On Dubai

Do you know anything about Dubai? All I knew was that it was some wealthy oil city in the Middle East and I only knew that from watching the Dubai Desert Classic on The Golf Channel. Annually, the sponsoring oil magnates lavish a $3 million appearance fee on Tiger Woods. It wasn't too long ago that the golf world was aghast at his "show-up" fee being a measly $1 million. Hey, at least he is appreciative enough to win the tournament once in a while (twice so far).

Apparently Dubai is an enormous planned city allegedly built upon much more than black gold. In Greg Norman's book I learned of Dubai-based Nakheel - an incredibly large real estate developer.

Go to their website and watch their absolutely amazing video.

Nakheel boasts on their site:

Did you know that less than 10% of Dubai's GDP comes from oil?

Yeah, well oil may not be the direct, official source of Dubai's prosperity, I am sure most of the tourism dollars, euros, and whatever those Arab currencies are floating around at Dubai resorts are not too far removed from petroleum-based enterprises. When I see a single T-shirt, computer, or pharmaceutical that says "Made in Dubai"....then they can start fronting!

Dubai has positioned itself as a tax haven in the middle, geographically and temporally, of history's greatest oil boom. That certainly appears to have been a most prescient move on their part. Remember who got rich during the 1849 California gold rush; it was those selling picks, pans, and axes; those selling liquor; and prostitutes.

Make sure you watch that Nakheel video that I linked to above. It really got my blood flowing. At any minute I thought Indiana Jones was going to swoop on in with his whip, his leading lady, ...

...and bid on a waterfront property!!!

Barbarians At The Gate - Pigs At The Trough

Currently I am reading the classic business/Wall Street book , Barbarians At The Gate - The Fall Of RJR Nabisco.

The story is mostly about Ross Johnson, RJR Nabisco's CEO - a man who typified the worst of corporate extravagance. Just to give you an idea how wasteful he was, I've re-printed pages 94-96 from the hardcover edition:



But it was at nearby Charlie Brown airport, where corporate Atlanta housed its jets, that the air of new money and restlessness found its ultimate expression. There Johnson ordered a new hangar built to house RJR Nabisco's growing fleet of corporate aircraft. Reynolds had a half-dozen jets, and Nabisco a couple of Falcon 50s and a Lear, tiny planes an executive like Johnson wouldn't be caught dead in. After the arrival of two new Gulfstreams, Johnson ordered a pair of top-of-the-line G4s, at a cool $21 million apiece. For the hangar, Johnson gave aviation head Linda Galvin an unlimited budget and implicit instructions to exceed it.

When it was finished, RJR Nabisco had the Taj Mahal of corporate hangars, dwarfing that of Coca-Cola's next door. The cost hadn't gone into the hangar itself, but into an adjacent three-story building of tinted glass, surrounded by $250,000 in landscaping, complete with a Japanese garden. Inside a visitor walked into a stunning three-story atrium. The floors were Italian marble, the walls and floors lined in inlaid mahogany. More than $600,000 in new furniture was spread throughout, topped off by $100,000 in objets d'art, including an antique Chinese ceremonial robe spread in a glass case and a magnificent Chinese platter and urn. In one corner of the ornate bathroom stood a stuffed chair, as one might grow fatigued walking from one end to the other. Among the building's other features: a walk-in wine cooler; a "visiting pilots' room," with television and stereo; and a "flight-planning room," packed with state-of-the-art computers to track executives' wives whereabouts and their future transportation wishes. All this was necessary to keep track of RJR Nabisco's thirty-six corporate pilots and ten planes, widely known as the RJR Air Force.

The aviation staff presented the plans for all this to Johnson with some trepidation. He had said state-of-the-art, but this cost $12 million. He wanted everything a corporate-jet hangar could possibly have, but this came out to 20,000 square feet. Johnson looked over the drawings, heard out the architects, and made his recommendation: add another 7,000 square feet.

The RJR Air Force was a defining symbol for Johnson. It was all about restlessness and restiveness. It was also about dispensing favors. Frank Gifford got rides home from "Monday Night Football" games. Gifford and his talk-show host bride, Kathy Lee, were whisked away to their honeymoon on an RJR Nabisco jet. (Johnson was best man at the wedding.) When Roone Arledge needed a lift from Los Angeles to San Francisco, an RJR jet was dispatched from Atlanta. Johnson's old buddy Martin Emmett, long gone from the company, racked up more miles on Johnson's jet's one year than nearly anyone still employed.

The jets were also a symbol of the increasingly fuzzy line between what constituted proper use of a corporate asset and what constituted abuse. Some thought the case of Johnson's German shepherd, Rocco, fell in the latter category. At the Dinah Shore that year, Rocco bit a security guard, setting off a flurry of concern in the Johnson household.

Would he be seized by the authorities and quarantined, or worse? Rocco, it was decided, had to go on the lam. He was smuggled onto a corporate jet and secretly flown out of Palm Springs to Winston-Salem, one jump ahead of the law. Escorted by a senior vice president named Dennis Durden, Rocco was listed on the passenger manifold as "G. Shepherd." It wasn't the only Rocco adventure: The company would later pay an insurance claim for a bite inflicted on the Johnson's gardener.

