Thursday, January 31, 2008

Asset Backed Securities: New Menu Item (and of course, other stuff)

all text & images © Arnold Lieberman except where noted

Dakini Bone Skirt Fragment w/ Citipati Motif
Circa 17th century
Carved bone

In my quest to expose you to interesting artwork, I want you know that by clicking on each image, you will go directly to the site. I'm also including the copyright information which I neglected to include before.

The image for today is relevant. It is meant to express danger. We've had what I consider a virulent rally in many oversold sectors such as homebuilders and banks. I have no idea what the gap is between reality and price, but the question at hand is, "Are we over the hump?"

I recognize that I have no insight as to whether or not banks and homebuilders are fairly valued. I do know this--you can spin a story to equate to every market move--whether it is in a stock or in the market. I do know this too--both homebuilders and financials were two of the most heavily shorted sectors. GaryK in yesterday's show noted that homebuilders and financials tend to be the bear market counter-trend leaders in a bear market.

No doubt that you've recognized from media content, should you listen or read, that there's a split between the camps that think that this is unprecedented buying opportunity v. we are going lower. I've still not met a soul who has a clear crystal ball, but I'm not beholden to any but me for performance..

I wanted to alert you to an update to the "Info Mosaic" menu. As you know, CDO's which I tackled here in March of 2007, are very much in the forefront. If you click on the last menue item, you will see some terrific graphics on the asset backed securities front. I don't remember that this information was available at the time of that work.

It is telling to see the volume drop offs. Remember, the investment banks made a fortune off of this stuff in the past year.

Sector Model

This graphic shows you the sectors that rotate among these cycles. Click on the graphic to be spirited away to Stockcharts where the full graphic, text and chart are available.

Today's Market Close

WSJ Market Snapshot

Yahoo's Leaders's and Laggards

Click on Graphic to go to spreadsheet that shows greater detail

I blew out some of the sectors for you and uploaded it to Please take a look!

Vince Farrell of Scotsman Capital-Verbatim

From: vince farrell []
Sent: Thursday, January 31, 2008 3:51 PM

S&P rating agency yesterday downgraded a zillion dollars worth of subprime mortages and Collateralized Debt Obligations, which are bunches of subprime things. An analyst at CIBC who correctly predicted that C would be forced to cut its dividend said tens of billions of writeoffs lay ahead since the insurers of a lot of the downgraded junk would lose their AAA credit rating and the banks that rely on the insurance to insulate themselves from loses would have to bite the bullet and mark the paper down. Where was S&P before this ? They wait till now ? They had rated this stuff AAA and now get religion? Anyway, the market started the day on a sour note but MBIA, the largest of the insurers, came out and said their AAA was ok. A huge sigh of relief, at least for now. Who knows if it will last. But the financials are leading the market today, and to me that is always a sign of good leadership.
Bad news this AM came from the unemployment claims. They were up a lot to 375,000 vs. 301.000 last week, the highest weekly level in 27 months. The four week moving average was up 10, 000 to almost 326,000. I have repeatedly said (look at your notes) that claims spike as recession sets in. This is a spike, but it is just one week. Let's keep an eye on this, but not good news.
OPEC meeting tomorrow. Don't expect anything. The potential fireworks come from the jobs number. Talk with you then.

Vince Farrell of Scotsman Capital-Verbatim

From: vince farrell []
Sent: Wednesday, January 30, 2008 10:27 PM

Busy all day today and will get around to disecting todays news later.The Fed cut 50 and the market sold off slightly as we guessed it would. For what it's worth, my bet is the market has seen its near term rally and needs to test the lows we put in place during the last weeks crazy volatility. The Dow Jones Industrial average closed today at 12444. The low of last week was around 11600. A 50% retracement of the gain is probably the best outcome, if not a total pullback to the low. We're not traders and we won't disturb the investment positions we have, but look for better prices to buy the next few weeks.
Felix Trinidad got decked twice in a bout against Roy Jones, Jr. and lost the fight. He later said "If I could have avoided the knockdowns, I think I could have won the fight." O.K. If I could have avoided the losses, I could be a zillionaire. "You was my brother Charlie. You shoulda taken care of me. I coulda been somebody. I coulda been a contender, instead of the bum I am now." Marlon Brando to Rod Steiger in "On the Waterfront".


From: vince farrell []
Sent: Thursday, January 31, 2008 6:36 AM

You've read more than enough about yesterdays weaker than expected GDP report. A few details that caught my eye however. Inventories were liquidated during the quarter, hitting the overall by -1.3%. Inventories had not been built to any extent the past few months, so I would expect inventory restocking to be a contributor to the balance of 2008, unless we are on the edge of a recession and there would be little chance of restocking.With a relatively lean inventory total, the good news is if a recession were to hit, it would not be exacerbated by high inventory levels that would need to be worked off.
Housing, on a normal basis, is about 4.5% of GDP. Exports are around 13%. But yesterday, housing weakend GDP by-1.4% and exports contributed only +.4%. I get the housing weakness, but, with the weak dollar, exports should have contributed more. Could be the number will be revised, could be just one of those things, but seems at odds with what you would expect.
Unemployment claims come out today and we have been keeping a close eye on them. Claims always have spiked as recessions have unfolded and claims have been trending down for the last few weeks. We'll see if the good news continues. The big jobs number comes out Friday and everyone is raising estimates because of the strong ADP (Automatic Data Processing- a company that does its own survey) number yesterday. The consensus had been for around 65,000 new jobs and I see numbers over 100,000 now. Lastly, OPEC mets tomorrow and no way are they going to increase production.
One quarter of the world's cranes are working in Dubai, constructing 5000 new buildings. With desert heat by day and seaside humidity at night there is not much to do except the beach and shopping. They got that big time. A 12 million square foot mall is being built and will have waterways, parks, ice rink and aquarium. Remarkable. Probably will require a bit of air conditioning.
The Girl Scouts are packaging cookies in smaller, 100 calorie boxes, for people who find it difficult to close a package of Thin Mints. They said it wasn't their intention for cookies to be eaten by the box. The hell !!!! Next they'll tell you Doritos are to be savored and not eaten by the bag (or case.)
Couple of more reasons it's easier to be a guy:
Chocolate is just another snack.
Other people get pregnant.
Belching is kind of expected.
Phone conversations are over in 30 seconds.
Wedding dress-$5000, tux rental- $200 (little more if you want the powdered blue shirt with the ruffles.)
You only wear comfortable shoes.
Remember, I expect a market pullback to correct the spike we saw last week. With the Fed news out of the way, we are not likely to get a surprise big enough to ccounter the very mixed bag of Q4 earnings that are now coming out.

