Wednesday, January 28, 2009

The Puppet Master On Stage

Having read and heard very little of George Soros directly, I enjoyed his column today in the Financial Times.

Now, of course, I disagree with his globalist, inflationist, communist prescriptions. But it's always important, make that EXTREMELY IMPORTANT to keep abreast of the Moron leaders puppet masters.

I admit that *credit default swaps* aren't my thing. BUT, I don't understand this statement of his:
The second step is to understand credit default swaps and to recognise that the CDS market offers a convenient way of shorting bonds. In that market the asymmetry in risk/reward works in the opposite way to stocks. Going short on bonds by buying a CDS contract carries limited risk but unlimited profit potential; by contrast, selling credit default swaps offers limited profits but practically unlimited risks.

How exactly could *buying a CDS contract* have *unlimited profit potential*?

Wouldn't *insurance* on say $1 million worth of bonds have a price ceiling at say, $1 million?

Someone please educate me. (Or George.)

Not Trading Update

So the market, particularly financials, rallied today on Obamian optimism - on the idea that printing money for pork and shifting bankruptcy from banks to the Federal government is bullish for equity holders.


I admit I barely know what happened today as I am too busy managing my brood and packing for the 1,600 mile drive back north. There was a Fed meeting?

Not only shouldn't I have shorted Goldman Sachs a few days ago near 67.00 - it was most definitely a mistake to whack it again recently at 77.00! [It bounced from 59.00 to 87.70 in six days.]

But look at the least I dumped it near $200. Today I started buying again at 120.90, after the close.

If time permitted I could have a whole lot of fun talking about the liars at Wells Fargo. Look at how it popped today (above graphic) after reporting admitting a $2.6 billion quarterly loss. Thankfully I covered my short close to $14. I would love, JUST LOVE for it to pop again - the higher the better - just so long as I don't whack it too early, a la Goldman. For some Wells background see my prior post - Wells Fargo Number Fudging.

Back to the suitcases....

Driving out in the AM.

Tuesday, January 27, 2009

Poor Little Michael Goodwin...

...His mother is a typical Boston Moron!

And she decided to display her vast Moronity in a signed letter to the Boston Globe:
I WAS running around with typical errands - picking kids up from school, cleaning the house, laundry, paying bills, getting dinner - all the chaotic daily chores of a working mother. In the middle of my self-induced whirlwind, my 6-year-old son handed me a letter he wrote to the president at school: "Dear President Obama, Congratulations! Please make no more wars. I will not litter. Sincerely, Michael Goodwin."

In times such as these, with the economy struggling, people out of work, our healthcare and schools in disarray, and global turmoil, his letter made me stop in my tracks. As I hugged him, glad for this brief moment of peace, I thought, why not? It should be as simple as that. Make no more wars and I promise not to litter. Give everyone a job and I promise to clean my room. Love thy neighbor and I'll love you back.

Last Tuesday, Obama asked everyone to step up and do their part. Well, change can start with a small child's straightforward promise not to litter. If everyone pledged to make an honest, small change, then progress would be possible. We would all be a part of making our country and this world a better place.

Rebecca Goodwin

Who knew that our national bellicosity came from litter!

What's that expression?

Sins can be forgiven but stupid is forever?

On Mike Shedlock, Mish

Mish's blog has really vaulted to the top of, not just my reading list, but that of most web-literate market savants. His posting is original, high-quality, and so frequent that one wonders if there's an ignored woman/life-partner in the background.

Yesterday's post Peter Schiff Was Wrong was a veritable fount of edification. Not only did I take the time to read his *most lengthy post ever* but I also meticulously read all 476 comments.

Now don't misunderstand. My praise for this post is not rooted in *piling on Peter Schiff*. I happen to disagree with Mish's verdict. Schiff was right for many years before he was terribly wrong last year. Everyone, except possibly Mish, who's in this business knows darn well that's how it goes. Buffett, Soros, Jim Rogers, Goldman Sachs,....even the savviest of all-time are occasionally spectacularly wrong - as Mish will (if he hasn't already) be one day soon enough.

After Mish rips apart Peter Schiff, he proceeds to toot his own horn; he brandishes his funds' ("Hedged Growth" and "Absolute Return") recent performance:

Yeah, that's right, a man with *over 20 years* in the business is touting his 3.5 year returns - returns he's only comparing to those of the S&P 500. And note that his returns only look *good* in the wake of 2008, an outlier year for the markets.

There ain't nothing like pumping short-term returns, against a low-hurdle benchmark, AND against a man like Peter Schiff who had a terrible 2008!

From my trader's perspective, Mish's *absolute* returns suck and scarcely warrant braggadocio.

He's acting like a third or fourth year trader who, from the perch of a *breakout year*, thinks they've finally commandeered all the nuance of fluctuating securities' prices.

See also my prior post Marginaling Mish.

And I Thought My Mother Abused Me!

Considering the innumerable Morons I've highlighted on this blog....she's vaulted into the lead pack!

Monday, January 26, 2009

On Yoga

One subject on this blog whose treatment is out-of-line with its importance in my life is yoga. I do it every morning for about 20-30 minutes. And, I've only being doing it for a year or so.

Let me just say that it is AWESOME. Forget the chanting, the *feel your thoughts float away like a butterfly* nonsense. Yoga is minimally about stretching and strengthening one's body. It'll improve your posture, respiration, and yes, even your *chi*.

What's great about yoga, beyond the results, is that you can do it without breaking a sweat; you can do it after eating a hearty breakfast; and that you can do it anywhere on this overheated Earth. It's cheap to boot!

