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Investors, you just haven't been freaking out enough this week. The markets have been too friendly. How about opening up a can of WLI to change that?

We're talking about the ECRI Weekly Leading Index, which Jon Markman calls "the most prescient statistical guide to the health of the U.S. economy."

The ECRI is set to go negative Friday for the first time since early 2009, which Markman says will spook super-bulls and make super-bears happy. 

General Motors caused a ruckus this week by telling employees to phase out the "Chevy" nickname in favor of "Chevrolet."

The company asked workers to say "Chevrolet" when talking to a dealer or even when speaking with friends or family, according to a memo obtained by The New York Times.

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Why kill off one of the most beloved American brand names? To be consistent, the memo said.

 

It's out of fashion for stocks to split nowadays.

That's the opinion of Howard Silverblatt, a senior index analyst at Standard & Poor's, according to Bloomberg. Three companies in the S&P 500 Index are splitting this week, which is a little unusual.

But a decade ago, Bloomberg reports, that would have been par for the course. 

I'm going to take advantage of the half-hearted bounce this week to sell Microsoft (MSFT) out of Jubak's Picks. (For more on this bounce, see this post).

The stock has not performed well on up days for the market and looks locked into a short-term down trend. (On the chart, Microsoft is flirting with a negative cross-over, where the 50-day moving average breaks below the 200-day moving average.) The stock traded just below $25 in late Wednesday trading.

I might want to own this one in the fall again when visions of higher sales for the Vista operating system and for Office 2010 start to dance in investors' heads.

 

Will the bailed-out American International Group (AIG) ever repay taxpayers in full? Doesn't look likely.

A panel investigating the bailout said that the federal government -- still an 80% owner in the company -- will likely continue as a significant shareholder through 2012, according to The Wall Street Journal. Taxpayers still "remain at risk for severe losses," the panel added.

AIG continues to be an embarrassment for the federal government, having received around $132 billion in aid from the Treasury Department and the Federal Reserve Bank of New York. 

Microsoft (MSFT) will offer as much as $1.25 billion in three-year convertible notes, according to the Dow Jones news service.

The software company will use the sales proceeds to repay short-term debt. If it was any other company I’d ignore this news as a daily noise, as this kind of things happens all the time.

But Microsoft has $39 billion of cash and generates $16-$17 billion of free cash flows a year. Issuing short-term debt, for which Microsoft will surely pay higher interest than it receives on the pile of its cash makes absolutely no economic sense -- zero.

 

Morningstar has a really nice rundown on using ETFs for pairs trading. It's a good explainer for investors who want more of an introduction into this area.

Pairs trading is when you trade two securities against each other in a long-short strategy, targeting a specific area in which they are different. "Pairs trading attempts to control for outside risk and allows you to focus on just one risk at a time," writes Michael Rawson.

For example, Rawson writes, if you thought the iPad would steal market share from Amazon's Kindle, you would simply buy shares of Apple (AAPL) and short Amazon (AMZN). That's an easy example. The bigger problem with pairs trading, Rawson writes, is that you need to have two good trading ideas when even one is sometimes hard enough to find. 

By Jim Cramer, TheStreet

 

We just get a number, simply a blow-away number, from China, showing much stronger exports and imports -- fully 50% more than people were looking for in terms of exports -- and what's the first thing the reporter and the anchor ask? "Is it sustainable?"

 

Wait a second. It wasn't even supposed to happen. This is huge news. China was supposed to be slowing to a crawl as they break the real estate market -- people are still looking at prices, which were up, and not transactions, the precursor, which are down huge -- and yet the economy there roared. That means they need more of our imports.

 

That means Europe is still growing, because China sells more into Europe than the U.S.

 

If only this leak is correct!

Reuters is citing three unnamed people who report that a Chinese government official told an investment conference that May consumer prices rose at an annual rate of 3.1%, exports jumped 50% in the month, and new loans totaled $92 billion.

If those numbers are correct, investors can tune down fears that the euro debt crisis and China's own efforts to rein in inflation have slowed its economy by a notch. It won't be possible to discern a strong positive trend in the numbers, I'd guess, but the leaked figures at least don't show a strong negative trend, either. And in the current situation, that's a big plus for financial markets.

 

Stocks continued to act like little schizophrenic chipmunks on Wednesday after a 126 point gain in the Dow Jones Industrial Average that took the big cap index over the 10,000 level was reversed into the closing bell. The small caps in the Russell 2000 managed to close with a small gain.

 

It's sure been a directionless couple of weeks -- since May 20 the Wilshire 5000 Index, the broadest gauge of the U.S. stock market, has lost about 1%.

 

But boy have things been volatile: There have been new fewer than six sessions since then (out of 13) that have resulted in a change of more than 1% for the Wilshire. So although it feels like we've all been put through the ringer, the equity market really hasn't gone anywhere since mid-May.

 

And lo, five years ago on this day Alan Greenspan came forth to say there would not be a housing bubble.

"Although a 'bubble' in home prices for the nation as a whole does not appear likely, there do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels," he testified to a Congressional committee.

June 9 has become known as National Froth Day, according to Jon Lansner at The Orange County Register. It's a time to "honor our inability to see a brewing bubble," he writes. 

Is it even worth it to invest in pharmaceutical companies anymore? Last year, only 25 new drugs were approved, reports The Atlantic.

Drug companies aren't producing as many new products these days. And groundbreaking, blockbuster arrivals are scarce -- which is surprising given the technology and resources available to scientists at those companies.

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It's hard to pinpoint exactly why this is happening. Are the companies to blame, or is it the Food and Drug Administration's fault?

 

Apple (AAPL) shares have finally slowed their jaw-dropping climb, but that isn't stopping Morgan Stanley from going even more bullish on the stock.

The firm's Apple analyst, Katy Huberty, has raised her price target to $332 from $310, Fortune reports. Her increase is largely driven by the iPad, which is seeing surprisingly strong sales. Apple shares were in the $249 range Wednesday.

Some analysts, like Charlie Wolf at Needham & Company, expected Apple to sell 2 million iPads this year. Turns out Apple did that in two months. 

Over my lifetime I've seen the same story unfold over and over again. Someone accumulates raw land with the idea of building an agribusiness like a dairy, cattle farm or orchard and is pretty successful. A city not far away begins to grow and pretty soon the suburbs stretch right to the border of the farm and the farmer becomes a real estate developer.

I grew up in Fort Lauderdale and saw that happen in Davie as dairies, cattle farms and orange groves became housing projects. My brother lives in Loxahatchee west of Palm Beach and now you see shopping centers and high schools surrounded by orange groves. Before Walt Disney changed it all, sleepy Orlando was a cattle and citrus farming town. I watched this happen on the north side of Atlanta and now I'm watching the same thing happen on the south side of Charlotte.

I've never had the capital to make major investments in real estate except for ventures into small rental units and REITs but maybe you can.

 

The debate over whose fries are better, Burger King (BKC) or McDonald's (MCD), is one of the oldest fast-food fights in the industry. But rather than just limit the debate to the drive-thru window, Burger King has changed the battlefield to the supermarket aisles.

 

How? Well, with a new line of frozen foods that include crinkle-cut French fries and healthy apple fries coming soon to your grocer’s freezer. There’s even a healthy line of Apple Fries, with the fruit skinned and cut to look like French fries and packaged in that familiar BK cardboard cup.