- The stock market has had a horrible year. No way to sugar coat it. There really hasn't been much good news. But why focus on the negative? It's not healthy!
- The last few days of the year are always a point of reflection on the year past. I don't much like the "best of" lists, but plenty of them are out now. I'm just going to put one on my list: Michael Phelps (not pictured).
- I think we should look back and reflect on the success of Michael Phelps. What a performance at the Summer Olympics in China. Outstanding. He is an example that we should all strive for. Hard work and dedication is required to excel at whatever you do.
- Work has finaly let up for me here at the Fun Factory. It's been a hectic few weeks wrapping up a year-end project. Implementation is happening now, and I'm sure there will be some issues to deal with over the next few days. Always something.
- I'm taking off early to watch some bowl games and drink a few Coronas. Quite a few.
- I hope you put an exclamation mark at the end of 2008 and have a very happy New Year's Eve. You've earned it. Enjoy!
Wednesday, December 31, 2008
Sunday, December 28, 2008
Nothing good happens with war in the Middle East.
Just as the prophets predict lower oil prices, craziness erupts in the Middle East.
I think the violence is horrible, but there seems no end to the hatred there. Maybe best to shut off the cameras and leave them be.
It would be nice if we had plans to build nuclear energy and use natural gas for some percentage of our cars to end reliance on energy from that region.
Anyways, fear is now back in style for oil prices.
Saturday, December 27, 2008
Ah, the experts are commenting on oil.
When oil was $147, they said it was going to $200. Now that has fallen, they say it is going lower. One thing for sure is that this extra money in folks' pockets will be spent. Don't discount the effect of that in 2009.
Friday, December 26, 2008
Sorry for the light posting the past week. I've been in the office quite a bit as we're gunning for a project implementation next week. Combine that with Christmas, and there has been absolutely zero time for anything else.
A belated Merry Christmas!
I anticipate it will be extremely busy here the next few days, so let me in advance wish you a very Happy New Year!
Tuesday, December 23, 2008
The bad news continues. Home sales. GDP. Whatever. Doesn't matter. It's gloomy out there. "The bottom line: Bah humbug. Recession, recession, recession," said Jennifer Lee, an economist with BMO Capital Markets in Toronto.
I've been working weekends and evenings lately trying to wrap up a project by year's end. Outside of that, I've been out shopping. I can say that the malls are empty after 8pm. I remember long lines at Best Buy in year's past. Not this year.
I'm more upbeat and positive than the news headlines. I've been that way for quite some time. The one thing in the headlines that bothers me is that we've taken our eyes off the energy ball. I don't think energy prices will remain low for long, and the issue of our importing energy and high prices will be back.
No Santa Claus rally yet. I remain long and patient.
Thursday, December 18, 2008
- Very busy at work. One of those "eating lunch at the desk" and "working into the evenings" kind of weeks.
- A quick check of the markets shows that it's just plain ugly out there today. Yahoo Finance gives the credit to GE, as it had its credit outlook lowered late in the session. The announcement induced selling pressure.
- And oil down: Though OPEC announced yesterday production cuts intended to bolster prices by realigning supply with demand, oil prices have gone on the slide this week. January crude fell as much as 10.2% to take out a multiyear low of $35.98 per barrel before settling at $36.74 per barrel
- Everything on my board is red, except for treasuries. Looks like the Fed is creating another bubble there, eh?
- Bush mulling "managed bankruptcy" in automakers. Compared to a "disorderly bankruptcy." What the hell does that mean?
- iPhone app... Pull my finger. Guess what that one does? Also try looking up "fart" in the app store. Yeah, those made it in the app store.
- More worry over Steve Jobs' health. I don't own $AAPL. Not because of that, but because of declining financials. But the Jobs' rumors don't help.
Tuesday, December 16, 2008
- President elect Obama names his energy team. Pictured. LOL. Maybe not. The team includes Nobel-prize-winning physicist Steven Chu as Energy secretary and former Environmental Protection Agency head Carol Browner in a newly created position to coordinate energy and climate policy.
- Maybe Steven Chu will be pro-active on nuclear power.
- The case for bonds. Investment-grade bonds, anyone? Anyone? Buehler?
- Does Toyota want GM to be saved? An interesting take.
- I don't want GM to go under. I can't see how they can continue to operate as they've been, losing billions a month. But I'd like to see them stay around. Maybe they could build some natural gas cars. Just a thought.
- Downloaded slydial for the iPhone. Can leave a message for any cellphone, rather than dialing and risking talking to an actual person. Very handy when you want to give a message, but don't feel like having a conversation. LOL.
- Chrysler has a plan to beat the Chevy Volt, in the battle of electric cars. I hope the plan includes building nuclear power plants because those cars are going to need a lot of electricity to charge those batteries.
- Is the Santa Claus Rally just a bunch of nonsense? From Mark Hulbert.
Monday, December 15, 2008
- Today's market sell off brought to you by "uncertainty," according to Yahoo Finance. That and the back-and-forth over the Big 3 bailout. Will it happen? Won't it happen? Turn in tomorrow for another episode of "As the Automakers Turn."
- That and the impact of the Madoff scam. In a Connecticut town, local officials scrambled to get a handle on damage to pension funds held for its police officers and firefighters. A Massachusetts charity announced it was shutting down. In New York, a distinguished economist feared he had lost his $2.2 million nest egg.
- And to think, I was watching Boiler Room tonight! (That picture is of Nia Long).
- The Madoff Scheme from the NY Times.
- Jewish philanthropies shut down over Madoff's scam. The Chais Family Foundation, a California-based charity that distributed about $12.5 million annually, was forced to shut down after investing — and losing — all of its money with the one-time wizard of Wall Street.
- Madoff ensnares victims from Paris to Tokyo.
- The Fed to cut rates tomorrow?
- Speaking of, have you seen the home loan rates? Very low. Rates are getting to the point where people might consider refinancing and locking in lower rates. That could provide economic stimulus.
- Combined with lower fuel costs.
- Although the fuel costs? Won't be low for long. Remember that as the government seems to have taken their eyes off the real emergency. We need nuclear power. We need to convert some percentage of cars over to natural gas. We need to control our energy future.
