• Someone Saw this Coming
    Posted by on August 11th, 2009 at 12:43 am

    GM is now selling its cars…on eBay.

  • Singapore’s GDP +20.7%
    Posted by on August 11th, 2009 at 12:38 am

    Wow!

    Singapore’s economy expanded by a seasonally adjusted 20.7 per cent in second quarter, underpinned by strong gains in the manufacturing sector.
    This represents a significant improvement from the 12.2 per cent contraction in the first quarter, said the Ministry of Trade and Industry in a statement on Monday morning.
    Compared to a year ago, GDP contracted by 3.5 per cent in the second quarter. As a result, the Singapore economy contracted by 6.5 per cent in the first half of the year.
    MTI said it would maintain the GDP growth forecast for this year at -4 to -6 per cent.
    Manufacturing output increased by 49.5 per cent, compared to the previous quarter’s contraction of 18.5 per cent. This was largely due to a surge in the production of active pharmaceutical ingredients in the biomedical manufacturing cluster and an increase in inventory restocking in the electronics sector.

  • Dow Theory Says Buy
    Posted by on August 10th, 2009 at 1:27 pm

    But with caution.

    Dow Theory, one of the oldest stock market forecasting methods, has shown a new buy signal: the Dow Jones Transportation Average joined the Dow Jones Industrial Average to close above January highs, according to Bank of America Merrill Lynch.
    However, the bank’s analysts said on Monday that a momentum indicator known as breadth thrust, which focuses on the proportion of advancing to declining stocks, shows a pull-back of 15 to 20 percent this fall when combined with the Dow Theory buy signal.

  • Wall Street Bum
    Posted by on August 10th, 2009 at 12:00 pm

  • Sysco Drops on Earnings
    Posted by on August 10th, 2009 at 10:46 am

    Shares of Buy List member Sysco (SYY) are down this morning after the company reported fiscal fourth-quarter earnings of 53 cents a share. That was four cents better than Wall Street’s consensus although it was down from 55 cents a year ago.
    The company is the nation’s largest foodservice distributor. Revenues are down about 7% but Sysco has been aggressively cutting costs—operating expenses declined to $1.22 billion from $1.34 billion, which helps during a recession.
    For the full year, Sysco earned $1.77 per share which was down from $1.81 per share last year. The company should earn about the same this year which makes the stock reasonably priced. The dividend yields close to 4% which is also nice.

  • Banks on Track to Make $38 Billion in Overdraft Fees
    Posted by on August 10th, 2009 at 9:14 am

    Banks are making loads of money, just not in banking.

    Overdraft fees accounted for more than three-quarters of service fees charged on customer deposits, he said.
    The most cash-strapped customers are the hardest hit by such fees, with 90 per cent of overdraft revenues coming from 10 per cent of the 130m checking accounts in the US. Regular use of overdrafts is most common among consumers with low credit scores, Moebs discovered.
    Banks say that the fees compensate for the risk they incur when they pay on behalf of customers who do not have enough money in their accounts. “Overdraft fees are there for a reason, we take on a lot of risk,” a senior banker said. “It’s a service to our customers, they want us to pay their overdrafts.”
    The highest overdraft fees were charged by the largest banks, said Mr Moebs. At banks with assets greater than $50bn – a group including Citigroup, Bank of America, JPMorgan Chase and Wells Fargo – the median overdraft fee is set at $33.
    At BofA, a customer overdrawn by as little as $6 could trigger a $35 penalty. If the customer does not realise they have a negative balance and continue spending, they could incur that fee as many as 10 times in a single day, for a total of $350. Failing to repay the overdraft within a few days results in an additional $35 penalty.

    So what do banks pay when they overdraft?

  • If You Test Every Correlation Possible, You’ll Eventually Find Something
    Posted by on August 10th, 2009 at 9:05 am

    Exact Prediction of S&P 500 Returns
    A linear link between S&P 500 return and the change rate of the number of nine-year-olds in the USA has been found. The return is represented by a sum of monthly returns during previous twelve months. The change rate of the specific age population is represented by moving averages. The period between January 1990 and December 2003 is described by monthly population intercensal estimates as provided by the US Census Bureau. Four years before 1990 are described using the estimates of the number of 17 year-olds shifted 8 years back. The prediction of S&P 500 returns for the months after 2003, including those beyond 2007, are obtained using the number of 3 year-olds between 1990 and 2003 shifted by 6 years ahead and quarterly estimates of real GDP per capita. A prediction is available for the period beyond 2007. There are two sharp drops in the predicted returns – in 2007 and 2009, and one strong rally in 2008. Equivalently, S&P 500 index should drop in 2007 and 2009 to the level observed one year before.
    Potential link between S&P 500 returns and 9-year-old population is tested for cointegration. The Engle-Granger and Johansen tests demonstrate the presence of a long-term equilibrium (cointegrating) relation between these variables. This makes valid standard statistical estimates. Correlation between the predicted and observed indices, including RMS difference, linear regression, and VAR demonstrate good prediction accuracy at two-year horizon, when the prediction uses 7-year-olds instead of 9-year-olds. The RMS difference between the observed and predicted returns for the period between 1992 and 2003 is only 0.09 with standard deviation of the observed series for the same period of 0.12 and the naïve (random walk) RMS deference of 0.18.

  • Traders Bet Rally Won’t Last
    Posted by on August 10th, 2009 at 8:43 am

    Historically, Septembers in the first year of a presidential administration have been tough for the stock market. For example, there was some unpleasantness in 1929, 1973 and 2001. Some traders are already bracing for trouble in September 2009:

    Options traders are increasing bets that the steepest rally in the Standard & Poor’s 500 Index since the 1930s won’t survive September, historically the worst month for U.S. equities.
    Traders are betting the VIX, a gauge of expected stock swings, will increase 13 percent in the next five weeks, according to futures prices compiled by Bloomberg. That’s the biggest spread since August 2008, right before the S&P 500 suffered the steepest two-month plunge in 21 years. The indexes have moved in the opposite direction 81 percent of the time over the past five years, Bloomberg data show.
    (…)
    History shows that U.S. investors lose the most in September. The benchmark index for American equities fell 1.3 percent on average since 1928 that month, data compiled by Bloomberg show.

    (Via: Joe Weisenthal)

  • Poseur Alert
    Posted by on August 9th, 2009 at 10:59 pm

    Check out this lede:

    In the coda of the Passacaglia and Fugue in C minor, composer Johann Sebastian Bach repeats the same chord sequence over and over again, leading the listener to anticipate one resolution, only to provide a tone completely different.

    Can you guess what the story is about? If you said, the Nationals 9-2 victory over the Diamondbacks, congratulations.

  • The Semi-Good Jobs Report
    Posted by on August 7th, 2009 at 11:05 am

    After nearly two years of horrible jobs report, we finally got one that’s not so horrible. Though it’s not so good either.
    Let’s start with the good news. Nonfarm payrolls fell by 247,000 last month. That’s the shallowest decline in nearly a year. The unemployment rate ticked down from 9.5% to 9.4%. If you want to go out a few more decimal places, it fell from 9.507% to 9.360%.
    If we look at the numbers more closely, we see that the civilian labor force dropped by 422,000 last month (that’s seasonally adjusted) while the number of employed dropped by 155,000 (note that that is a different calculation from the NFP report).
    In other words, the increase in the employment rate is due to the fact that people are leaving the job market faster than people are losing jobs.