Thursday, November 29, 2007

Criss Cross Applesauce!

  • We have a MACD crossover on the SP500, Sy. Seasonal buy signal for ya?
  • I remain 100% long.  Nothing to do here.  We're in the monthly strength period, and I think the overall gloomy economic consensus is wrong. 
  • Bonddad gives the market a 20% chance of going up from here, a 40% chance of sideways, and a 40% of the market going down.
  • Day Shark says all the good news is known.
  • Roger is skeptical of the rally.
  • The Lauriston Letter says Once the end-of-month shenanigans are over, there may not be much to hang your hat on this rally.
  • Jason had a buy signal last night.
  • The 0-11 Miami Dolphins are favored to win this weekend against the NY Jets.  “It means that everybody out there ain’t as dumb as they look,” linebacker Joey Porter said. “Some people still believe.”  Uh huh.

America's Next President Reality TV Show

I watched the opening minutes of the Republican YouTube debate last night. WHAT THE HECK IS GOING ON?  Shouldn't the Presidential debates be a bit more serious?  Aren't there real issues out there?  Or is this just one big game show?

That's it.   Why not run our Presidential elections like Dancing with the Stars or American Idol?  What better way to increase voter participation? Lets gather all Democrats and Republicans running for the office of President and house them in a mansion for 12 weeks and televise the thing for an hour every week on Monday nights, with the results show on Tuesday nights. 

Each week, candidates would be shown holding meetings, conducting their business, answering questions, and making statements.  They'd also be interacting with other candidates and American citizens.  America would be asked to vote for their favorite, and the candidate receiving the least number of votes would be eliminated from the contest.

Messages would be texted in via cell phone at $1 per message, thus raising revenue to pay down the budget deficit.  There would also be an ad-sponsered website where Americans could vote for free.  Television revenue would also be transferred to the general fund.

The results night show would be star-studded gala.  Celine Dion would sing songs.  Frank Caliendo would do John Madden impressions.  It'd be fantastic.  At the end of each results show, America would find out who was eliminated this week. 

Twelve weeks into the show, America would be left with only two choices for President.  The Monday night show would take the camera crew to the hometown of each candidate, and show America friends and family.  We'd see the baby pictures and meet the beer-drinking buddies.

Then we'd be down to the final results show...

"Congratulations, you are now the President of the United States!"

Wednesday, November 28, 2007

Two Days in a Row!

  • There's a saying in sports that you shouldn't get too high after a win or too low after a loss.  I think this also applies to the stock market.  But... Wow.  What a day.
  • Barry Ritholtz chimes in on the back-to-back market wins, and adds "The wild swings in the markets, +/- 2%, with violent up 200 or 300 point days  don't typically come in healthy Bull markets -- these spasms are symbolic of  Bear markets." 
  • Ah, the one-day wonder.  And to keep a level head, we saw one of those about 10 days ago or so.  Remember?  Things went south after that.
  • Yeah, but...  We sometimes see wild swings in both directions at inflection points in the market.  That is, when the market is about to change direction.  Monday's close was also 1 point above the closing low in August.  So a big rally off of a "retest" is also bullish. 
  • I think you can paint it however you like and find examples in history to support your cause.  So I suppose I should amend the ending of the previous paragraph to say that it's "sometimes bullish."  LOL.
  • I remain bullish and 100% long here.  I think that the consensus of us being in a recession or one imminently on the horizon is extremely loud at this point.  The bad news on TV and the news media is overwhelming.  So this means that we already know about it.  We know housing is in a recession.  We know there are bad loans out there.  We know financial companies aren't going to collect on some of these.  But that's why C has ALREADY dropped from the $50's to $30. 
  • Today was fun if you're a bull.  If one was a bear and rushed in to shorts on Monday, then things aren't going well so far.  These bears are stuck holding and hoping that their shorts make money.  Or maybe they'll be happy just to get out at break-even.  But the bears may be feeling a bit trapped right now. 
  • And then you have the folks on the sidelines who never know what to do.  When the SP500 was at 1560, they're looking for a dip so that they can buy the leaders.  When the dip comes, then they're waiting for a rally so they can go short the weak stocks.  Then a rally comes and lather, rinse, repeat.  Well, at least money markets are paying a steady 4% or so to these always-waiting bystanders.
  • Oh, and one Seasonal Investor still hasn't given a buy signal to let folks know that the favorable season has begun.  (Sy Harding is still waiting (as of his 11/22 blog entry).  The MACD is close on the SP500, Sy!
  • Helio?  Sheeez.  Mel B (Scarey Spice) was better. 

Tuesday, November 27, 2007

One Day in a Row!

