That was some week: Despite the latest worries — oil kissed $60, Gold hit $667.5, and there was more Fed jawboning about inflation — we saw the S&P 500 tag a
6½-year high; The Russell 2000 index also reached a record this week.
Upgrades of the Dow’s best performing stock (GM) markets was not enough to hold onto gains Friday. The S&P slipped for the third time in
four weeks, giving back 0.7%, while the Dow dipped 0.6%, and the Transports break out is looking more like a fake out.
The real news keeps coming from Nasdaq: Barron’s Trader column noted "the Nasdaq’s inability to ride the midweek lift from Cisco Systems’
(CSCO) robust outlook also points to the increasingly conspicuous
weakness in the technology sector. Bank stocks’ retreat amid credit
concerns will vex those looking to financials to lead."
The Bulls continue to dismiss the Bears, as Rev Shark noted, this is "exactly the sort of complacency that the market beast loves to punish."
No matter: Here’s all the links that are fit to click:
INVESTING & TRADING
• Bull market keeps getting new lease on life:
Contrarian analysis has been poised on the edge of a stock market sell signal for several months now. But every time such a sell signal appears imminent, advisers pull back a bit and their restraint gives the bull market a bit more lease on life. (Marketwatch)
• Various Looks at Sector Performance: The Tech sector has outperformed over the past seven months; Other time frames have been less kind.
• Uh-Oh: What did BusinessWeek just put on their cover? "Money is cheap. And some experts say it could stay that way for years. That’s creating opportunity—and brand new risks. It’s A Low, Low, Low, Low-Rate World." Damn, time to sell my bonds . . .
• Earnings Streak Snapped; How Pricey Are Stocks? It looks as if the double digit year-over-year earnings treak is likely to end this Q, which raises another question: Can profits keep rising? (Fortune)
• Outsourcing your bank accounts: Consider India bank, which pays above-market yields on CDs. Among the high annual percentage yields: 5.25% for a three-month certificate of deposit and 5.15% on a one-year CD. $100,000 deposits earn .05% points more. (Marketwatch)
• Merrill sounds alarm on global liquidity: Merrill Lynch has warned of a global credit crunch as central banks in Europe and Asia tighten monetary policy, advising clients to shun risk and switch to safer assets over the forthcoming months. See also A fluid concept (Economist)
• Internet Q&A with Mark Mobius on Emerging markets (FT)
• Mining chiefs take bow and quit while they are winning: The chief executives of the world’s three largest mining companies have decided to bow out this year, prompting speculation that they are quitting before the commodities bubble bursts. (Times of London)
• Warren Buffett on Value: Excepts of a recent speech by Buffet on human potential, value investing, and international investing.
• Dan Gross and I have some fun at HSBC’s expense, in light of their sub-prime issues. Wonder what HSBC actually stands for? Dan titles his Slate column Hey Sucker Banking Corporation; Meanwhile, my blog readers came up with many brilliant and amusing suggestions. A few of the printable ones are:
Have Sacrificed Business Credentials;
Helping Suckers Buy Crap;
Hollow Serenades Buoy Credit;
Homes Shall Be Confiscated!
Help! Sinking! Bring…Cash!
and my personal favorite:
Haven’t Seen Ben’s Copters;
If you can think up anymore, feel free to add to What Does H.S.B.C. Stand for?
