Larry Summers withdrawal from consideration as the next Fed chairman creates only one big winner in our admittedly dumb point of view and obviously it's one of the Winklevoss twins. Exactly which of the pair we aren't sure. Take your Winkle pick. But one of those Facebook ( FB)-failures is the victor here. Everybody else, from President Obama to John and Jane Q. Public, loses. Allow us to explain. The stock market immediately cheered Summers' exit from the race, rising half a percent Monday. As TheStreet's very own Herb Greenberg points out in his column titled Summers and Heroin, however, as much as the stock market reflects the so-called pulse of America, the country's bloodlines are tainted by heavy doses of Fed-dealt junk in the form of cheap cash. Since Summers was more of a threat than his rival Janet Yellen to cut off, or at least reduce, the supply of easy money into the system, his departure as the president's next pusher-in-chief garnered the expected relief high. And as Herb astutely concludes, giving the addicts on Wall Street exactly what they want is not always a good thing. We learned as much the hard way when Lehman fell five years ago this very week. "Low rates are wonderful for almost everybody but savers and retirees. They spur housing sales. They keep stock prices elevated. And, well, they make us feel good. Oh, and they also give an illusion that things are better than they really are," writes Herb (no relation) Greenberg. In other words, ordinary Americans -- the plain old folks at home who save and retire -- lose by losing Larry Summers, and it's more than an economic matter. It's a hematologic one. Of course, President Obama is clearly a major loser in the bloodsport that is politics as a result of Larry's concession letter. TheStreet's Jim Cramer says as much in his column thanking Summers for removing his hat from the ring to avoid a bloody battle on Capitol Hill. "This candidacy -- which required Summers to bow out in order to save the president some political capital and avoid gut-wrenching hearings -- was so ill-thought-out by the president that one can only wonder how horrendous the battle will be with the Republicans in a few weeks," opined Cramer, adding that Obama must have been blind to the fact that Sen. Elizabeth Warren (D., Mass.) was gearing up to slam Summers on behalf of women everywhere, even those without Harvard degrees. On that note, lest one think that American women emerge triumphant as a result of Summers ceding the Fed's top spot to a fellow female, well, we suggest revisiting that notion as well. Even if Yellen does assume the position of America's top banker, she will always be remembered as Obama's number two choice. In the eyes of far too many, including the commander-in-chief, she will have won by default and as any competitor knows, that is often a fate worse than losing. Suffice to say it will make for some seriously awkward photo ops with Obama if and when Yellen does become the country's first Fed Chairwoman. Summers quite clearly is a loser by definition. That said, he can be solaced by the fact that the President of the United States is on his side even while everybody else in the country hates his goddamn guts, especially the fairer sex. Which brings us back to those Winklevosses. Or Winklevi. Or whatever those two kids call themselves when they are not daytrading bitcoins. For those that may have forgotten, the Winklevoss brothers were smacked down by Summers when he was President of Harvard and they were lowly students seeking redress for Mark Zuckerberg's alleged crime of stealing their multi-billion dollar idea. The scene was famously reprised in the blockbuster movie "The Social Network" and brought up again in a subsequent interview where Summers categorized any student who pulls such a stunt as an "asshole." He may be the only one, yet somewhere a Winkle asshole is smiling triumphantly right now.
4. Option Outage
Sorry, Mary Jo, but gathering a gaggle of exchange bosses didn't solve much. What else ya got? Options trading across several exchanges was halted for a brief spell Monday afternoon due to a mysterious technical glitch in the Options Price Reporting Authority (OPRA), a computer system that distributes price quotes. All trading in options was halted at 1:40 p.m. and was totally back to normal by 2:30 p.m. Among the exchanges affected by the snafu were those operated by Nasdaq OMX ( NDAQ) and CBOE Holdings ( CBOE). Monday's shutdown followed the halting last Friday of two of CBOE's securities exchanges for more than half an hour due to unidentified OPRA problems. Ironically, the OPRA problems popped up the day after the heads of major U.S. stock exchanges met privately in Washington with regulators including SEC Chair Mary Jo White to clean up the rash of technical troubles afflicting the market and panicking investors, most notably the Aug. 22 computer failure at Nasdaq that caused a three-hour trading outage. "Today's meeting was very constructive," said White in a statement last Thursday. "I stressed the need for all market participants to work collaboratively -- together and with the Commission -- to strengthen critical market infrastructure and improve its resilience when technology falls short." Talk about "stressed," Mary Jo. Clearly your stressing didn't accomplish much in terms of immediate results. The only people who are stressing right now as we see it are options traders wondering if their next trade will be busted. Not that we are pinning the blame on White mind you. Not by a long shot. It's not her fault that her charges are unable to get it together. If we have a Rube Goldberg computer system of 12 different options exchanges that can't talk with each other, how can we expect their respective CEOs to communicate?
3. Not Berry Smart
What on Earth was Berry Plastics ( BERY) thinking -- and drinking -- at its investor day? Based on the stock's reaction, somebody at the disposable cup-maker must have spiked the punch! Shares of Berry got crushed like a plastic cup at a college kegger Tuesday, falling over 12% to $22 after theflyonthewall.com first reported that the company lowered its fourth-quarter earnings guidance. Apparently Berry's brass told analysts at the gathering that it's EBITDA -- earnings before interest, taxes, depreciation and amortization -- would drop 10% in its fourth quarter ending in September, compared to the previous year. Look. We understand that Berry had to eventually come clean and inform Wall Street's pencil-pushers that rising raw material costs would force them to slash their guidance. Hey, it happens to everybody at some point. Nevertheless, nobody should drop a stink bomb like that at their own investor day. Talk about a party foul! And even worse was the fact that the company raised expectations last month by telling investors that its operating EBITDA would be slightly higher in its fourth quarter. "Taking into consideration the lower volume forecast and resin headwinds as well as our new cost savings initiatives, we still anticipate a modest increase in our operating EBITDA in the September 2013 quarter versus the prior year," said CEO Jonathan Rich on the company's August 2nd Q3 conference call. Don't worry, Jonathan. You may have thrown one sorry shindig, but at least one person intends to keep drinking your Kool-Aid. Wells Fargo analyst Christopher Manuel shrugged off Berry's shellacking and reaffirmed his outperform rating. "Based on commentary during the presentation, we anticipate an announcement when the company reports its FQ4 2013 results in November regarding a sizeable restructuring effort. BERY did not comment on size or scale, but we believe efforts would be focused on all aspects of the business including headcount reductions, plant rationalizations, and other more permanent/structural measures," wrote Manuel in a research note. Based on Berry's latest debacle, we wouldn't drink to that just yet.
2. Joe's Junk Sale
Hey, Joe Gregory, where you going with that commode in your hands? Sotheby's ( BID) announced Tuesday that the former Lehman Brothers president is auctioning off a collection of antique furniture and artwork from the Long Island mansion which he sold in June after listing it for $22 million. The auction house said Gregory and his wife Niki would be unloading "important English furniture from some of the most notable cabinet makers, along with European porcelain and decorations." Our friends at Reuters confirmed that among the items listed for auction are two commodes -- chests of drawers -- made in the 1700s, estimated to be worth up to $120,000 and $400,000. Also up for sale is a painting listed for $60,000 to $80,000 by the Dutch artist Bartholomeus Assteyn titled A Still Life of Grapes, Cherries, Peaches and Other Fruit in a Basket, with a Rose and a Dragonfly on a Stone Ledge. Hmmm. That's an interesting title for a work of art. But we think we have a better one. How about Fruit Portrait of a Fallen Wall Street Titan who Flew Too Close to the Sun While Commuting to Work by Helicopter? Either that or Still Life of an Overleveraged Banker and His Overspending Wife. Yep, either one of those would capture the essence of the work quite nicely, don't you think? Not that the pieces are not exquisite mind you. Clearly Joe Gregory's taste in furniture was only exceeded by his taste for risk, the kind of risk that would eventually sink the 158-year-old investment bank, not to mention the global economy. Not that Gregory is the sole executive to blame for Lehman's collapse of course. Lehman's sad story had many authors from Dick Fuld all the way down. However, it's worth noting that a number of former Lehman employees paint Gregory as being consumed by issues like diversity as opposed to more pressing problems like its mortgage exposure. Diversity and promoting the ill-equipped Erin Callan to the CFO spot that is. Anyway, Gregory's soon-to-be-sold collection is certainly more tasteful than his $233 million claim against Lehman's estate in 2009 to recover deferred stock compensation. That joke of a claim, by the way, is still outstanding. Gregory's stuff, on the other hand, is on its way out to the person holding the highest paddle. And with nobody being punished for Lehman's multi-billion collapse, that's probably the only paddling we're going to see in this sad affair. (Full Disclosure: The author is a former Lehman employee who fondly remembers the good old days.)
