Good Saturday morning! Is it just me, or does it seem that each succeeding week has been getting increasingly whackier than the last? We started with Bartiroma-gate, ended with a NFP report driven market boom closing in on all time highs for the Dow.
That’s now in the history book; Before the next FOMC announcement, we have lots of links to review, and a hot week coming up, so lets get busy:
• The big confab in Omaha is this weekend, and Buffet shareholders from all over will converge for the annual meeting/lovefest.
Some good reading always comes out of it; You can see the homespun wisdom of the nations 2nd wealthiest man in all the past letters to shareholders here; Whitney Tilson edits that down to a more managable Sayings of Chairman Buffett (pdf); Last night, Berkshire dropped 4 large on an Israeli metal working firm; Some however, keep harping that Buffett’s Batting Average Is Sinking;
• Cody and I have disagreed on the Merits of big cap tech; Here’s 2 different but related views:
• The WSJ (free this week) notes that "the nation’s obsession with real estate shows no signs of abating" (House Voyeurs, Click Here). The Journal points to several sites that provide the actual sales prices of homes (Real Estate ABC, and Zillow) something you had to trek down to the county commisioner’s office for in the past;
Elsewhere, this looks like the week the wheels came off the housing bus: The leading subprime mortgage broker, Ameriquest, Laid Off 3,800 Workers and closed 229 offices (Their founder is the US Ambassador to Netherlands); Smaller lender Merit Financial laid off nearly its entire staff; Meanwhile, home refinancers are increasingly pulling equity out — and at much greater rates than before.
The builders are having a rough go of it; Toll Brothers (TOL) stock has been cut in half since their peak last July; They lowered 2006 forecasts for the third time. Other home builders have also noted a slowdown; That’s no surprise, given all the inventory building up — particularly in previously hot markets like Las Vegas, Boston, Florida and Denver.
All is not lost, however: CNN notes that the key is the jobs market — as long as it stays healthy, housing can avoid an implosion.
• Bloomberg’s John Berry holds Maria Bartiroma’s feet to the fire re: Ben Bernanke;
• Energy continues to be a wonder, as Crude rallied, plummeted below $70, and ended up just over that price. Wondering abounds: The Washington Post wonders just How We Got to $3 a Gallon; Slate’s Dan Gross wonders How dumb does Big Oil think you are?; Some of the Peak Oil folks wonder if we are at the Cusp of Collapse in Supply; I wonder if we will turn into a HybriBioFuelCellNation?
• While everyone is rooting for a One & Done scenario, history suggest it may more likely be One & Undone;
• This was a terrific week — not just for market performance, but for some very interesting commentary:
–What might Stock Market Return over the next 10 Years? ‘-Marketwatch’s Dave Callaway explains Why stocks will continue to stay hot;
-Fidelity offers this advice on 10 Smart Selling Strategies
-Ticker Sense shows How This Recovery Stacks Up (in 3 parts)
-University of Chicago Prof Charles Wheelan (author of Naked Economics) sets out to Debunk One of the Worst Ideas in Economics: The Laffer Curve;
-Brett Steenbarger explains How Professional Traders Differ From Amateurs
-Ned Davis and Miller Tabak offer the Bear Necessities
–Edson Gould’s Most Important Discovery
–Truth on the market blog points us to this paper on the Effect of Stock Spam on Financial Markets;
-Google video offers us a history of Money banking & the Federal Reserve
-Nasdaqtrader provides a video History of The Stock Market in 6 parts.
-Bloomberg’s Chet Currier projects current trends to "infinity and beyond" in What Stocks Need for a 20 Percent Gain This Year;
• In addition, it was a booming week for Contrary Indicators: Two of the Street’s biggest bears got bullish — Merrill Lynch’s Richard Bernstein increased his equity exposure, while Morgan Stanley’s Roach Turns More Positive about the global outlook; Bloomberg’s Caroline Baum notes the loneliness of those Forecasters expexcting a slowdown (present company included); Morningstar explains Why Popular Stocks Are a Sucker’s Bet;
• Interesting news out of Asia, with India is on the road to a transport revolution; The FT has a good round up of all things China; Curious as to the true state of what’s going on behind the scenes in Asia? The this is for you: China Uncensored. I was surprised to learn that China bad loans may reach total of $900bn I continue to like Malaysia and Taiwan. Why? Because these are Boom times at China’s factories;
• Interest Rates & Inflation were big this week also, with 10 Year yiled and Gold hitting record levels; We saw:
• Rising Inflation is a Bigger Tax Bite than Oil. As I am found of saying, except for everything going up in price, there is no inflation. If you want to know how the Fed looks at inflation, see Inflation Expectations: How the Market Speaks and (PDF);
• Jeff Matthews notes that a Funny Thing Happened on the Way to Unlimited Productivity…
• We prefer to avoid discussing politics, but these articles were genuinely surprising:
-The President’s polling numbers are down because of Conservatives;
– The former Chief Investment Strategist of Donaldson, Lufkin, & Jenrette says Iraq is on the brink;
–Bill O’Reilly’s ratings have been in a freefall;
-Lastly, RUMSFELD ORDERS RETIRED GENERALS BACK TO ACTIVE DUTY
• Smackdown! Michael Milken vs Jeremy Siegel;
• Top Ten List of Top Ten Lies Lists (amusing)
• Fast cars: A friend emails: I know you are a car buff, yet I never see you point to auto related items in the linkfest. Okay, you asked for it:
-Despite $3 gas, I love this Ode to Muscle Cars;
• I’ve mentioned Jack Johnson before; If you like his laid back surfer style of acoustic guitar, then definitely check out Donavon Frankenreiter; his eponymous album has been out for about a year, and he has a new disc scheduled for release in June;
• I’ve also been really enjoying James Hunter’s People Gonna Talk; Van Morrison calls "the best voice and best-kept secret in British R&B and soul." Very retro, very cool. I f you like motown or 50’s R&B, run-dont-walk to get this.
That’s all, from the sunny suburbs of NYC, where we are expected to hit 71 degrees today — and you know what that means: BBQ season!