Weekend Linkfest

(Editor's note: To access some of these stories, registration or a subscription may be required. Please check the individual links for the site's policy.)

More Power!

That was Friday's exclamation mark on a week that was all upside. This was the third consecutive week of gains for the Dow, with 15 of the past 16 sessions in the green. The industrials tacked on 2.8%, as Caterpillar(CAT Quote) and Honeywell(HON Quote) showed the upside of a weak dollar. The S&P 500 added 2.2% and is now less than 3% from its all-time high of March 2000. The laggards? Technology (Nasdaq gained 1.4%.) and small-caps (The Russell 2000 rose 1.2%.).

A combination of more M&A activity, better earnings than (lowered) expectations, and perceived modest inflation data were the key reasons given.

Barron's Trader column had this to say:

"Why the market climbed isn't nearly as telling as how it climbed. The market's breadth wasn't always convincing, with fewer stocks contributing to this advance than during the February rise. Stocks look stretched in the short term, with the S&P 500 running more than 3.5% ahead of its 30-day moving average."

But, the column noted, momentum remains to the upside.

The coming week will focus on earnings and the preliminary look at first-quarter GDP, which is due out Friday.

Given all that, we have lots of good stuff to cover this week. With no further adieu, Linkfest:

INVESTING & TRADING

• S&P 500 is Back in Black for the first time since April 2000.

• A profit gusher of epic proportions. "The grand total: $785 billion, a 29% increase over 2005. Those returns obliterated the previous cyclical peak, $444 billion, achieved in 2000 at the height of the tech explosion. Put simply, American companies are enjoying the most sumptuously profitable period in the 500's 53-year history." (Fortune) See also: 20 most profitable companies.

• Short Interest Precludes Correction: The record number of short bets has created a floor under the markets. Consider that if you think you are not investing with the herd...

• Is the Dow's Recovery a Mere Illusion? "The dollar's decline makes the performance of U.S. equities rather less impressive to global investors, especially Europeans, as Barron's Roundtable member Marc Faber has emphasized repeatedly." (Barron's)

• 1987 vs. 2007: "I keep saying I am not a fan of this parallel, but that doesn't stop Street.com readers from sending me all sorts of charts..."

• Uranium Contract To Debut on Nymex: "The futures contract would be designed to offer the operators of nuclear-power plants a vehicle to hedge against rising prices. It would also provide a forum to bet directly on gains and falls in the price of uranium, rather than speculating on the fortunes of companies that mine the metal."(The Wall Street Journal)

• An Actively Managed ETF?

• Great minds don't think alike about index funds: "When John Bogle, founder of the Vanguard Group, introduced the first retail index fund in 1976, he sparked a revolution in investing: Throw out the fund manager, keep costs low, and weight the stocks in the portfolio by their current market value. Today, $3 trillion in pensions and mutual funds are indexed. Now Jeremy Siegel, a professor at the University of Pennsylvania's Wharton School and author of Stocks for the Long Run, has reinvented indexing. Since June, his company, WisdomTree, has rolled out more than two dozen funds that are indexed according to a company's earnings or dividends, rather than market capitalization." (USA Today)

• Goldfinger Brown's £2 billion blunder in the gold bullion market. (the Sunday Times of London)

• Stocks vs. Real Estate: "Both real estate and stocks have had their day, but the question you need answered is this: Which contender is the superior long-term bet today?" (CNN Money)

• Why Hot Funds Are Tripping Up Some Investors: "In recent months, however, some ETFs have begun diverging widely from the performance of the benchmarks they are supposed to follow. At the same time, several newer ETFs with short track records are failing to match the hypothetical rates of return they would have achieved in previous years if they had existed then." (free in The Wall Street Journal)

• U.S. Dollar Index Breaks Down.

• Mutual fund tax bite at record $24 billion: "Mutual fund investors got slammed by Uncle Sam in 2006. A report by Lipper, a fund research company, found that shareholders in taxable fund accounts paid at least $23.8 billion in taxes. That figure reflects the impact on investors who simply held their funds and reinvested their distributions - those who sold fund shares during the year would have paid even higher taxes." (Money)

• Uh-oh -- I don't like the sound of this: Tax the Middle-Aged! (Slate)

• Fascinating reading: All the reporting the WSJ did on the options-backdating scandal ended up winning the newspaper a Pulitzer Prize for public service reporting. The Journal moved all of the related articles out from behind the subscription-only firewall: Pulitzer for Perfect Payday.

