1. SL Green Realty Corp. (own common and cumulative preferred): My remaining common shares were bought at less than $15, and I own shares in SLGPRC bought in two lots in retirement accounts at $10.5 and $11.89. This owner of Manhattan offices is suffering some from the downturn in commercial real estate. FFO for the third quarter was 98 cents, in line with expectations, but declined from $1.37 in the third quarter of 2008. The Manhattan occupancy rate at the end of the quarter was 95.7%. I am in a long term holding pattern with my tiny slice of this Manhattan brick.
2. Cramer Changes Tune: Cramer became decidedly more bearish during his Mad Money show last night. CNBC.com It is hard to be reassured by constant refrain that business had stabilized at low levels, repeated over and over again. I noted this refrain from Union Pacific who added the modifier "very" to the constant refrain of "low levels". Continued Weakness in Freight Volumes The Dow Transportation Average did break its trendline, and some view that as a trouble signal for the overall stock market. CNBC.com Rosenberg believes that he has found a "classic" double top formation in the transportation average. Dave I would just add that Rosenberg sees whatever confirms his pre-existing beliefs and the Dow Transport average is still trending above its 200 day moving average. ^DJT: Technical Analysis for Dow Jones Transportation I have previously noted that the Baltic Fright Index had declined from 4291 in June to below 2200 in September, and that this was a matter of concern to me. Since my last discussion of this Index in September, the Baltic Dry Index has started to trend back up closing yesterday over 3000: Bloomberg Still, the weakness in freight traffic does tell me to proceed with caution at this juncture.
3. 5 Year TIP Auction: The five year TIP was auctioned yesterday, actually a reopening of a prior auction with 4 years and 6 months remaining until maturity. www.treasurydirect.gov .pdf The coupon rate (real yield) on the original issue was 1.25%. Since this one was sold yesterday at a premium to par value the yield was reduced to .769%. This is just completely uninteresting to me. The break-even on these notes was about 1.5% at the time of the auction. Before I participate in another auction, and I am limiting my activity to just the ten year auctions, I am going to want a real yield closer to 2 1/2%.
4. CASE- SHILLER INDEX: This index for home prices in 20 large metropolitan areas improved for the third straight month, rising 1% in August. www2.standardandpoors.com CSHomePrice102706.pdf Compared to July, 17 cities had increases in home prices and 3 had declines. Las Vegas continues to be one of the 20 in decline. The highest percentage gains from July were in Minneapolis and San Francisco. For the 20 city index, prices are about where they were in the autumn of 2003.
I have been thinking about the exponential growth of fraud in the U.S. and my concern that fraud may be the fastest growing "business" in the U.S. I was confident that it was our fastest growing sector and Wall Street successfully securitized it in the form of CDOs and the even more ingenious CDO Cubed and squared, thereby facilitating the spread of this business worldwide. But when I was engaged in those ruminations about fraud in yesterday's post, I forgot about government spending as another one of our growth "businesses". So that is at least two areas of growth and maybe they go hand in hand.
I may flip my magic coin to determine whether it has any confidence in the management of Synovus Financial, meaning enough confidence to add 50 shares as a LT when the price falls below $2.
It is really scary to learn about the competence of those in charge of our financial institutions. Maybe some inventive hollywood type could explore that topic creatively in the horror genre.
The Conference Board reported a decline in consumer confidence to 47.7 in October from an upwardly revised 53.4 in September. The market gave up the early gains after the release of this worst than expected number.