• Friday Rallies
    Posted by on May 14th, 2009 at 4:23 pm

    The S&P 500 has rallied for the last five straight Fridays. That’s pretty impressive that there are buyers going into the weekend, and I think it signals some important confidence in the market.
    So what’s the record for consecutive “up” Fridays? It turns out, we’re not even close. This is one of those Dimaggio-like records that may never be topped. From April to September 1955, the S&P 500 rose for an astounding 22 straight Fridays!
    In the 1950s, Friday was almost a guaranteed money maker. During the decade, the market rose on 63% of the Fridays. The cumulative return was 138% over effectively two years (one-fifth of a decade).
    For many years, the stock exchange had a brief Saturday session but that was eventually ditched in the early 50s.

  • Not Regina!
    Posted by on May 14th, 2009 at 2:24 pm

    Zero Hedge has this ultra-cool map of Chrysler dealership closures.
    States that are big losers are:
    * Pennsylvania: 53
    * Ohio: 47
    * Texas: 45
    * Illinois: 43
    * Michigan: 40
    * California: 31
    * New Jersey: 30
    * Florida: 29
    * New York: 26

  • 8 Bedroom/7 Bathroom House for $675,000
    Posted by on May 14th, 2009 at 1:00 pm

    Here’s a great deal on an 8 bedroom/7bathroom Tudor home. It has a three-car garage and a koi pond.
    About the location….

  • Merrll Lynch Goes After Zero Hedge
    Posted by on May 14th, 2009 at 10:18 am

    This is not good news:

    Now that Merrill Lynch has upgraded every single REIT and has a price target of +/- infinity, (conveniently pocketing over $100 million in the process), the company can focus on more pressing issues at hand (and no, not redecorating Thain’s legacy office in the neo-uber-criminal style). Instead, the bank has sent not one, not two, but a whopping six cease and desist orders to Zero Hedge. As the recently acquired bank can finally afford to pay lawyers again compliments of its REIT analysts, it has decided to pursue the source of all evil: all those David Rosenberg posts Zero Hedge has published, that seek to educate and provide some color to otherwise confused and CNBC abused readers and investors.
    If it is any consolation, now that David is literally out of the building, ML can sleep soundly that ZH will only focus on the bank’s daily REIT upgrades (no, we have not forgotten about those) as it is alas the only source amusement coming out of doomed mother Merrill.
    So, dear readers, please be aware that the following six posts will be removed at some point tonight as Zero Hedge is unable to underwrite and collect on average $10 million per REIT dilution events and thus afford any lawyers (except potentially for White & Case’s Tom Lauria).
    http://zerohedge.blogspot.com/2009/05/parting-thoughts-from-rosenberg-ver-10.html
    http://zerohedge.blogspot.com/2009/05/shooting-shoots.html
    http://zerohedge.blogspot.com/2009/05/look-back-at-week.html
    http://zerohedge.blogspot.com/2009/04/are-fed-and-markets-on-same-page.html
    http://zerohedge.blogspot.com/2009/04/spin-on-6-gdp.html
    http://zerohedge.blogspot.com/2009/04/busy-day-for-reit-analysts.html
    As for the 500 or so websites that fervently and automatically repost and redistribute ZH content, well, those we have no control over.

  • See! I Told You This Was a Bigus Rally!
    Posted by on May 13th, 2009 at 4:02 pm

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  • The Yield Curve Knows Best
    Posted by on May 13th, 2009 at 11:53 am

    Caroline Baum is one of my favorite columnists. She has an article on one of the best economic forecasters out there. His name is Dr. Yield Curve.

    The yield curve, or spread, has several things going for it:
    First, it’s a leading economic indicator, officially added to the index designed to predict the economy’s ebbs and flows in 1996. It was a leader well before that, even though it was unofficial.
    Second, what you see is what you get. The spread is never revised, always available and in no way proprietary.
    Third, and most curious, the majority of economists don’t get it. They see rising bond yields in isolation — without paying attention to what that price-setter, the Fed, is doing at the front end of the curve.
    It’s the juxtaposition of short and long rates, not their level, that conveys information about monetary policy.
    In a July 2008 working paper, San Francisco Fed economists Glenn Rudebusch and John Williams examined the tendency for professional forecasters to ignore the spread. They compared the forecasts provided by the Survey of Professional Forecasters (SPF) to that generated by a simple, real-time model based on the yield spread.
    Guess who won? And it wasn’t even close.

