Wednesday, April 30, 2008

Captious Observations

So I was checking out this site that Thomas J. sent me and I came upon this Moronic nugget:

That comment was in regard to the HBO series John Adams. So Benny Franklin invented electricity? Crap, all this time I thought he had DISCOVERED it.

I perused some more and DISCOVERED that the website is just a bunch of puerile meatheads discussing sports, guessing the owners of faceless chick butt shots, and apparently it ventures into the realm of high brow American History - HBO style anyway.

What's worse is that despite 71 comments in the thread, no one corrected the blog author. To think, we wouldn't have any lightening without Ben Franklin's "invention"...

Then yesterday I stumbled upon the above nugget by ESPN's ace Bill Simmons. Click to enlarge if needed.

Okay, if he's going to use the word imbroglio AND draw attention to it ("Love that word!"), shouldn't he at least spell it correctly?

It's a great word but I would encourage pedants utilizing it to at least get down the spelling and proper pronunciation. By Google's count, this will be my fourth usage of the word on Marginalizing Morons!

im·bro·glio [im-brohl-yoh]
1. a misunderstanding, disagreement, etc., of a complicated or bitter nature, as between persons or nations.
2. an intricate and perplexing state of affairs; a complicated or difficult situation.
3. a confused heap.

An imbroglio could also be referred to as a scabrous situation.

Now Bill Simmons is a guy that I have mixed feelings about. He is somewhat of a peer, being another New Englander who's only five years my senior. He did an end-around the closed Big Media establishment and became ESPN's star columnist. I have to respect that.

What I disrespect however, is his grand self-unconscious ego. Success has clearly gone to his head. Ironically, he's become a blustering know-it-all not unlike the "appointed for life" Boston sports columnists (Bob Ryan, Dan Shaughnessy,...) he out-maneuvered.

I can't imagine how many Captious nuggets I'd mine if I started trolling MySpace or

Monday, April 28, 2008

Understandable Incontinence

Check out this new rollercoaster in Ohio.

The last picture will say it all.

Thursday, April 24, 2008

Josh Weintraub - Round Two With The Meathead

My post Bear Stearns - Run By Meatheads has drawn quite a few hits - as I predicted it would. From my tracking software, it was clear that the magnetic target was "josh weintraub", the meathead.

I got hits from numerous people in the NY area specifically googling him. No doubt - it was his friends, family, enemies, co-workers, and definitely the meathead himself.

Today I find out he's been hired to sit on the board of ResCap - which is GMAC's teetering mortgage company. (link)

I predicted the following about GMAC back in January (link):

Countrywide is on the cusp of bankruptcy. Greenpoint shut down in August. And WaMu is obviously tracking in the same direction.

GMAC will be the next to go belly up - I've heard as soon as this upcoming May.

Well, yesterday ResCap/GMAC had its ratings slashed by Moody's:

The agency said it had cut ResCap to "Caa1," its seventh-highest junk grade, and in turn that it had also cut the rating of corporate parent GMAC to "B2," its fifth-highest junk rating.

GMAC was spiraling down the toilet anyway; BUT Moody's probably saw the hiring of two Bear Stearns guys (Weintraub and "mortgage whiz" Tom Marano) as the catalyst for this additional downgrade. After all, the ratings agencies job is ostensibly predicting these failures IN ADVANCE.

Now back to my job. The purpose of this post is - predicting history in the making.

ResCap/GMAC might make it past May, but it has little chance of survival into 2009. THEREFORE, Josh Weintraub will most likely have presided over TWO massive, ginormous bankruptcies in a single year!!!

Somebody call the Guinness Book of Morons.

By the way, I also found this video of Josh boxing in November. They were happier days to say the least. Note the profane, Neanderthal toadies cheering Josh on. See what I mean about Bear Stearns, having been run by "meatheads"? They don't hire intelligent people on Wall Street - they hire nephews and fraternity brothers. Anyone who's ever worked in Lower Manhattan is well aware of this long-standing policy.

(Hi, Josh. What do you think of my blog?)

I May Hoard Rice...But I Disseminate Wisdom

The price of rough rice has doubled since last July; I believe it's up even more (177%) since last April but I couldn't find a decent chart. This doesn't really affect Americans as much as denizens of poor countries. If you go back and look at my Food Around The World post you'll see that the emaciated family from Chad spends only $1.63 per week on food - most of which appears to be rice. So clearly, a sharp move in rice costs can easily decimate their budget.

Just this week many countries like Brazil, India, and Vietnam have reacted to this rice "shortage" by limiting, if not banning, exports. Then we got the dimwits here in California who've already started rationing rice based upon "purchase history".

I am going to be busy today cleaning my house so this post isn't going much further. One point I wanted to make on rice was that its price pop can be partly attributable to the soaring prices of other agricultural commodities. AND, as we all know, much of that comes from asinine ethanol mandates. Well done greenies!

The food riots and Third World unrest are just starting. Before it's all over, who knows what havoc this "shortage" will end up causing? Who knows how much blood will be on the hands of evangelical environmentalists?

I wouldn't expect the Third World to be celebrating Earth Day in the foreseeable future.

Wednesday, April 23, 2008

My Unhappy Earth Day

Hah! That cover was provocative to say the least. As I have said before on this blog - every American kid should be forced encouraged to read Flags of Our Fathers.

Can y'all believe that only one pagan wished me a "Happy Earth Day" this week?

I guess fraternity isn't a such a big part of this born-again religion.

I spent all day (a full 24 hours) idling my Chevy Suburban and running the faucets (apologies to the water-providing landlord) and NOBODY CARED.

I had to laugh at my mother yesterday. She is starting a "compost pile" - can you say sheeple? I asked her if she was doing it "properly". Yes, she insisted. I probed further, "Is it elevated from the ground?" - to which she answered in the negative.

[Imagine my most derisive laugh here]

One of my old babysitters (I certainly don't research heathen rites) informed me that the compost pile has to be secured against animals, specifically raccoons in these parts. I also heard just now on the radio about some Moron in Marshfield, MA whose dog snacked from the compost and almost died. This is what is known in scientific circles as Moron Justice!

