Business

The upbeat earnings reports issued by retailers yesterday would have seemed inscrutable, had we not been buying merchandise ourselves hand-over-fist during the month of March. Our non-cash household purchases were all made on a single Master Card, and, for sure, the latest monthly bill was a whopper. It included a spring ski vacation, a set of Michelins, a porcelain crown and subscription tickets for next year’s season at the Denver Theatre Center.  But who could have imagined that millions of Americans would join us in shopping up a storm?  Our excuse is that the guru business has been good. Great, actually. But we have many friends who have been struggling through the Great Recession, and even the ones who have managed to keep their heads above water have succeeded in part by cutting back on household spending. So how to explain the impressive results turned in not only by high-end sellers such as Nordstrom’s, but by mid-level department stores like Kohl’s?  Sales there rose 22.5 percent for stores open at least a year, and Nordstrom’s led its group with a 16.8 percent jump. Its competitors did strong business as well: Saks reported same-store gains of 12.7%, and both Neiman Marcus and Bergdorf’s were up 9.2%. Women’s clothing, shoes, handbags and jewelry were the most popular items. A Pleasant Surprise This is hard to square with first-hand impressions gleaned at the local mall. The place usually feels pretty empty except on weekends, and the aisle traffic at Nordstrom’s, the shopping facility’s largest tenant, nearly always seems sparse. Still, it comes as a pleasant surprise that Nordstrom’s numbers have improved. It is one of the very few retailers that still does business the old-fashioned way, putting knowledgeable salespeople on the floor, selling high-quality goods, and standing behind everything they sell 100%. News

Schizophrenia still reigns at the Fed as policymakers attempt to head off an inflation that, statistically speaking, is almost nowhere to be found. In fact, inflation has fallen by more than half since 2007 if you measure it the way the Fed prefers, using a price index of personal consumption expenditures. What is the diligent monetarist supposed to do?  While some of the Fed governors see the glass as half-empty and want to keep interest rates low, their delusionally sunny colleagues want to tighten because they evidently believe all of the twaddle we’ve been reading about how the economy is in the throes of a strong recovery.  Consider the following headlines from Google’s business-news section yesterday afternoon: “Bets on Growth Buttress Stocks” (Wall Street Journal); “Oil Surges to 17-Month High on Signs of U.S. Economic Growth” (Bloomberg): and, “10-Year Yields Hits 4 Percent on Signs Economy Picking Up” (Reuters). To borrow a line from Goebbels, if the news media keep trying to mislead us with stories like these, eventually we will come to believe them. Or will we?  It’s one thing for the Wall Street Journal et al. to get all stoked about the supposedly robust pace of the recovery.  After all, the Journal’s owner, Rupert Murdoch, didn’t get rich telling readers the world was going to hell in a hand basket. But just because Murdoch has chosen to be a cheerleader rather than risk circulation and advertising revenues by giving it to us straight, that doesn’t necessarily mean that we readers have to believe such bilge. Why should we, when there is no hard evidence of a recovery in the economic lives and businesses that we see, and hear about, all around us? Behind the Headlines Could the newspapers simply be misinterpreting the signs?  It would certainly seem that

iPads flew off the shelves over the weekend, at least for a while, but most stores reportedly still had a few of the devices left after the initial buying panic subsided on Sunday. Although there’s been plenty of speculation that the device will be a paradigm-changer for users, the question of which paradigm it will change remained murky at press time. Just about any new device in the computer family is going to shift the game away from Microsoft in some small way, at least, since the Redmond-based software monolith hasn’t brought anything exciting to the marketplace since it introduced the Office suite in 1989.  Apple hasn’t exactly been standing still in the meantime, and the company looks like a good bet to surpass Microsoft in market capitalization sometime this year or early next.  Actually, there’s no reason why this couldn’t happen in mere days if investors were to suddenly grasp how Steve Jobs & Company has already eaten Microsoft’s lunch going out to 2015 and beyond. Remember when Microsoft was planning to dominate our living rooms with a “smart” home entertainment center that would have made going out on Saturday night unnecessary?  There were predictions that all of us would eventually pay the company a royalty for just about anything that made us feel good. Instead, they produced Windows 7 – a pretty decent operating system by most accounts, but not something you’d find at the top of the hedonist’s shopping list. Microsoft’s Last Chance Microsoft has been marking time for so long, accumulating cash it has no idea how to use, that it has forgotten how to innovate.  Our suggestion would be to team up with Sony, another company that has lost its way, to deliver the ultimate killer software that we all know is coming anyway.  We

What does Fibonacci analysis predict for Comex gold over the coming year?  We recently heard from a skillful practitioner of the dark arts, “Mestre Socrates,” who sees $1490 an ounce by around next May. But there’s a chance the path will not be smooth, he cautions, since prices could first dip as low as $1012 – more than $100 beneath current levels.  That would represent a great buying opportunity, however, according to Socrates – a place where bulls could back up the truck.  How confident is he?  Socrates notes that gold’s long-term price movements have been precisely foreseeable on the basis of Fibonacci sequences that have traced out cup-and-handle formations.  “Gold appears to have a predictable trading pattern of a new high, a slam down to the previous Fib level, reworking back to the previous high, a dull six-month ‘handle formation’ period, and then a two or three-month rally to a new Fib level. This has given workable projections for the comex gold price years in advance.” Socrates studied Fib numbers a decade ago with Larry Pesavento, a well-known technical analyst. “One of Larry’s ‘big ideas,’ ” he notes, “was the particular significance of the 0.786 level, which marked the transition from a simple retracement to a primary bull trend. Furthermore, once breached, a price could take out the 1.00 level and go straight to 1.272. The last major hurdle was to break through the 1.618 level and then ‘the sky was the limit.’ This applied to any financial instrument.” No Mere Oscillation So how does it apply to gold?  Socrates provided a detailed account of bullion’s ups and downs from 2003 forward, noting breakouts and cup-and-handle patterns that played out over periods as long as 18 months.  To bring the forecast up to date, the recent move down from