Assorted historical stuff:
President Hoover calls for White House conference and commission to study ways of improving credit situation for homebuilding and financing.
Army creates three-dimensional version of chess to teach air tactics. Bottom is conventional chessboard, representing ground forces; top board is transparent and holds pieces representing air forces.
German Labor Min. Stegerwald announces government contracts won't be awarded to companies which show "unsocial attitude in relations with employees."
Report of bearish speculators in Ericsson (Swedish telephone co.) being squeezed by “unnamed group” rumored to be associated with Ivar Kreuger of Kreuger & Toll; several of Kreuger's close associates subsequently elected to Ericsson's board.
[Advertisement: The Match King: Ivar Kreuger, The Financial Genius Behind a Century of Wall Street Scandals, by Frank Partnoy, available on Amazon, is an interesting new biography of Kreuger, AKA the Swedish Match King. The obvious analog to Kreuger today would be Madoff as far as size of investor losses, but as this book makes clear, Kreuger is actually a much more interesting character - I think it would be more accurate to put him about halfway between Madoff and Jack Welch].
Editorial: plans for possible European auto quotas "need not cause immediate alarm." US car exports were only about 5% of last year's production; France, Germany, and Italy took only 6% or 7% of exports. Other export markets could easily absorb cars that Europe refuses. Also, as a practical matter European factories are not up to producing that number of cars, and European countries would lose a substantial number of sales, service, and assembly jobs.
New theft-deterrant luggage grip invented containing an alarm triggered when the grip is “involuntarily released by the rightful owner.” Manufacturer offers $200 reward for arrest and conviction of anyone “molesting the person carrying such a grip.”
Captain C. Barnard sets new record for flying time between Malta and England; covers 2700 miles in 26 hours.
Otis Elevator gets contract for 31 elevators in Waldorf Astoria; include 9 regular passenger, 4 suite, 3 large ballroom, 14 service, and one with18'x6' 8,000 lb capacity coming up from the private New York Central rail siding underneath the hotel.
Saturday market very dull but positive. Two-hour session volume of 366,000 shares lowest since May 8, 1926. After a slight decline in open, upturn developed toward end of first hour; majors including US Steel, American Can, GE, duPont approached best levels of current rally. "Creeping improvement" continued for rest of session, stocks mostly closed at day highs. Utilities weak; very little trading in rails and oils. Bond trading volume moderate, prices generally higher.
Weekend business reviews positive, report gains in retail distribution; also positive was W.P. Chrysler statement that auto business, general trade improving.
Dr. L. Edie, economist for Investment Research Corp. of Detroit, disagrees with consensus among economists, predicts only mild recovery in fall followed by renewed slump in winter and full recovery not until Spring 1931. Cautions against “wish thinking.” Predicts long-term uptrend in market although interrupted by “radical and sharp” fluctuations. Anticipates reduction in P/E's; stocks selling for 20 times earnings may be reduced to 16-17, “and possibly lower.”
With brokers' loans at such a low level (down $1B over past month and $100M below November bottom), it's difficult to see a return of the "convulsive liquidation" seen in June. Weak holdings have been reduced so much that recent bear efforts have resulted in the lowest volumes in years.
Wide fluctuations recently in Gillette and Vanadium, both targets of considerable short selling.
Economic news and individual company reports:
NY Fed monthly review: number of workers employed in representative factories in US was down 2.4% mid-May to mid-June, more than usual slight decline.
Mutual savings banks (hold over 30% of total savings in US banks) report first half gain of $273.8M in deposits to $9.146B, vs. decrease of $82.7M in second half 1929. Seen as evidence of sound position, considering savings banks were source of funds for many losing jobs or money in the market declines.
Total US govt. gross debt was $16.176B on July 31 vs. $16.832B in 1929.
Livestock prices declining sharply; lamb around $8.50 per 100 lb. vs. $14.50 a year ago; cattle also down sharply, selling at 50% of raising cost in some cases.
Companies aggressively spending on advertising include American Tobacco, R.J. Reynolds, Coca Cola, National Biscuit, Procter & Gamble, Wrigley.
Companies predicting decent-to-good yearly earnings: Columbia Pictures (+147%), Caterpillar (roughly steady), Clorox (-14%).
The Room Wit observes “that a number of bears who are short of Gillette enter the customers' rooms in the morning with gashes where their whiskers once grew.”
+ The Boring Stuff: