Wednesday, November 16, 2011

Morning Journal Government directed industrial policy doesn't work

News on Stocks in Our Portfolios--courtesy of Seeking Alpha

03:30 PM Microsoft's (MSFT +1.3%) annual meeting underwhelmed those attending with only a strictly-enforced 15 minute window to ask questions of Chairman Bill Gates and CEO Steve Ballmer. Shareholders at the meeting - already edgy with MSFT mired in a $20-$30 trading range for a decade - only heard from Gates once during the meeting as he defended the firm's controversial enormous cash stockpile: "You want to retain enough (cash) so the company has the strength to be able to take big risks even in the face of some economic uncertainty." Comment!

02:58 PM Chevron (CVX -3%) shares remain under pressure after a report that an oil spill off Brazil "could be 10 times bigger" than official estimates. Other stocks affected: Transocean (RIG -4.9%), which reportedly operated the CVX well; Petrobras (PBR +0.4%), which owns a 30% stake in the well; Clean Harbors (CLH +2.2%), which offers environmental cleanup services on customer sites.

01:56 PM Staples (SPLS -4.2%) is having a bad day after missing FQ3 revenue forecasts and providing tepid FQ4 sales guidance. A 12% decline in European same-store sales is likely also raising eyebrows. Oppenheimer is maintaining a neutral stance; the firm is worried about U.S. and European macro troubles, but is impressed with Staples' expense controls and strong cash flow. (transcript)

11:48 AM Shares of Marathon Oil (MRO -1.6%) slip lower after Goldman Sachs tags the energy company with a downgrade to Neutral from Buy. Though analysts with the firm say the firm is heading in the right direction with its shale and oil sands operations, a recent runup in MRO's share price has them backing off their previous rating. Comment!


This Week’s Data

The International Council of Shopping Centers reported weekly sales of major retailers up 0.3% versus the prior week and up 3.1% versus the comparable period a year ago. Redbook Research reported month to date retail chain store sales up 0.2% versus the similar time frame last month and up 3.3% on a year over year basis.

September business inventories were unchanged versus expectations of up 0.2%; positively, September business sales rose 0.6%, another sign of tight management controls.

Weekly mortgage applications plunged 10.0% while purchase applications were off 2.3%.

October consumer prices fell 0.1% versus estimates of unchanged; core CPI rose 0.1%, as anticipated.


Federal tax shares and the Laffer curve (short):



The long, sad history of government directed industrial policy (long):

A great up beat essay on American exceptionalism from Victor Davis Hanson (long):

Compare and contrast with view of the administration (medium):

Emails show Energy Dept asked Solyndra to delay announcing layoffs until after the 2010 elections (medium):