- the slide in housing sales and consumer spending;
- Ballmer's failure to innovate; and
- the Nasdaq halt in trading.
The Shoe Moves to the Other Foot Posted at 3:56 p.m. EDT on Friday, Aug. 23 The shoe is now officially on the other foot. Last year at this time, the U.S. consumer and the homebuyer were buoying our markets and offsetting the declining markets of Europe and China. Now the exact opposite is occurring. As U.S. housing sinks badly, the Fed can't really counter it, and might not even want to given how unaffordable homes are in many areas of the country. Housing became too overheated in some of the biggest areas. We had just begun to have bids above the offering price abound in some of the biggest markets. There was a developing shortage of homes all over the place. HD) is a terrific barometer of home spending. While the quarter was beautiful, the stock's telling you not to be complacent. Meanwhile, all the data out of Europe have turned positive. First, it was manufacturing. Now it is service employment. I think Europe could have good year-over-year growth by this time next year. China? After about a year of "worse than expected" macro numbers, the turn is at hand. The Baltic Freight Index verifies that and the run in the shipping stocks confirms it, too. These two positives can offset the two negatives. However, they don't buoy the same stocks. The turns in Europe and China, synergistic as they are given that 25% of what China sells goes to Europe, will help the gigantic multinationals in this country. That's what seems to have the best bids underneath. At the same time, the domestic spending stocks, the bulwark of the market for so long, will either take a breather as higher rates cool things off and then recharge when rates stabilize (albeit at a lower level) or just be written off for the year entirely.
A Vicious Coda to the Ballmer Years Posted at 10:26 p.m. EDT on Friday, Aug. 23 To survive as a technology company in this day and age you need to be dominant in social, mobile and the cloud. Steve Ballmer's Microsoft ( MSFT) failed terribly with the first two -- despite owning Skype! -- and says it's big in the third, but I don't know a soul in the business who thinks that. That's why, in the end, he had to go. NFLX) or Twitter or Yahoo! ( YHOO) or even Sprint ( S) and reinvented the company, turning it into a social and mobile powerhouse. But he never did. Instead he hooked up with a sinking Nokia ( NOK) for mobile and never monetized Skype the way he should have and failed to buy Yahoo!, which was a dreadful decision.
That Was a Travesty Posted at 4:15 p.m. EDT on Thursday, Aug. 22 Where was the back-up system? Where's the redundancy? Where were the people who run the Nasdaq? Where was the SEC? Of course, nowhere. We know that. Today's three-hour Nasdaq halt was a total travesty. We all know that there are plenty of back-up exchanges available that could have been ordered into action by the government We know that if the SEC demanded it, the Nasdaq would have had to put up a redundancy system. FB) IPO. Just a totally disappointing day all the way around EXCEPT for the stock market itself, which was, quite frankly, huge, led by the transports and not even stopped by the decline in Hewlett-Packard's ( HPQ) earnings. I think that unless we get something fixed here, unless we get answers, we will, once again, have still one more wave of people getting out of the market. We never really recovered from the flash crash, which was more severe in terms of the psyche of the investor than almost anything other than the week of the Lehman collapse. Some would say it was worse than that because we could never trust the asset class again. I can't blame a soul for pulling out of stocks after today. Without answers about what happened, it makes a ton of sense. Because this whole business of stock trading has been sacrificed on the altar of high-frequency trading and the protected broker interests and nobody is protecting the little guy any more. At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long FB.