What is Washington, D.C. cooking up in response to the retirement savings crisis? With a new administration in town, there's a good chance some reforms may take place.
The scariest one on this list is:
A new national savings plan
Proponents of a government-backed retirement savings account that would guarantee an inflation-adjusted return of 3% initially got little support. But recently one of its biggest backers was asked to testify on Capitol Hill - a sign that the plan is getting serious attention.
Sounds like one of those crappy insurance products that guarantee that your savings will never go down. But this would be run by the government, so it'd be even crappier.
Sunday, December 14, 2008
- Maybe the US markets will have a nice monday. Looking at the calendar, it is options expiration week. It is also December. I believe there is also a cup and handle on most of the indexes. Making the handle now, and a big volume move up would definitely have the IBD folks rushing in. I think. Those folks like follow through days, and they love cup and handles. Come on, Monday!
- I think a strong day tomorrow would set us on our next leg higher of whatever this is. New bull market. Countertrend rally. Whatever. And that's my technical analysis opinion of the day. Worth it's weight in pixels!
- I know. Lots of negative press out there. I have a solution. Don't read the press.
- Sometimes I wonder how Playboy's The Girls Next Door organizes the TV show. In tonight's "brand new" show, Kendra Wilkinson organized a softball game with Playmates. When was this filmed?
- Free books for your iPhone. Some best sellers...
- I was blasted out of the Fantasy Football playoffs today. While I would have rather won, it's a relief it's over. My sundays are back. No more scouting injury wires or looking at player matchups. It's over.
- Asian stocks up on hope of a US bailout of automakers.
- Scandal-plagued Illinois Gov. Rod Blagojevich will not resign Monday. It'll be interesting to see how this plays out as the investigations go on. I get the feeling this guy would say anything to try to save himself.
- This is what a really bad recession looks like.
- I think the head cold is done. Mostly. Not coughing much today.
- Uh-oh, gas prices on the rise. Just as the US is forgetting about any notion of expanding domestic production or at least being able to tap into that if needed. Enjoy the under $2 gasoline while it lasts. It will go back up, and we're not willing to do anything about it except let it become a crisis again.
- Dumb us. We need nuclear power for electricity. Don't forget. Fossil fuels and coal are nasty and dirty. And oil is imported from countries who use the money we send them to to naughty things.
- Red Hawk Casino opening up in the Sacramento area this Wednesday Just outside of Shingle Springs. Will I be there? What do you think!?
- Major accomplishment this weekend? Powering through season four of The Office and the first ten episodes of season five. I am now up to date and the DVR is set to record all new shows. Phew. It was hard work, but I did it!
Friday, December 12, 2008
Technology spending from Uncle Sam. That's why the market advanced! Yeah, sure.
No changes in my market view. Bullish!
And thinking Bush just wants to kick the automakers issue down the road a few months.
Sorry for the lack of posts this week. Battling the head cold and being beaten at the Fun Factory. TGIF.
Scientists have agreed that that earth has cooled the past ten years, that ocean levels have fallen over that period, and the ice caps have added ice. So has the climate change thing completely divorced itself from science and found a new lover in politicians?
UPDATE: Which side are the scientists on?
-- Post From My iPhone
Thursday, December 11, 2008
Today's market crash brought to you by the US senate, who are too stingy to hand out free cash to the auto companies.
The jobless claims weren't pretty, either.
Wednesday, December 10, 2008
- Stocks finished higher today. Yahoo Finances seems stuck on the idea that the market is moving on auto bailout gyrations. I don't think it's all that. It wasn't financials today as much as energy and basic materials.
- Still battling the cold, but feeling better.
- GOP's Republican Senators may oppose auto bailout. "People realize that this bill is an incredibly weak bill, (and) is the product of an administration that wants to kick the can down the road and let somebody else deal with it," said Sen. Bob Corker, R-Tenn.
- Oh, this is nice: Pay raise for district court judges tucked into $14 billion automaker bailout plan. Thank you, Senate Majority Leader Harry Reid, D-Nev. The raise -- labeled a cost of living adjustment -- would bring U.S. District court judges up to par with members of Congress, who will receive an almost $5,000 boost on Jan. 1. District judges and lawmakers now earn $169,300 a year but are expected to be awarded a 2.8 percent raise next year, said Dick Carelli, a spokesman for the Administrative Office of the United States Courts.
- Is this the right time for bonuses and raises?
- Green Jobs or Green Unemployment? Watch Europe!
- California Governor Arnold Schwarzenegger warns of "financial armageddon" in California. "I'm frustrated," he said. "We have a system where we rely on the 120 legislators to make those decisions. I cannot make them stay here, I cannot lock them into the building, I don't have those kinds of powers. "Believe me, I would do it otherwise."
- 43 states in financial trouble.
- Trouble in the Apple App Store. Seems like the bulk of the apps purchased are in the 99-cent to free range, as folks don't want to spend money on apps. So companies producing apps are having trouble funding their development. I have to admit, I only have a few paid apps and tons of free apps. Once folks are used to free or 99-cents, everything else looks like a fortune.
- "$2.99? Are you kidding me? What does that app do, mint gold?"
Tuesday, December 09, 2008
Well, it happened. Zicam is holding some symptoms at bay, but it happened. Caught the cold. Working out anyways. F' the darn cold. Or flu. Whatever the heck it is. Went to work today. Should've worked at home, but just too much to do. I hate "those people" who bring in germs to the office place, but I just had to go in. I guess I'm one of "those people," too.
Who knows why the market does what it does these days? It moves in big percentage moves. The news is always bad these days, so there's no positive catalyst there. If anything it's just "worse and worser." We know the companies are reporting bad numbers and cutting staff. That's sort of priced in, as employment is a lagging indicator. But I always fear Paulson saying something dumb on top of the expected dreary news to make matters worse. Well, or "worser."
I'm bullish, but wary of a retest. I remain 100% long. If we should retest I'd probably get more aggressive depending on market internals. But I'm pretty aggressive now as it is. Read the previous blog entries below for the why.