I first started doing free on-demand yoga classes from Comcast on my color TV. Then I borrowed a book. Most recently I've been cruising the web and YouTube for new poses and stretches. That chick whose video I posted the other night (for her *qualities important to the superficial male*) I've actually found to be quite a good resource.

Here's the crux of yoga. Can you bend over, keeping your legs straight and touch your toes? Probably not - especially if you're a dude. Yoga people can not only do this, they can bend over so far that they can place their palms flat on the ground.

I mistakenly thought that I couldn't touch my toes because "I'm not flexible" and "Because of my bad back". But I discovered that my inability was actually due to *tight hamstrings*. I am happy to report that I can now not only touch my toes but almost get my palms completely flat on the ground. Note that I am still brimming with masculinity and I still have the very bad back!

None of this is philosophy or *detoxification*....It's pure anatomy. Hamstrings are, well, strings and you have about a bazillion of them (alright, maybe not that many). They get tight from our sedentary, automotive lifestyles and wreak havoc on our backs. Tightness in our bodies is a locally contagious affliction. What kills me to this day is that out of all of my doctors, not a one of them ever told me to stretch my hamstrings (or lose my gut) to mitigate my bad back. Remember I suffer from TOS (and had its invasive surgery) because of a freakish car accident almost 11 years ago now.

Not only did the doctors all push useless, expensive pills on me, and not only did they fail to recommend yoga, THEY STRONGLY ADVISED THAT I NOT DO STRENUOUS STRETCHING.

So they told me NOT TO DO the one thing that has helped the most!

The next thing you know, our powers-at-be will be prescribing for our debt-ravaged society....EVEN MORE DEBT!

Okay, I digress.

Yoga is one of these things that has the potential to really transform you physically. It awakens muscles you, even if a one-time star athlete, never knew you had. Heck, later in his career NBA icon Larry Bird used to *stretch* for a solid hour each day.

You naysayers need to realize that flexibility and strength are in no way disjoint goals.

I could add plenty more here on yoga but my time is short. Though I am going to add one final thought.

My wife - sagacious broad that she is - had unsuccessfully tried for years to get me to do yoga. I rejected the idea reflexively. I was turned off by the *people* who were into it, the airheaded philosophy of it, and probably the group/class aspect. I like to do things, make that just about everything, by myself. Essentially, I refused a life-enhancing practice because of the people, whom I believed, have co-opted it.

What I've truly learned over the past couple of years is to not reject ANYTHING based upon its practitioners.

Yeah, almost four years ago I set out to Marginalize Morons and in the process I accidentally got a whole lot more tolerant of them. Seriously.

So, again. Be careful what you ignorantly deprecate. How many meathead 'old coots' do you know that laughed at golf, retired, and then lamented the fact that they didn't take up the game decades prior?

My next post in this vein, will explain to y'all why I have started passionately studying ballet.

Theme Park Rip-offs

So what did I do today?

Not much. I spent the morning packing up some of my kids' junk. I was unable to wrest an extension on my Naples retreat from Mrs. C-Nut who sneakily *signed my kids up for activities* in February. So we'll be hitting the road on Thursday, back to Arctic Boston.

I'm stopping in Orlando (to see a friend's newborn) and figured I could take the kids somewhere touristy. We did Disney last year and would hate to set an *annual* precedent with my kids. Also my wife shot down that idea as *too expensive* anyway. "I think you should do Sea World," she suggested.

Well, even Sea World is a whopping $145 for me and my son (with little Princess C-Nut sliding in for free). But heck, I should go on Thursday anyway because next year, when my daughter's three and my wife is present, it'll cost $290!!!

I remember doing Sea World when I was ten. I did very much enjoy it - particularly the water ski show ("Hatfields and McCoys"?).

Of course, I wasn't the one paying.

Sunday, January 25, 2009

Depressing Facts

Today somebody on Mish's blog linked to this article that de-romantacizes, er de-bunks, the glory of FDR's New Deal *success*:
By 1931 unemployment was at 16.3% of the workforce, peaking at 25.2% on FDR's inauguration in 1933. Yet by 1938, unemployment was still a staggering 19.1% of the workforce, and in 1939 it remained stubbornly at 17.2%.

And how about this:
Why eight years of Roosevelt economic policy produced such disastrous economic recovery results, is the crucial question. The answer appears to be that the group of men who advised the President on economic and social policy during the peace years of the Depression, were focussed on a broad social agenda, one of using the depression crisis to shift the United States from a market economy, which they contemptuously termed "laissez-faire capitalism," towards a State-dominated economy of central planning.

A *broad social agenda*???

Does that ring any present-day bells?

Full Disclosure - for a chunk of my whormonal youth I too was hellbent on a personal *broad social agenda*.

Now, if you have any lingering doubt that FDR was a full-fledged communist (or at least that's who he delegated to) then read a bit of this lengthy excerpt:
'A new deal'

In his Presidential acceptance speech in 1932, Roosevelt promised "a new deal for the American people." The term was taken from a 1932 book by the same name, "A New Deal," written by Stuart Chase. That book rapidly disappeared from the shelves after Roosevelt's election. Its contents were the currency of White House economic policy discussion by Tugwell and other central planners around the new President.

Chase, along with Tugwell and Robert Williams Dunn, had jointly written a report, "Soviet Russia in the Second Decade," following their 1927 travel to Stalin's Russia.

