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June 2009

Recs

16

Today's Economic Indicator: Auto Sales are Improving aka U.S. Auto Sales Have Bottomed - Month 3

June 30, 2009 – Comments (8) | RELATED TICKERS: F , TM

Several months ago I made the call that light vehicle sales in the United States had bottomed out, that sales for 2009 will not fall below will not go below 9.5 to 10 million units on an annual basis and that the market will very slowly recover from that level.  A vocal minority here at CAPS scoffed at my prediction, but thus far things are playing out just as I had expected.  [more]

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22

Another example of how high taxes are bad for the economy

June 30, 2009 – Comments (14) | RELATED TICKERS: THI

The U.S. government is spending money at an alarming rate.  Eventually something is going to have to be done to shrink the budget deficit.  Don't hold your breath for less government spending.  If Uncle Sam can't tighten its belt and spend less, it is going to have to raise taxes.  That's a fact.  We can't just keep spending beyond our means indefinitely.  The money will eventually have to come from somewhere.  [more]

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49

"Nauseating Theft" by Nelson Peltz

June 30, 2009 – Comments (6) | RELATED TICKERS: WEN , CHK

  [more]

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25

"The Bottom" in pictures

June 29, 2009 – Comments (5)

Many people have been saying lately that the economy has bottomed and that recovery is right around the corner.  I think that these people are half right.  After falling off of a cliff at the end of 2008 and the beginning of 2009, the deterioration of the U.S. economy has slowed dramatically.  I clipped four excelent charts containing data from last week from my free three day trial of Bespoke that show evidence of this bottoming process:  [more]

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15

Historical trends bode well for July and the second half

June 27, 2009 – Comments (12)

Man this year is flying.  I can't believe that July is already here.  I usually don't put a whole lot of faith in technical analysis or seasonal mumbo jumbo, but I found the following information on the market's historical movement in July interesting nonetheless.  [more]

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27

U.S. Savings Rate at Highest Level in 15 Years

June 26, 2009 – Comments (23) | RELATED TICKERS: E

I have been a firm believer for a while now that the current economic mess that we find ourselves in would scare U.S. citizens into doing something that they should have been doing all along...saving money.  Fresh evidence of this trend of increased consumer saving was published this morning.  [more]

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16

China Bashes the Dollar...Again (now including the missing paragraph)

June 26, 2009 – Comments (1) | RELATED TICKERS: UDN

I usually risk permanent loss of sight by perusing Bloomberg.com's white on black website while having my coffee every morning.  Today the retinal burn was worth it.  I came across a number of great articles that anyone who is interested in the direction that the economy is headed should pay attention to.  [more]

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11

China Bashes the Dollar...Again

June 26, 2009 – Comments (3) | RELATED TICKERS: UDN

I usually risk permanent loss of sight by perusing Bloomberg.com's white on black website while having my coffee every morning.  Today the retinal burn was worth it.  I came across a number of great articles that anyone who is interested in the direction that the economy is headed should pay attention to.  [more]

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10

Spy Photos of Middleby's Next Innovative Product

June 26, 2009 – Comments (3) | RELATED TICKERS: MIDD

Anyone who subscribes to The Motley Fool's fantastic Hidden Gems newsletter is well aware of a company called Middleby.  This manufacturer of cooking equipment, mainly ovens, has been a big winner for the service, returning nearly 400% even after the market meltdown since Tom Gardner discovered it several years ago.  Followers of the company know that its CEO, Selim Bassoul, earns the big bucks (much to some shareholders' chagrin) because he usually delivers outstanding results by thinking ahead and always looking to capitalize on the next big emerging trend in the industry, such as the company's foray into convenience stores, more efficient friers, or its introduction of energy efficient equipment. It appears as though Mr. Bassoul has found his next innovative market segment to go after.

Everyone knows that in this day and age people are increasingly pressed for time and looking for ways to multitask. I have an inside source who risked life and limb to get me an early spy photo of the next innovative product that MIDD plans to launch:



My source tells me that "this 12V portable oven and pizzeria plugs right into your dashboard. High and low settings for cooking and warming. Unique heating elements cook from top to bottom. Built-in fold out carry handle. Easy to clean and maintain. Fine freeway dining."

Think about all of the time that parents will be able to save by cooking dinner while picking their children up from school. Sure, much like talking on the cell phone or even worse texting while driving, cooking while driving probably isn't all that safe...but talking on the phone while driving is illegal in many states. To the best of my knowledge no states have specific statutes that ban cooking while driving yet.

Man this Selim guy is good.

