Dog Days Linkfest

Sunday, August 20, 2006 | 05:51 PM

Another week for the record books: Stock prices moved higher all week, as a fragile ceasefire took hold in Southern Lebanon, and Oil prices dropped.

Indices were led by tech: The Nasdaq had its best weekly gain in over three years, taking on more than 100 points to close up an impressive 5.2% for the week. MIster Softee and Mo sent the Dow Jones up 2.6% over the same period.

Of course, there's always a fly in the ointment, and in this case, its the anemic volume (more on this below). It is after all, the dog days of August, and after the messy year we've had so far, investors will take it.

Speaking of which: Its the weekend, and you know what that means:

• The spark that ostensibly lit the fuse of the rally was the mild inflation news - while consumer prices came in more or less as expected, there was a surprisingly big drop in Producer Prices.

• As is often the case, the headlines and the details didn't quite match up: PPI was driven entirely by  $4.5B in SUV and light truck discounts. Given their dismal sales and weka pospects, GM is slowing production of big SUVs.

The irony here is that because GM can't sell low MPG SUVs, they had to offer big discounts -- which made it appear that inflation has disappeared. Hence, by being unable to sell their 10MPG trucks, GM's stock price actually rose!

• It looked like Bernanke's Gamble in Forgoing Rate Increases is Paying Off. Even the sardonic Liz Rappaport  noted that Everything's Coming Up Roses.  My take was that PPI was only a convenient excuse -- Sometimes, they just want to take 'em higher;   

• Elsewhere around the Globe, Central Bankers -- who are far behind the Fed in their tightening cycles -- continue to make Hawkish noise: 

China Puts Teeth Into Anti-Inflation Policy   

Bank of England voted six-to-one to hike rates

Bank of Japan Favors Slow Pace on Rate Rises

After the ECB hiked rates (and hinted of more), the Dollar down vs euro

• John Berry says the Fed Will Probably Will Skip Rate Increase in September;

• One thing the Fed is correct about, the U.S. Economy is slowing. That’s Reason to: (a) Cheer (b) Fret. Phrased differently, there are some good and bad aspects to this:  The ’06 Deficit Outlook has improved; However the Leading Economic Indicators Index Fell in July; Also on the Radar:  U.S. Treasury Yields had their Biggest Weekly Drop in Three Months;

• There are many Indicators point to economic slowdown: Total Automobile Sales are one; Sentiment data is another; And Home sales are yet another 'ugly,' according to the dismal scientists, along with increasing Consumer Debt

• Bottomline: The so called Soft Landing is a low probability event;

• Speaking of Home Sales:  WSJ's MarketBeat borrowed a line from Cramer and called them a  House of Pain  (If no WSJ, go here)

• The Four Horseman of Housing:

-Builders have hit the brakes   

-Too many consumers are House Broke   

-Home prices in deep freeze   

-Homeowners Feel The Pain of Rising Rates 

I keep referencing articles of this type: You can still sell your home for a decent price -- but you better know the Four Steps to Selling Your Home for Top Dollar

• Paired Trade:  2 different MSM views on Housing: Newsweek looks at a Housing Bubble Blog; While Businessweek negages in some mild understatement: Why Housing Looks A Little Rickety.

• A fascinating counterhistory:  What If 9/11 Never Happened?

Lots of good investing discussions this week, both Bullish and Bearish:

• As mentioned in our intro, the one element decidely missing was VOLUME; That bigger question is this: Is this rally designed for traders or long-term investors?

No surprise here: Emotion rules the brain's decision making apparatus; Speaking of which: What's our infatuation with $1 million as a number?

Look who's selling Google shares;

Mutual Funds Cash Levels are fairly low; But the US continues to attract foreign Capital at over $2 Billion PER DAY;

Goldilocks and Just One Bear (or beware the W formation) 

• Mirror, Mirror on the Wall... Who is the Most Bearish of Them All? A round up of prominent bearish observers and pundits (Guilty); Not on the Bear list is Ed Yardeni, who is looking for a soft landing; Also NOT bearish: Benjamin Graham. Here's What he Might Like Today

Some eclectic Energy issues:

• Even as prices have fallen, Global crude supply grows tighter   

• The NYT asks: Is a Futures Stampede Keeping Oil Prices High?   

• Did You Know There's a World Surplus of Crude Oil?

• Jeff Matthews asks: "So, What if the Browns [anti-Greens] are Wrong?"   

• Call it a silver lining: Thanks to global warming, we are dramatically boosting where wine making vineyards can be found;

Looking abroad to some surprising commentaries:

• France -- Europes 3rd largest Economy -- Added the Most Jobs Since 2001 Amid Faster Growth;

• Sy Hersh looks at Washington’s interests in Israel’s war in WATCHING LEBANON

• VIctor Hanson says Middle East Conflict Is About Failed Culture;



15 Websites that changed the world

Sprint Nextel's Hidden Advantage: WiMAX 

• You Are What You Search:  AOL's data leak reveals the seven ways people search the Web.

• The debate on Pluto goes on:  Planet or Asteroid?   

• How a Cat Parasite Affects Human Culture

BBC plans digital radio MP3 add-on   

• Steering the new 2nd Gen Segways is compared to skiing   

• Guess what country had the 2nd highest % of adults who said Evolution was a false theory? I was surprised also; The only reason for this that made any sense to me was this: Unlike the markets, there is no financial penalty for a false Variant Perception in Science;

• Stephan Colbert's Wikiality -- because if enough people believe it, then tis true.

Film Music Televison Books:

• Using prediction markets to determine Future Rock & Roll Hall of Fame Inductees;

• We are coming up on the one year anniversary of Katrina and the destruction of New Orleans: Buy the soulful album The River in Reverse by Elvis Costello and Allen Toussaint's, and part of your purchase price goes to New Orleans relief efforts.  The disc itself is very good -- the elegant piano of Toussaint married to horn arrangements reminscent of Costello's Punch the Clock -- only bluesier. Good stuff.

• Next up in the reading cue: Joseph Ellis' Ahead of the Curve;

• I am quite tempted by the outstanding cast, strong reviews and amusing preview to see Little Miss Sunshine;

• My favorite new disc: Corinne Bailey Rae.  A powerful debut, equal parts jazz, blues, and R&B. Although you may think she's from somewhere between Mississippi and New Orleans, she actually hails from Leeds in the UK.  You can ignore the reviewers comparing her to Billy Holiday -- talk to me again in 20 years -- but there's no doubt this is a major new talent. Her soulful voice is warm and charming, falling somewhere between a bluesier Ricki Lee Jones and a more sublime Alicia Keys.

Random fun stuff:

Flash Animations Fight Back   

• Terrific Photos of the Discovery's July lift off;

Denis Leary goes on a rant about Mel Gibson while in a broadcast booth at a Red Sox game

• The glorious rejected rejection letter

• Just for laughs: The politically incorrect alphabet

That's all from cloudy NY, where the unrated Dave Chapelle's Block Party is cued up in the DVD, and we eagerly await the last few Entourages!

Sunday, August 20, 2006 | 05:51 PM | Permalink | Comments (7) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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Regarding the link to the Newsweek article covering Ben Jones' Housing Bubble Blog: What do you think of that blog? Do you read it or post to it? Just curious.

Posted by: MtHood | Aug 20, 2006 6:15:13 PM

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