I made the mistake of showing my wife the orchid pictures.... :)

Any comments on SBUX this morning?
Is this a misquote, a split, what?

Starbucks (SBUX)
Pre-Market: 14.73 down $16.77 (53.24%)

What is a good way to trade premarket?

RE: Amazon was upgraded by a couple firms on Thursday and downgraded Friday by BWS Financial.

BWS DNgraded AMZN today (Monday) and Stifel Nicolaus DNgraded on Friday.

Briefing:
30-Apr-07 BWS Financial Downgraded Buy Hold $65
27-Apr-07 Stifel Nicolaus Downgraded Buy Hold

Looks like SBUX recovered after a few minutes...

Possibly a Yahoo glitch?

Pre-Market: 31.45 0.05 (0.16%) as of 7:41am ET on 04/30/07

hello from germany

Abn Amro “won’t Touch This”, Comparison of UK and US housing markets
including also charts about france, netherlands, japan etc…

Housing? What Housing? I Don’t See Any Housing: Caroline Baum

The Apple iRack / :-)

China Tightens Bank Credit Again / stocks up 2%

http://immobilienblasen.blogspot.com/

Permit me to pick up on the discussion initiated by Leisa Friday. How much of the loss of buying power of the US consumer will be compensated by consumers in emerging economies?

I offer this article (apologies if someone else has already posted before) from BusinessWeek:
http://tinyurl.com/3ycbkt

And this one from BCA Research:
http://www.bcaresearch.com/public/story.asp?pre=PRE-20070426.GIF

I enjoy reading BCA's commentary - rather succinct. For the year and a half that I have been reading them, they have been steadfast in their belief that the US will weather all financial storms with only minor hiccups and market corrections. Unlike Bill, they do not see any catastrophic market declines unfolding in the near future.

Billcara.com is the first blog I review every morning and I agree with most issues Bill cites. However, I also realize that the government and HBB meddle with the market and they control and lie about inflation and other reports. When you are free to print as much money as you want, you can avert any disaster - for a considerable period of time. Collapsing stock market - no problem - throw a few billion there to prop it up. Sub-prime issues - no problems - we will throw a few billion over there. Inflation? What inflation? Aren't you guys listening when we tell you there is No inflation? Traders - do you distrust us and want to bring the market down? No way. We don't want the public to see the ugly side. We are going to support this market no matter how many billions it takes. And we can do this since there is no control over how much money we can print. Eventually, the skeptics will have no choice but to throw in the towel and join the rally.

Who can fight that printing machine? Investors have little choice but to go with the flow.

Looking at earnings so far this quarter, it would seem the big cap stocks are doing well. At least part of this better performance comes from increased emerging market exposure.

Other reasons for the good earnings:

- Stronger economies in developed countries
- Weak dollar
- Share buybacks
- Cost cutting
- Moving jobs to lower cost countries
- Outsourcing
- Squeezing the blood out of existing employees

I suspect US large cap will outperform small in the near term.

I have been investing for 15 years. I know that markets go up much of the time and correct much fewer times. It hardly pays to raise cash levels to more than 20-30%. The last time I was 60% cash was in 1999-2000 - but at that point, despite the lack of Bill's guidance, the bubble was obvious to me. At uncertain times like today, I do raise cash. However, I participate 100% in market upside using LEAPS. If a correction does not materialize, I participate fully in the upside. If the market crashes and burns, I loose my LEAP premium. However, I have tons of cash to buy after the correction.

As much as I understand opinions of Bill and others who are looking for a market correction, I cannot turn a blind eye to the fact that we have moved from "free markets" to "managed markets". In an ironic twist of fate, what started as George Bushs' corny "Operation Iraqi Freedom" has resulted in US loosing ours.

jragusa--thanks for the links. After reading them, I do not see that either article addresses the consumer, but rather business investment.

I think that the linchpin in all of this is the American consumer. There are so many things to watch that sometime provide red herrings. My personal bellweather is going to be retail sales. So long as they hold and liquidity continues to lubricate all of the world's economies then all will be right in the investing world.

I have my doubts about the consumer. But I've been proved wrong rather frequently.

I mentioned this yesterday Leisa....
Be wary of the consumer as the transportation stocks are strong with the exception of those shipping to consumers, Fed Ex and UPS.