Market Close 30_Jan_08


Yahoo Leaders/Laggards

Wednesday, January 30, 2008

Did you know. . . .?

6. Apsara
Cambodia, Angkor Wat Style
12th c.

Mark and I rarely watch TV in the Spring/Summer. But in the months of darkness circa 5-6, we do. Lately we've been watching TV Land and enjoying the classics that we grew up with: The Andy Griffith Show, Sanford and Son, M*A*S*H (I should mention that I used to have a huge crush on Alan Alda--don't ask me why!), and most recently, the Beverly Hillbillies.

I felt compelled to look up Donna Douglas (the beautiful Ellie Mae) and Max Baer (Jethro). First, Donna Douglas was precisely my mother's age. She was born in 1933.

My "did you know?" lead in, though, is for Max Baer, Jr. He is the son of Max Baer--the boxer about whom Cinderella Man (the movie) is about. Max Baer killed a man in the ring. MB, Jr. criticized the movie stating that it glamorized the event, when in fact is father was deep affected by what happened. NPR did a Sunday show segment. I don't recall the program, but it was very moving how they described the event and it's aftermath.

This message is part of my public service to you should you be conscripted to participate in a game show.

Vishnu upon Garuda
12th c.

Preliminary Thoughts from Today's Close

Painting by John Darling Haynes.

I'll post the market close a little later. I'm not surprised by the move today. There appears to be a conflating of two things that caused the reversal.

  • Thing 1: So many of the interest rate sensitive stocks had already anticipated the rate cut.
  • Thing 2: The downgrade of FGIC today by Fitch caused a tremor to go through the financials.
There's a terrific quote from Selden's Psychology of the Stock Market that I wanted to share with you.

" Bear in mind that an item of news usually causes but ONE considerable movement of prices. If the movement takes place before the news comes out, as a result of rumors and expectations, then it is not likely to be repeated after the announcement is made; but if the movement of prices has not preceded, then the news contributes to the general strength or weakness of the situation and a movement of prices may follow. " (p. 28).
I think that we can say that we had a considerable movement in prices before this news, and a considerable movement of the number 2 variety afterwards. I love this little book.

Here are a couple of intraday charts on the XLB and the XLF:

Vince Farrell of Scotsman Capital-Verbatim

From: vince farrell
Sent: Wednesday, January 30, 2008 5:58 AM

I'm not so smart, but you know that, and I prove it to you on a daily basis. Even if Doritos are on sale at WalMart, you can only eat so many before your stomach sings at a full octave higher than normal. Thus, I'm up thinking of you, dear reader, and all the news that comes at us today.
Before the Fed rate decision at 2.15 this afternoon, we will have the ADP employment guess (wildly inaccurate, so wait for Friday's official number) and the Q4 GDP report. It's expected to be around a +1.2% growth rate. Oil inventories will also be reported and I look for another build in crude stockpiles reversing the tax related liquidation of crude at the end of last year. The price of oil continues to remain high, but I continue to think it will settle at a lower price and then resume its upward climb, but at a much slower rate of ascent absent geopolitical disruptions.
There is a lot of talk that the somewhat lower price of oil will benefit the American consumer by being translated to lower gas prices. Lower oil does equal a lower price of gasoline, but we need to look at the price deck over a longer period. Crude is down to $91 odd from $100 or so,but the average price of crude for 2007 was about $72. A $.10 change in the price of gasoline would be $14 billion to the American consumer on an annual basis. That's a lot, but for consumers to benefit in 2008 from lower oil, the average will have to be less than $72. We can't look at $91 and conclude we're better off vs. the $100 of a few weeks ago and that consumer spending will be fine.
There is some guy named Cramer that takes a lot of air time on CNBC. The rest of us notice this, but he occasionally has some good ideas. One of them is Conoco Phillips- COP. The company looks very attractively priced to me as well. Trades at $78 with a 52 week range of $91-64. It's one of the larger oil companies and trades at about 7x earnings vs. Exxon around 11x. There should be a quality difference between the companies, but not that much, and, I think XOM is cheap at that valuation as well. COP is engaged in $15 billion share repurchase and has very attractive exploration projects. A little more than 1/3 of earnings comes from refining and marketing, and that business has been under pressure lately. When the price of oil soars as it did in Q4 it is very hard for refiners to raise the prices of their end products fast enough to offset the rising price of the crude oil feedstock. That problem will fade as it always does and I think Jim Mulva and his management team are reliable and will guide the company well. That Cramer sure is some smart guy. Now if he would only bring some energy to his show. (I own COP).
More later.

