Happy Festivus! (Also, you have 2 1 shopping day left until Christmas).

Well, that was pretty wild: It was a week that technicians will be pointing to for some time to come. Volume was anemic, as we absorbed a plethora of Economic news.  For the week, the mega cap Industrials dropped less than a percent (0.8%), while the S&P 500 index fell 7 points (-1.1%). The Nasdaq lost 2.3% over the past five days — this was worst week for the tech-heavy index since July, not only due to the poor showing, but because the Nazz broke the uptrend inplace since those July lows.

The big loser for the week were the Trannies: The Dow Jones Transporation Average dropped 4.2% , led lower by earnings warnings and weak outlooks from the likes of Yellow Roadway, C.H. Robinson Worldwide, Fedex and UPS (more on Dow Theory below).

If the stock market’s advance over the past six months is a bet the economy will have a soft landing, then this week (and the next few weeks) could make those who believe the markets divine the economic future increasingly nervous.

Enough chatter — its a 3 day (at least) weekend — On to the Lumberyard!


Simple advice for investors: When the Fed’s tight, and short-term rates are above inflation, To Enjoy Life, Just Buy Big-Cap; We noted the same back in August, and earlier this week, we ranked GE a "Technical Buy."

•  The Outlook for 2007 is ‘Reasonably Pleasant’
(There’s no escaping the bottom for me, is there?)

•  The WSJ front page C Section continues its streak as a contrary indicator: This Bullish article on Monday preceded the worst week in the S&P500 since July: Santa Was Early And May Stay Awhile Longer;

• Fascinating interview: Jim Cramer on How to manipulate Markets via Futures and key equities; (be sure watch Aaron’s reactions — they are priceless!)

The man who saw the futures: very cool interview with Leo Melamed, who invented the S&P500 futures (I was just reading about Melamed’s 1980s copper trade in Ron Insana’s book, Traders’ Tales: A Chronicle of Wall Street Myths, Legends, and Outright Lies)

Toyota poised to pass GM, as Google passes Yahoo.

Speaking of Transports: Mark Hulbert notes the 2nd of 3 Dow Theory newsletters is turning bearish in How now, Dow?

• Interesting discussion on Converting the VIX into an oscillator (Barron’s)

Will Backdating Scandal Thwart Effort to Roll Back Reforms?; And speaking of shameless weasels, why hasn’t this %$#@ been fired yet? NASD:  Morgan Stanley Used 9/11 As Excuse for failing to produce millions of emails in hundreds of arbitration claims, even though it turned out not to be the case (WSJ)

• Michael Lewis offers some timely advice (given the huge bonus pool around town) on how to defend yourself and your money from the jealous and angry faction within the middle class that, come the holidays, is especially difficult to avoid — your extended family:  Pain for the Richest Guys in the (Living) Room Also: FT:  Blackstone chief warns on pay gap (free)

• Herb advises that we Stick With Cash and Caution If Stocks Seem a Little Too HotAre too many Mergers Dangerous for Stocks?    (WSJ) and: 

•  A look at earnings cycles: Beyond The Horizon: Economics & EPS (pdf)

Risk is the Hottest Four-Letter Word in Financial Markets, according to Peter L. Bernstein. Also: If speculators are “buying everything,” what does that do to inventories and prices?

You just won $1 million dollars. Now what?



The Wall of worry continues to build:

Core capital-equipment orders fall for second straight month; Excluding transportation goods, orders dropped fell 1.1%, the fourth decline in the past five months. Also, FedEx Delivers a Cautionary Message

•  You think your Bonus sucked? Get a load of these cheapskates: The Corporate Scrooge Contest Results

The Truth About Inflation (its mixed);  Myths about Manufacturing Productivity

•  Bill Gross’  Reality Check, and Will bond bump upset Santa rally’s sleigh?

• Nouriel Roubini’s Hard and Soft Landing News of the Week   

Econoblog: Two economists discuss the dollar’s recent slide against the euro

• Amusing!  How Christmas Brings Out The Grinch in Economists  (WSJ)


Mo money, mo shopping: A huge pre-Xmas retail bonanza!

Procrastinators expected to salvage retail’s season

NYC Tourist Shopping Extravaganza (hint: its the weak dollar)

• With 2 1 days to go until Christmas, the fate of the holiday shopping season is in
the hands of those aforementioned procrastinators. Retailers Mark Down,But Keep Hopes Up For Christmas Lift;

Did Retail Sales Really Increase 1% in November? (hmmmm)

Hefty Discounting Of Flat-Panel TVs Pinches Retailers; Meanwhile Retail Stocks Are Hitting a Ceiling;

Mrs. Big Picture’s Anecdotal Tales of Holiday Retail

•  Danger! Avoid these holiday gifts:  The 10 most dangerous play things of all time

Search Engines Help Shoppers Buy Locally

• Pimco’s Global Rebalance, Consumer Imbalance   

• WSJ Video: Very cool last minute gift ideas for Do-It-Yourselfers (free) I love the electric wrench


• Ouch! Study Predicts Foreclosure for 1 in 5 Subprime Loans

• Zillow takes a page from Craig’s list, and offers free listings of for-sale ads — (there are some caveats).

