MARKET COMMENT
December 20, 2006
While “Da Boyz”
are away spending some their $24B in bonus money, they’ve no doubt left a few
junior troops on watch to protect their positions thru the end of the year. Now you think I’m sour about all this
right? Well, yeah!
The firms that constitute “Da Boyz” network [GS, MS, C, JPM, BSC and so forth] are
publicly traded companies. Notorious
hedge fund managers can make a lot of money as well; but, the difference is
that investors in those funds hope and expect the fund managers to make big
bonuses. They know it going in. Many investors were shocked by the $40M bonus
MS’s Mack earned this year and GS chief Blankfein topped
that today with $54M. One of the
disturbing things is that GS isn’t paying any significant dividends to
shareholders. Sure, the stock has
appreciated substantially, but why not share the wealth with your shareholders?
Not only have Da Boyz left some reserve troops on duty, but their allies at
the Treasury and Fed have chipped in again over the past two days to keep things
humming thru New Years. [Please note:
all funds loaned “below” the prevailing Fed Funds rate. You’d take that wouldn’t you?]
Well, it’s good to be one of the 22 Primary Dealers right?
Things are starting to wind down and volume is
tailing-off. Barring any market moving
news, indices should remain fairly well-pegged thru the holidays.
But there is good news for the little guys out there today
as dividends start hitting some ETFs causing the sudden
price fluctuations we suggested would occur.
I do not have the data exactly yet, but you could see price drops in EWA,
EWM, EEM for example while Yahoo/Finance was reporting them higher on the day
after adjusting for dividends. The precise
dividend amounts will probably be posted late tonight. Expect more of this type of action throughout
the next 10 days.
Elsewhere, commodity and currency markets were, with the
notable exception of copper [which broke support at $3] fairly steady.
Tomorrow is Thursday and our commentaries will slow down to intermittent
postings. But we’ll be watching like the
privates in the foxhole above.
Have a pleasant evening.
Disclaimer: Among other issues, the ETF Digest maintains
positions in: SPY, MDY, PZJ, EWA, EWM, EEM, GLD, IEF, USO, DBC and TRF.