Media Appearance: Closing Bell with Maria Bartiromo (2/19)


Today’s media fun is CNBC’s Closing Bell at 3pm.

Maria Bartiromo and Dylan Ratigan will be interviewing me about the economy, some stock selections, and the market’s near term prospects today at 3pm.

Between the credit crunch, $99.50 oil, and the strength in Technology names, we should have plenty to talk about . . .


UPDATE February 19, 2008 4:10pm

So weird to be on the floor of the exchange — alone!  No one is there — its nothing like the old days when the floor was a hive of activity . . .

CNBC clip


Category: Media

Quote of the Day: Hard to Ignore Soaring Food Prices

Category: Commodities, Consumer Spending, Economy, Federal Reserve, Inflation

% of Stocks on the NYSE > than 200 Day Moving Average

Category: Markets, Psychology, Technical Analysis, Trading

While you were driving to work . . .

Category: Financial Press

Understanding What Recessions Are

One of the misunderstandings about recessions is what actually happens in the real world. A recession is where economic growth stops, and you are left with flat to contracting sales.

Real_retail_salesNote that economic activity does not grind to a halt — the year-over-year growth rate merely slips into the negative. This is often misstated, in some variation of "Gee, how it can it be a recession — I was out shopping and the stores were pretty crowded." Whenever you see that, the speaker is either technically misunderstanding what a recession is — or alternatively, is painfully long and hoping for the best.

Of course, Growth may falter, not total economic activity. With the $13 trillion US economy, economic
activity certainly won’t fall to zero dollars. Everyone is still
eating, driving to work, using electricity, phones, buying iPods, etc. If economic activity were to fall to an annual run rate of below $13 trillion dollars for a few quarters, well then there’s your mild recession. If it drops much below the $12.75 – 13 trillion dollar range, that’s a bit more serious contraction. Indeed, the greater the year over year contraction in economic activity, the deeper the recession.

Consider Housing:
Sales don’t drop from ~7m homes sold to
zero; rather, the number drops significantly (i.e., 4.5m sold). It only
seems like nothing after ther boom years.

But even if US activity were to drop a huge trillion dollars in a year — thats still a $12 trillion of economic activity, and that typically involves one or two people still going shopping and out to eat occasionally.

So far, we are only at the point where Real Sales have slipped into negative year-over-year territory. High food and energy prices, as well as health care, are keeping nominal sales positive. Outside of that, we see clothing, autos, homes all negative. Consumer Technology spending, and business CapEx spending remain positive.

Indeed, while many aspects of the economy are revealing marked weakness, select areas are still hanging on. We are just as likely to be in a recession — as not — as of February 19th, 2008.

Real GDP Growth, Annualized Year over Year
Q1 1990 – Q3 2007


Source: Economagic


Note:  We were out and about this past 3 day weekend (its not all linkfests); Our anecdotal expeiences are after the jump…   

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Category: Books

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Category: Investing, Markets, Technical Analysis, Trading

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Category: Financial Press

Category: Credit, Derivatives, Real Estate