Thing One: Tablet Wars Get Nasty: That electricity you feel in the air is not the approaching election or holiday season or god-awful Frankenstorm. No, it is the crackle of war, as giant tech companies zap each other with hurtful words and competing tablets.
This is kind of a sorry bunch these days, these tech giants. For example, Apple, the greatest company in the history of America, reported quarterly earnings last night that fell short of Wall Street forecasts for the second quarter in a row. It warned investors to go ahead and expect the first quarter of 2013 to suck, too. Fawning analysts took to CNBC to say this horrible quarter was absolutely great news for Apple, that its results were bad only because its products are just too good. They explained that, as often happens to Apple, customers simply delayed purchases of the old, boring Apple products because they were saving their money for slightly newer, slightly different versions of those same products. It just makes too much sense. So the stock somewhat surprisingly did not collapse in after-hours trade -- although it has fallen nearly 15 percent, or about $100 billion in market value, over the past month.
Apple's disappointment followed similar downbeat news from its rivals Amazon.com, Google and Microsoft. Amazon reported its first quarterly loss since 2003, and its sales fell short of expectations. A week ago, Google missed earnings forecasts, as did Microsoft.
As Wired's Marcus Wohlsen notes, these megatechs are struggling to adapt to changes in their environment, including the death of the personal computer and the rise of mobile. You would think that Apple would have a leg up in such an environment, as the producer of lots of cool non-PC devices. But it seems to be having a slightly harder time convincing shoppers of the need to drop everything and blow hundreds of dollars on the latest iteration of a device they already have. And its rivals have tried to adapt by flooding the market with competing products. Microsoft joined the fray yesterday, re-introducing its new tablet-laptop hybrid, the Surface, along with its new operating system, Windows 8.
It remains to be seen whether the Surface can unseat the iPad (I'm guessing no). But the heated competition is starting to erode the thin veneer of politeness these rivals usually show to each other, Bloomberg notes. Apple CEO Tim Cook sniped yesterday that the Surface was trying to do too many things at once. Amazon directly called out Apple's high prices. Microsoft directly called out the iPad's storage capacity. Google's Eric Schmidt earlier this month made fun of Apple's lousy mapping app. It's probably only going to get nastier. Hopefully consumers will be the winners, getting better products and lower prices.
Thing Two: Pandit Was Pushed: You may recall Citigroup CEO Vikram Pandit's shocking resignation earlier this month, coming less than 24 hours after he personally announced less-than-horrible corporate earnings. I and everybody else that exchanges oxygen for carbon dioxide thought the timing was a little fishy and/or awkward, and certainly did not fit in with Pandit's constant protesting that the decision was his and his alone. Today Jessica Silver-Greenberg and Susanne Craig of The New York Times have a must-read story revealing that our suspicions were correct. They lay out in painful detail just how Pandit was defenestrated. One day out of the blue, Citi's board gave Pandit the choice of approving one of three news releases: One was for an immediate resignation, the second was for a slightly-later resignation and the third was for being fired without cause. Brutal. And not at all dysfunctional!
Thing Three: Bankers Have Midlife Crises A Little Early: But who really wants to be in banking anyway? Certainly not the mid-career bankers that talked to the Wall Street Journal's Leslie Kwoh. They're all tired of eating takeout food and getting the stinkeye at parties and making mere hundreds of thousands of dollars each year, so they're up and quitting Wall Street with no other plan but to find themselves. Maybe ride a motorbike for a while like their hero, Che. And who could blame them, really? First-year bonuses have fallen to just over $200,000, while average salaries have collapsed to just $360,000, from $400,000 or more before the crisis. And one in five bankers might not even get a bonus this year, the WSJ warns. What is this, socialism?
Thing Four: Libor Stuff Happens: By the way, there are still things happening in that Libor scandal you don't care about. The attorneys general in New York and Connecticut have now officially subpoenaed all 16 of the banks we already knew were under investigation in the Libor probe. And the Treasury Department and Fed have declared, sadly, that there's just not anything they can do about Libor being in all of the government's bank bailout programs, even though the TARP special inspector general has said they should get rid of that flawed benchmark and can do so without any trouble.
Thing Five: Factories Cite Fiscal Cliff Fear: Anxiety about the "fiscal cliff" of tax increases and spending cuts looming at the turn of the new year is already causing businesses to pull in their horns, possibly costing the economy a million jobs this year, according to a new study by the National Association of Manufacturers. Of course, this follows a series of self-serving warnings about the deficit and the fiscal cliff, notes Felix Salmon. So take it with a grain of salt.
Thing Six: Coming Soon, Random Penguin Publishing: Giant publishing houses Random House and Penguin are in merger talks, reports every news outlet in the universe. For those of you who don't know what a publishing house is, they produce these things called "books." Writes the NYT: "A deal could signal a move toward further consolidation among the major publishers, much the way the music industry realigned itself as it made the painful transition to the digital marketplace. Facing intense competition from Apple’s iTunes, the industry shrunk from six major record companies to three." The excellent suggestion by the NYT's Binyamin Appelbaum for the new publisher's name: Random Penguin.
Thing Seven: Frankenstorm's Halloween Scare: I don't even want to think about this, as I am sitting right in the path of this stupid thing, but apparently the worst storm in the history of humanity is bearing down on New York. A year after a freak snowstorm ruined Halloween in the metro area, and a little more than a year after Hurricane Irene, a freak combination of three massive storms is going to cause untold deaths and billions of dollars in damages. According to the latest models, at least. We get it, Nature, you're angry.
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Calendar Du Jour:
8:30 a.m. ET: GDP for the third quarter
9:55 a.m. ET: University of Michigan Consumer Sentiment Index for October
Heard On The Tweets:
— Paul R. La Monica (@LaMonicaBuzz) October 25, 2012
RT IF YOU AGREE RT @conor64: I do think group think is pervasive, and that it would be so with or without Twitter.
— Matt O'Brien (@ObsoleteDogma) October 25, 2012
For Halloween I'm dressing up as a really annoying late season hurricane and I'm gonna mess up all your plans. j.mp/RJ4INj
— Ben White (@morningmoneyben) October 25, 2012
NYC Marathon coming Sunday, November 4th. The one time a year non-residents can see what it's really like to live here. #overrunbytourists
— Epicurean Dealmaker (@EpicureanDeal) October 25, 2012
OK now we're just throwing words together. RT @scaramucci: THE ROMCOVERY IS COMING
— Kevin Roose (@kevinroose) October 25, 2012
And you can follow me on Twitter, too: @markgongloff