Dollars and Jens
Thursday, October 28, 2004
Initial claims of unemployment

Vertical lines each quarter, horizontal every 25,000 (per week), there's a seasonally adjusted weekly number and a smoothed version thereof, which held pretty well around 340,000 for four months in the middle of the year before touching about 350,000 at the beginning of the month and coming down again somewhat since then.

That's the last such report before the election. Tomorrow the 3Q advanced GDP number comes out, and that could mean something.

Friday, October 22, 2004
Someone today paid over $180 for a share of Google. Those insiders who were going to offer shares in the dutch auction when it was expected to go off at $135, and had to withdraw when interest was less than hoped, might not be terribly disappointed by the way that's worked out. Assuming they didn't sell at $100.

markets in markets
Or in access to them, to be precise. A NYMEx seat sold for $2,000,000 a week ago; that's where the big oil contract trades whose price is quoted on the evening news. A seat on the Kansas City commodity exchange sold for over $100,000 in the past couple days. Meanwhile, a hedge fund has reportedly purchased a few seats on the Chicago Board of Trade, with no intention of using them to trade. I wonder whether those could be leased out.

Thursday, October 14, 2004
Gasoline prices
What should the government do about high gasoline prices?
At the end of the day, the best remedy for high gasoline prices is...high gasoline prices, which provide all the incentives necessary for motorists to conserve, for oil companies to put more product into the marketplace, and for investors to look into alternatives fuel technologies. Government has never demonstrated an ability to do better.

Friday, October 08, 2004
Oil drops below $52.50!
: Are you being sarcastic, dude?
: I don't even know anymore.

Wednesday, October 06, 2004
speculative bubbles
I heard mention that there has been a lot of flipping of real estate in the Las Vegas area — people buying and then selling quickly at a markup, with apparently no intention ever to hold the property for any real length of time. Sounds like tech stocks 5 years ago, dunnit? I don't think the real estate market in most of the country is in a bubble, but in some places — Las Vegas, apparently — it does. We know how this game ends — the music is going to stop and someone's going to get their seat handed to them.

Monday, October 04, 2004
Leaving Early for the Weekend
It's conventional wisdom that companies and politicians prefer to release bad news on Fridays, when their audience is distracted by the weekend. A new paper confirms this (link from Bainbridge):
We compare the release of earnings on Friday to other weekdays. The announcements have three main effects on stock returns. First, the next-day response to Friday earnings announcements is over 50 percent smaller than the response on other days of the week. Second, the same-day response to Friday announcements, instead, is of similar magnitude to the response on other weekdays. Third, the post-earnings announcement drift is 70 percent larger for Friday announcements. These facts suggest that weekends distract investor attention temporarily. Consistent with this interpretation, trading volume around announcement day increases 20 percent less for Friday than for non-Friday announcements. We then show that firms respond to investor distraction by releasing worse announcements on Friday. Friday announcements are associated with 25 percent higher probability of a negative earning surprise and a 50 basis points lower abnormal stock return.

Friday, October 01, 2004
Light Sweet Crude settles over $50
I'd like to point out that futures for the next several months drop some 60 cents per month as you go out*, but remain above $35 through 2009. In re that I'd like to note that demand for oil is more elastic over long time periods than over short time periods; if oil is that expensive that long, demand will, other things being equal, drop enough for oil not to be that expensive that long. What the market, presumably, is betting, is that other things are not equal, which, historically, is a very good bet. In this particular case, the market seems to be betting that supply expansion will be limited and that demand will continue to increase, presumably because of economic growth in oil-hungry parts of the world. This particular bet would be considerably less safe, but still not unjustified.

* If I were ostentatious I could use the term "convenience yield", but if I were ostentatious and a smart-ass I could just obliquely refer to the possibility.

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