My Email To Steve Jobs

I actually wrote an email to Steve Jobs yesterday ( He will be missed.

I'm sorry that I ever doubted you, Steve. I always felt that Apple products, while easier to use, weren't inherently that much better than PCs. Macs were slower and more expensive than anything I could get from HP or Dell. And Windows, with all its flaws, was good enough to do what I needed.

However, I never looked at the whole Apple experience. My wife has always been a huge Apple fan. One time, the USB cord for her iPhone stopped working. She took it to the Apple Store and they exchanged it for a new one, no questions asked. You don't know how remarkable that is unless you've spent hours-upon-hours chatting with a Dell employee in Mumbai, trying to figure out why the hard drive isn't being recognized by your computer or why you can't get a network connection even though you have a Mac and two iPhones on the same network that are working fine.

But I became a die-hard Apple convert when I took my iPhone into the Apple Store today. Last week, I had had an issue with the camera not working properly and after re-installing the operating system, the phone stopped powering up a couple of days later. I figured that my tinkering was at fault. Unbeknownst to me, our child had taken the phone into the bathroom and dropped it in the sink while washing his hands. Of course, he didn't tell us until we went to the Apple Store and the associate explained to us that the water sensors had been triggered.

Well, having experience with the water damaged cell phone before (a Motorola SLVR dropped in a cup of water), I knew what was coming…a long lecture on why a water damaged cell phone isn't covered under the $100 warranty you bought with the phone.

As expected, the Apple associate started explaining that typically the phone warranty would be invalid…however, since I had only had the phone for four months, he would be willing to replace it, at no cost, this one time.

I had to pick my jaw up off the floor.

After all the devices that have broken on me, I've heard every excuse in the book as to why a warranty is invalid (I once had a brand new laptop screen crack after being in a car overnight only to be told that it was an "Act of God" which, of course, wasn't covered under the warranty).

I have never, ever had someone tell me that they would happily honor the warranty, even though they didn't have to. To empower your associates to solve customer problems, even though it might not be the "cheapest" thing to do for the company, is remarkable.

So I want to aplologize that I doubted you. This Summer, I bought my daughter her first computer. I looked at the MacBook, but it was $200 more than a "comparable" HP Presario. She wanted a MacBook like her mother, but I convinced her that the HP was "good enough". Well, after it failed to connect to our network about a month after I gave it to her, she's not interested in using it anymore. I fixed the problem with about 20 man hours of my time but it's just not the same as the MacBook. The "touchpad buttons are harder to click than Mom's" and the "screen isn't as bright."

My mistake. It turns out that your products, like your customer service, are indeed better than everyone else's.

I will never buy anything but an Apple computer again. And I'm sorry I doubted you, Steve.

I wish you the best of health.


Martin Armstrong Is Free

You know you're facing desperate times when an old man, wrongfully imprisoned for over ten years becomes a financial prophet on the Internet using just an old Remington typewriter.  Ironically, the man was tried for a financial fraud that could not be proved, while the entire financial world crumbled from the multitude of frauds committed by bankers, lawyers, mortgage brokers, central bankers and government officials. 

But that's exactly happened during the financial crisis of 2008.  Martin Armstrong's story couldn't be written in a Hollywood script because it's just too unbelievable. 

As tragic as it has been, hopefully his story will turn out to have an acceptable ending as Mr. Armstrong was released from prison early and is now serving the remainder of his sentence under house arrest.

Here is his letter published yesterday by a friend:


And Martin has also published his first piece of March 2011:


Contrahour wishes Martin Armstrong all the best and sincerely hopes that his typewriter gets upgraded to a new MacBook Pro.  

If you have missed any of Mr. Armstrongs writings, they can be found here ( and here (    

Bond Market Lessons From The Days Of Yore

Facts do not cease to exist because they are ignored.
–  Aldous Huxley

Before IPO, talking trader babies, moral hazards and internet bubbles…before 0% interest rates, option-ARMs, house flipping hair dressers and housing bubbles…before TARPs, 10% unemployment rates, QE 2.0s and commodity bubbles, the United States had a stock market would generally rise and fall with the normal ebbs and flows of the business cycle. 

Art Cashin In these days of yore, bond yields directly competed with stock returns for the attention of investor affection.  In those days, the bond market was thought to be smarter and more attuned to the business cycle.  And since stock prices followed the business cycle, bonds could often fore-tell the future for stocks.  Old, grizzled stock pros who had survived the 1970s bear markets, would often look to the bond market for guidance on the future of stock prices.