I'm also worried about how the All Ordinaries is acting.

good mornin bill and all the world--------i,m a believer in kry-however ?? still waitin for the eviro. permit--- grz has thiers. whats the hold up.russ

Bill. Thank you for your fine piece on our healthcare system. I have over the past 20 years dragged my children through hospitals in the US, Europe and Asia after their usual Jack and Jill antics. I can safely say the best care we ever received was in Canada period.

Bill. You wrote a small piece about VAL.V after your visit to PDAC. Do you have anything further to add at this time.

Thanks
Horatio

Bill,

What are your thoughts on accumulating Interactive Broker stock as an ipo? You've been quite positive in the past about this company. It's priced 23-27. Thanks!

American Home Mortgage Investment (AHM) reported an over 40 percent fall in quarterly profit and cut its 2007 earnings outlook for the second time in a month, citing difficult conditions in the secondary mortgage market.

Stock is currently up 2.5% (because they beat lowered expectations...

Bill,

This is my first time to comment at your website. I am a great fan and appreciate all that you do. Your site is like having a guide through the jungle who can tell you which snakes, spiders, and venomous plants to avoid (and don't touch those orange frogs!) I appreciate the fact that you do not give advice and that each is responsible for his own decisions. With that in mind, I am long SLW, Khan Resources, Kinross Gold, and QID, all in my IRA. The commissions are so high in this IRA that I am loth to sell even QID which is dropping below my pp of 51. Although I'm the millionth person to say thank you (and also thank you to your contributors!), you have given me hope that I can have a reasonable retirement without having to worry about tainted dogfood in those years.

Someone is keeping the lid on SLW. Oh, well. This has been a pretty solid stock if you like to trade options around it's st fluctuations. Last month I made a few $$ on puts. This month, I'm boxed with some short calls.

SI02, the lenders are mixed today. Maybe AHM is up on short covering. I noticed that BoA upped MTB from a sell to neutral.

For those who love to hate the home builders, Centex (NYSE:CTX) reports today after the close. It's getting pumped a bit ahead of earnings. Or was early. I spent my weekend in true nerdlike fashion listening to a few conference calls from companies that reported last week. One of the themes that has emerged is that April has been a terrible month.

Another is that many builders are offering deep discounts on unsold homes to move inventory. I believe Horatio reported recently that he was taking advantage of this situation. Apparently, he wasn't alone. This lets builders raise much needed cash, but it also means significant losses. Many builders are now in danger of violating the credit coverage covenants on their loans.

I'll be looking for confirmation of these trends in Centex's report.

ALOHA !!

First off my sympathies to the San Francisco commuters. I used to do that commute! I also offer sympathies to the BART commuters since I am sure BART will be much more crowded now. I also used to commute on BART from the LAFAYETTE station. Anybody know what it costs to take BART to EMBARCADERO from LAFAYETTE? I recall it was less than $5 one way back in the 1990s.

Traffic nightmare Link: http://news.yahoo.com/s/ap/20070430/ap_on_re_us/highway_collapse

Gasoline here in Hawaii shot up 20 cents in one week to $3.14USD. Being a commuter in the San Francisco Bay Area must be extra frustrating when you add in gasoline costs. A friend on mine who lives in the city says gas is over $4USD! I am sure many international readers here consider $4USD for a US gallon of gas cheap!

On another inflationary note my Mother was shredding some old documents and ran across a hotel bill dated August 1974 for the Outrigger Reef Hotel in Waikiki Hawaii. My wife and I stayed there a month ago and paid $158USD per night "Kamainna" rate(Hawaii Resident Discount). In 1974 without any discounts it was $15USD for a standard room!!! WOW ... better than a 1000% increase, an average 32% annual price increase!!! I guess that is why many Americans have to take out a loan just to go on vacation!

Thanks Bill and other posters for your insights into Canadian medicine. I don't even want to think about the medical cost increases we've endured here in the USA since 1974. Two months ago I had an upper GI scope done here in Hilo, Hawaii and the bill came to near $1,400USD, for a 2 hour outpatient procedure. Didn't find anything other than a bacterial infection. Too many uncooked mangoes!

Basic products and services needed to survive on a daily basis continuously go up! A historical fact of life for those who suffer under corrupt fiat monetary systems.