Sector Selector: Employment Stocks

Today is a busy day with ADP numbers coming out as well as a Fed announcement. These days feel like high drama to me! Nevertheless, I wanted to give you a snapshot of the employment stocks. These stocks have been sold down very hard--this is just a two month look. It will be interesting to see how they react to the new.

Market Close 29_Jan_08

WSJ Market Close
Yahoo's Sector Leader/Laggards

Tuesday, January 29, 2008


Curvey-el mentions in the comments section the performance of the homebuilder ETF. It will be interesting to see how this performs tomorrow post-Fed announcement--it may give us a peak into how "real" the rally has been. I still do not see improving fundamentals, but rather shoring up the walls so their businesses do not implode in a pronounced downturn.

Note that homebuilding has a very high short interest. I believe that much of the 'rally' has to do with squeezed shorts. Here's the Nasdaq chart on short interest:

I'll update the chart after market close tomorrow.

Vince Farrell of Scotsman Capital

From: vince farrell []
Sent: Tuesday, January 29, 2008 2:45 PM

The Fed will announce its decision on interest rates tomorrow at 2.15 PM. The consensus is for a 50 basis point cut, but with the stronger than expected durable goods report earlier today, there is an opinion that the cut will be only 25 basis points. For what it's worth, I think the market will sell off either way. Bigger sell off with the smaller cut, but typical buy on the rumor, sell on the news reaction. This is the shortest of outlooks. I believe that during turbulent/down markets new leadership emerges, and we are seeing that with the strength in financials and retailers, last years worst performing groups.I also think that different technology stocks will come to the fore this year. Apple, Google, Research in Motion are fine, but Cisco, Microsoft, Texas Instruments (all of which I own), alone with names like IBM and Intel are better values for 2008.
WalMart cut prices a lot on a wide variety of goods (including Doritos- I'm on my way). 25% of WalMart customers don't have checking accounts, but they can get a WMT credit card. WMT is getting ahead of the government rebate program. Come spend your rebate check now, before you even get it, at Superbowl time, and we'll even finance the shopping. Clever, I suppose.
The Fed had another of the special Treasury auctions we have talked about (the TAF thing) , and almost nobody came. This is good news. Shows the stress in the credit markets has abated and the Treasury can soon revert to normal operations. Normal would be very welcome.
Countrywide Financial reported a loss of $422 million (I think, close enough). That is almost the exact amount that guy Mozilo made in selling stock during the decline. Doesn't seem right to me. It sure ain't a big deal that he so generously agreed to forgo $37 million in compensation "due" him if Bank America takes the company over. One third of the subprime mortgages Countrywide issued are in default, and this guy gets millions. Like Balzac said, "Behind every great fortune, is a great crime."

Nasdaq Beta Upgrade

Artist: Tom Tyler

I wanted to tell you about an improvement in Nasdaq's web site. Here's a a link to FMD's short interest page. I generally like to see what short interest looks like. But what is more interesting on this page is that you can see institutional holders. AND you can also click on the institutional holder and see all of their holdings. AND it summarizes for you the sectors that the institutional holder is in.

I think that is pretty cool. E-trade used to do it, and then I didn't see it anymore.

You might say, "So what?" I say, hey, these guys are professionals, I like to take a look behind their kimono-in only the wholesomeness of ways.

Here's a snapshot.
Here's a snapshot of holdings for Delta Partners

I hope that you will take a minute and look at the website.


This is my last Gloria Gaddis image. I hope that you've enjoyed them.

On RM, a fellow blogger pointed out an article that I wanted to share with you. The article is from the Financial Post--not a publication that I've used as a resource. The article quotes Marc Chandler, a noted currency specialist and contributer to Real Money. Here's the lead. Please click on the title to see the full story.
"Greenback is nearing bottom, currency experts
say Jacqueline Thorpe, Financial Post
Published: Tuesday, January 29, 2008

The U.S. Dollar is reaching a bottom, as interest rate cuts
get priced in, foreign investment starts to pour into the
United States and foreign markets start to look less
attractive, strategists at Brown Brothers Harriman in

New York said on Tuesday. "
I've written in this space previously about the investment story behind the weakness in the USD. Specifically, I wondered whether or not the cacophony of media voices touting "multi-nationals" and foreign investments would back pedal in the event that the USD value against other currencies would begin to reverse.

On Toshi-Tim's blog (Slope of Hope), I posited that our banking system may be perceived as being stronger than European/Asian banks. Given that so much of our market turmoil--not just here but abroad--is due to lack of confidence in the financial system, one could surmise that our US markets, not just our bonds, would be the beneficiary of a flight to quality. In addition to the qualitative (safety) aspect, the forces of buying more for less (value) potentially would lift our markets. But...there will be pressure on earnings from multinationals.

My thinking might be flawed on this, but I wanted to put that out there.

Linda Bradford Rasche

"There is a mystery about the painting process that pulls me in and creates a kind of magic beyond words and time. My work is about combining the reality of observed facts with the reality of the sensed experience. "Elusive Elements" refers to this process and explores the substances of air and wind; space and time; silence and sounds. Kandinsky called it "vibrations of the soul"; Einstein called it "wavelengths". These opposite elements (mind and spirit) create an active response in my work. " Gloria Gaddis

I've mentioned Linda Bradford Rasche in this space before. Her name popped up in a book, and I wrote it on note to follow up. She began trading in 1981. She has a website that you can access here.

There are a number of very good trading articles that you can access at that site--but you must register. I printed all of the articles. She also has a blog.

