Linkfest 2007

Cruel January! Investors counting on Fed cuts were delivered "bad" news on Friday, with a surprise gain of 167k new jobs. The report sent both stocks and bonds tumbling.

Talk about the soft prejudice of low expectations: In a nation of 300 million people, with a full time (non-farm) workforce of 140 million, rustling up a mere 167,000 new jobs is ever so slightly ahead of population growth. If we have been conditioned to think of that as robust growth, we are really up the creek sans paddle. 

Barron’s Trader column (in the new smaller Barrons) noted that "the week’s steep slide in oil and copper prices, failed to mollify investors. Without paying too much heed to the annual flip of the calendar, performance-chasing fund managers who had to run after the 2006 rally now get a fresh 12-month window to earn their keep. And they could — for now — wait for better openings to pounce."

The Dow slipped half a percent, the S&P500 fell 0.6% — the 2nd decline in 3 weeks for both — while last year’s laggard, the Nasdaq, started the year off on the right foot, up 0.8%.

On a personal note, these fests have been running increasingly long — and are taking more time to write than they used to — my New Year’s Resolution is to throttle the linkfests back a bit to a more managable size this year!

Oh, well, we still have time for one more ginormous festival to start off the new year:

INVESTING & TRADING

• WSJ: After the Dow’s 2006 Rise, Investors Ponder a Correction; In a reversal of 2006, the Dow and SPX were the worst performers while the Nasdaq made gains

• The first official trading session featured a pretty ugly Intra-Day Reversal

•  U.S. regulators grow alarmed over ‘hedge fund hotels‘ Just as VCs during the technology boom
created incubators to help entrepreneurs start businesses, so too a few big
investment banks are offering young ambitious hedge fund traders a
temporary home, complete with receptionists, espresso machines and
consultants to help manage them. And it has U.S. regulators growing increasingly alarmed;

Global Returns in 2006 Revisited

• How important has liquidity been this past year? The WSJ writes: Investors are Riding The ‘Cash’ Rapids — There’s plenty of money available, and much of it is in riskier markets; also, Money Is Everywhere, But for How Long?

•  Mark Hulbert on January’s Predictive Powers

Dow Theory Suggests Stock Worries Ahead (Barron’s)

• I’ve been playing with the WSJ’s updated Markets Data Center: Its no Bloomberg terminal, but its very complete — and a heckuva lot cheaper.

• The WSJ looks at social networking stockpicking sites: A New Way To Rate Stock Tips   I much prefer James Altucher’s Stockpickr: More data, less chatter (say it with a Boston accent: it rhymes!)

Five Sector Funds You’ll Need in 2007

Profits Likely to Slow in ’07 (WSJ)

•  Are Bonds a viable alternative to stocks in 2007?   

• Barron’s notes insiders collectively sold 55 shares for every
one they bought int he 1st 2 weeks of December:
Insiders were big Sellers (If no Barron’s go here) Gee, you think they could have waited 2 weeks to avoid the tax bite in April.

He’s Jack! Nardelli’s Ouster Shows GE’s Welch Picked Right With Immelt (Bloomberg)   

James Dines’ The Dines Letter is Marketwatch’s Investment Letter of the Year 2006

• Tony Crescenzi on Seven Reasons to Downplay the Yield Curve (I obviously disagree)   

• Does the Markets’ 4-year win streak mean a decline in 2007? It turns out there is no statistical support for that thesis.

The Wall Street Self-Defense Manual (Blodget)

•  The Price to dividend ratio.

Is your Boss a liar? That’s too bad — its bad for productivity, morale — and profits

 


ECONOMY

What Wall of Worry?:

• The NYT: Job Growth Is Strong, Surprising Economists (and a

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); Nouriel Roubini on Leading and lagging indicators of the labor market;  Also, Jobs Data Brighten Economic Picture (free WSJ) BLS data is always subject to revision, but if it stand, then ADP, Monster.com, and me all got this one wrong.

ADP claims that December is an especially perilous month to compare the two reports (because ADP’s numbers have to be adjusted for end-of-year tax accounting in ways that the Labor Department does not). ADP is, after all, a payroll processing firm.

The Goldilocks Recession?

• Whatever wage gains there have been are getting eaten up by exploding Health Care costs:    

Why Manufacturing Shows Resilience:  U.S. manufacturing is showing surprising resilience in the face of a sharp slump in autos and housing, and in the coming year it is expected to expand roughly in line with the overall economy.   

