Festival of even more Linkage!

Another week, another milestone:  The Dow added 87 points, or 0.7%, closing up for the week despite Friday’s hiccup. Barron’s Trader column notes this was the "fifth straight week of gains, as gauged by the Dow and S&P 500, while the Nasdaq Composite rose 0.4%, its fourth weekly gain in the last five, to reach 2350."

The Bulls can point to Earnings, which continued to be excellent, a few notable exceptions aside. Guidance is where the Bears can rest their case.    

No matter: another week pregnant with earnings, and quite a bit of economic data:  NAPM , Construction Spending and ISM mid-week, Productivity and Factory Orders Thursday, then everyone’s favorite, Non Farm Payroll (tho Given the massive revisions NFP has seen, perhaps we should be putting less stock in these initial numbers).

That’s what’s upcoming; Here’s what’s outgoing: an Autumnal linkfest!


Businessweek looks at sector rotation — away from higher Beta names, and towards the more defensive issues in A Creeping Caution on Wall Street

• WSJ: Berkshire Might Be a Bargain at $100,000; Also, you can see Warren Buffett speak to a group of MBA sudents at University of Florida;

Uh-Oh: How Good Are Earnings Really?

• The Hedge-Fund legend has some critical words about the industry he helped to create 40 years ago: Ten Questions: Michael Steinhardt;  Speaking of hedge fund legends: Soros, Bacon, Jones Hedge Funds Lag Behind S&P 500

• John Bogle, founder and former CEO of mutual fund house Vanguard Group, advisers investors to "Revise Your Market Expectations"

• The risk of reward: Betting on an increase in market

• The rally from the Summer lows has shifted leadership — the past few weeks has seen Energy and Materials stock re-assert themselves in:  Two-horned bull?"

Options Scorecard:  An updated look at more than 120 companies that have come under scrutiny for past stock-option grants.

I did not you know this: The Street.com is now rating stocks: TheStreet.com Ratings

• Has the Record Short Interest Prevented any major Correction? 

• Interesting sentiment discussion: Why You must be a Raging Bull AND a Prudent Bear and Pressures on the Dow are Not Sustainable;

• Why Your ‘Lizard Brain’ Makes You A Bad Investor — and How to Battle Back (See also You’re Just Not Built For It) See also this academic study explaining why sometimes more information often leads to worse investor decisions; The culprit is investor overconfidence; 

• MacroMaven’s Stephanie Pomboy discusses "A Yen for Risk"



The Wall of worry continues to build:

• There’s no other way to put this:  GDP stinkeroo! (or this or this)

• Treasury Secretary Paulson is hoping the Wealth Effect of Stocks will make up for Real Estate; That’s a bad bet;

• The full article is a rather fascinating discussion of today’s "lower upper class," which is seething about the
ultra-wealthy:  Revolt of the fairly rich

• On the economy, there is a plethora of both Good news and bad news

Pretty mediocre: Wal-Mart’s October U.S. Same-Store Sales Rose About 0.5 Percent

• Business Pundit asks entrepreneurs to "Please Stop With Your Chinese Math" ("We only need 3% of the market. . . ")

• A Bloomberg video twofer:

-Tannenbaum of LaSalle Says Consumers Not `Damaged’ by Housing      
-Ryding of Bear Stearns Sees `Limited’ Effect of Housing Decline (I say they are both wrong)


As expected, the Fed did nothing (and said less):

• WSJ’s Greg Ip on Why Fed Might Keep Rates on Hold Longer Today Than It Did in 1995 (If no WSJ, go here)

Seinfeld at the FOMC:  Something about nothing also could describe the meeting of the FOMC. Nothing changed in terms of the target rate for federal funds, which has stood at 5 1/4% since last July.  And the statement:  a lotta yada, yada, yada.

• All this aside, Treasuries saw gains the 2nd Week in a row as Fed Leaves Rate Unchanged      

• Pimco’s Paul McCulley always has something interesting in his Global Central Bank Focus


A Closer Look at New Home Sales Data

Barron’s Alan Abelson cites research by Merrill Lynch’s David Rosenberg regarding the recent "stabilization" in Housing. It turns out that the only thing which is stabilizing is inventory — but at extremely high levels (If no Barron’s go here)

• The Shifting Calculus of Buying a House now favors buyers, as Home Prices Seen Dropping Through 2007

• CNN on the The New Rules of Real Estate

 GMAC feels effect of US housing wobble

• Last week, I mentioned an auction of ~50 prime properties in Florida. Here’s how that worked out: 14 of the 51 properties did not receive a bid; see the full Oct 21 Naples Auction Results; Also, check out the auction catalog of properties.

Housing Slump May Pull Down Retail Work

• Derivatives Trades Suggest US Housing Slump Poised to Worsen


• Thomas Friedman: The First Law of Petropolitics

CNBC.com returns (did you even know it was missing?)

• How Nazi Germany and apartheid South Africa perfected one of the world’s most exciting new fuel sources.

•  Two economists at the American Enterprise Institute set up a nifty Web site to determine the future costs of the Iraq war.

• UK brigadier who lead attack against Taliban: Iraq war cost years of progress in Afghanistan;

• October has been grim in Iraq: 98 U.S. GIs killed in Iraq this month

• Conservative pundit George Will on the Questions to Guide an Iraq Exit Policy


With 10 days to go til the mid-term elections, I decided to break this out from the Military/Media grouping: 

Google Launches Guide to US Congressional Elections

• Does Mr. Market really care if its Republican or  Democrat? (no) And why both parties deserve to lose this election.