1. Schultz Holsters Mouth
Please, Howard Schultz. You can do more than shoot from the lip. We know you can. The politically outspoken Starbucks ( SBUX) CEO waded into the firearm firestorm Tuesday by sending an open letter to customers saying it would like gun rights advocates to stop holding "Starbucks Appreciation Day" events at his stores. Starbucks' current policy is to default to local gun laws, including "open carry" regulations in many U.S. states that allow people to bring guns into stores. Nevertheless, the coffee-chain mogul did not go so far as to issue an outright ban on guns in his company's 13,000 U.S. stores -- as many other chains do -- because it would require unarmed staff to confront customers potentially packing heat. Instead, the company will "respectfully request" patrons leave their firearms outside when shopping in its stores. "We found ourselves in a position where advocates on both sides of the issue were using Starbucks as a staging ground for their own political position ... I empathize with both sides" said Schultz, adding that Starbucks is "not a policymaker." Howie. Bubbeleh. We hate to remind you, but you can lay down the law in your own stores. It's your store, your policy. And while we know his aim is true, we wonder what happened to the straight-talking Schultz we used to know? You know, the guy who went national in his crusade to slash the national debt and the one who told off a shareholder who questioned Starbucks support of gay marriage at the company's annual meeting last March? Said Schultz at the time: "Not every decision is an economic decision." That guy! Come on, Schultzie. Clearly you are aware that 12 people were massacred in our nation's capital Monday because of lax gun laws. This is the week when you can actually accomplish something before the so-called second amendment advocates emerge from their foxholes to start screaming about slippery slopes and how Bambi's mother is too tough to kill without a Bushmaster XM15-E2S, the rifle which was used to mow down 20 innocent kids and 6 adults in Sandy Hook. Now is the time for you to get the drop on NRA numbskull Wayne LaPierre, before American attention spans expire and families turn their focus back to Dancing With The Stars. Make him realize that even if our kids are vulnerable in their schoolrooms and government workers are exposed in our Navy yard that hipsters, yuppies and struggling screenwriters can take shelter in one of your stores. "Safety and an Espresso." What's better than that on signs outside your stores? Much better than "No Bare Feet, Guns Frowned Upon." Don't you think? Look. We know that making Starbucks a gun-free zone won't stop insane, dangerous people like the Sandy Hook and Navy yard shooters. And we know it's a nearly impossible policy to enforce considering a large percentage of Americans are as addicted to Uzis as they are to cappuccinos. But if you can pry their assault rifles from their cold, dead hands and replace them with warm, mocha grandes even for a short while, that would at least be a start in ending this scourge now killing our neighbors and kids. Furthermore, Starbucks sales will probably improve as a result, just as New York City restaurants saw their business boom when Mayor Bloomberg enacted his smoking ban. At first they whined about the policy, now they cheer it because customers keep coming back. Trust us Howard. Your coffee-addicts will come back too. You are not being a "policymaker" by banning guns from your stores. You are being a smart businessman. Now go all the way. (Full Disclosure: The author's grandfather was killed by a bullet in his convenience store during a robbery attempt in 1948 at the age of 38, orphaning his mother and aunts. The author also drinks coffee. As evidenced by this column, probably too much of it.) -- Written by Gregg Greenberg in New YorkFollow @5gsonthestreet