Blind Man Trading

Today's performance was better than I expected. I don't know why I say that because even a blind man can see that the morning dips are routinely getting bought.

Sector rotation was the theme and the homebuilders (see XHB) are today's big winner (up +4%). Other bullish contenders were found in precious metals, healthcare, and energy. In case you are curious (or a closet indexer), for the month of November the Dow rose +1.2%, the S&P 500 gained +1.6% and the Nasdaq rallied +2.7%.

See you in December.

-- Kirk Report

Last Day of November

Mixed reports from retailers, higher-than expected inflation and rising jobless claims top this morning's headlines. Once again the combination of higher oil and gold prices and a weak dollar are back in play.

Upside movers in premarket trading are DRRX, DGIN, SNPS, HEPH, APTM, HOTT, MEDX, LTXX, ORCT, PSUN, BEAS, and ECMV. Downside movers are SCSS, RNIN, ZOLT, TIVO, BEBE, NPSN, CTDC, ARNA, GYMB, TGEN, and RYAAY. Premarket indications point to a relatively flat open and the help wanted index and NAPM-Chicago reports will be released at 10:AM.

The S&P 500 has risen +1.6% in November and is currently headed toward its sixth straight monthly gain which is the longest stretch of advances since August 2003. In addition, according to Stock Trader's Almanac, there have only been four down Decembers in the last 14 midterm election years. While the last trading day of November tends to be a weak one historically, December usually starts off strong. While historical tendencies have been useless tells this year, that certainly won't stop folks from being aware of them. Have a good one!

-- Kirk Report

Europe May Bear Burden of Dollar's Swoon

Global investors are keying in on the surprising rout of the dollar in recent trading sessions. On Nov. 27, the Dow Jones Industrial Average tumbled 158.46 points, or 1.3%, in its most severe decline since July. Part of the reason (disappointing sales by Wal-Mart played a role, too) has been the dour outlook for the dollar, which could weigh down U.S. stocks for some time to come. The greenback has fallen to its lowest levels since March, 2005, when compared to a basket of major currencies.

Yet the biggest loser in any major realignment of the dollar likely will be the Europeans. It is the euro that has appreciated most dramatically against the dollar. It's up 10.9% vs. the greenback on the year. Key Asia currencies such as the yen, up 1.5% vs. the dollar this year, and the Chinese yuan (which trades in a narrow band against the U.S. and other foreign currencies) haven't moved much at all. The Korean won, up about 8.5% vs. the dollar, is the big exception.

That means European exporters are losing their price competitiveness against both U.S. and Asian rivals. And France's Finance Minister Thierry Breton on Nov. 27 urged "collective vigilance" by the European Central Bank to the alarming rise of the euro vs. the dollar to 20-month highs in recent trading sessions.

Asia: Best of Both Worlds

The ECB is expected to raise a key interest rate by a quarter of a percentage point next week because of inflation worries driven by the improving economic performance in the euro zone. By contrast, the Bank of Japan's key interest rate is all of 0.25% while the U.S. has left the closely watched Fed Fund rate of 5.25% untouched over the last three months. It isn't likely to move to raise rates as long as the housing slump is depressing growth in the U.S., so the euro looks like the most likely candidate to appreciate going forward.

Asia, meanwhile, is far more dependent on export growth and more likely to manage its currencies to maintain price competitiveness for its big export sector. In fact, the region by and large is pretty much enjoying the best of both worlds. The euro is trading at record high levels against the Japanese yen and the yuan is widely decried in Europe as being grossly undervalued.

As a result, big Japanese automakers such as Toyota (TM), Honda (HMC), and Nissan (NSANY) are enjoying robust sales and market-share gains in both regions. Chinese low-end exports such as textiles and toys, plus higher-end stuff like consumer electronics, are also streaming into the U.S. and Europe.