It's now April school vacation and since my mother, the government school teacher, had the week off, I shipped my kids out to her for the week. ERGO, I am basking in kid-free bliss. I played golf yesterday and will do so again on Friday. As proof that there is a God, he's bestowed 80+ degree sunshine on me today and I am cavorting outside topless!

So besides some golf, I spent the morning at the DMV getting my NY license exchanged for a Massachusetts one; heck, I've only been here now 2.75 years. It only took 90 minutes and, as y'all know, it's great people watching at the DMV. West Coast Tom got me scared last week. It seems that he got pulled over (solicitation?) in California and the fact that he never swapped his Mass license for a California one got his car impounded. Pretty harsh, no?

Otherwise, for the rest of this glorious kid-less week I plan on cleaning my entire house - scrubbing tiles, cleaning underneath ALL the furniture, doing the windows, cleaning the stove, vaccuuming the cars, and a million other things. AND, I am very much looking forward to it all.

Never in my previous life could I have predicted that a vacation would ever include Windex and the DMV!

Friday, April 18, 2008

Homeschooling Abuse

My son (NOT to be confused with the homeschooled Palestinian above) turned three this past November and it became time for homeschooling to graduate from an idea to a practice in our household.

Our little Johnny is now on a fast-paced curriculum of my design.

He can't hold a pen and write yet - but then again my penmanship is now but a notch above illegible doctor scrawl. He's learning his letters and numbers on the computer.

I pull up MSWord, increase the font size as high as it goes and he types away: his full name, the alphabet, words, and numbers. He even knows how to change the font color; and knows full well not to ever type in green!

It took some time for him to learn the keyboard but now he's got it down pat. Navigating with the mouse has been a breeze for a while now too. Since John loves to watch Transformers clips on YouTube, he had to learn how to click on the search box, type "transformers", and either hit ENTER or click on Search. Believe me, this lesson plan needed ZERO prodding! He's also known for a while how to click on an interestingly looking icon and play a different clip when the current video bores him. Invariably, his wanderlust would take him away from the Transformers videos and onto some other less interesting subject. At first he'd go ballistic and track me down in the house, "Dad, Dad, my Transformers are gone! They're gone!" So I showed him how to use the back arrow. He's learned to keep hitting it until he's back on a Transformer riddled page. Not bad for a kid still less than 3.5 years old, huh?

The other day my wife dug out this little Vtech computer that John's grandmother bought him a while back. John hadn't touched it for a while since it was stuffed in an unopened moving box; he was also a little too young for it last year. Anyway, my son was playing with it yesterday and struggling to find the letters it was telling him to type. My father (grandfather) was artlessly yelling at him, "No John, the H is next to the I". I looked up and realized that John was having difficulty because he was used to the real ASDF JKL; keyboard where the "H" and "I" do not abut. Of course my father thought that by asserting his 3.5 year old grandson was more adept on a conventional keyboard...that I was chock full of you know what.

I laughed and said, "Hey Dad, just because YOU can't find the letters on a keyboard doesn't mean John can't."

Everyone projects!

Thus far, John is much better with letters and words than he is with numbers. While Optimus Prime is a robust concrete image, the number 13 remains a difficult abstraction. Right now, all John can process about 13 is it's placement between 12 and 14. But before you know it, he'll get the handle and have moved on to twin primes and trigonometric identities.

So it suffices to say that our curriculum is currently much more focused on words: recognizing them, sounding them out, and spelling them on the computer. You've got it keep it fresh and continue to move onward and upward. Since he's moved past all the names of his family members I had him start typing the names of his friends.

So let me ask y'all a question? Is it an abuse of my homeschooling powers to continue to send my son up to his unlettered playmates and have him spell their names for them?

Is it wrong to do this particularly when their parents are within earshot?

Remember, I am new at this homeschooling thing and really don't know where the boundaries are.

Google - Lowering Price Target

2.5 years ago, I penned a post titled Google - Price Target $3,000. At the time shares were trading around $300 apiece. They've had a decent little run since then, topping out at $747 in late 2007 before crashing this year to a recent low of just north $400.

Google is bouncing violently this morning up 75 points to around $525 on an earnings report that has quelled investor fears of a growth slowdown.

Nonetheless, the trajectory of Google's climb since September'05 - the date of my $3,000 prediction - has not been nearly steep enough for me to maintain such an optimistic price target. Heck, from my posting ($300) to the recent low ($414), the stock was up a paltry 35% despite two years of a mostly decent economy.

In fact, I think the sluggish price action of Google during the semi-bubbly years of 2006 and 2007 portends tepid returns for the foreseeable future. Over that period, there were plenty of other stocks running *like it was 1999* - FSLR, CME, AAPL, and even AMZN to name a few.

So what could put some pep in Google's shares?

Well, I am not sure. A stock split would help I suppose. But then again, I think the larger issue is valuation. Google is a $140-$150 billion company and using roughly a $500 share price and $20 in EPS, implies that shares trade at 25 times earnings. Quite frankly, market participants aren't comfortable valuing such large companies at high PE ratios. It's sort of uncharted territory. Furthermore, what history the market has in slapping high multiples on large names, e.g. CSCO and MSFT back in 2000 before they cratered, doesn't exactly encourage a 30 or 50 PE ratio for Google today.

I do believe that what's retarding Google's stock price is the

1) the share dilutions of recent years.

2) the largess it showers on employees.

Read this excerpt from one of today's news stories on the recent earnings announcement:

Google earned $1.31 billion, or $4.12 per share, during the first three months of the year. That represented a 30 percent increase from net income of $1 billion, or $3.18 per share, in the first quarter of 2007.

If not for expenses to cover stock given its employees, Google said it would have made $4.84 per share.

That last line is if not bearish, it's definitely NOT BULLISH.

.72 a share in, most likely, restricted stock compensation???

Now you are talking about $3 per share on an annualized basis. AND, that's in a quarter where the stock dropped from $750 to $400. (What these companies do is buy the stock in the open market and then give it to their employees - I think.)

So looking forward, say shares were trading at $1,000 a piece, well then, would it not follow that Google's stock compensation item would at least double - to $6 per year in EPS? Meaning, if management has to go out an pay market prices, this "expense" will keep rising with and continue to choke off the accounting of earnings.

