Belated Linkfest

Another challenging week in the marketplace: Tuesday saw the 2nd biggest Dow drop of the year, off nearly 243 points. Barron’s Trader column notes it was the Dow’s "second-biggest weekly drop of the year, closing down 166 points, or 1.4%, to 12,110. It had taken the Dow 82 trading days from its first close above 12,000, on Oct. 19, to its February peak at 12,790 — and just 15 days to fall back below 12,000, which it briefly did at midweek."

Other indices saw similar set backs: The S&P500 fell for the 3rd time in 4 weeks, sliding -1.1%; the Nazz dropped 0.6%, while the Russell 2000 slid 0.8%.

The NorthEast weather was frightful, so our linkfest is somewhat  abbreviated this week:

INVESTING & TRADING

•  Video Debate: Bull versus Bear:

-Barton Biggs Says U.S. Stocks Near `Bottom,’ May Gain 15% — Barton Biggs, a former Morgan Stanley strategist who now runs the $1.3 billion hedge fund Traxis Partners LLC, talks with Bloomberg’s Monica Bertran about the outlook for global stocks, the potential impact of rising defaults in the subprime mortgage market on the U.S. economy and his investment strategy. (Bloomberg Video)

-Dennis Gartman Expects `Sustained Bear’ Market for Stocks — Dennis Gartman, economist and editor of the Gartman Letter, talks with Bloomberg’s Kathleen Hays from Virginia Beach, Virginia, about the stock market and his strategy for investing in commodities. (Bloomberg Video)

What does the Dow Theory have to say about the stock market’s recent weakness? The short answer: Bullish Over a month ago, it flashed a bull-market reconfirmation signal. (although since then, it has closed nearly 500 points lower). (Marketwatch)

• These charts of the Home Builders show how badly you can get burned when you misuse technical analysis to rationalize preconceptions. Very dangerous.

• Do Hedge funds have to disclose to U.S. Bankruptcy Courts when they had bought their shares and how much they paid for them? It turns out yes: Since When Don’t Investors Have the Right to Know? (Bloomberg)

• Bill Gross on Ten Little Assets

Jim Rogers sees U.S. property crash  Commodities investment guru Jim Rogers stepped into the U.S. subprime fray on Wednesday, predicting a real estate crash that would trigger defaults and spread contagion to emerging markets. "You can’t believe how bad it’s going to get before it gets any better," the prominent U.S. fund manager told Reuters by telephone from New York. "It’s going to be a disaster for many people who don’t have a clue about what happens when a real estate bubble pops. (Reuters)

• How safe is your trading account from "Intrusions?"  Floyd Norris points out the latest  online brokerage account scam. (New York Times)

• Bracketology: March Subprime Madness!    

•  Hunch about markets being overvalued pays off for Harvard’s money manager:  In late January, Mohamed El-Erian, head of the $30 billion Harvard Endowment, made a $1.6 billion bet that markets around the world were overvalued, and sold off stocks representing 5 percent of Harvard’s total portfolio. (IHT)

• Forget EMH; try AMH: Adaptive Market Hypothesis    

 

• Fat finger trades – orders made erroneously by
careless traders that cost their employer an arm and a leg – continue
to cause problems, despite rigorous controls and the apparently simple
technology required to stop them. The fat finger points to trouble for traders: The 10 most expensive trading errors.


ECONOMY

The Wall of worry continues to build:

Producer prices unexpectedly jump 1.3%; (Unexpectedly? Don’t headline writers evert get out of the office?)

Bernanke, Greenspan Disagree on
Impact of Corporate-Profit Peak
: The disagreement between Alan Greenspan and Ben S. Bernanke about where the U.S. economy is headed boils down to just one word: profits.For the 81-year-old former Federal Reserve chairman, a peak in profit margins is a sign the economic expansion may be past its prime and the risks of recession are growing. For his 53- year-old successor, the topping out of margins may instead herald better times for U.S. workers as wage increases start to catch up with the five-year boom in corporate profits.   

Does Home Ownership Lead to Increased Unemployment? The Renter’s Manifesto: Big cities can struggle if they overspecialize and then find that times change. Detroit is an example. So is Manchester in Northwest England. Birmingham, in the English midlands, is a different story, a city bustling away, making everything and nothing in particular. As the wise economy-watcher Jane Jacobs once pointed out, Birmingham was thought highly inefficient compared with the specialized mills of Manchester, but when the downturn came, Manchester was devastated and Birmingham kept on chugging along. Chicago, Seattle, New York, and London have similarly reinvented themselves again and again.

Weakening Housing Market Leads to Rising
Debt Burdens
:  Center for Economic & Policy Research looks into the impact of slowing housing on consumer debt

Fingers of Instability

• Mortgage woes: More trouble for retailers: Wal-Mart, Kmart, Target and big chains that cater to low-income consumers could take a direct hit from the turmoil in the mortgage market, industry experts warned. And even though most analysts expect the hit to spending from subprime delinquencies to be modest, they say the retail industry may be in real danger of a sales slowdown if credit problems migrate up the ladder from low net-worth consumers to moderate income households.



HOUSING

Advice for Real Estate Agents The tough residential market means that agents have to smarten up — and become less annoying

‘No Money Down’ Falls Flat: Washington Post columnist Steven Pearlstein with a pop quiz on some potentially exciting new products that mortgage bankers have come up with to make homeownership a reality for cash-strapped first-time buyers.

Subprime Mortgage Woes Are Likely to Spread: Most economic forecasters in a new WSJ.com survey believe recent turmoil in the subprime mortgage market is likely to spread to the broader mortgage market and they expect a widely followed index of home prices to fall this year. But they still think the U.S. will avoid a recession and even a significant rise in unemployment.