In his 1932 book, "A New Deal," Chase argued that the earlier transition out of feudalism into what he called laissez-faire capitalism, was essentially over. The era of Trusts, monopolies, capital concentration by large banks, must now give way to central or collective planning. Chase wrote, "modern industrialism, because of its delicate specialization and interdependence, increasingly demands the collectivism of social control to keep its several parts from jamming. We find a government meeting that demand by continually widening the collective sector through direct ownership, operation and regulation of economic functions." He adds, "Competition is perhaps a good thing—in its proper place. Where is its proper place? Collectivism is beyond peradventure on the march."

Much of Chase's book was filled with fulsome praise for Stalin’s Russian model of central planning and its achievements, reflecting the fascination of numerous younger American intellectuals in the early 1930's.

In his "A New Deal," intended as a kind of blueprint for the Roosevelt campaign, Chase advocated what he called, "The Third Road, a road which runs neither to red dictatorship nor to black (business)." Chase proclaimed that under the Third Road, "private profit will not furnish the happy hunting ground it used to. State trusts, investment control, the curbing of speculation, will choke the muzzle of the more devastating forms." He also proposed drastic economic controls, an eerie harbinger of what would come to pass under the Federal Reserve of Alan Greenspan: "The Federal Reserve will take over the control of currency, the stock exchanges, banks and domestic investment... A new Foreign Trade Corporation will supervise exports, imports and foreign loans. Public works will undoubtedly be centralized in one department..."

Leaving no doubt that his sentiments were not market-oriented in any way, Chase concluded his tract by stating, "We can go on, however...without violent revolution...if we are willing to halt expansion, and organize industry on the basis of using to the full the equipment we now possess. This is the program of the third road. It is not an attempt to bolster up capitalism, it is frankly aimed at the destruction of capitalism, specifically in its most evil sense of ruthless expansion. The redistribution of national income, the sequestration of excess profits, and the control of new investment are all designed to that end." Little wonder that Chase was given a very discreet background policy role in FDR's inner circle. This was explosive stuff for the American public, even in an economic depression.

After leaving Harvard in 1910, Chase had joined the Boston Fabian Club and went to Chicago to work in Jane Addams' Hull House. As a young bureaucrat with the Federal Trade Commission in 1917, Chase investigated charges against Armour & Co. meatpackers. This all shaped his social outlook, and the Soviet model gave it justification in terms of national planning. Chase first met Roosevelt in 1932, but his role was more as a writer than as a policy administrator in the New Deal. He held several official consulting posts in the New Deal, but was mainly influential through his good friend, Rexford Tugwell, and through his writings.

Rexford Guy Tugwell, the Columbia University economics professor who traveled with Chase in 1927 to the Soviet Union, was the central person of this collectivist group around FDR. Indeed, when it emerged that Tugwell was one of the inner circle of the new President, business leaders and newspapers began to research Tugwell's economic writings, and came away shocked, leading some to nickname him, "Rexford the Red."

As newspaper journalists began digging into Tugwell's published writings for clues as to what policies the new President Roosevelt was being given by his top advisers, they became alarmed.

In a paper in the American Economic Review March 1932, Tugwell wrote, that the quest for profit no longer motivated business, but that instead it produced "insecurity" because profits were, "used for creating over-capacity in every profitable line; they are injected into money market operations in such ways as to contribute to inflation; they are used, most absurdly of all, as investments in the securities of other industries." Tugwell proceeded further in his frontal assault on the core of the market private enterprise system which had created such extraordinary wealth and improvement of general living standards over the previous decade: "Industry is thought of as rather a field for adventure...The truth is profits persuade us to speculate." When such comments were widely reported in the Nation's media, they did little to bolster businessmen's confidence in the new Administration.

In discussing a proposal to introduce national economic planning, Tugwell wrote in 1932, "it seems altogether likely that we shall set up, and soon, such a consultative body...The day on which it comes into existence will be a dangerous one for business...There may be a long and lingering death (of the private profit enterprise—w.e.), but it must be regarded as inevitable." Private business, Tugwell added, "would logically be required to disappear. This is not an overstatement for the sake of emphasis; it is literally meant."

In October 1932, that is, one month before FDR's election, Rexford Guy Tugwell went on to formulate a six-point program for dealing with the depression crisis. Tugwell opposed wage cuts, then a common method of corporate cost cutting. He insisted, however, on reducing retail prices, and called for "drastic income and inheritance taxes," as well as "avoidance of budgetary deficits and monetary inflation." Obviously businesses could not possibly simultaneously maintain wage levels, reduce prices, and pay increased taxes, without risking bankruptcy in such crisis times. To this, Tugwell advocated, "the taking over by the government of any necessary enterprises which refuse to function when their profits are absorbed by taxation."

In brief, Tugwell's program, and this was planed, would first make it impossible for business to function, then bring those failed businesses under nationalization or state ownership. Tugwell concluded his 1932 program, "So long as prices, profits and individual production programs are at the disposal of independent business executives, our system will continue to show much the same faults as it displays at present." Tugwell endorsed Norman Thomas' League for Industrial Democracy program which called for a, "new social order based on production for use, not for profit."

Tugwell was strategically placed in 1933 as Deputy Secretary of Agriculture, just under his recommended choice of Secretary of Agriculture, Iowa farm editor, Henry A. Wallace. Tugwell continued in the early months to have regular access to his old friend, FDR as well.

Now I haven't read the whole article yet but perhaps some of you shiftless folk can do so - and highlight other salient points.

FDR and "Uncle Joe"!