The RJR Air Force was Johnson's ticket to the high life. Each weekend the planes disgorged Don Meredith from Santa Fe, or Bobby Orr from Boston, or the Mulroneys from Canada. The jocks of Team Nabisco were frequent flyers on Air Johnson. The Pope took excellent care of them, paying more for occasional public appearances than for an average senior vice president: Meredith got $500,000 a year, Gifford $413,000 (plus a New York office and apartment), golfer Ben Crenshaw $400,000, and golfer Fuzzy Zoeller $300,000. The king was Jack Nicklaus, who commanded $1 million a year.

Johnson claimed his jocks yielded big benefits in wooing supermarket people, but the line between corporate and personal services was a blurry one at RJR Nabisco. LPGA pro Judy Dickenson gave Laurie Johnson golf lessons. Gifford emceed benefits for Johnson's favorite charities like the New York Boys Club. A pair of retired New York Giant fullbacks, Alex Webster and Tucker Frederickson, maintained offices at the Team Nabisco office in Jupiter, Florida; Frederickson ran an investment counseling business from his.

For all the money Johnson doled out for Team Nabisco, some of the athletes weren't easily managed. Nicklaus was notoriously difficult. For one thing, he didn't like playing golf with Johnson's best customers, which was his highest and best use. And he considered himself above the task of working the room at some Nabisco function. Although he was making more money than anyone at RJR Nabisco except Johnson and Horrigan, the "Golden Bear" growled at doing more than a half-dozen appearances a year. After several run-ins with subordinates, an arrangement was struck where only Johnson and Horrigan could personally tap Nicklaus's services.

Then there was the O.J. Simpson problem. Simpson, the football star and sometimes sports announcer, was being paid $250,000 a year, but was a perennial no-show at Team Nabisco events. So was Don Mattingly of the New York Yankees, who also pulled down a quarter million. Johnson didn't care. Subordinates took care of those and most other problems. He was having a grand time. "A few million dollars," he always said, "are lost in the sands of time."



Here's an ethical question for y'all:

Is it unethical for the likes of Jack Nicklaus to accept a seven-figured sinecure from a publicly owned corporation?

I say "yes"; Mrs. C-Nut says "no".

She asserts that the shareholders' lack of oversight is their own problem, their own loss.

I maintain that Jack Nicklaus took advantage of naive/incompetent directors and shareholders. I believe that in the ignorance-exploiting game, there's no difference between taking money from the corporate trough and selling snake oil remedies to simpletons on the street. I would engage in neither.

My wife comes back - "What, are you going to start passing laws? And regulating this stuff?"

No, I am not. I'll just never respect any of these guys that partake in such borderline theft.

I've known for quite a while that Jack Nicklaus was a jerk - and this just added confirmation.

For My Sophomoric Readers

Another radio DJ prank:



It's not that funny, but the guy's accent had me in stitches.

How did I find that? Well, the poster made it a "reply" to my second most popular video clip, Prank Phone Call - Social Security Reduction (70,000 hits and counting). Kids send out these "replies" to generate more traffic; here I was happy to oblige.

Lion Bites Tamer

One of the most uplifting headlines I have seen recently was this:

Lawmakers target $1b endowments

Massachusetts lawmakers desperate for additional revenue are eyeing the endowments of deep-pocketed private colleges to bolster the state's coffers by more than $1 billion a year, asserting that the schools' rising fortunes undercut their nonprofit status.

Legislators have asked state finance officials to study a plan that would impose a 2.5 percent annual assessment on colleges with endowments over $1 billion, an amount now exceeded by nine Massachusetts institutions. The proposal, which higher education specialists believe is the first of its kind across the country, drew surprising support at a debate on the State House budget last week and is attracting attention in higher education circles nationally.

The idea has prompted a range of questions, including whether it is legal to infringe upon private colleges' tax-exempt status or single them out based on their wealth. It also faces significant opposition from the colleges and some skeptical lawmakers.

But proponents say the colleges' vast accumulations of wealth - Harvard University has the biggest endowment at $34 billion - and their often modest contributions to their host communities justify the assessment.



Of course this bill will never get passed. For sure, Harvard can buy off politicians with far less than the annual $800 million tab it would suffer under the proposal.

Even though this legislation will NEVER see the light of day, I derived some pure joy from its bitter irony - the biggest class-baiters around having their wealth envied!

What, was it just a week or so ago that I opined on this very subject of Harvard hypocrisy? See Self-Segregating, Bigoted, Hypocritical Anuses.

The Boston Globe already reflexively stood up in defense of Harvard's (and their own) hypocrisy:

Meanwhile, lawmakers have more sensible options for bringing spending and revenues in line, such as cutting earmarks, asking state employees to pay more of their health insurance, and raising the income tax.

They titled their editorial "How To Strangle An Economy". Well, I am not going to argue against their level of expertise on that subject - even if their know-how is unconscious.

Yeah, "raising the income tax" is a more "sensible option" than taxing multi-billion dollar idle, bureaucracy entrenching, do-nothing endowments. As one blogger surmised, Is Harvard Just A Tax-Free Hedge Fund?

Remember my buddy Greg Mankiw? In response to this proposed tax initiative, he suggested that Harvard pack up and move South. I say good riddance. Check that. Harvard stay here - I don't want him anywhere near me when I eventually flee this miserable state.

More from the Wall Street Journal:

Such wealth has led Sen. Charles Grassley, the senior Republican on the U.S. Senate Finance Committee, to propose mandating that the largest college endowments make the same 5% minimum annual payouts as private foundations are required to do. In many years, many colleges have spent much less, provoking criticism that they are hoarding their wealth instead of spending it on educating students. In this hostile environment, some of the wealthiest colleges, including Harvard, have recently sweetened financial-aid packages.

