A strong week, as Bernanke’s testimony sent the Dow deeper into record territory. It finished the week up 1.5% — the biggest weekly gain in three months. The S&P500 gained 1.2% while the Nasdaq also rose 1.5% — despite the ongoing softness in Mr. Softee. Even given these strong numbers, the US markets are actually lagging global Bourses.

Sentiment remains frothy, but hasn’t hit extremes just yet. Barron’s Mike Santoli notes that Bullish Sentiment is Wide, Not Deep: "the very persistence of those predictions for a long-deferred pullback (guilty as charged here) and the constant lament about near-absent volatility could imply the first dip, when it comes, won’t be a real bruiser. Bullish sentiment is widely held, but doesn’t seem deeply felt. Retail investors haven’t yet caught the fever."

True dat. No need to scratch your heads, however. We got it all covered with this week’s linkfest:


•  U.S. Stocks Rally on Bernanke Testimony; Dow Climbs to Record: Federal Reserve Chairman Ben Bernanke enabled the stock market to continue its steepest advance since September with congressional testimony that brightened the outlook for inflation.

Bull versus Bear:

Michael Steinhardt Is ‘Very Sensitive’ to Signs Rally May End Michael Steinhardt, the investment
pioneer whose hedge funds returned more than 20 percent a year
for almost three decades, says the bull market in U.S. stocks
may be coming to an end after more than four years. (Bloomberg)

– Jim Cramer says: We’re Not Done Going Up   

Do You Define Your Investing/Trading Reality? Balancing the trader and the investor within you.

Nine Lessons I Learned in the Past Nine Years The goodbye column from Bloomberg’s John Dorfman offers lots of smart, common sense advice.

Ballmer: Vista forecast too rosy: Microsoft Chief Executive Steve Ballmer warned Wall Street analysts
Thursday to dial down their assumptions of how much Windows Vista, the
company’s newly released operating system, would contribute to revenues
next fiscal year. We made the same warning a few weeks ago: In Big Cap Technology, Caution is Warranted. And Fred Hickey is even more bearish on Tech than usual.

You Don’t Have to Fret Doom to Like Gold Now: SmartMoney notes that "You can’t spell Goldilocks without gold, and don’t have to be a bear these days to take a shine to the yellow metal. The global money supply keeps growing, but consumer inflation has cooled of late. The Federal Reserve is on the sidelines until further notice, and, anyways, has only limited room to raise interest rates given the current state of the housing market and the yield curve." See also: A Better ETF Mousetrap for Gold (

Q4 Earnings Drop Below 10%

Merrill Loaded for Bear in Mortgage Market That Humiliated HSBC: Merrill Lynch & Co. Chief Executive
Officer Stanley O’Neal was willing to lose $230 million to catch
Bear Stearns Cos. and the shakeout is just beginning. That’s because Merrill is determined to capture a dominant
share of trading in bonds backed by home loans, the fastest-
growing debt market since 1995 and this year’s most troubled. (Bloomberg)

•  Misunderstanding Prediction Market Failures

• "The individual stock-volatility markets are saying low volatility is here to stay, but the index-volatility market is saying the low volatility is a temporary phenomenon," says Leon Gross, Citigroup’s global head of equity-derivatives strategy. A Mixed Message Spells Profits (Barron’s) On a related note: VIX and more is a new blog focused on the VIX.

Capitalist Cred: Why do I suspect this bastard is going to make a fortune?


The Wall of worry continues to build:

Revisiting GDP: Look for downward revisions from 3.4% towards 2.0%   

This Expansion Looks Familiar The overall rate of growth has followed a trajectory almost identical to the first five years of the 1990s expansion. Now, as then, corporate profits have surged; the stock market has, too. But just as workers have finally begun to reap some of the spoils of a growing economy, many forecasters worry — as they did a decade earlier — that the expansion is running out of steam. (New York Times)

Banks That Took Greenspan’s Advice Pay the Price: The issue isn’t whether loans defined as risky carry risk;
they do. The real question is whether the risk was priced
correctly; whether rising delinquency rates on subprime loans,
sometimes made without proper documentation, will spill over into
the rest of the home-loan market; whether borrowers will default
when teaser rates on adjustable-rate mortgages reset higher at a
time when home prices are falling; and — the big kahuna, the one
that matters to the Federal Reserve — whether any of the bad-
loan problems will affect financial institutions’ ability to

• The NYT’s  Floyd Norris explains When the ‘Real’ Numbers Are Rosy, but the Others Are Less So

U.S. Tourism Rises to Pre-Sept.11 Levels

Retirees up against debt: Retirement used to be a time for people to enjoy life without a mortgage or high credit card bills, a time when heavy debts were mostly a thing of the past. Increasingly, that’s no longer true. (USA Today)


Homebuilders: Earnings & Prices

The Subprime Market’s Rough Road Rising defaults and delinquencies by home buyers with shaky credit are
wreaking havoc in parts of the mortgage industry and stirring concerns
about a stumble in the U.S. economy. See also
Definitely Not the Bottom   

