A week in the doldrums for the stock market, but not for the economy, which continues to race along at a splendid pace, although not a pace that bond traders feel comfortable with. It was also a week in which the technology doomsayers emerged in full force, leaping upon disclosures by Compaq, 3Com, and Micron to insist that at long last the tech bubble is about to burst. It's not really clear how the economy could be growing as fast as it can without people spending money on technology, but at this point anything's possible. And in any case, all the troubles in the tech sector only helped those ever-buoyant Net stocks. We've said it before and we'll say it again: Whenever investors get worried about earnings, the best place to be is a place where there are no earnings.
And so, on to the Chatter:
1. "Mattel fired its chief operating officer and announced that henceforth five presidents would be reporting to its CEO, Jill Barad. If you have five presidents, are they really presidents? Aren't they just junta members or something?"
2. "Networking-equipment maker 3Com announced Tuesday that it would miss analysts' estimates for its last quarter. Rumors about 3Com's falling short have been rife for a month, but just two weeks ago the company's CEO, Eric Benhamou, said things would be just fine. Now he says that the company experienced slower-than-expected sales in its core networking business, in its modem business, and in its LAN business. Oddly enough, Benhamou did not include the sentence 'What could I have been thinking?' in his most recent statement."
3. "Merrill Lynch debuted a new ad campaign that celebrates 'human achievement.' Its centerpiece print ad ends, 'Dangle the undoable in front of the world. Then, consider it done.' Well, let's see if that works. In front of the world, I dangle the possibility of Merrill Lynch's ceasing its practice of charging ten times as much as discount brokers do to execute a stock trade. Now, can I really consider that done?"
4. "Just once, when a company spokesman was queried about heavy insider selling by executives, I'd like him to say--instead of the inevitable, 'They're just diversifying their portfolios'--'Hey, they got out when the getting was good. If you think we're going to see this kind of price for our stock ever again, you're nuts.' "
5. "NCR has come up with a complicated stock-splitting plan to rid itself of 'small shareholders,' because mailing annual reports and the like to them costs the company $2 million each year. It's not really clear why shareholders' height would affect the expense of mailing things to them, but I'll take the company's word for it."
6. "A Canadian company has bought Lowenbrau beer, and as part of its efforts to revamp the brand it plans to raise prices to bring them in line with other premium beers. Interesting strategy: take a beer that hardly anyone knows exists anymore, and charge people more to drink it. After all, in a consumer culture predicated on status, how can you know a thing's value if you don't know its price?"
7. "Last week, Compaq's chief financial officer told a select group of institutional investors that demand for its PCs had slowed substantially. The stock, not surprisingly, was crushed the next day, although I think it's safe to assume the institutional investors got out first. Incredibly, a Compaq spokesman defended what the CFO did by saying that the disclosure didn't constitute 'material information.' Oh, sure. All those investors went running for the door yelling 'Sell!' because the news was 'immaterial information.' "