Market Talk

- Retail sales dropping 0.5% last month isn’t so bad considering the broader trend, James Picerno notes at The Capital Spectator. “That doesn’t mean that there’s nothing to worry about, but for the moment the annual pace of retail sales is still comfortably in positive territory.”

- Retail sales data were weak this morning, adding to a string of poor economic reports recently. “The economic data we have seen of late — manufacturing, employment, personal income — all suggest a slowing in economic growth,” Edward Harrison writes at Credit Writedowns.

- Research in Motion (RIMM) CEO Mike Lazaridis is pretty confident about his company’s upcoming BlackBerry 6 operating system, saying it’ll make “anyone that looks at it…say ‘I want a BlackBerry.’” “For RIM’s sake, let’s hope so because the company’s current OS certainly isn’t doing that now,” Digital Daily blogger John Paczkowski says. Consumer interest in the BlackBerry is dwindling, according to ChangeWave Research, just as smartphone demand is rising.

- Retail sales of Microsoft Office 2010, which Microsoft (MSFT) released to consumers last month, are so far a “a bit disappointing,” market researcher NPD Group says. NPD doesn’t reveal specific sales figures, but says revenue generated and copies sold are down from Office 2007′s initial two weeks of sales.

- Apple (AAPL) has purchased 3-D mapping company Poly9, according to Canadian newspaper, le Soleil. The company, best known for creating maps that can be viewed in a Web browser, has already relocated most of its employees from their native Quebec to California’s Silicon Valley, the paper reports.

- “Mortgage applications have fallen off a cliff,” Calculated Risk notes, after weekly applications for purchase fell 3.1%. “The weekly applications index is at the lowest level since December 1996, and the four week average is at the lowest level since September 1995 –almost 15 years ago,” blog says, noting the four-week average is off 35% since “the mini-peak in April.”

- The rich are getting richer, and they’ve been getting richer faster than the rest of us, and that exposes a real problem, Yves Smith writes at naked capitalism.

- Miller Tabak equity strategist Peter Boockvar cautions short sellers to tread carefully from now until year end. “Combine a settling down of European credit stress with potentially a better than feared earnings season, the growing possibility of gridlock in Washington DC come November, a Fed that wouldn’t know a rate hike if even the Bank of Japan wrote it on Bernanke’s forehead and a very underinvested money management community and we are set up for a big rally over the next 5 1/2 months which may have already started.”

- “You may not love the stock market, but you have to love how it can make a fool out of just about anyone,” Evan Newmark says.

- For all Jamie Dimon’s gloomy talk, JPMorgan’s future is looking pretty bright post-credit crisis, NYT’s Eric Dash writes.

- Hulu not being shy about broadcasting the fact that it’s profitable. “Even if the number isn’t huge, a profit is well worth bragging about, because I can’t think of another Web video company that has claimed on so far,” including YouTube, MediaMemo blogger Peter Kafka says.

- Capital rules alone won’t keep banks honest. “The better solution is the ‘dumber’ one: avoid having banks that are too big (or too complex) to fail in the first place,” Baseline Scenario bloggers Simon Johnson and James Kwak say.

- Naked Capitalism blogger Yves Smith rips Jamie Dimon’s “self-serving” defense of big financial institutions. “One has to wonder whether anyone in a position of influence really believes what he is selling,” she says.

- “Businesses have dramatically tempered the rate of firing but still seem reluctant to aggressively add to their payrolls,” says Miller Tabak’s Peter Boockvar. “That process will seem more gradual in nature assuming the economy can sustain its healing and recovery in the face of reduced government stimulus and the growing likelihood of higher market interest rates.”

- Felix Salmon discusses the economics of Netflix (NFLX).

- “The Fed has a big problem. It acts in secret. That makes it an odd duck in a democracy,” Robert Reich says. “As long as it’s merely setting interest rates, its secrecy and political independence can be justified. But once it departs from that role and begins putting billions of dollars of taxpayer money at risk — choosing winners and losers in the capitalist system — its legitimacy is questionable.”

- Jeff Miller offers his March employment preview. Following the strong ISM manufacturing report, he estimates zero net job growth before factoring in the temporary census jobs, translating into a monthly gain of 130,000. That’s less than the 200,000 gain economists expect.

- 90% of stocks in S&P 500 are trading above their 50-day moving averages. “This is at the top end of the indicator’s range over the last year,” Bespoke says.

- Hedge fund manager pay soared last year. The top 25 earned a collective $25.3B. “We bet on the country’s revival,” says top-ranked David Tepper, who earned $4 billion. “Those who keep their heads while others are panicking usually do well.”

