Who even knew that anyone still cared about things like trade deficits? I mean, the United States has been borrowing tens of billions of dollars every month from foreign investors for so long that I thought it was just something everyone--with the exception of Pat Buchanan and people looking for reasons to bash China--accepted. But apparently there are still some numbers that can scare even the most dedicated stock buyers, so that yesterday's news that the trade deficit soared to $24 billion for the month sent stock prices tumbling (well, relatively speaking).
Concerns about the suddenly weak dollar, worries about the trade deficit, rumblings that defaults on high-yield bonds are rising: What decade is this, again? And where's Robert Rubin? Just kidding, Larry. The truth is that a lot of these anxieties feel like just that: anxieties without any real object. After all, bond yields fell by more than a quarter point this week, assuaging a lot of concerns about the impact of rising interest rates on stock prices. So all the victims of the fears of August just had to find something new to fret about.
A bit Pollyanna-ish? No doubt. But something real has got to change before all this talk about a suddenly fragile economy will make any sense. So go buy something and keep the boom going. Here's Chatter for this week.
1. "According to IDC Asia-Pacific, 800,000 home PCs were sold in China last year. At that rate, it will take a mere 500 years until every family in China has a PC."
2. "In a week in which bad company after bad company filed for bankruptcy, satellite-phone company Iridium also filed for Chapter 11, which it had insisted it would never do. Let's see: Its huge, clunky, hard-to-operate phones cost $3,000. It cost $7 a minute to use the phones. And the service often didn't work. How could they have missed?"
3. "Sears is abandoning its 'Come see the softer side of Sears' slogan, in favor of a campaign that focuses more on Sears' strength as an affordable mid-tier retailer. Among possible slogans that were considered: 'We're not Bergdorf Goodman, but hell, we're not the Dollar Store, either'; 'We sold washboards to your great-grandmother: That's gotta count for something'; and 'Come for the batteries, stay for the home furnishings.'"
4. "Reader's Digest announced that it had doubled its earnings in its most recent quarter. Who would have thought that letting Chris Rock write the 'Laughter Is the Best Medicine' column would have made such a dramatic difference?"
5. "Rather remarkably, the Japanese yen just keeps getting stronger despite the fact that interest rates there remain at about zero. That means that even though there's no demand for money in Japan, which in turn means that it's hard to see how economic growth is going to be sustained there, investors are wagering that the Japanese economy is coming back. Or it could mean that ... Actually, the whole thing is probably just a conspiracy. Just like everything else."
6. "The Texas Pacific Group--it's just a group of investors--is on the verge of spending $650 million to acquire Piaggio Veicoli, the Italian company that makes Vespas. Why? Listen, if you have to ask, then you'll never understand."
7. "Planet Hollywood at long last has filed for bankruptcy, and has apparently negotiated a refinancing deal that will wipe out the value of all its current shareholders and trade 70 percent of the equity in the company for a measly $80 million. Of course, the company is now and will forever be effectively worthless. So on second thought, $80 million is probably overpaying."