Deej ;)   [more]

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29

Cap and Trade: Hop on the next bubble before it inflates

June 25, 2009 – Comments (44) | RELATED TICKERS: CAP

It's amazing that the cap and trade bill that is being debated in Congress right now is not receiving more media attention.  If it passes, this bill will have a direct impact upon every single person in the United States in the form of a higher electric bill and an indirect impact on them in the form of more expensive goods and services and lost manufacturing jobs.  [more]

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21

'Cash for Clunkers' mostly a clunker

June 25, 2009 – Comments (14)

It took CNN Money a week to figure out what I told my friends here at CAPS about the Cash for Clunkers aka Cash for Trash bill when it was officially passed.  Here's what I had to say on the subject on June 19th:  [more]

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5

Global air traffic may have bottomed

June 25, 2009 – Comments (1) | RELATED TICKERS: OMAB , PAC , ASR

FWIW, the International Air Transport Association believes that the 9.3% drop in airline passenger traffic that the industry experienced worldwide last month may represent a bottom. This 9.3% decline follows a massive 11.1% drop in March and a 3.1% decline in April.   [more]

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33

The media gets it wrong, the government screws up, the sky is blue, and grass is green

June 23, 2009 – Comments (14) | RELATED TICKERS: MO

Most CAPS players are well aware of how terrible the mainstream media is.  Once again, the headline writers at many major publications have gotten the story wrong.  Today, President Obama signed new tobacco legislation into law that puts the industry under the control of the Food and Drug Administration.  Many newspapers are hailing this new legislation as a huge win against "Big Tobacco."  [more]

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22

The reality of cash for clunkers

June 19, 2009 – Comments (19)

Looking at things objectively, the government providing consumers with money to purchase a new vehicle is absolutely absurd.  Of course, as someone who works in the auto industry I am hardly objective so I say bring it on ;).   [more]

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43

How on Earth do the new massive financial regulatory changes not address the @#$%&* ratings agencies

June 18, 2009 – Comments (18) | RELATED TICKERS: MCO

I have been blasting the ratings agencies here for what seems like years for being a major contributor to the financial mess that we find ourselves in today yet not being penalized one iota for their misdeeds.  The Big Picture's Barry Ritholtz has a similar opinion on this matter.  I love the rant that he had on the subject today.  As an added bonus, he slipped a "WTF" into his tirade, which always makes me laugh for some reason.  [more]

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16

I've been down for so long, it feels like up to me

June 18, 2009 – Comments (21)

The other day I caught some flack from a few people for talking about the price to earnings ratio of the S&P 500.  Mock P/E all you want, and it certainly is not a perfect statistic, but many smart investors look at the P/E multiple of major indices to judge whether stocks in general are over or under valued.  John Hussman is one such Intelligent Investor to borrow a phrase from Ben Graham.  [more]

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14

Rising gas prices hit drivers nationwide

June 18, 2009 – Comments (1) | RELATED TICKERS: GAS.DL

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10

Two Powerful Forces Unite to Form a Marketing Dream Team

June 17, 2009 – Comments (1) | RELATED TICKERS: SIX

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22

Half of the good borrowers from '05 through '07 are now underwater on their homes

June 17, 2009 – Comments (19) | RELATED TICKERS: BAC , WFC

Think that banks are on the mend?  Sure they have raised massive amounts of money by diluting their existing shareholders even further, but the toxic er um, excuse me "legacy" assets on their books are continuing to deteriorate.  [more]

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22

The Mega-Perma-Bears are right. WE"RE ALL DOOMED!!!!

June 16, 2009 – Comments (15) | RELATED TICKERS: HOG

The elite crew of the most bearish bears who can see what others can't and believe that the United States is doomed, that most Americans will eventually lose their jobs or file for bankruptcy are right to be afraid, but their fear is misplaced.  It's not the economy that's going to get us, it's PIGS!  Big Fat Giant PIGS!  Look out for the PIG BOMB!  [more]

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22

This Rally May Need a New Source of Fuel

June 16, 2009 – Comments (13)

This weekend's NYT had a great article on just how expensive the market is after its recent massive rally.    [more]

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8

CBO: New Healthcare iniative to cost $1 Trillion

June 16, 2009 – Comments (1)

I realize that as some who has access to a relatively good healthcare plan it's easy for me to say this, but the Administration's new plan to expand coverage seems awfully expensive to me.  At a time when the United States is running a massive budget deficit, the Congressional Budget Office estimates that the newly proposed plan would end up costing the government an additional $1 trillion over 10 years.  And this estimate doesn't even include the possible expansion of Medicade to create a public insurance plan to compete with the private plans that are out there.  [more]

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17

Boardwalk is a Buy

June 15, 2009 – Comments (4) | RELATED TICKERS: BWP

This week's issue of Barron's featured its semi-annual Roundtable of All Star investors.  This issue is always one of my favorites because it contains some fantastic information from some of the greatest investment minds around like Bill Gross, Marc Faber, and Scott Black (and a few duds as well like Abby Joseph Cohen).  [more]

