Good morning

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The headlines:

  1. Disney buys Lucasfilms.

    Link: cue the music.

    $4.05 billion for the Star Wars and Indiana Jones brands. And we can look forward to Star Wars Episode VII in 2015.

    And when you add that to Disney’s purchases of Marvel Comics and Pixar, it looks monolithic in its entertainment industry brand. The Disney share price:

    Which looks solidly like Colonel Hathi’s march.

    The purchase was half-cash and half-stock, which means that there will be some dilution in earnings for the next few years, which will hopefully be offset by the new Star Wars trilogy from 2015 onward.

    On a pessimistic note: I wonder whether the market force will still be with them. Maybe it’s just me – but does anyone else find that movies are a stretch of dwindling concentration spans?

  2. The recovery of New York.

    Link: the impact of a failed subway system.

    Check this out:

    It’s like a scene out of The Day After Tomorrow. And yet here it is today.

    The NY subway is going to be out of action for a while. Once the water has been pumped, 600 miles of track needs to be examined and checked. And then there’s the electrical systems… And lest we forget, this is sea-water. So there’s salt corrosion.

    The NYSE may open today, but I’m betting that its traders will be late to work for a while.

  3. Hon Hai is higher.

    Link: oh Apple.

    Hon Hai Precision Industry Co., in its guise as Foxconn, has reported fantastic increases in profit in the 3rd Quarter. Like: a 58% jump. Because “Apple Inc. paid more for the iPhone’s manufacture”. I talked about it in this morning’s podcast (which you can download here).

    I’ve been talking about this Apple-Foxconn profit-margin relationship for a while now (see here and here); and the summary is that I think we should expect some/most of Apple’s profit margin to fall in the direction of Foxconn.

    I mean, it’s this kind of quote that I find worrying:

    “Apple’s subsidies to Hon Hai were key to them improving profits for the quarter given how complicated the new model has been to produce and the fact they made about the same amount of iPhones as the previous quarter”.

    And when you add this to Apple’s disappointing earnings announcement on Friday last…

  4. “I lost control”.

    Link: Indeed.

    UBS trader Kweku Adoboli declared that he “lost control” in the trading loss debacle. And he was under a lot of pressure from his bosses.

    He then described UBS’s rules and supervision as “aspirational”. Which might just be the quote of the last banking decade.

That’s all for now.

Have a good day.