ORCHIDS:
Just a reminder that we offer a 5% DISCOUNT TO ALL BILL CARA BLOG READERS. Just indicate by typing "BILL CARA" in the SPECIAL INSTRUCTIONS box when ordering online.

Folks, I live about three miles from that SF interchange.

Commuting will be a nightmare for awhile. Indeed, my office is within spitting distance of the maze. Lucky for me, I approach from the opposite direction. My coworkers will not be as fortunate.

Kaimu, BART from North Berkeley to Embarcadero is $3.70 now. Plus, they now charge $1 to park your car at the station. It used to be free.

Inflation? You bet.

Kaimu, the hotel increase is not too unrealistic, that's about 8% annual rate increase for 33 years. Isn't the real (with gas, energy and without the lies) US inflation around that (these days anyway)?

Bill. Thanks for the update on VAL. Number2son I did take advantage of some fantastic deals on real estate last week. Of course the golden rule is "he who has the gold makes the rules". As I have said before it is amasing how quick decisions are made when the smell of cash is in the air.

ALOHA !!

I always get a monetary and economic education whenever I read at the Mises Institute website ... it never fails ... it never disappoints!

A few months ago I was posting about the Bush FY 2008 Budget and how his administration touts "no tax increases" yet in their budget is a 54% tax increase by 2012! DOES ANYBODY IN THE PRESS READ THESE BUDGETS? Show me anywhere in any of Bush's budgets where there is a tax decrease!!!

Well here is a more indepth look at taxes that shows the Republicans are every bit as bad as the Democrats when it comes to robbing you and your kids futures!

I highly encourage Republicans to read this and reconsider your vote ... not for Democrats but for more fiscally responsible people(not parties)like Ron Paul. Who is actually an "Independent Constitutionalist" running as a Republican.

Link: http://mises.org:80/story/2559

Forget about the innane crap you see on TV and radio from the likes of Hannity and Colmes and Rush Limbaugh and the likes ... who cares about the idiots they want to win because we always lose no matter what!

What matters is not Republican or Democrat ... Lib or Conservative ... Right or Left ... Red or Blue ... but what kind of a country your kids will inheret when you are gone! The track record of both parties is at best dismal ... Time for a change!

number2son, another one that you can get in and out of options lately is MU.

ALOHA !!

SiO2 ... unless I did my math wrong ... try 32% not 8%!

$158/$15 = 1,050%

1,050%/33 = 31.8%

Actually if you pay the regular hotel rate of $230USD per night then its even a greater annual price rise at 46%!

I don't think a 32% average annual hotel price increase is low and certainly not anywhere near 8%! I'd love it if it were only 8%!!!

Kaimu,

I just ran the calculations using a compound interest calculator. $15 becomes $158 in 33 years at a compound annual rate of 7.4%.

Fred

WMT
Top News April 23, 2007, 12:01AM EST
How Wal-Mart's TV Prices Crushed Rivals

The retailer's holiday decision to slash prices on flat-panel sets—selling one for less than $1,000—proved disastrous for electronics stores
by Pallavi Gogoi

Last "Black Friday," for its annual post-Thanksgiving sales blitz, Wal-Mart Stores decided to slash the price of one of the hottest electronics items for the holidays—the 42-inch flat-panel TV—to $988. The world's largest retailer had staked similarly audacious positions before, in numerous product categories, as part of its quest to remain U.S. retailing's "low-price leader." In turn, Wal-Mart's move caused a freefall in prices of flat-panel televisions at hundreds of retailers—to the glee of many people who were then able to afford their first big-screen plasma or liquid-crystal-display model.

Now, it is becoming apparent that Wal-Mart's calculated decision to break the $1,000 barrier for flat-panel TVs triggered a disastrous financial meltdown among some consumer-electronics retailers over the past four months.

The fallout is evident: After closing 70 stores in February, Circuit City Stores on Mar. 28 laid off 3,400 employees and put its 800 Canadian stores on the block. Tweeter Home Entertainment Group, the high-end home entertainment store, is shuttering 49 of its 153 stores and dismissed 650 workers. Dallas-based CompUSA is closing 126 of its 229 stores, and regional retailer Rex Stores is boarding up dozens of outlets, as well as selling 94 of its 211 stores. "The tube business and big-screen business just dropped off a cliff," says Stuart Rose, chief executive officer of Dayton-based Rex Stores. "We expected a dropoff, but nowhere near the decline that we had." Clearly, these retailers are taking such drastic measures because they don't see any respite in sight.

