“The first thing we do, let’s kill all the lawyers”
Posted by Eddy Elfenbein on January 17th, 2008 at 7:14 am

Retirees claim Morgan Stanley broker gave bad advice
ROCHESTER, N.Y. (AP) – A group of investors is suing Morgan Stanley, claiming a broker gave them bad financial advice when he persuaded them to retire early from Eastman Kodak Company and Xerox Corporation.
In a lawsuit filed today in state court, seven former employees maintain that they were promised ample savings for early retirement by broker Michael James Kazacos. They say the savings never materialized and many of them are now almost broke.
The lawsuit seeks more than $$140 million in compensatory damages and class-action status. It claims the retirees were persuaded to retire beginning in the late 1990s and told they could live off the returns their money would generate if invested with Morgan Stanley.

Market Hits New Low
Posted by Eddy Elfenbein on January 16th, 2008 at 4:24 pm

The S&P 500 closed today at 1373.20, the lowest close since November 3, 2006 which was the Friday before the mid-term election.
July 1, 1999 was the first time the S&P 500 closed above this level.

You Know It’s a Gold Rally When….
Posted by Eddy Elfenbein on January 16th, 2008 at 11:51 am

People sell their fillings.

Down the street at First National Pawn, customers have walked in carrying jewelry, coins and other items scrounged up to take advantage of the bullish prices, said manager Ryan Johnson.
“People have been digging around,” he said.
Some have even rummaged up their old teeth with gold fillings. Johnson said they often drop the teeth into soda pop to separate out the gold fillings. That gold can then be smelted and used later for jewelry or other products.
Gold business picked up at the pawnshop about three weeks ago and has been brisk as the price continued climbing.
“It’s skyrocketing, but we expect it to go higher,” Johnson said.

The Real Total Return of the S&P 500
Posted by Eddy Elfenbein on January 16th, 2008 at 10:32 am

Here’s a look at the real total return of the S&P 500, meaning adjusting for inflation and dividends:

We’re up a lot, but we still have a long way to go. Those are monthly numbers so it only goes through the end of 2007. It doesn’t reflect our little swoon at the beginning of the year.
The long-term real rate return for commons stocks has been about 7% (notice I said “long-term”). Over the last twelve years, stocks have returned an average of 6.92% a year.

This Can’t Be Good….
Posted by Eddy Elfenbein on January 16th, 2008 at 9:31 am

Katie Holmes is ringing the opening bell.
My gut says sell. My thetans say buy!

At 92, Anna Schwarz Blames the Fed
Posted by Eddy Elfenbein on January 16th, 2008 at 6:43 am

Still going strong at 92, Anna Schwartz lays into the Federal Reserve:

“They need to speak frankly to the market and acknowledge how bad the problems are, and acknowledge their own failures in letting this happen. This is what is needed to restore confidence,” she told The Sunday Telegraph. “There never would have been a sub-prime mortgage crisis if the Fed had been alert. This is something Alan Greenspan must answer for,” she says.

The Subpime Crisis Graphs
Posted by Eddy Elfenbein on January 15th, 2008 at 2:32 pm

If you’re completely confused, the BBC has an excellent explanation of subprime crisis. Lots of graphs. Here’s one of the U.S. housing market:

The S&P Nears a 14-Month Low
Posted by Eddy Elfenbein on January 15th, 2008 at 1:34 pm

The S&P 500 is back below 1390 again. We’re over 11% off the October 9 closing high of 1565.15.
We’re very close to the lowest close of 2007, which was 1386.95 (March 16). Before that, we’d have to go back to November 2006.

2008 Index of Economic Freedom
Posted by Eddy Elfenbein on January 15th, 2008 at 11:13 am

From the Wall Street Journal:

The nearby table shows the 2008 rankings but doesn’t tell the whole story. The Index also reports that the freest 20% of the world’s economies have twice the per capita income of those in the second quintile and five times that of the least-free 20%. In other words, freedom and prosperity are highly correlated.
The 2008 Index finds that while global economic liberty did not expand this year, it also did not contract. The average freedom score for the 157 countries ranked is nearly the same as last year, which was the second highest since the Index’s inception. This is somewhat of an achievement considering the rising protectionist and anti-immigration sentiment in the U.S., the uncertainty created by spiking global energy prices, Al Gore’s highly effective fear mongering about global warming, and the continuing threat of the Islamic jihad.

Hot CEOs Mean Hot Profits
Posted by Eddy Elfenbein on January 15th, 2008 at 10:50 am

A new academic study finds that more profitable companies have more attractive CEOs.

Using photographs of the highest and lowest ranked Fortune 1000 companies’ CEOs, psychologists Nicholas Rule and Nalini Ambady quizzed ordinary college students to determine which of the pictured faces were characteristic of a leader.
Without knowledge of the pictured individuals’ job titles, and by rating the faces on competence, dominance, likeability, facial maturity and trustworthiness, the students were able to distinguish between the successful and the not-so-successful CEOs.
Despite the ambiguity of the images, which were cropped to the face, put into grayscale and standardized in size, ratings of power- and leadership-related traits from CEOs’ faces were significantly related to company profits.
“These findings suggest that naive judgments may provide more accurate assessments of individuals than well-informed judgments can,” wrote the authors. “Our results are particularly striking given the uniformity of the CEOs’ appearances.” The majority of CEOs, who were selected according to their Fortune 1000 ranking, were Caucasian males of similar age.

Could be, but color me skeptical.
(Via Joe Weisenthal)