End of Quarter Linkfest: Week-in-Preview

Yesterday we reviewed the week that was; Today, we preview the week that will be.

Given that the 4th of July holiday falls midweek this year, we have an awkward trading schedule. On Tuesday, the NYSE closes at 1pm in observance of Independence Day. Bond markets close early also. Everything market related is closed Wednesday. ("No!", he said to a rather clueless retail broker, the UK does not in fact celebrate the Fourth of July). 

Expect light (domestic) trade most of the week, with many fund managers and traders off to the closest shore, lake front, or mountain.

Econ_week The data flow for the week is on the light side: Monday brings ISM; Tuesday is Chain Store Sales, Pending Home Sales, and Consumer Confidence;  Wednesday is *SPF15. The rest of the week is mostly employment related data: Thursday is Layoff reports, and the increasingly well-regarded ADP Employment Estimate. On Friday, we get BLS’ Nonfarm Payrolls (consensus = 125,000), as well as the Unemployment Rate (4.5%).

Also worth watching this week: How the Subprime Mortgage CDO adventure continues to play out, what we learn about iPhone sales (early rumors of AT&T stores selling out completely have been confirmed), and how China deals with health and safety concerns for their manufactured and exported products; their reputation is rapidly decreasing.

With the Quarter over, we now begin warning season. Pay close attention to what we hear from transports, retailers, semis, and home builders in terms of warnings. My working assumption is that big cap manufacturers, exporters, software, energy, materials, agricultural and consumer staples will continue to put in strong performance numbers.      

Our preview looks to the future: what trading tactics, investing strategies, articles, columns,
blog links and video what might be of aid to investors.

Fire up those mice! — its the Week-in-Preview Linkfest.


•  The Energy Boom Is Just Starting: Demand for crude oil continues to increase with economic growth, while productive capacity grows more slowly. (Barron’s)

Better Ways To Measure Your Portfolio: New tools are helping individual investors build a better yardstick to gauge if their holdings are performing up to par. Most investors compare their portfolio’s performance to that of such well-known stock indexes as the S&P 500. The problem is that the S&P 500 measures just a slice of the overall stock market, and doesn’t reflect the diversified portfolios that most individuals actually hold. (free Wall Street Journal)

• This week, I was part of an intriguing 5 man discussion on a broad variety of asset classes: Knights of the round table: mapping out the markets (June 2007)

Want to Learn How to Trade?

Old Drugs In, New Ones Out:  With drug makers big and small struggling to fill their product pipelines, other biotechnology companies are also betting that pairing old drugs can be a better business than inventing new ones from scratch — which can take years and cost hundreds of millions of dollars, with no guarantee of success. (The New York Times)   

• You can get lost tracking all of the CDO stuff circulating. Rather than waste too many more
pixels on this, these three items have been making the rounds amongst
my hedgie colleagues:

Looking for Contagion in All the Wrong Places (Bill Gross, Pimco)    
BIS warns of Great Depression dangers from credit spree (UK Telegraph) 
Liquidity under threat (FT)

ETFs: Bulwarks of the
:  When Exchange-Traded funds first gained prominence in the 1990s, they were
generally viewed as one of the easier ways for retail investors to build market positions on the cheap. And as hedge-fund assets ballooned after 2000, ETFs increasingly were used by these opportunistic pros to buy or short the market on the quick. Yet, as the ETF market has matured, these funds’ impact has nowhere been greater than on the way investment advisers construct long-term portfolios for their retail clients. ETFs — essentially index mutual funds that trade like stocks on an exchange — are suited to all the above constituencies. Their combination of low cost (for the most part) and liquidity means that they work for the buy-and-hold little guy as well as the trade-a-minute, hedge-fund trigger-puller. Their embrace by investment advisers, however, is arguably far more pervasive.  (Barron’s)

Here comes China 2.0: As Google’s stock slouches toward $600 a share and Wall Street debates the future of Yahoo following the ouster of Terry Semel, it’s easy to forget that there are other Internet stocks out there competing for investor attention. But for those who prefer to take a more worldly view of the World Wide Web, paying attention to areas outside of the U.S. has been incredibly rewarding, particularly for investors that have discovered the booming Internet sector in China . . . And many Chinese Internet stocks have far outperformed America’s big two Net giants this year. (CNN Money)   

Bear Stearns Takes a Longer Look at the Long Tail of User Generated Content

Are S&P and Moody’s About to Change Ratings on $200 Billion of Subprime Bonds?:  Standard & Poor’s, Moody’s Investors
Service and Fitch Ratings are masking burgeoning losses in the
market for subprime mortgage bonds by failing to cut the credit
ratings on about $200 billion of securities backed by home loans. Almost 65 percent of the
bonds in indexes that track subprime mortgage debt don’t meet the
ratings criteria in place when they were sold. (Bloomberg) You may recall that S&P and Moody’s maintained their
investment-grade ranking on Enron until days before the
Houston-based energy trader filed for bankruptcy.
Related:  Banks ‘set to call in a swathe of loans’   

•  Derivatives Market for Economic Indicators Closes What might the significance of this be?  I have no idea . . .


