The Week Ahead: Who's the Biggest Turkey?

Thanksgiving is on the horizon, and that bird we all savor is everywhere to be found, not just in the supermarket. The cluck is flying private jets to Capitol Hill, where at the same time he’s begging for $25 billion. He’s closing down his hedge fund in the Citi (NYSE: C), while pecking off rumors to stave off his stock’s slide deep into single digits. The Yahoo (Nasdaq: YHOO) is being forced out of the roost after turning down a deal worth three times the current value of his stock. The bald eagle is packing his things into a box after falling from the nest. He’s being roasted in Congress after flying the coop to start a jail term. The lame duck is migrating south to Texas, just as hunting season was set to open on him. Still, perhaps the worst turkey of the flock of gobblers is actually the bird buying stocks in the middle of a flu outbreak. So, in this group of turkeys, who is the biggest cluck then?

Well, there certainly are enough turkeys to feed the vengeance of the newly poor. Congress has wised up, after being taken for a wild goose chase that cost American tax payers $700 billion. As a result, the CEOs of the big three automakers were sent home to piece together that silly old thing we use to need to raise money, a business plan. Nancy Pelosi and Chris Dodd told the stooges “no plan, no help from the man!” Without the votes to pass an auto bailout, and with Congress’ experience from the Economic Stabilization debacle, the group is now mindful of the damage it can do to the psyche of the citizenry by failing to pass a critical bill up for vote.

Last Week

Last week cost corporate America a few heads, which makes sense since headless chickens are no rarity to bear markets or otherwise difficult times. Yahoo’s CEO and co-founder, Jerry Yang, was forced to leave by the company’s board and at the insistence of shareholders of a $10 stock that could have had $33 from Microsoft (Nasdaq: MSFT) some time back. Even so, couldn’t the same be said for stocks across the spectrum? I still think Yang is getting a bad wrap, because with a little work here and there Yahoo seems to me a fixer-upper worth investment.

Up in Washington town, where I had the pleasure to visit briefly last week, Hank Paulson found out who his inevitable replacement would be. One has to wonder if that quiet Ben Bernanke put in a word or two for his New York Fed chum Timothy Geithner. One also has to wonder how long until the villagers across this nation, including Detroit, come with torches in hand for the purpose of lighting up DC and old New York. Never has such intense global distaste been focused on such a tight pressure point. Better get that “change” fellow in here quick before structural support gives way!

The Week Ahead

The week ahead is a shortened one due to the holiday. A lot of the anticipated bad news is becoming repetitive and simply boring at this point. However, there are a couple reports that stand out.

We would be remiss not to mention Tuesday’s second reporting of third quarter GDP. Since it is the first revision, it has a greater chance of being significant. The Advanced GDP report showed the economy contracted just 0.3% in Q3. We think you can expect that contraction to worsen with this report. Same goes for Corporate Profits, the report’s side-kick.

Existing home sales picked up in September, but with the reverse wealth effect in play like never before, look for October sales to backtrack toward the year’s lows on Monday. The ICSC posted the first weekly same-store sales data decline in memory last week, and this week’s reporting seems likely to worsen. The Conference Board’s Confidence metric is one of those boring old bad news bearers we mentioned earlier.

The color this week looks to arrive on Wednesday. Personal Income and Outlays are due for October, and spending looks to be nonexistent. Durable Goods Orders should be likewise missing.

Weekly Jobless Claims have quickly overtaken our fear threshold of 500K, hitting 542K last week, the second sequential drastic jobs loss. Recent NAHB data points toward a horrible New Home Sales number as well. On Friday, look for more regional manufacturing contraction from Chicago to match this week’s Philadelphia report.

Thursday, open your belts, take a deep breath, have a glass of wine and forget the past year. Remember what you have, not what you’ve lost. Give thanks for the important things.

The week’s earnings schedule highlights: Monday – Analog Devices (NYSE: ADI), Campbell Soup (NYSE: CPB), Star Bulk Carriers (Nasdaq: SBLK); Tuesday – American Eagle Outfitters (NYSE: AEO), D.R. Horton (NYSE: DHI), Hillenbrand (NYSE: HI); Wednesday – Deere & Co. (NYSE: DE), Hellenic Telecommunications (NYSE: OTE), National Bank of Greece (NYSE: NBG), Tiffany & Co. (NYSE: TIF); Thursday – Ship Finance Int’l (NYSE: SFL) and Texas Industries (NYSE: TXI).

Comments

[henarl:]

The biggest gobblers are the CEOs of GM, F, C, Etc. but they seem to be able to keep their heads regardless of performance. They all should be served up on the Thanksgiving platter but who wants to bet on Pandit at Citi losing his after running C down the toilet at the eventual huge cost to the American taxpayer. How much longer will the Arabs and Chinese keep buying T-bonds to pay for this endless crap. When they decide to stop it will be game over for the IOUSA!

2008 Nov 24 11:48 AM