No End in Sight

Of course, a sharp and sustained crash in the dollar would be bad news for the entire world economy. When asked about big risks out there for the global economy, during a recent interview with BusinessWeek editors (see BusinessWeek.com, 11/3/06, "Paul Volcker Talks Trade at BW CEO Forum"), former U.S. Federal Reserve Chairman Paul Volcker asked, "suppose there is a crack in the dollar?"

The U.S. stock market likely would sustain severe wounds and the planet's biggest economy might even fall into recession. Right now, though, few economists are predicting economic Armageddon.

The U.S. would actually welcome an orderly dollar correction, given the country's gargantuan current-account deficit, the broadest measure of U.S. trade in goods and services. It clocked $431 billion in the first half of 2006, a figure that represents about 6.6% of U.S. gross domestic product and that isn't considered sustainable.

Dollar's Advantage

A gradual decline of the dollar would make exports—from Microsoft (MSFT) software to GM (GM) Cadillacs—more competitive in international markets, and likely wouldn't cause the U.S. economy too much grief. One big advantage of the dollar's status as the dominant international currency is that U.S. companies don't have to worry about currency risk since debt is raised in greenbacks and most major commodities transactions, such as oil, are in dollars.

Also, both Japan and South Korea have a track record of intervening heavily in global currency markets to prevent the yen and the won from appreciating too dramatically against the dollar. And Chinese financial authorities don't seem to be in a huge hurry to let the yuan float more freely against the dollar and other international currencies.

All this suggests that the Europeans could carry the burden of the current dollar adjustment. It's not a terribly fair deal, but seems the state of play for the moment.

Brian Bremner is BusinessWeek's Asia Regional Editor based in Hong Kong.

Bears Get Shot Down Again

That sure didn't take long. With today's upside move the bulls were able to dust themselves off and wipe away Monday's sell-off.


These kind of dramatic reversals will only serve to embolden the bulls and put the bears back on defense. For anyone looking for confirmation that the rally is over, today's market action quickly shot down that view. While end-of-the-month games probably helped quite a bit, unless we see a quick pullback under Monday's lows, the bulls still have firm control.

-- Kirk Report

Nice retouching

via WebMaster Republic

Howard Gossage

In a beautifully put together video, Jeffre Jackson of the OIA talks about interestingness and why it's important for a brand to be interesting. One of Jeffre's reference points is Howard Gossage whom he cites as a great influence. I thought it would be worth digging deeper into Gossage's history. Known as 'the Socrates of San Francisco', Gossage was an unlikely advertising man. With a military

Like no other

Musicovery

Josh Spear has pointed me in the direction of this excellent site. It's basically a more interactive version of Pandora. Instead of selecting an artist that you want to hear similar songs to, Musicovery allows you to select by genre and then by four different qualities: energetic, calm, positive and dark. You can also narrow the music down to a particular time period.

Wednesdays can make you feel...

THE VIEW FROM YOUR WINDOW

Great website.via Noisy Decent Graphics

Trip to North II: Ellaha and her daughters

We drove seven hours from Kunduz to Mazar-e Sharif. It is a long journey, but landscape is stunning. We pass the terraces of Surkh Kotal, which was the acropolis of King Kanishka, who ruled 1900 years ago. Landscape varies from desert to oasis. After the mountain range there is an interesting narrow gorge.
While driving I am thinking about Ellaha. I met this Badakshan-born lady at the birthday party of Nirvana, daughter of my friend Waheed. I was impressed with Ellaha and her four daughters. Ellaha has been working for Swedish NGO and she has been abroad many times. Older daughter Farangis worked as an English language teacher and dreamed about the career of a lawyer.
Second time we meet in Kunduz. Ellaha is asking me to visit her house. The family seems to be glad to see me: there is plenty of food on the table and even busy husband Bahman is at home to see the guest. The walls of the hall are covered with large papers. Poetry of famous Persian poets as Umar Hajjami, Saadi or Rumi is written there. Some poems are written by landlord Bahman himself.
Bahman seems to be very interested about our life in Estonia: he looks through the book about Estonia what I bring as a present. Still I can feel melancholy in the air.
Cheerless younger daughters, as fragile gazelles, sit in the corner. I already know why the older daughter Farangis is unhuppy: she didn’t pass the test to enter the university. I try to cheer her up that there will be another possibility next year.
After husband Bahman leaves, Ellaha explains the situation. Her husband has been a chief of Kunduz province administration for a couple of years. It is a high position; he is the most important officer after governor. Ellaha and her daughters stayed at Kabul. As husband and farther, Bahman felt lonely. He asked her family to move to Kunduz as well. Ellaha had to quit her job, because of a delicate subject of gender issues.
It seems that there are not many educated people to communicate with. And there are no possibilities to practice English language. Conservatism is the most difficult to accept for the family. Ellaha says that women of only 3-4 families who doesn’t wear burkas. And citizens of Kunduz don’t like it.
I told my husband that I will never put on a burka, says Ellaha fervently. Therefore the ladies of Ellaha family prefer to stay at home. The husband of Ellaha promised her that if the ladies won’t adapt to the conditions of Kunduz, then they can move back to Kabul a year later.
The whole day while driving from Kunduz to Mazar I meditate about this family. How vast is the gap between western style family and local traditions?