Monday, January 28, 2008

Today's Market Close

On a daily basis, I plan to provide for you the WSJ market close as well as Yahoo's daily sector leaders and laggards. There will be no art accoutrement to these daily post close informational charts. These posts (unless I forget--help me remember), will have a label called "Market Close". If your DNA gets in a kink, you will be able to look at these daily snapshots.

I will resume providing these on a daily basis. I will not be providing any visual accoutrements. Click to make larger.

Yahoo Sector performance

Mrs. Red, Desk Excavation and Paper Exhuming

Note: Blogger will have a schedule outage at 7 p.m. EST.

I'm still excavating my desk (and exhuming all sorts of things, but nothing that bites!). In truth, not only was it my desk, but a very large wicker basket filled to the brim. Though I have a high tolerance level for mess, at some point I don't mind just sweeping my desk off. To do that, one needs a receptacle. My wicker basket is capacious--it's 9" deep, 16" long and 12" wide--large enough to accept a couple of sweeps. I'm now down to a manageable pile, but it is a pile nonetheless. I plan to banish this pile, but not tonight. I need a break.

As an apostate David Allen apostle, I can tell you that any system that you have will fail you if you do not manage it. I'll suggest that Societe General is realizing that in spades. One of the "tools" that he recommends is getting a labeler and always having fresh file folders available. I have faithfully followed this guidance. So despite my miasma of paper, I do have a systematic means for dispatching it. I've plenty of file space, and I purge those files annually.

I use a Brother, PT-2300. It hooks up to my computer where it will print a multitude of label formats. It also uses different size tape. So making a label is as easy as typing on my keyboard. It has its own robust keyboard for portable projects. I cannot recommend it enough. If you do not have a decent labeler, consider getting one. When you are looking at uniformly printed labels, your eye can find what it is looking for better. Here's a picture. You know you want one of these!

One of the other requirements for David Allen's system is to set aside about 1.5 hours a week to review your system. That might sound like alot of time for you. I used to work at a very complex job for at least 60-70- hours per week. Devoting about 2.3% of that time to reviewing my system, making adjustments etc. ensure that I met my commitments and didn't work 80 hours a week. The complexity of your work and personal life dictates that percentage. My slated time was Friday afternoons after lunch. This was sacrosanct time. When done, I would reward myself and leave early. Leaving early on Friday afternoons seemed like a guilty pleasure, but I worked every Sunday for 8-12 hours for as long as I can remember.

Allen is a big believer in having leakproof buckets. One such bucket is a Someday/Maybe list. I did make a folder for that. I put the directions for doing vermicomposting in that folder. I need to enrich that list a bit, don't you think?

I'd like to tell you why I chose the chair above. First, you may click on the image. It will take you to the gallery that originated the image. The chair reminds me of my grandmother (my Armenian grandmother!). She had a set of furniture that was always ensconced in slipcovers. Underneath were these lovely fabrics in a velvet-type fabric. I'm sure that there is a proper name for it, but I don't know it. The sofa and the chair were red. The club chair was a very pretty medium blue. The fabric had a "carved" floral pattern. I gave the sofa away--I truly had no room for it. But I still have the two chairs. The arms of the sofa and the two chairs were very wide and had wood on them. Perfect for stacking books or supporting writing materials. Can you believe it.....there were not computers back then in the home!

I transferred from VA Tech to VCU the summer between my sophomore and junior year. The most compelling reason for the transfer was that I had been very seriously injured by an overthrown hardball that managed to find my right cheek. I had to have surgery as my face was crushed (tripod fracture of the right zygoma). Not a pretty sight, I assure you. I had to withdraw from school. I worked as hard in school as I did post college. So I had enough credits to be considered a junior which was very helpful. Tech was still on the quarter system, so I had to withraw after Q2 of my sophomore year.

Background noise to all of this was that Mark and I were in a serious relationship AND (I think that this was probably the straw that sealed my transfer, but don't ever tell my husband that!), I did not get on-campus housing. I elected to transfer to VCU--"that hippie college" according to my father who remembered it as RPI from the 60's. They had an excellent Accounting program. Though I adored Tech and transferring was difficult, everything worked out fine.

I lived at home in the addition that my parents had built for my grandmother who was deceased. Her furniture was still there. I had many, many hours of seat time on that sofa with all my books piled around me. My beagle, Suzie, (my very first dog of my own!) would sleep in the blue chair. I will always remember that chair for that. I didn't have too many troubles with living at home. I never had any truly wild tendencies and doing well in school was terribly important to me. Accounting was hard, and it was very competitive. My mother would often worry about me for I seemingly never came up for air. I did eat dinner, and I was always an early riser, as I am now. So I would drink coffee with her each morning.

Though the sofa is gone, I have the red chair and the blue chair--enduring and endearing memories of childhood and young adulthood. They werePublish Post manufactured by Chromecraft (I think) and have a 1945 date. I think they would be considered Art Deco.

"Mrs. Red", then, conjured up a very pleasant memory for me.

Vince Farrell of Scotsman Capital

From: vince farrell
Sent: Monday, January 28, 2008 12:34 AM

I expect the Fed to cut rates at their meeting this week. The European Central Bank seems reluctant to follow. It is important to remember there is a big difference in the respective charters of the two institutions. The Fed has the dual role of "price and employment." They worry about economic growth and the rate of inflation. The ECB has the sole responsibility of price stability. They are not supposed to concern themselves with the pace of economic growth. That's why much of what you hear from the ECB is talk about inflation. So the fact that Spanish unemployment is up sharply to 8.6%, and that Italian retail sales fell in November doesn't carry as much weight as German consumer sentiment being a touch better than expectations. France and Germany are about half of Eurozone activity and the historical memory of hyperinflation, especially for Germany, is very real.

