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Five Things You Need to Know: The Killing; Not Helping!; Captain Renault Shocked at Halliburton Move!; Television Supplants Baseball as National Pastime; All We Need Is This.


What you need to know (and what it means)!


Minyanville's daily Five Things You Need to Know to stay ahead of the pack on Wall Street:

1. The Killing

Retail Sales get top billing this morning, coming in at 0.1% for February versus overall market expectations for a rise of 0.3%.

  • Although the Retail Sales report seems to give the market a surface excuse to "take profits," the reality is most expected a weak February report.
  • The "whisper number" for Retail Sales had already been ratcheted down to 0.1% by a number of firms heading into this morning's release, so there wasn't much of a surprise here.
  • Still, the important aspect of Retail Sales is how the report gets translated by major media outlets.
  • Given the backdrop of what Fed governor Susan Bies on Friday called a "strong economy" except for the Housing and Auto Industries, we'll be watching for some reflexivity to appear in how Retail Sales wends its way through print and television media.
  • Think of it as a self-esteem issue.
  • For example, when an economist tells Bloomberg, "It appears consumer spending is something short of healthy," or the Wall Street Journal notes that the figures indicate "the economy's big driver, consumer spending, was weak in early 2007," how does that reconfigure how we view our own spending patterns?
  • After all, no one wants to be the last person standing at the cash register credit card swipe machine.
  • Consumption and shopping is simply a group activity pursued through the guise of individuality; call it shadow herding, crowd participation on the sly, with all the elements of crowd behavior turned inward on one's self - the pursuit of the prey, the impulse to seize it, the risk-seeking behavior of pushing one's bank account to the brink in order to experience the joy of the dangerous capture and the flaunting of the kill as a new handbag, a pair of shoes, or some animal skin cut and dyed into a protective jacket.
  • Enjoy it while it lasts.
  • Crowds can also turn against excess; and when killing for sport transitions into killing for necessity, those with the least to lose find new power in having the most to gain.

2. Not Helping!

Not helping the consumer is the latest report from the Energy Information Agency (EIA), showing gas prices have risen for the sixth consecutive week.

  • The average price for regular gasoline climbed 5.4 cents per gallon last week to $2.559, the Energy Information Administration said yesterday.
  • That marks the sixth consecutive weekly gain for gasoline prices.
  • Crude oil, which is back near $60 a barrel, accounts for a little more than half of the retail price of gasoline.
  • The EIA predicts gas prices will peak at around $2.67 in June.
  • According to Merrill's David Rosenberg, every penny increase at the pump drains $1.3 billion out of household cash flow, annualized.

    Retail HOLDRs (RTH) - Can I get $1.3 billion on pump 7?

3. Captain Renault Shocked at Halliburton Move!

Leading Congressional Democrats sharply criticized Halliburton (HAL) yesterday for relocating its chief executive to Dubai, suggesting it was possibly an effort to dodge American taxes and investigations, the New York Times reported.

  • See, this is just the kind of knee-jerk overreaction we've come to expect from Congress.
  • The company has a perfectly reasonable explanation for the move: They want to exploit growing business opportunities in the Middle East.
  • Why, there's no evidence Halliburton is relocating to avoid taxes and investigations! No evidence at all.
  • Sure, the company in the early 1990s was found to be in violation of federal trade barriers in Iraq and Libya, and after pleading guilty they were fined $1.2 million with another $2.5 million in penalties.
  • And yes, in 2002 Judicial Watch filed suit on behalf of Halliburton's own shareholders alleging accounting irregularities.
  • And it's also true that the Securities and Exchange Commission investigated the same issue and that in August 2004 Halliburton agreed to settle the issue for $7.5 million in fines.
  • Oh, and we suppose it's also "technically" true that, according to SEC filings, Halliburton in 2003 paid a Nigerian official $2.4 million in bribes in order to receive favorable tax treatment.
  • And yes, it might seem odd that Halliburton already has 17 offshore companies in tax havens with 131 foreign subsidiaries.
  • And yes again, Halliburton unit KBR has picked up contracts in Iraq since 2003 worth up to $18 billion, including one no-bid contract worth $7 billion alone.
  • And of course, there's the fact that Vice President Dick Cheney became chairman and CEO of Halliburton in 1995 and still retains unexercised stock options.
  • And then there's the crazy coincidence that President George W. Bush's grandfather, Prescott Bush, was a director of Dresser Industries, which is now part of Halliburton and which in the late 40s and early 50s employed former President George H. W. Bush (small world!).
  • But people, please. Don't be so cynical!
  • All that is no reason to suspect Halliburton's motives for moving to Dubai are anything but pure.

4. Television Supplants Baseball as National Pastime

A report in the USA Today says that all U.S. households will be eligible for $40 government subsidies to help pay for boxes that will allow analog televisions to work after the nation's transition to digital television is completed in 2009.

  • Congress last year set aside $1.5 billion to fund the purchase of boxes to convert digital signals to analog after Feb. 17, 2009, when TV stations must stop broadcasting in analog, the USA Today reported.
  • You realize what this means, don't you?
  • It means that after converting the nation's entire "television system" to digital, the government is paying people $40 apiece to convert the digital signal back to analog.
  • Well we suppose that's fair enough. Television is, after all, the new national pastime.
  • Still, we're going to use our $40 conversion subsidy for something else... like something in today's Number Five.

5. All We Need Is This.

According to The Sun, Britain's most reputable news source, wine lovers who can't be bothered to open bottles will soon be able to buy ready-filled plastic glasses of plonk.

  • The Tulipa foil-sealed glasses will launch in the UK this summer at £3.75 for two, the Sun reported.
  • Each glass is filled with red, white or rose wine and sealed with foil to... seriously, this is totally true... keep it fresh.
  • But wait, there's more mobile booze on the way!
  • Are you ready for Pocket Shots?
  • "Pocket Shot is a brand new way to enjoy your favorite hard liquor. No longer will you need to carry full size bottles. Gone are the breakable glass mini bottles. Now you can have it one shot at a time, any place, anywhere." So it says on the company's Web site.
  • Tin-foil sealed wine? Pocket Shots? Have we, as a society, reached the point where we can no longer be bothered to open our own booze? Have we really sunk to that level?
  • Yes! We have!
  • Now, if only someone would invent a beer that automatically jumps into our mouths!
  • Oh, and also a tortilla chip that comes pre-dipped in salsa.
  • That - and our $40 television subsidy - is all we need!

    All We Need Is This.
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