Linkfest: Week in Preview

Yesterday, we looked at the week that was. Today, we preview the upcoming market events that may be stock and market movers.

Its a relatively quiet week in terms of economic releases, backloaded for Friday: Retail Sales,  Import/Export prices, and Consumer Sentiment are all set free the last day of the week.

78_econodayIts a busy week in terms of Fed chatter: Big kahuna Ben Bernanke chats about inflation on Tuesday, with a slew of other Fed officials scheduled to follow him; Philly Fed Prez Charles Plosser on
Wednesday; Fed Gov Randall Kroszner and San Fran Fed
Prez Janet Yellen both opine on Thursday.

Earnings season kicks off in earnest Monday, with several big names scheduled to report: Alcoa leads off the hit parade, followed by Yum Brands report Wednesday.

Several Retailers are reporting June sales on Thursday, with the
outlook fairly mediocre. Look for 3 explanations as to retail weakness: Rising gasoline prices, slowing consumer spending, and a calendar shift, which moved Memorial Day
into May (from June) this year. Macy’s, J.C. Penney, Kohl’s and Saks have all forecast a
decline in June same-store sales. (We already heard from Target last week). The WSJ notes that "Weakness in June isn’t a good thing for the industry, as June frequently ranks as the second-biggest month of the year for retailers behind December."

Genentech reports Wednesday, and Marriott releases earnings Thursday — given the takeout of Hilton Hotels, you can bet the conference call will be chock full of questions about private-equity. On Friday, General Electric reports Q2 results.

Here’s our roundup of interesting — and actionable — articles that can impact your investing in the coming months: Get busy!


Why we bet on stocks:
Is historical performance the only reason for believing that stocks
will always outperform other asset classes in the long run or is there
a more solid basis for expecting that stocks will generate superior
long-term returns?  (Money Magazine)

These Natural Gas Stocks Are Big-Time Bargains:
What’s the hottest energy play in the lower 48 states? It’s not
Louisiana. And it’s not Texas.Try the Rocky Mountains.  (

Sears Responds to Its Critics With a Call for Patience:  Sears Holdings has prospered as a company, but the sales performance of
its chains has continued to decline. As the retailing industry has
grown increasingly competitive, Sears Holdings has poured relatively
little capital into its stores and has cut back on marketing and other
expenses. The low level of spending has been particularly vexing for
mall operators, analysts say. Once the nation’s leading retailer,
Sears has 861 mall stores, 518 of them owned and 343 of them leased. .
. . During the fiscal year that ended on Feb. 3, sales at United States
stores open for at least a year decreased 6.1 percent at Sears and 0.6
percent at Kmart, the company reported. During the first quarter of
this year, sales were off 3.4 percent at Sears and 4.4 percent at
Kmart. (New York Times)

Message in a Bottle: Thirty years ago, bottled water barely existed as a business in the
United States. Last year, we spent more on Poland Spring, Fiji Water,
Evian, Aquafina, and Dasani than we spent on iPods or movie
tickets–$15 billion. It will be $16 billion this year. Bottled water
is the food phenomenon of our times. We–a generation raised on tap
water and water fountains–drink a billion bottles of water a week, and
we’re raising a generation that views tap water with disdain and water
fountains with suspicion. We’ve come to pay good money–two or three or
four times the cost of gasoline–for a product we have always gotten,
and can still get, for free, from taps in our homes. (Fast Company)

A Challenge to Gene Theory, a Tougher Look at Biotech: The $73.5 billion global biotech business may soon have to grapple with a discovery that calls into question the scientific principles on which
it was founded. Last month, a consortium of scientists published findings that
challenge the traditional view of how genes function. To their surprise, researchers found
that the human genome might not be a tidy collection of independent
genes after all, with each sequence of DNA linked to a single
function, such as a predisposition to diabetes or heart disease. Instead,
genes appear to operate in a complex network, and interact and overlap
with one another and with other components in ways not yet fully
understood. According to the institute, these findings will challenge
scientists to rethink some long-held views about what genes are and
what they do. (New York Times)

Xerox’s inventor-in-chief:  Xerox has become an innovation power again, producing new technologies
that can read, understand, route, and protect documents, among other
things. Leading that effort is Vandebroek, 45, the company’s chief
technology officer since late 2005. Her task is to keep Xerox at the
leading edge of infotech progress in ways that make shareholders
richer. (Fortune)

Calendar Effects & Trading: Full-year and month-by-month performance of the stock market  (CXO Advisory Group)

