Weekend Cocktail Chatter

Weekend Cocktail Chatter

Weekend Cocktail Chatter

Moneybox
Commentary about business and finance.
June 24 1999 7:20 PM

Weekend Cocktail Chatter

Just a couple days ago, it looked like a sunny week, unmarred by any disturbing economic data or nerve-rattling pronouncements from our Lord and Master Greenspan. But then the bond market decided to wreck a perfectly wonderful summer week by getting anxious about inflation again. Because bonds trade in a much more esoteric market than stocks, and because they lack the glamour of equities, it's easy to believe that bond traders are somehow more rational and less susceptible to emotion than those goofy day traders. But the bond market is a market, and while that means it's an excellent way of determining prices, it also means that it's subject to the same bouts of fear that any market is subject to. Is there a good reason for interest rates to be above 6.15 percent with inflation in May at 0.0 percent? Who knows? So don't worry too much about it this weekend. Just chatter.

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1. "For what seems like the third or fourth quarter in a row, would-be Intel competitor Advanced Micro Devices announced Wednesday that it would miss analysts' estimates for its most recent quarter by a wide margin. Here's an idea: from now on, we'll just assume that AMD is going to miss estimates, and the company will only need to pre-announce if it's actually going to meet them."

2. "David Boies, lead attorney for the Justice Department, had Microsoft witness Richard Schmalensee of MIT testify that the company had paid him $250,000 for his testimony and added research. I, for one, am shocked. I really thought Schmalensee was testifying for free just because he loved Windows more than he could ever say."

3. "Bacardi, having lost in U.S. court, has gone to Spain to block the Cuban government and its joint-venture partner Pernod Richard from selling Havana Club rum. What's the argument here? 'Look, Castro threw out Batista, kicked out the Mob, got rid of the casinos and the showgirls. What does he know about the true glories of Havana?' "

4. "Weyerhaeuser announced that it would pay $2.36 billion in stock to purchase Canadian timber company MacMillan Bloedel. Man, just thinking about that makes me laugh out loud. Let's face it, forest-product-industry consolidation is just damn funny."

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5. "Larry Summers' nomination as the new secretary of the treasury was approved unanimously by the Senate Finance Committee. Just a few more weeks and he can go back to telling opponents of the estate tax that they're greedy."

6. "The Commerce Department reported that the information technology industry was responsible for a third of the country's GDP growth between 1995 and 1998, that workers in that industry are twice as productive as other workers, and that spending on IT has quadrupled over the last decade. So why is it, exactly, that the Dow Jones Industrial Average, which doesn't contain Dell, Microsoft, Intel, or Cisco, is the bellwether for the stock market? It's a bit like measuring the performance of a football team without counting forward passes, 'because they're just a little too newfangled.' "

7. "Attempting to quell concerns in Belgium over bad Coca-Cola that sent people to the hospital and got the company's products banned from supermarket shelves, Coke CEO Douglas Ivester said he'd like to buy everyone in Belgium a Coke. Does he want to keep Belgium company, too? And teach it to sing in perfect harmony?"