Labor Day Linkfestival

How was that for a week? Indices moved briskly higher on lower oil prices, as Ernesto — the hurricane that wasn’t — took some of the sting out of Crude prices. Oil flirted with the high sixties, closing Friday afternoon at $70.20.

August turned out to be the best month for market gains since January. The Dow had its highest close since May. The only question is what happens when the A-team retruns to their trading turrets: Do they feel performance anxiety and jump in, or do they take advantage of higher prices and hit bids? You’ll know the answer in 72 hours or so. 

Good week in the market, bad weather for the weekend. My sun & sea plans got cancelled by the wet, rain-soaked Labor Day weekend. Thanks to the slop, you get this belated and unexpected linkfest!

Real Estate and Housing

Housing by the numbers;  The secrets out about exotic mortgages seem to be out: MSNBC notes ‘Exotic’ mortgages seen losing their allure; Businessweek is even blunter: Nightmare Mortgages;

Realtors Official Forecasts Decline In Home Prices (WSJ)

• Bloomberg’s Caroline Baum looks at stabilizing prices, rising foreclosures and credit risks: Housing `Short Sales’ Are Latest Sign of Stress; The Association of Risk Professionals, in a dramatic case of understatement, observes US Housing Market Experiencing Turbulence;

• The increasingly popular numbered format for Real Estate columns:

5 homeownership tax myths
4 renovations that kill a home’s value   (any Agent will tell you: the Pool!)
4 Myths about Housing

• Marketwatch now has an entire section devoted to Real Estate; Barron’s had a nice round up of Housing Blogs (If no Barron’s, go here)      

The Federal Reserve and Bernanke

• Friday was Ben Bernanke Day in Dillon, S.C.! The Fed Chief expects strong U.S. productivity to continue;

• The Pause was a "Close Call;" Some on the Fed are unsure of further
Fed Gov. Lacker was the lone dissenter in recent vote to stand pat; He says inflation is too high; Regardless, Friday’s NFP data certainly puts the Fed will be on hold for a while.

Charles Bean, the Bank
of England
‘s chief economist, is aghast at the absurd focus on the Core Rate of inflation by the U.S. Central Bank: The Fed is Wrong on Core Inflation (if no FT, then go here)

Markets & Investing

• On Thursday, both Richard Suttmeier and I thought the Bond Rally Looked Crowded and Tiring;

• Chuck Jaffe on the mental exercise of Dumping Everything, and seeing what you would rebuy here and now.

Bears, Contrarians and the Crowd;

• What does the Dow Jones Utilities Averages’ new high mean? (hint: dunno)

• Here’s what some oldtimers are doing:

Wall Street Icon at 105, Avoids U.S. Stocks;

-Now that’s A Perma-bear! Still in Cash since ’86;

Saudi Prince opens Kingdom to the public

• von Mises on Money and the Stock Market: What is the Relation?

• For the truly cautious:  E*Trade is offering these rates for CDs:

5.46% APY on a 6-month CD.
5.50% APY on a 1-year CD.
5.25% APY on a 5-year CD.

Remember there is aways re-investment risk on all short maturity yield products;

7 Deadly Sins of Investing;

• Reuters Select Screens for Cumulative Performance

The Economy

• Friday’s NFP was pretty lackluster; The good news is it puts the Fed
on hold for at least another 2 meetings; The bad news is the data beneath the headline number was Fugly!

• I guess the watchword is slowdown:

Corporate Profit Growth Slows in Step With Economy (if no WSJ, go here)

Consumer Confidence and Commodity Weakness Heralding An Economic Slowdown

Data show economy slowing, not collapsing;

• Bernanke and Greenspan may not think much of the Yield curve, but two Federal Reserve Bank of New York Economists think it has predictive value: The Yield Curve as a Leading Indicator: Some Practical Issues (pdf)

Why India will overtake China   

• I’ve been kvetching about inflation for the past 4 years; Here is a sign it may be slowing and even reversing: Restaurants shave prices, plump menus and Can Stephon Marbury’s $15 sneaker revolutionize the sports-shoe business?