  • Today was an up day, but can the market manage more than "one day in a row" of up? All win streaks begin with the first day, eh coach?
  • I know there are a lot of bearish overtones in the market, especially looking at yesterday's action.  When the market starts up and then closes on a very sour note, that's bearish action. 
  • Opening up the playbook, dust and all, we see that we're closing in on month-end.  So 401(k) money should be dollar-cost averaged in.  (But the reason the playbook is dusty is because it hasn't worked very well lately...)
  • I was out and about today, so didn't make any trades.  Remaining 100% long.  Warp speed, Mr. Scott.
  • Dancing with the Stars?  I have to go with Scarey Spice as the winner. (Mel?)  We'll see how it goes.  Marie Osmond can't win.  That was just pathetic last night.  But who knows how many people in the USA are related to the Osmonds.  The phone banks could've been swamped.  I can't think Helio would win.  I dunno.  I didn't vote, though. 
  • Dolphins-Steelers?  LOL.  3-0.  I watched the first half and am amazed Cameron didn't try to kick the field goal after the penalty (and the missed field goal).  Why not kick it?  How many times are you going to get anywhere near the end zone?  Also amazed Steelers couldn't score... until the end.   Figured they had enough heft to punch it in just running it.  But that field was HORRIBLE.

Monday, November 26, 2007

Market Thoughts

  • That market close was fugly. Pretty much the opposite of what bulls (like myself) want to see. 
  • One of the stocks I've been watching (but not doing anything in) is Citigroup.  In past weeks, it made a new low and then rallied up quite sharply.  Many were worried that they had "missed the bottom," but I thought it more likely to retest the previous low and I was planning on seeing how it reacted once down there a second time.  Down over 3% today.  Now it's at a new low, and the process begins anew. 
  • Others are watching C, too:  Citigroup must be broken up to create value.  My thought is that when we see articles like this, we're near capitulation time on the stock.  But have to keep watching it.
  • The SP500 is 1 point above it's closing low in August!  (You remember August...  Back then, you passed on drafting Tom Brady and Randy Moss in your Fantasy Football league, and instead went with Larry Johnson or Frank Gore.  Oopsie!)
  • So, if we're retesting the August lows, it ought to bounce from here.  Sure doesn't feel like it wants to, eh?  Or maybe we get the capitulation day.  You know, before us on the West Coast have finished our Corn Flakes, the DOW is down 500.  One of those days that sees a massive reversal after the panic.
  • Then there's the Fed.  They meet on December 11th.  The odds are probably 217% in favor of a rate cut. 

Cyber Monday

  • Welcome to Cyber Monday. Why are you reading this blog instead of rackin' up credit card points on Amazon? 
  • Isn't that the big selling point these days for credit cards?  We're all obsessed over accumulating "points."  Did you get any points with that?  How many points do you have?  Only a few more charges until you make the next level in points!
  • The points eventually translate into rebates of some kind, on things like air fare, gasoline, or whatever.  Assuming we all cash in our points.  And I suppose the credit companies are hoping we don't!
  • Shopping stats from over the weekend....  The combined total for Friday and Saturday, $16.3 billion, outpaced last year’s $15.2 billion by 7.2 percent.  Even in the so-called "Worst.  Economy.  Ever."
  • The stock market appeared to be happy with this news early, but then slipped into malaise as worries grew in the financial sector.  Citigroup planning massive layoffs?  Etc.   You know the story with the financials.  Someday, they'll be tremendous buys, but the news headlines on them are sure ugly right now.  Now, the market is basically flatlining.  I remain long here, and contemplating getting more aggressive.  I believe the bull market is alive and well, and we're just seeing wall of worry stuff that typically comes along now and then.  The reasons may be different each pullback, but the underlying fundamentals of the bull market remain intact.  IMHO, anyways.
  • All in all, I was pretty lazy over the weekend.  I never go shopping over Thanksgiving.  No way.  I did get out in the yard some, but mostly watched football everyday, and caught up on TV shows.  I'm a fan of Sci-Fi, so caught up on the Bionic Woman and Journeyman.  Regarding the Bionic Woman, I like Michelle Ryan, but the shows with Katee Sackoff were a bit slow for me.  It's better without her.  I know the folks at AfterEllen love her; but, I'll pass!  (I think her character on Battlestar Galactica is horrible, too). 
  • Journeyman is a good show.  I always fall for a time travel storyline that includes hot chicks.  I'm worried it'll be cancelled, due to the Moon Bloodgood (pictured!!!) curse.  If she's in a show (Day Break), it gets cancelled.  She's an amazing looker.  Your shows aren't being cancelled because of me, Moon.
  • And until I looked up Moon on IMDB, I thought her character's name was Olivia.  It's just Livia!!!
  • You still have time to rack up some points before days end.  Get to it!