They never seem to learn, do they? Floyd Norris utterly demolished Donald Trump and the foolish backers of his publicly traded casinos: "All told, ignoring the warrants, a shareholder who invested $10,000 in Mr. Trump’s empire when the casino company went public in 1994 would now have about $636. That performance came at a time when the casino industry was blossoming across America, as more states accepted more gambling as a way to raise revenues. I counted five other casino companies that went public in the mid-1990s. All made money for investors in the initial offering. The champion was Penn National Gaming, which will take your bets in West Virginia, Pennsylvania, Mississippi, Louisiana and in Ontario. It went public in 1994, and a $10,000 investment would now be worth about $724,000. Over all, an index of casino stocks is up 268 percent since June 1995. Trump investors lost 93 percent. (New York Times)

Adjusting P/E Ratios for the Profit Cycle: Are the index profits earned over the most recent 12 months a true
measure of the earnings power of the index? Or are the average earnings
earned throughout the ups and downs of the business cycle a better
measure? Arriving at the true measure of earnings power is important,
Graham counsels, because that’s the figure to use when calculating a
proper P/E ratio. (Hester/Hussman)

As ETFs Seek Niches, Risks Rise: As exchange-traded funds have rocketed upward on the
sales charts, far outpacing the sales growth of mutual funds, they also
are showing up in disproportionate numbers on another set of charts:
performance winners and losers. (Wall Street Journal)


The Wall of Worry continues to build:

 Oil, Oligarchs and Opulence: The "Red Ritz" is in many ways a metaphor for the New Russia. Built at a cost of $350 million by Kazakh and Turkish investors, it is probably
one of the most expensive hotels in the Ritz chain, with some rooms at
$1,000 a night and a suite that goes for a cool $16,000. Under the able
direction of a German general manager, it is staffed by hundreds of
eager, young English-speaking Russians. The driveway in front is
stuffed with shiny black Mercedes, Audis and BMWs
that shuttle global executives and minor Russian oligarchs, along with
their security contingents, around the traffic-choked city. (Washington Post)

How Is Retail Doing?

Forget Florida; Central America the New Hot Spot for Retirees: Many Central American countries are betting U.S. baby boomers will be the generation that globalizes retirement. They’re gearing up by offering financial incentives that could make retiring internationally a smart financial move for some individuals. The same advances that allow companies to do business across borders are making it possible for people to live out their golden years in another country. "Technology and travel developments have put us in the position to do more with our lives while still staying in touch," says Susan Black, director of financial planning for eMoney Advisor.  (   


•  Homes vs. Offices: Office space is hot as a pistol; Homes, well, not so much.

"The World’s Most Hated Blogger"  interesting tale of the guy behind

Truly Al-ARM-ing "Based on the share of ARMs in some state
of negative equity at the end of last year and the decline in home
prices so far in 2007, a stunning $693 billion in mortgage loans are
already in the red. Assuming lenders are able to recover 70% of those
assets — which seems optimistic given the massive amount of housing
inventory yet to be unwound — that means mortgage lenders are already
grappling with $210 billion in outright losses."
(Barron’s)  if no Barron’s sub, go here.

Florida foreclosure future shock:
A tidal wave of foreclosures may be heading toward Florida, if you
judge by the number of homeowners looking to get rid of their homes as
fast as they can. (CNNMoney)

New Scheme Preys on Desperate Homeowners: With the housing market in decline, financial predators are finding yet
another way to take advantage of people who fall behind on their
payments. The schemes take various forms and often involve promises to
distressed homeowners of cash upfront, free monthly rent and a chance
to retain their houses in the long run. But in the process, someone
else takes over the deed, borrows as much as possible against the value
of the house and pockets the cash. And, almost always, the homeowners
still end up losing their homes. (New York Times)


Today’s Political links plays right into Doug Kass’ warnings about a much less market-friendly Congress/White House in the near future:

Young Americans Are Leaning Left, New Poll Finds: Young Americans are more likely than the general public to favor a government-run universal health care insurance system, an open-door
policy on immigration and the legalization of gay marriage, according to a New York Times/CBS
News/MTV poll. The poll also found that they are more likely to say the
war in Iraq is heading to a successful conclusion. (New York Times)

Ratings for Bush, Congress sink lower:
In a remarkable span, the approval that people voice for the job Bush
is doing has sunk to record lows for his presidency in the AP-Ipsos and
other polls in recent weeks, dipping within sight of President Nixon’s
levels during Watergate. Ominously for Republicans hoping to hold the
White House and recapture Congress next year, Bush’s support has
plunged among core GOP groups like evangelicals, and pivotal
independent swing voters. (Associated Press) See also A President Besieged and Isolated, Yet at Ease (Washington Post)

Politics 2.0 is a fascinating look at how the internet is changing the political
landscape in America (Mother Jones). I had no idea that PayPal was
originally a conservative, anti-fiat monetary concept, or about their
office religious practices. Rather amazing.