[That's ACTUALLY how FDR referred to mass murderer Joseph Stalin.]

Related blog posts:

I first slammed FDR 3.5 years ago in Poland And FDR's Depraved Indifference.

And my oft-visited, but plagiarized post - Depression Pics.

Sunday Scat

A crass guest explains what a *commode with legs* can do for Merrill Lynch's John Thain just after the 4 minute mark:


Though, the whole video is worth watching!

Saturday, January 24, 2009

Sorry... sheeple. I was out boozing tonight.

Go back and read any of my 1,000+ posts, will ya?

I Don't Know Why....

I can't get anyone else (guys!) interested in yoga!

Thursday, January 22, 2009

John Thain Sodomizes Ken Lewis - In The Public Square!

The wires today are abuzz with reports of Ken Lewis ousting Merrill head honcho John Thain. (Remember the firms merged this month.)

Here's what I said two months ago:

But it's time now for Ken Lewis to walk away from this deal. He's been duped by the more sophisticated Wall Streeters on this one. John Thain appealed to Ken's gargantuan ego and it worked like a charm. Lewis may as well have been a fanny-pack wearing tourist at a professional poker table - he was bent over that easily.

Here's the post-bend-over kiss-and-tell from today's Charlotte Observer:
Lewis' loss of confidence in Thain was due to a combination of factors, according to a source familiar with the matter. Merrill had been losing executives, and the bank heard concerns about his leadership from employees and investors. In addition, Lewis learned of Merrill's rising losses from the Merrill transition team, not Thain himself. When Lewis later talked to Thain, he didn't seem to have a good explanation, the source said.

Thain also went to Vail, Colo., on vacation in December at a time when Merrill's problems were emerging. Although Thain was working on the trip, the move was not perceived well at Bank of America, the source said. Thain also had planned to fly this week to the World Economic Forum in Davos, Switzerland, even though some Bank of America officials had signaled he shouldn't go.

Thain's payment of bonuses to Merrill employees before the deal closed also has emerged as a new black-eye for the bank.

Bank of America spokesman Scott Silvestri said today that Thain made the decision to pay the bonuses in December instead of the normal time of January. Merrill was an independent company at the time but informed the Charlotte bank of the decision, Silvestri said. He declined to say when the bank learned of Thain's decision.

December was a critical month for the merger. The bank has said it learned of rising losses at Merrill in the middle of the month, after shareholder approval on Dec. 5 but before the acquisition closed Jan. 1. Bank of America CEO Lewis last week said he considered backing out of the deal, but proceeded under the urging of regulators.

Last week, Bank of America said Merrill posted a fourth-quarter loss of more than $15 billion, largely because of writedowns related to the fallen value of securities. That loss, though, wasn't counted as part of Bank of America's own $2.4 billion fourth-quarter loss.

The bank wouldn't say how much Merrill paid in bonuses. Merrill disclosed compensation and benefits expenses of $15 billion for 2008, down 6 percent from 2007.

So, let's see....

Thain *hid* losses from Ken Lewis.

He went on vacation in December to Vail when the losses were coming to light AND just before the close of the merger.

AND, worst of all, he engineered a looting of the company by its employees at the midnight hour.


Now almost as bad as what Thain and Merrill Lynch did to shareholders and taxpayers is the shameless scapegoating from Ken Lewis.

He's trying to get the blame-fingers pointed at Merrill, Thain, and the *regulators* who ALLEGEDLY made him do the deal. Ken Lewis, with all this smoke and his BAC stock purchase is doing his very best to keep the focus off him and the fact that BAC is trading at $5.71 today - an 18 year low.

For sure, John Thain screwed Ken Lewis. But Kenny Boy showed up commando in a pink mini-skirt, wore a blonde wig, and toted a bottle of lube.

Sorry for the graphic imagery, but if you want a whitewash of this heinous crime you're going to have to look elsewhere.

Hints Of Apocalypse?

Today is the first day in recent memory in which both stocks and Treasuries are getting ripped. You can see the drop in Treasuries in the higher 10 year yield above. Or, you can look at TBT, one of my biggest remaining positions, which is up 1.47 to 44.31 as I type this.

As it stands right now, there's at least a trillion more in Treasuries to be sold next year - and that's merely in addition to what already was a monstrous, runaway deficit.

I've been wrong about shorting long-dated Treasuries for a couple years now. But I haven't given up - even though I've coughed up a whole lot of soon-to-be-worthless dollars on the bet.

Remember, I was *wrong* about housing crashing for a few years as well. Look at it now spiraling down the toilet. My Naples real estate buddy told me recently that he has seen a few houses trade below 1994 prices!

Just think where they'll be trading if the long bond crashes.

Grist For Pessimists

Many thanks to Kfell for alerting me to this video.

If that doesn't get you *down*....then give Dick Morris a read.

I'm certainly going to have my hands full trying to protect my assets, lifestyle, and my Constitutional rights against the Morons regnant over the next several years.

Wednesday, January 21, 2009

Marginalizing Calculated Risk

Blogger Calculated Risk wrote:
We will probably see a slew of articles over the next ten days on the various failures of the Bush administration. I think the two worst economic mistakes were the Bush fiscal policies (creating a huge structural budget deficit) and the administration's ideological opposition to regulation and oversight that allowed the housing and credit bubbles to form.

Okay, what the heck is *ideological opposition*?

To characterize an idea, disposition, or creed as ideological is to say absolutely nothing at all. Put it this way, what deliberate action would be insulated from such an accusation?