UBS was mentioned in the weekend press believing that for the recent upward move in the stock market to be sustained oil has to be below $80, and the government has to guarantee the viability of the bond insurers. I don't think oil will average less than $80 (it averaged $72 in 2007), and no way, in my opinion, should the government, in any way shape or form, guarantee the insurers. The original structure of the industry was to provide a guarantee to the issuers of municipal bonds for the timely payment of interest and principal. Timely payment. If a 30 year bond was guaranteed and somehow defaulted, the principal would be paid on schedule, in 30 years. The present value of that obligation makes the face value of the guaranteed debt more manageable. That management of these firms went off the reservation and speculated in CDO's and other financial wizardry is the private markets problem. The basic business is attractive (Warren Buffet just entered it) and at some price guys like Wilbur Ross or firms like Warburg will figure out how to price the assets. Pain will be inflicted, but that's what the market requires. Government guarantees will only encourage future idiocy. My opinion only.

Sunday, January 27, 2008

Don Coxe Broadcast

I'm sure this is a boot leg. But I enjoy Don Coxe. He doesn't get everything right, but he's worth your time listening to. You can access it here.

FTP and Sector Spreadsheet

After managing my euphoria for finding the big charts data, I spent a little time creating a spreadsheet that will track this information. If you are interested viewing this spreadsheet, I've created a FTP upload. I hope this works. Please give me feedback if it does not. I'm still in the initial stages of formatting and stuff. The data on this spreadsheet came from Big Charts. Also, I've not "checked" it thoroughly. I'm laying foundation.

Click below for the spreadsheet.

I hope that you are enjoying the artwork.


Bird Dogging! Yahoo Sectors

I'm embarrassed to say that I did not know that Yahoo had a detailed sector analysis. I stumbled upon it while I was doing some work on Waste Management Services.

If you click on this link, you will be transported into the world of Yahoo Sectors. It's nothing short of fabulous if you enjoy looking at individual sectors.

One of the "daily snapshots" one can do is top 5/bottom 5, as shown below. Personally, I find this view pretty nifty--though now I'm wondering if I should have used these sectors and company composition for my uber-nerd sector project. I'll reflect on that a bit. (sigh)

But the point of this post was to alert you to this resource...perhaps I'm the last one to know about it.

On a daily basis, I will be provided the above information along with the WSJ's daily market close. This post is labeled Bird Dogging because it represents my finding something to point out to you. Of course, I had the best mentor for this activity, Lucy. I'll close my b-d'n posts with her thumbnail.

Addendum 1:27.08 4:55 p.m. I found an even more interesting stock sector/subsector with interesting tools. You can find it here @ Big Charts . Here's an example of a sector tool that you can choose various time frames to observe sector performance.

If you click on the particular industry, you can see the makeup. I'm pretty impressed with this feature.


Saturday, January 26, 2008

Saturday Musings

Though I'm a David Allen apostle (apostate for too long), I keep a Franklin Planner. I've had one for more than 17 years. For about a week I wrestled with whether or not I really wanted to buy the daily refill pack.

I had an assistant for several years at my last job. Carey. She took care of me. She scheduled all my meetings, made all my reservations, filled out my expense reports and basically kept my day sane (nope, she cannot see you). Outlook handles all of that so well; but one needs a discrete place to write important notes. My planner has always served as that place rather than my scavenging an odd bit of paper and writing on it. If you saw my desk, you would realize the immediate calamity that an odd bit of paper would meet if it were expected to exist on my desk. It would be like a guppy--not a goldfish mind you, but a guppy--in an ocean.

So after determining that the axis of the orbit of my being would tilt precipitously if I were to be without my planner, I decided that I would change the "motif". (My husband better hope that my preferences for change are limited to this venue and hair color). For most of those 17 years, I used the "Blossoms" motif (there is a point buried in this mundane history of my life with my planner). This year, I'm using "Her P.O.V"-- as change in motif. This motif was not my preference. My preference was already sold out. Though I find the images captivating, I found the motif a little female-centric. I have enough trace amounts of testosterone from my years in the business world to give me a bit of an opposition reflex to the female-centricity. I contemplated further the danger to my axis and orbit, and elected to quell my reflexive opposition.

It did not take me long to get over it. In fact, I enjoyed one of the quotes and jotted it down in a note card to a good friend of mine. The artist for the images in POV is Karn Knutson. I Googled Knutson, and I found many other interesting images--not just from Knutson but others at the website you'll be directed to if you click on her picture.

As I was driving and thinking about the blog, I decided that I would find images for each post. It will be part of my Sensazione (enlivening the senses, especially sight) daVincian principle that I wrote about here.

So, I'll be actively looking for interesting images to add to my posts. I will have a link on the picture so that you can visit the situs point of the image. I was taken with the featured image, "always listening never hearing". Though I understood the essence of the phrase immediately, I couldn't help but reflect that the obverse is what is normally railed against. For example, I would have expected the caption to say, "always hearing, never listening"--as the criticism is that we 'hear' but are not LISTENING. But when I see the two phrases, the first one clearly portrays the point better. Regardless, the phrase and the image together are a potent thing to consider.

On the transport front....