I think the DOW came close to touching the 50dma today and bounced down. I'd imagine we'd hang out here for a bit before busting through. If that's what the market would do. And when I say "hang out," I mean AT LEAST 5% intraday swings around the 50dma, of course... Good grief!
So the Illinois governor is in custody. Gawd. I don't care if he's Democrat, because plenty of Republicans are guilty of corruption, too. It seems as if the whole political process is corrupt, and there's nothing we can do about it. People talked about socialism and communism during the election, but it feels as if we're already there to some degree.
Obama is going to meet with Hoaxist of The Decade, Al Gore, to talk about Global Warming. Sigh. In addition to being corrupt, politicians also seem a bit dim between the ears.
Fantasy football? I'm in the playoffs in one league, out in the other. At least in the latter I had the pleasure of being a spoiler and knocking a contender out on the last week of regular play. Sad news is that in a 14-team league I'm scored the 3rd highest in points, but just lost too many close ones head-to-head.
Who'd they kill off in Heroes? Uh, hint, hint... Kristen Bell.
Finished season 3 of The Office. On to season 4. I knew Jim was going to dump Karen for Pam. I suppose we all did. It's like the Cheers Sam and Diane thing, huh? Now I suppose some fights are coming. Don't spoil it for me. I may be in a streaming $NFLX marathon tomorrow.
When sick, I kind of play it by ear on exercise. If I'm feeling tired and lousy, I just hunker down under a comforter. If I'm just annoyed with pesky symptoms but feel okay (for the most part), I don't vary the routine much. I may cut down on minutes, weight or intensity. But the body is pretty good at crying "Uncle!"
Monday, December 08, 2008
- The auto bailout is taking shape. $15B to get them through until 2009 and they're supposed to figure out something by then to fix it. As the bailout money runs out, because of their bad business model, they'll be back where they are today. Unless a miracle happens.
- The Supreme Court refuses to hear Obama's citizenship case. You know, this is the thing where some believe his "certificate of live birth" was a phony and that he was born somewhere else on the planet. I don't buy into the conspiracy theory, but I think this is good news for Arnold Schwarzenegger who can now Photoshop himself a certificate of live birth from South Dakota and run for President in 2012.
- Price of gasoline lowest in 5 years! Woo!
- Christie Hefner stepping down as chairman and CEO of Playboy ($PLA). What about the TV show, Girls Next Door? Wow, shares up 21% today, just over $2 a share. Yikes.
- Over half of rescued borrowers default anyways.
- Has the stock market hit bottom? I think so, but wouldn't rule out a retest. Read the last blog entry for my thoughts.
- Level 3 ($LVLT) to shed 8% of workforce. Shares down to 81-cents. Wow, I remember trading options in this back in 1999. It was much higher then.
- Don't tell me how it ends up (to date), but I'm half-way through season 3 of The Office via Netflix ($NFLX) streaming. Streaming to the TV via the Roku wireless box. Right now, Jim is with Karen, but there's the whole Pam-thing going on and I imagine Jim and Karen won't last.
The stock market is behaving better. The rallies are coming on stronger volume and the selloffs on lighter volume. The market bottom has held, and each attempt to start a new bear leg down has failed.
The news headlines continue to be poor. But that is to be expected during the early stages of a bull market. Employment is a lagging indicator. And government revenues, especially at the local level, will continue to be poor for the next few years. But early signs of a recovery may be showing up at retailers and restaurants.
Consumers have more money in their pockets now that gasoline is under $2. That's almost a $3 drop from the peak back in early Summer. I believe that high energy prices was a major contributor to the consumer cutting back on spending. Now the stimulus package that keeps on giving is lower energy prices. 5 year lows on gasoline? Nice!
Of course, it may not be clear sailing for the stock market. Remembering how the 2000-2 bear market ended, we saw a low in September 2002 and then rallied, but then retested the lows in March 2003. Could we see something similar?
The things I could see derailing an economic recovery at this point are increasing taxes, coming down on free trade, and increasing regulations. President-elect Obama has reversed course from his campaign promises and seems unwilling to raise taxes on the rich and wants to cut taxes for the rest of the folks. He's also said he no longer favors an oil profits tax. My guess is that with the folks he is surrounding himself with, he'll keep free trade alive.
I remain bullish. I think this is just a recession and though it is worse than the last one, we will come out of this. We may have already.
Sunday, December 07, 2008
Nobel prize winner Paul Krugman (not pictured) says that the US auto industry will probably disappear. "It is no longer sustained by the current economy."
These days, other than iPhones, what is?
Speaking to reporters three days ahead of the Nobel Prize ceremony, Krugman said plans by U.S. lawmakers to bail out the Big Three automakers were a short-term solution, resulting from a "lack of willingness to accept the failure of a large industry in the midst of an economic crisis."
The reason the bailout won't work is because it's the business model of the Big Three that is causing their woes. They're losing billions. What will floating them billions of dollars do other than postpone the bankruptcy?
Meanwhile, the foreign automakers are operating in the same economy, but they have a better business model. And they build most of their cars here in the US. Same pool of workers, different outcomes.
Friday, December 05, 2008
$BGU is the 3x large cap bull ETF. It had quite a day.
Today's market swooned early, with the jobs news or whatever, and then made a remarkable turnaround, during Melissa Lee's Powerlunch or whatever, to finish 3.65% higher for the day.
The SP500's range today was 818 to 879, and closed at 876. From the low to close, the SP500 rallied just over 7%.
Child's play. Investing for babies. Why even bother? Might as well just bury your money in a tin can in the backyard.
What about $BGU? BGU closed 10.17% higher for the day. But that's not the whole story. That leaves out all the fun. $BGU's trading range was from $27.40 at the lows to $33.80 at the highs, and closed at $33.38. From the low to closing price, $BGU rallied 21.8%.
I hope you were on the right side of that one and got in $BGU at $27.40. Nice play!
- $AAPL iPhone shows 327% market share gain in third quarter. The iPhone has about 16% of the smartphone market share.
- So, the Chevy Volt will go 40 miles on a charge? That's if you remember to plug it in every night. I have a hard enough time remembering to plug in my iPhone and often wake up to a low battery. Imagine that with a Chevy Volt! And it's not like you can plug your car in to its cigarette lighter. After the charge wears off, the Volt will get about 50 mpg.
