Market Talk

- “Betting against the American consumer is one of the biggest mistakes Wall Street bears have made this year,” Tom Petruno says.

- No one wants to back down in this Apple/Adobe tiff. Adobe CTO Kevin Lynch offers his two cents in a blog post. And Adobe CEO Shantanu Narayen sits down with WSJ’s Alan Murray and fires back at Apple. Here’s Jobs’ lengthy missive posted yesterday on Apple’s website.

- Yahoo (YHOO) CEO Carol Bartz tries to downplay the recent exodus of executive talent. But BoomTown blogger Kara Swisher begs to differ. “The continuous brain drain is perhaps the company’s most profound dysfunction.”

- Economy has been expanding for three consecutive quarters, but the overall picture remains mixed, The Economist’s Free Exchange blog says. “Growth is clearly better than no growth. But there are real concerns with the composition of output.”

- GDP growth at 3.2% should confirm the recession’s over. But delving deeper into the details shows the report’s not quite so rose. “But I suppose an optimist could see in all this the potential for much better numbers to come once the recovery gets on track,” James Hamilton writes.

- The new GM’s back and its poised for success. At least that’s the message Vice Chairman Bob Lutz relays on GM’s FastLane Blog today, which marks his last day at GM. “I only have about 47 years of experience on which to base this opinion, but I believe GM is poised to win.”

- “Was Goldman a badder bank than other banks? No. Did other firms put their own free-wheeling interests before those of their clients? Yes. Is Goldman now a victim of its own, home-grown, blinding arrogance? Absolutely,” FT’s Alphaville says.

- “Google is going to have a problem because Google is only known for search,” Yahoo CEO Carol Bartz tells BBC. “They’ve got to find other things to do. Google has to grow a company the size of Yahoo every year to be interesting.”

- In the wake of Microsoft (MSFT) shelving plans for its two-screen, tablet-style device, is Hewlett-Packard (HPQ) also stopping the development of its tablet computer? That’s what Michael Arrington alleges at TechCrunch, citing a source who has been briefed on the matter.

- The Kentucky Derby looks even more wide open than ever this year.

- Auto sales are “crawling forward,” but still remain weak, James Hamilton says. “On a seasonally adjusted basis, we’re not making any progress from December…Whatever the explanation, auto sales so far this year remain 40% below the average seen for January and February over 2005 to 2008.”

- Small, mid-cap stocks leading the rally. As confidence about the global economy wavers a bit, some investors and traders are actually turning their attention to companies heavily dependent on the US economy, Tom Petruno writes.

- S&P 500 and US Dollar index are about as negatively correlated as they’ve ever been, Michael Panzner notes. But the equity-dollar relationship typically isn’t sustainable when it hits historical extremes, meaning investors may need to look beyond the currency markets for hints about the stock market’s next move.

- “Amazon’s MP3 store hasn’t done much to weaken Apple’s grip on the digital music business,” MediaMemo blogger Peter Kafka reports. “But that doesn’t mean Apple isn’t paying attention.”

- Since there are no assurances that new regulations will prevent a future financial crisis from occurring, regulators should take the next best step and break up the nation’s biggest banks, James Kwak says. “Politically, breaking up TBTF banks is something that should on paper be able to attract a bipartisan majority.”

- A consumer finance protection agency is a great idea, but it’s a shame that a simple mandate in the original plan — compare all mortgages to plain vanilla 30-year fixed contracts — was rejected, FusionIQ CEO Barry Ritholtz says.

- Millions of homeowners haven’t benefited from lowest mortgage rates in nearly a half-century because they can’t or won’t refinance, WSJ reports.

- Auto veteran Bob Lutz plans to retire from GM after four decades in the business and a career that included executive positions with each of the big three Detroit automakers.

- “It seems like governments are doing a lot of poking, probing and investigating of large investors in the markets recently. Especially when it comes to bets being made that have major implications for governments, i.e., positions taken on currencies and government debt,” WSJ’s MarketBeat says.

- NY Gov. David Paterson finds himself in the middle of yet another scandal.

The fact that Fritz Henderson couldn’t last a year as GM CEO is a tell-tale sign of who may be influencing major decisions at the automaker and what direction they want to take GM in the future.

GM Vice Chairman Bob Lutz said the automaker was “surprised and genuinely saddened” by Henderson’s departure, and added management wouldn’t have recommended his exit.  From Dow Jones reporter Sharon Terlep:

“None of us had any hint,” Lutz told reporters. “The board makes these decisions. [It's] not something [management] would have done.”

Reasons for Henderson’s fast exit are being widely debated this morning in the blogosphere. The Detroit News’ Daniel Howes suggests Henderson was asked to leave because his team didn’t move fast enough, “even if they were moving faster than any team in GM history,” he says.

“And speed, for the new GM, means everything,” Howes adds. “It’s the difference between success or failure, between readying GM for investors to buy new shares or not, between giving Team Obama an exit from an unpopular bailout with taxpayer money or giving its opponents a ready-made political club.”

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On the first anniversary of Lehman’s collapse, stocks reach their highest point in…about a year.

US stocks rally after Fed Chairman Bernanke says the recession is “likely” over, as the DJIA jumps 57 (0.6%) to 9683, its highest point since Oct. 6, 2008. S&P 500 adds 3 (0.3%) to 1053, Nasdaq Comp rises 11 (0.5%) to 2103.

August retail sales rose more than expected, and it was greeted as the latest sign that recovery is around the corner. But the gains were mainly oncar and gas sales. Don’t expect the former to last: GM’s vice chairman, Bob Lutz, says auto sales are already returning to the levels they’d sunk to before the cash-for-clunkers program. “So far, September is weak and the month is not meeting anybody’s expectations,” Lutz said at a presser.

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