    Two years ago, I looked at the impact of the yield curve on the stock market and I was stunned to find:

    Probably the most fascinating stat is that all of the stock market’s net capital gains have come when the 10-year yield is 65 or more basis points above the 90-day yield (that happens about 70% of the time). The yield curve hasn’t been that positive in 15 months.
    Anything less than 65 basis points, including a negative yield curve, works out to a net equity return of a Blutarsky. Zero Point Zero.

    Today the spread is out to nearly 300 basis points.

  • FactSet Raises Dividend
    Posted by on May 13th, 2009 at 11:45 am

    I have to add one quick post on the news that FactSet Research Systems (FDS) raised its dividend from 18 cents to 20 cents a share. It’s not a gigantic increase—last year FDS raised the dividend by 50% and the year before, they doubled it—but it’s very nice to see.
    The dividend increase is 11% and FactSet is probably on its way toward growing its earnings by 15% this year. That’s very good considering the rotten environment. You really don’t buy FactSet for the dividend yield (currently 1.5%), but it’s a nice reminder from the company that they’re continuing to prosper.

  • Outrageous Executive Perks
    Posted by on May 13th, 2009 at 9:58 am

    MarketWatch lists 10 of the most egregious executive perks. I liked #3 in particular, a “stay” bonus even if you die:

    Some companies are so keen to hold on to executives that they promise big pay and benefits even if the talent dies — in contracts known as golden coffins.
    Life insurance policies worth millions of dollars are the least controversial part of these packages — even though buying such coverage without company help shouldn’t be too difficult for executives pulling in six or seven figures a year.
    A peek under the lid of several golden coffins also reveals big severance payments, pensions and continued salaries if executives pass away.
    Abercrombie & Fitch agreed to pay Chief Executive Michael Jefferies a $6 million “stay bonus” to keep him running the successful fashion clothing retailer, according to its 2007 proxy statement.
    If Jefferies dies, the bonus stays and is paid out, along with $10 million from a company-purchased life insurance policy, to his estate. The retailer would also pay some of his incentive compensation, bringing the golden coffin’s value to more than $17 million, assuming he died on Feb. 2, 2008, according to the proxy.

  • The Wonderful Dullness of Small Banks
    Posted by on May 12th, 2009 at 1:31 pm

    David Segal writes about a topic that’s near and dear to our hearts—the boring stability of small banks. There are tons of little banks across the country that have barely noticed that credit crisis. Their businesses are boring and predictable, plus many of them are publicly traded.
    Segal quotes a small-town banker:

    “I was on vacation in California and this guy I had just met said, ‘So, traveling on that bailout money, huh?’ ” said Blake Heid, of First Option Bank in Paola, Kan., which didn’t take any bailout money. “I didn’t find that very amusing.”
    Though they greatly outnumber the national and regional banks, community banks have barely registered in any of the fallout from the credit crisis, in part because they hold less than 10 percent of the $13.8 trillion in bank assets nationwide.

    A few years ago, I wrote about three high-quality small-town banks. Not a single analyst followed them. Not long after I highlighted them, all three were bought out.

  • Obama Beats Buffett In Market Timing
    Posted by on May 12th, 2009 at 1:00 pm

    Bloomberg reports:

    President Barack Obama is proving to be a better judge of the stock market than Warren Buffett, the world’s second-richest person.
    The CHART OF THE DAY shows the Standard & Poor’s 500 Index began its biggest rally since the 1930s after Obama said on March 3 that equities offered bargains for investors with a “long-term perspective.” While the measure fell 3.5 percent over the next week, reaching a 12-year low on March 9, it went on to surge as much as 37 percent.
    Buffett, the chairman of Berkshire Hathaway Inc., wrote a column titled “Buy American. I Am.” for the New York Times in October, saying he may put all of his personal investments into U.S. stocks. The S&P 500 then plunged 29 percent through March 9 and is still down 3.9 percent. Berkshire, based in Omaha, Nebraska, posted its largest loss in at least two decades on May 8, in part because of Buffett’s “major mistake” of buying ConocoPhillips shares before oil retreated from a record.

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    Congratulations Mr. President! We’ve gained back everything we lost during you administration.