Well, many weeks back we hearkened back to that old Reagan for President ad and asked the question: "What if there is a bear?" As of this week, the more appropriate question would probably be: "How long will this bear be prowling around our camp ground, eating our supplies, while we're perched in a tree, hoping the branches don't break?" After a run-up in stock prices in anticipation of a half-point interest rate cut that was never going to come, equity investors fled in good Monty Python fashion--"Run away! Run away!"--as soon as the quarter-point rate cut was announced, and they have not returned yet. Some day soon, no one's going to want to talk about Wall Street anymore. But until that day comes, we have Cocktail Chatter. So, once more into the breach.
1. "Mutual-fund investors withdrew $11.2 billion from equity funds in August, the first time in eight years that there was a net outflow. What was it the perma-bulls said? Something to the effect that investors would never give up on stocks, and that there was nowhere else for all that liquidity to go? Perhaps the words 'under the mattress' are starting to have a nice ring to them."
2. "Watching Alan Greenspan answer questions from House Banking Committee members about the Long-Term Capital fiasco, it was hard not to believe that he wanted to say: 'How many of you here actually understand what an interest rate is? Good. Now, how many of you understand what a Treasury bond is?"
3. "AMP, the Pennsylvania company that's trying to fight a takeover attempt by Allied Signal, is pulling out all the stops in order to stay independent, and so far it's succeeding. The company actually offered to buy back shares at a higher price than AlliedSignal is willing to pay. Next will be free car washes for all shareholders, and a promise that Alex Trebek will host the annual meeting."
4. "House Speaker Newt Gingrich has called on IMF head Michel Camdessusto resign before Congress will approve an $18 billion contribution to the Fund. The IMF has mucked things up many times before. But considering that it's point man in the global crisis, might this be not exactly the best time for House Republicans to play chicken?"
5. "Can't wait for this year's Nobel Prize ceremonies. 'We have decided to rescind the prizes awarded to laureates Merton and Scholes, because at Long-Term Capital they nearly catapulted the world into a global depression. Oh, and we were just kidding about Dario Fo last year.' It'll be a sight to see."
5a. "How much longer will Long-Term be an appropriate subject of mockery?"
6. "Every single one of the Wall Street analysts who follows Yahoo! estimates that the company will make either nine or 10 cents this quarter. Not one person has estimated that the company will make more, and not one has estimated that the company will make less. But if everyone thinks the same thing, why do we need so many different analysts? Couldn't they just appoint a "pool" analyst, who could talk to the company and then tell everyone else what to expect?"
7. "Remember the good old days of 'Buy the dips'? Does anyone remember what those days felt like?"