Good Saturday morning! How was your Saint Patrick's/Quadruple Witching Day? I don't know which was more distracting: the huge market volume, or all the drum and bagpipe bands warming up for the parade 10 floors below my office window! (Makes you appreciate silence.)
Today brings a wildly random set of links from across the Web:
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¿ Barron's Mike Santoli notes that you cannot fight the tape in Stocks Race to New Bull-Market Highs. Of course, there is always some hair on the deal. (If no Barron's sub, go here). ¿ Inflation -- or the lack thereof -- was among the bigger news items this week. "One and Done" became a Wall Street meme. I doubt the third time will be the charm. Why doubt? CPI was mild due to a pullback in energy prices -- which has already been reversed in March. Betcha next month, we revert back to "CPI ex-energy." For more, see February CPI Tame, but...¿ Speaking of energy, it's hard to imagine but the Price of regular gas hit $2 mark one year ago. And for a really interesting discussion of nuclear power -- notable because it was republished by the Global Association of Risk Professionals -- check this out: Energy Risk - Is Nuclear Energy Safe and Sustainable?¿ March 19 marks the third anniversary of the start of the U.S. war in Iraq. On the eve of the invasion, I penned this analysis of the true basis for the war (no, not oil): Not-So-Hidden Agenda: Strategic and Economic Assessments of U.S.-led Invasion in the Middle East. It concluded that WMDs would not be found, the U.S. military presence would last up to a decade and the war cost could scale up to $1 trillion by 2011. The investment advice based upon that thesis proved quite profitable. ¿ The President's approval rating hit an all-time low, according to The Wall Street Journal (free). The Journal blamed nearly all of the President's negative ratings on Iraq. Barron's went in the other direction, citing everything from "the aborted Dubai Ports deal, post-Katrina ineptitude, the furor over wiretapping, Social Security reform, budget deficits, trade deficits, the unintelligible Medicare drug plan..." (if no Barron's, go here.) ¿ The other big news this week was the meltdown in the Middle Eastern bourses: Black Tuesday saw the Mideast stock markets nosedive. Wags started calling the Dubai stock market "Du-Sell." Some are crediting Saudi Prince Alwaleed bin Talal's $1.3 billion-plus buys with halting the stock market plunge. Also of note internationally: Investors are fleeing Iceland banks as economy heads towards 'hard landing.' ¿ Speaking of crashes: Crossing Wall Street wishes us a happy 100th on the anniversary of The Great Crash of 1906. ¿ A very interesting study by Bronson Capital Markets Research on Stock Market P/E Ratio Expansion and Contraction Cycles. The first few charts are fascinating.
¿ You may have missed it last weekend, but an article in The Wall Street Journal detailed the upcoming $2 Trillion dollars in APR mortgage resets. (If no WSJ sub, go here). It's a good news/bad news situation. The good news is that total additional mortgage payments barely amount to $15 billion per year, a figure the economy can easily absorb. The bad news is that the past 2 years saw more than $1.4 Trillion dollars in mortgage equity withdrawal, a ready source of consumer spending that is likely to plummet in the coming years. (The details are here: Coming Soon: Mortgage Payment Resets and Household Borrowing and the Mortgage Resets). ¿ How about some good news elsewhere? In addition to stellar earnings out of the brokers, we got some pretty positive research recently: ¿ James K. Galbraith takes a dim view of all the Public and Private Debts and the Future of the American Economy. Meanwhile, Bernanke 'quite concerned' about budget deficit. ¿ Fed Governor Donald L. Kohn compares European and US central bank strategies for dealing with market bubbles. ¿ Mark Cuban calls it The Big Lie that CEOs and Shareholder interests are aligned. Slate's Dan Gross is even more succinct, calling CEO pay an " abomination." ¿ Duke University economists are not impressed with fund of funds' performance. Now let's shift to some technology issues: ¿ Nyquist Capital asks, " Does the US really have a broadband gap?" These charts suggest otherwise. ¿ Judge Says Amazon Played With Toys In a Childish Way -- is a brutal smackdown of Amazon CEO Jeff Bezos. ¿ Meanwhile, First Monday notes that many online reviews are nonsense in Six degrees of reputation: The use and abuse of online review and recommendation systems. ¿ Lies, Damn Lies and Statistics is an interesting site dedicated to tech data. It's chock full of all sorts of interesting data points. On to Science: ¿ I found this discussion from physicist Michio Kaku utterly fascinating: The Physics of Extra-Terrestrial Civilizations. ¿ And how about this: Jupiter growing another red spot. ¿ Hitachi has recorded all the Noises Which Reveal Your Hard Drive is Failing! ¿ Some tunes worth checking out: Matt Pond PA's Several Arrows Later is pop-friendly alt-rock, favorably compared with Death Cab For Cutie or the Shins. (I like this disc better than Death Cab For Cutie's Plans.) ¿ For those of you who prefer jazz, check out the 1955 classic Sarah Vaughan W/ Clifford Brown, which has been lovingly restored. ¿ Finally, this very amusing riff on trading is a definite laugh. We've all worked with these monkeys before.
- Merrill Lynch Reassesses Hard Landing Risks. -Goldman Sachs notes Global growth momentum continues amid renewed concerns over USconsumer resiliency. -The Real Estate Journal asks: Is There Still Profit to Be Made From Buying Fixer-Upper Homes? The answer, not surprisingly, is yes -- if you find a good property that's reasonably priced (duh). -The future in China, via Simon Hunt. He just returned from Beijing with a full China Visit Report.
That's all from this end, where I eagerly await Netflix delivery of
. That, and the March 20 speech of
to the Economic Club of New York:
Reflections on the Yield Curve and Monetary Policy
(Are scalpers selling invites to this gig? How can I get in?)
Barry Ritholtz is the chief market strategist for Ritholtz Research, an independent institutional research firm, specializing in the analysis of macroeconomic trends and the capital markets. The firm's variant perspectives are applied to the fixed income, equity and commodity markets, both domestically and internationally. Other areas of research coverage also include consumer, real estate, geopolitics, technology and digital media. Ritholtz is also president of Ritholtz Capital Partners (RCP), a New York based hedge fund. RCP is driven by the analysis performed by Ritholtz Research. Ritholtz appreciates your feedback;
to send him an email.