P/E Ratio By Industry Group
Posted by Eddy Elfenbein on December 2nd, 2010 at 7:45 pm

Here’s a look at the P/E Ratio of each S&P 500 Industry Group over the last two years. Unfortunately, it’s a hard series to capture.

Due to barely positive earnings, the P/E Ratio of the Materials sector peaked at over 400. Similarly, the Discretionary sector peaked over 50. The problem is that if I had included those elevated levels, the other points would be blurred together. That’s why I decided to use 22 as an upper level.

Disney Raises Its Dividend
Posted by Eddy Elfenbein on December 2nd, 2010 at 12:37 pm

Disney (DIS) has been a quiet out-performer for several years. It’s strange to say that about a company that’s so large and well-known, but I don’t think many investors realize how well Disney has done over the last eight years.

The stock was an incredible performer through its early life, but beginning in the mid-1990s, Disney started to lag the market. In August 2002, however, Disney regained its mojo.

The company just raised its annual dividend from 35 cents per share to 40 cents per share.

Rep. Ron Paul on Federal Reserve Policy
Posted by Eddy Elfenbein on December 2nd, 2010 at 10:33 am

The Fed’s Data Dump
Posted by Eddy Elfenbein on December 2nd, 2010 at 10:17 am

I spent a good deal of yesterday browsing through the Federal Reserve’s massive data dump on the bailout. Frankly, it’s pretty boring stuff. Hatred and mistrust of the Fed is very high, so I’m not sure what some people were expecting the data to reveal; it’s largely what I assumed.

The media is full of dramatic headlines: “Fed made $9 trillion in emergency overnight loans.” This is another case of “accurate but misleading” reporting. Yes, the sum total of the overnight loans came to $9 trillion, but the Fed never had that much at stake at one time. That would be like taking the daily totals of your credit card or mortgage debt and adding them all up together.

The Fed’s Primary Dealer Credit Facility was created to keep the repo market going and thus prevent the banks from simply dumping their assets in a fire sale. This is what helped take Bear Stearns under. The Fed also relaxed its rules on what it allowed for collateral.

Morning News: December 2, 2010
Posted by Eddy Elfenbein on December 2nd, 2010 at 7:27 am

Stocks Poised to Keep on Rallying

Euro Holds Firm as All Eyes on Possible ECB Steps

Fed’s Crisis Aid Benefited Firms Beyond Wall Street

Job, Econ Growth Slowly Picking Up, Cheering Investors

Gold Firms Near Highs, Euro Debt Worries Persist

Fannie, Freddie Defend Foreclosures Amid Criticism

Spain Auctions EU2.5 Billion of Debt; Bonds Gain After Sale

Buy a Foreclosure – Save 30% on the Price

Toll Brothers Posts Profit on Tax Benefit

Starbucks Plans Acquisitions to Build Grocery Business

GM, Ford, Chrysler U.S. Sales Rise as Demand for SUVs, Pickup Trucks Gains

This Argument Is Dumb

The Fed Pays More Taxes Than Half the Country
Posted by Eddy Elfenbein on December 1st, 2010 at 8:15 pm

Here’s a stunning fact: the Federal Reserve pays more taxes than half the country pays.

In 2008, the Fed’s tax bill came to $31.7 billion.

That same year, according to the Tax Foundation, the bottom half of taxpayers paid a combined $27.9 billion to the U.S. Treasury. That’s 70 million tax returns.

The relationship probably grew wider last year. In 2009, the Fed paid the Treasury $45 billion.

We don’t know yet what the bottom half paid, but income taxes fell by 23% last year. It’s very possible that the Fed paid more than two-thirds of the country paid.

(Thanks to Alea for helping with this post.)

The S&P 500’s Real Total Return
Posted by Eddy Elfenbein on December 1st, 2010 at 3:59 pm

No major point to make here, I just thought I’d put up a chart of the real total performance of the S&P 500. This means it’s adjusted for dividends and inflation (or at least, the CPI):

In real terms, the market hasn’t made any money since March 1998.

Erin Burnett Interview at the NYSE
Posted by Eddy Elfenbein on December 1st, 2010 at 11:58 am

Alignment!
Posted by Eddy Elfenbein on December 1st, 2010 at 10:58 am

Way cool! The Dow and S&P 500 are nearly perfectly aligned at 11,200 and 1,200. That’s a spread of 10,000 points.

In other news, the moon is in the seventh house and Jupiter is aligned with Mars…

Here’s a look at the historic spread between the Dow and S&P 500. If I didn’t know better, it looks as if the market has been very aware of important barriers. Or is this just me trying to find a pattern in random data?

November ISM = 56.6
Posted by Eddy Elfenbein on December 1st, 2010 at 10:07 am

The ISM for November came out at 56.6 which beat Wall Street’s view by 0.1. The ISM has now been above 52.4 for 16 months in a row.

Two other items to pass along this morning: First, the dollar was the top-performing asset last month. The greenback beat stocks, bonds and commodities. This news will completely baffle the legions who have predicted the dollar’s imminent demise.

Second, Q3 productivity was revised higher to 2.3%.