Thursday, October 14, 2010

It's the "la-la-la-la-la-la" market

Have you ever seen a 3 year old standing next to his mother with his fingers in his ears singing "la-la-la-la-la-la" while his mom tries to explain why he can't go around smashing every glass in the china shop? Well, that's the stock market right now. The parallels to 2008 seem to be growing every day as the market shrugs of every bit of bad news and roars back (yeah, I know the market was down a bit today but it was down about 1% at 3pm when the HAL9000 decided he wanted to be flat and stocks roared back to even in the last hour).

Google continues to blow away their numbers because people continue to click on those "MAKE $73/hour at home!!" ads. For 8 years, I've watch in amazement as google has built a global empire off a business model that preys on our inability to tell the difference between "sponsored results" (ie, ads) and actual search results. I also love the fact that they have convinced everyone to exclude "traffic acquisition costs" from their expense items. That's like McDonald's excluding the cost of advertising, but Google is rocking after hours so ignore things like riots in Europe, the falling dollar, $3.10 gas (and rising), higher than expected unemployment claims, widening trade gap and widening CDS spreads on the banks (this is very, very much like 2008).

Tomorrow is an extremely heavy data day with Bernanke speaking, CPI, Retail Sales, Empire Manufacturing, and Consumer Sentiment. The market could swing pretty wildly in the first 2 hours or it could go straight up or straight down :)


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