Krugman: US Auto Industry Will Probably Disappear

Nobel prize winner Paul Krugman (not pictured) says that the US auto industry will probably disappear. "It is no longer sustained by the current economy."

These days, other than iPhones, what is?

Speaking to reporters three days ahead of the Nobel Prize ceremony, Krugman said plans by U.S. lawmakers to bail out the Big Three automakers were a short-term solution, resulting from a "lack of willingness to accept the failure of a large industry in the midst of an economic crisis."

The reason the bailout won't work is because it's the business model of the Big Three that is causing their woes. They're losing billions. What will floating them billions of dollars do other than postpone the bankruptcy?

Meanwhile, the foreign automakers are operating in the same economy, but they have a better business model. And they build most of their cars here in the US. Same pool of workers, different outcomes.

iPhone Flippers!

Is anyone actually planning on using their iPhone (not pictured) or just flipping them on EBAY?

• A Dallas woman hopes to cash in on EBAY:  She showed up with over $16,000 and was hoping to buy all the iPhones at the store. Her plan was for a big payday by selling the iPhones on ebay.  The video from Fox News.  Good story, as the guy she paid got an extra $200 and got an iPhone anyways!
• This guy was #25 in line and trying to sell his not-yet-purchased iPhone for $60,100.  “I am currently #25 in line at the APPLE STORE in CT and am going to buy an 8GB APPLE iphone. If payment is made tonight I gauranteed that I will ship it tomorrow morning!!! I will ship this as soon as payment is recieved FREE OVERNIGHT USPS."  Listing was removed.
• Average price on EBAY is $800, but some for way more.  There was two iPhone that sold for a whopping $10,000 another for $3,000 and a few in the $2,000 price range. There was a large number of Apple iPhones sold for $1,200. But it seems like the more iPhones are selling for the price around $800 today as the supply and demand are being balanced out.
• "I'm looking to double my money," says Alvaro Sanchez.
• Maybe the flippers are in trouble as Apple seems to have managed supply-demand, noted here in iPhone failing to attract a premium on EBAY.
• Alvinology with a screen-cap of the EBAY iPhone madness!
• HyperSensory notes that as of 9am PDT, 8000 iPhones had been resold on EBAY.
• Giolist wants to know why in "Blazes" would folks pay the premium on EBAY when there are still iPhones available in stores?
• The Morning After, from Reuters notes some more altruistic goals such as reselling the iPhone to raise money for kids in Africa with AIDS.  But also notes that there are still iPhones in stores, then wonders if it's because of lower demand or if "Steve Jobs is a supply-chain genious."
• John Murch says there are plenty left in stores, and to avoid overpaying on EBAY.
• Yes, that is Jessica Alba.  I am starting a policy that when I mention Jessica Alba, I do not mention naked, nude, topless, smoking, honey, fantastic four, dark angel, etc., in a shameless attempt to get search engine hits.  I don't know if Jessica Alba has an iPhone and is trying to flip it on EBAY; or, if she waited in line for one.  Maybe she wants broadband and is waiting for 2008?  Why speculate?  Who knows for sure?  Jessica, what is your position on the iPhone?

Can't Fight That Consolidating Feeling Anymore

• The stock market has that consolidating feeling this week, no? After the emotional roller coaster the past two weeks where we sold off quickly and then just as quickly rallied back up to the top of the bull market, I think we're all feeling a little woozy.
• Hat tip to REO Speedwagon (not pictured) for the blog title idea.
• I mentioned "the playbook" the other day saying that the week after options expiration week tends to be weak.  Bernie Schaeffer chimes in: 

Our historical research reveals that the week following options expiration hasn't been as reliable in terms of gains. Just 7 of 17 weeks (41.25%) have ended with a positive finish in the SPX. Given that this 18-month period encompasses a rather steady bull market, 41% positive weekly returns is actually quite low. Looking at all non-expiration weeks over the period, 29 of 56 have closed positive. Combining this with expiration weeks (13 of 18), we effectively have seen 56% of positive weeks overall. Take out the "week after expiration" data, and we have 61% positive.

• (Hat tip to Adam Warner for the Bernie linkage.)
• We're picking up speed through June and cruising to the official end of Spring and start of Summer.  The next play in the playbook is the end of month 401(k) stuff, end of quarter stuff, and then the July 4th holiday stuff.  More as we close in... 
• Yesterday's volume was extremely light.  Almost as if we've hit the summer doldrums already.  I remain conservatively positioned for the summer, with low beta holdings, cash, and trading a few mo-mo names.  Nothing much has changed in the strategy. I don't anticipate being more aggressive until later in the summer or fall.  I still believe we're going to see a correction this summer.
• Home starts fell for the first time in 4 months.  Home starts in the U.S. fell for the first time in four months in May as interest rates rose, suggesting the worst housing recession in 16 years will persist.  Before housing recovers, inventories need to come down.
• Yahoo stock has struggled, and CEO Terry Semel has been replaced with co-founder JerryYang.  Mr Yang's return to the forefront of Yahoo! revived speculation the company might be poised for more drastic changes, including partnerships with media and technology rivals, or even a merger. For some great "Yippee!" and "Bah!" comments on Yahoo, see Barron's Tech Trader column.
• Dr. Jeff with some random musings...
• Of course, with Fantastic Four doing well at the box office this past weekend, today's post IS AGAIN dedicated to Jessica Alba (nude, naked, topless, stripping, smoking, dancing, bikini, Honey, Dark Angel).  Saving the planet is a tough job, but I thank you for the hard work, dedication, and form-fitting outfits.

More Randoms (and Jessica Alba!)

• Hey, what a Fantastic Finish in the market today. Amazing how the market zags instead of zigs.  I was thinking with the open and meandering mid-day, we were going to see some quick profit taking into the close.  Instead, the bulls put on quite a show to finish things off.     Hello, random walk...
• Jessica Alba was born in 1981 in Pomona, CA.
• More info on the Apple iPhone from Barrons.  Says that the buyer will have to have an iTunes account for the thing to work, and the $500-600 price must include a 2-yr contract that could run up to $100 a month; or nearly $3000 for the 2-yr life of the phone.
• From Crossing Wall Street, today was the market's best day in nearly a year.
• How movie theaters make money.  They're in the snacks business!   “Owners joke about being in the candy business. If you didn’t have concessions at a movie theater, there would be no movie theater. We have movies just to get people in to buy popcorn and candy, where we make our money.”
• The Paycheck Guy is retiring.  Today is his last day.  I thought he had retired earlier, but apparantly he moved on to something else, somewhere else.
• The movie Into the Blue with Jessica Alba was watchable.  Well, she WAS in a bikini for a lot of the movie.  That helped. 
• KLo says the economy is moving faster than most realize.
• Closing comments by the Fly, with a special message to the bears...
• Howard Lindzon says it's time to jump into Facebook.  You know, I did.  And LinkedIn, too.  I searched for college and high school friends, and found not a single one.  Then I looked for former coworkers, and while some of the companies had folks registered, they were all very young.  I doubt many over 35 even know what these "social networks" are.
• Today's market close is dedicated to the Invisible Woman Jessica Alba (swimsuit, bikini, spandex, nude, naked, topless, panties, smoking, stripping) for her role in Fantastic Four.  Hat tip to Adam Warner for the idea in the comments.