Eternal Happiness Guaranteed!

Tonight's post will be a bit short on deep thought as the parade of trick or treaters has been pretty solid. Having never had a house of my own, it is kind of nice to see the neighbors and their children come to the door all dressed up. It is the little things that make you smile sometime. Now if my Pug Dog would stop going berserk every single time the doorbell rings.......

I Will Believe it When I see It
One of the plethora of issues facing the markets is that there is zero transparency in regards to what kind of toxic crap banks may or may not hold. Throw in derivatives and CDS obligations and there is no way to get a read on anyone's bottom line. The banks like it like this.

So imagine my surprise when I saw this headline story this evening on Yahoo Finance:
CNBC
Regulators to Approve Derivatives Clearinghouse
Friday October 31, 2:27 pm ET

Regulators are expected to approve a clearing house for credit derivative swaps in the next several weeks, CNBC has learned.
Regulators and industry participants have voiced concern that the private nature of the $55 trillion market for credit default swaps poses systemic risks because no one knows the size of a counterparty's derivative portfolio, and the failure of a large counterparty can create massive losses globally.
Creating a clearing house would remove the risk posed by a counterparty failure, provide price transparency and offer simpler, more standardized settlement of contracts when an issuer defaults, proponents argue.

This idea makes sense and is a strong positive for the system going forward. Are you stunned? Are you shocked? I am. But allow me to offer two observations that should temper any wild enthusiasm:
1.)The chance this thing gets off the ground is pretty small I believe
2.)This may be another bullshit play. By this I mean the kinds of swaps and derivatives listed will only be the best looking, most positive of the lot. the exchange will then function as a fake "price discovery" mechanism to allow crazy valuations of more mark to myth items.

Between number 1 and number 2 I would say number 2 seems the most reasonable. Another sick move by the banking industry with the full backing of the government. Cue the tears.

Eternal Happiness Guaranteed!
With the FED/Treasury (which will now be referred to as the Feasury to save typing on my behalf!)in the process of putting guarantees behind, well, everything, what else can we add to the list? I mean the commercial paper market? Check. Fannie and Freddie bogus debt? Check. Bank deposits? Check. What else can the Feasury do to make life even more awesome than it has been? Here is a top ten list:

Top Ten Guarantees the Feasury Should Provide
1. Fresh Young Turkey guarantee for all Americans in November
2. A Super Bowl title for every states NFL team (rotating basis)
3. Pocket Aces dealt at least once every ten hands in a poker game
4. Have said aces hold up and win the hand
5. Guarantee that your fries will be "in the bag" when you get home from the drive thru; you know that is annoying!
6. Provide a guarantee that we will always have one more roll of toilet paper left no matter what (the dollar backing is akin to the toilet paper gurantee, I know!)
7. A ban on hangovers on Sunday morning, effective immediately
8. A guarantee that Rap Music will cease to exist in 2009
9. Hank Paulson will grow a mullet; Business up front, party in the back!
10. No headaches, no tiredness, and no excuses by the wife for Saturday night action!

Leave your own list ideas in the comments section.

Friday Night Entertainment
We can have a bit of fun on Halloween, yes? Fun is still allowed.

Nightmare on Elm Street Poker Hand
My poker reference in the top ten list got me thinking about my poker days. I used to play online, before the so called "Port Security Bill" got US players banned from most of the top sites. The idea was that online poker sites skirted the tax laws because they were an online franchise and the government hated that.

Anyways, I used to do pretty well. Poker, just like life is filled with mostly dumb people and all you have to do is take advantage of their mistakes. I was in a large tournament of Texas Hold Em poker which started off with about 3000 people. You bought into the tourney for $5, and if you made the top ten you could make some serious cash. Online poker moves very fast and a game like this usually takes about 6 hours to complete.

I was dealt pocket Kings (K-K)fairly late in the tournament (about 400 players left), and an aggressive player 2 seats before me lead out the betting pretty hard. I figured him for some kind of an ace, so I would be in great shape if no ace was on the flop. The player right before me went "All-In"! Now there was a raise, and then a re-raise of all in. Looking at K-K, that is a tough call. But I knew, just KNEW the second raiser had an ace as well, probably A-Q or something. I called the all in, and then TWO MORE players behind me called as well! I was excited because if I won this hand I would have had enough chips to coast to the final 10 and win some good money.

Well, everyone's cards were flipped, and here is where I stood:
Me: K-K
player one: A-10
player two: A-J
player three: A-Q
player four: A-8 (not uncommon online, people play CRAZY!)

I was in amazing shape. There was No ace in the deck to help these guys, and they were a long shot on the hand.

The flop came down: 2-4-K
I had triple Kings (called a set), but I already had a terrible feeling in my stomach. That 2-4 was just scaring me to death.

The turn card was, of course, a 5.
Now I was very scared. I was looking at 2-4-5 and all four guys had an ace. If one of the four threes fell on the turn, all my chips would be split between these bums and I would be out.

I am sure you know how this ends, with the 3 falling on the river, completing the A-2-3-4-5 straight for the four donkeys. I only was out $5, but I missed out on a shot at at least $1000. Oh well, where is the Feasury when you need them!

Rock and Roll Ain't Noise Pollution
A little music to get the weekend started, yes?

One of my favorite Iron Maiden songs is the tune called "Running Free"; the song just pumps me up and is a true pure rock experience. Take a listen:


Full disclosure: I am an Ozzy worshipper. His early solo albums were pure magic, and the Randy Rhoades live "Tribute" album is the single greatest music piece in existence. I know you agree! Ozzy's later albums were not as powerful, but there were some standout songs. "See You On The Other Side" is a very strong song, and so I offer it here:


The wife's favorite band is Depeche Mode. I like a bit of their stuff, and the great guitar work in "Personal Jesus" is worth a listen:


I am not a fan of David Lee Roth as a solo artist, but I thought the video for "California Girls" may be eye candy, we all deserve candy on Halloween, yes?:


Have a good night.