Merry Everything!
Posted by Eddy Elfenbein on December 25th, 2009 at 9:47 am

I want to wish everyone a Merry Christmas and a happy, healthy and profitable new year.
I’d also like to thank all of my readers over the past twelve months. I’ve had this site going for 4-1/2 years now and it’s truly a labor of a love. I enjoy getting emails and questions from folks all over the world. I really don’t think I could do it without all the feedback I get. I’d also like to thank all of the folks who have linked to this site over the past year, which has brought Crossing Wall Street to an even larger audience.
Let’s hope 2010 brings us more profits—in all our endeavors.

Beware Santa’s Secret Legislation
Posted by Eddy Elfenbein on December 23rd, 2009 at 1:10 am

Crossing Wall Street contributor Gary Alexander notes that this time of year has become famous for secret legislation:
It’s no secret this time around, but once again we see the unseemly prospect of a select group of key legislators staying up all night and delaying their Christmas break long enough to muscle-through some controversial legislation before the close of the year. In doing so, they are continuing a grand tradition. December 23 or 24 has been a great time to pass controversial laws, while nobody’s watching too closely. Here are a few examples of what skullduggery the President and/or a few loyal Congressmen have enacted on December 23 or 24 in history:

• On December 23, 1975: President Ford signed the Metric Conversion Act, still a controversial law, and still widely ignored 34 years later.
• On December 23, 1982: Congress passed an unpopular five-cent-per-gallon Gas Tax increase, on the premise that would nobody would notice the nickel, or the secret vote.

While those items might seem trivial and harmless in the rear-view mirror, some of the worst legislation in American history was also hatched on Christmas Eve:

• On December 24, 1827, a group of Congressmen under the control of Andrew Jackson drafted a tariff bill so outrageously protectionist that it was later dubbed “The Tariff of Abominations.” It didn’t pass until the next Spring, but it had the intended outcome of helping Jackson oust John Q. Adams in the 1828 election – and alienating the South.
• On December 23, 1913, Congress passed the Federal Reserve Act, President Woodrow Wilson’s economic initiative for the creation of a national bank to match those in Europe, President Wilson quietly signed the Federal Reserve into existence on Christmas Eve, while most of the press was on holiday break, ignoring the epochal news.
• And on December 24, 2009, a massive new healthcare bill is likely to pass, one for which the recent head of the Democratic Party, Howard Dean, said that he would NOT vote.

It Was Only a Matter of Time
Posted by Eddy Elfenbein on December 22nd, 2009 at 2:51 pm

The Empire takes over Wall Street.

(HT: Carney)

Where’s the Priciest Real Estate?
Posted by Eddy Elfenbein on December 22nd, 2009 at 2:42 pm

With the help of Zillow, I looked at the number of homes on the market going for $5 million or more. I found 5,028 homes. These homes are overwhelming skewed to a few areas. For example, more than half the homes are in three states—New York, Florida and California. At the other end, many states only have a handful and five have none.
On this spreadsheet, I broke out the numbers into states, then prominent counties and also a few select towns and neighborhoods.
Let me stress that this is far from a scientific survey. I don’t fully trust every listing on Zillow, but I think this gives you a good idea of where the pricey homes are.
I also looked at the number of homes per 100,000 people. Be aware that just a few homes in a small community can really jack up the rate. Also, the rate is artificially high in resort communities because the pricey may not be owned by full-time residents.

Altucher’s 10 Predictions for 2010
Posted by Eddy Elfenbein on December 22nd, 2009 at 12:55 pm

James Altucher, one of my favorite financial writers, has his ten predictions for 2010. Here’s a summary:
1.) The S&P 500 will touch 1300 at some point during the year.
2.) Unemployment goes down to 8%.
3.) GDP hits an annualized 6% by Q2 as inventories get restocked.
4.) Dendreon (DNDN) is acquired.
5.) AOL gets bought by Microsoft.
6.) B will the best letter in the BRIC countries: Brazil, Russia, India, China.
7.) Health care will greatly outperform the S&P in 2010.
8.) Banks start lending money again.
9.) Either Apple or Amazon will develop the killer tablet computing product (or be close to it for 2011).
10.) The world will not end.
I like #7 as you can tell from my new Buy List.

Treasury Memo
Posted by Eddy Elfenbein on December 22nd, 2009 at 11:13 am

This is brutal. It’s funny, as they say, because it’s true.
(I love the idea of 82-year-old Paul Volcker giving the memo a frowny face and writing “H8 it!”)

The S&P 500 Breaks 1,120; VIX Below 20
Posted by Eddy Elfenbein on December 22nd, 2009 at 10:20 am

Stocks are rallying after the poor GDP report. The S&P 500 briefly broke 1,120 for the first time in nearly 15 months. The VIX also dipped below 20 for the first time since August 2008.

Third-Quarter GDP Revised Down…Again
Posted by Eddy Elfenbein on December 22nd, 2009 at 9:43 am

The final report on third-quarter GDP showed that the economy grew by a lackluster 2.2% during July, August and September. The original report said 3.5%, then it was lowered to 2.8% and now we’re at 2.2%.
That’s just not very good at all. The economy will have to grow at 3% or more to create new jobs to the empty the ranks of the 15 million unemployed. Four percent or more would be even better. The good news is that the third quarter was a long time ago and we’re about to close out the fourth quarter. Usually whenever a recession ends, we see a “boom quarter,” where GDP jumps by 5% or 6%. Hopefully, one will be coming soon.
Here’s a chart I like to look at every so often. This is real GDP divided by a trend line of about 3.08% a year. That’s been about the historic growth rate over the last 40 years. I then set the average value to 1.0. In other words, I’m trying a quick-and-dirty way to see where we are compared with GDP potential. Bear in mind, this method is very dangerous because it assumes past GDP performance will continue. Still, I think it’s interesting to see where we stand today compared with the past few decades.

Notice that this chart shows how meager the recover was from 2003 to 2007.

Invest in Faith
Posted by Eddy Elfenbein on December 21st, 2009 at 3:50 pm

Felix Salmon spots the FaithShares market which has a few faith-based ETF.
Here’s a rundown:
Baptist (FZB)
Catholic (FCV)
Christian (FOC)
Lutheran (FKL)
Methodist (FMV)
I suggest a counter-Reformation trade: long FCV/short FKL. The possibilities are endless.

The S&P 500 Passes Gold
Posted by Eddy Elfenbein on December 21st, 2009 at 1:44 pm

The S&P 500 is currently up 11.65 today to 1,114.12 while gold is down $17.80 to $1093.70. I have no idea what this means but I’m passing it along anyway.