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Apple HiFi
I guess I have to hear it before I declare "What's the big deal."
$349:
There's more here:
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UPDATE March 5, 2006 2:44pm
The LATimes is rather unimpressed.
Their verdict? Buy something else.
Well, It Can Fill a Room With Sound ...
Apple's new iPod Hi-Fi speaker system is tested against three rivals by a panel of trained listeners.
David Colker:Technopolis
LAT, March 5, 2006
http://www.latimes.com/business/la-fi-technopolis5mar05,1,6454922.column?coll=la-utilities-business
Tuesday, February 28, 2006 | 03:48 PM | Permalink
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Get Darwinian on Your Portfolio!
Of all the many battles on Wall Street, the one that strikes us as peculiarly absurd is the recent sniping between Economists and Technicians. Each of these specialties digests different data, and operates over widely diverse time frames. Dismissing each other’s work as if neither discipline has any value strikes us as exceptionally foolish.
Resolving the dispute is a relatively simple matter of carefully considering timelines and expectations. Technicians tend to respond to shorter term market moves (like today’s!), while Economists ply their trade over much longer time frames. By combining these two dissimilar disciplines, we can develop a view towards both the immediate and distant futures.
Despite the Red on today’s screens, the Technicals favor an upside bias over the next month. We are in the seasonally best period for equities, Indices are near new highs, and despite recent sector rotation, Momentum remains strong. However, the Macro-analysis suggests an eventual slowing of the economy is more than likely. Housing Sales are softening, the Yield Curve is Inverted, and the Consumer is slowly tiring. Inflation, at both the retail and wholesale level -- core and non-core alike, -- is still rearing its ugly head.
In between these two time periods, we see numerous technical warning signs: Low volume on Up days versus heavier volume when the market is down; An increasingly narrow advance, with less issues participating in the gains, and a small number of 52 week high list – despite the indices being at or near multi year highs – all suggest that a high degree of caution is warranted for equity investors.
What's an investor to do?
Darwin’s answer is to Cull the Herd. Now is the time to get Darwinian on your portfolio. The weak, the sick, the lame, the infirm – they will only hinder your portfolio's ability to survive. Your holdings must evolve, your stock selections must prove their adaptability. Its a case of relative strength – which is essentially the Technician's version of Survival of the Fittest.
Any stock you own which has failed to participate in the recent rallies should be aggressively sold. This is both a defensive maneuver, as much as it is a way to raise cash for the inevitable buying opportunity – whenever it may show. My guess (and its only a guess) is September/October.
As this "long in the tooth" cyclical Bull market continues to age gracelessly, your best bet is aggressively shoot those cattle who cannot keep up with the herd. The market is a cattle drive, and for the good of the herd, you must get rid of those who fail to keep up.
Adapt. Evolve. Cull.
If you have a philosophical problem with a Darwinian approach, then consider this a dose of Intelligent Design for your portfolio.
Tuesday, February 28, 2006 | 11:52 AM | Permalink
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Chart of the Week: Seasonally weak period for Small Cap and Tech
March has historically kicked off a 6 week period when small cap and technology stocks tend to lag the broad market. Over the past 25 years, the median of the ratio of the Russell 2000 to the S&P 500 index has seen a decline from March 2nd through April 14th of around 2-1/2 percentage points. Over that same span, the median of the ratio of the Nasdaq to the benchmark measure has fallen by around 2 percentage points.
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Seasonally weak period for Small Cap and Tech
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Explanations vary, but one that makes intuitive sense is that small investors, who have often favor such shares, need to raise cash to pay their taxes ahead of the April 15th filing date.
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Random Items:
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Economist Keeps Tabs On Government’s “Creative” Stats
Do Ex-Athletes Make Better Traders?
Increasing New Home Cancellations Concern Homebuilders
Oil’s Wild Cards: Geopolitics and Gasoline
Why Apple bet its future on Intel
You Know You’re a Permabull When. . .
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Quote of the Day:
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“A statistician is someone who can draw a straight line from an unwarranted assumption to a foregone conclusion” -Anonymous
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Tuesday, February 28, 2006 | 11:26 AM | Permalink
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YAiK (Yet Another iPod Killer)
Here's the latest in the never ending series of potential iPod killers:
The Samsung Z5
What makes this one significant is that Samsung hired Paul Mercer, 38, a veteran Apple Macintosh software designer who helped design the original iPod four years ago.
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Source:
He Helped Build the iPod; Now He Has Built a Rival
JOHN MARKOFF
NYT, February 27, 2006
http://www.nytimes.com/2006/02/27/technology/27mercer.htm
Tuesday, February 28, 2006 | 09:45 AM | Permalink
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Do Amercians Support a Gas Tax?
Here's something that is a bit of a surprise: While most Americans are overwhelmingly opposed to a higher federal gasoline tax, their views change if the tax were to be earmarked for specific ends:
"A significant number would go along with an increase if it reduced global warming or made the United States less dependent on foreign oil, according to the latest New York Times/CBS News poll.
The nationwide telephone poll, conducted Wednesday through Sunday, suggested that a gasoline tax increase that brought measurable results would be acceptable to a majority of Americans.
