Market Talk

- John Hussman writes about a subset of market conditions that have historically been associated with sharply negative implications for stocks. “The combination of unfavorable valuations and collapsing market internals is a sharp warning to examine risk exposures carefully here,” he says.

- Job prospects are showing signs of life for college graduates. But make no mistake, they the labor market is far from thriving.

- European banks not for the faint-hearted investors. “It makes more sense to simply bypass these stocks until the story is over unless you are more of a trader or don’t mind very big swings,” writes Roger Nusbaum. The consequence for being wrong is greater with these banks. Obviously this will be too conservative for some folks but ultimately this is a know thyself question.”

- Facebook CEO Mark Zuckerberg addresses new privacy settings in a Washington Post op-ed, hoping to quell privacy concerns. But his memo seems like a “classic non-apology,” MediaMemo blogger Peter Kafka says. “He’s sorry that Facebook ‘move[d] too fast.’ That’s the kind of thing you say in a job interview if someone’s lazy enough to ask you to describe your biggest weakness — ‘Sometimes I try too hard.’”

- The fact that current and former AIG executives won’t face criminal charges seems baffling. But “if you rope your advisors like your accounting firm into signing off on your stupid or possibly even criminal behavior, then you get off scot-free,” Yves Smith writes at naked capitalism.

- Existing home sales increased more than expected, but keep an eye on inventory levels, Bill McBride notes at Calculated Risk. Inventory rose to 4.04M in April from 3.63M in March. It’s also an increase from April 2009, breaking a string of 20 consecutive months of y/y declines in inventory. “The increase in inventory is the big story.”

- Twitter announces it’s banning in-stream advertising from third-party developers, which “are not necessarily looking to preserve the unique user Twitter has created,” COO Dick Costolo writes on Twitter’s corporate blog. “We believe it is our responsibility to encourage creative product development and to curb practices that compromise innovation.”

- What are the implications of Twitter’s move to ban third-party ad networks? “Twitter has now reduced the number of companies trying to figure out their optimal business model from thousands to 1,” angel investor Chris Dixon says in a tweet.

- Intel (INTC) introduces a series of low voltage chips that could make the price for ultra-thin laptops more attractive and affordable, Digital Daily blogger John Paczkowski says, which “bodes well for the ultra-thin laptop which hasn’t had much success staking out a middle ground between the netbook and the laptop because its performance often doesn’t justify its price.”

- Some excellent explanations of the Lost finale.

- “For the last 10 months, as stocks have rallied with only minor interruptions, even the bulls have warned that at some point a ‘correction’ would hit,” LA Times’ Tom Petruno says. “Is this finally it?”

- Not a lot to cheer in NBC Universal’s 4Q results. But don’t worry GE, it’ll all just be a memory soon enough.

- Obama’s bank plans don’t bode well for venture capital industry, Infectious Greed blogger Paul Kedrosky says.

- Gluskin Sheff chief economist David Rosenberg succinctly lists what’s plaguing the economy. “Greece. Portugal. Ireland. China tightening. Bank bashing. Foreclosures. The housing and mortgage market. Jobs. The Fed’s exit strategy (if it happens),” he says. What does it all mean? “There is no quick fix,” the Pragmatic Capitalist says.

- Bernanke’s confirmation vote suddenly looks like it’s in jeopardy. Not a good sign, especially since it would have some “unpredictable macroeconomic consequences all on its own,” Matt Yglesias writes.

- Betting on Bernanke not such a sure thing anymore. As more senators come out against reconfirming Ben Bernanke as Fed chairman, the betting markets are starting to sour on him, Catherine Rampell writes at NYT’s Economix blog. Odds of Bernanke being reconfirmed have fallen from 93% to 80%, according to Intrade

- The Economics of Contempt blog wonders if Obama’s plan is merely a “transparent political stunt”?

- People love to criticize. But Reuters blogger Felix Salmon says he’s “cautiously optimistic” about the future impact of Obama’s bank plan. “No, it won’t singlehandedly prevent another financial crisis – but I’m getting a bit tired, at this point, of people criticizing necessary moves on the grounds that they’re not sufficient,” he says.

- “Fear and greed are the odd couple whose constant squabbling dictates the direction of financial markets,” Liam Denning writes in a WSJ Heard on the Street column. Keep an eye on the VIX.

- The Last of Lost – ABC’s hit series set for its final season. How awesome is this show? Obama actually rescheduled his “State of the Union” address a few weeks ago so it wouldn’t conflict with the season premiere.