Monday, March 31, 2008

Banks - Tripling Down On Their Losers

I just got the inside word that one of these banks that I am already short:

Bank of America, HSBC, Wachovia, FirstFed, Wells Fargo

...has senior management pounding the table to increase its Home Equity Loan portfolio.

They are trying to UP the compensation to brokers to sell more HELOC products.

Hard to believe, isn't it.

Reminder - Housing is in the sewer AND it's still unaffordable; we're in the first inning of a recession; and mortgage rates can only rise from here. HELOCs, due to their secondary lien status, are trading at pennies on the dollar. Thus they can't be easily pooled, securitized and sloughed off onto investors - banks will have to hold them on their books indefinitely.

Admittedly I don't fully understand the banking business. But to me, it seems as boneheaded as the homebuilding biz. Just as Moronic builders like Ara Hovnanian won't EVER stop building - no matter that the US housing market is already over-supplied by 3.5 million homes - banks seemingly won't ever stop underwriting new loans. They mistakenly think merely slowing loan growth and raising lending standards constitutes a defensive posture. They are wrong - it's time to batten down the hatches.

If we can borrow a somewhat apropos expression from the Big Government solutions manual:

Remember, you're a every problem is a nail.

Their reckless pursuit of growth is what got them in trouble in the first place.

Sunday, March 30, 2008

Hey Jeff Jarvis and NYT

Let this post be a follow-up to Even Their Little Theories Are Bunk where I discussed the inane proposition that Hillary Clinton's people were wagging Matt Drudge.

Since that last posting I started saving all the unbehooving pics Drudge featured on his page so as to to provide evidence to the contrary.

Can you say FUPA?

Clearly, Drudge is an Obama supporter...

[for you Morons that don't read my blog...the above is sarcasm.]

Saturday, March 29, 2008

Job Market 2009

Ambulance Chasing At Bear Stearns

From CNBC:

I have to give a shout-out to Ray Schmitz, an associate broker at Coldwell Banker Previews International in New York City.

A week ago last Monday, when several employees of Bear Stearns Bear Stearns Cos were leaving the building with cartons and plants, Schmitz was standing outside the building, handing out his business card.

"There were some people who were not happy about their own circumstances,” Schmitz told me this morning, “and sure there were people who didn’t want to talk to me and some who didn’t want to look at me."

What next? Are divorce lawyers going to start whipping out their business cards every time they see a couple argue in a restaurant?

I wouldn't put it past them.

This Bear Stearns thing reminds me of my own serious car accident. About nine years ago, after the car I was in was pulverized by another and wrapped around a telephone pole, I laid sprawled out, immobilized on the backseat when some lawyer reaches in, before the paramedics, and handed me his business card. I wish I kept it so I could post his info here. Furthermore, of course the guy that caused the accident admitted, later on in legal proceedings, that he met his legal counsel randomly in the hospital. SURE it was "random". They are total scumbags, the lot of these PI lawyers.

Anyway, it's a wonder that some meathead from Bear Stearns didn't reach out and punch the real estate jerk.

There's a major difference between say my harmless brand of mental schadenfreude and the in-your-face commercial variety.

Real Estate Agent - The Second Worst Job In America Today

The Orange County Register. "Orange County real estate agents collectively earned about 13 percent less in commissions from home sales last year than the year before. And their income was down about 42 percent from 2005, shrinking by $645 million in the past two years."

"The reductions, spurred by two years of declining home sales, prompted more agents to either leave the business or find jobs elsewhere, while offices either closed or merged with other brokerages. Real estate brokers also reduced agent positions while cutting support staff and costs."

"‘The industry as a whole is definitely taking a gigantic haircut in commissions,’ said Steven Thomas, president of RE/MAX Real Estate Services of Aliso Viejo."

"Forty-five percent of all agents affiliated with an active Orange County real estate office had no income last year from commissions, said Patrick Veling, president of Real Data Strategies Inc. of Brea. Of the 55 percent of agents who had a sale last year, half did just one or two transactions apiece."

"To put that in perspective, a sales agent’s typical commission split amounts to a fourth of the overall commission, or about $8,900 for the sale of one median-priced home in 2007. Fewer than 28 out of every 100 agents did more than two transactions last year, according to Veling."

"‘We have too many agents in the business. This will filter them out,’ said Bill Plattos, broker for a regional chain based in Costa Mesa. ‘People thought it was easy. They muddled it up. Some of them were unprofessional.’"

"Virtually every agent knows someone who’s gotten out of the business, although most who have taken employment elsewhere say they’re keeping their licenses active and trying to keep a hand in the trade."

"One agent, saying he earned just $12,000 last year, took a job at a fitness center to cover living expenses."