Maybe a *hypocritical* one, but that's about it. (And in such a case, the defendant might very well plead *rational*.)

More often than not, the *ideological* accusation comes from an outright partisan. I am no fan of Bush (click here and here), but it's been obvious for a while now that Calculated Risk is a, well, let's just call him a "non-Democrat hater". Heck the guy gushes over Paul Krugman - calling him "Professor" like a wide-eyed naughty school girl. If this isn't a Moron warning sign I don't know what would be!

Again, to say that Bush opposed regulation and oversight in the housing sector over *ideology* is to say nothing at all.

Furthermore, it's a COMPLETE FABRICATION! Here's commenter Average Joe smacking down this buffoon in the comment thread:

"The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago....

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken.....

A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

"These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

"I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing," Mr. Watt said.

Yeah, Barney Frank actually said that! He said that Fannie and Freddie *weren't facing any crisis* more times than one could count. One might be bold enough to label his un-evolved stance as IDEOLOGICAL.

Calculated Risk also Marginalized himself in a recent post titled Demolition As Stimulus:
As the Obama team has noted, properly chosen infrastructure projects provide the best bang for the buck. These projects provide jobs today, and they are an investment in the future. We need more projects ...

And since Obama asked for suggestions ... How about a demolition program?

The idea that knocking down buildings, any buildings, could be stimulative should reek of stupidity even to non-students of economics.

It just so happens there is a well-known debunking of this very concept. It's called the Broken Window Fallacy:

Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when his careless son happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation—"It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?"
Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.
Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.
But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen."
It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.

Now if you click on the Wikipedia link above, you'll find this ironic gem in the entry:

"Ghastly as it may seem to say this, the terror attack—like the original "day of infamy" which brought an end to the Great Depression—could even do some economic good. [...] the driving force behind the economic slowdown has been a plunge in business investment. Now, all of a sudden, we need some new office buildings. As I've already indicated, the destruction isn't big compared with the economy, but rebuilding will generate at least some increase in business spending."

Aha! Now guess what Moronic, Pulitzer-Prize winning economist uttered that and thus displayed the depth of their ignorance in the wake of 9/11?

It was "Professor" Paul Krugman....Calculated Risk's co-ideologue!

Bank Of Morons

Here's a hilarious comment I came across on one of Mish's threads today:

So Ken Lewis buying shares of the company he imploded is bullish for not just BAC, but for the entire market?


Because he's proven to be such a savvy investor with Countrywide and Merrill Lynch?


At least the complicit board of directors participated in the farce.

Shorted The Effete Thugs - Goldman Sachs

Shorted a little Goldman Sachs at 67.07 today. The stock was down 13.85 yesterday - from 73.05 to 59.20.

I figure it may be good for a 5 pt or so scalp after today's bounce.

Tuesday, January 20, 2009

We're All Wired The Same

I have to admit, I've pondered most of them. What about you?

'Old Coots' want to maximize their theft of MY WAGES.

EBay dreams? Of course!

Women want to stay at home, throw occasional *parties* and become independently wealthy.

Every self-important intellectual wants to write a book, be it the *great American novel* or whatnot. (Me too!)

And who among us men doesn't wish they had a nickel for every time they....

As it turns out, you've got to be between 18 and 34 to become a compensated inseminator - because of motility or something.

Trading Update - Knocking The Ball Coverless!

So I'm cleaned up on my bank shorts now. I dumped my sizable SKF position late today at an average price of 195.11. My cost basis, as far as I can tell, was 132.20.

I also let out my remaining short positions on my least favorite bank - Wells Fargo.

I covered my since-exercised Jan 30 puts and my April 30 puts. The Jan flip was from 3.18 to 15.74. And the April put profit was the difference between my 4.80 purchase price and today's sale at approximately 16.32. Both trades were initiated 4 months ago.

Now if I were a partisan Moron....I might suggest that the stock market WAS NOT enthused by today's Presidential inauguration coronation.

Of course it matters not which stooge is the impotent figurehead - this stock market would be tanking even if I were taking the throne. [Possibly, anyway.] Asset prices (stocks, bonds, and real estate) are still too far divorced from economic reality.

It feels really satisfying to take these positions off. With the profits, my first goal is to coax a Naples extension out of Mrs. C-Nut - who had the misfortune of flying home this 2 feet of snow in our driveway!

She asked if she could call a plow....I soberly reminded her how bad the economy was and informed her that the shovels were on the back deck.

Next, I'm going to figure out how best to parlay these profits into some long-commodities and short-Treasuries positions. I could also very easily buy a ton more oil (DXO) here but just don't have the appetite at the moment.

Back From Golf

I am back from my Tampa golf excursion with my - as my MIL calls them - GutterBuddies.

It was a good trip. On the way up (from Naples) I stopped to play a round with my godfather in Sarasota. There, on an unseasonably cold and blustery day, I shot a respectable 85 at Seranoa. Not bad considering I've only played one round since September; in fact I haven't even been to the range.

Then, it was up another 110 miles to Spring Hill which is well past Tampa. Our Friday round was played at Hernando Oaks. What a great track! And it only cost $30.02. The cashier asked me if I had "two pennies" on me. I flat out lied. I had precisely two pennies in my pocket, as I always do when golfing to mark my ball. So I got the low, low price of $30 even.

Shot a horrific 93 there. It was horrific because I was blasting the ball down the middle most of the day. I just couldn't hit a green, chip it close, or make a putt. That's the fiendish brand of frustration known as GOLF.