The Dirty Little Secret of Inflated Real Estate Appraisals

In subprime mess, another dumb theory falls:  It seemed so obvious at the time, back at the peak of the Internet bubble seven years ago this month. Profits no longer mattered.
You see, it was different this time. It was a new paradigm. Internet companies were changing the world and old measurements of success, such as profitability, didn’t apply anymore. Until of course, they did. And we’re still living with the fallout from the resulting collapse in Internet stocks and tech stocks in general, seven years later.

The Ten Faulty Consensus Views about Sub-prime and Soft-Landing Roubini on why the crowd is wrong about Goldilocks.
 


FEDERAL RESERVE/WAR/MEDIA/POLITICS/ENERGY

• In honor of this week’s 2 day FOMC meeting, here are some amusing Fed cartoons.

Advice for Greenspan: Start a Blog

WHAT IS THE REAL COST OF CORN ETHANOL?

Wired’s new look:  They got their domain back (Wired.com), redesigned their site, and rolled  out a slew of new and interesting blogs



TECHNOLOGY & SCIENCE

When Corporate Interests Conflict on Global Warming: It looks like the carbon producers are going to battle the insurers and real estate  industry   

Will China be the next to moon?

• MIT’s 10 Emerging Technologies from 2007

Immense ice deposits found at south pole of Mars

25 Startups to watch

Starving Polar Bears, Melting Sea Ice Highlight Global Warming 

 



MUSIC BOOKS MOVIES TV FUN!

• Mike Panzner’s Financial Armageddon: Protecting Your Future from Four Impending Catastrophes is garnering some very strong reviews at Amazon. His financial warnings include derivatives, deficits, pension liabilities and Social Security/Medicare;

• Fitting the melancholy mood above is Jazz great Chet Baker. Check out this unusually long YouTube clip (40 minutes) for the details of his sad sack life story and fabulous trumpet and vocals.

The most ambitious prank in history

Hilarious: the people who created sex, drugs and rock and roll, who glorified thug life and guns, are suddenly all concerned with the moral character of America’s teens. Explaining the Crackdown on Student Downloading

 

That’s all from the NE, where after this weekend’s surprise storm, we are hoping that winter is FINALLY over.

Category: Weblogs

Types of Incompetence

Category: Psychology

Blackstone to Go Public?

Category: Corporate Management, Markets, Psychology

Friday Night Jazz: Chet Baker

Category: Digital Media, Friday Night Jazz, Music

Bracketology: March Subprime Madness!

Category: Economy, Federal Reserve, Inflation, Real Estate

BB & Greenie

Category: Federal Reserve

The Return of Inflation Ex-Inflation

Category: Commodities, Federal Reserve, Inflation

1998/99 versus 2006/07

Category: Markets, Technical Analysis

Rules for Real Estate Agents

We sold our house last year — priced it reasonably, and at our first open house (Thanksgiving weekend!), got a reasonable bid. We ended up selling the house to that couple.

Whenever you hear talk of a Real Estate bubble, remember that it matters much less if you own (versus rent). In effect, we rolled out of one over-priced property and into the next over-priced property. When you are a homeowner, actual prices matter less than the spread between properties.

We closed yesterday.

In the process, we dealt with a lot of different agents on our buy and the sell. Some were terrific (who we would not hesitate to recommend and/or use again), a few were jackals, and one or two were deeply disturbed psychopaths who were obviously off their meds, likely violating a condition of their parole.

Along the way, we developed somes Do’s and Don’ts. (I’m sure readers have their own suggestions; use comments and let fly!)

This is a free lesson for the smarter, blog reading agents out there. Its a tough residential housing market, and if you want to earn your living selling real estate, pay attention and heed this advice:

DONTs

1. Don’t waste our time.

I know some people do not know what they want, and you should feel free to schlep those poor bastards all over creation, burning valuable weekend time in the process.

However, when someone
gives you a very specific list of attributes and a broad price range, don’t drag
them around town(s) showing them everything but.

This is rule #1 for a reason: If you waste my time, I won’t do business with you PERIOD. If I tell you I DO NOT want a house with X and Y characteristics, and you drag me to 3 X & Y houses in a row, you are toast. Next agent, please.   

2. Don’t lie to us

In nearly every real estate transaction, the truth will eventually reveal itself. If a prior deal fell thru due to an engineer’s report, I will find that out. If the prior owner paid 1/10 of the selling price 25 years ago, that will be discovered also (not that it matters).

Some of the lies were so transparent as to be laughable. Others were more skillfully concealed. If I ask you a direct question, and you lie directly back, and I discover this lie via an expensive engineer’s report (which would have been unneccessary had you told the truth when asked), I will present the bill to you — and your corporate HQ. (Then collect in small claims court on a theory  of fraudulent misrepresentation).

Stop bullshitting, start adding value, and you might get a sales commission out of it.

3. Don’t tell us what is right before our eyes.

This is one of those nervous R/E habits: chattering on and on about the obvious. If you want to point out small details we might miss — for example, the kitchen drawers pull out all-the-way, or there is a built-in water filter in the kitchen sink, that’s fine. Even telling me the floors under the wall to wall are all hardwood adds something.

But seriously, I have two good eyes and so does my wife. I can see that THIS IS A BATHROOM; I can tell that THIS IS A WALK IN CLOSET.  We actually had one agent solemnly intone: THIS IS THE KITCHEN. Really, how can you tell? Were the fridge, stove and dishwasher clues?

Its not helpful and is actually very annoying. STF up occasionally.

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