"Edward Campbell of Midway City launched his real estate sales career in early 2007 but after six months realized that residential sales were not for him. He switched to commercial real estate."

"Campbell recalled holding two open houses in early 2007 to which nobody came. Those days followed attempts to market the house, then time spent setting up signs and flags. Only to end up spending the day sitting in an empty house, hoping somebody would show up."

"‘It was just boring,’ Campbell said. ‘It was just standing around doing nothing.’"

Okay now, I tried to find some worse jobs (pictured above) but I am sure they pay more than $12,000 per annum. (Don't forget sewer diving.) I have no sympathy for anyone who "loses" income. Y'all have to remember, when us traders have a bad year, it's a NEGATIVE one. Anyway, the agents out there who hustle will still do quite alright - it's the 25 year old newbies and part-timers who are done.

The only job worse than real estate brokering today is, of course, mortgage brokering.

Friday, March 28, 2008

Agitprop Update

"The oil companies, the predatory student loan companies, the insurance companies and the drug companies have had seven years of a president who stands up for them. I will be a president who stands up for all of you...."

That's a quote from Hillary Clinton's campaign speech yesterday.

I must admit, I haven't heard the expression "predatory student loan companies" before. It must be a new bogeyman.

Short JP Morgan Chase - And My Trading Update

Nothing but dividends for the past decade...

Last week, it was formally announced that JP Morgan Chase would up its approximate $2 bid for Bear Stearns to near $10 a share. JPM climbed 2pts and I got short at 47.18 because well, I didn't see that as "bullish" for the stock.

Shoot first, ask questions later, right?

Then I got to looking at its shorter term chart and discovered an interesting pattern. JP Morgan Chase is clearly in a downtrend over the past year and its slide has been peppered with sharp, fleeting bounces. I'd classify this pattern as a short-seller's delight. What a wonderful thing it is to whack a stock and get paid so quickly!

Not even a week later and JPM is down to 42.86. It's too bad I shorted a piddling of a position.

Here is as good as place as any to update my trading travails.

I am currently short BAC, COF, JPM, HBC, WFC, FED, FNM, HRB, WB, and SPG.

Only SPG and HBC have really clobbered me - so far.

The only stocks I am long are GOOG and FMD - the latter sort of being a hedge against my rather large and growing portfolio of financial shorts.

I have been completely annihilated and thus shaken out of my Treasury market short (30 year bond). Though with the stock market melting down, gold having recently cleared $1,000 an ounce, and oil at $106 per barrel, I think it's fair to say that my End-Of-The-World Trade was for the most part intellectually correct.

So how come I am still impoverished? Well, Treasuries of all maturities exploded in the flight to "quality", er insanity. In fact so many institutional investors and worrywarts are scrambling for them that there is somewhat of a physical shortage in the marketplace. These clowns think Treasuries are safe, well, they're going to learn otherwise when government debt gaps down one day and never looks back. There's already been a panic "run" on the dollar - so a "run, to the exits", on Treasuries will be as unsurprising as the current housing crash was. T-Bills and T-Notes can easily gap down 10%-15% from these nose-bleed prices. And, as for the temporary shortage, well, our bankrupt Federal government has already pre-solved that problem with the Medicare and Social Security promises. They have already started increasing the size of weekly Treasury auctions - as they well should do at these prices.

(The only problem is, the Feds are using the added cash, and then some, to buy up toxic, distressed mortgage debt that's probably going to zero when the long bond implodes.)

The current financial panic is pretty darn scary. People are worried about the integrity of every part of the system. Is your money in the bank safe? Some people have advised moving funds to "trust banks". Are CDs safer than money markets? Do you have funds at bankrupt institutions like Washington Mutual, National City, or First Federal?

Personally, even with no equity or real estate exposure, I must say I am pretty darn scared of how this drama is going to play out. The government is in a full-blown panic, legislating, bail-out mode and we haven't even faced job losses or tax revenue declines, yet.

Now to cheer you up even more, MAKE SURE you watch this video of James Grant.

It's very important that y'all watch that clip. Happy dis-investing!

Thursday, March 27, 2008

On Creativity

Throughout my life I have always considered myself to be "uncreative". I simply could or did not build, imagine, or produce anything. In fact, I reckon this blog is the first and only tangible thing I have ever produced in my entire life.

So why wasn't I creative? I always assumed I lacked the gene but have since dismissed that explanation. In fact, I am feeling my creative juices swell these days, so much so that I am even contemplating writing some fiction! So apparently I do have the capacity to imagine. Heck, most of my utterances are total BS anyway - how much of a leap is there from that to the land of make-believe?