Five themes for the next five years

• The Retail Sector is not telegraphing very good things to come:

Retailers: Back-to-school sales mediocre

Mixed Retail Results Breed Unease (if  no WSJ, go here)

AutoNation chief warns of recession

Business Spending May Languish, Raising Risk of U.S. Recession

The Odd Recovery: Unemployment Is Low and So Is Employment;

• You no longer have to wait for the first Friday of each month:  Play The Payroll Employment Game

Politics, Military and Media

• Barron’s goes postal on a Medicare accounting scam (If no Barron’s, go here)

•  Donald Rumsfeld gave a controversial address at the American Legion; His rebukes came from all quarters, left and right — the most reasoned was Slate’s Four Questions for Rumsfeld; The most  stinging came from MSNBC’s Keith Olbermann, who questioned Rumsfeld’s grasp of history  — (Video of Olbermann’s response)

• Why your capital gains tax rate ain’t remotely close to 15%:  The Unkindest Tax Cut (Barron’s)

• The NYT business columnist Floyd Norris is now blogging;


Tracking the web with Single Page Aggregators — I’m a fan of PoPURL

• I give Dell a lot of grief for all the things they do wrong: Let me praise them when they get something right: My head is a box filled with nothing;

Microsoft Grants 37 Million Shares To 900 Execs — about $1billion dollars;

Marketwatch columist John Dvorak claims "the real reason Google (GOOG) CEO Eric Schmidt is joining the Apple (AAPL) board is to lay the groundwork for a merger between Apple and Sun Microsystems (SUNW)."  Eric Savitz doesn’t think so; Neither does Jeff Matthews, who has a hilarious take down of Dvorak’s senile ramblings.

• Yeah, I wish:  New York to L.A. in Two Hours

Are tall people smarter? (this study says yes)

Ever wonder what happened to, Oregon? 

The top-10-best-presentations-ever

What whale-song looks like

• The $1,000,000 duck race (a charity event)

Music Film Books TV

• 8 years after Napster, the music industry has finally begun to compete with free music downloads: Spiral Frog;

• Vaughn Trapp sounds like a cross between The Beatles and Crowded House;

• Here’s the latest RIAA nightmare:  Google Hacking to Locate MP3s

• Download the classics for free: Google public domain books

• Bob Dylan’s new tune, When the Deal Goes Down;

The Pitchfork Effect:  How a tiny web outfit became the most influential tastemaker on the music scene.


And that’s pretty much all from the sloppy, rainy miserable northeast, where I will be neither jet skiing nor parasurfing. I do have an old bottle of Cognac I’ve been meaning to crack open . . .now if I can only get the missus to let me spark up a stogie in the house, I’ll be set for a few hours.

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What's been said:

Discussions found on the web:
  1. rob commented on Sep 3

    great bunch of links, you must be a very fast reader! love the site, keep up the good work and thanks.

  2. GRL commented on Sep 3

    In reading the above-linked WSJ on the NAR economist Lereah’s forecast of a price drop, I note the following:

    “I’m hoping for prices to drop, Mr. Lereah said in an interview. . . . Sales have stalled partly because “the sellers are not bringing prices down fast enough,” Mr. Lereah said. “They’ve been very stubborn.” A drop of 5% to 10% in California and Southern Florida “probably would be enough to bring sales back,” he said.

    . . . “The quicker we can get negative prices, the quicker we can get sales coming back,” Mr. Lereah said.

    Absolutely staggeringly stunning, coming from this perennial housing bull and the NAR.

    As an aside, I have started looking around for rental property in Southern California. Based on what I’ve seen, prices need to drop at least 15-20% ($100,000 on a $600,000 2-3 bedroom crackerbox, for example), not the 5-10% Lereah is dreaming about, for the numbers even to begin to add up.

  3. JGarcia commented on Sep 3


    I have to say I’m VERY surprised you did not include or even mention in your Linkfest, what I consider to be one of the most important pieces of news of the week:

    U.S. intercepts test missile over Pacific

    Fri Sep 1, 2006 2:14pm ET

    WASHINGTON, Sept 1 (Reuters) – The U.S. military shot down a target ballistic missile over the Pacific Friday in the widest test of its emerging antimissile shield in 18 months, a witness to the test told Reuters.

    “We’ve got an intercept,” said Riki Ellision, president of the Missile Defense Advocacy Alliance, a booster group close to missile-defense contractors and the Pentagon’s Missile Defense Agency.

    A Pentagon spokeswoman, Cheryl Irwin, said she would report the results of the $85 million test shortly. Officially, the test was designed to collect data rather than shoot down the target.

    Boeing Co. (BA.N: Quote, Profile, Research) is prime contractor for the ground-based mid-course defense. Major subcontractors include Lockheed Martin Corp. (LMT.N: Quote, Profile, Research), Northrop Grumman Corp. (LOC.N: Quote, Profile, Research) and Raytheon Co. (RTN.N: Quote, Profile, Research).

  4. brion commented on Sep 3

    “Officially, the test was designed to collect data rather than shoot down the target.”