Sunday, November 25, 2007

The Christmas Gloom and Doom

Hope everyone had a great Thanksgiving. This is my favorite holiday of the year.  We have a long weekend.  There are football games on every single day.  And, there are lots of leftovers at the ready.

It seems as if every year we're bombarded by media predictions of how bad this Christmas will be.  This year is no exception, as folks are predicting that this will be the worst Christmas ever.

Even the reality of crowded stores is presented as if the consumer is bucking the horrible economic headwinds.

Of course, we'll have to wait and see if this is the Worst. Christmas. Ever. 

So far?  Retailers cheer initial holiday sales.

The nation's retailers had a robust start to the holiday shopping season, according to results announced Saturday by a national research group that tracks sales at retail outlets across the country.

According to ShopperTrak RCT Corp., which tracks sales at more than 50,000 retail outlets, total sales rose 8.3 percent to about $10.3 billion on Friday, the day after Thanksgiving, compared with $9.5 billion on the same day a year ago. ShopperTrak had expected an increase of no more than 4 percent to 5 percent.

Wednesday, November 21, 2007

The Thanksgiving Rally that Wasn't

Who dat say?

There wasn't a Thanksgiving rally in 2000, either.  Uh oh...? 

I remain bullish, but with a gnawing feeling in the pit of my stomach.  One strategy to close the year out is to rotate from a losing stock position into something similar, to lock in the loss and offset gains from earlier this year for tax planning purposes.  Debating on doing some of that, although there are somethings I want to own here and also know that it's unwise to let your investment strategy be guided by tax planning.  But sometimes it makes sense if there is a stock or ETF similar enough out there.

Ballad of Nick Saban

  • Ballad of Nick Saban. Couldn't pass on that one.
  • Dow Theory sell signal!
  • As I type, the market is down about 17 million points.  Or so it seems after week after week after week of poor action. 
  • It's like the market was just unprepared for a tough ULM Warhawks ballclub...
  • Off to meetings.

Tuesday, November 20, 2007

Abby Joseph Cohen: Year-end Rally!

  • Abby Joseph Cohen (not pictured) sees year-end rally. Goldman Sachs strategists say the Standard & Poor's 500 Index will climb 9.7 percent from its Nov. 16 close to 1,600 in the final six weeks of 2007, the steepest gain since 1971.  Cohen, known for her bullish predictions during the 1990s, said in an investment outlook this month that losses for companies hurt in the housing market will be offset by increased earnings at corporations that sell technology and industrial equipment outside the U.S. The 55-year-old strategist says a recession is unlikely.
  • But... Remember Abby Joseph Cohen's 2000 predictions?
  • Jessica Biel is the "front-runner and fan favorite" for the role of Wonder Woman.  "However, from what we can tell, the shapely starlet has pulled a Howard Dean by bowing out of the race."  Don't worry; it's not like they'll be picking Abby Joseph Cohen (still not pictured) for the role.
  • The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day.  Yeah, especially if we keep the bans on drilling up, eh?  Say, wouldn't it have been nice to have started the process to get ANWR up 10 years ago?  Up to one million barrels a day there.  I'm not suggesting that oil is the future; but it is the present.  Until the next thing comes along, we need to drill more.  And isn't it a national security issue?

Monday, November 19, 2007

Stock Market Salmonella

Well. Yeesh.  This is supposed to be a strong period of the year.  It's a short week.  The turkey is thawing in the 'fridge.  You've rearranged your schedule to pick relatives up at the airport.  But the market is totally unaware of our happy annual ritual. Looks like the stock market has not reached an internal temperature of 165 degrees, and we have us a case of Stock Market Salmonella.

I remain long.  I remain bullish.  I rotated into higher beta holdings on friday, and will continue to look for areas that I think will outperform when the bull market resumes.  The Black Box is flashing buy signals on most everything right now.

Lets begin Turkey Week with a look at the gloom, doom and curious goings ons.  People are selling for a reason.  

