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Getting Back In

Friday, June 30, 2006 | 03:30 PM

How funny is this:


The New Yorker, 2001

Friday, June 30, 2006 | 03:30 PM | Permalink | Comments (7) | TrackBack (0)
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Marines' Cookbook

Friday, June 30, 2006 | 11:30 AM

via Baghdad ER:   

Kudos to Weber for sponsoring this cookbook:    Weber's Command of the Grill: A Cookbook Raises Money for Charities That Directly Benefit Wounded or Killed Marines and Their Families


The story is here:   Command of the Grill (PDF)

Story via Yahoo

Friday, June 30, 2006 | 11:30 AM | Permalink | Comments (0) | TrackBack (0)
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Martin Pring: Return of the Bear

Friday, June 30, 2006 | 10:00 AM

Martin Pring is a well known technician who recently started writing for the Street.com.

I particularly found this chart of his from a recent  RM column instructive:

click for larger chart


Pring describes this as follows:

"Once in a generation or so, you can spot a chart that has extremely important long-term consequences. The first chart below is such an animal.

It shows U.S. stock prices deflated by commodity prices back to 1800. The stock part of the equation consists of the S&P Composite since 1926 spliced with several other indices back through the ages. The commodity series is the CRB Spot Raw Industrial since 1955, which has been spliced into other historical commodity series.

The momentum indicator in the lower panel is a 120-month rate of change. It is a little-known fact that there is a close relationship between momentum and sentiment. Thus, high readings in this indicator correspond to previous stock market bubbles. The theory is that when the oscillator peaks from a high level, it tells us that the stock market bubble has burst and that the psychological pendulum has begun to shift in the opposite direction. This then needs to be confirmed by a trend reversal in the equity series."

Pring has offered up a number of free resources on his site (Pring.com)

Check out:

Return of the Bear (pdf) and

Return of the Bear, a 30-minute video on technical signals and market history.

Part 1

Part 2

Part 3

I found it quite informative.



S&P 500 Teeters on Wedge
By Martin Pring
RealMoney.com, 6/19/2006 1:04 PM EDT

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Haefling on Housing

Friday, June 30, 2006 | 06:34 AM

Carl Haefling is a portfolio manager in Bainbridge Island. He is a deep value player in small and micro cap stocks, biotech and medical devices; he and often takes a very long term view. Carl is often a contrarian -- recently, he has been accumulating shares of Jet Blue (JBLU).

He also has a sharp eye for the Macro-environment, and I often find his take on events intriguing. Following the recent data releases on Housing, he recently observed:

I believe the stock market is predictive -- not reactive -- except for relatively short periods of time. 

Housing stocks topped out in Dec and are now down up to 50% in numerous cases from those highs. It will take a couple of years at least for this scenario to complete itself.  A significant decline in the housing market over the next 2 to 6 years is being predicted by housing stocks.

It takes time for the housing market to fully unravel, we are in the early stages of stage 1.  Stage 1 is where the market begins to recognize that prices have reached levels that reduce affordability and thus the number of possible buyers. Sellers, who have been holding back selling for fear of not selling at the top, begin posting signs advertising their home, usually at prices that reflect the highest paid for a similar home, and suddenly the inventory of homes foresale explodes. This has already happened in many parts of the country. This stage may take one to three years to fully unfold. 

Stage 2 is price cuts by those who are becoming convinced that the market has softened if they want to sell their home they better cut prices.  Once those "reduced" signs start appearing, buyers start reducing offers, even on properties that have been already reduced.  Prices will drop far lower then anyone thinks possible in stage 2. 

Stage 3 is the exhaustive phase.  Buyers are afraid to buy, investors have no liquidity, mortgage requirements demand a high down payment and supporting cash flow, and the press is filled with articles claiming real estate is a terrible investment. (which happens to be true in the previous 5 years).

There are serious other problems that will contribute to this cycle, including a decline in the buying power of the middle class, tilting demographics which will reduce the number of possible buyers beginning about 2010 for real estate and possible shifts in values of owning vs. renting.  There remain other problems that are related to real estate but not thought of as being directly connected.  A decline in the value of the dollar may force foreign owners of commercial and residential real estate to try and liquefy.  Higher interest rates because of inflation or stagflation  also  impact real estate prices. 