Here's a long (20 minute) clip of Ken Robinson who asks, "Do Schools Kill Creativity":

Ken brings up the point that modern schooling is only 100 years old and that it was set up to serve "industrialists" by emphasizing math and literacy instead of "creativity". He doesn't dare mention the "political mind control" aspect to his progressive audience. It's not even clear that he understands that phenomenon. But his talk is peppered with decent jokes and has at least a palatable thrust, so there's reason enough to watch it.

So, does mass schooling in fact kill creativity?

Of course it does. It saps that and a few other core human potentialities.

The last two books I've read were on Mark Twain and Walt Disney - two towering examples of American creativity. Perhaps, I can soon do a more involved post on them and the subject in the future.

If I could only create free time...

Wednesday, March 26, 2008

Mail Order Bride Fulminations

In the course of my continuing self-educational program I happened to peruse old friend Perry Eidelbus' blog recently. On it I saw he had another net altercation and proudly linked to it so we could all behold his....idiocy?

On he was arguing with one "Hashfanatic" about something when the debate escalated to old-fashioned invective. Some of Perry's choice words:

No sh* think?

I should have known you'd resort to this vapid socialist rhetoric.

Complete bullsh*t. Do you even know what the hell you're talking about, or do you have to lie to promote your agenda?

You're just jealous that you saw my blog and realized my fiancee is far more beautiful, far more of a real woman, than you could ever hope to have.

Ah yes, you couldn't resist going back to ad hominem...

Make me, *sshole. You just try, and I swear to God in heaven, you'll have so much 7.62 mm in your *ss that your descendants will think they were born with buckshot.

You say "good night," and I say "go to hell." You just name when, and where, and I will deport your sorry face into the pavement.

Listen, f*cker, you're the one who threatened to "deport me." You want to threaten me, fine, but be prepared to reap the consequences. Go right ahead and try, because it will be the last, I swear to God, the last action you'll take.

c*nt-faces like you

...before I open up another can of whoop-*ss for you.

Name the place and time, punk. Then again, we all know you're just a coward.

Note that the ellipses are mine - I've got to keep my blog moving through those parental content filters.

So how does this involve moi?

Well, there was a part of the exchange that sent me reeling with laughter:

Hashfanatic - Perry? Do you think it's wise to threaten people with firearms over the internet? Particularly with your stellar relationship with the NYPD, and a third-world mail-order bride on the way?

Perry - ...if you insult my fiancee again with the lie that she's a mail-order bride, I will beat you within a millimeter of your sorry life.

Now allow me to explain why this is so doggone funny.

Flashback to January 14th, 2008 - that was the date of my uproarious post The Mail-Order Bride - An End Around.

When I posted it, I figured that if Perry had a brain cell in his dome, that he'd ignore my post to at least limit dissemination. I am right sure he saw my jab, either via an email alert on his name or through his own blog traffic. For all I know, I may have only sent him 3 clicks on his blog. So he likely steamed in private until someone else accused him taking the Mail-Order route. His AlarmingNews spat came two weeks later on January 27th.

Now this is pure conjecture but it looks like Perry was going to ignore my provocation but once another combatant nailed him with his UPS bride, he figured he better address the fact that, for all intents and purposes, he was looking like a mail-order bride purchaser. So, the tool decided to respond to my post.

What a mistake that was.

Here's the link to his retort which posted February 14th. In it he asserts that I can't afford a plane ticket to the Philippines, that I am a "moron", a "typical liberal", that I "beat my wife", among other comically ludicrous accusations. Of course the tough guy threatens my physically, again, over the web. He's certainly mastered the art of the template tantrum - "Liar, liar...FU...I'll beat you up" - Yaaaaawn. Y'all are probably going to have to read the entire post to grasp its inanity.

Now it gets even better.

The next thing I know, my original Mail-Order End Around post is getting slammed with hits. My tracker indicated a ton of clicks from the Philippines and Utah via Perry's artless post. Utah I believe is where Perry's extended family hails from. And the Philippines, well, I am sure it had to be the Mail-Order Bride and her family reading about her, well, Mail-Order characteristics - and not to mention the unbecoming portrait of her purchaser betrothed.

So Perry succeeded in alerting all his readers, fans, friends, family, and future in-laws (pending Homeland Security clearance) to my biting post.

Don't y'all think he should have stuck to his original plan of ignoring it?

But I am the "moron"...

Recently I emailed Hashfanatic,

I was just reading your hilarious "dialogue" with Perry Eidelbus from an AlarmingNews post (1/27) when I busted a gut laughing.

Tell me, did you discern the "mail-order" status of his "fiancee" from my blog post?

Or did you put 2 and 2 together yourself?

Hash responded that he didn't see my Mail-Order Bride post, that his riposte was of his own creation. Ergo, Perry faked himself out. Remember from above, I conjectured that the only reason Perry published a response was because Hash was belting him with the same stick as yours truly. The whole thing reminded me of Seinfeld's The Red Dot episode:

Elaine - Hey George, did you buy that sweater knowing that red dot was on it because you could get it at a discount?