I was lacerated by a kitten today. It's remarkable how well equipped they are to defend themselves against evil, snatching hands. I had to downsize their crate so that they would fit in the car. Clearly, they liked their old crate much better. The lacerations are not inconsequential--but I had plenty of sanitizing hand stuff (we use gobs of it when handling the pubs). As you might imagine, when rubbed into an open wound, the burn is quite bracing. Hopefully I inoculated all of the cat-scratch fever germs.

Blog Stuff

The above is from Gloria Gaddis. It is titled: Glittering Winds.

As usual, I'm doing a transport today. I'm drinking coffee and waking up. Our favorite coffee is reminiscent of the stock market. : Chock full O'Nuts. Even if I had a Starbucks nearby, I would not spend money on coffee. We eat and drink in mostly!

As I mention to Russell in the comments section (who politely took me to task for some undone things), I became apostate in my use of his system. In fairness, though, as I went into my "quiet period" prior to coming out with my resolutions, I emerged realizing that I had fallen into a shameful state. More importantly, I emerged with renewed vigor to re-embrace those tenets of organization that served me so well. But along the way one collects debris (piles of books, papers, other "stuff" in need of 'something'). I'm clearing away debris!

I shared with you that one of the items on my "list"--and I'm really trying to ensure that the list is kept manageable--is to provide more value-added items to this blog. Part of that effort will be to come up with more structured elements (e.g. Barron's Lucky 13 each Friday, or a featured company not widely media-fied, but may be of note).

While I finished my project early, I now want to find a meaningful way to integrate that work into something useful. I'll be working on that. If you have suggestions about something that you'd like to see, I'd welcome hearing about them.

I'm off now to prep for my driving and tending duties.

Friday, January 25, 2008

Lucky 13 for the Week ending 01.25.08

I will be publishing the Barron's Lucky 13 for 2008 on Friday's. I will include the performance for the M-F in this Stockcharts format. We'll be missing the 3 midlings.

ADR Listing

You can get an ADR listing from Bank of NY Mellon. Click here:

I downloaded this to Excel. If any of you are challenged with that download, e-mail me (see profile), and I'd be pleased to e-mail it to you.

Space Resolution

One of my resolutions was to keep my desk neat and organized. I've no desire to do this everyday, but once a week, everything on my desk should be touched: touched, put on an an action list, filed, or executed some action if it can be done in 2 minutes. (Part of David Allen's Principles). A long lead in to tell you that I'm cleaning off my desk.

In this endeavor, I excavated a gem of a book that I've shared in this space before: Psychology of the Stock Market by G. C. Selden. As a reminder, this thin volume was first published in 1912. When I read the book, I found many pithy things to underline. I randomly opened the book today (and I will do so in the future) and found this quote that I thought that I would share:

Hardly any event can happen of sufficient importance to attract general attention which some process of reasoning cannot construe as bullish and some other process interpret as bearish. (p. 52)

Thursday, January 24, 2008

A Tribute to Mary's Beloved Mollie Mae Louise

I keep a subscription to Real Money, the 'RM' that I referred to in another post. James De Porre (Rev Shark) posts a column there. I've considered that column to be a terrific value add. Not just because Rev posts quality content centered on the psychological and technical aspects of the market, but also because of the wonderful bloggers that are generous with their opinions, trading insights and trades.

One such blogger who I admire is ML153--Mary. Mary, like many, courageously posts her trades. The good ones and the awry ones. She has wonderful insights into the energy area. Mary recently lost her beloved Yorshire Terrier, Mollie Mae Louise. In the online world, we build communities. There is certainly a community there of animal lovers. Naturally, I bore them with my transport stories, as I do here! Unfortunately, I'm not the intrepid trader, and I do not provide much of benefit. So here's my chance!

Recently, Mary had to make the difficult decision to euthanize sweet Mollie when the scales of her life tilted too cruelly toward pain. The grace of Molly's life was that it was brimming with love--her receiving it and giving it. I offered to post these photo's of Mary's beloved Mollie Mae Louise so that the blogger family at that site could see this ray of sweetness that so charmed our "Mary". I know that these pictures will charm each of you.

Molly, August 2006

Mollie flying

St . Patrick's Day

Vince Farrell of Scotsman Capital

1) Oil is up sharply despite an increase in inventories. I think the short term movement is down for reasons articulated recently. But, there is a mention in the WSJ today that 78% of China's electricity is coal fired and they are now importing coal. Not likely to ease the Chinese seemingly insatiable demand for oil.
2) No way are foreign economies decoupled from the fortunes of the U.S. The U.S. consumer spent $9.5 trillion last year, six times more than the consumers of China and India combined.. The world exports to the U.S., and if we falter, so do they. 65% of Japans GDP is export and 23% of Mexicos GDP is derived from exports to the U.S. alone (Wall Street Journal.) Emerging economies,however, which are 30% of world GDP and 85% of the world's population, are better equipped today to weather a downturn. Brazil, for example, has a $185 billion foreign reserve, Russia $160 billion, and emerging economies in total have $4.1 trillion. Not so long ago many of these countries were faced with bankruptcy.
In fact, it costs $155,000 to insure $10,000,000 of Latvian debt via a credit default swap (see several prior notes on swaps), and $164,000 to insure the same amount of Merrill Lynch debt. Ouch!!! Latvia is (in one sense) a better credit than Merrill !

Corey Appeal Update

I'm pleased to announce that Corey has received the necessary funds to mend his leg and ensure that he is not euthanized. The shelter is very grateful for this response.

I'm not against euthanasia. Being compassionately dispatched to the netherworld sure beats living one's life in a cooped up shelter or at worse in the hands of an abuser.

