Alan Greenspan threw a sharp forearm shiver at the stock market today when he gave a speech in which he did not express unqualified support for the idea that new-economy-style productivity has destroyed the prospect of inflation. That send bond prices tumbling, interest rates up, and stock prices down, although by the end of the day the Dow had gained back most of what it had lost.
Of course, if you looked at what Greenspan actually said, there's not much evidence that he was really promising a rate hike, and relative to what he was saying a couple of years ago, his take on the economy was positively sanguine. But the air is very thin now, especially for the Dow stocks, and so anything that even hints at a threat to the market's oxygen supply--cheap capital--is bound to provoke a reaction. Just don't worry about it too much this weekend. No matter what indicator you look at, American business is humming along as smooth as ever. And however the market gyrates in the short term, in the long run that humming will prove out. And on that sober yet hopeful note, on to the Chatter!
1. "The Internet stock sell-off continued in full force this week. AOL is now down more than 33 percent from its all-time high, Amazon is down more than 40 percent, while some smaller Net stocks have seen their market caps more than halved. Of course, there's only one Pavlovian response to have to all this. Buy on the dip!"
2. "In its ongoing attempt to buy Orangina, which was blocked by the French Finance Ministry, Coca-Cola is now apparently contemplating buying the company but giving up the rights to distribute Orangina in cafes, bars, and restaurants for 10 years. What's next? 'How about if you agree to spend $825 million to buy the company, but also agree not to run it or take any profits out of it? We'd be sure to approve the deal then.'"
3. "CBS announced that Bryant Gumbel will host a new morning show beginning in November, pitting him against Katie Couric and Diane Sawyer. Purportedly, Gumbel did say, 'I'm not really a morning person,' but CBS decided they could work around that. The show will be recorded in the late afternoon, and then through special technology broadcast back in time, so it will air at 7 a.m., like its competitors. The network will have to be careful not to mention news that happens between 7 a.m. and the afternoon, though, for fear of upsetting the space-time continuum."
4. "After an intricate set of negotiations that produced a deal akin to one of those four-team, 13-player trades in baseball, AT&T merged with cable company MediaOne. To get the company, AT&T exchanged cable systems with Comcast, the other serious bidder, entered into talks with Microsoft about the possibility of that company's taking a minority stake in AT&T, and promised all the FCC commissioners that their houses would be the first in their neighborhoods wired for cable modems."
5. "Disney CEO Michael Eisner testified Tuesday that former Disney exec Jeffrey Katzenberg acknowledged that he was 'leaving $100 million on the table' when he left the company in 1994, and that Katzenberg added: 'It's no big deal. I'll get that back in no amount of time.' I'm about as able to grasp what it would mean to say of $100 million, 'It's no big deal,' as I am of understanding why Providence has become network television's latest big thing."
6. "Pepsi shipped to retail shelves this week the first five cans in its limited-edition collectible set of 24 Phantom Menace cans. Of course, 'limited edition' is a bit of a misnomer in this case, since Pepsi will be shipping a total of 5 billion cans. But 'an effectively unlimited edition' doesn't really have much a ring to it."
7. "ESPN is suing Major League Baseball over its attempt to back out of a six-year contract with the cable network. ESPN wants to shift three Sunday-night games from ESPN to ESPN2, so that it can show NFL games, while MLB insists that its contract says all games have to be shown on ESPN itself. Sports consultant and former president of CBS Sports Neal Pilson criticized MLB's strategy, arguing that ESPN has been really doing baseball a favor. 'The demographics of baseball are old, lower-income people who live in rural areas,' he said. Ah, just the kind of viewers advertisers salivate over!"