Linkfest!

Now that was a crazy week — up down sideways — at least the weather was nice. I am of the belief that the market does have a memory from day to day (trend, persistency, etc.), though the past 5 days certainly can make one wonder.

No matter: Spring has sprung, and with April showers upon us, can May’s flowers be very far behind? The temperature is heading to the high 50s and low 60s here in the NorthEast — and we have had a number of gorgeous sunny days — something that actually has been shown to matter to traders. If we can get Crude Oil to recognize that Old Man Winter has left the building, we may be on to something.

Such are the vagaries of life amongst the green and red ticks. But its the weekend, and you know what that means: Linkfest!

• Despite the run up in Oil and Interest Rates, the markets had a sizzling Q1. Barron’s points out that (once again), Analysts predictions re: the rotation into big caps were wrong again. (If no Barrons go here);   

• So much for One and Done:  Rate hike number 15 hit this week, and number 16 looks assured for May 10. Barron’s Mike Santoli (The Trader column) notes this tidbit, which reveals the impact of the Fed: 

"From the time the present bull market got moving in March 2003, most of its appreciation took place before June 30, 2004, while the Fed was either easing or held rates at 1%. During that span, the S&P’s total return was 39%, or a 2.7% monthly average. Since then, the S&P has returned 18%, or about 0.6% a month."

I’d modify that to point out most of the gains took place before January 2004.

• Speaking of the Fed: the Real Fed Fund Rates (adjusted for inflation) remain at historically low levels;

• Former Fed chair Paul Volcker notes that Bernanke is not inheriting the best of situations. But he’s not all serious, it turns out the inflation scourge has quite the sense of humor: At Grant’s Investment Conference, where Volcker was the keynote speaker, he quipped “Greenspan gets $500,000 per engagement, and Jim (Grant) offers me breakfast, which turns out to be coffee and a roll.”

• On Monday, I discussed my concerns about a market melt up in One More Time? and push out my market topping expectations a few months. For a change, I outline the technically bullish factors as to why this rally might still have further to run; No I didn’t get net long, but I hedged my shorts and covered a few others. The projections I had made in December for mid-year 2006 — 11,800 on the Dow, and 2600 on the Nasdaq — are looking increasingly doable;

• Top traders made more than $1 bln in ’05: leading the pack:  Boone Pickens’ pocketed an estimated $1.5 billion;

• There is no escaping Real Estate: The well respected economic research firm, ISI Group, looks at the
political and economic repercussions of "Housing Bubble Trouble," and asks Have we been living beyond our means?;
Although I am not in the bubble camp, I do think that
prices could easily "correct" 15, 25 even 35% — with huge repercussions elsewhere. USA Today expects slowing Real Estate to ripple through job market;  Foreclosures are up — Denver market foreclosures increased 31.5% — but still below record levels; Meanwhile Business Week cautions all in a recent cover story Buyer (And Seller) Beware;   

• The NYT has an unusually rich business section today: They take 60 Minutes to task in Selling Short the Virtues of Short Sellers; defend Technical Analysis and technicians as "providing a reality check to conventional thinking;" Observe that China and U.S. are the World’s Growth Engines (but their Markets are Laggards); Show how to Calculate what to Pay for a Home; And lastly, their above the fold Biz section cover story — Some New Math on Homes — has that uh-oh quality about it: New math rationalizes away fast rising prices (sounds vaguely familiar);

• This week saw a big rise in patent litigation stories: Check out the Rise of the Pure Patent Business Model, which is based on a Real Money column from 2004; Nathan Myhrvold, who spent 14 years as Microsoft’s chief technology officer, is pro-patent holder in Inventors Have Rights, Too!  (if no WSJ sub, go here)

• Globally, the expansion can be described as lumpy. NYU’s Noureil Roubini asks Today Iceland: Tomorrow Turkey, Hungary, Australia, New Zealand, Spain, U.S.? Even the Asia-Pacific Economic Growth Slowed in 2005; prospects for this year, however, are positive;

• The number of new millionaires reached a record 8.9 million in the US, while the 18 – 40 Demographic faces looks increasingly difficult finances;   

• While AP notes that the Rise in Consumer Optimism Confounds Analysts, I have a simpler explanation: Its from the Conference Board, and therefore, once you wipe the spittle off of it, is fairly worthless. Stick with University of Michigan’s reading, which has been positive (but less biased);

• More Wall of Worry: Forbes suggests that Smart Money Sours On The Market;   

• Is Global Warming an investment thesis? Fortune wonders "Could Global warming melt your portfolio?" There has been lots of stories about the effects of weather change, including Australia getting hit with several big cyclones, and a Caribbean Coral Reef Suffers Record Death. Although I usually look at Time magazine covers as a contrary indicator, I wonder if their recent cover story, admonishing us to "Be worried, be very worried" might not be this time;

• Speaking of which:  There is a terrific history of Crude Oil, OPEC, and the Oil Industry at this UC Davis site. Very informative.

• Mark Hulbert is cynical about shareholder democracy;

• The whole brouhaha about the DoJ litigation with Google turns out to have been the tip of the iceburg: The Subpoenas Reach Far Beyond Google;

• Some interesting blogs I’ve stumbled across this week:

-CFO magazine has a new finance blog called Dealbreaker
-Federal Reserve Bank of Chicago has several Blogs
-A new Aplia economic news blog specifically designed for econ students
-Barron’s gives the Kirk Report blog a terrific review (if no Barron’s go here)

• Director Peter Bogdanovich writes in the L.A. Times that we are Moving Away From the Movie Theaters;  (I’ve been saying this or a long time); Actually, that’s only partially true: Boutique theatre chains are doing very well by offering a higher quality experince versus the megaplex chains;

• Here are the Top 18 Skylines in the World;   

• Quite simply: the Best bumper stickers;

• NYT reporter Louis Uchitelle discusses the broader impact of downsizing in The Disposable American: a look at Layoffs and Their Consequences;

• A Jazz fan friend of mine asked me to note the passing of Sax great Jackie McLean this week; He advises checking out Fickle Sonance, Nature Boy, or Montmartre Summit 1973;

• Last week’s alt country Rabbit Fur Coat by Jenny Lewis shows how stylistically flexible she is; a previous rec for Postal Service is, despite gorgeous melodies, heavy on euro pop synth. Her other other band, Rilo Kiley, is indie rock; try The Execution of All Things
or More Adventurous. 

• The Pretenders have a new box set, Pirate Radio; Why should you care? Their first CD, Pretenders, not only a seminal and influential rock/punk album, but its probably the greatest debut album of all time, snarling sexuality the whole way through. If I’m really lucky, the bio pic of the Pretenders/Chrissy Hyndes, will cast Gina Gershon in the lead. If you weren’t alive when Space Invaders was THE video game of the moment, go get this disc.

With planting season nearly upon us, its important to remember that a varmint will never quit – ever. They’re like the Viet Cong – Varmint Cong. So you have to fall back on superior intelligence and superior firepower.

And that’s all she wrote!