- Plus, it's a Chevy. Wouldn't you feel better buying this kind of technology from Toyota? Or just get a gas-burning Honda Civic for $16,000?
- Sad news. That rumored 4.5% interest rate for mortgages would only be for new home purchases. No refinancing your existing mortgage. I guess you could buy a new home down the street, maybe even the same model, and let the bank foreclose on your current home. Just thinking outside the box.
- Oil under $42 a barrel? Wowzers. Declining world demand, they say. But the freeway was sure crowded last night. Took me a long time to get to Hooters. Missed most of the first quarter!
- $GM cutting another 2000 workers. It doesn't matter if they go bankrupt or restructure under a government giveaway package, there will be job losses. Automakers just can't lose a billion a month and keep on truckin' along.
- If we're in a period of deflation, the next to go down are salaries, right?
Watching the auto execs this morning, and everytime they mention billions of dollars they quickly say something about "higher fuel mileage" and "environmentally friendly."
Good grief. It's like a used car salesman showing you a picture of his wife and kids.
Oh, and then some Congress person was suggesting that the auto makers go "non profit." Hell, they're already VERY non-profit. Losing a billion a month? It's like they're already nationalized, because the only entities that can continue to operate in the red and declare themselves "raging successes" are government agencies.
This morning, I give you a picture of Heroes' Hayden Panettiere. Her character, Claire, is unable to die. Is there a connection between Claire, GM, Ford, and Chrysler?
- I suppose now we're all getting the feeling that the rally of Thanksgiving week is failing and something horrible is looming. We're watching world markets and seeing that they too are failing. The news releases seem to get worse and worse. Of course, the latter is what you'd expect when a new bull market is born. But it never quite feels that way. It's difficult to be optimistic when there is very little good news in the news headlines.
- I remain 100% long the market. Even if the market retests the lows or makes new ones. I don't see evidence among my friends and family that the economy is failing. I don't see evidence at the stores or restaurants I go to. (Tonight... Hooters. Crowded as ever.)
- It's easy to get cynical at this point with the market down nearly 50%. One can bottom fish and hope that things improve, or in the case that things don't, money will be worthless anyways. There will be a new country and new currency to take its place. I'm not that downbeat and believe that "this too shall pass."
- Will job losses drive the Fed to cut rates even more?
- ATT ($T) cuts 12,000 jobs.
- Will Barack Obama cut capital gains taxes?
Thursday, December 04, 2008
Wednesday, December 03, 2008
We've had only one dismal day in the markets the past week or so. It was quite dismal but the rest of the days seem to be grinding higher.
Here we have yet another gloomy headline. The market went up anyways. News releases also reflect what has happened in the past while the stock market is more forward looking.
Tuesday was called a follow-through day by Investor's Business Daily. IBD called today a follow-through day, but I am still cautious because of all the break-out failures lately. In other words, not every follow-through launches a big market rally. But no market rally has ever started without a follow-through.
Seems like we've had over 5 of those this bear market, and each of them has failed. Whipsaw City. Picking the bottom of this bear has been a losers game to date.
Positives? We seem to be hanging around the 8000 level on the DOW and in the lower-to-mid 800s on the SP500. Maybe some sort of basing action here.
I remain long and bullish. As I mentioned in The Psychology of Cutting Back, I think a lot of what's going on is emotionally driven by the media's gloomy drumbeat. I see folks with more cash in their wallets now than last year up to this Summer.
(Did someone say Summer? Summer Glau?)
Oil prices dropping like a stone. Huge impact to folks out there who drive cars. It's the stimulus package that keeps on giving.
Tuesday, December 02, 2008
- The market roared back late in today's trading session, capturing back about 40% of yesterday's trouncing. Have to love Yahoo's word salad today: Stocks were in positive ground after General Electric gave a better-than-feared business update and then surged to session highs in the final minutes of trade after General Motors outlined its plan for government aid.
- "Better-than-feared." If that doesn't describe market psychology at this point, nothing does. It's a climate of fear.
- And GM's plan? "You give us money; we build cars." GM wants loans and plans to repay them starting in 2011. Huh? Using what business model? The business model that burns $1B a month in cash? How does that work?
- Meanwhile, have to love Summer Glau in Terminator: The Sarah Conner Chronicles. Summer's one-liners are great. To explain her strength? "I've been working out."
- Auto sales plunge to 26-year low. Remember a few years ago when companies had 0% interest rates and were stealing sales from future years? Just thinking out loud.
- Oil at 3.5 year low! Woo! Gee, that was just $147 a barrel a few months ago...
- Orange Punch notices By now it’s widely known that President-elect Barack Obama scoffed at Hillary Clinton’s foreign relations credentials before he found them so fetching that he fetched her to be his own secretary of state. Kind of funny in retrospect.
- iPhone fever is contagious here at the Fun Factory. I have one. A coworker bought one soon after. And now, two other coworkers went and bought one for themselves and their wives.
- Speaking of, downloaded the free (until Friday) Easy Wi-Fi for ATT App that makes getting on the ATT wi-fi hotspots easier than the standard way. I find myself near ATT hotspots frequently, so this should save some keystrokes.
I was working out during the lunch hour, listening to the Tom Sullivan radio show. Sullivan brought up an interesting point about how we're being blasted by the media about how bad things are. Companies are also out there trying to get their hands on "bailout money," and sounding alarm bells. I know I've caught this "cutback fever" where I'm looking at my expenses and wondering what I could eliminate or reduce.
But why? My income is higher than it was last year. My bills are about the same as they were last year. Maybe they're a little less, actually. There is money left over at the end of the month and I find myself at the casinos, out to eat, and running around as always. Yet, here I am switching from bottled water to tap water and cutting back on Starbucks.
Sullivan called it the psychology of cutting back. We feel that we have to join in to the crowd mentality. But is there any real reason to?
Monday, December 01, 2008
An end of the day reminder of how much fun you could have had today if you were positioned properly at the close on Friday. Now, you wouldn't want to have been caught leaning in the wrong direction.
