Dog Days Linkfest

Another week for the record books: Stock prices moved higher all week, as a fragile ceasefire took hold in Southern Lebanon, and Oil prices dropped.

Indices were led by tech: The Nasdaq had its
best weekly gain in over three years, taking on more than 100 points to close up an impressive 5.2% for the week. MIster Softee and Mo sent the Dow Jones up 2.6% over the same period.

Of course, there’s always a fly in the ointment, and in this case, its the anemic volume (more on this below). It is after all, the dog days of August, and after the messy year we’ve had so far, investors will take it.

Speaking of which: Its the weekend, and you know what that means:

• The spark that ostensibly lit the fuse of the rally was the mild inflation news – while consumer prices came in more or less as expected, there was a surprisingly big drop in Producer Prices.

• As is often the case, the headlines and the details didn’t quite match up: PPI was driven entirely by  $4.5B in SUV and light truck discounts. Given their dismal sales and weka pospects, GM is slowing production of big SUVs.

The irony here is that because GM can’t sell low MPG SUVs, they had to offer big discounts — which made it appear that inflation has disappeared. Hence, by being unable to sell their 10MPG trucks, GM’s stock price actually rose!

• It looked like Bernanke’s Gamble in Forgoing Rate Increases is Paying Off. Even the sardonic Liz Rappaport  noted that Everything’s Coming Up Roses.  My take was that PPI was only a convenient excuse — Sometimes, they just want to take ’em higher;   

• Elsewhere around the Globe, Central Bankers — who are far behind the Fed in their tightening cycles — continue to make Hawkish noise: 

China Puts Teeth Into Anti-Inflation Policy   

Bank of England voted six-to-one to hike rates

Bank of Japan Favors Slow Pace on Rate Rises

After the ECB hiked rates (and hinted of more), the Dollar down vs euro

• John Berry says the Fed Will Probably Will Skip Rate Increase in September;

• One thing the Fed is correct about, the U.S. Economy is slowing. That’s Reason to: (a) Cheer (b) Fret. Phrased differently, there are some good and bad aspects to this:  The ’06 Deficit Outlook has improved; However the Leading Economic Indicators Index Fell in July; Also on the Radar:  U.S. Treasury Yields had their Biggest Weekly Drop in Three Months;

• There are many Indicators point to economic slowdown: Total Automobile Sales are one; Sentiment data is another; And Home sales are yet another ‘ugly,’ according to the dismal scientists, along with increasing Consumer Debt

• Bottomline: The so called Soft Landing is a low probability event;

• Speaking of Home Sales:  WSJ’s MarketBeat borrowed a line from Cramer and called them a  House of Pain  (If no WSJ, go here)

• The Four Horseman of Housing:

Builders have hit the brakes   

Too many consumers are House Broke   

Home prices in deep freeze   

Homeowners Feel The Pain of Rising Rates 

I keep referencing articles of this type: You can still sell your home for a decent price — but you better know the Four Steps to Selling Your Home for Top Dollar

• Paired Trade:  2 different MSM views on Housing: Newsweek looks at a Housing Bubble Blog; While Businessweek negages in some mild understatement: Why Housing Looks A Little Rickety.

• A fascinating counterhistory:  What If 9/11 Never Happened?

Lots of good investing discussions this week, both Bullish and Bearish:

• As mentioned in our intro, the one element decidely missing was VOLUME; That bigger question is this: Is this rally designed for traders or long-term investors?

No surprise here: Emotion rules the brain’s decision making apparatus; Speaking of which: What’s our infatuation with $1 million as a number?

Look who’s selling Google shares;

Mutual Funds Cash Levels are fairly low; But the US continues to attract foreign Capital at over $2 Billion PER DAY;

Goldilocks and Just One Bear (or beware the W formation) 

• Mirror, Mirror on the Wall… Who is the Most Bearish of Them All? A round up of prominent bearish observers and pundits (Guilty); Not on the Bear list is Ed Yardeni, who is looking for a soft landing; Also NOT bearish: Benjamin Graham. Here’s What he Might Like Today

Some eclectic Energy issues:

• Even as prices have fallen, Global crude supply grows tighter   

• The NYT asks: Is a Futures Stampede Keeping Oil Prices High?   

• Did You Know There’s a World Surplus of Crude Oil?

• Jeff Matthews asks: "So, What if the Browns [anti-Greens] are Wrong?"   

• Call it a silver lining: Thanks to global warming, we are dramatically boosting where wine making vineyards can be found;

Looking abroad to some surprising commentaries:

• France — Europes 3rd largest Economy — Added the Most Jobs Since 2001 Amid Faster Growth;

• Sy Hersh looks at Washington’s interests in Israel’s war in WATCHING LEBANON

• VIctor Hanson says Middle East Conflict Is About Failed Culture;



15 Websites that changed the world

Sprint Nextel’s Hidden Advantage: WiMAX 

• You Are What You Search:  AOL’s data leak reveals the seven ways people search the Web.

• The debate on Pluto goes on:  Planet or Asteroid?   