    That’s hilarious! They can’t hit ’em when they try to (even if they cheat) and accidently bag one on a test where they’re not even bothering….
    I wonder how the cargo ship nuke defense shield is coming along?

  5. whipsaw commented on Sep 3

    per JGarcia:

    “I have to say I’m VERY surprised you did not include or even mention in your Linkfest, what I consider to be one of the most important pieces of news of the week:

    U.S. intercepts test missile over Pacific”

    That’s great news! Where can I go to join the Missile Defense Advocacy Alliance?

    I think that you’ll find that “shot down” is open to interpretation and I suspect that what we are actually talking about is “test missile did not hit where intended.” Throw in the lack of basic countermeasures and the known time/location of the launch and I’d say getting a woody over this will only lead to heartache.

    They are probably getting better, but the fact that you are quoting the Missile Defense Advocacy Alliance rather than an AF general suggests that this is sell-side “news” rather than a leap forward. otoh, when Dear Leader’s longdong test went awry a month or so ago, it would not surprise me if an energy beam of one kind or another wasn’t involved. That stuff is a lot further along than John Q. Sucker has been led to believe and may become useful, but only if we have a warship standing within a couple of hundred miles of the launch site and immediate launch confirmation. So forget about it for Iran or Pakistan.

  6. Jim Bergsten commented on Sep 3

    Questions I’m asking myself…

    In whose interest is it to bomb the housing market? Who makes money from this and how? Why all the press?

    p.s. Who cares about NY to LA in two hours? I care about LA to NY (or anywhere else) to NY fast. Who cares about “the other way”?

    p.p.s.s. The “Top Ten Best Presentations Ever” made me physically ill, the first time ever from reading something, though in all fairness, it may have been the proverbial straw. “They” are turning us into a country, culture, and religion of marketeers and hucksters. This cannot bode well.

  7. bt commented on Sep 4

    Why would actual results of something as highly classified and as critical as the missile defense shield be made public? I don’t think the Pentagon is interested in sharing the real results with the public. The real results are highly classified and very know what the real state of the affairs of the missile defense shield is. What is released to the public (which means all our enemies have access to that info too) is what the Pentagon wants the Public to hear. I believe we may hear more of “successful tests” in the future because that gives the Pentagon a way to address, PR wise of course, the growing threat of missiles (e.g. N. Korea’s missiles).

  8. Barry Ritholtz commented on Sep 4

    I missed that Missilie article — although in all fairness, my resesarch & reading ended late Thursday (‘cepting Barron’s on Saturday)

  9. Webster Hubble Telescope commented on Sep 4

    My review of Pitchforkmedia: 0 stars out of 10.

    Anyway the site seems sluggish. I would much rather read something like or just wander around WFMU than read PM.

  10. Leisa commented on Sep 4


    From where I sit, Ernesto packed enough of a punch. Trees down, flooding, no electricity. We were out since Friday mid-day, having only regained it two hours ago. Thank goodness for the Yamaha generator. Cable out too, so internet (and cable viewing) withdrawal was the worst for us. Though others who lost lives (6 in VA) paid a dearer price. Hurricane, tropical storm—when you live among the oaks or near water, wind and rain, hold great danger.

  11. babycondor commented on Sep 4

    JimBergsten: “”They” are turning us into a country, culture, and religion of marketeers and hucksters. This cannot bode well.”

    Some of them may seem like that, especially Seth Godin, but Martin Luther King’s “I have a dream” speech? Steve Jobs introducing the Mac? Dick Hardt, Guy Kawasaki? These men are passionate, brilliant, visionary, charismatic individuals sharing their ideas and dreams. They are storytellers. If anything will keep the American Dream alive, it is these sorts of people.

    When you tell a story that energizes people and gives them something to strive for, I think this bodes very well indeed.

  12. Jim Bergsten commented on Sep 4

    babycondor (cute!):

    Agreed. I didn’t mean to shoot the messengers, just the message. The inclusion of Dr. King on the list made me hesitate commenting at all, but one good apple doesn’t, well, maybe it’s the other way round.

    I admire and envy great storytellers. Still, it’s a sad commentary on our society that these greats are mostly pushing product (7 of 10) instead of ideas.

    As for Kaufman, to this day I believe he knew he didn’t have long to live and just didn’t care. I hope I’d have that sort of courage and outlet if circumstances were similar.

  13. BB commented on Sep 4

    we need to “bomb ” housing …….
    it’s way over due for a crushing ……..
    we’ll make a killing when the average Joe goes belly up

  14. JGarcia commented on Sep 5

    “we’ll make a killing when the average Joe goes belly up”

    Great Kharma BB.

    Sleep well.

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