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INVESTING & TRADING ¿That's all from what were surprisingly fogged-in Hamptons beaches. No matter -- fall foliage season will soon be upon us. Got a comment, suggestion, link idea? Or do you just have something on your mind? The Linkfest loves to get email! If you've got something to say, then by all means, please do.
Coming Week: Bull Charge: "Can the market keep setting records with banks awash in writedowns? ... Next week brings more insight into the Fed's thinking, when the minutes from September's meeting come out on Tuesday. Federal Reserve Vice Chairman Donald Kohn said in a speech Friday that the Fed did not cut merely to save the markets. He said the Fed seeks to 'encourage moderate economic growth over time,' and explained that the lagged effect of monetary policy would mean that the impact of September's easing wouldn't be felt until mid-2008." ( TheStreet.com) ¿ Seeking Patterns in Corporate Profits: "The volatile third quarter is over, but the impact on businesses will become clear only in the next few weeks, as companies report earnings for the period. If the forecasts are accurate, there will not be much to report. Profits for the companies in the Standard & Poor's 500-stock index are forecast to have grown by about 3 percent from the third quarter last year, based on compilations by Thomson First Call of estimates made by brokerage analysts. That is anemic by historical standards and especially poor relative to the last five years." ( The New York Times) See also: Subpar Earnings: Companies Blame Housing, Credit Problems for Weakness. ( The Wall Street Journal) ¿ Are Markets Always a Discounting Mechanism? ¿ Danger Sign: True Believers Are Getting More Fervent: "This continues to be a stunning year for technology investors. The average tech mutual fund is up 19% since the end of 2006, more than twice the S&P 500's return. In particular, it's been a good year for large-cap, high-growth names: Google ( GOOG) ... Apple ( AAPL), Research in Motion ( RIMM), VMware ( VMW) and Amazon.com ( AMZN) (AMZN) are all at or near highs. Not 52-week highs, mind you, all-time highs. And there are other positive signs." ( Barron's) ¿ Are Durables Goods Orders a Leading Indicator for Stock Prices? ¿ Interesting piece at MarketWatch: How 2007 is different from 1987 and how it's the same: "Analysts, including yours truly, love to draw parallels between current market conditions and those of the past. Just this summer, when the Dow Jones Industrial Average topped 14,000 for the first time, I compared 2007 to its 1998 ancestor. Both times, the market dropped, stopped and dropped again for an "official" correction exceeding 10%. But the more we wade through the minefield that is today's credit crunch the more is written about the last time we saw such problems -- 1987. Parallels are also being drawn in politics, the dollar, war and Wall Street itself so this confluence of coincidences may not be such happenstance at all." ¿ Mr. Market's Psychology: "Calling Dr. Freud. Come in Dr. Freud. Mr. Market needs help. For it is a sign of thinly veiled confidence or deep neurosis that the stock rally hinged on Friday's jobs report. In the good old days of bulls and what must be called bull-malarkey in a family publication (and you have to be over 30 to remember those days), Mr. Market would have -- and could have -- steamrolled over a jobs report and just about any other data report put together by statisticians and factotums of federal facts. But now, Mr. Market, who is the ultimate expression of the teeming mass of institutional investors, is writhing about like the Rothschilds of old Vienna. Thankfully, the report showed job growth and the articulated groans will be kept to a minimum." ( Barron's) ¿ Sector rotation: an investment dead end? ¿ Tomorrow's WallStrip is very, very funny. Here's a preview: The Value(less) U.S. Dollar.
ECONOMY The wall of worry continues to build: ¿ Dr. Irwin Kellner of MarketWatch looks at why this could be one of the worst holiday seasons in years, in Retail: Blue Christmas: "It's the first week in October, so it must be the start of the Christmas shopping season. Don't take my word for it; visit your local department store or mall. You'll find holiday decorations have been hung with care, with the hopes that shoppers soon will be there. Talk about high hopes. This year's holiday shopping season figures to provide all the merriment of a funeral." ¿ Suddenly, It's All Greenspan, All the Time: "Roll this phrase around in your brain: Alan Greenspan, chatterbox. For more than 18 years, that combination of words would have seemed absurd. You could hardly get Mr. Greenspan, the famously cryptic former head of the Federal Reserve, to say anything, lest a casual slip of the tongue send the economy into a tailspin." ( The New York Times) ¿ What was the impact of the Fed action in August and September?- Investors to Fed: Thanks for nothing. ( CNN/Money.com) - Why The Fed's Cut Won't Spark Inflation. ( BusinessWeek)Regardless, the Fed may find its options narrowing, especially as markets make new highs following the liquidity injections: Trouble ahead for the Fed.
HOUSING ¿ Here's a new one: Being too broke to sell: "But another factor was at work: Sellers -- not buyers -- were in trouble as their closing dates neared. 'Our office had four sales in one week that failed to close because the seller didn't have the cash,' said the real estate agent, who declined to be identified because she feared office repercussions. The sellers couldn't come up with the money? It seems that for those homeowners on the margins -- those with some but not much equity -- the costs of a real estate transaction are turning into a kick in the pants." ( Chicago Tribune) ¿ Pending home sales index drops to lowest level ever. ¿ Homebuilders Liquidate Assets in Desperation Sales: "When D.R. Horton Inc. ( DHI), the second-biggest U.S. homebuilder, couldn't sell the one-bedroom condominium in San Diego it listed for $349,800, the property was auctioned as a last resort for 37 percent less. D.R. Horton, with annual revenue of about $11 billion, and Hovnanian Enterprises Inc. ( HOV) now face the worst choice in the worst residential real estate slump since the 1930s. They're selling homes at any price they can get. 'It's desperation time and some companies may not make it,' said Alex Barron, an industry analyst at Agency Trading Group Inc. in Wayzata, Minnesota. 'At this point in the housing cycle, if you have too much debt, it's hard to get out from under it.'" ( Bloomberg)
TECHNOLOGY & SCIENCE ¿ Fascinating experiment in music pricing: Radiohead is letting Listeners Determine Download Prices. ¿ Its Creators Call Internet Outdated, Offer Remedies: "In 1969, at the Pentagon's Advanced Research Projects Agency, Larry Roberts oversaw a program of connected research computers called ARPAnet that became the foundation for the Internet. Four decades later, he has spent nearly $340 million trying to redo that same technology, which he now believes is far behind the times." (free in The Wall Street Journal) ¿ Some good advice for Rupert Murdoch: WSJ.com: Free or Paid? (Yes)
MUSIC BOOKS MOVIES TV FUN! ¿ Last week, we mentioned the new Bruce Springsteen album, Magic. While everyone is buzzing about that disc, I want to direct your attention to a band that reminds me a great deal of The Boss of old: The Hold Steady. This band has great vocals and well-written, raucous songs. ¿ In the Race to Buy Concert Tickets, Fans Keep Losing. ( The New York Times)