Contemplating Key Indicators
May 31, 2008
David Merkel submits:
I figure when things are relatively quiet, it is time to start thinking about the bigger picture.
Quiet? Are things quiet now? Well, sorta… we still have problems:
Standard Pacific Corp. Q1 2008 Earnings Call Transcript
May 30, 2008
Consumer Spending: The Reality of Zero
May 30, 2008
James Picerno submits:
You can slice it, you can dice it. You can even massage it and look on the bright side. But you still can’t get blood out of a stone or, it seems, inflation-adjusted increases in consumer spending.
30 May 2008 16:00:00 - Top 5 Stocks up on Unusual Volume
May 30, 2008
| Intraday Unusual Volume - Top 5 Up |
| Symbol | Volume % Change | Price % Change | News | |
| MRVL | 436% |  17.36% | news | |
| WIND | 402% | 10.82% | news | |
| ISRG | 286% | 293.59% | news | |
| IXYS | 283% | 11.66% | news | |
| DTSI | 241% | 33.50% | news | |
 | ||||
30 May 2008 16:00:00 - Top 5 Stocks up on Unusual Volume
Friday Options Outlook: CRM, MNST, IR, LPX, MRVL, JCG, CIT, BUD, DELL, MSFT
May 30, 2008
Andrew Schmitt submits:
Salesforce (CRM) – Have takeover rumors come home to roost at Salesforce.com? The company, whose so-called “Platform as a Service” concept allows businesses to develop online applications without costly infrastructure investments, received positive attention in a Minyanville column yesterday touting it as a possible takeover stock, expressing wonderment that someone of Larry Ellison’s caliber hadn’t yet spoken for the company. The first inklings of bullish rumors coursing through the options came this morning, with a 12.8% spike in implied volatility to 47%, making Salesforce.com one of the day’s top implied volatility gainers as its shares set a new 52-week high at $72.47. The take higher in volatility was accompanied by heavy buying interest in the conspicuously out-of-the-money June 80 calls, which traded for about $1.00 apiece on volume of 4,940 lots, where open interest numbered no more than 574 lots previously. Until today, the 122,500-strong open interest in Salesforce.com showed a fairly even split between puts and calls, making today’s 7-to-1 privilege of calls an eye-catching development indeed.
Monster Worldwide (MNST) – A similar dynamic appeared to move lots this morning in another evergreen rumor-stock, recruitment and job-search site Monster Worldwide. An early doubling in option volume against the normal daily average occurred as shares trading 2.5% higher at $24.98, and we saw a rash of buying in June 25 and 30 calls. Monster shares dipped decisively below $30 around the first of the year and have loitered consistently around the mid-20’s ever since, two spikes higher in February notwithstanding (both, incidentally, on takeover rumors).
Friday Options Outlook: CRM, MNST, IR, LPX, MRVL, JCG, CIT, BUD, DELL, MSFT
Compared with Canada, U.S. Economy Looks OK
May 30, 2008
Grace Cheng submits:
The US dollar was initially stronger versus the Euro, Swiss franc, British pound and Japanese yen Friday, but its gains gradually faded into the US session. The Euro gave way a little during the European session upon the release of German retail sales data which turned out to be quite horrid at -1.7% m/m and -1% compared to a year ago.
Focus was then shifted to the recessionary-like conditions in the US as weak US economic data came in one after another. US consumer spending slowed in April as income gains weakened: Personal income rose by 0.2% in April, in line with expectations, following a revised 0.4% rise in March (was 0.3%). Personal spending rose by 0.2%, also as expected, following a 0.4% gain in March.
Compared with Canada, U.S. Economy Looks OK
30 May 2008 11:40:00 - Top 5 Stocks up on Unusual Volume
May 30, 2008
| Intraday Unusual Volume - Top 5 Up |
| Symbol | Volume % Change | Price % Change | News | |
| MRVL | 564% |  17.18% | news | |
| WIND | 340% | 10.53% | news | |
| GMXR | 334% | 46.92% | news | |
| IXYS | 308% | 11.78% | news | |
| DELL | 266% | 23.481% | news | |
 | ||||
30 May 2008 11:40:00 - Top 5 Stocks up on Unusual Volume
What Recession? Disposable Income Grows
May 30, 2008
Mark J. Perry submits:
Buried inside today’s BEA report on April Personal Income (tables available here, see Table 10) is the statistic that "Real Disposable Personal Income" grew at an annual rate of 1.82% in April 2008 compared to April 2007, the highest rate of growth since December 2007 (see chart above).
This will probably not get a lot of attention from the media, but provides some additional evidence that the U.S. economy is not on the verge of recession, and might in fact actually be moderately healthy.
What Recession? Disposable Income Grows
Stagflation’s Worldwide Strangulations
May 30, 2008
Dr Enzio von Pfeil submits:
Excerpts from Dr. Enzio von Pfeil’s May 29, 2008 appearance on Channel News Asia:
- Inflation
remains a big concern.- Particularly stagflation – which is characterized
by higher prices AND lower (if any) growth. - We have “called” stagflation since 2006.
- Crucially, as this is cost-push inflation, Central
Banks can not do so much about it. After all, even a Central Banker’s ego
cannot manage crop cycles or mineral cartels!
- Particularly stagflation – which is characterized
- Inflation has limited impact so far because there’s no
wage price spiral.- As we discuss next, that is the good news (no wage
spiral). - But, as we will also discuss next, the bad news is
mounting political tension.
- As we discuss next, that is the good news (no wage
- But, will that scenario change?
- Yes: the political implications are not good.
- We are seeing food riots in Egypt, and rice export bans in parts of Asia.
- This is not good news for the man in the street - wages
can’t compensate for rising prices.
- Hence the food riots and thus food export bans.
- Think of cost-push inflation, particularly as regards
food, as a “tax” hike. The result is that the population at large has less
discretionary cash to spend. - Thus, less consumption leads to a worsening of The
Economic Time™: it morphs from an “excess demand for goods” to an “excess
supply of goods.”
- Are there options to deal with rising inflation?
- It is very tough to control
cost-push inflation. - It looks like tighter money is
ahead, or, in the jargon of The Economic Clock™, an “excess demand for money.” - This excess demand for money
gets exacerbated by banks lending less and less, as we already see in America. - Whenever there is an “excess
demand for money,” that, in conjunction with an “excess supply of goods,”
implies that corporate profits wane – and that will be bad for markets as
stocks have to get re-valued, based on weaker earnings.
- It is very tough to control
Stagflation’s Worldwide Strangulations
Housing Affordability Proves Elusive
May 30, 2008
Colin Twiggs submits:
Thirty-year Fixed Mortgage rates remain at 6.0%. Rising treasury yields, however, would increase upward pressure on mortgage rates, suggesting the decline in housing prices is far from over.
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