These veterans knew that falling interest rates were bullish for stocks as they were in 1982, when after several false starts, one of the greatest bull markets in history kicked off.

Bonds vs Stocks 1982 


Likewise, these veterans understood that rising interest rates would have the opposite affect and generally spell trouble for stocks.  For instance, in October of 1993, the veteran stock investors got a well-telegraphed warning when bond yields suddenly began rising as interest rates anticipated a Fed tightening.  Stocks continued higher on their merrily way for  several months until they snapped to attention and promptly fell four months after bond yields had bottomed.

 Bonds vs Stocks 1994


And again, just a year later, bonds again telegraphed highs and lows in the stock market.

Bonds vs Stocks 1995 


The grizzled veterans also understood what would happen if the stock market ignored the message of the bond market too long. They had gone through the October 1987 crash, when stocks closed their eyes, covered their ears and started yelling LALALALAL!, launching themselves to the sky.

Bonds vs Stocks 1987 


Clint eastwood unforgiven Most of these veterans are long gone now, having been ridden out of town by high flying internet stocks, gravity defying home builders or other phenomenon that they could no longer understand. But just because they aren't around to warn young gun hedge fund managers or high frequency trading computers of the risks of rising interest rates, doesn't mean bonds won't have an affect on stocks. 

As the veteran stock traders learned so well in 1987, the stock market can only ignore the bond market so long.   And stocks have ignored the bond market for five months now as investors plowed back into the risk trade.  But those rising rates will bite at some time.  And as the wiley veteran would say, it will probably happen sooner than anyone expects. 

Bonds vs Stocks Today 


The lessons of the bond market have long been lost among the circus of high frequency trading, put-selling hedge funds, activist Fed chairmen and single stock ETFs but they have not been forgotten.  The bond market might yet show the stock market a thing or two about forecasting the the future.

Expectation Of Rising Inflation Become a Self Fullfilling Prophecy

The Federal Reserve governors who are pushing for another round of quantitative easing should take heed because inflation expectations are already rising.  After listening to the first round of earnings conference calls, it's clear that CEOs are expecting steady, but slow, economic growth AND higher levels of inflation. This is a problem because once business leaders begin expecting higher levels of inflation, it becomes a self-fulfilling prophecy.   

According to a 2005 paper written by Sylvain Leduc, Keith Sill and Tom Stark, "a sudden increase in expected inflation leads to a long-lasting increase in actual inflation via an accommodative monetary policy."  Their conclusion makes empiric sense.  The oil embargoes in the 1970s created inflationary pressures which weren't reduced until interest rates increased dramatically in 1979 – 1981.  Accompanied by easy monetary policy, businesses and workers expected inflation to keep rising even after initial price shocks moderated.  Unlike the oil price shocks of the 1970s, the oil shock caused by the first US-Iraqi war in 1990 didn't lead to sustained inflation because monetary policy was actually tight in the early 1990s.  
Oil Prices Vs CPI YoY 
Source: EIA and Bloomberg

The Fed is already stoking inflationary flames because current monetary policy is already very accommodative.  Not only is the Fed Funds rate already at zero, the real yield on TIPS (inflation adjusted bonds) is currently a negative 0.50%.  Despite the already loose monetary policy, the Federal Reserve is expected to try to goose the economy by engaging in another round of quantitiave easing (i.e. printing money to buy treasury bonds or mortgage securities).  The theory holds that the United States needs higher growth to reduce the unemployment rate.  However, engaging in quantitative easing to improve employment is like trying to hammer a nail with a screwdriver.  Any additional monetary stimulus would just create inflation, rather than increase economic demand and reduced unemployment.

Real Interest Rate 

Source: Bloomberg

That's because the expectation of inflation is already rising with CEOs and CFOs.  And as the United States already experienced in the 1970s, once inflation expectations rise, they become a self-fulfilling prophecy.  For example, on the Q3 2011 conference call for Astec (ASTE) industries, CEO Dr. Don Brock said inflation was a substantial risk. Despite the fact that Astec has seen continued weak demand in the United States for its asphalt and mining equipment, the company is expecting inflation.  "I see a grizzly behind the curtain.  If volume picks up, you will see inflation take off," Brock stated on the conference call.   The reason being is that inventories and the supply chain is still very lean and order times have stretched out.   No business is ordering anything unless they have to.  Since no one wants to be caught dead with excess inventory or excess capacity, the first response to increased demand will be price increases.