Devil's Advocate - Yo, as share prices go up, Google will do what all companies do and hand-out fewer shares to achieve the bonus targets.

Well DA, that may very well be the case, BUT, have you seen any sign that Google is throttling back? By the time it's trading 1,000, who knows how many more high-priced employees they'll have added.

I certainly haven't with their cafeteria and other perk anecdotage.

The fact is, as I heard someone else assert a while back, Google management might have the highest "Ego-to-Price" ratio in stock market history. They think because they launched a timely business model (web search advertising) that they can scaffold up to eradicating the combustion engine, among other utopia building fancies.

They think they can be cutting edge and growth-hungry while lavishly compensating their employees.

You know, many decades ago, when Walt Disney was the Google of its time, it paid its employees peanuts. The best and brightest went to work for Walt solely for the rush of "changing the world" (of entertainment anyway). This describes the tech bubble boom of the 1990s as well.

In Google's defense, it's not all their fault. In my utopia, companies would be able to grant stock options WITHOUT expensing them - as they legally could do before the bubble blew and the econo-illiterates in Congress got to work. Over the last few years, companies shifted what used to be long-dated, high striked option compenstion to the more short-sighted restricted stock grants.

Today I have to figure out what to do with the extra Google I bought at $508 a month or so ago. Should I dump it or close my eyes? Given that the bubble's implosion is well underway, it's very hard for me to optimistic about owning ANY financial asset in the near term.

And those of you who are long Google ought to be thanking ME for today's bounce - because in March, I bought a ton more at $428, held it nervously for three weeks, and dumped it at $432.

New Google Price Target for August 2010 - $1,000.

And just like all these hack analysts on Wall Street, deep-down I know that's probably waaaay too optimistic.

UPDATE - I dumped my 508 stock at 543.58, with Google up a whopping 94 points on the day.

Thursday, April 17, 2008

Real Estate Autopsy

Eleven months ago, in May of 2007, my wife and I bid on our first house in Hingham, Massachusetts. Here's the old post.

The house was listed at $750,000 and we BID (not "offered"!) $700,000. As far as I am concerned, that is a sh*tload of money to commit to for one's first home - unless of course you have a trust fund. I was pretty unsettled by the whole process. In fact, only when the seller refused to hit my bid (he came down to $720k) and it expired did I fully realize how nervous I was. I had such a sweeping sense of relief that losing the kick-*ss house was probably for the best - partly because of the geographical instability of Mrs. C-Nut's job and also because we really didn't know anything at all about the South Shore region. The thought that we would buy a house, move in, and discover we hated the area was nightmarish, to say the least. My wife was very disappointed and a wee emotional upon our bid's expiration - but that's what the women do, they fall irrationally in love with stuff, and occasionally undeserving men.

This post will catalog my interaction with the SOB seller and in doing so will illuminate some of the larger forces at work in this housing debacle.

Alias will be used.

Leroy - SOB owner and seller of the house

Lindsey - listing broker

BuyingBroker - didn't use one, you clowns. Only a Moron would.

C-Nut - himself

First, about the house. It was put on the market at near the very peak of the Massachusetts real estate cycle - December 2005. I don't know the precise offering price but I believe it was just north of $1 million.

Ten months later, in October 2006, with the house not moving, Leroy rejected/ignored his first bid of $725,000.

The house sat, and sat there on the market. By April of 2007, when my wife and I found it, it had been listed for 17 months now, and had just been lowered to $750,000. We absolutely loved the house. It had high ceilings, plenty of light, an open, flowing floor plan, and it was almost 4,000 square feet. There was a ginormous oak paneled room replete with a bar and fireplace in addition to the four bedrooms, study, dining room, formal living room, and a sunroom. There was something wrong here because even in this teetering market, homes much smaller in Hingham were selling for substantially more. It took some thinking and research but we came up with three possible explanations:

1) Folks in family-centric Hingham highly value a backyard. Though this house was huge, and sported privacy, it really didn't have much of a yard.

2) Folks in Hingham, in that price range, for a family-sized house like that, highly value a "neighborhood". This house was sort of off a main road and wasn't exactly on a quiet tree-lined street; they're just weren't tons of kids nearby who could entertain your own.

3) Folks in Hingham don't value contemporary homes; they like center-hall colonials - which I detest. So great, the market undervalues what I really like!

Given the house's attributes, we talked ourselves into decertifying the "no neighborhood" and "no backyard" drawbacks. After all, just about every house has its tradeoffs.

Now, Lindsey, the broker, couldn't have been more direct. She had just gotten the stubborn bastard to lower his price from $800,000 to $750,000. He insisted, and she relayed, the caveat the he wouldn't take anything less than $750,000. This guy will epitomize the reality-blind, market chasing seller of the past few years.

So my wife and I dug in and crunched the numbers. One thing that did concern me was the apparent un-salability of the house. If it wasn't moving then, in a slow market it should also expect to languish at least as much and trade at a steep discount to its theoretical value. Since we follow around my wife's career - from Philly to NY to Charlotte to Boston, to...??? - we had to assign a significant probability to the chance that we might not be there that long and thus forced to sell the house in the near future. Remember that selling a house costs $$$$: 5%-7% of the list price, plus closing costs, inspections, attorney fees, and boxes and moving trucks - so we are talking close to $50,000 of post-tax dollars, not even counting whatever loss you might take. The last thing in the world we wanted to do was buy a house, settle in, and then find out we have to move a few months later. This is what happened to us in Charlotte. We were not there six months before my wife's job got removed to Beantown. Thankfully, we had decided to rent down there.

The number we came up with for our bid was $700,000. It certainly wasn't based on "the most we COULD pay" but rather on more intelligible factors like where the real estate market was headed, what I expected the economy to do (i.e. tank), transactional costs, etc.

My wife wanted to bid around 675k and then end, via "negotiation", around 700k. As a professional bidder-and-offerer I refuse to play those amateurish games. I decided that we'd start almost at our limit, articulate that to the broker, and not budge. So we took a deep breath and made the bid official. It might have been live for a two or three days - my memory fails.

