That was some week. Despite the latest worries -- oil kissing $60, gold hitting $667.50 and more Fed jawboning about inflation -- we saw the S&P 500 tag a 6 1/2-year high. The Russell 2000 index also reached a record this week.Despite upgrades of the Dow's best-performing stock, GM (GM - Get Report), markets could not hold onto gains Friday. The S&P slipped for the third time in four weeks, giving back 0.7%, while the Dow dipped 0.6%, and the Dow transports' breakout is looking more like a fake out.
INVESTING & TRADING ¿ Apocalypse later: "Contrarian analysis has been poised on the edge of a stock market sell signal for several months now. But every time such a sell signal appears imminent, advisers pull back a bit and their restraint gives the bull market a bit more lease on life." ( Marketwatch) ¿ Various Looks at Sector Performance: The tech sector has outperformed over the past seven months. Other time frames have been less kind. ¿ Uh-Oh: What did BusinessWeek just put on its cover? "Money is cheap. And some experts say it could stay that way for years. That's creating opportunity -- and brand new risks." It's A Low, Low, Low, Low-Rate World. Damn, time to sell my bonds... ¿ Earnings Streak Snapped; How Pricey Are Stocks? It looks as if the double-digit year-over-year earnings streak is likely to end this quarter, which raises another question: Can profits keep rising? ( Fortune) ¿ Outsourcing your bank accounts: Consider India bank, which pays above-market yields on CDs. ( Marketwatch) ¿ Was the transports' big move a breakout, or a triple top? ¿ Merrill sounds alarm on global liquidity: "Merrill Lynch has warned of a global credit crunch as central banks in Europe and Asia tighten monetary policy, advising clients to shun risk and switch to safer assets over the forthcoming months." ( Telegraph) See also, A fluid concept. ( The Economist) ¿ Internet Q&A with Mark Mobius on emerging markets. ( FT) ¿ Mining chiefs take bow and quit while they are winning: "The chief executives of the world's three largest mining companies have decided to bow out this year, prompting speculation that they are quitting before the commodities bubble bursts." ( The Times of London) ¿ Dan Gross and I have some fun at HSBC's (HBC) expense, in light of the bank's subprime issues. Wonder what HSBC actually stands for? Dan titles his Slate column "Hey Sucker Banking Corporation." Meanwhile, my blog readers came up with many brilliant and amusing suggestions. A few of the printable ones are:Don't forget to get something for your sweetie. Consider Chocolate (User's Manual Enclosed) ( WSJ), or even the White Castle Valentine's Day special!Have Sacrificed Business CredentialsMy personal favorite:
Helping Suckers Buy Crap
Hollow Serenades Buoy Credit
Homes Shall Be Confiscated!
Help! Sinking! Bring ... Cash!Haven't Seen Ben's CoptersIf you can think up any more, feel free to add to What Does H.S.B.C. Stand for?
ECONOMY¿ GDP to be Revised Downwards: New BEA inventory data make that original 3.5% GDP number likely to get revised downward to 2.75% or so. ¿ Yield Curve Withholds All-Clear Sign for Economy: "An inverted yield curve has been a harbinger of recession in the past. Unless this time is different -- a popular way of dismissing the spread's stellar history -- real gross domestic product growth of 3.5 percent in the fourth quarter may turn out to be the outlier, not the trend." ( Bloomberg's Caroline Baum) ¿ Never mind: "Instead of 1.8 million, the Labor Department now believes that the economy created over 2.2 million jobs last year. In case you're keeping score, that's a miss of more than 22%." See also: Many layoffs coming in housing, economists say. "Data revisions show few construction jobs have been lost... yet." ( MarketWatch) ¿ In this podcast, Bob Lucas, Nobel Laureate and professor of economics at the University of Chicago, talks about wealth and poverty, what affects living standards around the world, the causes of business cycles and the role of money in our economy.