One week into Q3 earnings season, l have listened to several calls from a broad segment of industries that highlight that volumes in the economy are improving and that inflation pressures are building.  Here are just a few of the excerpts:

  • Package Corporation of America (PKG):"Wood costs and energy costs are expected to be higher, and recycled costs have begun to trend up and are expected to be higher in the fourth quarter.  Containerboard and corrugated products pricing improved significantly year-over-year reflecting a full pass-through of our containerboard price increases to boxes"
  • FedEx (FDX): Demand for parcel service remains strong with volumes up 4% year over year. Freight rates will increase an average of 5.9% in 2011.
  • WalMart (WMT): Wal-Mart outlined its growth strategy at its most recent analyst day by increasing store counts, adding back reduced inventories and focusing less on pricing.  WMT expects food inflation to return in 2011. 
  • American (AMR) and Delta (DAL): Air traffic and seat miles are up and growing. Revenue growth returning through increase in airfares.
  • Fastenal (FAST):  "The sales to our manufacturing customers stabilized in May 2009 and then started to demonstrate patterns that resemble historical norms. This reversed the negative trend which began in October 2008." 
  • W.W. Grainger (GWW): Volumes in the United States were up 11%; volumes in Canada were up 24%
  • Johnson Controls (JCI): Automotive backlog is at $4 billion vs $2.5 billion a year ago. North American industry is back to life, the North American OEMs are coming back to their normal sourcing patterns
  • JP Morgan: Asset management had net inflows of $38 billion and credit card charge offs and delinquencies continue to improve in Cardholder Services.
  • Cognex (CGNX): Sales expected up 60%.  Strong demand for its vision systems, sensors, and identification readers used in manufacturing
  • Toll Brothers (TOL): Actively pursuing growth in attractive land and debt acquisition opportunities.  Second consecutive quarter of sequential growth in land position.

The market and businesses, unlike the Federal Reserve, have already been looking into the future and discounting the rising inflationary pressures.  Commodities have been surging on increasing demand and a fear of shortages.  The last six month chart of relative performance between stocks and commodities certainly doesn't look like an economy experiencing deflation. 

 Stocks vs Commodities 

The Federal Reserve is undertaking a significant risk by pursuing additional monetary easing on top of already loose monetary policy.  Even though consumer prices remain in check according to government reports, inflationary pressures are already building in the pipeline.  In the conference calls I've listened to this quarter, CEOs are already preparing for increasing prices. Once inflationary expectations enter the economy, they are virtually impossible to stop without instigating a severe recession.   

Windows Was Counterfeited: Why Steve Ballmer Needs To Go

Lee Ainslie of Maverick Capital recently pitched Microsoft (MSFT) as a good investment at the Value Investing Congress.  Unless Whitney Tilson has changed the name of the conference to the Value Trap Congress, I can't imagine why you would be enamored with the stock right now.

Two-Red-Aces-Pocket-Aces-520x345In Texas Hold'em, when you have a leading hand on the flop but don't play your cards right you can often be "counterfeited."  For instance, if you hold 9-10 and the board flops 5-9-10 you will be leading against even a pair of A-A.  However, if you don't protect your hand and get your opponent to fold with a big bet, you might end up losing.  If a 5 falls on the turn, your winning hand will have turned into a losing one.  You will now be holding middle two pair vs top two pair. 

Microsoft let its winning hand, Windows, become counterfeited because of its poor management.  The only two business lessons Bill Gates preaches are 1) always hire the best lawyers you can afford (a reference to the contract which gave Microsoft control of the operating system it wrote for IBM personal computers in the 1980s) and 2) always control the 'choke' point of a system.  The choke point in the computing world is the operating system.  Hardware is a commodity because it is worthless without an operating system to run it.  

When Bill Gates ran Microsoft, the company owned the choke point of the computing world with Windows.  Gates was ruthless in defending his turf.  When Netscape threatened to own the internet access choke point with its browser, Microsoft dropped everything to destroy its upstart competitor.  When PDAs became all the rage in the late 1990s, Gates created an operating system for PDAs to combat Palm OS.  Palm never recovered after Microsoft entered the PDA market because Microsoft always had the best hand – the company owned the PC and the PDA had to integrate with the PC to be useful.  When Sony threatened to invade people's living rooms with Playstation and control their entertainment flow, Microsoft backed the Xbox.