• How a Cat Parasite Affects Human Culture

BBC plans digital radio MP3 add-on   

• Steering the new 2nd Gen Segways is compared to skiing   

• Guess what country had the 2nd highest % of adults who said Evolution was a false theory?
I was surprised also; The only reason for this that made any sense to
me was this: Unlike the markets, there is no financial penalty for a
false Variant Perception in Science;

• Stephan Colbert’s Wikiality — because if enough people believe it, then tis true.

Film Music Televison Books:

• Using prediction markets to determine Future Rock & Roll Hall of Fame Inductees;

• We are coming up on the one year anniversary of Katrina and the destruction of New Orleans: Buy the soulful album The River in Reverse by Elvis Costello and Allen Toussaint’s, and part of your purchase price goes to New Orleans relief efforts.  The disc itself is very good — the elegant piano of Toussaint married to horn arrangements reminscent of Costello’s Punch the Clock — only bluesier. Good stuff.

• Next up in the reading cue: Joseph Ellis’ Ahead of the Curve;

• I am quite tempted by the outstanding cast, strong reviews and amusing preview to see Little Miss Sunshine;

• My favorite new disc: Corinne Bailey Rae.  A powerful debut, equal parts jazz, blues, and R&B. Although you may think she’s from somewhere between Mississippi and New Orleans, she actually hails from Leeds in the UK.  You can ignore the reviewers comparing her to Billy Holiday — talk to me again in 20 years — but there’s no doubt this is a major new talent. Her soulful voice is warm and charming, falling somewhere between a bluesier Ricki Lee Jones and a more sublime Alicia Keys.

Random fun stuff:

Flash Animations Fight Back   

• Terrific Photos of the Discovery’s July lift off;

Denis Leary goes on a rant about Mel Gibson while in a broadcast booth at a Red Sox game

• The glorious rejected rejection letter

• Just for laughs: The politically incorrect alphabet

That’s all from cloudy NY, where the unrated Dave Chapelle’s Block Party is cued up in the DVD, and we eagerly await the last few Entourages!

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What's been said:

Discussions found on the web:
  1. MtHood commented on Aug 20


    Regarding the link to the Newsweek article covering Ben Jones’ Housing Bubble Blog: What do you think of that blog? Do you read it or post to it? Just curious.

  2. j d ess commented on Aug 20

    Block Party is a feel-good revelation. I was so pleasantly surprised by both the performances (?uestlove deserves massive props for his arrangements) and the filming (nicely weaved background and performances, and no nausea inducing editing). Best movie I’ve seen all year. Can’t wait for Gondry’s next one in October.

  3. injured list commented on Aug 20

    On the currency front: “The Japanese yen, which is frequently used as a proxy for the Chinese yuan in foreign exchange trading, rose slightly to 115.75 against the dollar after the announcement.” This occurred after the Chinese increased their cost on borrowing money in order to surpess inflation/growth. Is there not a lot of talk about just how far the Chineese will need to go to make the Yuan stronger? Does this mean steady pressure on the USD? Could lead to a stronger Yuan, cheaper dollar, and rise of mega intl domestic companies? Large cap has been prognosticated for a long time, but it finally looks to be happening, as in the S&P100?…………….OTIL

  4. Anna S commented on Aug 20

    I thought this was an interesting observation from “Between the Hedges” for inflation watchers to chew on:

    “BOTTOM LINE: The CRB Index broke down through its 50-week moving average for the first time since its major move higher began in October 2001. Soaring commodity prices have been the main source of inflation fears. This is one of the reasons the 10-year T-note continues to rally. Gold and Copper have likely already made long-term tops. Oil will likely begin a significant move lower over the next 6 weeks.”

    Makes sense to me. Here’s a question – how many are planning on shorting any move higher on Monday? It seems this year is full of consensus bashing….how many hurricaines vs expectations?

  5. DavidB commented on Aug 21

    Here’s one for the ‘fest

    The Mises blog took a look at how much mining is actually done on this earth and how long it would take for us to run out of minerals. It is a good hard slap in the face for the enviros

    This is mind blowing

    Mining for the Next Million Years

  6. Movie Guy commented on Aug 21

    Barry“As is often the case, the headlines and the details didn’t quite match up: PPI was driven entirely by $4.5B in SUV and light truck discounts. Given their dismal sales and weka pospects, GM is slowing production of big SUVs.”

    “The irony here is that because GM can’t sell low MPG SUVs, they had to offer big discounts — which made it appear that inflation has disappeared. Hence, by being unable to sell their 10MPG trucks, GM’s stock price actually rose!”

    It’s interesting that you continue to deceive others as to the fleet mileage and individual vehicle mileages of GM’s trucks and SUVs.

    GM certainly has serious problems, but the U.S. corporation doesn’t need your dishonesty. As you are fully aware, I posted the EPA/DOE mileage data for all of GM’s truck models under the post concerned. You acknowledged that the data was posted.

    [deleted by editor for length]

  7. Barry Ritholtz commented on Aug 21

    You have caught me!

    I admit it — I am continuing to decieve others over GMs wonderful mileage on their trucks and SUVs.

    Also, Honda and Toyota get lousy gas mileage, have poor initial build quality, and are hardly gaining share.

    Oh, and I trashed Ford and Chrysler this week also.

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