  • Bill Fleckenstein has his weekend MSN freebie up in No Shelter From the Housing StormFor any folks out there still branding our credit problems "contained," Mr. Money Market has one word for them: not.
  • Todd Harrison at Minyanville looks at the "3-D Dilemna":  You may remember us talking about the 3-D dilemma (dollar, debt, derivatives) for a long time.  This is playing out now, unwinding some of the cumulative excesses that have built through the years.  While there is tremendous risk left in this complicated concoction, the question is quite simple if only anyone knew the answer: containment or contagion.  The simple truth, however, no matter what anyone tells you, is that nobody—not Hank Paulson, not Ben Bernanke, not LLOYD! Blankfein, not any television prognosticator and certainly not I—can possibly forecast the depth, velocity or timing of such an intricate mix.  (But we will try, right Toddo?)
  • CalculatedRisk notes that the Mortgage fall out has more to go.
  • The Bob Brinker Fan Club notes that there is something curious going on with Brinker's audio on demand service.  The hourly MP3 downloads for hours 1 and 2 for Moneytalk on 11/10/07 only have about 28 minutes of audio each, as opposed to the typical 38.5 minutes. Bob's program opening monologue is completely missing from hour 1 (though it is referenced by a caller at minute 10), and instead it starts abruptly with a call to the show.  (Did you see the movie "Dick" where Michelle Williams is recording a 18-and-a-half-minute declaration of love on Nixon's tape recorder?  WHAT'S ON THE MISSING 10.5 MINUTES, BOB?)
  • Greg Mankiw notes that there is income inequality everywhere you look, even the NFL!  (Hat tip to Adam Warner for the link). 
  • Bill Cara's daily commentary, traders can no longer ignore the economic condition of the US.   The primary economic drivers, being consumer spending and business and residential investment, are trending down in the US. There are new reports that the economic slowdown is beginning to affect the commercial real estate sector. Moreover, the US Department of Labor (Bureau of Labor Statistics) reported on Thursday that year-on-year, the overall Consumer Price Inflation (CPI) jumped from +2.8 pct in September to +3.5 pct in October, but the current yield on the two-year Treasury Notes is now down to +3.33 pct and falling.  What this means is that inflation in the US is destroying wealth today, the implications of which are very serious.
  • From Barry Ritholtz, if the US has a recession, who is to blame?  (We're just trying to put it off until 2009, BR, so we can blame Hillary!)
  • When looking at gloom, I'd be remiss if I didn't include a link to FinancialSense.  From Talking Turkey with  PhD Peter Navarro, While retail sales were up slightly, the increase was due to higher expenditures on gasoline. In other words, we are not buying more stuff but merely paying more for our oil based products.  More broadly, this is shaping up to be the worst holiday season in years. Consumers are caught in the vice of rising gas prices and falling home equity as home prices sank back to 2005 levels.  I'm sure some talking heads on the tube will be able to tease out of a declining dollar, rising oil prices, and a flagging consumer some bullish buying opportunity. I ain't going to be one of them. Risk reward continues to favor the short side. For the risk-averse, cash is king

There you have it.  Gloomy enough to make you crawl inside a turkey carcass and wait it out.  As long as you don't mind having giblets as a neighbor...

Friday, November 16, 2007

The 800-Calorie Cup of Coffee in the Room

  • Added more beta to the portfolio this morning.
  • So I'm reading around the web yesterday (blogs) and listening to some financial talk on the radio (via Gary Kaltbaum), and all I'm getting is "BEAR BEAR BEAR BEAR BEAR BEAR BEAR BEAR BEAR."  And yes, I'm using caps because it does seem like they're all yelling at me.  But the good timers are bullish, the bad timers are bearish.  So... Well...  Er... Uh... 
  • Starbucks has shed nearly half its value the past year:

As we saw in yesterday's results, Starbucks has overexpanded and is scaling back store openings. The company cut numbers for the current quarter and all of 2008. They've seen profits eaten up by a rise in costs like milk, while the price rise passed along to customers helped them hit some numbers but also sent people fleeing the stores and is a measure that obviously can't be duplicated without further consequences.

Same-store sales came in at the low end, a rarity for Starbucks. Meanwhile, these two little outfits called McDonald's and Dunkin Donuts have been competing with coffee you don't have to buy on layaway, including fancy-pants concoctions.

  • Barry Ritholtz notes the inflation connection with SBUX (of course he does).  I would also imagine that this year's hike in minimum wages could be affecting some retailers as their forced to raise prices or eat it in their profit margin.  But note in the piece from TheStreet above, that competition is coming in with lower-priced coffee.  So, cash-strapped consumers are not giving up coffee, but realizing that there are more affordable options out there.  In addition, a common one-liner out there is "I need to give up these 800-calorie cups of coffee."  So there could be a competition and calories factor when it comes to SBUX.
  • I hear Kaltbaum (and others) say "Ignore the major indexes!" and that there's a "bear market in stocks."  But if one has a diversified portfolio by holding an index, rather than having a big holding in an SBUX (for example), then the portfolio isn't in a bear market.  Specific stock risk...
  • Adam Warner with some Barry Bonds inspired randoms today...
  • Dolphins welcome back Ricky Williams.  He'll be on the practice field next week, and could play on November 26th.  "I don't know if I had a daughter if I'd want her to date him," linebacker Channing Crowder said, "but as a football player, as a teammate, I love him."