George - What? Did I what?

Elaine - You did didn't you.

George - Elaine, I'm, I'm shocked. I'm shocked. Here I go out in the spirit of the season (Elaine looking like she's not buying a word of it) and spend all my savings to buy you the most beautiful Christmas sweater I have ever seen to show my appreciation to you at Christmas and this is the thanks that I get at Christmas.

Elaine - Well Jerry told me that you did.

George - You told her? How could you tell her? I told you not to say anything.

Jerry - I didn't tell her you stupid idiot. She tricked you.

See what I mean when I said:

Well, when it comes to Perry Eidelbus, it seems you can put the poop ten miles away from him, send in in the opposite direction, blindfolded, and he'll still end up walking on it.

...the other day???

Now a poster named Contractor left a very well written indictment of Perry on my blog and the Petulant One devoted another entire blog post to addressing it.

Contractor accused Perry of being somewhat "racist" for explicitly wanting to marry a Filipina. Perry insisted he was not; he insisted that he was "traditionalist".

Only later on in the post could readers grasp the full meaning of that defense. Apparently the tradition in his family is to strike out in America and then resort to finding a spouse in the Philippines. He writes:

I've been thinking of moving there, as a matter of fact, as my father did. He went there on business, to invest in mining operations with some friends, and then he happened to meet and fall in love with someone he met at a party. So my father also married a "mail-order bride" too?

Like father, like son. Is there any doubt that the loserhood is genetic?

Is there any doubt that Perry Eidelbus is about as self-oblivious as one can get?

Man, his self-emasculating revelations seemingly have no bottom.

Lastly, some "childhood classmate" of Perry emailed me a pic of little Perry from way back when.

Now I am skeptical as to whether this really is little Perry. Nonetheless, it may as well be.

Same amplitude. Same dorkitude.

Oh boy, now I've done it. I really hope Perry threatens me with his gun this time. I feel that if anyone (Hashfanatic?) merits a virtual gun waving it's me!

I've got to end this here; and I haven't even gotten to how Perry pathetically tried to rat me out to Google for using his "copyrighted" images. What a "libertarian"!!!

UPDATE - Perry has blocked my direct links to his posts. So to get to his blog from here, one must right-click on my links, copy the shortcut, and paste into another browser tab or window. For more on this childish tactic of his - click here.

Tuesday, March 25, 2008

Marginalizing Peter Bernstein

John Maudlin's newsletter gave the stage this week to Peter Bernstein. I suffered through the tedious piece waiting for a whiff of insight when I came upon this doozie of a paragraph:

The root of today's problems in the financial markets and in the economy as a whole is the household sector. The point needs no elaboration, but its significance cannot be minimized. As we have argued on more than one occasion, the shrinkage in the personal savings rate is not the result of consumer profligacy, as other commentators persist in describing it. Rather, the savings rate has been suppressed by a slowdown in the growth of household incomes.

At this point, your Commi-dar should be blaring.

Yeah dunderhead, our neighbors with their BMW, adjustable mortgage, cleaning ladies, who eat or order out every meal aren't saving because those evil businesses aren't paying them more.

They are borrowing because they have to? My butt they are.

How about this Peter, "if you make less money, you should spend less" - no matter what the reason for your earnings shortfall???

Surely they can work sage advice like that into the lofty curriculum at Harvard, no?

According to Wikipedia, Peter Bernstein is a 89 year-old Crimson alum. I don't care what he did or how sharp he was a half century ago. At this point he's a decrepit agitator who doesn't merit an audience. Kind of like that other spotlight-craving egomaniac.

These Morons really do live in an alternate universe where up means down, right is wrong, and cause and effect are conflatable. Bernstein reminds me of those smart guys who were insisting that social problems like hunger, obesity, and expensive healthcare explain why public schools stink. Here is the link for that one. I'll warn you, it is a long, edifying post - albeit mostly on Health Savings Accounts (HSAs).

Saturday, March 22, 2008

Nanny Criteria

If you are, by chance, one of these people that's proudly resistive to popular culture and hasn't yet seen Brooke White perform on American Idol, watch any of the clips you find here.

She also has a beautiful personality to match her obvious talent and stunning looks. No matter how she does on the show this season (ten contestants left), I get the feeling she is going to a star recording artist for years to come.

In her pre-American Idol life, she was a nanny who, as my wife unequivocally stated, "WOULD NEVER BE HIRED TO WORK IN THIS HOUSEHOLD." There's no way my wife would let her babysit and "play house" alongside this author on a daily basis. In fact, in the CraigsList ads my wife has specifically stipulated, "Wanted - Homely Lesbian Babysitter".

