"That Was the Week That Was" was a 1964 (or so) reproduction of a BBC hit show that lasted about one year in the US.
It satirized the news of the week in musical form and I remember it as being a lot of fun.
Both it and the British version starred David Frost. You might know him as the interviewer who pushed on Nixon in the recent movie "Frost/Nixon" directed by Ron Howard. I was also just getting interested in world news in the early '60's which was a good thing because the winds of change sure started to blow at the end of that Vietnam dominated decade. What got me thinking about the show was a yearning to get this week over with and be able to look back and with some characterizations about what went on.
It looks like Ben will get the votes necessary for another four year term, but at what cost? Harry Reid, he of the Senator Ben Nelson of Nebraska deal to sell 49 states down the Medicaid road to get one Senator's vote, alleged to have extracted a promise from Bernanke that Ben take additional steps to increase the flow of credit to the middle class. The Fed is supposed to be independent and free from political influence and here is the majority leader saying he has influenced it. Is the Fed supposed to stay with easy money as long as Harry wants it? An editorial in Monday's Wall Street Journal worried that "Mr. Reid's declaration of a confirmation quid pro quo will not reassure global investors who already fear that the Fed lacks the political will to withdraw its historic post-crisis liquidity binge soon enough to avoid new asset bubbles."
We also have the Fed meeting Tuesday and Wednesday and, under the circumstances, even if they wanted to they wouldn't/couldn't change the wording of their statement. So rates will stay low "for an extended period." The President will deliver his first State of the Union address Wednesday with nothing to show for his first year in office. If anyone can pull off a good speech it's likely to be this President but what direction will he go? Health care looks unpromising, cap and trade is dead, an immigration overhaul is on the back burner and financial reform is now in St. Paul's hands and he thinks ATM's are the only financial innovation worth anything. I always have been amazed by E-Z Pass myself. That is until the Kindle came on the scene. How can it download a book in 6 seconds?
The President needs to reframe his agenda and explain how it connects with the public's concerns. The overly long and extremely messy fight over health care is an example of how the Administration has failed to connect with the voters. Exit polls after the Massachusetts vote named jobs and the economy as principle concerns and very few thought health care was a top priority. The Administration acted like Senator Reid in that they pursued the vote above all else and even Dan Pfeiffer, the White House communications director, said "The process often overwhelmed the substance."
The question is should Mr. Obama adopt a more populist stance or move a bit to the center?
Should he try to get some legislation passed via compromising with the Republicans (who probably aren't in a negotiating frame of mind) or should he look to push them into an obstructionist corner in the hope of drawing November election lines. That's why I wish we were already looking back on this week.
On top of all that we have about one quarter of the S&P reporting earnings this week. One company that reported last week was Forest Labs (FRX, buy rated, recent price $29). Manoj Garg follows the company for Soleil and recommends its purchase. FRX reported revenues for the fiscal year 2010 third quarter of $1.06 billion, ahead of both his and the Street's estimates. Earnings per share were $.97 and Manoj had figured on $.90 and the Street $.86. The stronger earnings came from both better sales and cost cuts. Manoj has raised his FY 2010 estimate to $3.60 from $3.52. At $29 the stock is trading at a bit more than 8 times earnings (versus a group average of 10-12 times).
FRX is not an earnings story, however. It is, according to Manoj, a "pipeline and execution story as management transitions away from Lexapro (for depression, 55% of revenues, and facing a 2012 patent expiration), and Namenda (for Azheimer's, 27% of revenues, 2015 patent expiration)." The company has $3.9 billion in net cash ($12 a share), and "significant upcoming cash flow generation ($16 a share) until its core products face patent cliffs." The pipeline of 17 products is worth $10 a share which is how Manoj comes up with his price target of $38.
Wisconsin Electric (WEC, buy rated, recent price $49) raised its dividend 18.5% last week to $1.60 from $1.35. This brings the yield to 3.2%. Maury May, Soleil's Small/Mid-Cap Utility analyst, sees the next two years at least as bringing $.20 dividend increases and recommends buying the stock. The company operates in a reasonable regulatory environment and will finish its expansion projects this year with the completion of two more coal fired plants. He expects earnings this year of $3.70 so the multiple is about 13 times. His price target is $59.
Vincent Farrell, Jr. is chief investment officer at Soleil Securities Group and a regular contributor to CNBC.