Now Leroy was beside himself. He spoke with the broker seemingly every day and was well aware that a bid was, finally, materializing. When it came in 50k below his recently reduced offer, he was devastated, literally. He was rendered so speechless that he couldn't even muster a counter offer, maybe he said 745k, I can't recall. One thing I do remember him saying was, "Well, they can't afford my house!" Can you believe that? But otherwise, Mr. Big Shot was so wracked with emotion that he turned over the entire process to his father! Now Leroy had relocated to Florida and his father was local, but c'mon - a middle-aged man who couldn't handle selling his own house? Bear in mind, from Lindsey, I had been informed that Leroy "owned a few businesses" including "a trading or investing type of firm". Keep this last detail in mind.

So the clock was ticking and new cast member Daddy, at the last minute, countered at $720,000. My wife half-heartedly implored me to go to 710k or 715k but I vetoed her. The fact is, we were exhausted from months of house hunting; we really didn't have much in the way of other options. The rental market is tough in Boston. Anything with 3-4 bedrooms gets pretty expensive due to college student demand (let me tell ya, my toddlers don't contribute sh*t yet for rent!). And in suburban Hingham, there was almost nothing for rent. Still, I saw little reason to capitulate - especially at this point. As I told my wife, that house has been sitting and will continue to sit there on this foundering market. Let him call us back in a few weeks.

My wife and I soldiered on. With 2-3 months left on our lease there wasn't really time to find, vet, and bid on another house so we focused on finding yet another rental. Lindsey kept badgering me over email because well, Leroy was pestering her. There was another "young couple" taking multiple, hard looks at the house. They were "probably going to make a bid"....

Imagine me yawning off these provocations.

The "young couple" did in fact make a bid. Six weeks after we were out of the picture, this couple matched our bid 700k for Leroy's house. And guess what, the SOB countered at $725,000, five grand higher than his counter to us! Into the teeth of this plummeting market, he had the nerve to fade his offer. I don't know, maybe he was working off a 2005 calendar or something.

The fact is, Leroy's ego was running the show. He had just gotten two $700,000 bids within a couple of months and figured he had found the price floor - as if the housing market was a static animal that could deteriorate no further. So after "losing" about 300k from his original personal value of the home (remember it started over $1 million), he was now going to get real serious about the last $5,000, $10,000, or $25,000. Above all rational considerations, clearly his ego feared "selling the bottom".

So it turned out that the "young couple" likewise didn't raise their bid; they walked away, and quickly bought another house in nearby Hanover. So Leroy had been jilted twice in succession now and the most recent potential buyer was completely out of the picture.

It's now the end of June and after much scouring we did find our current, glorious abode for rent.

Of course, as I predicted, Leroy's house was still sitting there a month plus after our failed bid. After losing the "young couple", Leroy (via Lindsey) reached out to us to see if we were still interested. Having mentally moved onward, here is the email I sent the broker:



Haha. If I emailed you what my wife said about Leroy after I told her that your other couple bid 700k, and he countered at 725k (5k higher than he offered us – while rates were higher!), the Coldwell Banker profanity filter would explode. We could have been all done (and happy) at 710k, six weeks ago. Instead we’ve been scrambling all over for a place to live, he’s still paying taxes and upkeep, and you didn’t get a commission. We’ve been dragging our two babies in the car, every single weekend, and wasting all sorts of time.

Leroy is a pig. On Wall Street the expression is "bulls and bears make money, but pigs get slaughtered". He deserves every penny of his "loss".

There're 200+ homes for sale in Hingham – many of them are beautiful and the buying season is nearing its end. Mortgage rates today are 6.61% versus 6.21% when we bid. Leroy’s house (and every other one in America) is worth 4% less than when we bid. My bid, if we were still interested, would be 675k. But of course, that would "insult" his highness.

Leroy has to understand that even if he sells his house for a lower price than he wants, that he’ll get more interest on his cash in this higher-rate environment. So it’s a wash for all involved except of course for his ego.

This guy thinks he’s so smart but what exactly about the last 19 months has signaled to him that he’s got the SLIGHTEST CLUE about real estate prices in Hingham?

I told you the first time I met you that mortgage rates would rise. Guess what, rates are going higher still and the economy is about to take a dive.

I feel your pain Lindsey. You should drop his listing.


Now Lindsey, who as a typical broker only wants a sale, at any price, asked my permission to forward that email to her obstinate client. Sick of trying to convince the SOB to get realistic herself, she leaned on me. Do y'all think I have ever turned away an opportunity to agitate? She titled it - "A Buyers Opinion" and sent away.

The next day I receive this steaming pile of condescension from Leroy (via the broker)

(Leroy's response)

SUBJECT - Fwd: Now i understand/ probably too much house for him anyway"

LOL- God am I smart, I guess I know it all. Why would C-Nut ever buy any piece of real estate given his prognosis of the economy, interest rates and housing market, not to mention weather forecasts? Give me a break. Doesn't sound like a good investment if he's right. I do think the housing market is a problem, but saying every house in America is worth 4% less given a 50 bp move in interest rates is so absurd and shows his ignorance. In fact I believe the house is priced to reflect much of what C-Nut is saying at this point. With that said, a house is only worth what some one will pay for it. C-Nut also fails to realize that the market is a leading indicator, not a lagging indicator. Much of what he is predicting is already priced into the housing market. Sure could get a bit worse but every market is a bit different. Also I believe, if you look at it on a bellcurve looking out 5+ years, prices now will look attractive. A house is a long term investment, and there should be many factors that go into decision- sometimes its easy to be dollar wise and pound foolish. I am not insulted by C-Nut's thoughts or offer. He is entitled to his opinion. We are both big boys here. I am not sure I agree with C-Nut's prognosis, and long term predictions. Despite what C-Nut says, the economy is in relatively good shape, and longer term America will be just fine. In fact, I expect some of the money to shift from various asset classes to real estate over time given the correction. I also don't think interest rates are going to move much from these levels, and if there's many who also think the next move could be down. Regardless still relatively low historically speaking. . With that said, I am not going to sell the house below $700,000 and that has nothing to do with ego. If C-Nut's willing to step up a bit perhaps we can get something done here, but sensing its a long shot as the house is worth less and less every day according to C-Nut. The best time to buy is when there's blood in the street? C-Nut must have loved the Lennar preannouncement and all the weakness in the home builders today. My house probably worth $625K now in C-Nut's mind. I appreciate you following up w/ C-Nut and passing along his email. I will keep it to myself, as I can see why my dad did not want me to see it. No worries here, as I am pretty thick skinned. Speak with you soon and thanks again for your efforts on my behalf.