Vince Farrell of Scotsman Capital

1) Unemployment claims were off 1,000 to 301,000, and the four week moving average was down 14,000 to 315,000. Remember, recessions are accompanied by a rise, often a sharp rise, in unemployment claims. A very rough guess I mentioned a couple of weeks ago is that a rate of 375,000 weekly claims would be equal to 0% GDP. This indicator sees no recession.
2) The monthly jobs report is next Friday, February 1. Estimates are for +75,000 new jobs, and that will change as the week goes on. Last recession there was a monthly decline of an average of -215,000 jobs per month.
3) Oil inventories were up +2.3 million barrels last week. 2nd increase in a row and in line with our guess that we would see inventory build in the early part of the year after year end liquidation for tax reasons. The January 2009 contract closed last night at $84.27 vs. $87 for the near month. Still slightly in backwardation. Oil averaged $72 per barrel in 2007, and if the Jan. '09 contract is an indication, oil will be higher this year compared to last.
4) Home sales in 2007 were 5.652 million, off -13% compared to 2006. The median price was -1.8% for the first annual decline since they started keeping records (1960's I think.) A whiff of good news is that inventories of unsold homes was down slightly to 3.9 million units, a 9.6 month supply. Still far higher than normal, but a bit better. Also, applications for mortgage refinancings are up smartly. Shows that lower rates do affect things. I mentioned a couple of days ago that 50% of conventional mortages could refinance and that number will probably grow as rates continue to decline.
5) Then there was the chef in a Swiss restaurant who cut off a piece of his finger using a new slicing machine. The insurance company was skeptical of his claim and sent an investigator who promptly cut off a piece of his finger fooling around with the evidence. The claim was paid, the investigator fired.

Snapshots from Energy Sector

Because of size limitations, SOME of the sector charts that I show here will essentially be "oreos". You'll see the bottom cookie (worst performers), you'll see the top cookie (best performers with an arbitrary cut off by me), but you'll see no creamy center.

In the future, I'll label the chart "Oreo", so that you'll know that you're not seeing a full list but rather a truncated "Oreo" list.

Again, I'm being "selective" in what I show until I evolve this. But energy is always a favorite, and I thought you might find it interesting.

Wednesday, January 23, 2008

A few Sector Snaphots

Capital Goods: Constr Supplies Fixtures and Raw Materials

As you can see, this group had a robust day today.

Gary K

Says that we've put in "a low", but it may not be "THE low". Looking for follow through day. His quote: "I really liked the action today."

My UYG went green today.

I'm experimenting with how I can provide you with some worthwhile information post close. I guess that is part two of uber nerd project. Until I get something more comprehensive, I'll pepper you with discrete information. My goal is to have something more tied to the whole.

Today's Lucky 13

Only JNJ had a bad day. In fact, I was looking at JNJ's chart when I saw it drop precipitously. That is when the DOW was down almost 300 points. We ended UP 300 points--which based on my math is a 600 point swing.

I don't know that I take comfort in that. The market is acting like all of the momo stocks prior to their faltering. I'll post more later, but many of the most heavily shorted sectors were up hugely today. Oh, and my MDC was up about 14+%. You will recall that I have puts on that. Perhaps a stupid stock trick! I still think that their numbers are going to stink. But....we'll see when they report early Feb.

I did buy a handful of FMD FEB 17.50 calls. On RM, someone posted that JPM was looking at their books. Could just be a rumor, but you know that I've been expecting someone to buy them. GS has already taken a stake. JPM was in the consortium of buyers for SLM with Flowers and BAC, so it would make sense that they were interested. So far I'm green with these.

Duck, Duck, GOOSE

I said that I'd report back on the recipe. The recipe is no doubt for goose breasts covered with skin and fat. For skinless goose breasts, it is too much cooking. I overcooked them. But everyone got seconds. I can honestly say--and you guys know I'm an intrepid cook--NOTHING has smelled better in my kitchen than those goose breasts roasting. My neighbor smelled it as soon as he walked in to our garage and winnowed his way into my kitchen to find the source. It was almost a savory, buttery smell. I can't quite describe it, but it was very, very pleasing to the the olfactories!

I'd modify the recipe that I posted here

I'd pan fry the breasts in a little bit of oil--4-5 minutes each side to brown. I'd then put them in the oven on the recommended temperature for perhaps 1/2 the time--I'd look for about 135 on a meat thermometer. I also added some thyme--the recipe practically cried out for it.

Vince Farrell of Scotsman Capital

When I last wrote about Vince Farrell, I shared with you his opining on the credit markets--specifically the credit market debacle was the worst credit event that he had witnessed in his lifetime. I think for most of us, that will stand true.

On the morning of my post, I visited Scotsman's Capital's website to ensure that I had the correct spelling of his name. He had a handy e-mail address, so I wrote to him to tell him how much I enjoyed his commentary during his frequent guest host spots on Squawkbox.

He promptly returned my e-mail, and put me on a mailing list. He offers various commentary throughout the day--his perspective, certainly. But as I read them, I thought that readers here might find them of interest. I wrote him yesterday and asked permission to publish his comments on the blog, to which he gave me "quote away" permission. Accordingly, I'll be posting various missives here that I think that you might find interesting. Here's a recent one from today:

What a reversal. Off -250 on the Dow to start the day and now, up 300. Could be short covering, could be the rumor that NY regulators are planning to aid bond insurance companies (MBIA, up over +20%, and AMBAC + more than 40%), or it just could be. If this is a bear market rally it will be short, violent and dramatic. The key for the market to sustain upward momentum will be the volume. If volume stays strong, so will the market,
My bet is that this is a new move. Different leadership- financials and retailers. And, then there is the Fed with a big hammer to hit interest rates with. Also, my friend Fred Dickson at D.A Davidson reminds me that there is over $3 trillion in money market funds earning very little and could move into stocks.
I hope that you enjoy the commentary.