State Rep. Paul Kujawski, a Democrat from Webster, Mass., who is a main proponent of the tax on big endowments, calls the size of the biggest endowments "exorbitant," raising questions of whether they are truly nonprofits.

Kevin Casey, a spokesman for Harvard, said the proposal would hurt Massachusetts and colleges because it would damage "stable bedrock institutions" that have helped shield the region from the worst of the economic slowdown

Did you get that last point? Harvard, all by itself arrogantly thinks that it shelters Massachusetts from an even worse economic plight. Anyone up here who believes that well-deserves the plight of Boston living.



The Harvard "spokesperson" really illustrates the thesis of my post. The bags o'scum at Harvard have rung the bell of class warfare for decades. They've scared away all private enterprise and empowered a monolithic army of socialist politicians. Far from saving or behooving the shell of a market economy up here, they've actually ruined the area for everyone else. AND, now that those same demented pols have targeted them, Greg Mankiw and his cronies threaten to pack their stuff and move on out.

It's all rather incredible.



Here are some alternate titles for this post that I "workshopped":

Do ONLY Unto Others

Dr. Frankenstein Attacked By The Creature

Utopia Bites Utopists

And the runner-up...

Big Government Taxes Itself

If this proposal had a snowball's chance of passing....it might have interrupted my Ted Kennedy Cancer Celebration!

And, you people (cowardly emailing me on the side) that are uncomfortable with my schadenfreude need to wise up. Ted's demise behooves the "greater good". If you don't understand that concept, then I suggest reading more Big Media agitprop or auditing a couple courses at Harvard.

If you opt for the latter option, be prepared to shell out some $$$. The student loan market is frozen, home equity lines are shut off, AND I wouldn't expect any help from the $34 billion endowment!

Greg Norman - The Way Of The Shark

A buddy lent me Greg Norman's book Sunday and I, well, read the entire thing in the afternoon. Sorry Greg, but your life story is speed-readable - all 300 pages of it.

But it was nonetheless an interesting read on a biographical level. Greg talks extensively about his failed battle against the PGA tour. His little tiff with commissioner Tim Finchem over expanding play into a "World Tour" is all by itself a case study in the tyranny of institutional bureaucracy and monopoly. We'll start with that first.

Back in the mid-nineties, Greg Norman had the idea to start a new series of professional golf tournaments. They would feature only the best 30-40 players in the world, have elevated and guaranteed prize monies, and be played all over the globe. Greg and his brain-trust had done considerable planning, sought out the support of his fellow players, and even had a lucrative television deal inked with the upstart Fox Broadcasting Network. Well, when the PGA Tour got wind of this development, they went ape-sh*t, to say the least.

The PGA used every dirty trick in the book to quash this rivaling development. They even went so far as announcing a similar "World Tour" right before Greg's scheduled public announcement.

They threatened to expel any card-carrying PGA players who partook in Greg's tournaments. They unleashed a bevy of legal pressure on Greg. They implemented a sleazy propaganda campaign from every angle: tournament sponsors, individual pro golfers, politicians (e.g. Senator Bob Dole), etc. And they took THE tack of dirty politics - they smeared Greg Norman, branding the new tour as a "money-maker" for him personally.

Anyway, the PGA won as none of the players besides Greg would stand up to it. One analog you could put forward is that it was like a failed unionization at an oppressive company. Norman's tour would have lavished an incredible amount of money on top players and loosened the grip that the PGA had on their livelihood. So what wasn't to like?

This isn't the place to go much further into detail but I want to point out that the PGA reacted to Greg Norman in the same exact manner as all large, powerful institutions do to their perceived competition. A few examples might be Microsoft destroying its upstart rivals (e.g. Netscape), the government school system attacking charter schools and homeschools, or the university/college system taking aim at "for-profit" education. The ultimate comparison is with the self-preservative bent of Big Government.

Repeatedly, the PGA propagated the talking points that Greg's world tour would "hurt the game of golf" and "hurt the many charities supported by the PGA". There's no difference between this tripe and the innumerable times politicians have raised fees and taxes "for the children", "for education", or "for the poor". Puuuuhhhleeeeeeeeeeeeezzzzzz!

Sheeple fall for this junk. Arnold Palmer, the 'old coot', stood up and vociferously denounced Greg Norman's idea. More accurately, the unthinking Moron became a megaphone for the PGA's talking points.

It's not really a surprise that the players abandoned Norman as they were threatened (with expulsion) and essentially in over their heads in this war of wills. Pro golfers beat balls all day - for their entire life. They aren't studying any of life's larger issues or realities. Greg knew that his golf career had a finite window and he was, at the margin, at least interested in maximizing his current opportunities. The other meatheads on tour, just like the average voter, hadn't the stomach to stand up for their own best interests. I won't elaborate here, but the PGA had very strict rules on how its members could and couldn't earn income. It was all about "brand protection"....sure.

What it was about was monopoly entrenchment - just like government agencies and not-for-profit foundations, no matter how well-intentioned their births, always morph into self-perpetuating monsters. Finchem's over-riding interest was to preserve the insulated and cushy status of PGA Tour management. As Greg put it, the Tour saw players are mere "pass-through entities".