The Triple Beta Funds, baby.
Looks like the "smart" play at the close on friday would have been to buy $FAZ, the "Financial Bear," which is 3-times the inverse of the financials. Wow!
Things happen in much shorter timeframes these days. Bull markets take only a week, as we saw the market go up 20% from Friday to Friday. Now, we have nearly a 50% fibonacci retracement in just one day. You blink, you miss it. It's like the stock market recorded on a DVR. You just fast-forward through all the flat days and get to the really big moves.
Yeesh. Only kidding I think. But how fugly was today? And it's December 1st, for those who faithfully, patiently, and steadfastily dollar-cost average into their 401(k) plans. That money should be piling into the market. But, are folks still doing that? Has everyone come to grips with the thought that they just may have to work forever and all this "saving for retirement" and "saving for college" was just a big smoke screen?
Says a lot for "carpe diem." Imagine if, instead of "saving for whatever," you had gone on a cruise, went to Norway, paid cash for a Porshe, spent it all on strippers, or all of the above? Would that have been better than watching your shares of $GOOG drop 50%? Where was the fun in THAT?
Getting back to the topic of cutting back and spending less, the consensus from callers to the Tom Leykis show was that land-line phone services were vulnerable (call waiting, 3-way calling, call-forwarding, etc.) Also vulnerable to elimination? Satellite radio, extra channels and premium channels on cable and satellite TV, newspaper and magazine subscriptions, and coffee drinks from coffee stores. I thought of switching from the large garbage can to the small garbage can; that's another $5 a month in savings. Another big saver is ordering a water instead of soda when eating out. In addition, don't drink bottled water. Put a filter in the refridgerator or faucet at home.
Jacksonville at Houston tonight.
- Selling momentum picking up speed as the market down over 6% as I type. Yahoo finance says that buyers are sitting on the sidelines. Maybe they're shopping. It's Cyber Monday!
- Over the weekend, I was catching up on podcasts via the iPhone. One radio show that isn't here in Sacramento anymore is the Tom Leykis show. I subscribed to the podcasts and have been listening to the economic-related ones. The one I'm listening to today is the one on what folks are cutting back on during tough economic times. Leykis brought up the book The Millionaire Next door and how that most rich folks got that way by being frugal. So he mentioned that he himself was cutting satellite radio service, extra cable TV channels, and cooking at home more often. More later as I listen.... LOL.
- I remain bullish on the economy. I think the gloom is overplayed. Black Friday shopping was up over last year. Folks have more money with fuel prices and mortgage payments down. I half wonder if the gloomy media is being played so that "drastic" political changes can happen next year. It's as if the propaganda is trying to convince everyone that paying higher taxes is the elixer to solve the economy's ills.
- Be. Very. Skeptical. That's all.
- Trump Entertaiment to miss interest payment. Facing tough competition and sliding revenue amid the economic meltdown, Trump Entertainment Resorts will have to skip a $53.1 million interest payment scheduled for Monday on its 8.5% senior secured notes due 2015 in order to maintain sufficient liquidity. Why anyone would invest in a Trump business remains a mystery to me.
- I'm also skeptical of Trump. But he does know how to play folks.
- Barack Obama names Hillary Clinton as Secretary of State. Robert Gates will stay on as Defense Secretary. So far, I'm happy with Obama's choices. Not seeing too many crazies being assigned posts. Mostly folks who are in the political center. Hooray for Barack.
- Should HIV/AIDS testing be mandatory for those 13-years old and up? In the United States, HIV affects more than one million people, and about 20,000 new infections are caused each year by people who don't know they have HIV. Screening can help identify undiagnosed cases of HIV infection and prevent further transmission of the virus.
- I'm surprised that the US didn't require testing and go after this more aggressively early on. Maybe it was a political thing because of the community mostly affected by HIV/AIDS here in the US.
A rough start to December as the market is down over 5% as I type.
Perhaps the market is reacting to my fantasy football teams being knocked out of contention this weekend?
Or, Black Friday sales were only up 3% from last year. And worldwide economic news continues to be gloomy.
Hope December 1st finds you better than the new headlines.
Friday, November 28, 2008
Thanksgiving is my favorite holiday. It's a long holiday weekend. Next, no stressful gift giving to worry about. Football on everyday of the weekend. Plus college and NBA basketball. Lots of food. Hanging out with family and friends. Plus, the weather here in Sacramento is actually still pretty nice.
Oh, and the market is in a new bull market. Really. We're up 20% from last week. Sure, it could be just a snapback from the relentless selling the past few months. After the weekend, payday hits for many with the first of December and with it, contributions to 401(k) plans, that were 201(k) plans when the market fell 50%, and are now about 241(k) plans. Still a long way to go.
But think about it for a second. If you're younger than your fifties then what we're seeing is a chance to accumulate stocks at a far better price then what they traded for in the Fall of 2007. For folks who are dollar cost averaging in, the more months go by at these kinds of prices, the more "value" is being accumulated. And it's not like you had to wait and camp out 3-days in front of a Best Buy over the holiday weekend to get the deals. Here they are!
Speaking of, I never venture out shopping on Black Friday, but I "hear" it's very crowded out there. That's why I don't think we're in a Great Depression. I've said it before, but with gas prices down $3 from the top, that's a lot of cash consumers aren't sending to OPEC and can spend freely. Plus, many cash-strapped homeowners lost their homes over the past 2 years, and are now renting and have less monthly outflow. Combine that with a refinancing wave that could hit now that 30-year rates are just over 5%, and that could be the stimulus the economy needs to rev back up.
Wednesday, November 26, 2008
- The SP500 is now 19.7% higher than it was at the lows on Friday, November 14th, 2008. You remember back then, right? Barack Obama was the President-elect and selecting his cabinet, the US automakers were seeking a federal bailout package, US troops were still in Iraq and Afghanistan, and the US economy seemed to be in trouble.
- That was then, this is now. If we're in a long-term secular bear market that began in 2000, interrupted by a cyclical bull market in 2003-2007, back to the secular trend and new lows from 2007-2008, and now practically a new cyclical bull market from last Friday through today.