But now, under the leadership of Steve Ballmer, Microsoft has lost the choke point.  The choke point has moved from the PC to mobile devices.  Microsoft's winning hand has been counterfeited by both Apple (AAPL) and Google (GOOG).  

Apple has been a thorn in Microsoft's side for the better part of the past decade but never a huge threat because most businesses and many consumers would never dump their PCs to buy slower, more expensive Apple computers, no matter how good the user interface.  Steve Jobs was selling Lexus compared to Microsoft's Camry.  It was basically two different markets.

The iPhone, however, was a direct threat to Microsoft's control of the 'choke' point.  The iPhone was revolutionary not because of it's interface, which was brilliantly designed, but because Apple opened up the code to allow third party developers to create new applications outside of the traditional Windows platform. Microsoft should have seen the threat immediately because it was a direct copy of the threat Palm posed with its operating system.  Yet Microsoft's response was slow and disorganized.  It didn't introduce a phone until 2010 and the KIN was a weak response to Palm's phone, not to the threat Apple was posing. 

So weak, in fact, that it allowed the unimaginable to happen.  It allowed another dominant competitor into the market: Google (GOOG).  The Android operating system, which was introduced in late 2007, should never have gained as much traction as it has.  Android was open design developed by a consortium of companies  specifically aimed at combating both the iPhone and any future Microsoft entry.  However, Microsoft should have been able to use its clout, cash war-chest and expertise to muscle into the market, just as it had with its PDA operating system. 

Both the iPhone OS 4.0 and the Android are now working themselves backward to the PC from the newly introduced tablet computers.  Both allow third party developers to create applications that basically mimic the dominant Windows Office environment. Not only that, but in many cases, the targeted applications are easier to use than Microsoft's increasingly bloated software. 

Microsoft is now running behind with the introduction of Windows Mobile 7.0.  To continue the poker analogy, while Ballmer was trying to beat Google's hand in search with his pursuite of Yahoo, Google hit an set on the turn with Android.  Microsoft didn't bet big enough and fast enough on Mobile and Google stole the pot from under its nose. 

This is clearly management's fault.  Allocating resources and putting in place the correct division managers are strategic decisions that need to come from the CEO.  While KIN management was clearly incompetent, Ballmer should have realized this much earlier than 2008, when work on Windows Mobile 7.0 began. 

Unless the Board replaces Ballmer with more competent management, I believe Microsoft's stock will always trade at a discount to its competitors.  On paper, Microsoft looks like a value investors dream.  The company trades at a steep discount to Google and Apple, even though Microsoft's margins and growth stack up equally or better.

MSFT Comps 101510         Click image to enlargen

In addition, Microsoft's earnings have been growing steadily over the past two years.  In the chart below, you can see that the forward estimates indicated by the dotted line have been rising even though the stock has been stuck in the mud.

            Source: Baseline

And the stock's Price/Earnings ratio is basically at the lowest level ever.

             Source: Baseline

Since the introduction of Windows 7.0 and the resultant earnings boost from it the stock has basically gone nowhere.  I believe the market realizes that Microsoft has lost its dominant hand.  It no longer owns the choke point since that point has moved from the PC to mobile devices. 

If the introduction of the biggest software upgrade since Windows XP in 2001 can't move the stock higher, what will? Will it be Windows Mobile 7.0, a hopelessly late, fourth-place entry into the wireless market?  Will it be the rise of Bing, which costs Microsoft about $1 billion in losses every year to operate?  Will it be the Xbox which saw no growth and represents only 12% of Microsoft's revenues?  Will it be the corporate upgrade cycle in PCs, which is being cannibalized by the introduction of tablet computers? 

My answer is none of these will make the stock move higher.  Microsoft has relegated itself to a dying utility through its slow and inept management.  They have lost their dominating starting hand of pocket aces to a couple of upstart players that were playing a much weaker cards.  I believe much like IBM, which lost the operating system to Microsoft in the 1990s, Microsoft's stock will trade at a forward P/E of the mid to low teens for the foreseeable futures.  The stock is, in my opinion, a value trap.  There's no doubt the stock is cheap at 11x earnings and could move back to the high $20s.  And an increase in the dividend could make it more attractive to yield hungry investors.  However, I don't see a sustainable advance back to $30 or higher until the Board cuts its losses and replaces the CEO who played his cards so poorly.   

Disclosure: Contrahour is long Microsoft (MSFT) but for the life of it can't figure out why.

