Cherry-Picking the Economic News–Anything to Whistle past a Graveyard

Foreign Sales Help I.B.M. to a Strong Quarter

Published: January 14, 2008

The fallout from the banking industry’s woes and a slowing American economy are certainly not hurting I.B.M. yet.
The giant technology company gave Wall Street a pleasant surprise on Monday morning by announcing quarterly earnings that were far higher — up 24 percent — than most analysts had forecast.
January 14, 2008

Sears Expects 60% Drop in Profit for Quarter

Sears used to beckon shoppers to come see its softer side. Now, they are starting to see its struggling side.
Sears Holdings, the rocky combination of Sears and Kmart, said Monday morning that its profits would fall by 60 percent in the current quarter, which ends Feb. 2, compared with last year. The news sent its stock tumbling 6 percent.
January 14, 2008

Americans Cut Back Sharply on Spending

Strong evidence is emerging that consumer spending, a bulwark against recession over the last year even as energy prices surged and the housing market sputtered, has begun to slow sharply at every level of the American economy, from the working class to the wealthy.
The abrupt pullback raises the possibility that the country may be experiencing a rare decline in personal consumption, not just a slower rate of growth. Such a decline would be the first since 1991, and it would almost certainly push the entire economy into a recession in the middle of an election year.
In the face of the first consumer spending decline in 17 years and a 60% drop in sales for what was once the nation’s major retailer, investors settle for IBM’s profits (entirely earned overseas) to talk themselves into a 171 point belly-up to the bar.
“Who’s buying, Charlie? Is this your round?”
Anything will do, any scrap of positive news to assure these paper warriors that the investment war has not been lost. Where have all the brass-bands of victory gone? Why is the ticker-tape parade all tape and no ticker?
Europe prints a half-trillion euros just to keep their banking heads above water, each day that dawns in America brings yet another ten-billion dollar write-down at this or that investment bank, while a not-so-steady-on-its-feet Bank of America tries to swallow the rotten carcass of Angelo Mozilo’s Countrywide Mortgage.
Amidst all these swollen bodies floating in the sewerage of America’s current (and largest ever) bank fraud, Wall Street finds 171 points of courage in an IBM quarterly report.
Amazing . . . simply amazing.

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