Thursday, November 15, 2007

The Wayback Machine

  • The SP500 is now at levels not seen since Monday, November 12th, 2007.  Seems like forever ago.  Back then, the Miami Dolphins were winless, Alex Rodriguez was shopping for a baseball team that could afford his salary, television writers were on strike, and President George Bush had low approval numbers.
  • The market plunked lower today on.... (insert gloom here).  Well, the folks at Yahoo Finance blame Concern about Consumers.  JC Penney's came out and... Wait.  There are still JC Penney's?  Anyways, they reported and nobody liked what they had to say.  "The J.C. Penney comments in terms of their guidance have sort of put another nail in retail. The assumption is the consumer has given up," said Charlie Smith, chief investment officer at Fort Pitt Capital Group in Pittsburgh. "Three-dollar to $3.20 a gallon gas and house prices falling at 5 percent a year is really a double-whammy the consumer can't overcome."
  • Well, Charlie, it's keeping a lid on GDP, but not creating a recession.  Employment is still strong, and we'll have continued slow growth, low inflation, and potential Fed rate cuts ahead.  I think the market's a buy, Charlie.  Read on!!!
  • Best long-term market timers believe we're in a bull market. from Mark Hulbert (emphasis mine):
The bottom line? None of these nine top timers is bearish. The average equity allocation among all nine is 83%. This is down only slightly from where this average stood in recent months.
This 83% average is good news for the stock market in its own right, of course. But it's particularly bullish relative to the average forecast of the ten stock market timing newsletters with the very worst risk-adjusted performances over the last decade. The average recommended equity exposure among these worst performers right now is just 9%.
In other words, the worst market timers are quite bearish right now, while the best timers are quite bullish. Rarely are we presented with a contrast this stark.
There are no guarantees. But to bet on a new bear market right now, you have to bet against the timers with the best long-term records and with those whose records have been awful.
  • Two Led Zeppelin tickets fetch $170,000 in charity sale.  A man from Glasgow, Scotland, paid 83,000 pounds ($170,000) for a pair of tickets to a one-off Led Zeppelin reunion gig in London on December 10, according to the BBC which organized the charity auction.
  • Core inflation contines to be tame, as the CPI numbers were released this morning.  Overall consumer prices rose 0.3 pct last month, in line with expectations and the same increase seen in September.  Core prices rose 0.2 pct in October, also in line with expectations and the fifth straight month core prices have increased by 0.2 pct. That leaves the three months through August at a 2.1 pct seasonally adjusted annualized rate for core inflation.
  • Hey, does the BLS include Led Zeppelin tickets in the CPI "market basket" of goods and services?  I expect Barry Ritholtz to chime in on this oversite soon!  (Just teasin' BR.  Saw the Led Zep "Mothership" column on your blog earlier...) 
  • "Hey, hey, mama, love the way you move.  Gonna make you sweat.  Gonna make you grove."  (If you're not doing an air guitar right about now...)

Wednesday, November 14, 2007

Ricky (and the Markets)

  • BREAKING NEWS: Ricky Williams reinstated!  Ricky can't play until week 12, FWIW.  Adjust your Fantasy Football rosters accordingly.  And guard your weed. 
  • Miami Dolphins also naming TV talk host Glenn Beck as their starting QB this weekend in Philadelphia.  Wait, I think it's really rookie John Beck out of BYU.  But either way, I'd pick up the Philly defense in your Fantasy leagues, if available. 
  • OK, the stock market.  Blech.  Everything looked okay until the trading day was close to the finish line.  What happened?  Even Yahoo Finance could not rationalize the late day selling, stating, "There was not a specific news item to account for the plunge."  Ah, "Heck if we know."
  • The rally rules (per IBD) are such that we now look for a follow-through day somewhere from the 4th to 10th trading day.  Of course, if the market plunges before that, it won't matter.  I'm still 100% long.  I wouldn't rule out a retest of the previous lows in this thing.  So if we get there then it could mean that I really do rotate into some of the names mentioned in the previous entry.  We.  Shall. See.
  • I'd have liked to see a little more sideways action today, though.
  • Miami writer Armando Salguero:  The John Beck Era Has Arrived.
  • The Future Has Arrived from Phin Phanatic.
  • Poor John Beck.  The weight of Marino's shoulders are on him.  Fortunately, Dan's shoulders are a little lighter since the whole Nutri-systems weight loss thing.  But, Miami fans have big expectations here....

