Sunday, January 20, 2013

A Week of Views from a Biker and a Banker, Some CEOs and a Fed President

  • From a Biker and a Banker: Lance Armstrong - “It was a mythic, perfect story and it wasn’t true,” he said. “All the blame and fault was on me . . . now the story is so bad and so toxic and a lot of it is true” and his partner, the Silicon Valley banker,; Thomas Weisel - “I did not know until very recently that Lance Armstrong had engaged in doping while riding for the team” and “any allegation that I was aware of or condoned or supported doping by any team rider is false.”
  • From Corporate Earnings Reports: General Electric CEO Jeff Immelt "The outlook for developed markets remains uncertain, but we are seeing growth in China and the resource rich countries";   Morgan Stanley CEO James Gorman -  "The U.S. economy is recovering. That's unmistakable. The speed of it still remains to be determined";  Johnson Controls CEO Steven Roell - "Uncertainties remain in our global markets and we expect earnings in the first half of fiscal 2013 to be significantly lower than 2012, consistent with our earlier forecast" and  Intel CEO Paul Otellini  - ”We are in the midst of a radical transformation of the computing experience with the blurring of form factors and adoption of new user interfaces. It's no longer necessary to choose between a PC and a tablet.”  
  • From the U.S Federal  Reserve: Kansas City Fed President Esther George - “Prices of assets such as bonds, agricultural land, and high-yield and leveraged loans are at historically high levels” and “We must not ignore the possibility that the low-interest rate policy may be creating incentives that lead to future financial imbalances”.
MY TAKE
  •  Regarding the Biker and the Banker with both players as named defendants in former teammate Floyd Landis’ lawsuit (which alleges fraud against the team’s sponsor – the U.S. Government’s Postal Service), this and other related legal actions will likely reshape the business of sports and promotional sponsorship.
  • Regarding corporate earnings – In general, the comments from CEOs suggest an uneven global economic recovery, while Intel’s comments highlight that while the PC is not dead the major transition to mobile and touch screen devices continues.  
  • Regarding the Federal Reserve – it seems the time to unwind the Fed’s massive monetary stimulus effort is approaching, a process which may introduce some unexpected risks.

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