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23

The United States has too many stores

June 15, 2009 – Comments (15) | RELATED TICKERS: WMT , BBY , BBBY

  [more]

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9

Fracking, Emergency Funds, a Mysterious Photo and More

June 12, 2009 – Comments (0) | RELATED TICKERS: JNJ , CHK , F

I'm trying to finish up some work before heading out to hang out with my brother and his family this weekend, so I don't have a lot of time to blog today.  Instead I though that I would quickly provide links to a number of interesting articles that I have come across today for your enjoyment.  Have a great weekend everyone.  [more]

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32

The flawed logic of the silly Karl Denninger "Downturn Moderating? More LIES!" post

June 11, 2009 – Comments (41) | RELATED TICKERS: H , CRT

I don't know who this Denninger guy is.  I read a ton of blogs, Calculated Risk, Big Picture, etc... but I've never read his before (I don't read that Mish guy's blog either).  However, a post by him that Gold cut and pasted here on CAPS received a huge number of recs.    [more]

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14

Positive Sign: companies are ramping up their IT spending

June 11, 2009 – Comments (11) | RELATED TICKERS: VGT

   [more]

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11

Amazon, Starbucks Rose Too Far Too Fast

June 11, 2009 – Comments (1) | RELATED TICKERS: AMZN , SBUX

I came across a great Bloomberg article by John Dorfman on the meteoric rise in consumer discretionary stocks over the past several months.  According to the article, consumer discretionary have increased by nearly 50% over the past three months.  The author fears that they have risen too far, too fast and that the rebound in consumer spending may not be nearly as dramatic as what they have priced in.  [more]

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13

Cool Mortgage Rate Calculator Paints a Grim Picture

June 10, 2009 – Comments (0)

As I mentioned in my previous post one can usually tell where mortgage rates are headed by looking at the yield on 10-year Treasuries.  Calculated Risk had an excellent post on this subject today.  It provided a link to a cool calculator that is available on a blog called Political Calculations.  The calculator lets you plug in the yield on the 10-year and it will estimate where mortgage rates are headed using the historical correlation between the two.  [more]

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9

In Asia, Hints of a Distant and Fragile Recovery

June 10, 2009 – Comments (0)

The NYT published an interesting article on the status of the economic recovery in Asia this morning. As has been widely noted in the media, the global economy has stopped its free fall, but recent data from Asia indicates that a major recovery and a return to growth may not happen for a while and once it does arrive growth will be weaker than we have become accustomed to.

A few of the pieces of data that the article focused on include:

- Orders for machinery in Japan fell 5.4% in April, more than analysts expected.

- Factory output in Malaysia fell 11.4% year-over-year in April. While this is the eighth consecutive monthly drop, the pace of the decline has slowed.

- Exports from the Philippines dropped 35.2% year-over-year and 3.6% versus the prior month in April.

- South Korea and Taiwan recently reported similar disappointing export numbers for May.

Interestingly, the unemployment rate in South Korea rose to a four-year high...but it is only at 3.9%. People in the U.S. would give anything to have a rate that's even twice that right now.

- Resource rich Australia's economy on the other hand has been supported by the recent rally in commodities. Consumer confidence there jumped by the most in 22 years in June.

On the bright side, most of the aforementioned data is a little old and it has likely improved over the past month plus. Similarly, many Asian countries are free of the excessive level of debt that the United States has on both the government and consumer level. Still, without a rapid recovery in the world's largest consumer, the U.S., Asian countries...particularly China...are going to have to do a better job at stimulating domestic demand to experience anything like the rate of growth that they had become accustomed to before the current recession.

In Asia, Hints of a Distant and Fragile Recovery  [more]

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21

Unintended Consequences

June 10, 2009 – Comments (12) | RELATED TICKERS: GAS.DL

  [more]

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20

High Gas Prices Could Slow Recovery

June 09, 2009 – Comments (8) | RELATED TICKERS: GAS.DL

   [more]

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14

Reply from the person who said "swine flu concerns are exaggerated?