Tuesday, November 13, 2007

Bunch-o-Folks Buyin'

  • The market is surging on news that.... uh, well. Isn't it the same bunch of news we've had the past few weeks?  The market has sold off quite dramatically to lows last seen in August.  The usual scapegoats get the nod for the selloff:  dollar, subprimes, decline of the consumer, real estate recession, energy, etc.  But today, Yahoo Finance can't find a reason du jour, just that "The major indices are trading at or near their best levels of the session following an increase in buying interest..."
  • Today's rally created by a bunch-o-folks interested in buying.  Er, okay.  And, let me guess, a lack-o-folks interested in selling, eh?  Well, we shall see if it holds into the clothes.
  • I remain 100% long this thing.  I mentioned an idea last week about rotating into some of the higher beta names and market leaders to take advantage of the market weakness and buying opportunity.  I didn't do it, but look at 'em.
  • Is PANIC In Your Plan, from Bill Rempel. 
  • Barry Ritholtz notes Barron's Best of Financial Bloggery.  BR gets a nice  mention in the piece.  Barry left out a few blogs mentioned in the article that are worth checking out, including the Trading Goddess blog.  One of my favs.
  • Oil dropping here.  Back down to $91ish.   We all know $100 is coming sooner or later, right?
  • The TV writers go on strike, and who suffers?  The People!  24 cancelled.  Jay Leno in reruns.  I mean, c'mon.  If this goes into the 2008 election year, people are going to take their frustration out at the polls!

Friday, November 09, 2007

Recession-Risk Denial Friday

  • The market is visiting the dominatrix again today and being punished and tortured. Thank you, Mistress.  The reason du jour from Yahoo's market update?  "Recession-risk denial."  Reuters reports that Lehman Brothers'  Chief Global Bond Strategist sees the "deepest correction" ever in structured finance and the current market is in "recession-risk denial". The Chief Bond Strategist also expressed the opinion that the U.S. credit crisis is now worse than the one caused by Long-Term Capital Management.
  • Barry Ritholtz notes the dramatic decline in consumer sentiment.  And who can blame folks for being so gloomy?  With the writer's strike, Fox has announced the cancellation of this season's 24.  I'm a little melancholy myself.
  • Yesterday's early selling was countered with some dramatic buying late in the day.  Friday's tend to move opposite of the weekly trend as traders book profits ahead of the weekend.  My guess is that a lot of shorts may want to cover and book their gains before they go home.  Lets watch the last hour again today to see if the bears can push it down and keep it down, or whether the market bounces back.
  • Doomsayers Dead Wrong About the Dollar's Decline.  An interesting opinion from Mark Dow.  It isn't all bad; there is some upside.  Excerpt:

This kind of market action has encouraged familiar warnings from those "bunker monkeys" who link the dollar's decline to dark visions of a disorderly global collapse.

But the U.S. dollar has been depreciating for about five years in pretty much linear fashion and is primarily a structural phenomenon, not a cyclical one. Moreover, even though the U.S. economy is clearly facing headwinds that are, if anything, likely to intensify, the greenback's decline, in and of itself, is not a symptom of U.S. weakness.

Instead, it reflects other countries finding confidence in their own currencies, and weaning themselves of excessive dependence on the dollar as the only international currency for their savings and transactions. In short, across the globe, individuals, companies, central banks and investors are de-dollarizing.

  • "Bunker monkeys!" LOL.
  • Dr. Jeff also has a blog entry up on Understanding the Dollar.  You are reading Dr. Jeff daily, aren't you?

Is China Bottom-Ticking the US Dollar?

You remember some of the signs of a market bottom or top, right? One often mentioned is magazine covers citing how wonderful or poor the market is.  Maybe a major news release citing that investors are doing one thing en masse.  Because when the crowd all agrees on something, that's usually when people feel safe with the underlying opinion.  But that's often the time that whatever the trend has been, is about to change.

I bring this up because of the new Chinese policy towards the US dollar.  China said they'd diversify away from the US dollar to "stronger currencies."

Isn't this selling low and buying high?  Isn't this what investors do all the time?  I hear and read stories about folks selling their stocks in October 2002 or March 2003 because they don't want to lose anymore and they want to invest in something better.  Same thing in early 2000, when it was a new paradigm in the stock market and folks leveraged up to buy equities.

Is China selling the dollar low?  Have they bottom-ticked the falling dollar?

Just thinking out loud!

Thursday, November 08, 2007

Stock Market Armageddon

It's Armageddon in the stock market as I type. Especially the Nasdaq.  Anxious to see how this thing wraps in the final hour.  I'm still 100% long, and don't believe we're entering a bear market or recession.  But there is fear on the streets.  I'd love to buy fear, if I had some cash!  Might reallocate to higher beta holdings here and some of the market leaders that led from the August bottom.

Call me a crazy fool, but this looks like a buying opportunity to me.

Cross posted at the Trading Goddess.

Wednesday, November 07, 2007

Prince Slams Markets!