Now here's another nanny that my wife would never hire - even for $2.50 an hour.

Searching for that pic, I was led to a blog titled I Saw Your Nanny.

Immediately I said, oh boy, what kind of soft porn site did I stumble upon here? In the interests of journalism, I just had to investigate further.

Turns out to be some type of anti-nanny site where all sorts of people submit content on nanny observations. It's, among other things, a rat-out line for NBB - Nannies Behaving Badly.

On Friday March 14th 2008 around 12:00 pm I witnessed a nanny that makes the rest of us Nannies look horrid. I was at the park near Shepton HS and Huffman Elementary,off Plano parkway in West Plano TX, with my charge when I saw a little girl all alone on the playground. The girl had blonde hair and was wearing red pants and pink Crocs. There were teenagers swinging nearby but I knew she didn't belong to them off to the other side of the park about 100-200 ft. there was a young Hispanic woman wearing a gray sweatshirt and an older Hispanic man that when it dawned on me that the little girl must be this woman's charge. My biggest problem was that this woman wasn't paying attention to her charge and the little girl was only about 1. You cannot leave your charge alone like that that's horrible and irresponsible.

The site clearly gets a lot of traffic. People, mostly women, really do enjoy reading this real world gossip. The fact remains, nobody cares about the economic nuances of homeownership and the other stale motifs of my blog!

Now getting back to the full-mooning nanny pictured above...

They say that plumber's butt is "the new cleavage" - heck, it's got a Wikipedia entry. Even with my wife's strict hiring criteria, I have been personally mooned by no less than three of my sitters over the past couple of years - though they were more of the crescent variety. I must say I found it a little discomfiting. Two of them even skipped the thong altogether!

Experts say the thong is on the way out - but, according to my googling, they've been saying this for a few years now. At the bare minimum, they should at least legislate a size limit.

Lastly, here's a hilarious video spoof on the original plumber's butt.

Friday, March 21, 2008

The Virtuous Paternalist

Look at this new show on HGTV:

In the opinion of many people, I am a meanie. I am always mocking and Marginalizing and thus brushing off flack from weak-stomached wimps. But this blog can't possibly transmit the full gamut of my psychological omnipotence. If getting under people's skin was an Olympic event, every four years the rest of the world would be vying for the silver. I fire virtual BBs at a twit like Perry Eidelbus and my high-minded fans are taken aback. Y'all should see the nukes that I fire in person! Y'all should see me when I have a serious beef with someone. Let's just say, there were more than a few new traders in my pits that I kept from sleeping at night. One of my victims once brought his wife down to the floor (nothing any 3-digit IQ'd person would ever do) and after I was identified to her, I swear it took all her fortitude not to run over and gouge my eyes out. I was sort of the opposite of Joe Popularity. Instead of being the guy whose affection everyone sought, I am a guy whose dis-affection no one relishes. Even guys who hated my guts would choose me for their pick-up basketball team; they just didn't want to play AGAINST me.

Anyway, I can be whatever the situation dictates. I can be the malicious Marginalizer or I can be the benevolent one. Like most psychopaths, I have convinced myself that my methods are truly in everyone else's best interest; my antics behoove the greater good.

For example, look at the "before" and "after" pics of a family member's cluttered basement. Now, I can't claim full responsibility for this particular triumph as there were multiple interventionists, nonetheless, I like to think posting the "before" pic on my blog played some small part in the (partial) de-cluttering - not to mention the months of in-person ribbing included in my service.

Is it cruel to put up a "Hurricane Katrina" pic of a dear relative's basement on the World Wide Web?

Well, what if it impels them reform?

Believe me, I have better things to do than mock Perry Eidelbus. But I am morally compelled to show him this tough love. Look at it this way, if someone else had smacked him down to size years ago, I would be relieved of the task. So who really is the virtuous one? I submit that it ain't any of those weak-stomached wimps who've given Perry a pass all his life. Those anti-interventionist buck-passers unwittingly let him grow into the animal insect that he is today. He's a very bright kid who will one day be thanking me for setting him straight. By the way, I am pretty sure he tattled on my last post to Google (owner of

So, what about my methods?

As a youth, I used to whip my older brother's ass at ping pong. After a while I couldn't get him to play with me at all which really sucked. He said that he didn't mind losing to me, he just didn't like the "supercilious" or "hectoring" manner in which I beat him.