June 09, 2009 – Comments (7) | RELATED TICKERS: F

I suspect that dwot was referring to me in her recent post "Someone said swine flu concerns are exaggerated?".  I like reading her blog and I have a ton of respect for her, but I believe that she is way off base here.    [more]

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32

The Mysterious Birth / Death Adjustment

June 08, 2009 – Comments (8) | RELATED TICKERS: B , D

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25

Now is the time to buy natural gas - Part 2

June 08, 2009 – Comments (12) | RELATED TICKERS: UNG

  [more]

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16

A Ray of Light? Further Analysis of the May Jobs Report

June 05, 2009 – Comments (10)

Here's what David Rosenberg had to say about this morning's jobs report.  I'll tell you why I disagree with his assessment of it after:  [more]

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6

Swine Flu Hammers Mexican Airports / A great chart on drillers

June 05, 2009 – Comments (2) | RELATED TICKERS: PAC , ASR , NE

The swine flu outbreak in Mexico is clearly having a devastating effect upon Mexican airports like PAC. Its May passenger traffic fell 36.6%, including a 43.7% drop in international traffic.  I don't believe that the third public Mexican airport, OMAB, has published its May traffic numbers yet.  [more]

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14

Ford / Toyota Boost Production, BMW Sees a Bottom - Auto Sales Have Bottomed - Month 2, Post 2

June 04, 2009 – Comments (8) | RELATED TICKERS: F , GM

Last month I made the call that U.S. auto sales had hit a bottom and that they would not fall lower than 9.5 million to 10 million units for all of 2009.  Today I came across additional evidence that this is exactly what is happening.  [more]

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12

Valero Sucks

June 04, 2009 – Comments (5) | RELATED TICKERS: VLO

  [more]

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6

Wal-Mart to the rescue

June 04, 2009 – Comments (0) | RELATED TICKERS: WMT

As much as everyone demonizes Wal-Mart for not being unionized, look at what has happened to the companies with the strongest union ties...the automakers versus what has happened to one with none.  Thetwo of the "Big 3" automakers are bankrupt partially as a result off their massive union retiree healthcare and pension obligations meanwhile Wal-Mart plans to add 22,000 new jobs in 2009.   [more]

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7

GM Political Cartoons

June 04, 2009 – Comments (0) | RELATED TICKERS: GM

As someone who works in the auto industry, GM's demise saddens me.  Some of these cartoons are prretty darn funny though.  [more]

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5

P-PIMP is toast

June 04, 2009 – Comments (0)

One interesting neews item that came out yesterday is that the government's garbage asset purchase plan, oh excuse me...legacy asset plan, is being delayed (I read that to mean that it might not happen at all).  I say good.  While it's annoying for me to see common shareholders diluted into oblivion, it's better than seeing my tax dollars thrown into the trash (which has been happening a lot lately).  As someone who owns bonds of the banks it's no skin off of my back.  In fact I welcome dilution.  Bring it on.  [more]

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11

Spam Buster 5000

June 04, 2009 – Comments (4)

While I do not have the ability to delete all of the annoying prescription drug ads and such that keep popping up on the front page of the blogs section, I do have the ability to push them down the list and into obscurity.  As such, I am going to make a series of posts containing what I believe are the most interesting business stories of the day.    [more]

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26

The reason why oil is down so much today

June 03, 2009 – Comments (9) | RELATED TICKERS: USO

  [more]

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11

Thr Great Depression Ahead Update

June 03, 2009 – Comments (4) | RELATED TICKERS: DE , NT

  [more]

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9

Auto Sales Have Bottomed - Month 2

June 02, 2009 – Comments (7) | RELATED TICKERS: GM , F , TM

On May 1st, I made the call that light vehicle sales in the United States had hit a bottom and the rapid deterioration that we had witnessed over the past year would stop.  Some weakly disputed my claim by citing erroneous WSJ statistics and blanket statements that unemployment is headed to 100%.  [more]

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8

Chinese Hummers

June 02, 2009 – Comments (8) | RELATED TICKERS: GM , F

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11

A Wii Bit of Competition

June 02, 2009 – Comments (5) | RELATED TICKERS: NTDOY , MSFT

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15

Cross of Gold / A permanent 60 per cent across-the-board tax increase?

June 01, 2009 – Comments (8) | RELATED TICKERS: UDN

Always listen to your parents.  While this is probably a bad rule of thumb for most adults, after all stupid people can reproduce too...often in greater numbers than smart people (see Travis Henry's 9 babies with nine women for an example of what I mean), this is one of the most important lessons that I will take away from the recent financial crisis.  Many of you who have read my blog in the past know that my retired father (he still does some consulting) is very involved in commodities and follows the stock market very closely.  [more]

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10

Pet Peeve of the Day: SPAM

June 01, 2009 – Comments (6) | RELATED TICKERS: AM.DL

My personal pet peeve of the day is related to spam, but not in the way that you think.  Sure people who fill my inbox and fill messages message boards with thousands of messages about how to enlarge this, or how to get cheap meds, or that I have a message waiting for me from a hot secret admirer, or that there is millions of dollars in Nigerian funds that they need my help getting out of the country, or how there's a problem with "my bank account," or where to gamble (much like the annoying person who filled up the front page of the CAPS blog list with ads this morning) are annoying, but they really are not the problem here.  No one would spam if there wasn't any economic incentive to do so.  [more]

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