October Linkfest!

Some week, huh? The Dow made a new high, and almost hit a new all time closing high, adding 170 points (1.5%) for the week. The S&P500
gained 21 (1.6%), while the Nasdaq added 39 (1.8%).

The rally has some internal issues, which we will discuss below. So far, the most fascinating aspect of it has been the response via the business channels. Fox has been breathless, Bloomberg circumspect, and CNBC somewhere in between (leaning more to the giddy side).

The last straw for me was James Glassman, the author of the Dow 36,000 book on CNBC, reiterating his "undervalued by 65%" theme. I didn’t even mute the TV — it went off for the rest of the day.

As an example of how absurd his statement was, I point you to the simple fact that since the last time I saw his schtick on TV in January 2000, the Dow has been handily outperformed by cash — and by 818 basis points.

Enough details — let’s get clicking:


• Barron’s Alan Abelson on the Caveat Emptor market (if no Barron’s, go here)

• How various Dow Components have fared since January 2000


• We’re getting fairly bored with Amaranth, and so there will only be 3 such items this week (but they are good ones):

The Transcript of Amaranth’s Group Investor Conferenmce Call;
Full text of Sept. 29 letter from Amaranth Advisors to its investors;
Amaranth Swag on eBay or Amaranth Lost Six Billion Dollars, and All I Got Was This Lousy T-Shirt

Dow vs Money Market

How to invest when trends zig and zag   

Owning dividend-paying stocks — and reinvesting those dividends — will beat any Bear Market   

Dr. Doom turns bullish on U.S. large-cap stocks    

• Money Manager: Things You Should Know & Ask

7 ways to commit financial suicide


Lots of New this week

New worry: A hard ‘soft landing’; Its true: the hope for a Soft Landing Continues to Fade;

New Conundrum: Who’s Right, Stocks or Bonds?

New question: Will a U.S. Downturn Derail the World Economy?
    –Yes, it will (FT)
    –No, It Won’t (Merrill Lynch)

• In Asia, they are discussing The US, a debtor nation;   

• Former Fed Chair Paul Volcker spoke extensively at Bloomberg HQ;

Goldman and Merrill See Bond Rally Continuing

• Lastly, for you soft landing aficionados, try these three:

U.S. Q3 profit warnings ramp higher
Retailers Racked by Less Spending
Consumer Spending Slows, Inflation Rises

Psychology & Sentiment

A Primer on Being a Prudent Bull

Debunking Some Myths About Active Management   

New Highs and New Lows: What They Tell Us

Energy & Commodities

The Downside Of Cheaper Oil   

Fill ’Er Up — With Dictators

Why is Oil Dropping (and what might its impact be)?

Raw-Material Pullback Catches Some Off Guard

Energy refinery margins fall; stock ratings cut

• Three related politics of oil articles:

How Bush Looks to Define Energy-Policy Focus 
Better Mood at the Gas Pump. What About the Voting Booth? 
Americans look for political manipulation as gasoline prices plunge (I personally am not even remotely convinced of this)


• This week saw lots of Ugly Headlines About Slumping Real Estate;

• We’ve heard about all sorts of exotic loans: Interest only, variable fixed, Libor based, No document loans.  Here’s a new one on me:  Liar Loans. Apparently they exist, and go way beyond Home Buyers Stretching Truth, Budgets to Get Loans;  Here is a discussion of the Lending Guidelines an Credit Squeeze

The Good: So far, the Revision of ARMs not yet impacting people’s pocketbooks   

The Bad:  Home Prices Drop; 1st time in a Decade

The Ugly: An extreme view of how long the Housing market can slump;

• Let’s keep the book trashing party going (this one is a doozy):  Are You Missing the Real Estate Boom? Why The Boom Will Not Bust and Why Property Values Will Continue to Climb Through the End of the Decade — by none other than NAR’s Chief Economist, David Lereah;

• Lots of Houses are still selling — but Pricing Your Home Gets Trickier As Houses Languish on the Market

• I guess we can expect to see a slew of companies now blame weak housing for bad numbers: Housing slump hurts Pentair   See also Housing’s Hidden Headache

Condo prices near a cliff;

• Well, which is it?

New Home Sales and Recessions;

Housing market isn’t necessarily a predictor of stock    

Housing And Recessions


• Author Douglas Coupland ask "Is Google God?" (fascinating)

11 New Disruptive Technologies

• Every vote by your US Senator, now on line

•  Google: Chaos by design

• I’ve long wondered about this: What to do with your old cell phones

• Beam Me Up: Apple’s iTV strategy is iChat on steroids

• Here’s 2 for you covert fans:

-Meet the Counterterrorism-Industrial Complex
Spy Agencies Outsourcing to Fill Key Positions (let’s hope they can do a better job)

How to Get Attention, In a New-Media World

Music Film TV Books Fun!

•The shortlist for the second annual Financial Times and Goldman Sachs Business Book of the Year Award was announced Tuesday.

The Long Tail by Chris Anderson
Small Giants by Bo Burlingham
The Wal-Mart Effect by Charles Fishman
China Shakes the World by James Kynge
The Box by Marc Levinson

• Ticketmaster challenged by upstart over excessive fees: Concert Giant Sees Cutting Prices as Ticket to Success

• The funniest movie preview I’ve seen in a long while — I laughed out — is Norbit.  Not only does Eddie Murphy play the lead character, and an enormous black woman, and an elderly Chinese Man, but the trailer has the best usage of the Jaws theme since, well, the infamous Caddyshack.

• Nearly everything you listen to today can trace their roots to this TV appearance;

• The Green Flag’s Out for Bold, Fast and Highly Styled Cars

• And just because its so amusing: Senate Wins Fight To Lower Allowable Amperage Levels On Detainees’ Testicles


That’s all she wrote, from what looks to be a nice weekend here in the Northeast. Enjoy the nice weather while it lasts!

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What's been said:

Discussions found on the web:
  1. Pen Island commented on Oct 1

    Not convinced, or just CYA?

  2. ac commented on Oct 1

    Do we open lower tomorrow as the “alternate reality traders” have had time to catch up on the news this weekend?

  3. Frugal commented on Oct 2

    Really appreciate your link on my article of Money Manager: Things that you should know & ask. Your link helps tremendously for a small blogger like me. THANKS.

  4. Larry Nusbaum commented on Oct 3

    I read the Liar Loans and on the surface it surely seems so easy. But, it’s not. The mechanic, who is not self-employed states his income is $13,000 per month.
    Sorry. It won’t fly. Mechanics don’t make that much money and it will get screened out.
    Now, don’t get me wrong, lying on the loan application is a federal crime much like submitting fradulant tax returns, and fewer people do it than what is reported.

  5. PaulsJusticeBlog commented on Oct 6

    TicketBastards (TicketMaster Sucks)

    While reading the Big Picture Blog’s Linkfest, I saw a headline Concert Giant Sees Cutting prices as Ticket to Success (LA Times, 9/26/2006).Right on. (Well, maybe; it doesn’t look quite as good as you keep reading) The article notes that…

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