Return of the Linkfest

Yes, after a vacation induced hiatus (the missus insisted), the linkfest has returned!

I put the l-fest together as the workweek progresses; All week, I read through a lot of data and analysis, including MSMedia items. Each day, I pull aside (virtually) 4 or 5 of the most interesting items each day.
By Friday, I have a ton-o-stuff.

Let’s not delay this any further:

• Earnings season began rather inauspiciously: Alcoa, 3M, EMC, Lucent, AMD. While the spin has been these are all company specific issues, after 14 Qs of double digit growth, its smells alot like earnings are softening;

Mideast Strife Wounds Stocks: That’s been the major headline this week, but it is somewhat overstated. Why? From the June lows til last week, the SPX rallied 5% — thats 60% annualized, and that’s unsustainable. Between that and the poor earnings kickoff, we were due for a correction, anyway. The mideast strife makes for as good an excuse as any.

•  Russell explains What War Means for your Wealth;

• Oil futures did move towards $80, so the situation there is not completely irrelevant. But as Howard Simons pointed out, last we checked, there’s no Oil in Gaza or Lebanon. With Iran as the likely source behind the Hamas and Hezbollah attacks, an Israel-Iran war becomes a possibility — and that would certainly be a major issue for energy markets and the equities. As this goes on, its becoming clearer that China and Russia are the beneficiaries of our incursion in Iraq. The US has very little leverage to deal with abundant global crises. And you know things have gotten really weird when Patrick Buchanan sounds increasingly reasonable on foreign affairs.

• Energy is the fulcrum here, and these few items stood out from the fray:

Study: Ethanol won’t solve energy problems

IEA Sees Oil Supply Growth Exceeding Demand in ’07

Few US Workers Who Could Telecommute Do So 

A disruption in Iranian oil exports looks unlikely

• OK, enough overseas news: Option issues refuse to go away: Spring loaded options were the prior scandal; Today, the WSJ discusses the newest option related scandal: Post 9/11 options. (if no WSJ, go here). Its a disheartening tale of greed and unamerican behavior from a large group of corporate assclowns.  Robert J. Samuelson is almost as blunt: He writes about the Delinquency Of the CEOs;

• The Fortune Global 500;

• One thing that really stood out this week were all the budget deficit/savings related
issues. It all started with a surprisingly upbeat NYT article on the
deficit: Surprising Jump in Tax Revenues Is Curbing Deficit.

A few discerning deficit watchers noted the NYT had been
punk’d. The White House has pulled a page from Wall Street and is
playing the game of beat by a penny. Budget Watcher extraordinaire Stan
Collender calls this an annual game:  Each year, the White
House overstates expected deficits, and then manages to produce an "upside surprise." He details this in  Deficit Reduction: Stop Me If You’ve Heard This One.

The L.A. Times is even more succinct: In Deficit’s Good News Less Than Meets the Eye Joel Havemann wrote:

"This will be the third year in a row that the administration put forth
relatively gloomy deficit forecasts early on, only to announce months
later that things had turned out better than expected. To some
skeptics, it’s beginning to look like an economic version of the old
"expectations" game."

The last word on Deficits and tax cuts came via the WSJ’s Washington
Wire. Dasvid Wessel noted that the claim that "Tax Cuts Pay for
Themselves" is belied by the administration’s own budget:  The answer is No, "if you read the fine print in the new White House midsession review of budget trends."

• The Stock Trader’s Almanac laid out the Bull’s case last week.    

• It is not only the Federal Government (see the deficit discussion above) who’s spending exceeds its
income — its the American family also. The Kansas City Star — about
as heartland as you can get — is warning that our Saving trend is troubling; Paul Merriman goes even further, and claims that America’s savings hoax exposed.

• The good doctor inquires: So you want to write a market blog?

• Laurence J. Kotlikoff of the St. Louis Fed asks Is the United States Bankrupt? The answer will surprise you.

• One of the reasons I’ve been so negative on big cap tech is history: Here’s some data on Why Former Market Leaders No Longer Lead;

• I found this version of Dante’s Economic Inferno amusing: Henry Paulson and the Five Circles of Economic Hell

• The NFP data last week was a huge disappointment. That oughta teach the dismal set not to rely on the ADP data. Anytime we get a major shortfall, it always brings out the intellectually bankrupt who insist we should rely on the Household Survey. As the Federal Reserve, the BLS and Alan Greenspan noted, you shouldn’t. Merrill Lynch’s David Rosenberg calls that ploy "a hoax of gargantuan variety." Dan Gross calls it "The Job Wars";

Forget the various surveys for a minute, and look at this chart from HVB Group; Temporary Employment and the Help Wanted Index both point to a slowing — not tightening — labor market. Something perhaps that the Fed might want to note.

• Rev Shark and I had an interesting discussion on just what is Capitulation.