All the Best,


PS- Can tell C-Nut that I am not a pig despite what he thinks. Far from it. I remember that saying from my rookie days on wall street. Remind him Best time to buy is when there's blood in the street's.

So now, a dispassionate business transaction has turned into a pissing contest - at least for Leroy. Just as I has supposed, selling his home at market prices was proving an ego management crisis for Leroy. Apparently, my *sound economic reasons for the magnitude of my bid* really chafed the guy. "Too much house" for me? Hah, how about "not enough money" for him. He can't have it both ways. If he's such a big shot, so wealthy, then why niggle over $20,000???

Despite his no doubt, self-acclaimed rejoinder, he was still up all night thinking about C-Nut. He's hardly the first bonehead I have ever caused to lose sleep. As proof, he had to send ANOTHER, even more condescending email first thing in the morning - the fruit of his lucubration. Here it is in all its glory. Try to remember that this is a middle-aged adult who is supposedly a very successful entrepreneur:

The funny part of C-Nut's analysis is he's the one shlepping around Hingham w/ a couple of infants, wasting all sorts of time, and can't seem to find a house to buy despite being a buyers market. So now he's going to rent, and have to relocate the family again. Tell C-Nut I will be thinking of him when I am offshore fishing in my sportfish next week as he tried to find his temporary home. ### ***** street is a great home, and don't mind holding for time being until we find someone who appreciates it as much as I do. Tell him can [he] get a great deal on a house on the railroad tracks, probably can save a few sheckles, Mr Wallstreet- lol. Give me a break- He's talking one trade as the difference between owning a house or not, kind of short sighted in my view, but not surprised. My wife also laughed and said tell C-Nut and his wife that we hope C-Nut has fun moving into his rental when are [sic] family will be out boating and enjoying life- Enjoy the weekend Lindsey and don't worry about C-Nut.

First of all, I submit that anyone over the age of 40 who uses "LOL" is an unmitigated tool - he's used it twice now.

Yeah, Leroy, I am a "Wall Street rookie". If being a pig, trying to squeeze water from a rock is a rookie mistake, he needs to remember that I am not the one who started at $1,000,000 and chased the housing market down 30% - and counting.

Now I could go on splice and dice his email at length. For example, he claims that the idea that housing prices drop with rising mortgage rates is "absurd" and "shows C-Nut's ignorance". But then he says that "much of what C-Nut is saying is priced in".


If it's so "absurd" then why address the notion of it being "priced in"?????

So big deal, the guy doesn't understand real estate. On that he's co-ignorant with 99% of the country. Heck, there are guys that write for the Wall Street Journal and Forbes that don't get it either.

But the interesting part of this exchange is Leroy's gross immaturity and transparent, if not pathetic, chest-thumping.

C-Nut can't afford his house?

Boy am I smart?'re renting?

I'll be thinking about C-Nut while I am out sportfishing and enjoying life?

That's about as grown-up as this sand sculpture:

Remember this is the guy, this big shot, who was so distraught over my *lowball* bid that he couldn't even continue with the negotiation. Daddy had to step in. And apparently Daddy temporarily shielded his middle-aged son from my unpleasant email as well.

Leroy is clearly what men, young enough to use "LOL", would deem a "poseur".

Throughout this exchange, there was also the angle that Leroy was challenging my financial manhood. He was trying to goad me into paying up and proving that I had the cash for his house.

Cripes, he even said:

"...and don't mind holding for time being until we find someone who appreciates it as much as I do."


In other words, my bid didn't show enough appreciation for his beloved house?

Now, we loved the house. I'd have never bid on it in the first place otherwise. I am just not the type to settle - for anything, ever. Unfortunately for Leroy, I also highly value cash in the bank and my precious four hours of sleep at night.

I am sure there are some people Moronic enough to pay-up for a house when their financial manhood is questioned but it certainly wasn't the case for the only bidder for Leroy's house within sight.

Now whenever I mix it up with clowns, Mrs. C-Nut is invariably the first one to scold me. "Why are you getting into it with Leroy?", "Why are you picking on Perry Eidelbus?", etc.

My wife said to me.

"These people are idiots. Don't piss him off because then he'll do something irrational like NOT SELL to us simply because he doesn't like us."

"Take it easy," I told her. Almost everyone, even my wife, forgets that I am a professional bidder/offerer - an extremely experienced financial negotiator. I am well aware of all the angles, all the politics, and all the realities of a transaction. I told her, listen, Leroy is probably atremble thinking, "Hey, maybe I shouldn't have patronized C-Nut??? Perhaps he'll be less likely to ever bid again because of my email...????"

The mistake almost everyone makes when analyzing interactions is focusing too much on their own perspective. A month later I was proven 100% correct. Read this rather rich email Leroy, with his house still sitting there, sent me:

7/20/2007 11:37am

Hi C-Nut-

I figured I would touch base directly with you. Perhaps we got off on the wrong foot, as I did not mean to run you around with the little ones and waste your time as I have 3 little ones myself, so familiar with that drill. With that said, not sure where you head is at. Please keep in mind that the whole process is a bit emotional for me, as I truly love the house and enjoyed living there. I have relocated to Florida as I am sure you are aware. Despite what you think, I don't have much of an ego, quite the contrary. Feel free to contact me directly if you still have a sincere interest in the house. It's a great home, I know firsthand.

All the Best,


We "got off on the wrong foot"?

That sure is a curious way to describe his childish, baseless condescension.

Clearly, he was, ham-handedly, trying to placate any hypothetical animosity he provoked in me - just as I had predicted to my wife. After all, he's the one carrying a house that needs to be sold in a downtrending market.

Mind you that he now only wants to know if I have a "sincere interest" in his house - as if a dollar-denominated bid demands an emotional rider.