Saturday we drove even further north to The Dunes. There they hit us up for the ultra-low fee of $42. Let me just tell y'all....this course was awesome. True to its moniker, there's sand everywhere. Though most is deemed "waste areas" and one can ground their club. I didn't hit into a single one all day. Even with bogeying the last four holes I still managed a respectable 83. What made it such a great course (besides the price) was that it was a Florida layout with tremendous elevation changes. Just about everything I've played down here has been boring and flat.

This short but long (602 miles on my rental car) trip was a success. We had a good time in spite of being in the middle of nowhere. There was enough of us that we could take over the otherwise deserted local bar. The guys danced, performed normal karaoke, AND demonstrated a more crass form of the art.

We also played a little pool. C-Nut was ON!

I beat the *6th ranked player in the State of Pennsylvania* at 8-ball three games in a row. I dusted him him twice and then, shaken and discombobulated, he scratched on the 8 in the third game.

[There are no *rankings*. This guy told the jabronis he was *ranked 6th* and they've been parroting that talking point for years. He's a good player for sure - one of the best in Philadelphia. The last time I played him I think I got one turn. He's played for big money (with backers) and can break at 30 mph. The suspect is the fat kid in the top picture with the white jacket.]

Some of these guys can really play golf. Here's a glimpse:

Fear not, my flock. I have a long list of blog ideas scribbled in my notebook. Mrs. C-Nut just flew back to Boston this morning so I'll have more time, albeit late at night, to catch up. We'll get to this shaky stock market and our friend Ken Lewis soon enough.

Thursday, January 15, 2009

Philly Pagans Demand More

The Philadelphia Eagles have snuck (or is it *sneaked*?) into another NFC Championship game. There were no expectations this year so Donovan McNabb's impending choke (either this Sunday or in the Superbowl) won't be as tragic as in the past.

Who could forget McNabb's *6 minute* version of the *2 minute* offense against the Patriots in Superbowl 39?

I mistakenly thought that after the Red Sox won the World Series in 2004, that after ending an 86 year drought, that Boston fans would relax a bit. I was dead wrong. They got even more fanatical maniacal.

Perhaps it's the same for Philly pagans? The Phillies recent World Series triumph may in fact only have whet their appetites.

At least the Moron above is asking the only power capable!

Gone Golfing

My wife and MIL have I rented a car and am off to Tampa to golf with my South Philly jabronis.

I've never been to Tampa before. All I've heard about it, besides my wife's *North Shore Long Island* deprecations, is that it's got the best strip joints in the USA.

What's that expression - Trust but verify?

Hah! Won't be any of that on this trip. These guys are too cheap and too alcoholic. At the end of this golf vacation (a full week for them) there'll be enough empty domestic beer cans to boost Alcoa's bottom line!

In fact, that's why Alcoa warned on Monday....

Because my jabronis pushed back their annual trip by a week!

There are 14 other guys going....I bet I get 6 Happy New Year wishes!

Wednesday, January 14, 2009

Domaining Gold

No, that's not Short Round all grown up.

That's Kevin Ham, a guy who made $300,000,000 buying up internet domains.

Read the amazing, edifying story here.

And here is another, albeit older, great article on the same subject of *domaining*.

Much thanks to Funny Circus Bears for dropping that name in the comments of my prior post - Where Is That Next Gold Rush Anyway?

What a truly fascinating subject! It's must-reading for all ambitious 'young coots'!

Tuesday, January 13, 2009

Burrito Bubble Popping

So I went to the Moe's on Immokalee Rd in Naples, FL today for dinner. There aren't too many places I can take my 20-minutes-tops kids. There are food courts, Chinese restaurants that don't really cook the food (10 minute!), and fast food joints like McDonalds.

At 5:57 pm the place was completely empty. I asked the clerk what was going on:

Clerk - Ever since they opened the other store on Naples Boulevard we've been dead....It's owned by the same guy.

Hah! He cannibalized his own sales. Ain't nothing like twice the overhead for the same revenue!

Now, obviously there could be *other factors*. I punched up the distance on Google is a full 6.4 miles between stores. Granted, 6 miles ain't much in a town like Naples, but still the stores could arguably be tapping different semi-circles of customer traffic.

Furthermore, the plaza that the Moe's I dined at is in was a near ghost town. Two of the three adjacent stores were *empty/for lease*; an anchor tenant at the other end was gone (Linens N Things) and a couple of in-between stores must be taking on water as well: Haverty Furniture, Pier One (down to 50 cents per share. OUCH!), and Home Depot's Expo Design Center.

So the rest of the plaza is empty, the economy is imploding, AND the owner might possibly have poached his own customers....

But heck, what do I know?

Maybe the owner is actually quite savvy? Perhaps he used the downturn to get a *really cheap lease* on Naples Boulevard AND is planning to *jingle mail* (foreclose) on the Immokalee Road Moes?

There's a whole lot of *walking away* going on down here in Naples. Almost everyone I meet down here owns a distressed property or two. In fact, I just found out today that the owner of this condo I am renting is (unsuccessfully) *trying to do a short sale* on it.

We'll see how much of my $500 deposit this failed investor/flipper actually returns - as he owns "several" condos on each coast of Florida, all purchased this decade.

Maybe on my way out I should abscond with the big screen color TV as a hedge?

There's plenty of room in my 1997 Chevy Suburban.

My "Moron Policy"

Single digits here we come! Atta boy, Ken Lewis!

