TGIF Randomosity!

• As I sat down this morning to blog, the market was tanking, er getting smoked, yet again.  But work intervened and when I came back to my office, things weren’t so bad.  Obviously, the market got hit with the Dell news (as did Dell!).  The WSJ said investors wanted safety today.
• Hat tip to Market Power (twice) for the link to the College Athletic Graduation Data.  Kind of interesting, and good to know that rates are on the rise.
• Everyone is rolling their eyes when they hear that employment lags in this economic recover.  Mark Thoma explains why it may be until 2013 that we see employment recovering.  Oh, and there are graphs.  I like graphs.
• Eyes on health care this weekend!

Sixty votes in the 100-seat Senate are required to clear Saturday's vote, meaning that all 58 Senate Democrats and the two independents that generally vote with them will need to hold together. All 40 Republicans are united in opposition.

"We are not assuming a thing. We are working hard to bring all Democrats together for the 60 votes necessary to proceed to this historic debate," said Dick Durbin of Illinois, the No. 2 Senate Democrat. "I'm hoping that we can muster our ranks."

• So, I have Dwayne Bowe on my fantasy football team.  Good grief, he’s suspended for 4 games.  So I’m going through the free agent list and looking at picking up some other cast off.
• I don’t really have an opinion on Sarah Palin’s new book.  Sorry.  I don’t think I’ll read it.  There are many blogs out there commenting on the book.  I wonder how many have actually read it, compared to how many love or hate Palin, and are just reciting talking points?

Dude, I Hope You Didn’t Own Dell

Dell reported that their fiscal third-quarter profit fell 54%.

Officials offered less than robust outlook on end demand. Chief Financial Officer Brian Gladden said demand had stabilized but a significant uptick was unlikely until 2010. Dell’s shares are down about 6% in after-market trading.
In the post-earnings conference call, officials said desktop PC revenue declined 26% year-over-year. Mobility fell 14%, servers down 6%, storage down 19%, according to our colleagues over at Digits.
Link

You know, this is sad news for the 3rd quarter and all, but I’m guessing that 4th quarter demand (and forward) may increase with people upgrading PCs and moving to Windows 7.  I’m speaking for myself, as I am planning on a new purchase in the next few weeks. In addition, friends and family are also in the market now that Windows 7 is out.  I’m guessing Dell will get most of our business.  Just saying.
But bad news in the rear-view mirror, that’s for sure. 
Is the 26% year-over-year decline in desktop revenue really that shocking?  I can’t think of anyone buying right before the Windows 7 release.  Even with a free upgrade to Windows 7, it’s much easier to just buy a PC with the operating system already installed.

DOW Theory Buy (Recently)

In case you missed it, the DOW Theory buy hit last Monday. 

As Mark Hulbert (not pictured) reports, the action on the Dow Transports last Monday finally triggered a Dow Theory buy signal, which has been enough to persuade some erstwhile bears to grudgingly turn bullish. Of course, Hulbert notes that there may nevertheless be some Dow Theorists who remain dismissive of this buy signal due to the lack of any extended correction since the market's March low.
…
Richard Russell (not pictured, either), editor of Dow Theory Letters, is one of the technical analysts who, in light of the joint new highs of both the Dow Industrials and the Dow Transports, are now officially bullish on both the secondary and primary trends of the stock market.

There you go.  Good to know, I suppose.
But heck, Gary Kaltbaum was talking about “momentum tops” on his radio show today.  Of course, he was hedging this way and that way and being rather unspecific with regards to making any sort of market call.  As usual. But he does have an entertaining radio show.
I remain 100% long.
Pictured is Monica Raymund, from Lie to Me.

Market Valuation

Mark Haines (not pictured) made a comment this morning on Squawk Box about market valuation. Many folks are complaining that market valuation is too high considering the weak economy. We have unemployment over 10%, homeowners are facing foreclosures, and there is an overall sense of gloom. Haines said that early in an economic recovery, valuations would be higher because corporate earnings haven't caught up with the turnaround.

Corporate earnings are reported looking at the rear-view mirror. We're not at the point where things in the rear-view mirror look anything close to rosey.

And for federal and state tax revenues, things look even worse as those lag the economy based on tax years. We know the federal deficit is closing in on $2T. California may be looking at a $25 billion hole.  As the recovery progresses, then tax revenues should increase.  If the stock market closes out a positive year, maybe we'll even see some capital gains taxes roll in.  In states like CA where we rely heavily on the rich to pay taxes, as the rich prosper the state prospers.

Anyway, nice comment by Haines.  I think looking when looking at data points, it is important to look around and see where we are in the economic recovery, rather than apply a strict and rigid historical model.

