Kirk Lindstrom

Why the ECRI Is a Good Economic Indicator

"I have no doubt that WLI is showing historic growth. But it is coming from very low levels."

WLI growth rate was more than telling. One of my older charts is here

forbestadvice.com/Mone...

I'll try and update that with a more current chart later today, maybe with the market price on the chart. Key point is the WLI growth has SURGED way, way above the old highs.

You can see it had already fallen off a cliff by Jan 2008. I used its decline to lower my allocation to equities several months earlier AND I used its bottoming in Dec 08 and higher low in March 09 to increase allocation to equities.

NO INDICATOR is perfect, but WLI growth seems to provide useful clues.

Easy for Top Banks to Make Money with Low CD Rates

I've added this comment to the article on my blog:

"I used to get great CD rates at World Savings. World Savings was bought by Wachovia which continued to pay high rates to attract assets. Washington Mutual (WaMu) and Wachovia competed for deposits with each other by offering high rates.

To help save the banking system, the US eliminated some competition so the banks that are "too big to fail" can make money more easily. Wells Fargo, which had low rates all along, bought Wachovia. Likewise, Chase Bank bought WaMu. Now small savers have joined US taxpayers in bailing out the banks!"

Easy for Top Banks to Make Money with Low CD Rates

On Sep 25 11:01 AM greedcanbgood wrote:
> Too bad you don't understand how assets and liabilities are funded > by banks. It's not as simple as CD rates versus 30-year motgage.

Too bad your manners and reading comprehension are equally lacking. I never said it was that simple.

Toyota Tests and Rejects Lithium-Ion Batteries for the Prius

Art, you must have misunderstood what I wrote as you constructed a straw man to argue against.

On Sep 15 04:27 PM ART005 wrote:
> Kirk, I think your post can lead to misunderstanding by people that think technology can solve everything and eventually everything is destined to $9.99 at the strip mall discount center.
>
> "My point is cost and reliability can and probably will come down
> with time as long as there is not a limitation due to physics and/or chemistry."
>
> Clearly your background is such to differentiate what technology
> easily discounts and what it is likely not to discount but it could
> be misinterpreted by those used to thinking everything is destined to $9.99. ...
> The widespread dream that relatively heavy things like batteries
> are destined to $9.99 is very misleading and a bit naive for typically younger people that have seen that curve happen to almost all their personal use items.
>
Nowhere did I say technology would bring $10,000 in batteries down to $9.99 nor did I imply it. I believe I tried to imply that given time we should get a 50% cost reduction which makes the technology. What I wanted to convey is it takes time, usually a lot of time, to get prices down after something is proven feasible and it starts to show up in products.... We are only starting to see Lithium ion batteries show up in niche products like the $109,000 Tesla, Segway scooter and Bramo motor cycle.


We might also decide to pay the current cost today if it means not losing sons, daughters, nieces, nephews, friends, spouses in wars to keep the flow of oil going.

Toyota Tests and Rejects Lithium-Ion Batteries for the Prius

John.
I used to do R&D on 1300nm PIN diode design at HP labs in the building in Palo Alto that Tesla is moving to. Back when I started work on designing optical transceivers to do 200 MB/s at 1300nm in 1984 (WOW!), we paid about $1 per nm or $2600 for an LED and PIN diode to transmit data over fiber optics. To get the required operating life, we had to put the transceivers in hermetic packages. A working 200 mb/s module cost many thousands of dollars.

Today you can buy optical links that go 100 times faster at pennies on the dollar of 1984 prices.

My point is cost and reliability can and probably will come down with time as long as there is not a limitation due to physics and/or chemistry.

IF Lithium is ONLY half the cost now AND switching to it NOW means no more dead soldiers... sons and daughters of many in the US... then maybe we'll pay the price sooner rather than later.

I appreciate all you bring, but I don't want to discourage anyone from trying to bring costs down and reliability up by implying there is something wrong with the chemistry or physics of Lithium.

Until then, I'll buy what is cost effective... just bought a new E150 V8 gasoline van to haul my windsurfing gear as 3,000 miles a year doesn't justify an electric van...

Toyota Tests and Rejects Lithium-Ion Batteries for the Prius

More info on others who use Lithium in products

2008 Brammo Enertia Electric Motorcycle Overview
www.motorcyclistonline...
"The Enertia is powered by the combination of a Valance Lithium Iron Phosphate battery and a High Output Permanent Magnet Brushless DC Motor that produced 24-hp and 37 lb-ft of torque."

Brammo Enertia TTR on the cover of Motorycyclist magazine.
photos-g.ak.fbcdn.net/...

Toyota Tests and Rejects Lithium-Ion Batteries for the Prius

I doubt they will tell you why they decided to not use Lithium but we can have fun guessing.