And one of the unseen values will be the desire to downsize as the cost of insurance (in some high risk hurricane states you cannot get homeowners insurance except through the state at 3 times previous cost) explodes, the cost to heat and air-condition accelerates, and the cost of maintenance become detriments to ownership. 

A house may go from being something that we take pride in, to becoming a burden.

Interesting stuff --thanks Carl.

Friday, June 30, 2006 | 06:34 AM | Permalink | Comments (27) | TrackBack (0)
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Is Overstock Behind Hedge Fund Testimony?

Thursday, June 29, 2006 | 11:30 AM

Remind me never to piss off Herb Greenberg:

"Herb Greenberg, in his blog on MarketWatch.com, raises an eyebrow about the testimony delivered at today's Senate hedge-fund hearing by Demetrios Anifantis, a former employee of Gradient Analytics. "How independent is Anifantis? Did he write and/or edit his own testimony? If not, who did? For a clue, look no further than a copy of the transcript he provided to the Senate Judiciary Committee," he wrote. (The testimony can be see here (45K Word file). "Scroll down the 'file' menu at the top of the Word document to 'properties.' Click on 'summary.' It says the author of the report is 'mgriffin.' Company: 'Overstock.' Who is 'mgriffin'? Hard to say, for sure, but one attorney representing Overstock is Mark Griffin, the former director of the Utah Securities division. Why is 'mgriffin' of 'Overstock' named as author of the report?"


More questions about a key witness
Jun 28, 2006 - 12:13:50 AM Eastern
:: Written by herb

Blog Roll -- Morning Edition

David A. Gaffen
WSJ, June 28, 2006

Thursday, June 29, 2006 | 11:30 AM | Permalink | Comments (10) | TrackBack (0)
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Apple Chart

Thursday, June 29, 2006 | 09:45 AM

I am a big fan of Apple for many years -- like the company, the iPod, the Macintosh, and even some of Steve Jobs' schtick.

But looking objectively at the chart, this is a stock facing some problems: a series of lower lows, possibly pulling back towards the $45ish area.

To avoid this, the stock needs to get back over $60, and in a hurry:


Weekly, 2 years
click for larger chart



Any technician's care to weigh in?


UPDATE  JUNE 30, 2006 8:43AM

This is why it is foolhardy to dismiss techncials as Voodoo.   Someone clearly knew there was a problem with Apple, and they were sellers.

The WSJ reported that "Shares of Apple were down $1.27, or 2.15%, to $57.70 in pre-market trading. The home of the iPod revealed last night it had discovered "irregularities" in its stock-option grants between 1997 and 2001, including one to CEO to Steve Jobs. Apple is investigating further. . . "

Thursday, June 29, 2006 | 09:45 AM | Permalink | Comments (30) | TrackBack (2)
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Google Checkout

Thursday, June 29, 2006 | 06:45 AM

Google_checkout The initial reports were wrong. The new service is not, as was previously stated, G-Buy or Google Wallet, but Google Checkout.

And the goal seems to be less of creating a direct competitor to PayPal than another way to generate targeted advertising search revenue, and improve the data and specificity of targeted search results. The San Jose Mercury News reports:

"If Google Checkout is successful, the company could reap big rewards. The transaction data for each person who makes a purchase, combined with their search history, could lead to advertising that takes into account their favorite stores and preferred brands. The more targeted the advertising, the more advertisers are willing to pay."

Since Google will waive the transaction fees for vendors who buy AdWords, the goal may simply be to create more search advertising. If Paypal gets dinged in the process, they are collateral damage.



Her's the cost structure: Sellers pay Google 2% of each transaction, plus a 20-cent fee. That's less than what they would pay MasterCard or Visa, who charge 1.95% plus 30 cents per transaction. PayPal charges a 2.9% plus a 30-cent fee (but Paypal's fees decrease when merchants sell over $3,000).

Google appears to be subsidizing transactions. The reason is ad sales: For every $1 in fees a company spends on search advertising, they will waive fees on $10 worth of purchases. That is about a 20% rebate on advertising spending.

As we noted previously, this is likely to inure to the benefit of consumers.

