Friday, September 10, 2010

BAGAKOAA September 10, 2010 Two In A Row


September 10, 2010 Two In A Row

Hey we got two weeks in a row of a positive gains in the S & P 500. That has not happened since June. Our prognostication about being up a point and half was 66% accurate. The market finished up another point this week and we will happily take it even if only 9 people were trading today. This was the lowest volume of the year. We will feel better when we can get a gain with some inertia behind it.

As we mentioned earlier this week, the wholesale inventory report was released today and there was a sizeable gain in the number which should have been a downer for the market. A portion of the report did suggest better sales by wholesalers and apparently that balanced the inventory news.

In looking at all the news today, we can’t figure why the market finished up. The inventory news was not good. Forecasted PC sales for the holiday season is negative. Chip sale forecast were adjusted downward and accordingly so some of the semi cons were down. There has been a shift, be it small, from the treasury market to equities. (You can tell because the 10 year yield is starting to creep up.) Maybe that little shift in asset selection got some attention and drove the market up a bit. The other prevailing theory is that after the Presidential press conference today, it is clear that we will end up with a dysfunctional congress and senate which would be good for business.

Earlier in the week (Monday night) we took some guesses at earnings report this week let’s wee how we did. MW, Men’s Wearhouse was expected to hit 77 cents a share. We did some homework and looked for a beat at 80 cents a share. Well, drum rollllllllllll, we hit it dead on at 80 cents a share. Damn we’re good. They managed to manage cost while seeing a 2% increase in revenue. The CEO had some nice things to say about next quarter.

We also guessed PBY, Pep Boys would beat the 19 cent estimate. We suggested 22 cents a share. Well, drum rollllllllll, almost but no cigar they came in at 20 cents a share.

Thankfully that was all the guesses we made.

Bloggers say the funniest things.

If you remember about a month ago we suggested that the market only need be open for the last hour of the day or even the week. Well today’s WSJ had an article about and investment fund group called Briargate. The three principals only work the first 30 minutes to hour of the day and the last hour of the day. They know that nearly 60 percent of the volume of the day takes place during those time periods. They over see a program trading system with human intervention, but have stop gaps built into the program to insure then don’t get crashed in a flash crash like we saw in May. Interesting article about how these guys just play all day long. They look like all those mortgage bankers from 3 years ago who are now flippin burgers at Wendy’s. Any guesses where these three will be in a couple of years.

A Very Taxing Question

There is a lot of discussion as to what will happen to taxes over the several months.  We will speculate on this at a later date.  However I think people would feel better about paying more taxes if there money was spent more wisely.  Several years ago we had a little e-mail thread (Called Show Me The Pork) that a few of you used to get from me. Here is one example from one of those e-mails (This was under the Bush Administration circa march 2005 so I was being critical of the administration and congress of the day).


Ever heard of it. Well have you heard of Radio Free Europe or Radio Free Asia Or Radio Free Cuba to name a few? Have you heard of Sawa, the radio/TV network of the middle east? I happen to think these are all worth while ventures. Their annual operating budget is about $660,000,000 (2004 dollars) a year funded by tax payer money.

Now that's a lot of money. Well is it? NBC will pay that every year for the next 6 years to show Sunday night football. ESPN will pay double that to show Monday Night Footbal and neither gets the Superbowl because that goes to CBS as part of their 8 year 4 billion contracts for all AFC games. HMMMMM. Here is an idea.

Have ABC, CBS, NBC, ESPN, WB, HBO, Showtime, .......... all split the cost of The BBG. For the top 10 broadcasters, it would only be 60 million a year to spread democracy and stabilization to 56 nations that are emerging democracies, because when they become a democracy, they (the broadcasters) go into these countries and show world cup soccer, I Love Lucy, and Baywatch and make millions in regional advertising.”

And from the "If it were only true." White House Photo Gallery:

"Crap!  I can only get one more bill through Senate.  I only have one more pen left."
Salve Lucrum


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