Lithium works well enough for Segway, Brammo and Smith Electric where customers will pay the higher cost for all electric.

Run gasoline up over $5 with oil doubling to $150/bbl and the economics of an all electric car might make sense to enough to make a major investment. Right now, auto companies are trying to cut costs by offering FEWER choices so this decision was not unexpected.

Also, someday the government might decide it is cheaper and cost fewer lives to subsidize electric cars like they do installing solar and energy efficient windows and appliances and use our natural gas supply to make electricity to power electric cars than to send troops to Iraq and Afghanistan.

Most of us buy on cost and gasoline is still cheaper than even the regular Prius.

What if it is a “V” Recovery?

Thanks for the good article.

One could worry that the Fed would have to raise rates to combat inflation from outside the US perhaps due to an international recovery creating more jobs outside the US than inside. Thus it is important to keep an eye on international inflation.

The article "ECRI's Expectations for International Inflation"
seekingalpha.com/artic...
says for now inflation pressure remains restrained to non-existent.

You are invited to our facebook group "investing for the long term" where Lakshman answers questions about ECRI for free.

Communications Small Caps: Ever a Risky Ride

Thanks for the list of high risk stocks.

You wrote:

"Finisar (FNSR) $0.63 and Powerwave (PWAV) $ 1.27 are similar financially only. Both are almost breaking even and increasing annual revenues, but have a large amount of debt and negative BV;"

Finisar has a positive book value according to both Reuters and Yahoo! while Powerwave shows a negative book value.

www.reuters.com/financ...

finance.yahoo.com/q/ks...

A large debt load not always bad, especially if you used the money to buy a revenue generating factory at dimes on the dollar during the downturn. Finisar has used its financial strength to acquire growth assets and it sold a slow growth asset to JDSU to help finance it.

Abby Joseph Cohen's Bullish Calls

More from Abby at "Abby Joseph Cohen Stock Market Outlook"
kirklindstrom.blogspot...

Remember... free advice is worth what you pay. GS makes some of its money managing assets. Easier to attract assets with sugar than vinegar.

Swine Flu Stocks - Just Wait Until Fall

You asked "What are your favorite Swine Flu Stocks, Ideas and Forecasts?"

Take a look at NanoViricides Inc., NNVC

Article: "Swine Flu Cure: NanoViricides Flu-Cide Drug Designed to Destroy Influenza A Viruses" at kirklindstrom.blogspot...

Charts home.netcom.com/%7Ekir...

Disclaimer: I added recently to my personal and newsletter position at 56¢

Short Interest on Nasdaq: Why the Data Delay?

All you did was expand on my statement the release of the data is delayed. You didn't answer the question "Why?" or any of my other questions that are more important.

GE Capital Datapoint of the Day

Unless you want to overpay your executives, why not take advantage of lower priced debt? Would you rather GE raise more capital by diluting shares or going to Buffett at 10% a year?

The alternative is pay Buffett 10% for more capital, add 5% to that for profits and charge consumers 15% for their new appliances... nobody will buy appliances so GE will have to lay off more workers...

I own stock in GE and recommended it for my most recent buy in March at $6.76 for my newsletter explore portfolio. I took some profits at $11.59 but I still hold half the shares purchased at $6.76.

After paying for so many others to benefit from bailouts, I kind of like the idea of getting some of the assistance from TLGP. The program is meant to get funds to consumers to buy things like dishwashers and refrigerators so the savings are actually passed on to consumers with lower cost financing from GE capital.... the intention of the program, no?

10-Yr Treasury Auction Results

"My advice" to "my subscribers" is given in my newsletters. FWIW, I have not recommended long bonds in some time.

In the article, I did not recommend a long or short position in 10-year treasuries. I CORRECTLY stated demand was healthy at the time of the auction because there was $54 billion bidding for the $22 billion offered.

Most people now are better off buying CDs. You could get a 4%, 5-Year CD at PenFed CU www.verybestcdrates.co... at the time of the auction which was a lot better than what Treasuries paid.

You need to beware of tracking error on those short Treasury ETFs. If they are anything like the OIL ETF for tracking oil prices, you could be very unhappy. See "OIL ETF Disappoints Oil Investors" at kirklindstrom.blogspot...

The OIL ETF Disappoints Investors as a Crude Tracking Instrument

Good article! I put your symbols all on one page for easy quotes and charts

==> tinyurl.com/OIL-ETFs

On Jun 13 01:30 PM Kalani Martin wrote:
> DXO (and it's inverse, DTO) is by far the best ETF/ETN at tracking crude oil and it's not a coincidence that it's also the best at managing the effects of contango.