  • The market sold off early on the news that the musician currently known as Prince moved to sue fan web sites. Fan sites dedicated to Prince say they have been served legal notice to remove all images of the singer, his lyrics and "anything linked to Prince's likeness." Smooth! Maybe the next time he does the Super Bowl halftime show, he can ask all in attendance to leave for 15 minutes so he can perform alone.
  • No image posted with this entry as a silent protest to the artice currently known asPrince. And to avoid receiving legal notice.
  • Well, in the real world, stocks are visiting the dominatrix today and taking a beating. Maybe some pre-options weekstuff setting up a fantastic entry point in this market. Just thinking out loud. SP500 1490 looks like support, and we're right about there as I write.
  • Oil is volatile, heading over $98 before sliding to $95ish here.
  • "Prince performing at the ampitheater on November 27th. No tickets will be sold. All fans showing up will be asked to leave."
  • From Adam Warner (and others), can you tell the difference between Fox Business Network anchors and porn stars?

  • Wait! What am I thinking?  Was I really going to put up a picture of the musician currently known as Prince anyways?  Of course not!  Instead, I give you the Miami Dolphins cheerleaders.  Miami is 0-8 and in a battle with the St. Louis Rams for the #1 NFL draft pick in 2008. 

Tuesday, November 06, 2007

The Worst Economy of Our Lifetime

  • Those of you who had "Nasdaq up 30 even" in today's stock market pool win! New lows exceeded new highs, despite Drew Carey's plea for legalization of medical marijuana. 
  • Lets face it, the bears are winning the propaganda war right here.  We have the real estate recession, banks imploding, Pakistan, Iraq, waterboarding, the US dollar nosediving to $0, global warming, health care crisis, budget deficits, rampant inflation, and Bush/Cheney still haven't been impeached.  The Bonddad says this is The Worst Economy of Our Lifetime!
  • And while watching the NFL ticket "red zone" channel on my big screen HD TV on Sunday, eating Round Table Gourmet Veggie pizza, and sucking down Coronas, I realized that Bonddad is right.  We do have it worse than any generation since the 1930's.  I remember my grandfather telling me about the days of not knowing where your next meal was coming.  And as I sprinkled crushed red pepper flakes on another slice of pizza, I thought, "That's just like today.  I don't know where I'm going to get my next meal.  Maybe Chinese.  Maybe Japanese.  Maybe Mexican.  Who knows?"
  • But just as I was entering a new level of melancholy, my buddy shouted out "Hey, backup the DVR, you missed a good shot of the cheerleaders."  Cheerleaders in HD has a way of making one forget, at least temporarily, how bad we have it here under Bushitler.
  • Oil was briefly over $97 a barrel.  Enough of this flirting with $100.  Lets just do it so we can get on to the next milestone.  I say everyone get in their Escalades tonight and burn a few tanks of gas.  At 13 mpg city and 17 mpg  highway, lets keep it to the surface streets.  We can do it, folks.  Fill those tanks up early and often.  Focus!
  • Fantasy football note:  No reason to pick up Dolphins' rookie QB John Beck.  Cleo Lemon has been named the starter.  At 0-8, why would the Dolphins risk messing with the mojo?  Now THAT may be the worst franchise of our lifetime!

Monday, November 05, 2007

Monday Night Snoozeball

  • The Baltimare Ravens look pretty hapless out there. This is an ugly Monday Night Football game.  
  • Market thoughts?  I remain bullish here.  I think we're going higher.
  • All Citigroup all the time.  This is a Google blogsearch for everything Citigroup.  Just in case you weren't overwhelmed by the media coverage today and wanted more.  What's an $11 billion write-down among friends?
  • At some point, and this is a familiar tune, Citigroup is going to be a great buy.  As are the financials going down in sympathy with C.  Not yet.  Let those who want to sell down here sell.  We have tax planning stuff to go through and folks may be selling losers.  And banks are quite the losers.
  • Ravens look bad.  Have I said that already?
  • Greg Mankiw writes about the health care crisis:  Don't be fooled with statistics.
  • Well, except for this Monday Night Football game.  Right, Greg?  Statistics here are not lying.  It's 28-0 in the 2nd quarter.

Sunday, November 04, 2007

Sunday Night Live

  • Jim Cramer was at the Cowboys vs. Eagles game tonight. Looks like the Eagles were a "sell, sell, sell" Jimmy.
  • More recession knuckleheads over at Financial Sense.  Now these folks are pretty much always doom and gloom.  Broken clocks they are.  Always an interesting read.  Here's their quote from Friday:  "Thus, when one stops long enough to actually look at the facts, it is clear that the Fed wants you to believe that they can control the equity markets by cutting interest rates. This is simply not true. The greatest tool the Fed has in this regard is the perception that they have created."
  • I think bearishness always sounds more intelligent than bullishness, but remember that the market does go up about 2/3rds of the time.  Being perpetually bearish will make it difficult to outperform the SP500 over a long period of time. 
  • I think the bears are an interesting read.  Especially now.  I'm willing to be convinced, but the arguments they have seem a bit tired.  If we saw the Fed really tightening the money supply or the government coming at us with a major tax hike, then I'd be worried about economic growth.
  • Greg Mankiw goes behind the numbers of the US Health Care Crisis
  • Lots of folks are eager to predit a bottom in the real estate recession.  Sacramento Landing notes that many dates have come and gone, but they're followed up with new dates.  I think we'll have to see declining inventory on the market before the prices rebound.  That'll be the sign.
  • The Confusing Economics of Free Content
  • My fantasy football team visited the dominatrix today.  My team was spanked, whipped and tortured.  