Copper prices tumble after U.S. construction spending drops (See also: Copper, commodities sell-off may signal slowdown)

• ECRI — which has an admirable track record — says Says Recession ‘No Longer a Serious Concern’

Could the world shrug off U.S. Recession Concerns? Economic might may be shifting to old stalwarts

Economy Poised For ’07 Rebound, Forecasters Say (WSJ)  U.S. Trust’s Robert McGee was the most accurate forecaster in the 2006 second half; Here’s what he sees in 2007. See also Economists Cautiously Optimistic About 2007

• Stephen Roach’s Lessons of 2006

The Baltic Dry Index (BDI) shows global growth remains strong

• Three Factors for ’07: Housing, Fed Moves And Capital Spending (WSJ) 

How Business Trounced The Trial Lawyers;



RETAIL/Consumer Spending

I keep wanting to retire this topic, but it keeps staying relevant:

Retail Sales Roundup

• What does it mean now that holiday Retail sales have dissappointed? "Holiday retail sales, once considered a barometer of the health of the economy, are no longer a crystal ball." Holiday-Sales Figures Leave Big Gaps (Forecast: The bullshit machine will shift into overdrive by the spring). Also, Holiday-Spending Estimates Decline;

Flat-Panel TV Jam:  Now
that flat-panel television sets are the biggest hit in consumer
electronics, manufacturers are wondering how to put off the forces that
could turn them into low-margin commodities; In December, Best Buy and Circuit City sales rise;

• On a related note, the WSJ looks at the Battle for the Living Room (free)

The Whole Foods Story (Slate)

• Ron Lieber’s 2006 Loyalty Report: frequent-flier miles, cash rebates and merchandise rebates, etc.

Money Saving Tips for Life



HOUSING

• There’s been a lot of Spec construction on Long Island;  Be sure to check out all the comments from builders and developers — quite informative.

• Caroline Baum suggests that Housing Data Yield a False Sense of Complacency   

• Is the Economy poised to shake off housing slump? Or is Lennar warning of further debacles?

• The Mortgage Lender Implode-O-Meter; also: Sub-prime lender Ownit seeks bankruptcy protection

• The Historical chart of Residential Investment Cycles, 60 Years implies that the housing slowdown is still relatively young — unless this is repeat of the 1995 scenraio

• And for you hard core geeks, Monetary Policy and the house Price Boom Across U.S. States;

 


FEDERAL RESERVE

The Fed was a big mover of markets this week, between the FOMC minutes and the speechifying:

Parsing the Fed minutes, (Video with Greg Ip and Jon Hilsengrath)

Fed Officials Move Toward a Neutral Stance on Rates

Pimco’s Gross sees fed funds at 4.25% by year-end; Despite jobs growth, Gross thinks the Fed’s biggest need is stoking GDP;

• Over the past 22 years, Jeff Kleintop, of PNC Wealth Management has tracked price increases with his holiday inflation gauge: the Christmas Price Index. Its up 3.5%, considerably less than last year’s 9.5%.

 


Sentiment/Psychology

New Year’s Resolutions for Irrational Investors

Investors Greet New Year With Ambivalence

Three Pervasive Myths of Trading Psychology

• Know thyself:  Self Awareness and Trading      

 


Media/Energy

• The WSJ goes all YouTube on us with embedded flash video; Do it yourselfers can go to Hellodeo — a new site that allows real time webcam embedding of video — (no more ripping and uploading).

• More headaches for the networks:  News at Seven automatically generates a virtual newscast pulled
from stories, images, videos and blogs all linked by a common news
topic;

• BARRON’S Mike Santoli kicks off a new column, Streetwise (if no Barron’s, go here)

• Has Malcolm Gladwell — author of Blink and the Tipping Point — finally jumped the shark? His defense of Enron as having done nothing wrong is, well, indefensible, and Joe Nocera of the NYTimes calls him on it: Tipping Over a Defense of Enron (and

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) Nocera is relatively gentle on him — there was a much harsher takedown in the NY Observer in Oct ’06 — but there seems to be a wee bit of a Gladwell backlash developing;

2006: Energy Year in Review (Thanks, Paul!)

The Land of Rising Conservation; On a related note, this interview with Power Co AES’ cheif is fascinating: A Future With the Wind

Power-Sipping Bulbs Get Backing From Wal-Mart; See also Wal-Mart readies large-scale move into solar power;      


War/Politics

Can Bush’s Tax Cuts Survive?