Trip to North I: Kunduz

We had a wonderful trip to North: we got hot weather at Kunduz, mist at Pul-i Khumri, chilly rain at Mazar-e Sharif and snow on Salang Pass.
First we drove to Kunduz, which is known for its fertility. Although watershed of Amudarja (Oxus) River covers only 14% of the territory of Afghanistan, it gives 57% of water. Afghans can afford two crops a year at lower parts of this area. There was a proverb: “If you want to become a rich, come to Kunduz.”
Thsingish-Khan devastated Kunduz at 1220. And the area never recovered. There was a little bit of better times in the 19th century, but then another trouble emerged: malaria. The new proverb was :”If you want to die, come to Kunduz.”
The pushtus were resettled here by King Abdur Rahman in the 1930ties. The value of land was really almost nothing: people came from the South of Hindukush and refugees of Russian Revolution came from North.
I respect farmers of Kunduz: they are hard-workers. When I was there in May, it was already the time to harvest wheat. Now it is the time of autumn ploughing. Other popular crops seem to be maize, rice and cotton. Roads are swamped by camels, donkeys and men, dragging colossal bags stuffed with snow-white cotton tufts.
I drove to a little village Aqtepa with Jelle, the leader of Kunduz River Base project. First we race along the straight highway to North. At certain moment we turn to half desert and start to drive across dunes. There is nothing at the horizon but sand and clumps of thorny plants.
Aqtepa oasis is situated at the crossing of Taloqan and Kunduz Rivers. There are big old trees, plenty of canals and mudbrick walls and houses. Jelle says that during the last one and a half year the situation has improved; he can hardly recognize the village. There are lots of people in the narrow street and a row of tiny shops. There is even a mobile mast at the edge of the village.
Today an important event takes place: the water master – who is responsible for distribution of water in canals - is elected. Jelle explains that first the drinking water needs must be covered, agriculture is the next priority and only after that come other needs like energy etc.
First we reach the place where the council of farmers is gathered. It is lunch time and delicious fish from Amudarja is being served. After eating the discussion follows. Jelle is informed that former water master has been elected back: there is no competition this year. Another issue: the locals are asking for a new dam with gates to regulate the amount of water in canal.
We drive to see the place. The canal is situated on the edge of the oasis: there is magnificent view to crossing of the rivers and another view to expansible marsh. Even frogs are croaking. Jelle is promising support to the construction of building before the new vegetative season. He states his terms as well: the villagers have to monitor the condition of the dam and gather some money for repairing of the foundation.
Tadjik Turamurod, the head of the construction company, discover my Russian language competence on the way back to Kunduz,. He invites us to his office. Very soon me and Jelle, we are sitting behind the table, carrying a remarkable amount of food. Bottle of Tadijk wine can be found as well. I try to be a translator (Jelle doesn’t know Russian and Turamurod doesn’t know English), but soon I am totally confused because of crafty Tadjik wine.

