-- Posted Friday, 13 June 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Friday, June 13, 2008
“Phenomenally accurate forecasts”
Yesterday’s rally on Wall Street faded coming down the stretch, supposedly because oil prices jumped on concerns over Nigerian supply. We saw the news as nearly irrelevant, however. It looked like a purely technical day, with DaBoyz testing the mettle of bears by manipulating a fairly powerful short-squeeze on the opening. With no negative news of significance on the tape, the specialists simply stepped aside and let shorts work their magic. And so they did, buying with the kind of urgency that bulls very seldom can muster. An hour into the session, the Dow Industrials were up about 185 points. But the short-covering ran out of steam after another hour, perhaps because there was not enough news of any kind for the spinmeisters to spin. Retail sales were up a little bit for a change, and although the news was a day old, it could not have hurt. But because the tax-rebate effect is presumably close to exhaustion, we doubt it will have much of an impact on sales, let alone on stocks, in the weeks and months ahead. (For our part, we’re not sure whether we already spent the rebate or not, since there were some extraordinary household expenses to deal with before the check even arrived.)
Even though there was not much news to power stocks, there was certainly enough of it to entertain. The item of the day concerned Yahoo!, which appears to have escaped the greedy clutches of Carl Icahn. While Icahn would have us believe that his corporate-raider shtick is rooted in his deep concern for the welfare of shareholders, we know an unregenerate mercenary when we see one. Icahn has been trying to force Yahoo! to sell itself to Microsoft for upwards of $34 a share, but his plan went down in flames yesterday (see chart above) when Yahoo! struck a deal to work with Google in some vague fashion.
Trump Is Later
Yahoo! plunged on the news, and we doubt that even Icahn, with his world-class mouth, will be able to talk the price back up to where he bought an estimated $1.5 billion worth of shares. Yahoo! was trading above $26 when Icahn stepped into the picture a while back, so yesterday’s plunge to as low as $22.50 had to have hurt. Granted, it would have been more satisfying if Donald “I don’t have any of my own money in this deal” Trump had been the bag holder, but we are consoled to think The Donald’s impending real estate crash is going to make Icahn feel like he got off easy.
Elsewhere in the world of high finance, Boston Properties mogul Mort Zuckerman was alleviating the financially crippling burden of fellow real estate titan Harry Macklowe, buying four NYC towers from him, including the General Motors building, for about $4 billion. Why Zuckerman paid top dollar for these buildings just ahead of an almost certain collapse of real estate values in New York City is open to speculation. This doesn't look like the kind of deal that will allow Zuckerman to sit down with his new board of directors and vote himself a special dividend to cover out-of-pocket expenses and cushion risk. These are real properties, and the price Zuckerman paid for them assumes that tenants will be clamoring for space in the GM building until Kingdom come. Perhaps they will. But if the financial giants of the banking business continue to downsize, he’s going to have plenty of competition -- all the way from the Battery, where vast quantities of first-class office space are scheduled to open up in the next few years, to Harlem, which is well along the way to gentrification.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Friday, 13 June 2008 | Digg This Article | Source: GoldSeek.com