- A cyclical bull market in 3+ days of trading. Simply amazing.
- The Detroit Lions are another NFL team with no cheerleaders. *Sigh* So I bring you their competition this week, Kerry, a Tennessee Titans cheerleader. You have to think the Titans running game will be HUGE tomorrow.
- Barry Ritholtz has the SP500 Index returns from 1825 to 2008 in a "ginormous" chart. Very cool, BR. This year is at the extreme left of the picture. So far. C'mon, Santa Claus rally!
- Just as folks were having fun with the 3X beta ETFx comes the news that the VIX has fallen below the 50dma. A close below today will signal that levels of fear have finally started to decline.
- Brooke Burke won Dancing with the Stars!
- Google ($GOOG) admits to using undocumented API in Google Mobile app for iPhone
- $RIMM Blackberry Storm panned.
- President-elect Barack Obama names former Federal Reserve Chairman Paul Volcker to "New Economic Panel." Sound like an old economic panel to me. I hope he doesn't recommend raising the prime rate back to 21.5%.
- Oh, phrase change with the coming Obama administration. "Economic Recovery Program" is the new "stimulus" package. House Speaker Nancy Pelosi chimed in, "We're not using the word 'stimulus.'" Well, no wonder the market has rallied this week. It's all about presentation.
- Speaking of interest rates, 30-yr. fixed rates in the low 5's%. WOW.
- Whoa Fonzie (not pictured), did you see that the dividend cuts are the fastest since the 1950's? “Until we start to see the economy turn around, you have to assume broadly that dividends could be at risk in many sectors of the economy, especially among financials,” said Fritz Meyer, the Denver-based senior market strategist at Invesco Aim Advisors Inc.
- And those were the Happy Days?
- President-elect Barack Obama has another economic press conference on Wednesday. Seems like the guy is on TV everyday, like a soap opera star or something. As the Economy Turns.
- More iPhone stuff? Downloaded the free game Jelly Car. Played it for a few minutes without reading the instructions. Didn't get very far. Seems kind of addicting, though.
- Plenty of buy signals from the Chart Pattern Trader.
- Mistress demand falling? (h/t Greg Mankiw). You know times are tough when the rich start cutting costs on their mistresses. According to a new survey by Prince & Assoc., more than 80% of multimillionaires who had extra-marital lovers planned to cut back on their gifts and allowances. Still, only 12% of the multimillionaire cheaters said they plan to give up on their lovers altogether for financial reasons.
- Or maybe they'll offshore those Jobs to Thailand.
- A Novel Way Around Smoking Bans. A smokers fee is paid at the door, so that the bar owner can pay the fine.
- I paid $1.99 for premium gasoline here in CA. Wow! Seems like it was close to $4.99 just a few months ago. That means more cash to go to the local Indian Casino with!
- Keynes' Open Letter to Roosevelt. Good read.
Boy, these triple leveraged ETFs sure look like a whole bunch of fun, eh?
Although they've been trading for less than a month, the 3x ETFs have already become very popular trading vehicles. And with a market that is averaging a daily change of nearly 4%, these ETFs have already taken traders for a wild ride.
- Yahoo Finance called Tuesday's market a "choppy day of trade," as the market was up 2% and down 2%, before closing with a small gain. Looking at the internals, blech. Not that good. That's a bit troubling as we've had a couple of big days and things seem to be petering out. But this is a holiday week and should anticipate volume being light the more the turkey thaws.
- I believe historically, the day after Thanksgiving is a decent day in the market. And Thanksgiving is late this year. When we come back from the weekend, it'll be December. We'll have those 401(k) contributions piling in. Assuming folks are still doing that.
- I remain 100% invested. Did some tax loss selling last Friday early, and rotated into like-kind things that have behaved well the last three days.
- I was just thinking that historically, the market averages about 8-12% a year. Or so. But the past 10 years the market is flat. We're taught that in order to plan out a savings goal, to use the "Rule of 72" to figure out how the money will grow over time. Uh, how many times does 0% go into 72? Throw those retirement and college savings goals out the window!
- Of course, folks are helped by dollar cost averaging in, and buying more shares when prices are low. In addition, at some point, someday, we'll look back and see that over the long term the market is still sticking to its historically averages and there are some nice double-digit percentage gains in the years ahead to smooth it all out and make those numbers work.
- Well, my subscription to Telechart expired this week. It's been my major feed for data the past many years. I love the service, and have some custom PCFs and such, but it's played a minor roll in developing my "trading systems." I've mostly used the data as a feed into another tool, Amibroker. In addition to Telechart data and others, Amibroker also lets you download free quotes from various places.
Tuesday, November 25, 2008
- $SBUX (Starbucks) fell 5% afterhours monday as consumers cut back on their coffee splurges. The coffee retailer, in a regulatory filing, said 2009 will be "extremely" challenging as it anticipates a pullback in spending by customers as more people lose their jobs, face foreclosures and file for bankruptcy protection.
- But if people are foreclosed on and move from a $2000 mortgage to a $1200 rent payment, won't they have more money to spend on coffee? The bank gets stuck with the house and the people move on. And with gasoline prices down from nearly $5 a gallon to about $2 a gallon, that's a big boost to the wallet. If one uses 15 gallons of fuel a week, that's $45 a week to spend on something else. Stores and restaurants around here have been very crowded.
- But lots of competition for your coffee dollars out there. I had one from McDonalds today...
- Peter Brimelow takes a look at a money guru who has done well this year. But - and it's a big but - the long-term record isn't that great.
- Seems strange that just as the US appears to be ready to fight the good fight against "global warming," Europe is moving in the opposite direction. Looks like the main reason is economic costs.
- The electric car economy from Fortune. It seems to be coming, but one troubling thing is they write, Another winner in the electric car economy will be solar and wind companies and utilities, particularly those like PG&E (PCG) and Southern California Edison (EIX) that are making multi billion-dollar investments in renewable energy. Most folks would plug their cars in overnight, when there is no sunshine. Unless they're working graveyard.
