Saturday, November 29, 2008
Some Delightful Videos for the holiday
From Comedy Central, have a laugh!
Russel Peters:
Indian vs. Chinese
Gabriel Iglesias:
Drink Driving & Presidential Election
Russel Peters:
Indian vs. Chinese
Gabriel Iglesias:
Drink Driving & Presidential Election
Black Friday Sales Rise 3%
From American Research Group, Inc.: Shoppers Cut 2008 Christmas Spending Plans in Half from 2007
"Shoppers around the country say they are planning to spend an average of $431 for gifts this holiday season, down from $859 last year. The overall average planned spending is down almost 50% from 2007 and it is the lowest level of planned spending recorded by the American Research Group since 1991."
| Year | Average Spending | Percent Change |
| 2008 | $431 | -50% |
| 2007 | $859 | -5% |
| 2006 | $907 | -4% |
| 2005 | $942 | -6% |
| 2004 | $1,004 | +3% |
| 2003 | $976 | -6% |
| 2002 | $1,037 | -1% |
| 2001 | $1,052 | + 9% |
| 2000 | $968 | + 3% |
| 1999 | $939 | + 1% |
| 1998 | $928 | + 34% |
Combined with the sharp plunge in October retail sales, this suggests a very weak fourth quarter for personal consumption expenditures (PCE) and suggests that forecasts for Q4 GDP might be too high.
From Yahoo! Finance and Bloomberg:
"The nation's retailers got a much-needed sales boost during Black Friday's traditional shopathon as consumers, lured by deep discounts, spent nearly 3 percent more than they did last year.
Sales on the day after Thanksgiving rose to $10.6 billion from $10.3 billion last year, according to preliminary figures released Saturday by ShopperTrak RCT Corp., a Chicago-based research firm that tracks sales at more than 50,000 retail outlets.
While it isn't a predictor of overall holiday season sales, Black Friday is an important barometer of people's willingness to spend during the holidays. Last year, it was the biggest sales generator of the season.
But experts caution that this year's sales growth may be hard to sustain for the remainder of the holiday shopping season, which has 27 days between Thanksgiving and Christmas instead of the 32 last year.
Across the country, sales in the South were up 3.4 percent from last year while they climbed 2.6 percent in the Northeast."
Frontline (FRO) slashes its dividend
According to MarketWatch:
As OPEC ended its meeting without any production cut during the weekend, they decided to meet again on Dec.17 to "take any additional decision to balance oil supply and demand and to achieve market stability". Crude oil prices have been down more than 60% since its record high in July. In October, OPEC agreed to cut production targets by 1.5 million barrels a day.
Frontline on Friday reported to slash its third-quarter dividend to 50 cents a share from $2.75 and $3.00 for the first two quarters of 2008. Tanker companies pay out dividends on the profits they earn from leasing their ships on the spot market. In June and July spot, or day rates, soared to record highs, but as oil prices began plummeting so did charter rates. The stock price of Frontline has dropped 60% YoY from $72 to $29.
Frontline, Ltd., through its subsidiaries, engages in the ownership and operation of oil tankers, including oil/bulk/ore (OBO) carriers. The company primarily transports crude oil, as well as raw materials, such as coal and iron ore.
As we discussed few months ago (at that moment, the dividend is 17.6%, right now (before slash it), the dividend is 36.4%):
"When a stock pays a dividend > 7% the dividend is not safe. By the time a stock dividend is twice the CD rate the risk to the dividend is large. I'll bet that the dividend will be cut soon."
As OPEC ended its meeting without any production cut during the weekend, they decided to meet again on Dec.17 to "take any additional decision to balance oil supply and demand and to achieve market stability". Crude oil prices have been down more than 60% since its record high in July. In October, OPEC agreed to cut production targets by 1.5 million barrels a day.
Frontline on Friday reported to slash its third-quarter dividend to 50 cents a share from $2.75 and $3.00 for the first two quarters of 2008. Tanker companies pay out dividends on the profits they earn from leasing their ships on the spot market. In June and July spot, or day rates, soared to record highs, but as oil prices began plummeting so did charter rates. The stock price of Frontline has dropped 60% YoY from $72 to $29.
Frontline, Ltd., through its subsidiaries, engages in the ownership and operation of oil tankers, including oil/bulk/ore (OBO) carriers. The company primarily transports crude oil, as well as raw materials, such as coal and iron ore.
As we discussed few months ago (at that moment, the dividend is 17.6%, right now (before slash it), the dividend is 36.4%):
"When a stock pays a dividend > 7% the dividend is not safe. By the time a stock dividend is twice the CD rate the risk to the dividend is large. I'll bet that the dividend will be cut soon."
S&P Monthly Update
S&P Moving Averages: Month End Update from dshort.com:
"At November's close, the S&P 500 10-month moving average (10-MA) and exponential moving average (10-EMA) both continue to signal a cash position. In essence, when the monthly close of the index is above the moving average value, you hold equities. When the index closes below, you move to cash.
Please also read "A Quantitative Approach to Tactical Asset Allocation" (Please download the PDF format) from Mebane Faber explaining in detail on longer term monthly MA timing strategy and its performance against buy and hold.
"At November's close, the S&P 500 10-month moving average (10-MA) and exponential moving average (10-EMA) both continue to signal a cash position. In essence, when the monthly close of the index is above the moving average value, you hold equities. When the index closes below, you move to cash.
The SP&P 500 closed the month at 896.24, which is 27.1% below the 10-MA (1,229.92) and 24.5% below the 10-EMA (1,187.40). Since 1950 only once before (September 1974) has the index gapped more than 25% below the 10-MA."
Please also read "A Quantitative Approach to Tactical Asset Allocation" (Please download the PDF format) from Mebane Faber explaining in detail on longer term monthly MA timing strategy and its performance against buy and hold.
Friday, November 28, 2008
Everything About China - Calculated Risk
Read the World Bank Quarterly Report on China
As China's unemployment rate hiking and GDP reduces to its lowest level in a decade, China is facing a critical period of merging social unrest.
From Bloomberg: China property slump
House prices in Shanghai, Shenzhen and Guangzhou are plunging, and the global economy may grind almost to a halt next year because of it.
As China's unemployment rate hiking and GDP reduces to its lowest level in a decade, China is facing a critical period of merging social unrest.
From Bloomberg: China property slump
House prices in Shanghai, Shenzhen and Guangzhou are plunging, and the global economy may grind almost to a halt next year because of it.
Construction of homes, offices and factories fell at least 16.6 percent in October after rising 32.5 percent a year earlier, according to Macquarie Securities Ltd. That's squeezing an economy already slowed by recessions in the U.S., Japan and Europe that have cut demand for exports. Building is the biggest driver of China's expansion, contributing a quarter of fixed-asset investment and employing 77 million people. Real estate investment is now close to zero. Construction will contract 30 percent next year after expanding 9 percent in the first three quarters of 2008.
In 2005, China vaulted past the U.K. to become the world's fourth-largest economy, after expansion averaged 9.9 percent annually for the previous 30 years. GDP has increased 69-fold since free market began in 1978. China accounted for 27 percent of global growth last year.
Black Friday Market
Market extends its gain for five consecutive days and ends up higher in a short trading day today. We have not seen a five consecutive up days in 2008 at all. This is the best performance week since 1974, surged 12% in a week; however, the worst November since 2000, dropped 7.4%.
Even more impressive, the Dow gained 1,277 points, or 17%, in just five sessions, marking its best five-day percentage gain since 1932, and its best five-day point gain on record.
S&P is up 1% to 896. It breaks its downtrend in November, and is higher than its 10 and 20 DMA.
Today is the Black Friday, the biggest shopping day in a year. There are a lot of crazy deals provided by the retailers, such as blu-ray player for $99, and 50" Panasonic Plasma-HDTV for $899.
After rebounding from the 2002-2003 lows strongly, are we going to see the market continue its uptrend in December? VIX is down to 55 from its record high of 90.
Let's wait for the Black Friday retail data to come out.
Even more impressive, the Dow gained 1,277 points, or 17%, in just five sessions, marking its best five-day percentage gain since 1932, and its best five-day point gain on record.
S&P is up 1% to 896. It breaks its downtrend in November, and is higher than its 10 and 20 DMA.
Today is the Black Friday, the biggest shopping day in a year. There are a lot of crazy deals provided by the retailers, such as blu-ray player for $99, and 50" Panasonic Plasma-HDTV for $899.
After rebounding from the 2002-2003 lows strongly, are we going to see the market continue its uptrend in December? VIX is down to 55 from its record high of 90.
Let's wait for the Black Friday retail data to come out.
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