---

INTERNATIONAL

• Global Markets Driving the Dow: "The rest of the world is carrying the U.S. stock market. Fast-galloping overseas economies, flush world capital markets and a sagging dollar fatten multinationals' earnings and furnish the fuel for commodity-related stocks to surge." (Barron's) If no Barron's, go here.

• China Selloff II: The Attack of the Giant Jitters. "For the second time in less than two months, a drop in Chinese stock prices rattled markets across Asia and was felt modestly in Europe and the U.S. Investors said Chinese stocks are becoming a measure of their tolerance for risk everywhere." (free WSJ)

• Japan's Savers May Be Ready to Spend, Fueling Growth: "Japan's penny-pinching savers and earnest salarymen may at last be ready to loosen their purse strings as bank deposits earn more and millions of workers collect retirement windfalls." (Bloomberg)

• "Overseas investors look at the Shanghai Stock Exchange as a way to gauge the health of the Chinese economy. They really shouldn't." Investor Beware. (Portfolio)

• Many Savers, Few Spenders Leave South China Mall Almost Empty: "South China Mall stands as a symbol of China's failure to stimulate more spending by its 1.3 billion people and to curb runaway investment in real-estate projects." (Bloomberg)

---

ECONOMY

No Wall. No Worry. No build:

• Why This Isn't Stagflation: For some reason, the word stagflation keeps creeping back into the lexicon. It really shouldn't. As we have noted for quite some time, we are experiencing a form of "demi-stagflation." Growth is below the long-term trend, inflation is above it. Call it "stagflation lite" or blahflation, but it is not the 10% inflation, 1% growth of the 1970s. So why are so many concerned about stagflation?

• Inflation Confined to Rest-of-the-World, Avoiding U.S.

• The New York Fed hosted a conference on the euro and the dollar this week -- most of the presentations will soon be online for your econo-geek viewing pleasure.

• March tax receipts in California came up 7.4% short.

---

HOUSING

• Big Drop in LI Luxury Real Estate Prices: Some local regions have already shown drops of 8% to 12%, according to Zillow.com.

• Real estate cheerleader concedes price drop: "Satan must be shoveling snow out of his driveway, because the underworld has frozen over. By that I mean that the National Association of Realtors has finally conceded that home prices are falling nationwide." (San Diego Union-Tribune)

• Industrial Real Estate is Booming.

• "How did a strawberry picker earning $15,000 a year qualify for a loan of $720,000?" (SF Gate)

• Still Renting: "Based on the current outlook for housing, I will likely be renting for one to two more years. While many factors that influence housing prices have turned negative, I suspect we have not yet hit bottom. In fact, housing prices should head lower throughout the rest of this year and next year as well." (PIMCO)

• How to Sell Your House (Money)

---

SENTIMENT/PSYCHOLOGY

• Genuinely contrarian: How to tell when good news isn't, and act accordingly. (MarketWatch)

• The hardest trade to make right now? Shorting: Cody Willard had an intriguing post on shorting into strength Friday.

• Stock Market Psychology: Perspectives.

• As Dow finds new peak, the doubters are only digging in. (MarketWatch)

---

WAR/MEDIA/POLITICS/ENERGY

• Daniel Gross' satirical Slate column this week compares the various presidential candidates to stocks, complete with buy, sell, and hold recommendations. Hilarious: Obama Is Google. McCain Is GM

• Wall Street Antes Up for 2008: "Wall Street ranked as the top source of large campaign donations for presidential candidates in the early part of the 2008 campaign, aided by traditional contributors and new donations from the private-money industry, according to newly released campaign-finance reports." (free WSJ) See also Pickens's New Commodity: Giuliani.