HOUSING By now, you've read all of the front page news on the ongoing stress in the sub-prime market. There are lots of fascinating details bubbling up from beneath the headlines: ¿ I gathered some fascinating maps and charts of the ongoing decay in U.S. residential real estate from some off-the-beaten-path sources:- Foreclosure Heatmap¿ Seven out of the 10 riskiest housing markets in the nation for home price deflation over the next two years are located in California, according to the Winter 2007 PMI U.S. Market Risk Index (PDF). See also Profiting on Foreclosures. (free WSJ) ¿ Mortgage Refinancing Gets Tougher: As Adjustable Loans Reset at Higher Rates, Homeowners Find Themselves Stuck Due to Prepayment Penalties, Tighter Credit. (free WSJ) ¿ Back in 2005, we noted the Bull Market in Real Estate Agents. Now, amid the real estate slump, Real-Estate Agents Are Hanging Up Their Blazers. ¿ What's your house really worth? The real estate industry is based on what economists call information asymmetry, which simply means that one party (typically the seller) knows more about a product than the other (the buyer). It's an opaque market that encourages obfuscation and leads to flawed pricing. Until now. ( Fortune) ¿ MarketWatch is sporting a dedicated real estate page.
- Geographic Distribution of House Price Risk
- Rates of Home Price Appreciation
SENTIMENT/PSYCHOLOGY¿ Implied complacency: "The price investors are paying to insure their portfolios is low. Therefore investors are complacent. That is the standard assumption. But it may not be right." ( Economist.com). ¿ A look at Aggregate Investor Sentiment and Stock Returns.
WAR/MEDIA/POLITICS/ENERGY¿ The battle of Fox Business News vs CNBC is heating up, and it's already turning odd, with Fox promising to be less hostile than CNBC to business. I am curious to see if a Fox business channel will improve on the demographics of Fox News. ¿ Report: Iranian Nuclear Scientist 'Assassinated'. Also, Do We Need a Special Tax for the War on Terror? ¿ Solar Power Heats Up: "Only about 1/30th of 1% of all the electricity produced in the U.S. is generated by solar power. But recent technological advances and a continued decline in the price of solar-power systems are prompting homeowners to ask if this renewable-energy source is worth the investment." (free WSJ) ¿ "In Washington, business opposition to global-warming legislation is melting faster than the polar ice caps": Why Key Executives Are Warming To Legislation on Climate Change. See also this video from the article's author, Alan Murray. ( WSJ) ¿ Real Climate, one of the most level-headed and serious science blogs out there, has had enough of the delusions of The Wall Street Journal Op-Ed page: The Wall Street Journal vs. The Scientific Consensus. ¿ Brad DeLong and Arnold Kling debate New Takes on the New Deal. (free WSJ)
TECHNOLOGY & SCIENCE ¿ A Big Bang... of Innovation: At the site of the world's most powerful accelerator, physicists aim to recreate the Big Bang. Innovation is an unexpected -- but welcome -- by-product. ¿ Steve Job's Thoughts on Music. The condensed version: Dump DRM. ¿ Microsoft( MSFT - Get Report ) Revisited. Not only has Vista arrived with a dull thud, but journalists are asking Bill Gates some tough questions. ¿ From NASA comes this gorgeous Cassini Spacecraft Photo Essay. ¿ "From the outside, Hitachi's groundbreaking Deskstar 7K1000 may look like your run-of-the-mill, sandwich-sized computer hard drive. But inside, it holds a terabyte of data." ( National Post) ¿ 3-D model shows big body of water in Earth's mantle. ¿ Hackers Attack Key Net Traffic: "Hackers briefly overwhelmed at least three of the 13 computers that help manage global computer traffic Tuesday in one of the most significant attacks against the Internet since 2002." ¿ The Wizards of Buzz. (free WSJ) ¿ The beauty and elegance of mathematics: Amazing flame fractals.
MUSIC, BOOKS, MOVIES, TV, FUN!¿ Friday Evening Jazz: Mose Allison: One of the most influential song composers of our time, his work has impacted The Who, David Bowie, The Clash and Nirvana. Pretty good for a jazz pianist. ¿ I've been enjoying The Undercover Economist by Tim Harford. Think of it as a Freakonomics, only applied to the economics of everyday life. So far, I am finding it quite fascinating. ¿ Sarah Silverman's Comedy Central show ( "The Sarah Silverman Program") has promise, but I am rapidly losing my hope that she would be a female Lenny Bruce or Bill Hicks (too many scatalogical jokes). Oh, and Silverman agreed to answer questions about love and/or sex at The Onion. ¿ Awww, isn't that cute! My first YouTube DMCA Take Down Notice. ¿ BLOGUMENTARY ¿ Playboy Archives Go Digital; That Means Its Articles, Too. (free WSJ) ¿ Another game that is a fun, giant time suck. ¿ The Best Place To Hide Money: Conversation With A Burglar. ¿ Why? For the love of God, why? Mullets Galore. ¿ Strange statues from around the world.