on June 4th, 2007 at 8:07 am

    I forgot to mention this last week, but one of our Buy List stocks, Fiserv (FISV), rose nearly 10% in last week’s trading.
    The company agreed to sell its Fiserv Investment Support Services business in two separate transactions. The stock was also upgraded by Cowen & Co. Shares of FISV are up 12.32% this year.
    Also, Donaldson (DCI) got hit despite a good earnings report. I’m still trying to figure this one out. At one point on Wednesday, DCI was down 9%.
    Earnings came in at 49 cents a share, four cents ahead of estimates. Sales came in at $484 million which also Wall Street’s estimate of $462 million. The company sees full-year EPS of $1.73 to $1.80.