The personal attacks and betrayal from the "World Tour" fiasco left Greg quite bitter and disillusioned. The salt in the wound is that even today, when talking about the PGA's "World Golf Championship" series, Tim Finchem has the balls to publicly thank Greg for his "support". It's all a crock. They never wanted to or did listen to Greg, nor was he ever asked to consult on how they were going to STEAL and implement his vision. The PGA has never apologized or reconciled with Greg Norman. These public displays of gratitude are nothing but continued giant middle fingers thrust in his direction. If I were him, I'd have knocked Finchem out by now.

Now let's get on to Greg at the personal level.

He's always been a *risk-taker*. His tales include death-defying surfing incidents, scuba gear failure 100 feet below the surface, shooting an attacking 10 foot black snake at close range, and a car accident where he drove home a hundred miles with a leaking gas tank. Though hardly Captious, he surely was a Nut!

For those of you unaware, Greg Norman was the best golfer in the world for a few years back in the 1990s. He was known as much for his successes as he was for some unfortunate "chokes" in the majors. He pretty much walked away from golf to run his little empire of business enterprises: apparel, clubs, golf course design, real estate, wine, etc. I have got to respect anyone who has the stones to essentially leave one comfortable field and seek out a greener pasture.

One point of note - Greg's philosophy does not include risking his own capital. He reiterates it several times in his book. On this he loses some respect from me. Despite his undeniable business success, a cynic might assert that Greg simply leveraged his celebrity status into lucre. As far as I am concerned, if Greg is as confident in his abilities as he admits (over and over again), then why wouldn't he ever put his capital where his mouth is?

Remember I am a solo trader. Trading my own money has given me all sorts of freedom (and risk!). So I am biased against those who traffic in OPM (Other People's Money).

But many days, I get the feeling that my go-it-alone approach may be completely stupid!

I have in fact resolved to start trading OPM in the near future when my kids are a bit older and I can devote more time to the markets.



Now the last subject on Greg Norman that I want to address is on the gossipy side - his personal life.

Almost thirty years ago he hit on a flight stewardess (how cliché!). They wed and had two kids. In the photo section of his book there are pics of his son and his daughter, but none of his oft-discussed wife. Right there I knew something was afoot. Throughout his autobiography, the way Greg was running all over the world chasing dollars I couldn't help but see a parallel to General Electric's Jack Welch. What kind of marriage and family life is possible when Dad is always elsewhere? Not a very pleasant or enduring one in my vicarious experience. Welch incidentally has been thrice married. Many athletes retire so they can spend more time with their family but Greg simply replaced one all-consuming passion (golf) with another (business). Seemingly, even when Greg wasn't building golf courses he was off on extended hunting and fishing trips. Most normal guys who merely hit the bar on the way home (for french fries) get an earful from their wives. Highly ambitious men and women simply aren't conducive to family life. They and their spouses simply grow apart.

My hunch was confirmed way back on page 291 where Greg mentioned his impending divorce from Laura, his flight stewardess wife of 25 years. It turns out, Greg was bopping his neighbor, tennis legend Chris Evert who's now 54 (pictured above). Chris was married too so a couple of marriages were ruined from this sordid affair. As of this post, Greg and his new love interest are supposedly engaged.

Now I don't know why any guy would marry Chris Evert with her record. Sure she was married to current husband Andy Mills for quite some time (by celebrity standards) but she was a "player" on and off the tennis court for decades. Her little black book is quite extensive: Jimmy Conners, Burt Reynolds, Geraldo Rivera, Adam Faith, Vitas Gerulaitis, Pat Boone, and John Gardner "Jack" Ford, son of U.S. President Gerald Ford. Then she married and divorced tennis pro John Lloyd before marrying skier Andy Mills the latest cuckold.

I guess one of the most prescient acts of the past century was Chris Evert keeping her maiden name upon marrying John Lloyd. Otherwise she'd be now known as "Chris Evert Lloyd Mills Norman"!!!

For you young'uns unaware, Chris Evert was the Maria Sharapova/Anna Kournikova of her day. She was one hot babe!



Greg Norman is nobody I'd be hoisting up on a pedestal - but you'll find his bio worthy reading - particularly if you, like me, have dual interests in golf and business.

Cross-posted on Marginalizing Hackers.

Case Of Mistaken Identity

You might want to pull you pants up buddy before any future frisks!

"You Get To Refinance"

"You get to refinance" was the sales pitch used on one Dan Bailey - a man who just made the news over an email he sent to Countrywide Financial asking to modify his ballooning adjustable-rate mortgage. The short story is that chief executive Angelo Mozillo read the email, labeled this tale of woe "disgusting", and inadvertently hit "Reply" instead of "Forward" (to someone in-house).

Ask anyone you know who took out an adjustable rate mortgage if that was how it was marketed to them. Everyone I have asked has affirmed as much.

One acquaintance of mine - Ivy League educated - took out a mortgage a couple of years ago and despite his repeated plea for a fixed rate, the mortgage broker still wangled him into a variable rate product. Luckily, three months later, after poring over his loan agreement my buddy realized what he had been sold and locked in a fixed rate (costing him fees). He said to me,

"Look, if I couldn't even understand the loan terms, that just shows how hopeless lesser brains would be at staying away from an adjustable mortgage."

He's absolutely correct. The fact is, most people are profoundly economically illiterate. Nobody even understands basics like stocks and mutual funds. It's asking far too much for them to understand Pay-Option ARMs, Interest-Only loans, the historical range of mortgage rates, and the like.