INVESTING: All that above stuff and we haven’t even gotten to anything investing specific. Here’s a quick round up:

How the Market Confounds Human Nature

Online Stock Trades Get Even Cheaper

Ignore Inverted/Flat Yield Curve at Your Own Risk

Stagflation: A new peril for stocks (its really more of "stagflation lite")

Corporate Debt Begins to Worry Bond Investors

There’s No Such Thing as Idle Cash on the Sidelines

-Mark Cuban’s Share Sleuth has launched

S.E.C. Looks to Cut Costs of Meeting Audit Rule

• I’ve discussed Real Estate enough that you should be well familiar with the slow motion slow down idea. Now high prices are crimping affordability; But what if you have to sell? Here’s two pieces of good advice:

Surviving a Real-Estate Slowdown

Four Steps to Selling Your Home for Top Dollar

• There was Tech and Science news aplenty the past week:

-It turns out that Van Gogh painted perfect turbulence in Starry Night

-On the one hand, we have The MySpace Bubble; On the other hand, MySpace Moves Into #1 Position for all Internet Sites

-SOBs: Spyware developers net huge profits, outrage

Red flags raised over eBay as rival Google nips at its heels

What’s the Universe look like in 10 Dimensions: This

Go Ask Alice: Mushroom Drug Is Studied Anew

-Of course, what would a tech round up be without an Apple mention? While the press naively repeats with Microsoft’s vaporware announcements, Apple is Keeping the iPod Humming Along;  Meanwhile, Marketwatch asks: Can GM learn something from Apple (hint: it involves design)

On to Media and Content:

• I am enjoying the free streaming videos from Amazon, such as this John Fogerty concert.

• Not surprisingly, a Federal Judge ruled against film sanitizers;

• Meanwhile, network TV continues to fade (must be all that downloading)

• Interesting data set on the publishing industry;

• I am really enjoying the book The Long Tail; I couldn’t get a date for Wired’s book party in Tribeca, so I was forced to spend the evening chatting with David Byrne (so cool!)

• Speaking of World music (nice segue), my favorite bboxed set this year has to be This is Reggae Music. It is simply awesome.

• I loved this year’s World Cup — even the flawed ending. My favorite aspect of the head butting incident? This little piece of Chirac-Zidane photoshopping. (See also The Rednecks of Britain)

• Speaking of photoshopping: check out Pop Culture Monsters

   That’s all from sunny NY — where the rains seems to have finally stopped, a nice weekend is in store, and the beach beckons.  Enjoy the weekend.

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  1. Bearish commented on Jul 16

    Barry: Love the linkfest. Thanks.

    You experimented with “open” any-topic comments a while back. I liked that. Perhaps you could do it every saturday? As a place for us to discuss the upcoming investing week?

    For example, I would like to hear the thoughts of the readers here about this weekend’s fighting in the ME and upcoming week of data in US.

  2. whipsaw commented on Jul 16

    Linkfest is always fun, but it looks like Barry missed the arrest of Dr. Dino which is some pretty entertaining stuff. Anyway, the scope of linkfest is so broad that it could probably cover most anything that would come up under an open thread.

    Regarding the ME, oil, and the market this coming week, everything is extremely shakey and likely to get even crazier. But my guess is that we see a furious 1-2 day rally at some point which will be a good setup to gore the bulls with puts again. They are by no means broken yet and remain willing victims, so I have no qualms about taking their money for a third time.

    But we’ll see what happens, the main theme is just Long Is Bad.

  3. Barry Ritholtz commented on Jul 16

    When I was on vacay, I did a lot of “Open Threads”

    Saturday nite is a good idea for regular forums —

    Let’s try next week — 6:00pm

  4. sell_the_10_year commented on Jul 16

    Are you saying Kudlow is intellectually bankrupt?

  5. Chief Tomahawk commented on Jul 17

    Careful: Kudlow’s a hand that feeds.

    I’d like to hear Barry raise the stimulous contributed by the housing market the last few years and what a downturn there will portend next time he’s on and the Bushy cheerleaders laude W’s tax cuts. I caught one of the Saturday morning stock gabfest shows on Fox yesterday, and several of the guests fawned over W’s tax cuts. Not a one mentioned the contributions of the housing market for any credit. It was like they were all plugging the same talking point.

    Someone really needs to do a study about what adds more stimulous to the economy: tax cuts or mortgage rate cuts. We got both, and although it’s early, it appears they and exotic loans (aren’t there three ingredients required to form a ‘perfect storm’?) have sent prices to unsustainable levels. I sense a new round of reality tv shows coming – repo people at work.

  6. pulaski commented on Jul 17

    “With Iran as the likely source behind the Hamas and Hezbollah attacks…”


    Those may be the Israeli talking points, Barry, but it seems to me that Israel is the ‘source’ behind the attacks. The problem is those damn darkies/arabs/muslims just don’t understand the rules, they are supposed to lie down and take it. Although as far as implications for oil, I agree — Israel and elements in the US administration want a war with Iran.

  7. cm commented on Jul 17

    Barry: You may think it is tough to put this stuff together, but what about us who have to keep up reading? :-)

  8. butters commented on Jul 17

    “Mideast Strife Wounds Stocks: That’s been the major headline this week, but it is somewhat overstated. Why? From the June lows til last week, the SPX rallied 5% — thats 60% annualized, and that’s unsustainable.”

    Great reasoning, Barry. And you criticize stock option timing! Let’s see, if SPX ups 1% in one day, it’s most certainly due for “correction”, because 1% a day is, what, a 1000% a year, and that’s just unsustainable. And how is SPX doing so far this year, is it sustainable?

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