What Fundamental Factors Make A Stock Move

A lot of investors are confused because of the extreme volatility in the stock market.  However, the fundamental factors that actually make a stock move up or down over the long term haven’t changed despite the advent of high-frequency trading, the ‘great recession’ or government intervention.  They’ve just made stocks more volatile in the short term.  In the following presentation, I’m going to get back to basics and try to explain what fundamental factors actually make a stock move. You’ll need the Adobe Flash player to view the video.




Martin Armstrong Updated Market Outlook

I received a very nice note from Martin Armstrong which I wanted to share.  Now that every central bank in the world as managed to re-flate itself out of the economic collapse, Martin's work might fade into the background.  However, it shouldn't.  His work is all about cycles and we will find ourselves back were we came from soon enough.   

In his note, Martin writes that he believes a market top could arrive after Labor Day with a retest of support in 2010.  New highs could follow by 2015. 

Letter From Marty082309   

Martin also notes that he continues to wait for a response from the Supreme Court on his case.  However, it sounds like little progress is being made.  Please contact Martin with any thoughts or well wishes at

Cash For Clunkers: A Shining Example of How Government-Run Programs Work

Joan McCullough, the incomprable market analyst at East Shore Partners, has a great riff about the government managing health care.  If you were on the fence about this issue, McCullough will shove you over to her side with her description of how the "Cash For Clunkers" program is going:

Hey. Are you sure you really want the government runnin’ healthcare? You do? One trip to any US Post Office oughta’ relieve you of that sentiment. But if that didn’t “cure you” and you need further evidence of why the last place Uncle Sam oughta’ be pokin’ his nose is up a proctoscope, how about considering the Mongolian Bluster Duck they’ve made of the cash-for-clunkers program before coming to such an ill-fated decision?

Ahem. You probably won’t believe what’s goin’ on with this puppy. Nevertheless, here goes:

We’ll start with the bottomline. There is a fixed amount of do-re-mi to be doled out by the NHTSA (National Highway Transportation Safety Administration). It’s $1 bil LESS $50 mil for “administration”. That $50 mil, I guess, is to pay for the 30 employees being hired by the new agency the NHTSA has created, the Office of the Car Allowance Rebate System. And also for the 200 “contractors” to whom most of the work will be farmed out.

*contractors: There is something unclear here. The press all talks about “contractors” in the plural, all 200 of them. But the text issued by the NHTSA, cited below, talks of “the contractor”, singular. I can only find reference to one contractor so far. And it’s none other than Citigroup. Perhaps Citi’s division handling the request for  reimbursements is 200-workers strong. We’ll find out eventually, I guess.

Perhaps you will be as edified as I was to learn that this new agency with the clever acronym CARS is, like “All Gaul”, divided into three parts.

Like so (highlighting is mine):

The Transaction Oversight Division which will work closely with the outside contractor NHTSA has retained to review incoming request for payment from dealers to ensure that those requests are reviewed correctly and in a timely way.

The Data Analysis and Reporting Division will review data generated in connection with the program to help ensure the system's efficiency and detect problems with the process or indications of potential compliance issues.

The Compliance Division will work to detect and deter problems related to the program and coordinate closely with NHTSA's Office of Chief Counsel when possible violations are found. It will also work with the Transportation Department's Office of Inspector General on allegations of fraud. [Ref.: This is the 136-page handbook released Friday.]

Lemme stop right now and ask you a question. Do you have a headache just thinkin’ about this bureaucratic nightmare or what? I thought so. Take an Excedrin and keep readin’.

Compounding the Bluster Duck, the program ends on November 1. Or until the money runs out. Whichever comes first. Got that? Okay. For starters, customers were comin’ into the dealerships starting on July 1 which was the official kick-off date. But the government wasn’t ready to allow any dealers to “register” with the program until July 24 which is the date that CARS finally published its 136-page handbook. Thus, right off the bat, there is a bottle-neck and a lot of uncertainty. And guess what else? They changed some of the original parameters that Congress had cobbled together.