Election Update, part 3 Tradesports some changes: up almost 2 points  GOP has a 36.1% chance of retaining control of the House;  GOP odds were up nearly 4 points for retaining control of Senate remains at 73.9%.

• Two interesting (free!) articles from the WSJ: 

-You can look at Campaign Cash Clues to see where the parties are defending or giving up. Biggest surprise:  GOP has stopped investing in Ohio

– Political Polls and Pundits: How Reliable Are Forecasts?    

• There is a surprising re-alignment in the midwest: Moderates in Kansas Decide They’re Not in GOP Anymore; WSJ’s John Harwood on Why the Center Matters in This Election

File this under Bleecchh:  We are not even through the mid-terms, and already 2008 is looming large: Mining Midterms for Clues to ’08 Field; Speaking of which: McCain Tries to Trump Republican Woes, Sets Foundation for a Presidential Run in 2008 (disclosure: I supported McCain in 2000);

Technology & Science

IBM Suing Amazon over Patents

The Boss Puts The iPod to Work

•  No more funny: YouTube Removes all of Comedy Central Clips Due to DMCA   

• New theory on what killed the Dinosaurs: Not meteors, but worms

• Some users are renouncing the social networking sites as just too big in MySpace, ByeSpace?

Did the Viking Mission Miss Mars Life?

•  Circumventing DRM:  Apple’s iPod code ‘cracked’


Music Books Movies TV Fun!

• If you like the prior recommensdations for KT Tunstall or Bittersweet, than have a listen to Feist’s Let it die

• I haven’t read Bob Woodward’s State of Denial, the 3rd part of his Bush at War trilogy. It seems that every other person on my train is carrying the book.

No cash = no inspiration = no rocket sauceJack Black schools all of you on the truth about piracy (save your emails, its a parody). JB & Kyle also have a new movie out: Tenacious D‘s The Pick of Destiny

• For the math geeks out there:  Finite Simple Group (of Order Two) (cute)

• Sometimes, the Onion is more accurate than the MSM:  Stock Market Invinciple;

• Via NASA, we can see Von Karman Vortices, Aleutian Clouds, Aerial Whirlpools: Earth as Art!

• The Cohiba Behike is world’s most expensive cigar: priced at more than $450 each (WSJ — if you can’t afford the sub, you can’t afford the cigar!)

How did I miss this: The Simpsons vs Star Trek mash up

That’s all from my corner of the North Shore of Long Island, where lots of rain and plenty of fallen leaves combine to make driving treacherous — and unlike Ice or Snow, ABS won’t help if you skid on wet leaves. Drive safe!   

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What's been said:

Discussions found on the web:
  1. pjfny commented on Oct 29

    Nouriel Roubinis blog from today (29oct06) is explosive if true. Some investigation required, but he thinks the gov made a mistake or massaged the auto prod numbers to get to a 1.6% gdp report…without those “mistakes” the reprt would have been close to 0.9%.
    See his blog on right hand side of web site!

  2. Barry Ritholtz commented on Oct 29

    I read the Bloomberg piece late Friday — yes, it is accurate — I am waiting to hear back from Commerce Dept as to how and why this calculation was done.

  3. whipsaw commented on Oct 29

    ah, a fluke. They happen. A lot. Let me see if I have a complete list of pre-election flukes:

    _March-ish: M3 is no longer relevant to greater transparency, goodbye.
    _April-ish: MSM is chirping about “sell in May”
    _May: Market dumps on schedule, but only moderately.
    _July: Paulson is sworn in and 2 days later GS index is changed resulting in oil/gas freefall over the next 2 months
    _August: Market unaccountably begins a 3 month tear despite dismal economic data
    _September: No significant pullbacks, despite data. Just one of those things.
    _October: BLS discovers that it lost 810,000 jobs, cash market continues to rise via remarkable behavior in the futures markets; when called on GDP, BEA sort of says that just maybe GDP was overblown by a third.
    _November: Verdict in Saddam “trial” that ended in June(?) to be released 2 days before elections. The scheduling was announced in September but the Iraqis started to think that maybe it would fall behind schedule once they got into a difference of opinion with “us” earlier this week. Back on track now, apparently.

    Have I left anything out? Will there be another fluke in the form of an OBL tape released either Nov 3 or 6? Of course not, The Manipulati are just a myth.

  4. blam commented on Oct 29

    The degree of corruption in the US government has reached epic proportions since the appointment of Paulsen. There are too many coincidences to ignore.

    The government and financial markets appear to be under the control of organized crime.

  5. V L commented on Oct 29

    “financial markets appear to be under the control of organized crime”

    26% jump in motor vehicle production and overestimating GDP?!?!? I hope it was simply an honest mistake and it does not have any political or any Wall Street investment bank connections. (I can only imagine how much money big investment banks would lose if GDP was not overstated)

  6. S commented on Oct 29

    Stephanie Pomboy’s piece “A Yen for Risk” is on the mark. Thanks for including it.

  7. whipsaw commented on Oct 29

    per V L:
    “I hope it was simply an honest mistake and it does not have any political or any Wall Street investment bank connections.”

    heheheh. I assume that you are being sarcastic. “Hope” rhymes with, erm, …

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