Mar 26 2012

Pending home sales take a hit in February.

Pending home sales dipped in February according to data released by the National Association of Realtors.  The duality of the recovery is exposing a stock market with what appears to be healthy returns but underlying it all is a weak housing market.  Housing is a bigger component of wealth for Americans so seeing home sales dip is not exactly a vote of confidence that things are improving or getting better.  Pending home sales dipped for the month but are up 9 percent on a year-over-year basis.  Much will be seen once the spring selling season hits since home sales are very seasonal.  With more properties being pushed it will be interesting to see how the market reacts.  Also with government action in the mortgage settlements across various states and banks still holding onto a large inventory of properties it will be telling to see what occurs in the generally stronger spring and summer selling seasons.

Below is the data for pending home sales:

pending home sales

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Mar 23 2012

Apple Flash Crash: Trades halted after odd trade causes 9 percent drop. For a second Apple lost $50 billion in market cap.

Apple stock took a very big drop today, actually dropping by 9 percent while circuit breakers were activated to halt trading.  The hit took place early in the morning.  It must have come as a shock to many traders especially given the near unstoppable rise in the value of Apple’s stock.  The sale and plunge is now being attributed to a “fat-finger” trade.  In other words someone accidentally put in a trade for a really low price.  I’m always surprised how fragile the financial system is when a company worth over half-a-trillion dollars can see nearly 10 percent of its market value disappear in the matter of a few seconds.  Apple quickly regained the lost market cap value once traders realized the error and ended the day at 595.05 a share.  Talk about a fat-finger because for a brief moment, some $50 billion was wiped out in Apple market share.

The plunge was brief and likely created short-term volatility while circuit breakers halted trading:

apple shares plunge

Not exactly a confidence event.

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Mar 23 2012

How much does it cost to run a losing NBA team?

Professional sports provide a fascinating business model.  Every year, in the most popular American sports of the NFL, NBA, and MLB one winner will emerge out of a multitude of teams.  In sports, winning is everything and organizations pay big bucks to bring a championship to their town.  What this also means is that many teams fail to achieve the stated goal of ultimate winner but still need to pay to play.  Of course the revenue model of say an NBA team will come from ticket sales, marketing, and other ancillary products.  Teams that are competitive will usually do well but how about teams that are having a very difficult season?  I wanted to take a look at the salary for players from the struggling Charlotte Bobcats that currently have the league leading worst record of 7 wins and 37 losses.

Pulling up the data on this team we realize that money is not necessarily everything especially when it comes to sports.

Charlotte Bobcats roster:

nba charlotte bobcats salary roster

Source:  ESPN

The roster of players comes out to roughly $49 million.  This does not include the coach and supporting staff.  Professional sports operate under very unique business models but where else will it cost you roughly $50 million a year simply to have a very subpar record?

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