Monday, November 24, 2008
Many users place a lot of trust in the App Store review system, but that appears to have changed in at least one case. In what seems to be the first reported instance of a developer relying on a bit more than a quality application to rack up good reviews, someone behind the SantaLive application has been spotted shelling out to get good "reviewers."
Doesn't anybody play by the rules anymore? Ah, they're not rules, they're "guidelines." Seems a little like not playing by the rules to stack the deck for your app.
So far, I've downloaded about 20 apps. I haven't reviewed any at the $AAPL app store, but maybe I will. I listed some of my favorites here. Some I've even paid for now. Yeesh.
President-elect Barack Obama introduced his crack team of men with middle initials who will serve as his financial team this morning. In the NY Times article it lists the middle initials of everyone except the President-elect.
The market faultered during the conference, as many were concerned about the lack of specifics during President-elect Barack H. Obama's speech. (Just showing you a little MI love, Mr. President-elect). But the swoon was short-lived, as the market had another huge day after the Citigroup ($C) bailout deal announced over the weekend.
That's two big days in a row for those keeping count. I believe that's called "a streak." Haven't had one for awhile. *Sigh*.
-- Post From My iPhone
Ben Bernanke says that he was wrong and underestimated the impact of the mortgage fallout.
Ya think? There hasn't been a "wrong" that bad since the San Diego Chargers drafted Ryan Leaf with the number two pick of the 1998 NFL draft.
"I and others were mistaken early on in saying that the subprime crisis would be contained," Bernanke said in an article in the Dec. 1 issue of The New Yorker magazine. "The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict," he said in the piece titled "Anatomy of a Meltdown."
You know, I may be alone here, but I think college professors should stay at college. Enough with these folks sitting behind their ivory towers of education. The real world differs from a text book.
Picture is of Giselle, San Diego Chargers cheerleader. Giselle’s rich culture has influenced her love of dance, Latin food and salsa and merengue music.
Sunday, November 23, 2008
What's $306 billion between friends?
The U.S. government agreed to a $306 billion rescue plan for Citigroup Inc, agreeing to shoulder some losses from toxic debt in the latest attempt to bolster a financial services industry in turmoil. Citigroup's package may also prove a template for other banks that are expected to face growing losses as economies worldwide sink into recession.
A "template for other banks?" Good Lord, how much are we (the taxpayers) going to have to fork over to rescue the banks?
I suppose the bottom line is that the government is the lender of last resort. Perhaps this is what it is coming down to. But who gets to decide who goes under and who doesn't?
The financials make up about 20% of the SP500. At least they used to. I imagine this would have a positive bump for that sector and maybe the market.
Futures up a bit tonight.
Saturday, November 22, 2008
Everyone is sitting at the edge of their chairs in anticipation of President Barack Obama creating a new New Deal. He almost said as much in today's Message from the President-Elect.
President-elect Barack Obama said Saturday that he has told his economic team to come up with a recovery plan focused on creating new jobs -- 2.5 million of them in the next three years to be exact.
In the Democratic Party's weekly radio address, Obama said that while the details are yet to be worked out, it will be a "two-year, nationwide effort to jumpstart job creation . . . and lay the foundation for a strong and growing economy."
Among the targets will be rebuilding roads and bridges and modernizing schools, along with "building wind farms and solar panels; fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead."
Sounds very 1930's. But what were the causes of the 1930's and have we learned our lesson? From the New York Times comes this view that the new deal of the 1930's didn't always work.
The traditional story is that President Franklin D. Roosevelt rescued capitalism by resorting to extensive government intervention; the truth is that Roosevelt changed course from year to year, trying a mix of policies, some good and some bad. It’s worth sorting through this grab bag now, to evaluate whether any of these policies might be helpful.
(Read article to see the analysis of the "grab bag.")
If you read the conclusion, lets hope that it doesn't take World War III to get us out of this funk.
Picture is of the Miami cheerleaders. Student support for athletic teams at the University of Miami is perhaps best exemplified by the longstanding tradition of fine cheerleading squads. Uniforms and cheers have changed over the years, as this photograph of UM cheerleaders practicing for an upcoming football game in the 1930's illustrates.
Roger Nusbaum asks, what would Lou Rukeyser do? Remember back in 1987 after the market crash? Lou said, "Let's start with what's really important tonight," he told viewers. "It's just your money, not your life. Everybody who really loved you a week ago still loves you tonight. And now that that's all fully in perspective, let me say. .. Ouch! And: Eek! And: Medic!"
I've found myself saying much of the latter the past few weeks. It's been pretty brutal for us longs. I was able to do some tax loss rotations Friday morning. Hopefully, that'll be the end of that.
I've been running the Black Box models against the market, and the volatility is really throwing the models for a loop. As I mentioned over a month ago, I've quit trading them until volatilty settles down. And truth be told, there's no leadership in this market. At least from the bullish side. One can say that on the bearish side, financials have been leading.
Ah... Saturday. Hard to believe the college football season is winding down. Already!
- Stocks rallied Friday, with the Dow industrials closing up 494 points after reports surfaced that President-elect Barack Obama will nominate New York Federal Bank President Timothy Geithner (not pictured) as his new Treasury secretary.
- E! entertainment television has just named supermodel Karolina Kurkova the sexiest woman in the world.
- You be the judge on the real reason for the market rally. Timothy or Karolina?
- Even with the market rally, financial lagged badly. Not a good sign. What are the chances of some Citigroup ($C) news this weekend?
- Warren Buffett says that the automakers must rethink their business model. Bankruptcy would be a poor solution for the auto industry, Buffett said, so he hopes a better way can be found to work out the union contracts and other issues the companies face.
- The problem is that the unions don't want any more give backs. Of course, bankruptcy would be the ultimate give back. It'll be interesting to see how this plays out, and everyone is watching. I imagine something will be done, but I hope it's not just propping up a poor business model. The last thing anyone wants is for the companies to burn through the cash and come back in 6 months asking for more.
- With oil prices low, people are forgetting about the need to "get 'er done" on . The cold reality of plunging energy prices and the credit crisis have cast a pall over recently hot shares of solar-panel makers, as a leading Chinese manufacturer slashed its revenue outlook to close out a dismal week in the sector.