Neither the Bush administration nor Democratic Party leaders make that distinction. Both are opposed to increasing the gasoline tax as a means of discouraging consumption, although President Bush, in recent speeches, has called for the development of alternative energy to reduce dependence on foreign oil."
This is more than a classic example of how a question is phrased that generates a different answer; This is a polling question addressing a specifically different issue beyond the gas tax question. It is in part a referendum question on faith in Congress on spending and priorities.
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Click for larger graphic
Courtesy of NYT
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No suprise that the Dismal set disagree:
"Many mainstream economists believe that a shift that raises the gasoline tax while lowering income-based taxes is the most efficient way to reduce consumption. It might require a $1-a-gallon increase in the tax phased in over five years, said Severin Borenstein, director of an energy institute at the University of California, Berkeley."
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Source:
Americans Are Cautiously Open to Gas Tax Rise, Poll Shows
LOUIS UCHITELLE and MEGAN THEE
NYT, February 28, 2006
http://www.nytimes.com/2006/02/28/national/28gas.html
Tuesday, February 28, 2006 | 06:45 AM | Permalink
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Cuban to The Donald: Blow this for a million dollars
Get your minds out of the gutter, and consider this: Mark Cuban has offered Howie Mandel 1 million dollars (donated to the charity of his choice) if:
"Howie, if you can get Mr Trump to pull a rubber glove completely over his head and blow it up on your show, not only will I watch it, I will donate 1 million dollars to the charity of your choice.
What could be better than that ? Money for a great cause that you love. For the Donald, the thing he loves more than anything, bragging rights. Is there any doubt that by Tuesday afternoon he would be able to say that he was responsible for the most watched television show in the history of TV ?
Is it possible that any human being on the planet would be able to resist watching Donald Trump blow up a rubber glove over his head ? I dont think so. Combatants around the world would lay down their arms and all enjoy a moment of shared laughter."
I hope if I ever become obscenely wealthy that I'd be that kind of billionaire . . .
Tuesday, February 28, 2006 | 12:55 AM | Permalink
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Home Foreclosure Surge
Final post of today's Real Estate marathon:
"LAST WEEK, RealtyTrac published its January U.S. Foreclosure Report. According to the company, the report includes homes in all three phases of foreclosure: pre-foreclosure (notice of default), foreclosure (notice of sale) and real estate owned (properties that have been foreclosed on and repurchased by a bank).
In January, 103,540 homes were in foreclosure, up 27% from 81,290 in December and 45% above last year. January's foreclosure total was the highest level since RealtyTrac began releasing monthly reports in May 2005."
Pretty crazy, right? Well, he's the real shocker: Even though foreclosure activity is accellerating, at 0.7%, its still below the long term trendline of 1%.
"January's 27% increase in foreclosures is consistent with the increasing foreclosure trend seen throughout 2005. In total, nearly 847,000 properties entered foreclosure in 2005, representing 0.7% of total households. This is still below the historical average of approximately 1%, according to RealtyTrac."
What's the basis of this increasing foreclosure trend? Take a wild guess:
"In our opinion, the recent sharp increases seen in foreclosures are indicative of the heightened leverage taken on by home buyers through the past several years of robust price appreciation and record-low interest rates.
In addition, we expect the proliferation of adjustable rate mortgage (ARM) and interest-only mortgage products tied to the short end of the curve to provide an additional headwind as short-term interest rates continue to increase. For 2006 year-to-date, on average, the one-year ARM is 132 basis points higher than last year."
Nothing to see here folks, just move along . . .
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Source:
Foreclosure Surge Indicates Home Stretch
Ivy L. Zelman
Credit Suisse First Boston, FEBRUARY 27, 2006 2:56 p.m.
http://online.barrons.com/article/SB114105560291284313.html
Monday, February 27, 2006 | 10:38 PM | Permalink
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Non-Core CPI (known elsewhere as "Prices")
I just read a commentary by RaJa's Jeff Saut, that is dead on target with our prior commentary:
"The call for this week: We don’t believe the geometrically weighted, seasonally adjusted, hedonically priced, owner-equivalent rented, core-CPI numbers; instead, we use the non-core CPI numbers that do not exclude food and energy. And last week the non-core CPI was reported to have increased +0.7% for the month. That is an 8.4% annualized inflation rate, implying that despite all of the Fed’s rate ratchets we may still be in a negative real interest rate environment. If true, the Federal Reserve might continue to raise rates higher than most expect.
We don’t think the equity markets are prepared for such a potential “rate rape” given their 19.3x P/E ratio combined with some of the highest profit margins in history. Since profit margins are probably mean-reverting, we think earnings estimates are overly optimistic. Consequently, we keep hearing the band Chicago Transit Authority echoing down the canyons of Wall Street and the tune is their 1970 hit “Does Anybody Really Know What Time It Is?” So far that question has been followed by the next line from that song, “does anyone really care?!” Clearly we do, which why we remain cautious and continue to invest/trade accordingly."
To put a picture to that, consider these charts: Do they reveal inflationary pressures or not?