Saturday, November 03, 2007

Early Linkages

  • First and most importantly, before the links, I think the Patriots are going to spank the Colts. It's a revenge game after last year's playoffs.  The Patriots have upgraded their offense tremendously.  Belichick would like to score about 200 points in this game.  Unless the Colts can match the Pats score for score, ie no punting whatsoever, the Pats are going to cruise.
  • (Contrarian alert on that game?  Patriots seem like an obvious consensus.  Who is taking Indianapolis???)
  • Dr. Brett is cranking out some quality posts.  Recent ones include So You Want to Trade for a Living.  His first bullet is "Make sure you're adequately capitalized."  And I thought of the old one-liner, "What's the quickest way to make $1 million dollars?  Start out with $10 million dollars."
  • Another recession knucklehead over at SCSU Scholars.  As their number-one bullet they mention consumer sentiment.  Sheez.  Talk about the weak sister of indicators.  Then they say, "Some think the recession might occur this quarter, but I think the majority view is that, should one come, it's more likely to be in the first quarter next year."  Well, two quarters of negative GDP required, right?  So that would mean it starts in this quarter or next quarter for them to be right.  Good luck with that prediction. 
  • A slow economy does not a recession make.   A slow economy is a slow economy.  Energy and real estate are dampening growth, but not stopping it.  Sure seems sustainable, though.  Low unemployment and low inflation (uninflation!), and the Fed is cutting rates.
  • Kevin Stecyk continues to blog about the market, and take pictures of hot chicks.  Nice gig, KS.
  • Bernie writes that gold and crude soar on strong economy and weak dollar.  Lots of people complain about the low dollar, but do they realize how that helps our exports? 
  • Cross posted at the Trading Goddess blog, where everybody knows your name.  And you're always glad you came.

Friday, November 02, 2007

The Recession Knuckleheads

  • The recession knuckleheads are WRONG! What is it about low inflation, low interest rates, and low unemployment that have them so bearish?
  • It Hurts So Good, folks!   (In Edit: The John Cougar Mellencamp  video from YouTube disabled for embedding.  Click here to watch/listen.  I guess I'll use the bull picture instead!)
  • Recession probability down.
  • Barry Ritholtz tries to show some inflation pressures on the economy.  I just wonder if Barry has taken a look at core CPI year over year?  And what about the PCE year over year, Barry?  That's the Fed's favorite, right?  Under 2% year over year.  So, Barry cites all these anticipated price hikes, but they haven't happened yet and we'll see if companies have the pricing power to implement price hikes beyond the average of 2-3%.
  • Higher energy prices are helping to keep inflation low and the economy from overheating. 
  • Love the John Cougar Mellencamp?  LOL.
  • Ben Bernanke action figure!  I'm nickin' the pic for future use.
  • 50th consecutive month of job growth, by the way.
  • Is the economy as bad as YRCW says?
  • BREAKING NEWS:  Looks like Gary Kaltbaum is growing his mustache back.  (Watching Fox Business Network).  LOL.
  • So on TNT's NBA games last night, Dirk Nowitzki was asked about Mark Cuban's Dancing with the Stars stint.  TNT kept showing the dancing clips and having some fun at Cuban's expense.  Pretty funny.  I think I'll just set the DVR to record the NBA on TNT, and skip through the games to listen to Charles Barkley et. al. before, in between, and after the games. You know?  That's good TV!

Thursday, November 01, 2007

Free Candy Hangover

  • Lets ignore the market selloff today for just a second or two.
  • I'm reading Barrons online right now, and one coumn says to look for a rate cut at the December 11th Fed meeting, and the column next to it says that future rate cuts aren't likely.  A little Point-Counterpoint, Jane?  (You ignorant slut!)
  • So the slide is being blamed on earnings, financials, and perception that the Fed is done.  Just to counterpoint that (Jane!) inflation is still tame and with energy prices rising it means that consumers will have less money to spend at the malls.  Yes, foeclosures are hurting the banks.  But lower interet rates will help.  Earnings seem to be mostly okay.
  • What, me worry?  Not here!
  • Not too many trick or treaters last night in my hood.
  • I keep forgetting the NBA season has started...