Thursday, May 19, 2011


Favorite low-priced long speculation: NMR

Relative to the money it makes and as measured by equity capitalization to sales, LinkedIn might just be the costliest stock extant.

Run, don't walk, to read Knowledge@Wharton's weekly issue that deals with everything economic in the Middle East.

The May Phily Fed saw big drop in new orders to 5.4 from 18.8, shipments also dropped big time to 6.5 from 29.1. As well, inventories turned negative, though employment was better at 22.1 vs 12.3.

The Philly Fed joins the Empire survey as a disappointing data point.

Look for the May national ISM to drop perilously close to 50 later this month.

April home sales declined by nearly 13%, and months of inventory increased to over 9.2 months.

Finally, the leading economic indicators stunk up the joint.

All in all, not a great day for the bullish cabal that endorses a smooth and self sustaining recovery.

My guess is that the Fed will discontinue investing in maturing securities in late 2011. And within a month or two of that action, a rise in the fed funds rate will come. Finally, by mid-2012 asset sales should be expected.

There is little there there in the Glencore and LinkedIn deals.

"It is far better to grasp the universe as it really is than to persist in delusion, however satisfying and reassuring."

-- Dr. Carl Sagan

Color me the skeptic, but one of my few comments regarding both the Glencore and the LinkedIn, IPOs is to quote Warren Buffett: "Price is what you pay. Value is what you get".

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