Ed’s Daily Notes for September 16th   Leave a comment

Two big events this week: First, the Federal Reserve’s Open Market Committee meeting on Tuesday and Wednesday; and second, Friday is “quadruple witching” (aka options expiration).

Speaking of the Fed:

Bloomberg: Summers Quit Fed Quest After Democrats Spurned Obama Favorite

Good news to start a Monday!

Lawrence Summers’ withdrawal as a candidate for Federal Reserve chairman came after an unprecedented campaign to stop a Fed nominee even before he was announced, spearheaded by Democratic senators who took on a president of their own party.

The decision by Summers, the former Treasury secretary and economic adviser to President Barack Obama, came as liberal and moderate Democrats on the Senate Banking Committee began publicly and privately signaling their concerns about Summers to the White House.

Business Week: Krispy Kreme’s Unlikely Comeback

Although the article above pumps Krispy Kreme (KKD), my favorite donut maker, it fails to mention one thing: The stock is overpriced UNLESS you think Krispy Kreme can really grow MUCH bigger, and by that I mean stealing donut market share from Dunkin’ Donuts, and coffee market share from Starbucks. While KKD might steal some market share, the amount they would have to steal to justify a higher stock price is unrealistic, in my opinion.

I would have to rate this stock a “sell”, unless you can buy it on a large dip.

Business Week: Google’s Boss and a Princeton Professor Agree: College Is a Dinosaur

The article above is good, even if the headline is a bit sensationalistic. For example, buried in the article is this from Google Chairman Eric Schmidt:

He said college “just produces a better adult.” While acknowledging that Google’s college recruits aren’t equipped to contribute immediately, he said, “They are phenomenal employees after the training program.”

Rather, the point of the article is how obsolete colleges are becoming, as the online education model is beginning to form. Admittedly, these are the opinions of both Schmidt and “Anne-Marie Slaughter, a former Department of State official and until this month a tenured professor at Princeton University.” However, considering the increasing costs of colleges, and the failure of the political class to realize their subsidation of higher education only makes it cost more, we are heading to a time when only students getting a full scholarship, or students with rich parents, will be able to afford college. Ironically, that was where we were prior to government-subsidized student loans.


Posted September 16, 2013 by edmcgon in Editorial/opinion, Federal Reserve, Market Analysis, News, Stocks

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