Wednesday, June 16, 2010

Comedy in the markets

About 3 weeks ago the CEO of Toll Brothers - a large developer of McMansions around the US - said "With demand increasing in many areas, we are very focused on growth." Ooops, not so much on the whole demand thing...

"In the three weeks following our earnings conference call on May 26, 2010, our per-community deposits have been running about 20% behind the comparable period."

They also trotted out the lamest excuse I've seen to date - "worries about the oil spill in the Gulf of Mexico and its effects on the economy and the environment have negatively impacted the outlook of American consumers." Yeah, Biff and Muffy in NJ aren't buying your houses because of the spill in the Gulf.

Speaking of the spill - remember when I said that there were estimates that indicated there could be 2 mill + gallons of oil leaking per day? Well, that's what we are now estimating at the top-end. Again for perspective - that's an Exxon Valdez every 4-5 days and we're on day 58.

The BP $20 billion fund will clearly be a starting point to stabilize Gulf businesses, but somehow I suspect attorneys will make an effort to get 20% of that money. It reminds me of the large class action lawsuit vs. Expedia that resulted in a settlement payout for me - Yippee!!

This was the actual text from the class action lawyers "You are receiving this notice of credit because you booked a hotel stay through Expedia and paid “Tax Recovery Charges” or “Service Fees” during the period from January 10, 2001 through June 11, 2008. As part of the settlement, you are entitled to receive $1.16 in the form of an Expedia Coupon." I'll try not to spend it all in one place.
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The markets staged a nice rally on little news yesterday and less volume - when no one is buying or selling a little strategic buying can really move the markets. The technicians can be more positive as the market has crossed back over it's 200 day moving average. The non-tarot card crowd has to consider things that are still looking a little shaky like: the European debt crisis, weak retail sales, weak housing market, weak job market and rising global debt levels.

As one analyst said today determining the market direction is "basically like tossing a coin".

Cheers!

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