Monday Randomosity

• Hey, two blog posts in one day!  I think I can, I think I can…  Brought to you by a sexy race girl. Just cuz.
• Did you see where Warren Buffett doubled his Wal-mart holdings?
• While we’re debating government-run health care, it may be important to see how government-run mail delivery is going.  The U.S. Postal Service reported a $3.8 billion loss in the 2009 fiscal year, and plans to propose to Congress in 2010 that it drop Saturday delivery.  Nice!
• Hey, the Fed sees no asset bubbles!  "The prices of assets in U.S. financial markets do not appear to be clearly out of line with the outlook for the economy and business prospects as well as the level of risk-free interest rates," said Fed Vice Chairman Donald Kohn.  Should we file this in the folder with the internet stock bubble and housing bubble the Fed also didn’t see?
• Arnold Kling:  No Bubbles Here.  Move Along Now.
• Hey, niacin is good for the heart after all.
• I have little interest in Sarah Palin’s book, Going Rogue.  You?  Heck, $30.   Review up at WSJ. 
• Speaking of, I recently subscribed to the online and print version of WSJ.  It really is a well-written newspaper, and contains more than just recycled AP news stories.  I’m enjoying the hard-copy for a change of pace.  Old school, baby!

Monday Ramp

• Seems like a big deal to break 1100 on the SP500. If we can hold it today. Technically, the market seems fine. Fundamentally, it sure seems as if we are going to have some issues with higher market valuation.
• I remain long and don't see a compelling reason to sell just yet.
• Monday Night Football between Ravens and Browns. What a clunker. I will probably watch. LOL.

Sunday Game Day

I'm still long the stock market. Haven't seen too big of reason to sell. I think the economy is recovering, and the bump up in the productivity numbers was nice to see at this point. It may be a bit before companies start hiring folks, but it seems as if we're on a normal economic recovery trajectory. Of course, interest rates are near 0% and gold is around $1100. There is that.

I've been dragging with this head cold the past week. Or swine flu. Whatever. I had a sore throat early last week, now just have a stuffy nose. Was only at work on Monday and Thursday. Thursday was a bit questionable. I didn't get much done, and opted to stay at home on Friday.

Home Sick

Bleh. Fighting a cold or flu. I think the former. Anyways, on the sofa watching movies for two days straight.

Market Getting Smoked!

• Whoa Nellie, the market is tanking.  Yesterday, we had a feel good bump but today we’re getting a feel bad thump.  We had an early “quote delay issue” and then Traders also pointed to comments from billionaire investor Wilbur Ross on Bloomberg Radio Friday, saying a "huge crash in commercial real estate" is beginning, as adding to the worries across the financial sector. Mr. Ross, the chairman of W.L. Ross & Co. LLC, said occupancy and rent rates are falling while the rate of return that potential investors are seeking is rising.
• So, yesterday is looking like a one-day wonder in this down trend. I thought maybe it was end of month stuff kicking in, but it all seems a bit larger than that.
• Inexact climate models:  Is the earth warming?  Is the earth cooling?  It all seems to be a guessing game with each side (alarmists vs. deniers) providing their quotes from science gurus far and wide, but the politicians want to take immediate action!  "There is a lot of room for improvement" in the models, says Mojib Latif, a climate scientist in Germany and co-author of a paper predicting the planet will cool for perhaps a decade before starting to warm again -- a long-term trend he attributes to greenhouse-gas emissions. "You need to know what you can believe and can't believe from the models."
• Hey, if you want to reduce CO2 it seems the best way is to build nuclear power plants and run cars on natural gas – until scientists figure something else out.
• Did you see that spending dropped .5% in September?  Wasn’t me. But with the cash for clunkers ending and a soft job market, folks are worried.  Hey, employment is just a laggggging indicator!

The Slide Continues

• The market continues to sell off this week. Kind of refreshing, in a way.  I think we need to reset before we can move higher.  I'm not expecting anything ominous, since I feel that the economy is recovering and we will see slow to moderate growth going forward. 
• Of course, I didn't see anything ominous in 2007, either.  Just being honest.  
• I mentioned yesterday that I had tried to upgrade my iPhone RSS Player to listen to podcasts.  It's still not working but seems as if it will be resolved very soon.  In the meantime, I've been using Mediafly.  Try it.  It's free.  I'm not sure if I like it more than RSS Player, but it has some other features that may keep it on my iPhone.
• NBA has started, and I'm in 2 fantasy basketball leagues.  Geez, can't help myself.  One is a total stats league, another is weekly head-to-head.  Should be interesting.
• Speaking of, the NBA has an app for the iPhone where you can listen to the audio streams of the games.  Similar to what MLB did with baseball.  Cool.  Just $9.99.
• Kind of interesting to watch the Health Care debate in Congress.  I have no idea what will come out, but many moderates have said that they won't support it.  Different polls say different things, but I haven't talked or emailed with anyone who likes the idea of a government public option. I know those folks are out there, but sometimes I wonder if the "excitement" about a public option is just a few people making a lot of noise.