• Integrate Google Maps with housing and population data and you get Neighberoo 

It’s their default position: There’s a lot of speculation about where the housing market is headed. Some
analysts contend the shakeout is already over. Others maintain it hasn’t even
begun. Hennigan and the company he works for, Home Center Realty, don’t
have the luxury of waiting to see how the story will play out. They need to make
a living now, and they’re betting that things are going to get worse. Maybe much

Simon of Pimco Sees Subprime `Fallout’ Continuing Through 2007 (video)


Goldman Sells GSCI to S&P

•  Iran reformists want U.S. to tone it down   

• A WSJ two-fer: Climate Change’s Cold Economics (free) and "It turns out that the Climate Pessimists Were Right 

The New Math of Alternative Energy: The numbers are starting to look promising. For years, the big criticism of alternative energy was cost: It
was too expensive compared with energy based on traditional fuels like coal and
natural gas. Now the equation is showing significant signs of change. Costs are falling for
some alternative-energy sources, driven by new technology and renewed
development interest.

Wall Street Democrats Try to Revive Clintonomics


• Two offbeat Google stories worth looking at: In the New Yorker, GOOGLE’S MOON SHOT and in Moment Magazine, The Story of Sergey Brin

• This is way cool:  Online Video Industry Index

• Damn! My iPod (40G 4th gen — 2 years old) just went and died on me! So far, nothing has revived it. Also, here’s How Steve Jobs Played Hardball In iPhone Birth (free WSJ)

Hacking the human brain: "Jeff Hawkins was just another junior engineer at Intel in 1979 when he stumbled across an issue of Scientific American magazine that would illuminate a path to what would become his life’s work. It
had nothing to do with the two great breakthroughs – the PalmPilot and
the Treo – for which Hawkins would later become celebrated as one of
the great technological and design geniuses of recent times. The issue
was devoted to the human brain. (Business 2.0)

Who does an Amazon Tivo Combo present a threat to?

How to create your own TV channel: Since the dawn of the Web, we’ve been plagued by too much
information and too little time to consume it. It’s impossible to keep up with
dozens of social networks, millions of videos, and thousands of blogs.
Hyperaggregation is simply a way to do in the new-media world what old media
has done for centuries: neatly package information.

Examples of serendipity in science and technology (also known as dumb luck)

F is for fantasy:  a groundbreaking analysis of what makes Britain tick sexually



• New bookS in the queue:  Money-Driven Medicine: The Real Reason Health Care Costs So Much. This one’s written by Maggie Mahar, who did such a wonderful job with Bull: A History of the Boom and Bust, 1982-2004 that I can’t wait to start this one. Also queued up: Bloomberg’s Guide to Economic Indicators: Making Sense of Economics

• Two terrific Jazz selections this week: a few videos from Sarah Vaughn; Also, check out the new weekly Coltrane podcast, Traneumentary

How to kill a Lobster humanely

Folding under pressure (fascinating origami discussion)   

• Want to sue the illegal acts of telemarkets? Go to

A brief and edifying list of infographic music videos   

Unsure of where to go for lunch? Punch in your zip code and spin the Wheel of Food via Yahoo! Local

The hell with this cold weather! I am off to Sunny California for a little bit of business and a lot of fun. Forecast for next week’s Linkfest: Doubtful. 

Stay warm!

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  1. Rick Hanley commented on Feb 19

    Dramatic Interview Quotes from Netflix Management
    June 7, 2006
    The New York Times
    What Netflix Could Teach Hollywood
    Reed Hastings, CEO
    “Americans’ tastes are really broad,” says Reed Hastings, Netflix’s chief executive. So, while the studios spend their energy promoting bland blockbusters aimed at everyone, Netflix has been catering to what people really want — and helping to keep Hollywood profitable in the process. [30% of Netflix rentals are those ‘bland blockbusters’]
    February 1, 2007
    The DMW Interview with Ted Sarandos
    Ted Sarandos, Chief Content Officer
    “At the end of the day, Blockbuster doesn’t have the ability to change the existing merchandising policies that create demand. They’re purely in the demand fulfillment business, and we’re squarely in the demand creation business.”
    February 1, 2007
    The DMW Interview with Ted Sarandos
    Ted Sarandos, Chief Content Officer
    “What Netflix has done an amazing job of is personalized merchandizing, based on billions of movie ratings and incredibly sophisticated algorithms that put the perfect movies in front of every individual subscriber.”
    February 15, 2007
    World Cinema Web
    Steve Swasey, Director of Corporate Communications
    “We are a bastion of distribution for smaller independent films that wouldn’t see the light of day otherwise.”
    February 15, 2007
    World Cinema Web
    Steve Swasey, Director of Corporate Communications
    The mainstream audience still wants to watch the films on DVD, Swasey contends, “which will be the preferred delivery method for at least 5-7 years.”
    [Who thinks mail-order physical DVD will own rental until 2012 to 2014?]

  2. mickslam commented on Feb 20

    You rock Barry. You’re just a nice guy, and fun too. I am going to take John Dorfmans recommendations and study them. Look at the returns from number one. Its incredible.

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