Now, did my brother learn from my domineering, smash-the-ball-so-it-bounces-off-his-face, ping pong lessons? Did it inspire him to concentrate and become a better player? Of course not. He threw a hammer at me - just missing my precious dome. In fact, he once pushed me down an empty man hole. Another time he pummeled my head with a sizable log. And when my head is shaved you can see at least a third scar on my scalp that memorializes our fraternal rapport. These all weren't post-ping pong incidents but they shed a little light into the upbringing that shaped my Marginalizing methodology

We were four kids raised in 1,200 square foot house. There were only five years from oldest to youngest; we fought a lot and teased even more. No one was immune. My thick skin was surely environmentally wrought. Admittedly, one of my biggest character flaws is that I too often presume others to be equally insensitive to goading, ribbing, and outbursts of brutal honesty.

To all my style critics out there I say, "Hey, you should have seen my immature antics a couple of years ago....I AM MAKING PROGRESS."

Another thing about me is, if y'all didn't figure it out by now, I've always got a rejoinder, or three, ready to fire back at a moment's notice.

Lastly, there's an expression that goes like this, "If you put the poop out in front of them....they'll [Morons] always step in it." Well, when it comes to Perry Eidelbus, it seems you can put the poop ten miles away from him, send in in the opposite direction, blindfolded, and he'll still end up walking on it.

I have a nice little post on him raring to go, but in the spirit of Easter and my "progress"....I won't post it until next week.

Thursday, March 20, 2008

Abby Joseph Cohen - Too Bullish On Stocks, Too Bearish On Planet Earth

Goldman Sachs Perma-Bull Abby Joseph Cohen made the news this week.

She was demoted:

Goldman's Cohen Replaced as Chief S&P 500 Forecaster

By Lynn Thomasson

March 17 (Bloomberg) -- Abby Joseph Cohen, the second-most bullish Wall Street strategist at the start of the year, was replaced by Goldman Sachs Group Inc. as the bank's chief forecaster for the U.S. stock market.

Cohen, 56, gave up the title of chief investment strategist and will no longer make predictions for the Standard & Poor's 500 Index in her new role as senior investment strategist, Goldman spokesman Ed Canaday said in an interview. David Kostin will make the calls as U.S. investment strategist.

Kostin, 44, said today he expects the benchmark index for U.S. stocks to fall 10 percent to 1,160 in the "near term" before rebounding to 1,380 by year's end. Cohen in December predicted the S&P 500 would reach 1,675 in 2008.

"Sounds like it's a downgrade in a position," said Andy Engel, who helps manage $4.3 billion at Leuthold Weeden Capital Management in Minneapolis. "People have been disappointed in her outlook over the years, and she's been pegged as overly bullish on the market."

The S&P 500, which has fallen 13 percent this year, lost 0.9 percent to 1,276.60 today.

Cohen, known for her bullish predictions during the 1990s, will develop public policy ideas related to capital markets as president of Goldman's Global Markets Institute. She wrote about growing investor interest in climate change and covered a United Nations meeting on the subject in a report dated March 14.

Her year-end forecast for the S&P 500 at the beginning of 2008 was second only to the prediction of 1,700 from Bear Stearns Cos.'s Jonathan Golub, HSBC Holdings Plc's Kevin Gardiner and UBS AG's David Bianco.

Cohen at the start of 2007 expected the S&P 500 to rise 9.3 percent to 1,550 that year, then raised her year-end forecast to 1,600 on May 7, when the S&P 500 stood at 1,505.62. The index ended 2007 at 1468.36, 8.2 percent below her forecast.

Anyone who's followed the market over the past decade knows Cohen as the dimwit who screamed "Buy. Buy. Buy" the entire way down from NASDAQ 5,000 (to 1,135!). You'd think they would have sent her out to pasture after that. Apparently Goldman isn't comfortable with her as the firm's mouthpiece for a second market meltdown this decade.

Now I could give two hoots for travails of this particular woman. But one thing that struck me from the article is the color of Abby's new pasture - green.

Cohen will work with clients "around the world and provide commentary on financial markets focusing more on longer-term market activity," Canaday said in an e-mailed statement.

"I spend half of my time traveling overseas, working with our clients on issues like environmental sensitivity, regulatory matters and accounting," Cohen said during in an interview today.

I did some googling and found other evidence of her green fetish.

Abby Joseph Cohen, managing director at Goldman Sachs, noted the public was not yet rewarding sensitivity to climate issues in the marketplace or at the polls. "Someone's obviously buying and driving those S.U.V.'s, and they are voting," she said. link

Ms. Cohen outlined the obstacles where leadership is needed to improve financial assessments of climate change risks. "The data by itself is not good" to measure the impact. The time horizon of institutional investors is increasingly shorter, creating a mismatch between long-term objectives and short-term demands for portfolio management. Furthermore, she said, it is "very hard to find any studies in environmentally sound investing strategies that have led to better returns" than those of broad market indices. link

"Investors believe it is simply not acceptable to be environmentally irresponsible," link

Admittedly, those quotes don't paint her as the second coming of Al Gore or John Doerr, but mark my words, I am sure Abby Joseph Cohen swallows the whole "climate change" fable.