• HSBC Sours on American Loans (WSJ)

• When rates fell to historic lows, few bothered paying "points" to reduce their mortgages rates.
Sometimes, it makes sense to do so — if the numbers are
right: Deciphering Mortgage Points;


• Money magazine gives us 6 strategies to survive any real estate bust

• Small real-estate investors are shifting their focus from single family homes to multi-unit rental properties: New Rules for Real Estate

How to Buy a $450K Home for $750K (Warning: excessive snark)


• Bloggers are bearish, fund managers are bullish: Sentiment Depends on who you ask!; see also Bullish Sentiment Joins the List of Worrying Sign

• Saw this one coming: The WSJ gets C section front page Bullish again

Signs of a Market Bottom? (not exactly)   

• Hulbert:  Not exactly the risk they had in mind: Stock bulls’ ‘low risk’ theory actually supports market bears   

• Is A Trending Bull Market Due For A Fall? (inconclusive)

• Very interesting chat on managing risk and playing statistics: It is not the cards you are dealt – but is how you play them



• Thomas Friedman’s Mideast Rules to Live By

Iraq Insurgents Starve Capital of Electricity

Is the US losing war of web to terror groups?

• The Republican Identity Crisis

Incentives on Oil Barely Help U.S., Study Suggests

•  WSJ’s Best (and Worst) Ads of ’06 (free)   

The Five Best Political Moments of 2006

• Interesting story how SNL purposefully posted a digital short to the web: Censored ‘SNL’ Sketch Jumps Bleepless Onto the Internet (YouTube version posted by NBC: SNL: Dick in a box) Listen also to Paul Kedrosky on NPR’s Viral Video and the Rise of YouTube

Technology & Science

Peter Coffee’s 25 Killer Apps of All Time

• You are gonna love the Revolution: I’ve seen a sneak preview, and it’s neat.

•  How an iPhone could rock wireless

• Video: NYT’s David Pogue’s very funny take on MSFT’s Vista OS (loosely based on this)

How to Make Money on eBay (also: How Sellers Trick EBay’s Rating System)   

• from the Its Not an iPod newsdesk:  Sandisk’s 2GB MP3 player cuts its price in half;   

• Cringley’s $700 billion Christmas wish list

Music Books Movies TV Fun!

• This has become a fun, annual rite: A Different Kind of Music List: Best of 2006 — its a great list (if I may say so myself) of what was frequently spinning in the car/ipod/laptop/iMac a lot this past
year — call it my soundtrack for 2006. 

1 Year, 4 Good Months — and 10 Top Movies

Meet the Smithereens!

Virtual Rock Game Is Real Hit for MTV: The second edition of Guitar Hero is one of the hottest-selling games
this gift-giving season, with stores finding it hard to keep it in
stock. Reviews have been largely ecstatic, and encomiums have been
pouring in from real-life rock stars, including Trent Reznor of Nine
Inch Nails to Jack Black of Tenacious D.   

• If you find all the cloying holiday music unbrearable (see the 10 Most Annoying Christmas Songs Of All Time), then check out our cool list of Favorite Holiday CDs;

• You don’t see these too often: Comedian/Guitarist Rob Paravonian’s rant on Pachebel’s Canon in D

• One of my all time favorite writer/directors — Preston Sturges, considered the father of the screwball comedy — has a new box set coming out. (see also this American Masters special)

• Speaking of Box sets: I just received the new Sinatra in Las Vegas box set as a gift (thanks Tom!) — 4 CDs, 1 DVD — and I am in Frank heaven.

• Colossal time suck: Double wires (Damn you James Altucher!)

• For those of you who find the entire holiday a bit too materialistic, some of my favorite charities are here.

• Finally, for those of you who do not care at all for the holiday season — or just need a good laugh — Eric Idle has some NSFW words: F^%$# Christmas

That’s all from gift wrap central, where the Festivus celebration is in full swing, presents are lined up nicely, and its gonna be 58 degrees today. Hey, guess what? The days are already getting longer (12/21 is the shortest day of the year)

At this point, I am actually looking forward to winter!

Here’s wishing you and your family a healthy, happy and safe Holiday!

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What's been said:

Discussions found on the web:
  1. brion commented on Dec 24

    i just watched the cramer clip….never seen him before.
    I have to ask in my own naive way but…..Was that a real exchange or was that some kind of skit?

  2. My1ambition commented on Dec 25

    I’m afraid that may have been a real exchange. Incredible if so. Fundamentals don’t matter, until they matter. And when they do, a lot of “Cramers” are going to get burned. Amaranth style.

  3. spencer commented on Dec 25

    the individual writing about productivity does not know what he is talking about.
    He shoul really take a lesson in how output is calculated.

  4. dblwyo commented on Dec 26

    Barry – thanks. As usual the linkfest is a feast. At the risk of getting checkmarks on your piece on the classic blog postings and comments but hopefully worth your while you might find George Packer’s article on the role of culture in the war on terror and specifically an Australian expert named Kilcullen in the New Yorker worthy: http://www.newyorker.com/fact/content/articles/061218fa_fact2

    And, like others, I found Cramer’s interview extraordinarily revealing indeed. Presuming it’s “honest” it reveals first a calmer and more analytic Cramer who’s expert in the tactical mechanics of hedging AND market manipulation. It also lay out the role of such manipulations in the short-term trading.

    How accurate do you find it ?

    And, if worthy, when do fundamentals or even un-manipulated technicals catch up with intraday trading management ?

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