It is a gorgeous day herein the Northeast: Sunny and 60 degrees (hit 65 yesterday!) No wonder Crude is slumping.

No time to chit chat, I gots stuff to do outdoors. With no further ado, here is this week’s linkfest!

• The WSJ on the NFP: Jobs Data Suggest Economy Picking Up Steam;   

• Barron’s Technical Analyst, Mickael Kahn, notes that "Rising Bond Yields Will Pressure Stocks"  (If no sub, go here);

• I previously linked to Hedgefolio’s terrific Permabull piece; I used many of your suggestions to assemble the opposite take: You Know You are a Permabear When…  (its freakin’ awesome);

• Bloomberg’s Caroline Baum asks: Where’s the Evidence of Labor Market Tightness?

• In the real world, stuff costs more money. Hence, the Thomas’s Ham & Eggery Guide to Inflation;

• Despite my bearish outlook for 2006 equities, I’ve never been a believer in the housing bubble; Research from Denmark’s Danske Bank reaches a similar conclusion as to the housing boom– its not a bubble:  US housing – boom or doom?

• Look who’s bloggin’: The WSJ Joins the Blogging Crowd;

• The president’s advisory panel on tax reform issued its report in
November — and most surprisingly, they effectively trash what was (arguably) the
greatest success of the Reagan administration: Is the 401 (k) in Danger?

• Is Corn the next Gold?

• I have been lamenting the impending end of M3 reporting (See "Can M3 be Saved?"); The Capital Spectator interviewed Ron Paul, the Congressman trying to do just that: ONE CONGRESSMAN’S FIGHT TO SAVE M3;   

• Cramer’s Mad Money has been outperforming the indices by a 2 to 1 ratio: Booyah Audit;

• Last week, the NYT’s Dave Leonhardt had a column about how the popping of the Real Estate bubble may not be so bad after all. Northern Trust’s Paul Kasriel asks: Is Dave Leonhardt A Renter?

• A long article written for advisors on how to cope with this mess: Understanding Secular Bear Markets: Concerns and Strategies for Financial Planners    

• The Financial Times notes that a spike in insider selling alerts equities analysts;   

• We remain vulnerable to an Oil price shock, and terrorists are increasingly targeting Oil infrastructure: An Energy Pearl Harbor?   

• Guess what happens when a new CD release is put out at $7.98? You would think that maybe Music Labels Might Stop Ignoring Basic Economics;

New Rydex ETFs to track ‘pure style’ indexes from S&P

• Ever wonder why home electronic prices decline each year as technology advances keep making them better — but kitchen and laundry room appliances — loaded with electronics — defy the trend and cost more?

• Eliot Spitzer wonders Why Doesn’t Digital Music Ever Go On Sale?

• Respected economics firm Bridgewater is getting increasingly cautious;

• It turns out that Money can make you happier;

• Here’s a site dedicated to Renewable Energy Stocks;

• The next generation OS from Microsoft is set to drive NAND flash memory sales: Vista OS set to drive NAND growth, says Samsung;

• As cigarette sales hit historic lows, Mcsweeneys takes an amusing look at some of the Less Powerful Industry Lobbying Groups;

• Forbes reveals the Top Topless Beaches 2006;

•  Thank You For Smoking looks like an amusing movie (good cast, too);

Top 10 Strangest Lego Creations;

• New CD out from Pink Floyd guitarist/vocalist David Gilmore: On an Island. Amazon has a video interview with him on the disc, his first solo album since 1984′s About Face, and his first studio recording since Floyd’s Division Bell. (Sirius is running an all Pink Floyd/Gilmore Channel this weekend);

• Lastly, an experiment to determine how smart your Right Foot is:

1. While sitting at your desk, lift your right foot off the floor and make clockwise circles.

2. Now, while doing this, draw the number "6" in the air with your right hand. Your foot will change direction.

You can keep trying, but you cannot outsmart your foot!