- Other things are in the headlines, but once the world's economic growth resumes then energy demand will increase. Will we take action now, or be saying "If we had acted years ago, the energy would be coming online?"
- Downloaded the new iPhone 2.2 upgrade, and everything seems okay. The streets view on the maps is cool. Just like the desktop version. Pretty slick. Pretty fast.
Friday, November 21, 2008
- The stock market again reverses late in the day. This time to the positive. Decliners leading advancers, though. Maybe shorts booking gains ahead of the weekend. It's been another bad week for the market.
- Bloomberg says U.S. stocks rose and the Standard & Poor’s 500 Index rebounded from an 11-year low as NBC News reported President-elect Barack Obama will nominate New York Federal Reserve Bank chief Timothy Geithner to head the Treasury.
- Timothy Geithner. The Federal Reserve Bank of New York president is widely praised for his management of the Wall Street meltdown. He also worked at Treasury for 13 years starting in 1988. Hmm. Management of the meltdown, huh. Hmm.
- The new iPhone operating system 2.2 is out! Some issues and bugs. What's new? Podcast downloads! Cool.
- Well, I did my tax loss selling for the year near the lows today, and reinvested in like-kind things. We'll see if I get to do that again in December...
- "We likely are in for a protracted period of poor economic performance," said Charles Evans, president of the Federal Reserve Bank of Chicago.
- Court says Shell can't drill near Alaska. Sure, oil prices are down now. Anyone think that'll last? Not me.
- China fears job riots. China's job outlook is "grim," and the global financial crisis could cause more layoffs and more labor unrest until the country's economic stimulus package kicks in next year, the nation's minister of human resources and social security said Thursday.
Thursday, November 20, 2008
We're back near the 2002 lows. The financial sector is down nearly 6% so far and 67% year-to-date. Goldman Sachs ($GS) once traded at $234, and is now around $50. That's a "must own" all the way down, right? And what about Citigroup ($C)? Down to $5.25 as I type. Something very bad is happening at $C. Leading indicators shows .8% decrease. The Philly Fed Index came in at -39.1.
Everything is gloomy. How can anyone sugarcoat this? It's not possible. The ramifications to most folks probably hasn't even been felt yet. Companies will downsize. Government revenues are going down much further than they are today. Government employees are at risk.
My grandfather lived through the Great Depression 1. He told me stories about how bad it was. Nothing like those of us in our prime have seen. He always told me to pay for everything in cash, and to never go in debt. He said folks in debt back in the 1930's lost everything. Unemployment reached in mid-20% range.
I'm an optimistic guy. I see the malls, casinos and restaurants here, and they all look pretty busy. I think the analysts are missing the additional cash folks have in their pockets due to falling gasoline prices and even smaller mortgage payments. Yes, many have gone back to renting as their homes were foreclosed on or they were able to renegotiate with their bank. I think that is providing some stimulus that will be showing up in the numbers at some point.
Here in 2008, the stock market is now back to where it was in 2002. To paraphrase John Belushi in Animal House, "Six years of investing, wasted."
Do you remember 2002?
- January 8 - The No Child Left Behind Act is signed into law by U.S. president George W. Bush. (Gee, how's that one working? Are there any children being left behind?)
- February 3 - The New England Patriots beat the St. Louis Rams 20-17, in Super Bowl XXXVI in New Orleans. (I had the Rams in this one. Lost.)
- February 8–24 - The 2002 Winter Olympics are held in Salt Lake City, Utah.
- March 30 - Queen Elizabeth, The Queen Mother dies in her sleep at the Royal lodge, aged 101
- April 1 - Maryland defeats Indiana 64-52 to win the NCAA Men's Basketball Championship at the Georgia Dome in Atlanta, Georgia.
- May 26 - The Mars Odyssey finds signs of large water ice deposits on the planet Mars.
- October 2 - The Congress of the United States passes a joint resolution, which authorizes the President to use the United States Armed Forces as he deems necessary and appropriate, against Iraq. (But wait, I thought the Democrats in Congress all thought this was a bunch of lies?)
- October 27 - The Anaheim Angels defeat the San Francisco Giants in Game 7 of the 2002 World Series to win the title. (Seems like yesterday - The rally monkey!)
- November 5 - The U.S. Republican Party maintains control of the House of Representatives and gains control of the United States Senate. (Ah, great to be a Republican back then).
- November 6 - The U.S. Federal Reserve System drops its primary discount rate by 50 basis points to 0.75%, putting the real interest rate solidly below the inflation rate. ("The more things change, the more they stay the same." - Cinderella).
- November 25 - U.S. President George W. Bush signs the Homeland Security Act into law, establishing the Department of Homeland Security, in the largest U.S. government reorganization since the creation of the Department of Defense in 1947. (That'll be the answer to a trivia question someday).
Lets hope the Rally Monkey helps us as much now as it did the Angels in 2002.
Well, not encouraging but this from Peter Brimelow asks if the Bears' glass is half-empty or half-full? Right now, I'd say their cup runneth over.
In the half empty camp: Dow Theory letters' Richard Russell. He wrote Wednesday night: "You may not realize it, but the Transports have already broken below their October lows -- up until today, the Industrials have not confirmed. Alas, the market has rendered its verdict-- today the Industrials closed below their Oct. 27 low. The primary bear market was re-confirmed. The direction of the market is to lower levels, how much lower, the Dow Theory can not tell us. The tragedy continues to play out, all that remains is the 50% principle level of 7,470 [half the bull market peak] and the 2002 low of 7,286"
Which brings us to the half-full camp: Michael Cintolo's Cabot Market Letter.
In the short term, Cintolo is almost hopeful, although Wednesday's action was obviously a surprise. He writes: "You can see how the Dow has tested the 8,000 level several times since early October ... you'll also see that the number of new lows has declined sharply on each foray lower. Even today's figure was relatively contained. That's a sign that selling pressures are gradually easing (believe it or not), which is a characteristic seen at every major low ... we wouldn't put it past the market to rally off this 8,000 area and begin a sustainable upmove."
Just to throw grease on the fire, Paul Farrell writes 30 reasons we'll be in Great Depression 2 by 2011.