New Smart Site

This is the first website we've put together since we decided to do web stuff properly. It's part of smarts Positive Driving campaign, which is all about seeing things in a different light because you're in a smart. I think it's pretty damn good. Nice use of Flash 9 but most of all it gets the benefits of the car over in a very engaging way. Smart Positive Driving

Fabulous Murad Khane

I spend another wonderful evening, photographing at Murad Khane quarter. First time I was here, I just concentrated on architectural details. This time I try to capture the special atmosphere of this place.
The guide from Turquoise Mountain Foundation refers us (there are some other rubbernecks as well) to different households. We clamber up cranky stairs to admire the view from windows without glasses. We spy local ladies at the kitchen hut and try freshly cooked bulani’s (the stuffed pies cooked in hot oil).
It seems that typically locals don’t live on ground floor. At first house we are invited in, there is a hall without walls were our hostess is trying to scrub the mountain of dishes. The only living room is empty, just covered with cheap matting. There is a TV-set in the corner and the poster of movie Titanic give hints that there is twenty first century outside.
A young lady from other house has heard about coming guests. She is wearing a make up. Lots of bracelets are around her hands. She really seems to like posing for photos – what an uncommon view!
We visit the house of a local elder, too. There is a tiny courtyard in the middle of his house. There are lots of authentic details like wooden shutters, paneling and doors. He has marvelous children. When I look around me, it is surprising to see their handsome colorful dresses, carefully washed hair and even earrings.
One guests asks for the explanation: how can local people survive cold winter time in those uninsulated houses. In response the local men demonstrate us their tradition. In middle of the room a low wooden table is placed and covered by a bed sheet. Under the table warm stone is inserted. Family is lieing around this table: they place their feet under the table and cover themselves by the bed sheet.
And now we are ready to listen to the stories of our grandmothers and grandfathers, says the elder with a smile.

Dedicated to Kunduz

My husband has to travel to Nothern provinces, to visit local centres Kunduz and Mazar. It is not clear at the moment if we will be allowed to travel by car. Or we have to take a plane.
Dreaming about this trip, I am excited. Even local people say that you have to go to Mazar during spring-time when fields are covered by red tulips, I am quite happy to go in autumn time as well. It is a thrilling possibility to see Blue Mosque, the most famous sanctuary in Afghanistan.
My trip to Kunduz over Salang pass in springtime was something very special. Also I liked the rural atmosphere of Kunduz. I only grieved that I didn't see the irritation area that is located near of the town.
The book I liked most about this country is Love and war in Afghanistan by Alex Klaits and Gulchin Gulmamadova-Klaits. Tadjik-American couple collected the biographies in the northern provinces of Kunduz and Takhar. They collected 150 stories; 12 of them are chosen for publishing in the book.
Compering to some celebrated and carefully composed books as Kite Runner (which one is on the top of Amazon bestseller list according to Economist), this book is a real treasure. There are just life stories that are told mostly by simple men, but the tales told by former soviet army soldier or Taliban fighter as well. Is seems that there has been no way to avoid anarcy. Everyone's family was affected by different regimes.
It is a good book for understanding the history of last decades of Afhganistan. Young generation don't know how to live in traditional way, they know only violence and disorder. The memories of older generation can be quite different: some ladies wore western clothes, studied in universities or even chose their spouses. It was real tragedy for them to put on a burka as the situation became unsafe. And there are some stories of ladies who lived in very traditional way, following rigid Moslem rules.
It is a good book to understand how different is life here, comparing to European lifestyle. One story was about a young guy who was for many years attracted to one young lady. Everyone presumed their marriage. But somehow it happened that he sent some sweets (it expresses the wish to engage) to another lady. Some time later he understood that he has done the worst mistake. But it was too late: there is no possibility to withdraw from marriage. This guy has spoiled the life of the first lady (because nobody wants to marry her now), the life of second lady (because she knows that her future husband doesn't love her) and his own life as well.