Here's a very long article on Bank of America, with an update on its Merrill Lynch acquisition, which weirdly also offers up an extended biographical sketch of my whipping boy Ken Lewis. It reads, ironically or perhaps presciently, like an epitaph. The article is average at best so you lazy arses don't have to read it!

I just pulled one quote for its comic value:
The deepening U.S. recession is squeezing off Bank of America’s lifeblood: consumer spending. American households probably lost a staggering $7 trillion in net worth in 2008, according to an analysis of Federal Reserve, housing and stock market data by Thomas Lawler, former senior vice president of risk policy at Fannie Mae.

Did y'all get that?

*Risk manager* had to be one of the most ridiculous, most phony job titles in corporate America today.

But how about those crumbs at Fannie Mae!?!?!?

They don't even pretend to *manage* risk.....they merely have a *policy* toward it.

And that *policy* would ignore it, then to hide it, when caught redefine it, and ultimately to dump it all onto taxpayers!

Hank Paulson - Not Stupid, Evil

MARIA BARTIROMO: The fed increasing its balance sheet by one and a third trillion dollars in a couple of months time. The fe-- the treasury injecting money from tarp, taking stakes in bank. Can we afford this as a country?

HANK PAULSON: Maria, we can afford it as a country. We're a rich country. And (COUGHING) if history teaches us any lesson, it is that when you have an historical problem like this, if we don't react to it quickly, and react to it with force quickly, the long-term economic clock-- consequences will be much more severe. Now, again, a good deal of this treasury issuance is going to be the fund investment programs that really aren't expenditures. For instance, the $250 billion bank capital investment program. This-- this is money that will come back into the treasury. And it will come back into the treasury with a profit. So all of it won't be spending. And again, I-- I think a big part of this success will be the-- the focus that the-- and the policy choices that the next administration makes, as it relates to their stimulus program. And I'm hoping that it will be-- relatively short-term, because, as you pointed out, we have long-term fiscal challenges. And one of the things that I started working on as soon as I came down here were the long-term fiscal challenges-- social security and health care challenges. And I think that if, in the first year, the next team in Congress starts to address some of these fundamental long-term problems, it will make investors and others around the world much more comfortable with some of the things we need to do in the short-term, to deal with a very-- present and real-- you know, ec-- economic-- downturn we have in this country.

MARIA BARTIROMO: But do you worry about foreigners becoming unwilling to lend? I mean, how do we know that they're continue buying our-- our debt? Who is gonna finance, and at what interest rates-- what we have right now?

HANK PAULSON: Well, Maria, right now, there's great demand for our treasury securities. And at very low interest rates. I've spent a great deal of time personally talking with investors overseas, talking with investors in the Middle East-- China, Japan. And I will say to you that everything they indicate to me is they feel comfortable with the things we're doing. They like the fact that we're dealing forcefully and stepping up to meet the challenges and to stabilize our financial system. And to protect-- their interests, and that we-- we as-- as a nation respect property rights and respect foreign investments.

You young'uns aren't going to believe this but Maria Bartiromo used to be considered a real babe about 10-12 years ago.

I remember once, when CNBC condescended to report from the floor of the Philadelphia Stock Exchange, all the horned neanderthals from the Home Depot option pit hooting and hollering at her while she gave a live report. The *money honey* scooted out of there plenty fast and probably never returned. What class we had!

This is a to-be-continued post.

I just wanted to highlight a couple of lines:


Maria, we can afford it as a country.....

This-- this is money that will come back into the treasury. And it will come back into the treasury with a profit.

Well, Maria, right now, there's great demand for our treasury securities.

Yeah, there was *great demand* from Miami condos in 2005 as well!

This post will be revisited, as our national debt spirals out of control, the treasury's *profits* fail to materialize, and the Treasury market crashes.

Hank Paulson is a crook of the highest order; the Maria Bartiromo's of the world (and I'm not deprecating her) simply aren't Captious enough to call his BS.

How about....

CaptiousMaria - WAIT Hank! HISTORY TELLS US lot of things. It's tells us that fiat currencies have a failure rate of 100%, that governments since the beginning of time have debased their coinage, that the solution to debt has never been more debt, that statism is a national death sentence, that propping up *zombie banks* (Japan) only prolongs economic agony, and that great civilizations have always died when the mercantilists ran the show.

FURTHERMORE, RECENT HISTORY TELLS US that when you ran Goldman Sachs you petitioned the government for increased leverage (From 10-1 to 40-1 for investment banks) and then when the party ended, you and the Goldman Sachs cabal co-opted the Federal government to bail yourselves out.

Deranged Dog Riches

Was in a mall pet store the other day passing time with my kids. There were four employees standing there each with a different puppy in their hands. Of course they wanted customers to hold and pet them.

I asked how much the golden was, "$1,309," the dude responded.

A bit later I asked how many puppies they sold there:

"Twenty to thirty per week,...."

"Wow! And they're all over a thousand bucks, right?", I inquired.

"Well over a thousand."

Boy do I wish I was on the other side of this business. They are selling $100,000 of puppies alone each month. Even after paying the clerks, the overhead, and for the puppies they must be making a killing. (And I'm sure they make a boatload on the birds too.)

I wish I knew the definitive list of lucrative business models when I was much younger and had wide open career options.

Instead, I was at an expensive Ivy League university learning about C+I+G+X-M and other useless sophistry.

Sunday, January 11, 2009

She Can't Do Much From There!

On Mike Shedlock's blog, some commenters were teasing each other about the relative financial sense of the sexes. One guy artfully culminated the discussion:
"Behind every successful man there is a woman."