That’s all from Lawn Gyland, where I am off to brunch, a quick spin on the twisty backroads of the North Shore, and then some gardening. Enjoy the weekend — and the return of the Sopranos

Category: Weblogs

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

6 Responses to “Weekend Linkfest”

  1. Eclectic says:

    You know you’re a per…

    (looks around)

    Oh! Forgot… Sorry, it’s hard to break old habits.

    You know… Pavlov and all that.

  2. Get Long Vega says:

    No housing bubble? Come on, you run money! You should know better than that. Have you read Rosenberg’s conference call transcript? Have you been to southern FL or anywhere in CA or Arizona or Boston (I won’t even bother asking you about NY and NJ)? It’s March of 2000 for the housing market. But wait. There’s probably about 4x as much leverage in the consolidated housing trade as there ever was in the dot.BOMB blowout. 43% of home purchases made with no money down last year? 33% of home purchases classified as vacation homes or investment properties? Come onnnnnnnnnnn. What do you think the real rate of house price appreciatiation prior to 1997 was in the USA? Answer: MAYBE 1%. It sounds like you’re too close to your own purchases to be realistic about housing. Housing = 150% of GDP? Yeah, that’s sustainable. Real income has done NOTHING the last 4 years, yet prices are up 20% a year in moderate markets? Just wait until the resets start. It’s going to be horrible for a lot of people. Mortage industry insiders say 1 in 8 homes have a good chance of defaulting. And what’s the savings rate? And the economy keeps bubbling along with the HELOC orgy? Housing is done, man. Game over.

    But don’t listen to me. Read Rosenberg’s piece. Then read the psychology of a RE crash headline piece. It’s all about drama. Sure, you get drama on the upside. But if you’re not COOL about it, if you don’t understand why you’re making all that money and that it really isn’t WORK so much as it’s just a massive ED SEYKOTA, long term trend in RATES going DOWN DOWN DOWN because the NASDAQ is off 80% and the FED is CLAMMORING to keep the economy on some sort of legitimate footing…

    Look, we never paid the Piper for stock market sins in the late 90s. Sure, prices cratered, but we had one quarter of negative GDP growth and that’s it. AND THE CONSUMER STILL SPENT MORE THAT QUARTER THAN THE PRIOR QUARTER. This time, this next recessiong that is, there is going to be NO PLACE TO HIDE. The LIQUIDITY TRAP is here. Fed’s gonna smack the short end and NOTHING IS GONNA HAPPEN. There’s wayyyyyyyyyy too much debt that has to be repaid. Think Japan in the 90s.

    Anyway, get ready for the bottom to fall out in housing. The specs and homebuilders are leading the way down, they GOTTA sell, it’s their BUSINESS. What makes is a total SNAFU is that ODD-LOT ROBERT is going to have to compete with the BIG BOYS and that will not be pretty. Supply is off the charts, demand is in the toilet because most everyone who wants to buy has already BOT, and affordability (cost of homes and rates) are at lifetime hights.

    Rosenberg’s Note:

    http://rsch1.ml.com/9093/24013/ds/50479419.PDF

    Real Estate Psychology Headlines:

    PENDING (the link is at work)

    And if you have an argument WHY there is no bubble in housing today or stocks in 99, maybe you could explain what I’m missing.

  3. KirkH says:

    Some Real Estate thoughts

    1> Most people would consider the 35% drop you cite in your article as evidence of a housing bubble.

    2> People are borrowing money to buy homes. Most people playing with stocks use their own real money.

    3> Apprasial fraud, No documentation stated income loans, Fannie buying up risky loans.

    4> Speculation. Flippers create artificial demand by using home equity extractions from home 1 to use for downpayment on homes 2, 3, etc. My buddy owns 3 homes and he can’t afford to pay for two of them when his ARM adjusts.

    5> Inventory. 37,000 homes for sale in Phoenix, 15,000 of them are unoccupied/investor owned.

    6> According to the most popular article on WSJ.com right now “First American Corp., projects that about one in eight households with adjustable-rate mortgages that originated in 2004 and 2005 will default on those loans.”

    7> The 1/8 figure from 6> assumes prices don’t drop and rates don’t rise.