(Pic Removed)



"You get to refinance"....

They sold it to you like it was going to be a privilege!

A Few Trades

For background, first read my May Trading Update.

This week I covered my Lehman Brothers short for a 10pt profit - $47.45 to $37.46.

I covered my Washington Mutual short - sold at $12 and bought at $9.48.

I profitably sold my puts on Jones Lang LaSalle - paid $7.70 and sold for $15.

I initiated a long position on EEV (a short Emerging Markets ETF) at $63.16. (This means that I am SHORT some international junk.)

And I bought some more puts on First Federal. Went with January 15s this time at $2.90.

I also increased my short NASDAQ-100 position - cost basis is now $48.83 on QQQQ. As I type this it is trading at $48.03.

Finger Food

This week on Hell's Kitchen, Matt, surely one of God's queerest creations, chopped off the tip of his finger while preparing a dish. Fast forward to around the 5:15 mark of the video to witness the amputation.

Then, about a minute later they go a-scrambling to find the severed fingertip.

Chef Ramsay - Where's the top of the finger gone?

Christina - Ah, good question.

Corey - We need to find his finger.

Roseann - I don't know where it is.

Corey - What's this?

Roseann - I have no idea.

Unknown - I am not seeing anything there.

Unknown - Check in the pancetta he was cutting.

Corey - Gross!

Chef Ramsay - Oh my (expletive)!

Christina - We just cooked Matty's finger. I might lose it. I am serious.



Pancetta is a pain in the arse to cut. I used to order "chunks" of it, say a half an inch thick at the deli, but now I make them slice it thin to facilitate my own chopping. I am sure my fingertips appreciate the gesture.

By the way, Matt has got to be one of the dumbest people ever to last this long on a reality show. Later on in this week's show, he messed up badly and got excoriated by Chef Ramsay. Five seconds later he says to his team,

"Let's wake up everybody!!! Especially me."

Kleenex...

...will not see an uptick in sales today!!!

Precocity = The Absence Of Retardation

Read this essay by a 15 year-old homeschooled girl:

Home Schooling
Truly Free
~By Kristan Mikala~

As a student in almost every sense of the word, I have experienced many different types of teaching. The worst of all were the styles in which you were so boxed in you felt you couldn't breathe, couldn't move, couldn't do anything. The best was that rare wildflower of learning, homeschooling. In homeschooling, you are free; free to learn, free to be yourself. You needn't worry about what your peers think of you, you needn't worry about whether this or that teacher does or doesn't like you, you only worry about whether there's something you forgot to remember to learn. In the fields of your mind, you choose what you plant. You don't need someone to do it for you because you want to learn. No one can force you to do what you are already doing. There may be rows you'd rather not hoe, but for the sake of your future you do it anyway. You look forward to tomorrow, and you know that even if you aren't completely prepared, you can and will make it, because you can and will learn how to. Saying 'the sky's the limit' is untrue, because you can reach beyond. There are many things only you can understand because others aren't willing to learn. They won't open their minds unless someone does it for them, and some things can only be learned voluntarily. Some things can only be learned if one knows how to learn and loves learning itself. Some things can only be experienced with open eyes. Hiding from the world, and even from themselves, many cannot understand that.

How can you revel in the glory of the sunrise if you won't wake up?

How can you marvel at the beauty of a flower if you won't stop and look?

How can you breathe the fresh sea air if you won't leave your house?

How can you find if you won't seek?

You can't.

Neither can you reach your full potential if you limit yourself by closing your mind to knowledge. So open your mind. Shake yourself free of the tangling cords around you, hindering you from truly living. Shake yourself free and fly into the blue sky that expands with every new thing you learn. Soar into your ever-growing horizon, and learn what it is to be truly free.



Seriously, in the face of her obvious precocity and erudition, are y'all still worried about her level of "socialization"?

On that subject, here's a quick read.

Whenever I mention homeschooling - to ANYONE - I can start the countdown 5, 4, 3,... before I hit 1, I am rebutted with "socialization", "social skills", "interaction", blah, blah, blah, blah. Yet none of these education shirking outsourcing parents ever seem to be worried about exactly what their kids are learning. The important thing is to have friends, I guess.

And nearly 100% of respondents insist that their local government schools are "good", if not "great".

If they want to perpetuate that self-delusion, then I would advise them not to compare their 15 year old child to the young lady quoted above.

Hard evidence has the potentioal to be very unsettling.

Bob Ryan - Senility On Full Display

From today's Boston Globe:

Every once in a while Pierce reminds us that he is the greatest pure scoring machine in Celtics history. Many old-timers bristle when you say that, citing John Havlicek, Sam Jones, Larry Bird, Kevin McHale, or whomever. But it just happens to be the truth.

He can get his own shot, which is a major plus. He is an extremely proficient, highly ambidextrous, driver. He takes a lot of free throws. He is a constant 3-point threat. And he is the best fast break finisher the team has ever had. No argument.



First of all, my mossback neighbor needs to stop talking about "old-timers" in the third person.

The idea that Paul "never won anything" Pierce is a the greatest pure scoring machine in Celtics history is hogwash, if not outright blasphemy - ESPECIALLY coming from a man who watched Bird and McHale hoist banners from press row.

As a scoring machine, Larry Bird shot 49.6% from the floor for his career. Kevin McHale tallied a whopping 55.4% lifetime mark.