My wife wanted me to respond kindly (Ha!) and to explain to him that we had just signed a 12 month rental lease (that Leroy mocked) - a $30,000 contractual obligation.

I RERAINED from any such conciliatory action - Puuhleez Mrs. C-Nut! There're countless things she's more competent than me at - but we're talking about my métier here. Did Muhammad Ali take boxing advice from his wife?

I said let the SOB squirm. Let him continue to wonder if I am still a possible buyer. Don't tell him anything about my lease - which could always be broken or sublet. We still liked the house and I didn't want to tell him we were out of the picture in which case he might wise up and fire-sale it. Why help injure a possible $650,000 purchase in December?

(For those of you reading this in the distant future...the stock market tanked shortly after Leroy's "conciliatory" email in August of 2007 and then bounced to new highs in November. Meanwhile, house prices continued to crater everywhere but NYC and a few other places like Portland, Seattle, and Charlotte. In January of 2008, the stock market tanked again; this time taking out August's lows, credit markets froze up, a large investment bank went under, and housing continued it's downward spiral.)

In November of 2007, seeking to extend his two year run of precise 50k overpricing, Leroy dropped his nominal list price from $750,000 to $729,000. In January of 2008, he dropped the list price to $699,000.

And this month, April 2008, I saw on the web that his house finally sold, 28 months after listing it for over $1,000,000.

Mr. Big Shot, Mr. Wall Street Veteran eventually reaped $670,000.

By rejecting not one, but TWO 700k bids ten months earlier, Slick cost himself at least $60,000 - as I estimated the carrying costs for his unsold home at 3k per month added to the bid differential. And let's not forget the headaches and anxiety inherent in such a prolonged ordeal - for such an obvious emotional basketcase.

The other day I licked my chops and sent Leroy a "congratulatory" email:

Greetings Leroy,

I see on the web that you sold your magnificent house for 670k - it's definitely the nicest house to sell in the 600s in Hingham in many, many years. So well done! According to my email files, you did vow to me that you would never sell it for less than 700k; so I applaud your grown-up flexibility. By my calculations, "fair value" for that house is 640k today so it's like you MADE 30 grand!!! I am so glad you found another family that "appreciates" the house more than we did - even if said appreciation expressed itself in the form of a lower cash flow to you, plus another 10 months of carrying costs.

I do want to thank you for not budging on your 720k offering to us last year; in fact we were definitely prepared to settle at 710k or even 715k. But it was the wrong house for us and I am a firm believer that things always work out for the best. We are renting in [another town] now and have determined that we like it a bit more than Hingham; it's less "diverse" if you know what I mean. The fact that we are renting a house NICER than yours for $2,500 a month (a full 40% cheaper than the total cost of owning a 700k home at 6% rates) allows me to sleep soundly at night. I just renewed the lease through July'09 and I will continue to laugh at all these sheep who got sucked into the real estate trap at bad prices. The fact is, mortgage rates are headed inexorably higher and your large oil-heated house is headed to the 500s. I think you and I both learned over the past year that Hingham-ites don't value square footage; they want and pay up for backyards and neighborhoods. It's got to be a cruel joke for you that even today, has your house worth $968,500.

I got to thinking the other day that, depending on when you bought your Florida house (2005?), between that and the Hingham house selling debacle, you might very well have hemorrhaged $1 million bucks or so on real estate in the past few years. Now I have no idea whether or not that is pocket change for you. Some Googling research has revealed to me that you are a successful businessman and you may indeed be one flush dude.

BUT, that would just make your obstinacy and niggling over $5,000, $10,000, and $25,000 pittances - not to mention all the "deferred maintenance" on the Hingham house - all the more bewildering. I mean really Leroy, wall-to-wall carpeting in this day and age? And as for your kitchen - or as I dubbed it the "shitchen" - did anyone ever cook in it? Or was your cookbook a stereotypical "collection of take-out menus"???

All the Best!


He did send a weird response that I may broach at another time.

My wife is gonna LOVE this blog post!

Wednesday, April 16, 2008

Another Nemesis Of 'Old Coots' - Proper Pronunciation

It was a tough weekend, this past one, for old men at golf courses all across the fruited plain. Brandt Snedeker, pictured above, was in contention all week at the Masters. I almost pissed myself laughing at two old guys in the clubhouse trying to say his consonant-riddled name. Because, if you weren't aware, that's what old men do. They get up at 4am, watch the weather channel for 30 minutes, drink coffee, peruse the newspaper, poop, make their way to the golf course, and get all fired up about the prior night's sporting events. Even though I too am an early-morning person, it really is a sight to behold - these 'old coots' yammering about current news-cycle trivialities while the rest of the country is still fast asleep. It's even funnier when the nonsense is spiced up with gross mispronunciations.

My father may be one of the worst pronouncers on the planet. For a decade I had to listen to him calling José Canseco - "Ho-say Can-es-ko". It's okay to get it wrong when the guy is a rookie but my father proved incorrigible, for years. At least for this one he didn't pronounce the "J" in "José". If you ever hear him pronounce jalapeño with the hard "j", you might very well fall on the floor.

My MIL (mother-in-law), despite her scholarly erudition, also struggles with pronunciation a bit. Her notable nemesis is the word "vegan"; she cannot help saying "vee-jan" or another mutilation like "vej-an". Now in her defense, she does have an inborn psychological issue with the concept of vegetables. In fact, her weekly vegetable count will rival, if not underperform, that of the American family in my prior post.

And I've already mentioned my uncle who refers to this musical star: "Bay-onz", instead of Beyoncé.

How to explain this pervasive 'Old Coot' disability? I don't really know. They struggle with the whole gamut of words: those with too many consonants, or more than two vowels, they struggle with the polysyllabic, and definitely with quasi-foreign words.

I guess it's part of being old in that they no longer care what they look like, what others think of them, and apparently what they sound like. But there's also got to be a kernel of explanation in their flattened, if not inverted learning curves.

My father really is a self-contained comedy act in this field. I've compiled a lengthy list of his botched pronunciations that would make just about anyone writhe with laughter. For a while my wife thought I was being too harsh on this challenge of his.