Kaimu mentions the very interesting and real issue of inflation. With regards to actual inflation, the reported numbers can be made as high or as low as what we pick in our measuring basket. Does anyone know of serious institutions which report actual/real inflation - does such thing even exist?

The income growth for March has just been reported as 0.7%. If this could be translated into inflation, the annual rate would be 8.3% (which sound about right to me).

In retrospect, oil and gas are cheap. And there are still some who think oil will drop of USD 40 a barrel. I find it amazing that oil is still priced in USD (at least in these corners of the world). Things like airplane tickets and delivered flowers will get much more expensive.

Agree Bill. That was probably the primary reason along with (if memory serves me right) WMT had disappointing results around the Friday after Thanksgiving in '05. Don't think they wanted to risk it again.

Might as well seize the day before your competitors do with a consumer slowdown. It also gets them in the store even if they don't have the money, they may use the credit card if the bank hasn't restricted use.

I'm in and out most of the day and only have some short breaks to check in.

ALOHA !!

SiO2/lovesaves ... Yes, you're correct, 7.5% compounded annually and 1,050% over 33 years! Bankers prefer compounding since 7.5% seems more acceptable than 1,050%!

Any yes, flower delivery costs are rising ...

Kaimu, I know this is off-topic, but how do you get around the agricultural restrictions on the shipment of flowers?

ALOHA !!

omphalos ... We don't get around anything!

We are a State Of Hawaii Certified Nursery and each of our boxes must be stamped with our certified number. Each box is randomly inspected by the Hawaii Dept. Of Ag ...

I only wish they were as strict with imports. The coqui frog has been a disaster for Hawaii and the Ag Dept completely failed on that one! I am amazed some heads did not roll ... NOT !!!!

Question for those who know PM's: Many investors turn to gold because gov'ts are creating credit with abandon. Investors also know that gov'ts manipulate the gold market to maintain faith in paper money.

So, why don't the PM's which gov'ts DON'T manipulate (silver, and even moreso platinum) detach from gold, and become favored vehicles, which appreciate even when gold is taken down by gov'ts ?

Also, why are there so few platinum miners? Is the metal really only found in S. Africa and Russia?

Market beginning to get weaker. Dow Down 25 now.
Buying some AMZN May 60 Puts at 1.60
Getting out of AMGN and UXG.

So what happened today ? I thought housing has bottomed.

the smart trade between now and october might be to go short, especially with everyone having been burned on that trade...

The yield on 3-month T-Bills plunged today. On a weekly chart it looks like the yield is rolling over and turning down. The end of speculation?

Dump of JPM, block trade of 6M in last 15 minutes before close - Bloomberg Live.

Keep Loading XLF. Oh Yeah !

Put in feeler short on the indices this morning with a very tight leash. Suspicious of that being gold ST bottom today. Sunny here so don't have trusty sidekick to give me signals. ;)

Looks like the pounding of Circuit City is the evidence, finally, that the American consumer is getting crushed under too much debt to buy any more flat panel TV's and digital cameras. Of course, Wall Street will spin this into an "isolated incident" and say it is "contained" (subprime style!), and somehow spin things positive for a bit longer. I sure am curious to see how the spinsters obfuscate, manipulate, and deliberately misinterpret to get around this one though.

By the way, thanks everyone on here for all the great analysis and comments. I have learned more about financial markets reading this blog and associated links in the last two months than I did in eight years up to then. For an engineer untutored in such matters - it has been nothing short of enlightening.

Irishtowtruckteam: great illustration of the perils of leverage!

By the way, does anyone know where you can get more information on LEAPS? I understand you can use them in your IRA.

aucourant
Start with www.amex.com, click on "options" on the let menu, then "products" (I think) and then LEAPS.
They list a number of long term option opportunities.

Bill. Thanks for the tow truck pictures. The Irish love to pull one over people now and then. The first part of the picture is true. It happened in County Galway, but the larger trucks are fake. Sorry to spoil the fun

nice one Bill.

gives new meaning to the "Plunge Protection Team."

Thanks, Rigdon.