BusinessWeek reports

"this battle is bound to benefit consumers and merchants. By providing new and cheaper alternatives to credit cards for buying items online, these and other new online payment services could give buyers more confidence in a wider range of e-commerce sites. And coupled with e-commerce services from eBay, Google, Amazon.com, and others, they're likely to help smaller merchants who can't afford a credit-card merchant account to compete with bigger players."


There is a short video tour of Google Checkout at the demo sit (halfway down the page).

click for video


Google Aims to Speed the Online Checkout Line
NYTimes, June 29, 2006

Google launches Checkout service to compete with PayPal
Elise Ackerman
Mercury News, Wed, Jun. 28, 2006

Google's eBay Challenge
Robert Hof
Businessweek, JUNE 28, 2006

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1/4 point, or . . . ?

Wednesday, June 28, 2006 | 10:00 PM

I simply don't know how all this 50 basis point chatter got started and pinged around Wal Street like its a likely option.

Hell, why only 50 ? Why not 100, if the economy is so damn strong?

Let's open up a thread on this: 

Does anyone think that much besides a 1/4 point is in the cards tomorrow? Major language change? And what might Mr. Market have to say about all this.


Wednesday, June 28, 2006 | 10:00 PM | Permalink | Comments (67) | TrackBack (0)
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Global HNWI Grows

Wednesday, June 28, 2006 | 01:30 PM

Earlier this week, I referenced the increasing concentration of wealth in the U.S., on both the individual and corporate level.

It turns out this phenomena is global in nature. From Metrics 2.0:

"The wealth of high-net-worth individuals (HNWIs), people with net financial assets of at least U.S. $1 million, excluding their primary residence and consumables, climbed to $33.3 trillion in 2005, an 8.5% increase over 2004, according to the 10th Anniversary Edition of the World Wealth Report, released by Merrill Lynch and Capgemini.

The Report found that the number of HNWIs grew by 6.5%  over 2004, to 8.7 million, and that the number of Ultra-HNWIs — those who have financial assets of more than $30 million — grew by 10.2 percent, to 85,400 in 2005."

Sources of HNWI Wealth, 2005
click for larger chart

Interesting stuff . . .


Global High-Net-Worth Population Grows to 8.7 Million, Worth $33.3 Trillion
Metrics 2.0,

Wednesday, June 28, 2006 | 01:30 PM | Permalink | Comments (19) | TrackBack (0)
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Technical Analysis of STOCKS & COMMODITIES on The Big Picture

Wednesday, June 28, 2006 | 09:01 AM

ScTechnical Analysis of STOCKS & COMMODITIES magazine has an excessively nice review of The Big Picture in the July magazine, where your humble narrator gets favorably compared with James Cramer, and the blog itself gets kudos for its scope and breadth. 

Here's an excerpt:

"Ritholtz's The Big Picture is an excellent contribution to what are known to some in the blogosphere as "expert blogs." While blogs have gained notoriety for both sociopolitical commentary and a certain professional-caliber narcissism (the two not necessarily mutually exclusive), the expert blog phenomenon is one that must be applauded by all of us who have found ourselves subtly (or not so subtly) getting a greater degree of our news and opinion from places other than the traditional news media. Like widely respected Middle East historian Juan Cole on Iraq, or University of California at Berkeley economist Brad deLong on economics, Barry Ritholtz has used the blog form as a way of making his knowledge of the world of finance and market behavior accessible to any interested party with a web connection.

Cramer, Cole and DeLong:  Heady company to be compared to.

This paragraph very much resonated with me; I find it hard to recall how we invested and/or traded prior to the internet:

For those who have come of investing age during the information revolution of the past decade, it is hard to imagine how our trading predecessors managed without online brokers, real-time streaming quotes, fundamental corporate information within a mouse-click, and more technical analytical tools than keys on a grand piano. To that list, we can add the free insights available from men and women who for years have made the financial markets their home."

I am grateful and humbled by the review.

You can see the piece in its entirety here.   


Websites for Traders
David Penn
Technical Analysis of STOCKS & COMMODITIES, July 2006


Wednesday, June 28, 2006 | 09:01 AM | Permalink | Comments (22) | TrackBack (0)
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