• Gaming the Data: Realtors Are Fudging the Housing Numbers   

Regulators Tighten Subprime-Lending Rules:
The new policy comes after a record number of borrowers with these
loans — so named because they are generally made to consumers with
shaky credit histories — entered the foreclosure process at the end of
2006 and the beginning of 2007. The guidelines require more than 8,000 federally
regulated lenders to underwrite loans based on a borrower’s ability to
make payments on a loan’s adjusted rate, not just its low introductory rate.
(Wall Street Journal)

• A CNN/Money comparo

When bad loans get worse
Where the housing boom goes on 


Fake Steve
thanks all of Apple’s employees for the sacrifices they made for the
iPhone; Also, he rounds up some hysterical quotes from the famous: Rudy: "If you don’t buy an iPhone, then the terrorists have won" and Cheney: "F%$# the iPhone. And f%$# you, too."

•  Microsoft Search Request: Is Google a Monopoly?   

Vertical farming in the big Apple
scientists at Columbia University are proposing an alternative. Their
vision of the future is one in which the skyline of New York and other
cities include a new kind of skyscaper: the "vertical farm." (BBC) See
also The Vertical Farm Project

• The New York Times Magazine goes a Wikipedia huntin’:  All the News That’s Fit to Print Out   

Survey finds YouTube visits larger than rivals combined  (Reuters)

Adobe has Microsoft in its sights (Cringely)


Blade Runner Turns 25: One of my all time favorite films, based on a 1968 science fiction novel "Do Androids Dream of Electric Sheep?," by one of my favorite Sci-Fi authors, is having an anniversary.

• And while everyone was so busy waiting for the iPhone, this
slipped by almost unnoticed: Apple iTunes became the third largest
retailer of music in the US, outselling Amazon.com and Target.

• A short list of the words 1,700 that were first used by Shakespeare   

The Best Barbeque:
True barbecue is a complex, slow method of cooking meat in an enclosed
space with low, indirect heat and smoke. True barbecue emerges from the
"pit" still moist and very tender after as many as 18 hours of cooking.
Its flavor is a mix of the smoke, the sublimation of fat, the
caramelization of meat juices, spices rubbed on it, soaked or injected
into it and sauce basted ("mopped") over it while it cooks.

• The reviews for the first Disney Pixar film Ratatouille have been uniformly outstanding


That’s pretty much it from what was an exhausting week. The weather
outside looks delightful, so I definitely got some top down driving on
my mind. Enjoy the holiday week!


Got a comment, suggestion, link idea? Or do you just have
something on your mind?
The linkfest loves to get email!  If you’ve got something to say, then by all means please do.


* That’s "Sun Protection Factor 15" — You should use sun protection products, because you’re worth it!

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What's been said:

Discussions found on the web:
  1. Old Ari commented on Jul 1

    How many Iphones were bought with credit Cards?

  2. Rob Dawg commented on Jul 1

    …warning season. Pay close attention to what we hear from transports, retailers, semis, and home builders…

    Homebuilders. And just what would constitute an additional warning? “WE’RE ALL GONNA DIE!” Followed by “TWICE!”?

  3. dryfly commented on Jul 1

    The BBQ article near the end of the linkfest was outstanding. I lived in Decatur for a while & ate at ‘Bobs’… plus a number of the others on the list, especially in and around KC & Memphis.

    None are as good the stuff I make in my own homemade pit in the backyard. Might have to burn some meat this week in honor.

  4. dblwyo commented on Jul 1

    My other favorite financial columnist Mr. Jubak has a series of outstanding and non-technical columns on the credit markets and the risks and exposures:

    # Deepening debt crisis hits close to home

    by Jim Jubak, 6/29/2007
    # Can bond market stand to be exposed?

    by Jim Jubak, 6/26/2007
    # Why stocks are safer than bonds now

    by Jim Jubak, 6/22/2007
    # Steer clear of the rotting bond market

    by Jim Jubak, 6/19/2007

    that are well worth following up for those of us who find it easier to think hard thoughts by starting with simpler, clear explanations than some of the trade press. The accompanaying videos are worth the price of admission alone because of the extensions as well as the visual examples.

  5. mitch commented on Jul 1

    Vertical Farms?


    “Duuuude, what if we had, like, a giant growhouse?”

  6. BCS commented on Jul 1


  7. TexasHippie commented on Jul 1

    Barbeque – one of the few things we can do right down here!

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