- Give the good ol’ microwave some respect.

The White House is attempting to contain the damage surrounding President Obama’s curious remarks about bank bonuses. Whether it’s working is up for debate.

In case you missed it, Obama said he doesn’t “begrudge” the multi-million dollar bonuses JPMorgan (JPM) CEO Jamie Dimon and Goldman Sachs (GS) CEO Lloyd Blankfein received, noting it’s all part of the free-market system. He also compared these “savvy businessmen’s” exorbitant salaries to sports, saying some baseball players make more dough than both of those folks.

Now the White House is trying to mop up Obama’s mess. Huffington Post has the details:

The White House is moving swiftly to stem the fallout from a potentially damaging interview President Obama gave on Tuesday, in which, it was reported, he did not “begrudge” the multibillion-dollar bonuses of Wall Street executives.

Administration aides insisted, in email exchanges with the Huffington Post, that the quote was largely overplayed. The story, they say, made it appear as if the president didn’t mind massive compensation packages when he was simply stating that he didn’t fault anyone for his or her personal or professional success. Moreover, they added, the president has made similar remarks many times before without getting the critical reception he received on Wednesday morning.

“The president has said countless times, as he did in the interview, that he doesn’t ‘begrudge’ the success of Americans, but he also expressed ‘shock’ at the size of bonuses and made clear that there are a number of steps that need to be taken to change the culture of Wall Street,” spokesperson Jen Psaki told the Huffington Post. “[That is] a sentiment he has consistently expressed since long before he took office.”

The White House is clearly on damage control, trying to clean up a messy situation. But Princeton economist Paul Krugman, who heavily criticized Obama yesterday, still can’t get over the presiden’t “clueless” comments.

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President Obama strikes a curious chord, to say the least, in his latest comments concerning bonuses given to Goldman Sachs chief Lloyd Blankfein and JPMorgan CEO Jamie Dimon.

Obama says he doesn’t “begrudge” the multi-million dollar bonuses they received, noting some athletes make more dough than these two folks. From Bloomberg:

The president, speaking in an interview, said in response to a question that while $17 million is “an extraordinary amount of money” for Main Street, “there are some baseball players who are making more than that and don’t get to the World Series either, so I’m shocked by that as well.”

“I know both those guys; they are very savvy businessmen,” Obama said in the interview yesterday in the Oval Office with Bloomberg BusinessWeek, which will appear on newsstands Friday. “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free-market system.”

Umm, we’re not even sure where to begin on this one.  Free-market system? That went out the window when the government engaged in its bailout binge with the nation’s largest banks. As former IMF chief economist Simon Johnson points out: “Not only were their banks saved by government action in 2008-09 but the overly generous nature of this bailout means that the playing field is now massively tilted in favor of these banks.”

And wasn’t it only a few weeks ago that Obama was ripping “fat cat” bankers on Wall Street for their “obscene” bonuses? From fat cats to savvy businessmen, that’s quite the reversal.

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Of course, you know, this means war!

President Obama, in full populist rhetoric, tsk-tsked the bankers today, and swore to make them pay for their “obscene” bonuses  — literally, by proposing his bonus tax, or whatever fancy name he’s given it. (For the record, they’re calling it a “financial crisis responsibility fee.” Sounds like they’re charging a fee for being responsible, no? Is that ironic or what?) He said he’s committed to getting back “every single dime” the American people are owed.

Don’t get me wrong,  I have no sympathy for the banking industry, which deserves its fair share of the blame for the financial meltdown. But the president’s little assault today is just a blatant attempt to draw some popular support, or at least deflect popular anger.

To be sure, in some ways, the banks brought this on themselves. As my colleague Madeleine Lim commented during today’s Tomorrow’s News Today (coming later this afternoon,) among all the various parties that bear some responsibility for the housing crash and credit crisis, the banks remain the most tin-eared.

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- Obama’s bailout fees on TARP recipients should become a “too-big-to-fail” tax.

- Netflix’s business model transformation continues.

- Recovery won’t happen in a vacuum, bulls, Miller Tabak’s Peter Boockvar says.

- One week later Nexus One is off to a slow start.

- Google’s pride stands out in China’s threats.

- Jamie Dimon previously didn’t even consider a stress test when housing prices fell. Unbelievable.

- More than 100,000 are feared dead after Haiti earthquake.

- Some questions for the banking chiefs.

- Beige book shows modest improvement.

- California’s debt rating cut again.