The market continues it's latest rally despite at best mixed news today. The biggest news is that pending home sales dropped more than Dolly Parton's boobs have in the past 5 years (and for the record, she now calls them "anklets"). The 16% drop was more than the expectation of a 2% drop after a 3.7% gain last month. Of course the gain last month was due to the first time home buyer tax credit which stimulated the existing home sales market like Simona Halep once stimulated the WTA. The number today should not be shocking as when there are incentives for something, and then those incentives go away, that behavior does not always remain when it comes to a non-reflex behavior like Economics. You hear that Pavlov? You can keep ringing that bell, but I know there is no tax-incentive in the dish, so stop fucking with me and get me my $5k deduction while I lick my balls some more. On second thought, I'm just gonna keep doing this, so you can get me the deduction later. Arf. Therefore, it is not surprising that the initial sell-off in the morning based on this news has reversed.
The one real effect of the news though was the dollar falling again as optimism that the Fed will raise rates sooner rather than later is beginning to wane, like Alan Greenspan's misguided influence. This thought was reitirated yesterday at The Boar's Nest by Fed Governor and Bo and Luke's long lost and full chromosome having cousin, the lovely Elizabeth Duke. Ms. Duke was quoted as saying: "In the current environment, the FOMC continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period." So perhaps Greenspan's influence isn't waning afterall, ugh. Duke then went on to say, "to quote my good friend Roscoe P. Coltrane, in time, the economy will be "Good, Good, Good.""
In market news, Ford has reached it's highest price since 2005 as traders anticipate Ford's December sales numbers which are being released today. A strong number will be very positive for the economy because if people are buying Ford's shitty cars, they will likely buy anything and thus discretionary spend will be back. Finally, Kraft upped their offer to buy Cadbury to the tune of issuing 370MM new shares in the proposed take over. This has drawn the ire of Warren Buffett who owns a 9.4% stake in Kraft. Buffet argued that issuing shares will dilute the already cheap Kraft stock at a price $6ish below where Kraft bought shares back themselves in 2007, will give Kraft a "blank check" to renegotiate the deal higher whenever they want, and will make him really really angry to the point that he will go to his room and not come out or talk to anyone until the company rejects the plan. The 78 year old Buffett was then heard to complain about those damn kids on his lawn, CBS's decision to take Matlock off the air, and the fact that dames no longer have yams like Eleanor Powell.
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