Quite frankly, nobody could indulge the inanity by globetrotting in furtherance thereof, if they weren't aboard the looney eco-pagan train themselves.

Cohen is a weird bird to say the least. Most people mistakenly assume she is a lesbian based strictly on appearance and stereotype. I'll say this, if she is, her husband and two daughters are tremendous cover! Others find her monotone manner of speaking to be off-putting - though it isn't very pronounced in the only video of her I could find on youtube. (Take comfort, in it she predicts "no recession" for 2008.)

If we can be chauvinistic for a second...

Nor is she steeped in femininity, with a man's name "Joseph" and those unadorned ears. I don't have a problem with women who keep their maiden names; I have a problem with their wuss husbands. You could be the biggest alpha male in town, but if your wife keeps her name, make no mistake, every guy around is mocking you. Now read this queer statement Cohen made for Businessweek:

"Every male CEO in the country should be required to have a working wife."

What? Is she prejudiced against domesticity? Against tennis clubbing trophy wives?

Does she think kids are best raised by Latin American nannies?

Like I said, she's a weirdo of uncertain utility. A Perma-Bull is essentially worthless as they don't even provide good contrary indicators. For that, I find the incontinent blowhard Jim Cramer far more useful.

Go save the planet Abby, you've killed enough portfolios already.

Wednesday, March 19, 2008

Obama's Theocracy

"When God created the Earth he entrusted us to take responsibility to take care of that Earth,"


A Creationist has infiltrated the Democratic Party.

But on the other hand, he does speaks ill about those who have "hijacked religion".

I guess what we can infer from these somewhat contradictory sentiments is that "religion" should only be "hijacked" in the furtherance of eco-paganism.

It takes some stones to literally drench one's campaign rhetoric with religiosity and then turn around and condemn others for similar politicization.

Rumor also has it that he has been known to say "G*d bless you" in the presence of sneezers.

If I were a militant atheist, Islamist, or whatever, THAT would offend the bejesus out of me!

Big Government As "Victim"

With a reeling economy, it's hunting season for statists. They'll be ramping up the agitprop against sundry timely bogeymen: "volatile financial markets", Wall Street, predatory lending, the "credit crisis"...

So Boston's Turnpike Authority is facing rising debt payments. Was it Wall Street that forced it to borrow short for its long term infinite obligations?

Note this article from the Boston Globe used the subtitle - "Authority a victim of recent turmoil in finance markets"

That's right, while glibly mentioning a recent toll hike (January) and adding more tolls to "create a fairer toll system", Noah Bierman's article paints Big Government - not taxpayers and commuting wage slaves - as the victim.

"At the same meeting, the authority's board discussed a preliminary report on how to create a fairer toll system, which could mean adding tolls in some areas that are currently free, including the Interstate 90 extension. Cohen said the board remains in a "research phase" on the toll issue, which will take four to six months as the Patrick administration looks for cost savings elsewhere.

Cohen has been cautious on the issue, trying to steer clear of controversy since an aide public discussed adding tolls to Interstate 93.

But the report from Cohen's staff suggested Turnpike Authority officials might look at reinstating some Western Turnpike tolls for cars, as well as a Newton toll that ended in 1996. The report also said that the state could add an optional toll lane on I-93 that would let solo drivers use the carpool lane if they pay a fee. That idea, often called a HOT lane, has been raised in the past and has gained support nationally as US Secretary of Transportation Mary Peters has encouraged states to try it.

What would this discussion be without a mention of "carpooling" - as if that has anything to do with the incompetence of politicians whose solution to every problem of their own creation is a tax hike, a scapegoat, and these days, a rhetorical bone thrown to eco-pagans?

Y'all need to believe me when I tell you that Big Government is the biggest subprime borrower of them all.

Think about it. What exactly is the difference between your irresponsible neighbor with the adjustable or interest-only mortgage and the pols who build schools, roads, and tunnels with short term financing?

They both presume growing income and they both presume indefinite benign borrowing environments.

And "resets" and "recessions" are going to kill them both.

If only Big Government were going to die - instead us taxpayers will bear the agony - and it will morph into Bigger Government.

For example, my landlord is aboard the express train to bankruptcy. On the $600,000 (at best) house I rent from him, I just found out that his current $5,200 mortgage payment is scheduled to reset at over $7,500 per month. It's been tragic to hear him cheer every Federal Funds rate cut since September as they've been powerless to stave off his inevitable foreclosure. To his credit, he's refrained from blaming bogeymen for his plight - though he hasn't admitted to any personal culpability either.