There are a ton of very successful and financially responsible women out there.

"Behind every successful woman there is an astonished man!"

And as Groucho Marx said:

"Behind every successful man is a woman, behind her is his wife."


Though I think Groucho should have re-phrased, "IN FRONT of every successful man is a woman, behind her is his wife."

Yeah, I could very well have put up one of these pics but I generallly aim to keep my blog current.

Human Personality Ain't Extinct, Yet

In the relatively boring social world of married couples....this seems like a pair that'd be fun to hang out with. It's their first dance:

13 million hits on youtube!

Then again, this couple could very easily be *too much*.

Plunder At Citigroup

Here's a damning article on Clinton's Treasury Secretary and more recently Citigroup's Robert Rubin.

His is a head from this Wall Street mess that should rightfully *roll*. But it'll never happen. The ruling statists will never indict their ideological predecessors.

Bun-Dusters And Their Carbon Footprint

Revealed: the environmental impact of Google searches
Performing two Google searches from a desktop computer can generate about the same amount of carbon dioxide as boiling a kettle for a cup of tea, according to new research.

And, as we all know boiling teapots foment hurricanes and direct them toward minority-laden cities!

One grand irony, as pointed out by a commenter on that ridiculous article, is that eco-saint Al Gore invented the globe-scorching internet.

Back to tea...

From one of my new books:

Bun-duster - An effete male who likes to go to teas and other similar mild social occasions.

What a great epithet! I am always excited to add weapons to my arsenal.

This is a word I needed last year to describe my metrosexual brother - whose carbon footprint will now have to be recalculated.

Saturday, January 10, 2009

Where Is That Next Gold Rush Anyway?

One of the get-rich jackpots of the past decade or so was *domain-flipping*.

That's where you buy an internet domain like "" for $10,000 and then you flip it for millions later on.

Actually, unclaimed domains are more like $10 apiece - or even less.

Anyone who discovered this gold mine early on must have made a fortune. [I don't know anybody, do you?]

I just found some blogger's compilation of the ten highest selling domain names:

10) for $3.5 million
9) sold for $5 million in January 2000
8) sold for $5 million in June 2007
7) sold for $5.1 million in January 2000
6) sold for $5.5 million in 2003
5) sold for $7 million in 2004
4) sold for $7.5 million in 2006
3) sold for $9.5 million in 2007
2) sold for $11-14 million in January 2006
1) sold for $350 million in 2007

Re-scan that list. Apparently we inhabit a materialistic, alcoholic, gambling, money-chasing, lecherous society!

There must be more than a few people who cleaned up from flipping domains. Imagine, one insight like this and some spare change....and you'd never have to *work* again.

You could sit at home all day in your underwear, drinking macro-brews, playing online poker, ordering expensive gadgets, and enjoying virtual companionship from sites #2 and #3!

UPDATE - I just shorted at $6.95!

I've elaborated on this post in - Domaining Gold.

Resume Drop

My buddy down here who's a real estate agent is doing a brisk business selling *bank-owned* properties. Of course Naples homes are going for peanuts so his commissions aren't what they used to be.

Anyhow, he's getting so many phone calls from prospective buyers that he's decided to hire an assistant. He put the ad out the other day, promising the generous hourly wage of between $8 and $12.

Guess what. He received 50 resumes right off the bat - not from illiterate kids either. Many of the applicants even had their own real estate licenses. $12 per hour annualizes to less than $25,000 per year. One could make that at 7/11 or UPS, could they not?

Oh yeah, I guess only if those places were actually hiring!

[Anecdotally, I also heard that college kids home for that ridiculously long winter break had real trouble finding *seasonal work*.]

Friday, January 09, 2009

Enjoy It While It Lasts....Because It Never Does

I love chatting it up with the moms at the park....I get such rich blog material.

For instance, today I met a young lady down here in Naples. She relocated from the Midwest in 2005. Her husband was in "wholesale subprime lending" for Merrill Lynch. He's obviously no longer employed as that industry - and much of that firm - has evaporated. His wife said currently he is "in transition".


They live in my little dream section of Naples - "Pine Ridge Estates".

Right now, there are 31 homes listed for sale there.

I will catalog them here in order of list price:

1st - $8,950,000
25th - $995,000
26th - $939,000
27th - $900,000
28th - $899,000
29th - $869,900
30th - $830,000
31st - $575,000

Not much on the *affordable* end, huh?

No job, an expensive house, two kids.....without help (mom and dad take evasive action!) this family could be in real trouble.

Even if this former Merrill guy paid off his entire house with windfall income, he's still on the hook for confiscatory property taxes, hefty *hurricane* insurance, and the 130k a year or so it takes to raise a family of four.

I learned waaaaay back, the hard way, that personal bull markets *never last*. The timeless quote is here at the 41 second mark.

And I feel really bad for those that will learn the lesson much later in life, when families and lifestyles are at stake. I look at my early career struggles as a blessing from above. I really do.

Of course I didn't always think that way!

The Miracle Of Birth

My buddy down here in Naples is, along with his wife(!), having his fourth child.

They just went to see it in "4D" which is described as "3D in motion".

For $150 they did so at the practice of a *retired doctor*. I don't have or remember the full story but supposedly this particular physician couldn't take watching couples opt for abortions after the sonograms revealed developmental deformities. The slight ones really ticked her off, e.g a missing finger. Again, I admit I know very little about what I am talking about here - but the above video is marvelous.

[I guess the gist is that the doctor is no longer in *diagnosis*.]