Is SV souring on India?: Across Silicon Valley, some technology companies, particularly start-up and midsize ones, are beginning to turn away from India for low-cost labor to do sophisticated tech work. The lure was the wage level: just a quarter of what experienced Silicon Valley computer engineers make. Then Indian salaries soared. Last year, some engineers in India made about half of Silicon Valley levels. By early this year, it was 75%. "Taking into account the time difference with India, we weren’t saving any money by being there anymore." (free Wall Street Journal)

iPhone-Free Cellphone News: The other big news in the mobile telephone sector (New York Times)

CEOs Must Be Designers, Not Just Hire Them. Think Steve Jobs And iPhone:
Innovation, design, and technology are all flowing into one another to form a single river of roaring change radically altering our culture, and especially business culture. (BusinessWeek)

EBay wants a fight, but Craigslist won’t put up its dukes: Online auction site eBayThe Globe and Mail) launched a U.S. version of its Kijiji online-classified service this week, after more than a year of
focusing on building that business in countries such as Germany,
Britain and Canada (where it is the leading classified service, ahead
of U.S.-based Craigslist). You might think that such a move would make the shareholder meetings
at Craigslist a little awkward, considering eBay owns a 25-per-cent
stake in the service. And no doubt it would make things uncomfortable –
if Craigslist had meetings (it doesn’t), and if founder Craig Newmark
and chief executive officer Jim Buckmaster gave much thought to the
competition (they don’t). (


• For the Fourth of July, we present: The Stylistic Artistry of the Declaration of Independence   

• VERY FUNNY: Straight dope from Fake Steve Jobs:
For months now, one of the best-read blogs in technology circles has
been the starkly funny, pull-no-punches Secret Diary of Steve Jobs.
Otherwise known as "Fake Steve Jobs (FSJ)," the author–who writes as
if he is, in fact, Steve Jobs, uses his blog to poke vicious fun at
anything Apple, technology or Silicon Valley, all the while claiming
the mantle of the marketing genius that is Steve Jobs. His motto?
"Dude, I invented the friggin’ iPod. Have you heard of it?" (C/NET)

The 20 most annoying business expressions (Houston Chronicle)

Now he tells us, after the holiday weekend!  A new study finds that most sunscreens don’t offer sufficient protection. How to find the right one.  Sizing Up Sunscreen (Newsweek)

How to CG food

How to Kill a Lobster   

That’s all from what’s been a gorgeous week out on the East End of Long Island — and where continuing  connectivity problems means this is being beamed to you from Starbucks (SBUX)!



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What's been said:

Discussions found on the web:
  1. drsqueeze commented on Jul 8

    That Casey Serin/foreclosure Wikipedia parody site is hilarious. That anybody would put that much effort into documenting the stupidity of a character like Serin is truly what the internet was made for.

  2. Winston Munn commented on Jul 8

    Nice article on biotech – and a reason I’ve avoided these stocks. The human genone is simply too complex and intra-connected to be a candidate for slice-and-dice therapies.

    As one research paper I read about 5 years ago put it, “We don’t know exactly what will happen. It’s like introducing rabbits to Australia.”

  3. S commented on Jul 8

    Did I miss the links about the Live Earth concerts in either of this weekend’s

    Roger Waters still kicks after all these years.


    BR: Nah, there was so much coverage of it, it would have been redundant . . .

  4. Kevin Rooney commented on Jul 9

    Here is the punchline for investors from the article about gene tech:

    “Evidence of a networked genome shatters the scientific basis for virtually every official risk assessment of today’s commercial biotech products, from genetically engineered crops to pharmaceuticals.”

    Longer-term and wider-scale, here is the even more interesting part:
    “Yet to date, every attempt to challenge safety claims for biotech products has been categorically dismissed, or derided as unscientific.”

    It is not a question of venality but of obsolescence on a society-wide scale. The structures we will someday evolve for organizing intellectual production will put a huge priority on integrity.
    When the National Association of Realtors announces that the housing market has bottomed out, again, the reason it is funny is not because their behavior is unusual, but because is it so typical. Because we can sense how poorly our current way of organizing societies fits with the new capacities we are developing. This is the first step.

  5. MikeF commented on Jul 9

    Here are my three candidates for the most annoying overused trendy business jargon list:

    1. traction (used to apply to tires only)
    2. metrics (what ever happened to statistics?)
    3. learnings (seems to have replaced knowledge in “consultant-speak”)

    Kind regards, MjF

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