Lots of news this week from the world of Economics:
• GDP to be Revised Downwards: New BEA inventory data makes that original 3.5% GDP number likely to get revised downards toward 2.75% or so;
• Yield Curve Withholds All-Clear Sign for Economy: An inverted yield curve has been a harbinger of recession in
the past. Unless this time is different — a popular way of
dismissing the spread’s stellar history — real gross domestic
product growth of 3.5 percent in the fourth quarter may turn out
to be the outlier, not the trend. (Bloomberg)
• 2006 job growth was underestimated by a whopping 400,000 The Labor Department admitted that it had underestimated the number of jobs employers added to their payrolls during 2006 by a whopping 400,000. Instead of 1.8 million, the Labor Department now believes that the economy created over 2.2 million jobs last year. In case you’re keeping score, that’s a miss of more than 22%. See also: Many layoffs coming in housing, economists say Data revisions show few construction jobs have been lost… yet (MarketWatch)
• Bob Lucas, Nobel Laureate and professor of economics at the University of Chicago talks about wealth and poverty, what affects living standards around the world and over time, the causes of business cycles and the role of the money in our economy. (Podcast)
By now, you’ve read all of the front page news on the ongoing stress in the sub-prime market. There’s lots of fascinating details bubbling up from beneath the headlines:
• I gathered some fascinating maps and charts of
the ongoing decay in the US residential real estate from some
off-the-beaten-path industry sources:
• Seven out of the 10 riskiest housing markets
in the nation for home price deflation over the next two years are
located in California, according to the Winter 2007 PMI U.S. Market
Risk Index (PDF); see also Profiting on Foreclosures (free WSJ)
• Mortgage Refinancing Gets Tougher: With
rates on many homeowners’ adjustable-rate mortgages rising, some who
would like to refinance into a new loan are finding they can’t. In some
cases, that is because their loan carries a prepayment penalty, which
would force them to come up with thousands of dollars if they refinance
in the first few years. Such penalties are common with so-called option
adjustable-rate mortgages, which typically carry a low teaser rate that
rises sharply after an introductory period. (free WSJ)
• What’s your house really worth? The real estate industry is based on what economists call
information asymmetry, which simply means that one party (typically the
seller) knows more about a product than the other (the buyer). It’s an
opaque market that encourages obfuscation and leads to flawed pricing. Until now. (Fortune)
• Marketwatch is sporting a dedicated Real Estate page
• Implied complacency: The price investors are paying to insure their portfolios is low. Therefore investors are complacent. That is the standard assumption. But it may not be right (Economist).
• A look at Aggregate Investor Sentiment and Stock Returns.
• The True Investment Mood of Insiders: Those who base their stock-market timing on the behavior of corporate insiders are running scared these days, since insiders in recent months have sold a lot more of their companies’ stock than they have purchased. But a leading academic expert says that these worries are overblown. (Marketwatch)
• Lessons From a Successful Trader: Six Keys to Trading Success
• The battle between Fox Business News vs CNBC is heating up, and its already turning odd, with Fox promising to be less hostile than CNBC to business. I am curious to see if a Fox business channel will improve on the demographics of Fox News.
• Solar Power Heats Up: Only about 1/30th of 1% of all the electricity produced in the U.S. is generated by solar power. But recent technological advances and a continued decline in the price of solar-power systems are prompting homeowners to ask if this renewable-energy source is worth the investment.
• In Washington, business opposition to global-warming legislation is melting faster than the polar ice caps: Why Key Executives Are Warming To Legislation on Climate Change; (See also Alan Murray WSJ Video).
• Real Climate, one of the most level-headed and soberly serious science blogs out there, has had enough of the delusions of the WSJ Op-Ed page: The Wall Street Journal vs. The Scientific Consensus
• Brad DeLong and Arnold Kling debate New Takes on the New Deal
Technology & Science
• A Big Bang… of Innovation:
At the site of the world’s most powerful accelerator, physicists aim to
recreate the Big Bang. Innovation is an unexpected—but
• Steve Job’s Thoughts on Music Shorter version? Dump DRM
• Microsoft Revisited: Vista, Apple and the Sony/Nintendo Phenomenon — not only has Vista arrived with a dull thud, but the Media is asking Bill Gates some tough questions.
• via NASA, comes this gorgeous Cassini Spacecraft Photo Essay
• Hitachi’s groundbreaking Deskstar 7K1000 may look like your run-of-the-mill sandwich-sized computer hard drive. But inside, it holds a terabyte of data
• Hackers Attack Key Net Traffic: Computers Hackers briefly overwhelmed at least three of the 13 computers that help manage global computer traffic Tuesday in one of the most significant attacks against the Internet since 2002.
• The Wizards of Buzz (free WSJ)
• The beauty and elegance of mathematics: Amazing flame fractals
Music Books Movies TV Fun!
• Friday Evening Jazz: Mose Allison: One of the most influential song composers of our time, his work has impacted the Who, David Bowie, The Clash and Nirvana. Pretty good for for a jazz pianist.
• Sarah Silverman’s Comedy Central show (The Sarah Silverman Program) has promise, but I am rapidly losing my expectations as her as a female Lenny Bruce or Bill Hicks (too many scatalogical jokes). Oh, and Silverman agreed to answer questions about love and/or sex at the Onion
• Awww, isn’t that cute! My first YouTube DMCA Take Down Notice
• Playboy Archives Go Digital (Articles, Too)
• Another game that is a fun, giant time suck
• Why? For the love of God why? Mullets Galore