Then one day we went to a restaurant on the Outer Banks where he opted for the "saw-teeeeed" vegetables. My otherwise charitable wife keeled over and lost it.

Food Around The World

Here I am publishing an interesting email that's been making the rounds. Snide remarks are flying about the American family that's been chosen as representative.

Germany: The Melander family of Bargteheide
Food expenditure for one week: 375.39 Euros or $500.07

United States: The Revis family of North Carolina (Sure hope most American families eat more fresh fruits and vegetables and less junk food than this family.)

Food expenditure for one week $341.98

Italy: The Manzo family of Sicily
Food expenditure for one week: 214.36 Euros or $260.11

Mexico: The Casales family of Cuernavaca
Food expenditure for one week: 1,862.78 Mexican Pesos or $189.09

Poland: The Sobczynscy family of Konstancin-Jeziorna
Food expenditure for one week: 582.48 Zlotys or $151.27

Egypt: The Ahmed family of Cairo
Food expenditure for one week: 387.85 Egyptian Pounds or $68.53

Ecuador: The Ayme family of Tingo
Food expenditure for one week: $31.55

Bhutan: The Namgay family of Shingkhey Village
Food expenditure for one week: 224.93 ngultrum or $5.03

Chad: The Aboubakar family of Breidjing Camp
Food expenditure for one week: 685 CFA Francs or $1.23

Go back and look at the Mexican array. I counted twelve 2-liter bottles of Coca-Cola - for a week!

I am pretty sure we, in my household, spend $250-$300 per week on food or $12,000-$13,000 per annum.

Tuesday, April 15, 2008

Manliness Update

After my last post, I received this email from my buddy:

does your brother get pissed off at your recent blogs and your calling him a metrosexual? that is pretty funny though, ordering tea with lemon and honey at a bar.

He's right, I should strive to pick on everyone equitably. Ironically, this particular friend of mine is his own breed of metrosexual with his vests and body waxing. Furthermore, he has a fetish for one of the most un-masculine drinks concoct-able - pink lemonade. I mean, he goes into bars and restaurants and specifically asks about its availability! It just so happens I have a pic of him sipping one on Boylston Street in Boston. (Rattlesnake Bar and Grill)

And he wonders why random dudes keep coming up to him on the subway or the street and giving him their business cards!

Oh yeah, this buddy of mine also knows the differences between lilac, periwinkle, and lavender.

And Don't Order A Water At The Strip Joint

In the comment section of my previous post - Marginalizing Men Who Brunch, Taylor mentioned that he was dutifully taking notes in the hope that he would one day be a real man. This reminded me of these great beer commercials:

Though my favorite - not shown - was the one where the guy got caught sneaking a peek at his wife's soap opera.

Two other un-masculine stories come to mind:

Recently my metrosexual brother was visiting. We went to some bar, a typical Boston-type pub in Scituate on the water and he proceeded to order, "a tea with honey and lemon". I almost reached across the table and cracked him myself!

There was a guy in my trading pit in Philly who was notorious for ordering effeminate lunches such as salads with " you have a raspberry vinaigrette?". This wuss would order sandwiches and instead of adding manly hot peppers he'd whisper into the phone, "Can you put sprouts on that?" This guy, just like in the commercial, was always soaking the grease off his pizza as well - I kid you not.

There isn't so much a defined list of what a real man or a real woman should do. It's more like a catalog of prohibitions - like men shouldn't brunch and women shouldn't fart, EVER.

Monday, April 14, 2008

Marginalizing Men Who Brunch

I can't think of a bigger waste of time, a bigger waste of humanity than waiting 30 minutes for a brunch table at 11am on a weekend. You people toting your newspapers, lattes, and wireless laptops certainly aren't winners.

I just don't get it. In my book, one toils all week so he can do what he really wants to do in life on his days off. If someone's weekly prize is sleeping late and a mushroom quiche then I pity their sad existence. Quite frankly, they probably need a new career and some new hobbies - or perhaps a primer on masculine couple obligations, i.e. she can very well brunch with her friends.

What about the women who crave brunch?

Well, since they can't cook eggs (due to impatience and excessive heat) they get a genetic pardon. The brunch menu obviously caters to the fairer sex, which most certainly buttresses my contention. Remember to never argue with the dictums of the free market. But seriously, breakfast foods are the easiest of all to make, the cheapest, the fastest, and pretty darn easy to clean up. So why turn a simple functional task into a grand production that wastes a good chunk of your precious weekend?

Real men are up at the crack of dawn on Saturday (without an alarm clock!) - either beating golf balls, fishing for largemouth, stalking deer, or doing something otherwise manly like washing their car.

They certainly aren't licking their chops for frittate or for Gingerbread Waffles with Apple & Vanilla Bean Compote (link).

April Trading Update

I had to ring the register today on my Wachovia short. Read this morning's catastrophic news. It was a very small trade but making 6 pts on a $30 number so quickly compelled me to cover and move on. I also covered my Capital One Financial short today and my latest Fannie Mae whack. I made 6.25 and 8.25 points respectively!

Here's my updated list of positions:

Bank of America - short from $38, this time. Trading at $35.50 as I type this.

HSBC - short from $71 - a twelve point loser so far. I have added puts in April, May, and January on the way up. It's a foreign bank with lots of exposure to booming (read: "bubbly") China and Europe. If it didn't crater, it'd be the only large bank not to.

H&R Block - another short, trading at 20.44. I'm down about 1.5 points. They have a large, unrecognized exposure to mortgage junk - so the rumors allege. As I was typing this I decided to short some more.

Simon Property Group - short from $86, currently trading $96. It's been pretty darn annoying. I did buy some puts and I added a long position in SRS which is an "UltraShort Real Estate ETF" that has SPG as its largest component. I really need this sucker to start tanking. They lease commercial malls and whatnot. In this real estate meltdown, it's not a question of "if", but of "when".

Wells Fargo - still short Warren Buffet's chief bank holding. Trading at $27.25, right now I am up 3pts and doing even better on my October 30 puts.

But my best short has been First Federal Corp. I bought some pricey puts a month ago and since then the stock has dropped from $28 to $18. I am holding out for zero on this distressed, California mortgage lender.

