Apr

11

 The silo that a certain conglomerate might like to use to fill earnings with sales of grain and other assets purchased 100 years ago, might have run dry today and its stock dropped to its lowest level since June '04. Like a pressure cooker whose valve was finally released, the market, after staying with a hair of unchanged the whole week, including its Friday 6:00 GMT level of 1368, finally burst the dam, and dropped a fast 35 before closing down a mere 2% on the major US and European markets. The last healthy gasps were in Japan and Asia with the Nikkei up 2.5% and other Asia markets up 1% to 3%. Amazingly this earnings report was not released before the announcement to the big boys, and the staggering immediate 1.5% drop that ensued in the minutes after the announcement must have been dismaying to all who are accustomed to fair warnings on things of this nature. It reminds one of the Charles Addams cartoons about the old couple that manages to put up a facade of happiness for many years, until a small incident, perhaps the failure to take out the garbage, causes an explosion.

Alan Millhone enquires:

It amazes me that the first time 17% drop in one quarterly earnings report in over five years for the conglomerate drives down the market by almost 260 tics. Also Vic's mention of 'time delay' release of sensitive financial information reminds me of the ruse in The Sting, where they used delayed track reporting over the wire service to dupe Robert Shaw (who played Doyle Lonnegan in the movie) out of all his money at the betting window. Could big financial firms (not all) be using this type of delayed reporting to dupe the average investor who mostly trusts financials and P&L statements in order to try and make educated investments?


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