Isn’t that amazing? Dealers had been accepting trade-ins since July 1 and on July 24, they made alterations! If you really wanna’ go nuts, go here:

Car buffs are familiar with the above website, Edmunds. On Monday, they put out a press release, part of which reads like this:

… “As if Cash for Clunkers wasn't complicated enough, Edmunds. com has learned that the qualifications are a moving target. The EPA confirmed with that last Friday the agency "refreshed" its combined mileage ratings for older vehicles and that the new data often gives potential trade-ins a higher mileage rating. learned of these changes over the weekend from consumers who had checked that their trade's mileage rating qualified for the program up until Thursday. When shopping for a new vehicle for new vehicle over the weekend, they learned they no longer qualified.” …

Isn’t that a hot, steamin’ deal from the government? J, M and J. They didn’t notify anybody. They just changed some numbers on the website. I guess you hadda’ be there when they did it or you were left in the dust. Meanwhile on balance, the major glitch goes like this:

Joe SixPack goes into the dealership and they accept his trade-in and sell him an upgrade at the discounted amount. This puts the dealer on the hook to collect the $4500 back from the government. Sounds easy enough, right? Here’s the problem: at the time the dealer passes the discount to the consumer, he does not know how much if any clunker money is still left in the kitty or if his paperwork will be rejected (some times for ridiculous reasons) or accepted … or when he can expect to get his money back.

Some dealers are already complaining that the paperwork is next to impossible to complete. That sounds about right, eh? And that given the time and the myriad of BUREAUCRATIC STIPULATIONS, there are thousands of cars that could be sold but which cannot be, owing to the frustrations of the process itself. … “"I have over $300,000 outstanding," says Gordon Stewart, who owns Chevrolet and Toyota dealerships in Michigan, Florida, Alabama and Georgia. Stewart has sold close to 80 vehicles to customers under the program. Despite many efforts, his staff has been successful in applying for rebates on only three sales. “ … [Ref.: Autonews] That kinda’ says it all, eh? 80 request for reimbursement; 3 approvals.

The government spokesperson said that there was “not a huge backlog”. However, he had no idea how many reimbursement applications were waiting in line for approval. Typical government baloney. He did promise, though, that “eventually” on the website they have set up for the dealers to register and submit paperwork, they will have a “ticker” which will show how much money is left of the $1 bil. Lemme ask you something: If you don’t know what the request pipeline looks like or the time it takes for an average reimbursement to be approved, what the heck good does it do to signal how much money is left in the kitty?

Last, lemme lay this one on you; consider it the “icing on the cake”:

Also on an as/of basis, the government is now demanding as follows:

… “Dealers will have to remove the engine oil from the crankcase, replacing it with a 40 percent solution of sodium silicate (a substance used in similar concentrations in many common vehicle applications, including patching mufflers and radiators), and (run) the engine for a short period of time at low speeds (rendering) the engine inoperable," NHTSA said. "Generally, this will require just two quarts of the sodium silicate solution." … [Ref.: Detroit News]

Unfortunately, nobody so far has made any provision to pay the dealers for this work. Isn’t this hot stuff?

Are you sure you want this crew handlin’ your request for an MRI? I thought you’d come to your senses. Good show.

Web 2.0 Kicks Into High Gear With SkyGrid

Social Media I'm still trying to figure out if Twitter is a real application or another narcissistic creation of Gen Y'ers who equate a meaningful life with how many "famous" people they stalk.  If you don't believe me, then look at the popularity of Jimmy Fallon's or Shaq's Twitters.  You have to sift through a 1,000 of their tweets to get one that is even slightly amusing or interesting.  

That said, you can follow my own personality disorder on Twitter here.  I like using Twitter because it doesn't require the long process of coming up with more than one coherent sentence in a row, i.e. I'm lazy.  Like John Steinbeck said, "If I can't write a sentence in 140 characters, what's the point?"  Or something like that.

Anyway, many more useful applications are coming down the pipeline.  One of them being SkyGrid.   SkyGrid is an up to the minute, streaming news service focused on stocks and industry sectors.  Much like Yahoo Finance, SkyGrid allows you to customize the news you see by uploading your portfolio or sector of interest.  However, unlike Yahoo, SkyGrid sorts the most relevant news so you can quickly gage what is moving your stocks.  Unlike some news applications that I've tried, the service runs in your web browser and therefore doesn't take up a huge chunk of your computer memory even if you leave it up all day.  And the news sources include everything from the major wire services to your favorite blogs. 

The service is currently in beta testing but I have found it to be very stable and useful.  Contrahour has joined a partner program with SkyGrid that allows our readers to join the beta test.  There's no fee for signing up and no spam if you give them your email address. I think it will be well worth your time to try it and give the developers constructive feedback on their service.

If you're interested in joining the SkyGrid beta test, please click here.