Meanwhile Paul Pierce is a mere 44% career shooter.

Bird also shot better from the 3-pt line (37.6% versus Paul's 36%) - and mind you, the arc was further out in his day as well.

And Bird made 88.6% of his free throws to PP's 84%.

You'd think a "machine" would have to be EFFICIENT, would it not?

If by "pure" scoring machine, Ryan means that Paul shouldn't be judged against multi-dimensional Celtics like Bird, McHale, Sam Jones, and Havlicek who actually did stuff without the ball like rebound, make their teammates better, and WIN championships, then yeah, Bob, I catch your trivial drift.

I'll bet Bob, in his manifest dotage, would like to be judged "purely" on the style of his writing - with little regard to its accuracy.

This reminds me, I am overdue for emailing the 'old coot'. I used to regularly harass him and he sent back some of the most dizzying responses one could imagine. Usually I start off by blaming the recent decline in Globe circulation on him and he invariably responds with a screed calling the public illiterate and whatnot.

Self-Segregating, Hypocritical, Bigoted Anuses

They aspire to live here.



From Forbes:

If exclusivity is everything in luxury real estate, 303 Third Street, a cooperative of new apartments in Cambridge, Massachusetts, represents something of a coup: Only faculty, staff or alumni of MIT, Harvard or Massachusetts General Hospital (included for its research ties to both universities) may buy apartments here. According to Bob Simha, former director of planning for MIT and one of the principals behind University Residential Communities at 303 Third, the goal is to create "an academic community, a place for people with shared cultural interests and an affinity for the intellectual life."

"It's for like-minded people connected to a university," says John Cetra, describing his design of the building's interior and amenities, which will include a library with an eco-friendly fireplace, a club room outfitted for lecture series, a round-the-clock concierge and a fully staffed private dining club.

"We're facing a group of Nobel Prize winners and university presidents," recalls Cetra. "This was not a golf community. The questions were not just what's the color of the carpet, but what are the chemical emissions from the carpet? How many air changes per minute in the bathroom and kitchen? I was taking questions from the world's authority on off-gasses from paint. It was an educated buyer."



"Like-minded peope"???

So much for diversity!

Note that these are "educated buyers" - they aren't the Cro-Magnon Morons who inhabit "golf communities"!

These smug bastards just ooze with condescension AND bigotry. One of the only justices in this world is when I get a hold of such an elitist at a social event and decided to patronize the sh*t out of them. I'm quite good at it too - if I do say so myself. My best Marginalizations are always live and in-person.

These like-minded scumbags have never shirked from coercing others to assimilate via ethnic quotas, sensitivity training, affordable housing mandates, etc. but obviously they are different special. For example, here's a 2002 Harvard Crimson editorial on Augusta National's male-only membership policy:

Although Augusta National and other private clubs have the legal right to restrict their membership along gender lines, it is morally repugnant to do so. To base membership decisions in any institution along gender lines, whether it is explicitly stated in membership rules or not, is discrimination pure and simple...

Hah!!!

"Morally repugnant"??? ....at least it is when rubes, NASCAR fans, and the rest of us Morons decide to self-segregate.

With the Harvard/MIT pedigree mandate and units priced from $465,000 to $1.5 million, 303 Third Street will be a veritable monument to hypocrisy.

If and when this project gets built and completely sold, I have to remember to go up there, infiltrate the "gated community", and do a minority headcount.

Click here for a follow-up post.

Latrell Sprewell Victimized Again!

NBA baller Latrell Sprewell just had his house foreclosed (his boat too!)

This is the same Moron who choked and swung at his coach in 1997, meriting a year-long suspension. (without pay!)

Then, as Wikipedia tells the tale:

On October 31, 2004, the Minnesota Timberwolves offered Sprewell a 3-year, $21 million contract extension, substantially less than what his then-current contract paid him. Insulted, he publicly vented his outrage, declaring, "I have a family to feed."

After turning down that insulting offer, he never earned another penny in the league.

I wonder how many former pro-athletes are positively broke?

I am guessing that it's around 70% of the lot.

Marginalizing Upwind Peeing Pagans

I know a guy who's, well, an environmental wacko. I forget how it came up, but one day he started going off on cell phone chargers. He got all hot and bothered about how people leave their cell phone on the charger and plugged in long after the charging is complete.

This guy is such, like, a total DOUBLE LOSER.

By no means was this a personal crusade. I right away found the issue on TreeHugger.com. None of these clowns think for themselves.

Apparently, phone chargers burn electricity even when there is no phone plugged into them. So exactly how much electricity, if I may to ask the obvious, germane question?

Well, you had to get far down the comment thread to find out, after one brave soul tested his charger with a Kill-O-Watt meter, that over the course of a year, his particular charger burned 1.1 KWh.

So that's around 14 whopping cents - for the entire year!!!

Note this DOUBLE LOSER has a PhD from one of the top five universities in the country.



It's been fun recently breaking balls on composting. The idea has been around for quite a freakin' long time. As such, anyone jumping out of their seat to buy a composter at Costco today is a certifiable, docile Moron. It's a fad for crying out loud - as very well proven by them selling at big box retailers.

It reminds me of the Atkins diet at its peak in January 2004. When many of my MOST DUMBEST friends/family members pig-piled into the decades-old idea of carb reduction I knew the mania was over.

By the way, that composter above retails for about $500 - more proof that a justice-rendering, fool-impoverishing God exists!

