THREE THINGS I THINK I THINK

  • Are the problems in Europe having a real impact on corporations yet?  Peter Boockvar at Miller Tabak has a smattering of opinions:
  • The new big question for the US economy is of course what impact the prospect of European weakness will have on our growth. While its still early on and thus uncertain what the impact will be, here are some comments today from some US co’s: “DOW ceo says seeing strong demand in Europe.” The ceo also said “China is still very robust.” “GM sees euro zone effect to be neutral.” Warren Buffet said “European crisis not yet threatening Berkshire.” Avnet, a large distributor of computer and related products, said at a conference today that they are not seeing any impact on demand right now from Europe.

    I expect to hear a lot of this during the upcoming earnings season.  CEO’s will be a bit more cautious, but I don’t think we’re anywhere near experiencing the sort of negativity that will put a serious damper on the upcoming earnings season.  On the other hand, with high second half expectations already built into estimates it should not be shocking to see a less than optimistic (or at least cautious) outlooks from most companies.

  • The hypocrisy of Warren Buffett just never ceases to amaze.  Regular readers know I think Buffett is one of the most misunderstood investors of all-time.  He has sold his folksy image to the American public and they’ve swallowed it up like it was a delicious Cherry Coke.   This time, Buffett is defending the ratings companies.  Meanwhile, FCIC Chairman Phil Agelides (and just about every other rational American) thinks the ratings agencies played a central role in misleading investors.  This fact is plain as day to anyone who doesn’t own millions of dollars worth of their stock.  This is the second major blow to the Buffett ego (and portfolio) in as many months (Goldman Sachs of course being the first).  Are investors beginning to see Buffett for what he truly is – just another Wall Street banker who just happens to live closer to a corn field than a skyscraper?
  • A reader recently asked me what I think of the oil spill in the Gulf of Mexico.  I wrote the following:

The whole thing is a mess.  Environmentally it’s obviously a disaster.  Economically, it’s a mess because the U.S. can’t afford to keep relying solely on foreigners for energy sources.  Politically it’s a mess because the Republicans look silly after years of “drill baby drill” while Obama’s leadership skills pale in comparison to Bush’s Katrina response.  There’s nothing good that comes of this.  Absolutely nothing.”

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Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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