    8> You wrote “it is an increasingly extended asset class that may be subject to a significant correction in the future. But a 25%-35% retracement is a very different situation than a bubble”

    9> A 35% drop would mean the 1/8 would vastly underestimate the amount of defaults and subsequent supply added to the already large supply of homes.

    10> Home ownership rates are flat while new home construction is at all time highs suggesting people are buying up the excess as investments.

    11> Most people think home prices never go down.

    12> Median wages are dropping, median home prices are exploding.

    13> People are using no money down, negative amortization, 40 year loans.

    14> Hundreds of $billions worth of adjustable rate loans are going to adjust in the next two years.

  4. You raise some good issues, but let’s look at some of the specifics:

    Some Real Estate thoughts

    1> Most people would consider the 35% drop you cite in your article as evidence of a housing bubble.

    As I wrote: As the rate cycle plays out, prices will slide. I’m looking at a slow asset depreciation of 10%-30% over the next several years as a realistic possibility.

    Due to pop growth, it won’t stay down forever — just a few very ugly years.

    2> People are borrowing money to buy homes. Most people playing with stocks use their own real money.

    Actually, people used tons of margin to buy stock in the 90s, and continue to this day

    With Real Estate, you are comparing a down payment plus ,mortgage payments for the equivalent of renting

    3> Apprasial fraud, No documentation stated income loans, Fannie buying up risky loans.

    No doubt it exists — thats the bank’s problems

    4> Speculation. Flippers create artificial demand by using home equity extractions from home 1 to use for downpayment on homes 2, 3, etc. My buddy owns 3 homes and he can’t afford to pay for two of them when his ARM adjusts.

    When the music stops, someone wont have a chair — but let me remind you that According to an NAR survey, “only 3% of all home buyers sell their home in a year or less.” That is not exactly the picture of excess speculation.

    5> Inventory. 37,000 homes for sale in Phoenix, 15,000 of them are unoccupied/investor owned.

    Inventory is huge now — over 5 months supply — and it cant be good for prices.

    However, there are plenty of houses that are “just only barely” on the market — people testing the waters, asking top dollars, not really motivated sellers

    6> According to the most popular article on WSJ.com right now “First American Corp., projects that about one in eight households with adjustable-rate mortgages that originated in 2004 and 2005 will default on those loans.”

    That’s huge for the macro picture
    See this: Coming Soon: Mortgage Payment Resets
    http://bigpicture.typepad.com/comments/2006/03/coming_soon_mor.html

    7> The 1/8 figure from 6> assumes prices don’t drop and rates don’t rise.

    I ordered the report –havent seen it yet –

    8> You wrote “it is an increasingly extended asset class that may be subject to a significant correction in the future. But a 25%-35% retracement is a very different situation than a bubble”

    yes.

    9> A 35% drop would mean the 1/8 would vastly underestimate the amount of defaults and subsequent supply added to the already large supply of homes.

    exactly

    10> Home ownership rates are flat while new home construction is at all time highs suggesting people are buying up the excess as investments.

    time for more immigration !

    11> Most people think home prices never go down.

    Thats because over any 10 year period, they haven’t historically done so (not adjusted for inflation)

    12> Median wages are dropping, median home prices are exploding.

    Not any more they aren’t — home prices were up 13.5% last year, and that’s skewed by the high end

    13> People are using no money down, negative amortization, 40 year loans.

    Some People are idiots

    14> Hundreds of $billions worth of adjustable rate loans are going to adjust in the next two years.

    Eli’s coming . . .

  5. Eclectic says:

    On the debate:

    …a healthy nod to BR, with one exception.

    per BR

    ” Actually, people used tons of margin to buy stock in the 90s, and continue to this day.”

    It’s BBs to a boxcar in comparison.

  6. Eclectic says:

    It’s possible there could be a housing crash, but I doubt it.

    My whole thing is that just a topping-out in housing will affect between 20-35% of all jobs in the US.

    If that were to drive the economy into enough of a recession, then nobody could be sure that a housing crash wouldn’t accompany it.