First of all, what are you doing here?
Why it's Christmas Eve, Mr. Scrooge – Japan is closed, most of Europe is closed and the rest have a half day so if you are waiting for a Santa Clause rally on a half-day's trading you are very likely to be disappointed.
Remember Marley, who cried: "Business! Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence were all my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!"
Marley was a man who worked and worked until the day he died and regretted it every day after. If you don't believe in an afterlife and you don't believe in leaving behind the World a better place than you found it, at least find some time for yourself so people don't call you "a squeezing, wrenching, grasping, scraping, clutching, covetous old sinner!"
It's been pretty warm this Christmas and a rainstorm washed away all our nice snow this weekend but I don't blame global warming for this one as the cause is obvious – Inflatable Lawn Ornaments! Inflatable lawn ornaments are an epidemic in the United States, particularly in the Northeast where they cover almost every square inch of some people’s yards. The fact that over 10 million of them were sold in the US this year alone seems innocent enough until you think about how they work:
"Many inflatables are lighted within and equipped with motorized fans to keep them inflated, so an extravagant display can set a homeowner back as much as $1,000 a month in electric bills."
A note to my international readers – I AM NOT JOKING! This is a true and appalling fact of American life, while we worry about the price of gas we are busy lighting up millions of blow-up lawn ornaments pretty much straight from Halloween through New Year’s Eve all of which require (get this!) the constant operation of a fan that is the equivalent of a 1,400 watt hair dryer!
So aside from the amazing amount of energy being consumed, think about the amount of heat that tens of millions of these things, running all night long, must throw off! Does advertising your dream of a white Christmas make a white Christmas much less likely to happen?
Anyway, for those of you who are trading today, last year Xmas was on a Monday so Friday the 22nd was our last trading day and we dropped about 60 points on low volume but that was a gap down open and we had a good run going into it – that doesn't look like the case today. Dec 26th had even lower volume and gained it all back and we consolidated through mid-January at around 12,400 from where we broke out to a new high at 12,800 before crashing and buring on 2/27 when the Dow lost almost 500 points in one day (we'll talk about that in January).
Today we still have all that lovely money sloshing around Europe and our own Government just passed a $500Bn spending bill so that's $1Tn floating around that wasn't there a week ago, you would think that should give the markets at least a little boost, right?
I went to the mall yesterday as it was raining and the kids needed a run but what a disaster it looked like (from an investors standpoint). Bloomingdales was having a 40% off sale – ahead of Christmas that's a really bad sign! Another bad sign was the deadness of the jewelry stores and the Disney store was surprisingly spare. Macys was very crowded but they were woefully understaffed and out of too many things for me to think it was due to being busy – more likely it was due to the fact that the retailers have little faith in moving inventory post-holiday.
Despite the sales the buying looked reserved to me and I'm not going to blame Mr. Murdoch yet as it's Christmas but why is there no mention in the Journal of something that was headlining in China last night – An AP analysis shows a 26% increase in October credit card delinquencies (to $17.3Bn) compared to last year along with a 16% rise in defaults, to $1Bn in October alone. While that may be a drop in the bucket in what is estimated to be $175Bn of outstanding credit balances, that is a pre-holiday number and is very unlikely to improve as consumers stretch themselves to make it through the holidays.
Don't forget that we are getting through this season with the government, the Fed, Gobal Central Banks, foreign governments, CNBC, the Fox Financial Network and pretty much every other Fox holding along with most CEOs and the venerable Wall Street Journal telling us how good everything is and how it's all going to be fine next year and they've been so good at it that 87% of US homeowners do not believe their homes will lose ANY value at all next year. Gosh I hope they're right!
So there's nothing in the World going on that seems to matter very much this morning as most people know how to take a break for the holidays. Asian markets that were open were well up and the FTSE and CAC are open and up about half a point. MaxJet in Europe filed for bankruptcy and the Queen is making her first YouTube video, which is very fitting as she broke ground 50 years ago with an historic TV broadcast that my English relatives carry as one of those "I remember exactly where I was when" kind of moments. It's hard for Americans to realize what a thrill it was to see a monarch to take a step like this but, at the time, the queen said it best:
- "That it is possible for some of you to see me today is just another example of the speed at which things are changing all around us. Because of these changes I am not surprised that many people feel lost and unable to decide what to hold on to and what to discard. How to take advantage of the new life without losing the best of the old.
- "But it is not the new inventions which are the difficulty. The trouble is caused by unthinking people who carelessly throw away ageless ideals as if they were old and outworn machinery. They would have religion thrown aside, morality in personal and public life made meaningless, honestly counted as foolishness and self-interest set up in place of self-restraint.
- "At this critical moment in our history we will certainly lose the trust and respect of the world if we just abandon those fundamental principles which guided the men and women who built the greatness of this country and Commonwealth.
- "Today we need a special kind of courage, not the kind needed in battle but a kind which makes us stand up for everything that we know is right, everything that is true and honest. We need the kind of courage that can withstand the subtle corruption of the cynics so that we can show the world that we are not afraid of the future.
- "It has always been easy to hate and destroy. To build and to cherish is much more difficult. That is why we can take a pride in the new Commonwealth we are building."
God bless the Queen and Merry Christmas to you all.
– Phil
