NY FED Empire State Survey: El Stinko

Joan McCullough (formerly of Bear Stearns, now at East Shore Partners) has a few bon mots on the Empire State manaufacturing survey:

"Every month, the New York Fed sends out a survey asking respondents to assess general business conditions as well as company business conditions. For general business activity, respondents are asked, "What is your evaluation of the level of general business activity?"

Answers are given based in the current month versus the previous month, and the outlook for six months from the current month. An indicator is presented for a decrease, no change, an increase, and a diffusion index. For each indicator, the diffusion index is calculated by subtracting the percent of respondents reporting the indictor lower for from the previous month from those reporting the indicator higher.

The data are seasonally adjusted. The NY index tends to overstate swings in the ISM.

Expectations were for 11. vs. the prior 3.12.

Actual: UH-OH. Dropped unexpectedly to MINUS -11.1. Lowest level since June of ’03.

There was a better than 10% increase in the number of survey participants who said that business conditions had deteriorated.

Prices Paid (by manufacturers): flat

Prices Received (paid to manufacturers): Dropped by almost 6 pts to the lowest read
since early ’04.

Now look at this: Future Prices Received dropped a whopping >17 points to 6.0. This
takes us back to November of ’03. Yikes. This means they don’t think that they will be
successful in pushing prices thru.

Employment: Dropped from 8.5 to just above zero.

Bottomline: From head to toe, this stinks. But note, this is sentiment only. Maybe they had a bad hair day. Dismissed.

The good news is this is a volatile series which has only modest impact elsewhere. Teh bad news is its an early read into ISM.


Category: Economy

Dollar Rebound ?

Category: Currency, Technical Analysis

The Cyber Elite 50

Here’s a fascinating list of the top 50 cyber elite — the most influential titans of tech, and a great guide for how investors should put their money to work.

#1 is Bill Gates, and with good reason. Hasn’t he and his company done so much for internet technology? Of course he’s at the top of the list. Think of all the innovation  Microsoft is responsible for.

#2 is Nobuyuki Idei,  President and co-chief executive officer of Sony Corp. ‘Cause really,when you think of "Cyber," doesn’t Sony immediately pop into your mind?

#3 is Steve Case of AOL. ‘Nuff said.

Worldcon’s Bernie Ebbers is #11, GeoCities founder and chairman David Bohnett is #16, and
Lucent Technologies’ Chairman and CEO, Richard Mcginn is #18. Then there’s Eckhard Pfeiffer, Compaq’s CEO at #21.

Be sure to watch VC Ann Winblad at #22. Latest investments: "Keep an eye on Biztravel.com, Liquid Audio and wedding services and information site, The Knot." Oh, and she once dated BIll Gates.

And yet — somehow — the guys at Google got overlooked in this list. (I wonder how that happened?). 

If you haven’t figured it out yet, I am pulling your leg. I left out one small detail: The list is from Time Magazine’s 1998 most influential Cyber elites. The point I hope to make is just how caught up in the moment the financial press can get (btw,that’s a new category I am introducing with this post).

Magazines love lists, and while this might make entertaining reading, its a classic example  of exactly how dangerous it is to follow these sorts of rearward-looking junkets for investing ideas.

While the list as investing advice is laughable (Gerald Levin of Time Warner! Christos Cotsakos of E*Trade!), some of the quotes contained within are outright hysterical: The fawning over Eckhard Pfeiffer’s plans for Compaq. 

But this one is truly my favorite:

"WorldCom is here to stay."


The full 1998 list can be seen below:


Read More

Category: Financial Press


Category: Uncategorized

Turtle Rules: Discipline and Consistency in Trading

Category: Finance

Panic or Euphoria?

Category: Psychology

Housing Markets

Category: Real Estate

The Best Mutual Fund Managers

Category: Investing

Reasons to Be Bearish: Plus Ca Change

Category: Investing, Markets, Psychology

Octagenarian Billionaires

Category: Markets