What did y'all do with your egg shells and coffee grounds this morning anyway, you Earth-rapers?!?!?!



One of my new favorite shows is Hell's Kitchen. Despite the ridiculous volume of profanity and ugliest cast in the history of television, the show is a compelling watch. Anyone who cooks or eats out (everyone?) might be interested in seeing how a restaurant kitchen functions behind the scenes. (Yes germaphobes, they are constantly sticking their fingers in your food to test for doneness and proper seasoning!)

Gordon Ramsay is a famously successful restaurateur in Great Britain ($60 entrees?) - but like any specialized ego-maniac, he thinks his intelligence transfers smoothly into all other fields. He's now calling for banning restaurants from using vegetables that are "out of season" and have to be trafficked half-way around the world. "Buy local" is his preachy platitude presumably to save the planet from burning fossil fuels.

Mr Ramsay said in a radio interview: "There should be stringent laws - licensing laws - to make sure produce is only used in season.

"The quicker we get legislation pushed through the Houses of Parliament, the more unique this country will become in terms of its sourcing and level of inspiration.

"Fruit and veg should be seasonal. Chefs should be fined if they haven't got ingredients in season on the menu."

Yeah Gordon that's a great idea! Go shut off the richest markets on this over-heated planet to impoverished Third World farmers. He's a real world-saver!

This sort of reminds me of the nearby Hull windmill:



Hull is a tiny beach town up the road from me (1.5 miles) that has a very low socio-economic status (average household income $58,136); it's quite rough if you what I mean. However it happened, the eco-pagan elites got Hull-ites to sully their skyline with a couple of hideous windmills. They are an absolute eyesore. I brand anyone that claims otherwise an Automatic Moron. Meanwhile, Ted Kennedy and other "do as I say, not as I do" wealthy Earth-copulators have been able to keep wind turbines away from their pristine horizon in Martha's Vineyard.

Note the full-court brainwashing going on in Hull:

Hull has been "a model for engaging the entire community to understand and move forward together on its wind power project, from school teachers, utility engineers and local leaders to state government, academia and industry".

I found that on a website "not affiliated with Hull", powered by CARE (Citizens for Alternative Renewable Energy). The addresses I found for CARE were Greenwich, CT and Washington DC. Thank you citizens elitists!

I wish some of the crunchy trust funded tools in Cambridge would saunter into Hull one night and start barroom discussions of renewable energy, climate change, and sustainablity. If they did, they'd probably be going home minus a few teeth to say the least.



Unplugging cell phone chargers, composting 8 egg shells a week, and providing *sustainable* electricity for a fraction of one town's mere 11,000 residents....

...it's like peeing upwind(!) on a forest fire.

UPDATE - Here's an email on this subject I received from a reader:

Hi C:

I just read your blog post about the Hull windmill. I previously audited a Nebraska electrical company's books (during my CPA days) and asked about the 2 windmills near Lincoln, the state capitol. The employee said that if the taxpayers (it was a public utility) knew about how many $$ the windmills lost, they would be outraged.

Chelsea Clinton's Date

After Chelsea returned from a date, Hillary asked her if she had a good time.

Chelsea said she had a wonderful time and thinks she's in love.

Hillary said, "You didn't have sex, did you?"

Chelsea said, "Not according to Dad."

I Am A Lamb At The Teat...

...according to Mr. and Mrs. (Josh) Weintraub.

Read the comments of my prior post.

I don't know why any clear-headed person would be so eager to trade invective with me.

They get a pass - for now - because there are far worse things in this world than loving, delusional parents.

But I just don't see why, if Josh Weintraub was such a hardworking, intelligent trader then why didn't JP Morgan Chase consider him an asset worth keeping.

Can you imagine that after presumably 10-15 years in the mortgage arena, after all his success, that another bank would essentially say, "We don't see any role for you in our mortgage business"?

Ironically, that would almost be like looking at a nationally accomplished mathlete and trying to stump him with fourth grade arithmetic!



Jeez, how hard would it be for me to conceive an animal analogy for mortgage traders at Bear Stearns?

HSBC - A Long Term Disinvestment

One of my foundering shorts is HSBC Holdings. I shorted it practically at its recent low - near $71 a share. Today it is trading at $86.

Thanks to Citigroup's recent demise (From $50 to $24 a share), HSBC is now the largest bank in the world. Like all banks, it's having problems with mortgages and collateralized debt in the United States BUT, it is allegedly in the sweet spot of the booming Asian markets.

If you think Asia, particularly China, is in an investment bubble then shorting HSBC would be a good play on that. In that case, buy some January puts as the stock is high and the options are relatively cheap, IMO.

Like all of today's big banks, HSBC is too big, too unwieldy to manage. Even though they've already written down $27 billion in the past couple of years, they simply have to have more toxic debt on the books. I expect them to float more stock, preferred, convertible, or otherwise dilutive. And I expect that once the Asian profits inevitably fade, a more honest picture of their balance sheet will emerge.

Most likely, in a couple of years, these Asian profits will be similarly written down and proven just as sham as the "profits" originally booked on US mortgages.