Furthermore, just as homeowners are facing the double pain of a weaker job market and commodity inflation, municipalities are, and will continue to be, ravaged not only by sky-rocketing financing costs, but also withering tax revenues. Receipts of every stripe are spiraling down: property taxes, sales taxes, income taxes, corporate taxes, etc.

In fact, outside of commodity prices, it seems everything these days is dropping.

Note the very last thing to expect is an uptick in political competence.

Poor Big Government...just an innocent bystander caught in the crossfire of Wall Street greed.

Tuesday, March 18, 2008

Bear Stearns, Run By Meatheads?

Sorry for the poor chart. Click to enlarge.

This was the wild ride last Friday morning for Bear Stearns, an erstwhile major investment bank rumored to have "liquidity issues".

Where do you think I sold the BSC that I bought Thursday at $51.69?

Alright, I'll tell you. God forbid I tax your brains.

I sold it at $58.40 a mere 10 minutes before the spike (see the intraday chart above). I cursed myself for all of five minutes. Then after the nosedive began, I started tooting my horn. Bear Stearns closed the day at around $30 a share - well below the boundary of my chart.

Then this weekend, in lieu of filing for bankruptcy, sold itself to J.P. Morgan Chase for a whopping $2 a share.

There are plenty of other places to read and discuss the debacle. Find them on your own if so interested/ignorant.

I just wanted to offer this one little anecdote about Bear.

Now, fortunately I don't have any friends that work there. Though one of my wife's former bosses "just went to work for Bear Stearns" (it'll probably be a short-lived tenure as rumor has it that JPM is planning to reduced headcount by 50%).

But I did interview for a job at Bear about 6 years ago. In fact, the job opening was on the mortgage desk - the very desk that brought down the firm. For the interview I met with three gentlemen. The first two rounds went well, but then I met the honcho - Josh Weintraub.

This unmitigated a**hole came in, took one glance at my resume and snapped, "You're strong at math, huh?" He looked up, "What's eleven sixty-fourths of $27 million?"

I answered, the best I could off the top of my head. Then he asked me another one, and another one and another one, "What's twenty-three thirty-seconds of $61 million?". I might very well have gotten them all wrong; he was going so fast and demanding quick answers, I couldn't remember.

After this display of his superiority, he asked me a few things about my experience, patronized me some more, and abruptly left. Suffices to say, he didn't hire me, which was fine. At least I got to speak to three different people. I've had more frustrating job hunting experiences where the interviewers didn't even ask me a single question. I've also had my time wasted by job postings and interviews where there was clearly never an intent to hire anyone.

Supreme arrogance is not something that I can't handle - thanks to six years in a trading pit with lowest multi-millionaire scum of the earth. But what irritated me about Josh Weintraub was that he could see my math creds and my pit-trading experience yet he deliberately tried to fluster me. So he was fluent in sixty-fourths of large numbers - I bet if I asked him what 7 7/8 - 2 11/16 + 5 1/2 - 13/16 was, he wouldn't be able to compute so rapidly or accurately. (At the time, that would be the quick math an option floor trader would be proficient at.) The fact is, nobody can do the rapid computation right away - it takes practice. To put it mildly, there is nothing about my Olympian math credentials that should ever make another human being question my quantitative abilities.

My pachydermal memory may have even forgot this egomaniac if I hadn't 1) seen him in Trader magazine recently and 2) been thinking about Bear Stearns amidst it's demise.

The Senior Managing Director of Mortgage-Backed-Securities recently flexed his ego and muscles at some Wall Street charity boxing event. Good for him!

Now, let me ask you a question: From a profiling standpoint, does this big shot look like a savvy, intellectual who's competent to to be juggling billions of investors monies?

Or does he look (and sound) like some Cro-Magnon, meathead footballer you hated in high school?

They say that 30% of Bear Stearns' stock is owned by its employees.

Here's hoping that Josh Weintraub was arrogant and stupid enough to own just a few too many shares. I should email him,

Hey Josh, real quick, no paper, what's eleven sixty-fourths of your personal net worth?!?!?!

In all frankness, with the billions of losses Bear posted in 2007 and all the lost brokerage assets (starting in August), why the heck didn't Bear fire its head of MBS Trading?

Because he could box?

Sure, it must have been someone else's fault.

If you think I am being pretty harsh on a guy based on some 5 minute interview years ago, then you are probably right.

Though, in fairness, he was gratuitously rude to me back then.

And, if you find my schadenfreude towards a guy who likely helped obliterate the net worth of 14,000 of his co-workers (not to mention shareholders) to be a little overdone, than you ought to head over to the comment threads of Calculated Risk.

The denizens of that blog have an unsettling fetish for the misery of others.

I drop in there once in a while just to make myself feel charitable.