Source:
Higher Energy and Non-energy Prices Lift Overall CPI
Asha Bangalore
Northern Trust Global Economic Research
February 22, 2006
http://tinyurl.com/ecy7u
Monday, February 27, 2006 | 06:14 PM | Permalink
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Home Depot CEO: Stunningly Clueless Regarding Employment
On CNBC just now, Maria Bartiroma is interviewing Home Depot Chairman & CEO Robert Nardelli, who states that we have "a very good employment picture."
I rarely write stuff like this, but: That reflects a lack of grasp of the reality of what is happening in the labor market economy -- at least when it comes to employment and wages; Frighteningly, stunningly, shockingly incorrect.
Perhaps his view is skewed by his perspective as Chairman/CEO; He owns at least 2.4 million shares, and recently sold a block of about $5m (125,000 shares).
Or, maybe there is a shortage of quality people willing to work at Home Depot -- its a tough job, encompassing customer service, retail sales, expertise in your given area (plumbing, painting, etc.) They have had a terrific number of quarters -- but from HD having a hard time hiring (a guess on my part) to the extrapolation that we have a "very good employment picture" is simply not supported by the macro data.
I like Home Depot, and shop there regularly; Its just that I am amazed when I hear stuff like that out of a major corporate CEO . . . he should fire his writers.
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UPDATE: February 27, 2006 4:58pm
Jeff Matthews is far less sanguine than I about Home Depot's CEO.
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Disclosure: I have no position in HD or LOW
Monday, February 27, 2006 | 04:19 PM | Permalink
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Greg Ip Discovers Data Manipulation
This wasn't supposed to Housing Monday, but that certainly seems to be what is happening -- especially after I saw this blasphemy cross the tape . . .
It seems that Greg Ip, the WSJ's acting Fed pipeline, has discovered that -- shocking! -- data can be slanted and/or manipulated.
However, he manages to find data that understates the strength in the housing market:
"New-home price gains are slowing, but not by as much as you might think. For the past year the growth rate in new-home prices has been artificially depressed by a change in the sample of homes used to calculate the price.
Last year, the median new-home sales price rose 7% from 2004, a considerable deceleration from the 14% gain in 2004 over 2003. The slowdown appeared to gather pace through the year, with December's median price actually down 0.3% from a year earlier.
Then, the January new home sales report released Monday appeared to show a rebound: the median home sold for 7% more than a year earlier. What's going on?"
What makes this so astonishing is how Ip -- the Journal writer with the greatest access to the Fed , and the person that Greenspan used to leak out information/spin to -- has managed to ignore the Fed's reliance on data we know to be widley misrepresentative of reality: The undue emphasis on Core CPI, ignoring the 5 year uptrend in Energy; The Owner's Rental Equivalency versus actual Housing Costs; And (of course), the absurdity that is the Leading Economic Indicators.
Here's the data point which Ip focuses on:
"New-home sale prices are always tricky to analyze because they are heavily influenced by the mix of homes sold: more luxury home sales will tend to bias up the figure, more homes sold in the south or Midwest, where prices are lower, will bias it down.
But in the last year an additional issue has muddied the trend. In January 2005, for the first time since 1985, the Census Bureau updated the sample of local permit offices it checks to track new-home construction and prices. A lot changed between 1985 and 2005. Older, pricier areas became heavily built up and activity declined. In newer, outlying areas, where prices were generally lower, construction picked up. The 2005 sample thus has a larger share of those newer, cheaper areas. Comparing 2005 figures to those in 2004 will give the impression of a slowing in price gains, but that's somewhat artificial.
Michael Carliner, an economist at the National Association of Home Builders, estimates the sample change may have depressed price gains by about five percentage points. He cautions there are so many factors pushing the numbers around it's impossible to be precise. But using that figure suggests gains last year were closer to 12% than the reported 7%, which would put them more in line with the existing home prices and the price index published by the Office of Federal Housing Enterprise Oversight."
You see, the housing market is actually stronger than you have been led to believe. Well, at least the very high end of it is, and that's what is skewing the numbers.
To be fair, Ip does discuss the actual slowing trend in housing:
"That said, Mr. Carliner says it's clear that a slowing is underway, both in the data and in the information he is hearing from member firms. In particular, luxury home sales have slowed notably, so low-end houses are more heavily influencing the mix of sales. "It's not that the same house will cost less but we are selling more at the lower prices." (That should affect the average price more than the median price, however.)
Moreover, the Census Bureau's constant-quality price index of new home sales corroborates the story of slowing gains. That index compares houses with the same characteristics and in the same regions to their equivalent in prior periods, and it shows a 0.3% drop (not annualized) in the fourth quarter from the third. The year to year increase fell to 4.8% from 8.5% in the second quarter."
This will likely be an article in tomorrow's WSJ . . .
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UPDATE: February 27, 2006 3:25pm
Part of Bernanke's Princeton speech from this past weekend just ran on CNBC: The clip was his quotw on Core CPI . . .
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Source:
Sample Change Distorts New-Home Price Gauge
GREG IP
WSJ, February 27, 2006 12:45 p.m.
http://online.wsj.com/article/SB114106117594684373.html
Monday, February 27, 2006 | 02:45 PM | Permalink
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