Thanks for all the nice feedback, after last week’s linkfest was put up at TheStreet.com.
The most common emailed question: Where do you find all these links? Well, during the course of a week’s worth of research, I see tons of great stuff. I cull my favorites articles and columns, saving them and voila! Weekend Linkfest.
Let’s get down to it:
• Awful. That’s the only word for Q4 GDP (prelim), as Government spending plunged, the Consumer throttled back, Businesses failed to pick up the slack, Inflation accelerated and Imports (mostly energy) surged. There will be 2 more GDP releases — a revised and final — and I expect the data may creep up some.
• Is New York City a microcosm of the US? I never thought so, but "Priced out of Brooklyn" implies otherwise. There are surprising similarities between the wealth disparities of Manhattan versus the Outer Boroughs, and the rest of the nation’s economic class distinctions;
• Demand for Durables Goods rose 1.3%, but Furniture sales took a big hit;
• Despite the strong week, be aware of the The December Low Indicator’s track record; It’s pretty damned good — and that’s bad for the Bulls;
• Jim Rogers in BW on Investing in a Material World;
• I was almost a guest on The Daily Show. Almost (so close!).
• Speaking of TV: Rumors abound of a Jim Cramer Wall Street Reality Show
• We know about The Five Dumbest Things on Wall Street This Week — How about Business 2.0′s 101 dumbest moments in Business ?
• Forget the Cult of the Bear for a minute, and consider The Cult of Ferrari;
• Enron is proof positive that Markets can be Astonishingly Inefficient;
• IBD looks at how Home Equity Extraction in Q3 Fueled a Shopping Spree;
• The NYT asks "Is the Fourth Year a Charm for the Bull Market?" This is a surprisingly oversimplified single variable market prediction. Simple and understandable are good, but I find that over the long run, oversimplification is a misleading and money losing approach;
• Oil Charts galore:
• In a Ruined Country: The Atlantic argues Yasir Arafat destroyed Palestine;
• The Associated Press totally blew a story on Digital Music; If you are going to merely repeat industry press releases, why should anyone take you seriously?
• Former Treasury Secretary and now Citibank Director Robert Rubin on why "We Must Change Policy Direction;"
• There is no indicator more worthless than the Conference Board’s LEIs;
• Is there a potential Liquidity Fire Trap?
• An Interesting blog: sound money tips;
• Speaking of Blogs: Here’s Forbe’s look at the Best of the Web, including lots of blogs;
• Fun with Lists:
• Lastly, some pop culture mash up that is simply too funny: A Fan-produced video of William Shatner’s version Lucy in the Sky with Diamonds
That’s all from NY, where its a gorgeous, sunny, 50 plus degree day — and yet Oil
remains over $65 a barrell — what happens when it becomes seasonably cold?
Get outside, and enjoy the day! (Don’t worry, you can finish the linkfest tomorrow — its supposed to rain!)
The always excellent online Journal collect lots of econo-geek comments on yesterday’s GDP stinkeroo: I didn’t feel the need to pile on, but I do dig the difference between the excuse makers and those genuinely shaken by the awful data:
WSJ: "After the economy navigated a brutal hurricane season to post robust growth in the third quarter of 2005, growth cooled considerably in the fourth quarter. Gross domestic product, the broadest measure of U.S. economic output, increased at just a 1.1% seasonally adjusted annual rate as free-spending consumers became more cautious and the gaping trade deficit continued to provide a drag on the expansion. For all of 2005, GDP growth averaged a 3.5% annual rate. What does the slowdown in the fourth quarter mean for the economy in the months ahead?
Economists weigh in with their reactions:
"In both its overall appearance and underlying detail, the 1.1% fourth quarter growth in real GDP ranks as the most perplexing report in memory. At face value, such weakness would seem to make it more difficult for the Fed to tighten monetary policy again. But the underlying details reinforce — if not increase — perceptions that much faster growth lies ahead. Nonetheless, the confusing and conflicting contradictions with other data make it difficult to be confident in any inferences about the outlook."
– David Resler and Gerald Zukowski, Nomura Securities International
* * *
"Consumer spending was actually a little better than expected, rising by 1.1% in the quarter vs. our forecast of +0.3%. I think more of the decline in auto sales was apportioned to the business sector (fleet sales) and less to the retail side than we expected. Housing posted a reasonable gain of 3.5%, but this was less than half of our assumed rise. The monthly source data pointed to a bigger gain, so this is a bit puzzling."
– Stephen Stanley, RBS Greenwich Capital
* * *
"The consensus was a bit optimistic but this is a big surprise. The softness against our 2.6% forecast is explained by two components, fixed investment and government consumption. The former rose only 3.0%, with equipment and software up only 3.5%. This is baffling, given the 19.5% annualized leap in the value of capital goods production and the 14.9% rise in shipments of core nondefense capital goods. We expect big upward revisions."
– Ian Shepherdson, High Frequency Economics
I got involved in a debate earlier at RealMoney – Columnist
Conversation, and wanted to pass it along here.
Pre-GDP (1/27/2006 7:31 AM EST), I wrote :
1) Technicals remain strong, and continue to be the driving force short
term. But economics look weak, and continue to be source of concern
2) Last Friday’s market actions was the market’s early warning sign.
Very heavy volume to the downside on a big selloff is never a good
thing. I interpret that day as a foundational crack of the cyclical
Bull market. Again, we are not looking for a 1987 situation, but rather
a Q1 topping out, and an ugly rest of the year.
3) Gold also looks toppy — it’s well overdue for a 10% correction. We
are short here, but would re-establish a long position in the 480-510
4) A 500 point day in Japan is too exuberant — it’s a sign of very
emotional trading. Historically, these sort of buying frenzies tend to
end badly. As such, we are lowering our multiyear price target on the
Nikkei down from 21,000 to 18,000. I would not be surprised to see this
lowered again before year’s end. And the Korean Topix, which I have
liked for some time, is geting crazed. Still plenty of upside, but
Norm Conley raised a legitimate question about this:
"It seems as if you are taking two outlier one-day moves in markets (one "up"
move, and one "down" move), and extrapolating that although they are
contradirectional, they both carry ominous portents."
My response was: