Amazing Vocal Stuff

Sorry I couldn't embed this, but if you want to see a demonstration of an amazing vocal group, go here right now and enjoy. Thanks to Carol for sending this along.

The 200 Moving Average

Want to see something interesting? Go find a chart of the S&P 500 for the last 10 years. Then, have the 200 day moving average laid over the chart, which can be done simply on just about any financial info service like Yahoo or WSJ. Notice anything?

The index consistently bounces as it hits, or slightly crosses this line. 10 times in the last 10 years, the index hits the line and then bounces back to continue the trend it was in. Only 3 times does it cross and keep going, and when it does, it does so for a long time.

Why do I bring this up? The rally in the market that has taken place since March has put the index at the 200 day moving average. Will it go through, and establish an uptrend that should become a several year bull market? Or, will it bounce down, retest the lows of March, and possibly even continue lower? Hell, if I knew the answer to that question, you'd have to pay to read my blog!

Ritholtz of fixing Financial TV

I probably shouldn't steal from Barry Ritholtz again after using his excellent time line of the financial crisis last week. He appears on a lot of financial TV shows, and today he has a great list of how to fix financial TV news. I think a lot of it would be a good outline as to how to fix news in general. Can we get this guy in charge of CNBC? I particularly like #1!

1. Stop Yelling. Stop interrupting. Stop Talking Over Each Other: This is not Jerry Springer, its serious business. People’s retirement and investments are at stake. Please treat it that way.

2. Bring us People We Don’t Have Access to. What various FinTV channels do really well is when they bring us long, thoughtful interviews with the likes of Warren Buffett, WIlliam Ackman, David Einhorn, and others. People we wouldn’t ordinarily have access to. Example: This morning, CNBC had on James Rickard. More of this please.

3. S - L - O - W D - O - W - N

4. Risk: All traders must appreciate the potential downside of trades. So too, must FinTV. Explain stop losses. Understand Risk/Reward. Recognize there are periods when Buy & Hold is a jumbo loser.

5. Lose the Octobox. Fire whoever came up with the Decabox. ‘Nuff said.

6. Separate the Signal from the Noise. Understand that most of the day-to-day action is simply noise. Look at a long term chart, you can barely see 9187 or 9/11. If those major events get lost in the long term trend, what does the intraday jags, kinks and reversals mean? Very little. Recognize that not every data release, slice of news, or rumor is at all significant. Stop treating them as if they were.

7. Fact Check: An awful lot of things on air get stated with authority and confidence. Much of them are little more than junk or pop myths. Why is it that the more dubious a proposition is, the greater the confidence the speaker seems to muster? Consider fact checking as much of the statements that are made on air as possible, and making frequent corrections.

8. Accountability is important: I am astounded at some of the money losing hacks that are various shows again and again. These are the “articulate incompetants” to use Bennett Goodspeed’’s phrase. Why not keep track of the records of guests — and let the viewers know how their past few calls have been. Are they Perma-bulls or bears? Are their stock picks awful? Are they reliable money makers? If not, let us know. (Of course, the better question is, if not, why even have them on?)

9. Bring Back Louis Rukeyser: Not the man, but rather, his style. Wall $treet Week — Rukeyser hosted it from 1970 to 2005 — was plain-spoken, thoughtful and accessible. Quiet, contemplative, discussions, with intelligent market participants, revealing helpful information. The investing public would appreciate something of that sort — again.

10. Sound FX: What is with all the bizarre sound effects every time a screen changes? Its financial news, not a video game. Kill ‘em.

11. Embed your video (on your own website or YouTube) instead of using WMP. At long last, thank you.

12. Investigative Pieces: David Faber seems to have a monopoly on deep, long thoughtful analyses. Be they on Wal-Mart, the credit crisis, whatever, his long format work is a highlight of CNBC. More of these, please.

13. Most stock picks are losers. That’s normal, but the audience does not realize this. A big part of the challenge is informing the viewer that finding the biog winners is a low probability, high outcome event. As in a baseball, a 350 hitter is a star. Explain this to your audience.

14. Stop the Bull/Bear Debate: This is a vast over-simplification of the market, and often does not serve the audience well. There are nuances and variables that get lost when you reduce everything to black and white.

15. Partisanship: Leave your personal politics at home. Viewers don’t care what most of you think.

16. Respect the Audience: We are adults. Treat us that way.

Old Jews Telling Jokes

Not much time to write today, but my college roomie Gordon sent me this site, and it definitely needs to be shared with the world. It's called Old Jews Telling Jokes, because that's what it is. You should enjoy, life is short.

One Ugly Picture

Barry Ritholtz, author of The Big Picture blog (link on the right of this page), and now of Bailout Nation, his new book about the financial mess. I haven't got hold of the book yet, but I plan to. However, Ritholtz put this chart on his blog, that he calls "Anatomy of a Crash", which is from the book. If you can enlarge it enough to read it, it is an interesting time line of the contributions everyone made to the crisis.

More on Moronic Ethanol

The Wall Street Journal's editorial page is about 80% utter right wing craziness. That is a shame, because the Journal is an otherwise excellent newspaper, and occasionally even the the Opinion Page contains something intelligent. An example is an editorial today about the costs of ethanol. Besides the taxpayer subsidy of $.45 per gallon to the industry, the editorial points out:

The Congressional Budget Office reported last month that Americans pay another surcharge for ethanol in higher food prices. CBO estimates that from April 2007 to April 2008 "the increased use of ethanol accounted for about 10 percent to 15 percent of the rise in food prices." Ethanol raises food prices because millions of acres of farmland and three billion bushels of corn were diverted to ethanol from food production. Americans spend about $1.1 trillion a year on food, so in 2007 the ethanol subsidy cost families between $5.5 billion and $8.8 billion in higher grocery bills.

A second study -- by the Environmental Protection Agency's Office of Transportation and Air Quality -- explains that the reduction in CO2 emissions from burning ethanol are minimal and maybe negative. Making ethanol requires new land from clearing forest and grasslands that would otherwise sequester carbon emissions. "As with petroleum based fuels," the report concludes: "GHG [greenhouse gas] emissions are associated with the conversion and combustion of bio-fuels and every year they are produced GHG emissions could be released through time if new acres are needed to produce corn or other crops for biofuels."

So the question is, do the corn farmers in this country have photos of everyone in Congress in bed with a 14 year old and a goat? How else to explain our farm policy

GM trading on the "pink sheets".

Turned on the TV yesterday morning to the news that General Motors was officially being taken out of the Dow Jones Industrial Average. Despite my belief that GM has been a badly run company that deserved to go into bankruptcy, the idea that it will no longer be in Dow's list of the 30 biggest US companies is quite an eyeopener. It really pounds home how fleeting the existence of anything or anyone is here on earth. So many companies that were considered juggernauts when I was young....GM, Kodak, Xerox, AT&T...have changed to the point they barely exist.

I was going to write this yesterday, and got distracted. This morning, I hear the CNBC guys mention that GM now trades with a new symbol on the "pink sheets", the listings for companies that don't meet the requirements of the big exchanges. My how the mighty have fallen!