Addendum: Here was his 2:40 missive:

2.40 PM and the market is almost unchanged after being down 250 points on the open. The Fed is taking a hammer to interest rates and the smartest guy I know, Doug Kass, says buy the early cycle stocks. I agree and was banging on the financials for all I was worth yesterday on TV. Financials, retail, and even homebuilders. I don't have the guts for the homebuilders, but how about things home related like a Home Depot or Wal Mart. As I have said so often the last few weeks, in chaos comes new leadership. Early cycle stocks are shaping up to be the leaders.
Did I mention the financial stocks ?

A Friend in Need

(Click picture for full story).

Dear Readers:

I hope that you do not find this post gauche, but I'm going to post an appeal for Corey. I promise that appeals will not be a routine part of my blog. In fact, I've been blogging for 16 months and have not made not one appeal! I plan to go for a similarly long period. But I realize that my "distaste" for posting an appeal could result in needed funds not making their way to help this dog in need.

Corey is at the Lenoir County SPCA and needs surgery after being hit by a car. His cast is temporary. As you know, I'm a volunteer transport driver for Lenoir County--almost every weekend. I've made a donation to help Corey. The reality is that if Corey is not helped, he will be euthanized, as this shelter is funds constrained (as they all are). It's a reality that I both understand and accept--so I don't say it for any reason but to state the alternative.

I'd like for you to consider joining me in helping to fund Corey's surgery. If in your consideration you decide that you can help, please you can click on Corey's picture to get information on how to donate. Your contribution is tax deductible.

Thank you for indulging me in making this appeal.

Tuesday, January 22, 2008

Nature's Bounty Lands on my Door step

The above recipe can be found here, at Astray recipes. I cannot help but always read it as AsHtray. I find interesting recipes there. If you like to snoop around for recipes, I recommend it. Rarely do I just settle on just one recipe, but rather I make Frankenstein recipes--cobble something together from 1, 2, sometimes 3 recipes. I'll just settle on an Adam recipe.

Our blog friend, Valvoline_6, brought to me today some goose breasts. They were so fresh that they were still warm in the bag. They weren't quivering though. I was grateful for that! I've never had fresh goose, so I searched for and found a recipe. It looks like the cooking process is also a bit of a meat curing process to get the excess fat out as well as remove some of the blood. (I noticed a whole goose recipe that called for soaking in vinegar overnight, and that is something that I do with other game). I'll try this and report out on the results.

Lucky 13

I'm not going to even comment on the market today other than to say that the activity did not give me much comfort. The market's reaction to the AAPL poor earnings report will be more telling tomorrow.

In their Jan 21 edition, Barron's gave the list of IQT's "Lucky 13 Stocks". You can read about it here. Why don't we follow these stocks along this year? CTML!!!
Under the performance measures, the stocks are bought at the end of December. Given that you could get some G-forces going if you were riding a sled down the price slope, this year's Lucky 13 may have started the year out roughly.

Selected Halter Index Stock Performance-Intraday

Uber-nerd Project Part 2

Here's another view that I like quite a bit. I am a chart reader. I don't claim to be a good one, but surveying a filed of charts in a sector--this one is Constr/Ag machinery. This is the other "product" of my work that I was looking for. For large sectors, it means scrolling through pages, but they can be printed out and highlighted. From this view (you can click image to make larger) you can easily see who is rolling over and who isn't.

From this list, I see a stock, CNH, that I'm not familiar with. I'm going to look at them now. If I see anything of interest, I'll post.

Monday, January 21, 2008

Uber-Nerd Project Completed

I've completed my uber-nerd project. Naturally once of was through about 75% of it, I found a much easier way to do it.

I'm not a techno-weenie. I have a program call HyperSnap from Hyperionics which is a screen imaging program. I like it very much, and in fact, this project gave me the opportunity to use more of its capabilities. To remind you, I was using the Metastock sector/subsector categories and creating them in Stockcharts. Why? Because I think that Stockcharts has greater "bird's eye view" capabilities.

Unfortunately, there is no way to print these symbols underneath the sector umbrella. Therefore, I would take a picture of the screen. Hypersnap has a function that will automatically scroll the screen down to the end and capture the picture. I would then print the Hypersnap doc and manually enter the symbols.

Toward the end, I found that I could use the "TextSnap" functionality. It puts the tickers in a column in Hypersnap. I needed them in symbol-comma-symbol format. I copied them into Word and then wrote a macro to delete the hard return, insert a comma, insert a space etc, etc. I was so proud of myself. It made the last of this arduous process go by much more smoothly. Essentially it converted



I use Hypersnap quite a bit for most of my blog images. If you do not have a robust screen/text capture, I would recommend this program. It is very inexpensive. You can find out about it here. There may be better programs, but I'm only familiar with this one.

Now, what did I accomplish? I've created a pretty comprehensive list of stocks that I can view easily by sector. I believe that understanding sectors within the current economic cycle are very key. If one is not attuned to how the sector is performing within an economic/business/interest rate/market cycle (they are inextricably linked) then one runs a pretty great risk of buying at a disadvantageous time EVEN THOUGH THE FUNDAMENTALS ARE TERRIFIC.

Case in point: Real estate investment trusts.

Here's the "Big Picture:

Because of the size of this chart, I'm going to break the sub sectors down for you so that you can read them easily


As you can see, this was quite a project! But I wanted to be able to do this: