Play the Federal Reserve Game
Posted by Eddy Elfenbein on August 14th, 2009 at 9:02 pm

The San Francisco Fed has created perhaps the wonkiest video game world history—it’s the Federal Reserve Game!
Haven’t you always wanted to test your monetary policy skillz online? Well, now you can! Set rates too high and you’ll cause a recession. Go too low and inflation will creep up.
See if you have….
the cool judgment of an Arthur Burns.
the sober confidence of a William McChesney Martin
or the raw sexuality of a Marriner Eccles
Note: I tried to audit the game but kept getting an error message.
(Via: Economix via Carney)

16 Companies that Have Raised Their Dividend by 10% or More for the Last Nine Years
Posted by Eddy Elfenbein on August 14th, 2009 at 5:15 pm

Let me add a disclaimer at the start of this post. This is the result of a data dump so the numbers may not be correct. I searched for companies that have increased their dividend by at least 10% for the last nine straight years. I haven’t doubled-checked the data off another source, but here are the initial results.
Federated Investors (FII)
Linear Technology (LLTC)
Bank of Kentucky Financial (BKYF)
C.H. Robinson Worldwide (CHRW)
Expeditors International of Washington (EXPD)
AFLAC (AFL)
TJX Cos. (TJX)
Brown & Brown (BRO)
Novo Nordisk (NVO)
Fastenal (FAST)
John Wiley & Sons (JW-A)
Johnson & Johnson (JNJ)
Pfizer (PFE)
Mercury General (MCY)
Polaris Industries (PII)
LSB Financial (LSBI)
The current year isn’t included since we’re not done, but a few stocks may fall off the list by year’s end.
The ones that really stand out are Pfizer, Johnson & Johnson and AFLAC. According to my data, these have raised their dividend by 10% or more for at least 18 years. Pfizer cut its dividend in half this year so it’s due to fall off the list.
The smallest dividend increase for AFLAC has been 12%. The company has already raised its dividend by 16% this year, plus the stock is going for about nine times this year’s earnings forecast (not the Street’s forecast, but AFL’s).
J&J increased its dividend by only 6.5% earlier this year so it’s also in trouble. The company has, however, raised its dividend for 47 straight years.
Let me add a special shout out to LSB Financial which is the holding company for Lafayette Savings Bank. This isn’t a micro-cap, it’s a nano-cap. It’s a 140-year-old Indiana-based thrift with a market cap of just $17 million. That’s about 25 minutes worth of sales at Wal-Mart (WMT). LSBI has no analysts who follow it. Sadly, it will fall off the list this year — like many financial firms, the thrift chopped its dividend in half.

Coolest Map of Bank Failures You’ll See All Day
Posted by Eddy Elfenbein on August 14th, 2009 at 2:34 pm

From The Wall Street Journal. You can really tell when WaMu went under.
(Via: Clusterstock)

Headline CPI Unchanged; Core +0.1%
Posted by Eddy Elfenbein on August 14th, 2009 at 8:44 am

Year-over-year consumer prices are down 2.1% which is the biggest drop since 1950.

Wow
Posted by Eddy Elfenbein on August 13th, 2009 at 7:54 pm

Academic Report: Having Chicks on Your Board Is Bad for Your Stock
Posted by Eddy Elfenbein on August 13th, 2009 at 1:41 pm

The Telegraph:

Companies with women directors perform badly on stock market, report claims
Those companies that have just one female director on their board are considerably undervalued – in terms of their share price – compared with companies run entirely by men.
The study by the University of Exeter, published in the British Journal of Management, makes clear, however, that companies with women directors perform just as well when it comes to making profits.
Prof Alex Haslam, a psychologist at the University of Exeter, said the lengthy study had tried to strip out any coincidental factors, such as women tending to run retail and technology companies, which might have performed badly during the period of the study: 2001 to 2006.
“However, the evidence is very strong that gender is the unique factor in this pattern.
“The market very clearly responds to women’s appointments to boards in an adverse way. Or – to put it another way – they like to back all-male boards. Maybe investors see them as a safe bet.”
The study examined FTSE 100 companies, Britain’s biggest companies listed on the stock market. At the start of the study, half of all of the companies had all-male boards, but by 2006 just 15 per cent did, suggesting that a quiet revolution had happened during the time, with more female executives making it to the top even if only a handful made it to the very top job of cheif executive. Marjorie Scardino at Pearson and Rose Marie Bravo at Burberry were, at one stage, the only two women to head a FTSE 100 company.
However, companies with all-male boards had a market valuation equivalent to 166 per cent of their book value, while companies with at least one female board member had a market value equal to just 121 per cent of book value.

Also…have you seen them drive?

Buffett Admits Berkshire Goofed on Derivative
Posted by Eddy Elfenbein on August 13th, 2009 at 1:34 pm

Oopsie!

Warren Buffett’s Berkshire Hathaway Inc (BRKa.N)(BRKb.N) underestimated the risks of falling stock prices to its billions of dollars of derivatives bets, yet still believes it is valuing the contracts fairly.
Berkshire revealed its error in a June 26 letter to the U.S. Securities and Exchange Commission, one of several pieces of correspondence with the regulator about the company’s annual report, and made public on Thursday.
It also agreed to SEC demands for more explanation on $1.8 billion of writedowns on stock investments, and $2.7 billion of auction-rate and other municipal debt holdings. On June 29, the SEC said it completed its review without further comment.
The correspondence shows Omaha, Nebraska-based Berkshire, which has close to 80 businesses and ended June with more than $136 billion of stocks, bonds and cash, is struggling to comply with SEC requirements to disclose enough about its finances.
This issue had surfaced in June 2008, when the regulator demanded “a more robust disclosure” of how the insurance and investment company values its derivatives. Buffett did provide some additional disclosure, in what he called “excruciating detail,” in his annual shareholder letter in February.

Ever Wanted to Ring the Opening Bell?
Posted by Eddy Elfenbein on August 13th, 2009 at 11:03 am

Here’s your chance.

Blast From the Past
Posted by Eddy Elfenbein on August 13th, 2009 at 10:17 am

I’ve seen bad predictions before, but…wow!

Downturn doesn’t mirror past, UCLA panelists say
By Dean Calbreath
UNION-TRIBUNE STAFF WRITER
March 11, 2008
UCLA’s Anderson Forecast, which previously has been ahead of the curve in forecasting the downturn of the California housing market and the resulting decline in the economy, predicted yesterday that the state and nation would not fall into a recession.
“The data don’t yet add up to a recession, and there is nothing to challenge the basic story of sluggishness that we have had for two years. Don’t worry, be happy,” said Edward Leamer, director of the forecast, the state’s best-known economic report.
Leamer and two fellow economists on the University of California Los Angeles panel – Ryan Ratcliff and Jerry Nickelsburg – say the economy does not match the models of previous recessions, when huge factory layoffs led to downturns.
Because the current situation does not match what happened in the past, they say, the state and nation probably will dodge a recession.
The UCLA economists have little company in their optimism.

At the time, the recession was already four months old.

Yours for Just $349,900
Posted by Eddy Elfenbein on August 12th, 2009 at 7:49 pm

The description:

Impeccable inside & out! Gorgeous English Tudor w/ amenities & updates too numerous to list! Classic style in neutral decor w/ lavish appointments thruout. New granite kitchen & fabulous marble masterbath. Gracious room sizes thruout. Amazing lower level boasts projection screen media area, wet bar & game level plus 2nd kitchen & 2 powder rooms exceptional landscape and electric gate.

If you’re wondering why this is so cheap, real estate is all about location.