Anecdote - 1.5 years ago my wife was almost poached by HSBC. Pretty much the job was hers if she wanted it but for the details of a sufficient raise and our willingness to relocate (yet again) back to New York. Mrs. C-Nut was turned off by the "imbeciles" who constituted senior management. She said the firm was "European" and didn't believe in "firing people". She said there was "furniture" all over the bank earning sh*tloads of money who managers had to just "work around". My wife also didn't like the antiquity of HSBC's processes. She said they did all sorts of important, complicated calculations "manually", i.e. on spreadsheets instead of using refined code-written algorithms. In this case, the grass wasn't any greener - my wife was coincidentally promoted at her current firm and we stayed put in the worst state of the union.

UPDATE - Investor says HSBC undervalued loss by $30bn

Charged With Stupidity - In The 1st Degree

I came across this item in the May 5th, 2008 issue of Forbes:

Facing its own subprime mortgage lending problems, E-Trade has sued several ex-employees, saying they improperly took along client info when defecting to rivals. For sheer smoking-gun-style proof it's hard to top the injunction-seeking Los Angeles lawsuit E-Trade just filed against Joseph S. Reilly, described as its third-highest-producing financial adviser, and his new firm, Bank of America's brokerage arm. The complaint says Reilly vacated his office so fast in late January that he left behind handwritten "to do" lists--reproduced in the pleading--that said, "Call clients using cell to determine their interest in coming w/me," and "Copy as many names #'s as possible." No comment from Reilly; BofA denies wrongdoing.

That was pretty funny. For those of you unfamiliar, financial advisers, aka "stockbrokers", generally sign no-compete clauses that specifically ban client poaching. Though in reality, the practice is as common as speeding on the highway.

This reminded me of all the stupid criminal stories I have heard over the years - like a guy who filled out his name and address on a pharmaceutical application and THEN decided to rob the store. Or a dynamic duo that tried to rob a Dunkin Donuts in Saugus, Massachusetts. Here's a decent place to read more - Stupid Criminal Files.

Videos of this genre abound. Here's a good one:



And here's another that I remember from way back. Essentially, it's a "classic".



Want to read about more Moronic criminals? Click here.

Want to keep your brain idled and watch them? Click here for more videos.

You could easily spend all day watching and reading about these clowns.

May Trading Update

First prime yourself with my March and April Trading Updates.

So what have I done recently?

Well, I pared my Google down to its original size.

I shorted Washington Mutual at $12 - currently trading $10.54.

I shorted Lehman Brothers at $47.45 - currently trading at $43.45.

I added to my UltraShort Real Estate ETF position at $86.67 - currently trading at $87.17. My cost basis is around $91.00, so still slightly underwater. The recent run-up in its largest component, Simon Property Group, which I am also short outright, has been the culprit for my SRS loss.

I also initiated a small short position on the NASDAQ. Essentially, I shorted the QQQQ at $48.49 - it's currently trading at $48.17.

As y'all can see, I haven't been doing much trading or blogging. When the (relatively speaking) warm weather breaks in New England, I spend an inordinate amount of time outside for any reason whatsoever: golf, yardwork, the beach, and taking my kids to the playground. People think the spring and the fall are so euphoric up here but that's not really true.

It's just that the 5 month winter is that dour!



The overall economy is foundering. Forget whatever the headline GDP numbers are saying. Tax receipts are falling nationwide. Credit card usage is way up. And an astounding 18% of workers are currently borrowing from their retirement accounts. Of course gasoline is pushing $4 a gallon and the housing market is still spiralling down the toilet.

As you can see, I am pretty bearish on the large financial companies. I'll re-catalog my financial shorts here: Bank of America, First Federal, HSBC, H&R Block, Washington Mutual, Wells Fargo.

And note that I have been periodically shorting Fannie Mae, Capital One Financial, Citigroup, and Wachovia.

There are so many systematic risks to the American financial system, I don't know how anyone could own a single bank share. There's the possible debt spiral from the death of municipal bond insurers Ambac and MBIA. There's the mortgage crisis - subprime, Alt-A, and jumbo varieties. There's a HELOC bomb on the books of most banks. These "Home Equity Lines Of Credit" are trading at 10 cents on the dollar in the open market, yet the banks are marking them on their books at near par value. For example, Wells Fargo has $84 billion in such toxic debt on its books. Bank of America has over $100 billion. If these banks were forced to mark HELOCs to market, they'd be bankrupt. This stuff really scares me and it should worry you too, unless you have no savings to fret over!

Mind you, HELOCs alone are a big enough problem. I haven't even gotten to commercial real estate, credit card debt, student loans, the so-called auction rate market, or the generalized pain that accompanies a recession.

Sleep tight.

If you want to read more on the banks' debt bombs, start reading Mr. Mortgage.

If laziness prevails, you can watch him on youtube as well.

Housing - The Blue State Bailout

Below find a foreclosure map that Fed Chairman Ben Bernanke just presented. Click image to enlarge.



Do you see what I see? Ben practically put up a Red/Blue State election map - with the notable exception of Florida, a 50/50 state marked by a heavy concentration of speculating Northeasterners and Midwesterners.



UPDATE - Hello Malkin-ites!

By the way, I am well aware, as the first commenter pointed out, that there are many, many ways to interpret these highly correlated maps.

UPDATE 2 - My illiberal Communist buddy just said to me, "Well, that's because we have the minorities...What you need to compare is the foreclosure rate between Red State and Blue State non-minorities..."

Say what??? Didn't we end up in a Civil War the last time it was decided to *not count* everyone equally?

Like I said, there are many, many ways to interpret the maps. The most practical application for them I can think of is, well, ribbing your illiberal acquaintances.