• I got slaughtered by AMT last year: Senators seek repeal of alternative minimum tax

Rep. Frank Opens Door to Business: Proposed Trade-Off Of Agenda Goals May Ease Rancor; and Business Mobilizes to Defend Turf – Firms Plot Campaigns to CounterEffects of Democrats’ Agenda   

Stem-Cell Research is a test for Bush, new Congress

House Passes Ethics and Budget Measures;

• The War of the World: Twentieth-Century Conflict and the Descent of the West (for those interested in less serious war analyses, there’s always Doonesbury) And what might be the most unexpected book, an infantry team leader with the 3rd Stryker Brigade Combat Team of the 2nd Infantry Division pens a book of war poetry: Here, Bullet; See also: The horror, the horror of Iraq, in poetry

• Opinion:  Our Iraqi Mistake


Technology & Science

Science news story of the week: A vast ice shelf — more than 40 square miles in extent – over five times the size of central London –  collapsed in the Arctic; It was located off a Canadian Island; Global warming issues aside, a large city floating south form the North Atlantic poses a shipping peril;

How to go to M.I.T. for free

• USA Today says Apple’s new iPod could bolster music dominance;  Apple is entangled inseveral Patent and anti-Trust lawsuits (disclosure: I am on the BoD of one such plaintiff).

• The Macworld rumors have already started to fly: Macworld predictions for next week;

• Cringely’s tech forecasts for 2007:  #11) The year will see two kinds of large cap tech and media companies: those that destroy shareholder value quickly by acquiring companies and those that destroy shareholder value slowly by not acquiring them. (Disclosure: I am on the BoD of Burst.com)

• Very cool BBC documentaries: The Secret Life of Machines is up at Google Video;

• A New Way to Gauge a Start-Up’s Worth   
http://www.nytimes.com/2006/12/31/business/yourmoney/31stra.html

• Who knew this was even a hobby? For Extreme Tree Hunters, Redwoods Rule   

Mindball, the new game where you move a ball with your mind (Video)

• Microsoft gets some good and bad reviews:

-Bold Redesign Improves Office 2007

-Zune is already a failure, thanks to the RIAA, sez Bob Lefsetz (see # 10 of his 2007 Predictions)

Also, see the WSJ’s Rob Guth on Microsoft’s evolving strategy

• What carbon emissions are doing to the ocean: THE DARKENING SEA

• The Twists and Turns of History, and of DNA; Also, The Science of Evil

• YouTube’s new owners may yet run into Copyright troubles after their Piracy vow went down the YouTube; Also, a papparazzi video is casuing YouTube some trouble: Its of Super Model
Daniela Cicarelli (ex-wife of soccer great Ronaldo) frolicking on the
beach with her Merrill Lynch banker boyfriend;  A Brazilian court ordered the site shut down

until it
removes a video from its site — but as fast as the company
removes the video, Brazilian users keep uploading fresh versions! 



Music Books Movies TV Fun!

•  We noted James Brown’s passing last week. After that, I started poking around and discovered a live James Brown concert available for free download at NPR.

Norah Jones has a new album, Not Too Late, coming out late this month. You can stream the first single here, or watch a video here.

• Lots of live streaming concerts, via NPR.

• In 2006: Album Sales Plunged, Digital Downloads Soared   

• I have quite a few Books in the Queue; Also, Reminiscences of a Stock Operator is now in the public domain, and you can download a PDF of it for free   

•  facinating:  A Billionaire Divorce — And Not a Lawyer in Sight

Hey parents!: Allowance 2.0

God Denies Talking to Pat Robertson; Supreme Being Calls Televangelist ‘Delusional’   

• This will be the funniest thing you see today: Spiders On Drugs

Another winter weekend, and its already 67 degree! The ragtop comes out of the garage again! My collectors insurance ($223) is for only 3,000 miles a year, and if the weather stays this nice in January and February, I may surpass it!

Welcome back to RM, George!

Category: Weblogs

New Year’s Resolutions for Traders

Category: Apprenticed Investor, Psychology, Trading

New Barron’s Column: Streetwise

Category: Economy, Financial Press, Psychology, Technical Analysis

Soul Man

Category: Digital Media, Music

Plus 167k!

Category: Data Analysis, Employment

NFPayroll Day

Category: Data Analysis, Economy, Employment

2006: Album Sales Plunged, Digital Downloads Soared

Category: Digital Media, Music, Web/Tech

Retail Sales Roundup

Category: Consumer Spending, Retail

Residential Investment

Category: Economy, Real Estate

Hellodeo

Category: Digital Media, Television, Weblogs