Randomly Noted

Having read the coverage of Federal Reserve Chairman Ben Bernanke’s appearance before a reasonably hostile House committeee about the Fed’s role in the disputed Bank of America buy of Merrill Lynch, it would appear the central banker kept the critics at bay.

Given opportunities to express regret or missteps, he admitted to none and claimed all the Fed’s actions were appropriate, despite the chatter about arm-twisting Banbk of America one way or another as Merrill’s losses became more evident before the deal closed. There are no ‘smoking guns’ to demonstrate alleged inappropriate arm twisting.

Responsibility for informing Bank of America shareholders about the Merrill problems and bonuses before the merger vote fell to the Bank of America board, Bernanke said.

He was also right to question whether Bank of America had the objective evidence to back out of the deal.

Remember the times. It seemed like the financial system was closing in on expiration. Confidence in securities firms was near zero. An attempt to break the Merrill deal would  have had unpredictable but certainly most unwanted consequences.

Lennar's 16% Gain Today Has The Stock Near Break-Even For The Year

The numbers by themselves look pretty dreadful – Sales at homebuilder Lennar were off 21% in the second quarter. The loss was $125 million. Deliveries of new homes down 18%. New orders off 19%.

So why, then, was the stock up 16.37% late in the day? Because as bad as business was for one of the largest homebuilders in the U.S., things are starting to look a little better.

Continue reading…

The WSJ’s interview with Toyota Motor Corp.  requires a read-between-the-lines attitude. The Japanese auto maker’s new president, Akio Toyoda, reveals much by what he doesn’t say, which is a lot. As WSJ’s John Murphy writes, the grandson of  Toyota’s founder provides “few details about how he will address the company’s many troubles, including excess capacity at its plants world-wide.” Factory capacity – as well as plants’ location – is, frankly, Toyota’s biggest problem: It has to diversify away from its dependence on U.S. demand and tilt toward the likes of Brazil and China. It has to inject its workforce with a dose of adrenalin so the company returns to its 1980s-era nimbleness and hunger. This may well require painful high-level firings to show that failed bosses are no longer welcome. Saying he’ll take a 30% pay cut is a nice gesture but hopefully just a start; the 53-year-old CEO had better start talking specifics soon. Unfortunately, he tells the Journal he won’t shut factories in Japan and shift production to lower-labor-cost locations. This is hardly the best way to ease the concerns of stakeholders, except employees, of course. Continue reading…

Until January, Britain’s 99-year-old Woolworths was a traditional street-front retailer: You walked in, found great bargains, paid a pittance, walked out. Then it went bust, the biggest retail casualtyof the recession, as DJN colleague Lilly Vitorovich reports. Now it’s reappearing as an online retailer under new owner Shop Direct Group, a catalogue and internet retailer. I reckon it has a chance of succeeding as long as prices stay low and the product line disciplined. In a period of austerity (and hopefully afterward, unless folks return to their profligate ways) consumers want good value products at the lowest prices. This is what Woolies always provided in the children’s apparel, toy, candy, DVD and greeting card arena. The supposed pleasure of leisurely browsing brick-and-mortar store aisles is over-rated. In particular, shopping online for the retailer’s well-regarded Ladybird line kids’ togs will appeal to parents, aunties and grandparents. The only potential glitch is this: Shop Direct’s CEO Mark Newton-Jones says prices won’t be the lowest in the market even though the retailer “will keep costs down by being only online and using Shop Direct’s existing distribution and warehouse network.”  Hmmm. Without super-attractive prices, the new-look Woolworths will get mowed over by the likes of Tesco PLC’s online store, among others, which offer a greater variety of attractively priced products, from soup to nuts. Literally.

The decision to double the number of U.S. films nominated for the Best Picture Oscar is a bad one. It manages to dilute the brand of the Academy Awards. I am not sure of  the marketing value of the banner  Academy Award Nominee for Best Picture plastered on a printed advertisement. Whatever it was, it’s worth less now that 10 U.S. movies can boast that designation rather than the previous five.

Sid Ganis, the prsident of the Academy of Motion Picture Arts and Sciences, is quoted in today’s Wall Street Journal saying, “This wasn’t a knee-jerk decision.” In fact it had been considered for a couple of years and there was “no pressure” from the film studios. “We just felt we needed to expand the possibilities to allow more genres,” he told the Journal.

Cynics will think it’s tied to ratings declines for the annual awards broadcast. Cynics will think it’s another example of a we-are-all-winners culture that winds up diluting real achievement.

Being named Best Picture has never meant the film was really the Best Picture, which ultimately is a subjective judgment. 

The phrase that all the nominees use, whether sincere or not, is that win or lose it was an honor just to be nominated. Now, for Best Picture, it’s a little less so.