Now for my longs which....suck.

I added to my Google position essentially twice on its 350 point descent. I got out of my last buy for a small profit but still have some $508 stock. Presently that purchase is 50pts in the red.

Coeur d'Alene is still killing me, it's been hemorrhaging my cash for almost two years now. I am so glad I dumped my Newmont Mining ten points higher. What a POS these mining concerns are! They simply can't get the metals out of the ground.

Also, I unsuccessfully tried to bottom pick First Marblehead, the student lender. I bought at an average of around $7 and ended up dumping it at $4. I figured that I needed to be long at least one of these distressed financials as a hedge against my Armageddon-predicting portfolio of shorts. Luckily, it was a tiny, tiny trade.

Lastly, I did recently initiate a put position on Jones, Lang, LaSalle - a commercial real estate name. That's one of the next bubbles to pop painfully.

Remember I got my butt handed to me these past several months shorting long term Treasuries. Otherwise, I've been batting a high percentage with my recent trades. So piggyback away if you dare.

Sunday, April 13, 2008

Massachusetts And Healthcare - Another Profile in Fascism And Stupidity

As of 2007, Massachusetts residents are now compelled by law to have health insurance. If one chooses not to be insured, the state will fine them I believe around $300. Likewise, if a business employs 11 employees or more it must offer a health plan or suffer a fine as well.

Sure if you want to drive a car, you ought to have insurance in case you injure another party, but what could possibly be the motivation for forced health insurance?

If I get sick, how exactly does that affect anyone else? Contagious diseases are few and far between these days.

Devil's Advocate - Well, if one doesn't have health insurance, when they do get sick and show up at the hospital, then the government will have to foot the bill. So in that sense, the uninsured cost taxpayers money.

Well, obviously we need to get rid of mandated care then. DA you should go back and read my free hot dog analogy. Since it's short I will reprint it below:

If some restaurant decided to give away free hot dogs, there'd be a long line around the corner to get them. Then invariably, some politician will point and clamor, "Look how many people NEED hot dogs!"

I say you allow hospitals to turn away anyone who can't pay. Let gunshot victims from the hood bleed out on the sidewalk if they're uninsured. No doubt one of his buddies has some bling currency to pay for urgent care.

The idea that the government is capable of administering a universal, for-the-wretched-and-poor, healthcare system remains a fancy. It's their very mandates, tax-breaks, and existing subsidies that have pushed healthcare costs to such stratospheric levels . So now, after they have made it prohibitively expensive, they are going to wax indignant and compel everyone to buy it one way or another!?!?!?

Massachusetts employers (there are 12 left!) actually have to issue a new tax form to their workers - a 1099-HC. The Commonwealth has decided to use tax returns to enforce the healthcare mandate. My wife accidently threw it out with the junk mail and we had to scramble to find another copy. From reading some websites, she was by no means the only one to make this oversight.

While filing, I noticed a religious exemption to the healthcare mandate. Residents can check a box if their faith rejects modern medical treatment; I assume it's for the Scientologists(?).

Then right below, the tax form asks if you are claiming a religious exemption BUT have sought medical treatment in the past year. Don't try to lie! In other words, they are going to investigate any religious hypocrisy - which apparently the State of Massachusetts also feels is well within its charter.

Well, if that is the case, why pick on one religion?

I say, if some emptyhead buys a Prius but has oil heat and/or more than 3,000 square feet, and/or keeps their thermostat above 73 degrees....

...then the state ought to revoke the $2,000 hybrid vehicle income tax deduction.

After all, the government isn't supposed to be establishing or favoring any particular religion, correct? I say round up and flay all the hypocrites!

Make no mistake, this healthcare mandate is not the rotten fruit of economic illiteracy - as making MORE PEOPLE buy something that is too costly only aggravates unaffordability.

It's not about nanny-statism or a treatment crisis - as 90% of Mass residents already have some form of health coverage.

This mandate is but another Trojan horse, another salient by statists against the rights of private individuals. If you pay attention, the subterfuge is apparent in the words of program officials:

"We need to be fair and lenient in terms of enforcement both on employers and individuals in the first year in order to not incur some kind of a backlash," said Richard C. Lord, president of Associated Industries of Massachusetts and a member of the Connector board. "We need to.....give everybody a chance to adjust to the new realities."

They've already admitted the fine for uninsurance will rise every year. Was there ever a doubt? Next up will be more regulation ("standard setting") on the minimal care and insurance levels. In the meantime, jobs and people will continue to flee the state - an old reality that jurassic politicians have yet to adjust to.

My neighbors here in Massachusetts are old and Moronic; unfortunately I also get the government they deserve.

Friday, April 11, 2008

Elevating Jason Lewis

As I dashed off to mail my tax return, I just heard a great analysis on the radio:

If some restaurant decided to give away free hot dogs, there'd be a long line around the corner to get them. Then invariably, some politician will point and clamor, "Look how many people NEED hot dogs!"

That little hypothetical illuminates at least a couple of the major ailments of our healthcare system.

I am pretty sure the raspy voice who uttered it was Jason Lewis. I first heard him when I moved to Charlotte where he was THE local radio talking-head. I guess if he's now subbing for Rush Limbaugh then he's sort of a rising star in his realm. He's pretty decent on economics and historical analogy - but man, he is one angry dude.

Although I guess that there are as many serene radio talkshow hosts are there are serene basketball coaches.

(Adult Language Warning)

Alright, I just had to work that profane clip in because I found it funny. Serious, more cogent blogging will return now that my taxes are done and I have vowed not to start another book for the time being.

Monday, April 07, 2008

Pluming Prius Putzes

Read these holier-than-thou license plates.

Virtue may be its own reward -- but as any self-respecting Prius Progressive can attest, the payoffs of hybrid ownership don't stop there. Beyond the gas pump savings, the tax breaks, the entree to carpool lanes, the freedom to park without feeding meters and the aura of cool kinship with Hollywood hybriders such as Leonardo DiCaprio and Cameron Diaz, comes something more visceral.

Say what? Prius drivers don't have to feed the parking meters? Are you freakin' kidding me?

Read more here.