• America's 'Seinfeld' strategy in Iraq: (How did I ever miss this one?) "In 'The Opposite,' George breaches the most fundamental laws in his universe -- for example, the age-old principle that 'bald men with no jobs and no money, who live with their parents, don't approach strange women.' Similarly, in its geopolitical incarnation, adherents to the Costanza doctrine cast aside many of the fundamental tenets they learnt at staff college or graduate school. Let me name a few... (Financial Times)

• Behind high gas prices: The refinery crunch: "Each spring, just before the summer driving season, gasoline prices skyrocket. And every year, these four words appear in news reports nationwide as a big reason for the runup: 'lack of refining capacity.'" (CNNMoney.com)

• A Media Fourfer:

- In a Troubled Time, a New Business Magazine: "S. I. Newhouse, chairman of Condé Nast, said in an interview that he had no patience with Portfolio skeptics. 'Damn the torpedoes and full speed ahead,' he said. 'I don't think we're going to trample on Forbes or Fortune. I think we're going to help the whole field. We're going to bring excitement to it, and we're going to bring luxury and fashion advertisers into it.'" (The New York Times)

- Best-Informed Also View Fake News, Study Says: Survey "respondents who seemed to know the most about what's going on -- who were able to identify major public figures, for example -- were likely to be viewers of fake news programs like Jon Stewart's "The Daily Show" and "The Colbert Report"; those who knew the least watched network morning news programs, Fox News or local television news." (The New York Times)

- Newspapers Lose Readers, Advertisers, Now Analysts: "Readers were the first to abandon U.S. newspapers. Then advertisers and investors. Now analysts are joining the exodus." (Bloomberg)

- In case you were wondering who's to blame for the Virginia Tech massacre, here's a list of over 50, with the appropriate media attribution.

---

TECHNOLOGY & SCIENCE

• At last, music is the winner: "In truth, [EMI's] radical new online strategy looks more like an act of desperation than a progressive rethink of DRM. It's perhaps best understood as a gallant attempt to kick-start the shiny new vehicle (online retail) before the wheels fall off the terminally ill one (CD retail) while hopefully closing the gap on its rivals in the same cavalier manoeuvre." (The Age) See also: Apple holds upper hand in music negotiations.

• The Next People's Car: The $2500 auto from Tata. (Forbes)

• Microsoft, Adobe Set A Collision Course on Web: Microsoft(MSFT Quote) and Adobe(ADBE Quote) "are on a collision course as they seek to dominate a new kind of software that will change how personal computers and the Web work together. The companies have been partners in the past, and Adobe is one of the largest makers of software for computers running Microsoft's Windows operating system. The companies have also tussled before, but they have generally stayed in their corners of the tech arena." (free Wall Street Journal)

• What Time is Dinner? The evolution of mealtimes.

• Big Box Watch "tracks new retail construction of several national retailers within the United States. The retailers tracked here all have major expansion plans within the United States, or the opening of a new location will have a significant economic or political impact on the local community." (Google Maps mashup via kottke)

---

MUSIC BOOKS MOVIES TV FUN!

• I just added three new books got to my summer reading list this week: Dan Gross' Pop!: Why Bubbles Are Great For The Economy sounds like just the sort of counterintuitive analysis that makes economics and investing so intriguingly fascinating.

Next up: Todd Buchholz' New Ideas from Dead CEOs: Lasting Lessons from the Corner Office. I enjoyed Buchholz' New Ideas from Dead Economists so much that this new book went right on my list.

Given the current state of the greenback, this book couldn't be any more timely: H. W. Brands' The Money Men: Capitalism, Democracy, and the Hundred Years' War over the American Dollar. The money men are the five key players in American financial history: Alexander Hamilton, Nicholas Biddle, Jay Cooke, Jay Gould and J.P. Morgan. The book is as much about history as it is about finance.

• How NOT To Write A Personal Finance Book.

• Music for the Jazz Damaged: A lovely podcast of songs programmed to engage those who are jazz damaged. Forget interminably long solos or boring improv -- these jazz tunes feature beautiful melodies and gorgeous musicality.

• Neil Young Live at Massey Hall: I haven't heard this new CD/DVD yet, but the reviews are great, and the live version of "Needle and the Damage Done" is outstanding.

• Suicide Food Reminds me of cow/waiter/steak in Douglas Adams' The Restaurant at the End of the Universe, where the food literally speaks for itself.

Is that?... Might it be?... Yes, I think it is actually sunny out! Wow. What a welcome change. Break out the cigars and gardening tools, because spring is here !