I can’t think of a more politically stupid move right now than dismissing the Occupy Wall Street protests as bunch of "whackos." As I’ve already stated, it seems to me these protestors are articulating the frustrations of many Americans. And much in the same way that the Tea Party did.
Why anyone would dismiss the frustrations of potential voters is beyond me.
Sure, we can question certain, particular ideas. Like is redistributing wealth via taxes on the rich the right thing to do. But even if that’s a bad idea, the Occupy Wall Street protests represent a much bigger frustration: that the American people are not being served by our elected officials, and, in fact, that politicians have chosen to support corporate CEOs over and above the American people.
If I were a politician, I would be doing everything I could to dispel the idea that I was in Wall Street’s pocket.
Yesterday, the protestors in New York embarked on a "Billionaire’s Tour." According to the promotional material, protestors can:
"Join us on a walking tour of the homes of some of the bank and corporate executives that don’t pay taxes, cut jobs, engaged in mortgage fraud, tanked our economy … all while giving themselves record setting bonuses."
Again, the specifics of the accusations can be disputed, but what American doesn’t secretly chuckle at the idea of a huge group of protestors standing outside JP Morgan (NYSE:JPM) CEO Jamie Dimon’s house in Manhattan?
Make no mistake: the Occupy Wall Street protests are a significant event.
Apple (Nasdaq:AAPL) sold over 1 million of its latest iPhone on the first day of availability. That number absolutely blew away all estimates, and served as a stark counterpoint to the analysts who called the phone a disappointment at its release.
Morgan Stanley says that pace suggests 27 million iPhones could sell in the fourth quarter. Morgan Stanley’s previous estimate was 22 million units.
It is remarkable that Apple has so consistently outperformed. And the company serves as a terrific contrast to Blackberry-maker Research in Motion (Nasdaq:RIMM), who can’t seem to do anything right. It’s lost 4.3 million users over the last year. And recent service outages in Europe, the Middle East, Africa and South America are a bad sign for growth.
It goes to show us that just because a company is an early leader in a particular area, doesn’t mean it will stay there. Constant innovation and forward-thinking is needed to stay on top. Come to think of it, that message would serve many politicians just as well.
Congress killed the jobs bill but passed the bill that would allow U.S. companies to tack duties on goods from countries that manipulate their currencies, like China. I still doubt the measure will become law, but Congress seems intent on sending a message.
And while we’re on China, it’s being reported that a state run investment fund has been buying shares of Chinese banks. It’s resulted in a nice rally for shares of Chinese banks. But it may not be a good thing.
We’ve seen some data showing that real estate sales have been particularly weak. So the Chinese government stepping-in with a show of support for Chinese banks may not be a coincidence.
As I’ve said, the situation in China is one we’ll keep a close eye on.
Finally, earnings season got underway with an underwhelming start by Alcoa (NYSE:AA). The company beat on revenues, but missed pretty badly on EPS due to rising costs and weaker prices for aluminum.
Prices for aluminum fell 12% as investors and economists alike fretted about the economy. That helped Alcoa to a $0.15 cents a share profit, when analysts were looking for $0.22. Estimates were down 25% in the last month alone.
Alcoa maintained its volume sales forecast for the year. And really, the third quarter could have been much better if prices had remained stable. Also, weakness in Europe may have played a role in the miss.
Economic activity seemed to have supported aluminum demand, but it didn’t support prices. I’ll be interested to see how this gets interpreted.
It’s a huge week for earnings and I’ll be bringing you the details form banks and big tech as they come in.
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