The Big Picture

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• Succinct Summations of Week’s Events 9.13.14
• $100 Million Homes Are Outliers . . .
• Too Bullish or Too Bearish?
• 10 Friday AM Reads
• 5 Most Powerful Cars on the Planet by HP

Succinct Summations of Week’s Events 9.13.14 Posted: 12 Sep 2014 01:00 PM PDT Succinct Summations week ending September 12th Positives: 1. Job openings are at the highest levels since 2001. 2. Average price of gasoline fell to $3.42 on supply glut (lowest level since February) 3. Retail sales gained 0.6% m/o/m. up from a flat July (which was revised up 0.3%). 4. Consumer confidence rose to 84.6, up from 82.5 and above the 83.3 expected. 5. NFIB small business index rose to 96.1, half a point from the highest readings since '07. 6. Chinese exports rose 9.4%, better than the 9% expected; German exports rose 4.7% in July, well above the 0.6% expected. 7. Industrial production in the Euro Zone rose 1% m/o/m after falling three of the last four months. 8. The US budget deficit shrank to $128.7B, down from $147.9B from last August. Negatives: 1. Initial jobless claimes came in at 315k v 300k expected. 2. The S&P 500 and the Dow both finished in the red for the first time in six weeks. 3. Mortgage applications fell 2.6% w/o/w to the lowest level since February. 4. Chinese imports fell 2.4% y/o/y vs expectations of a 3% gain. 5. German imports fell 1.8% m/o/m vs expectations of a 0.2% rise.

$100 Million Homes Are Outliers . . . Posted: 12 Sep 2014 11:00 AM PDT Source: National Association of Realtors   Expensive home sales have been in the news a lot these days. The Wall Street Journal wrote about a "palatially priced" mansion in Florida listed at $139 million. The Los Angeles Times featured a Beverly Hills mansion listed at $85 million — interestingly, it was built on speculation. Business Insider, when it isn’t creating lists like the 18 most expensive Silicon Valley mansions, is writing up listings like this New York mansion that was listed for "an Insane $114 Million." Home prices, at least according to the headlines, have run amok. Does this actually reflect the housing market, though?   Continues here

Too Bullish or Too Bearish? Posted: 12 Sep 2014 05:53 AM PDT One of my favorite pastimes is dissecting accepted Wall Street wisdom to see if it contains any value for investors or traders. Often, upon examination, the widely held beliefs turn out to be closer to magical thinking than financial acumen. One of the more recent examples is the way some analysts use data on sentiment to determine how much an investor should allocate to equities. The problem is that the sentiment data is inconclusive and sometimes contradictory. There is no signal within the noisy data. Sentiment is extremely difficult to use as an indicator because it is only rarely at the extreme readings needed to generate a reliable trading signal. Recall the March 2009 low, where every measure of sentiment was deep in the red. Or October 2002, by which time the Nasdaq Composite Index had fallen almost 80 percent from its high and everyone hated tech stocks. These extreme events are rare. One of the analysts who has observed these phenomena for many decades is Laszlo Birinyi, formerly of Salomon Brothers, and now of Birinyi Associates. In this weekend's Masters in Business interview, Birinyi describes why so many sentiment measures are worthless. There is no usable signal in the American Association of Individual Investors bull/bear survey, Birinyi says. Many other such polls also lack a consistent methodology or are otherwise flawed. They are useless to investors, he says. Continues here

10 Friday AM Reads Posted: 12 Sep 2014 05:00 AM PDT Long week, looking forward to the weekend — but not before these morning reads start your Friday: • If You Can’t Say “I Was Wrong” You Should Not Manage Money (Fool) • Classic cars – a vintage investment? (Investors Chronicle) • Be Humble, Become Wealthy (Psy-Fi Blog) • Oil Glut Ignites Gasoline Price Swoon (WSJ) see also The Inflation Cult (NYT) Continues here

5 Most Powerful Cars on the Planet by HP Posted: 12 Sep 2014 03:00 AM PDT When it comes to high performance supercars, power is just as important as speed. Bloomberg Ranx looks at the five most powerful cars on the planet. Source: Bloomberg

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