Death of a Personal Hero
I had a terrible sinking feeling in my heart today when I noticed that one of the most searched items on Yahoo was Alexis Arguello. I just knew something bad had happened and sure enough Alexis Arguello has died. I am not going to detail the fact that a wildly popular man in his home country of Nicaragua who was anti-Sandinista until a recent extension of good will was almost certainly murdered by political enemies, that will come out in time I am sure. As reported, it was a self inflicted gunshot wound suicide.
That said, you can learn about Arguello's magnificent career here. With such a storied career it is hard to pick out one highlight, but I think his fight in Miami in 1982 against Aaron Pryor would be it.
In what was voted "The Fight of the Decade" the junior welterweight championship fight was the single best boxing match I have ever seen in terms of action and pure boxing skill. Arguello had taken over the fight in round 11 (of 15) and in the 13th round hits Aaron Pryor with a right hand that thumped Pryor's head against his own back such was the force of the blow. Pryor rallied to stop Arguello in the 14th round, but later tapes show that Pryor was given some kind of stimulant late in the fight. That must have been some stuff because I can tell you after many fights and both being hit hard and hitting somebody hard that shot in the 13th round would have dropped anybody. Try hitting your own back with the top of your head and see what I mean. You can see the shot here at the 4:36 minute mark of the video:
On a more personal note, I had the extreme pleasure of meeting Mr. Arguello. Back when Economic Disconnect was very young and just getting into his boxing years, my gym was asked to participate in a charity boxing event held at the Lowell Memorial Auditorium ( a great venue). I was not on the fight card that night. As it was there were some celebrity attendants. Kevin Rooney, former boxer and trainer of Mike Tyson. Our own Arthur Ramalho, trainer at my own West End gym. Al Valenti, boxing promoter.
And Alexis Arguello.
My mother was good friends with an event organizer and thus when Mr. Arguello wanted to have someone introduce him to the fighters and watch the event with him, I lucked out for that spot.
I was blessed with 3 hours in which to talk about and watch boxing with a 3 time world champion.
The man was a class act. I really cannot tell you how humble and good natured he was. Here is an example:
Kevin Rooney (Mike Tyson's trainer) had actually fought Alexis Arguello and was knocked out inside of ONE round! I asked Mr. Arguello if he felt strange to be near Mr. Rooney and he said to me "Kevin's here? Where?" I pointed Mr. Rooney out and Arguello went right over and shook hands and talked with him. When he returned he said "very nice man!".
Later I asked him about the time he was the first man to beat Ray "Boom Boom" Mancini by a 14th round knockout and Mr. Arguello said "I knew Ray would win a world title, he had so much heart". I brought up the issue with Aaron Pryor and the stimulant and Mr Arguello said "I lost a great fight against a great fighter and I don't know anything about that.". I mean, come on! Class indeed. We spent the entire event discussing boxing and he gave me tips on training and a special jab-slip back-jab move that I thought sounded like it would not be effective, but proved to be one of the best techniques at keeping an opponent off balance I have ever tried.
I could spill pixels aplenty about Mr. Arguello. Sad that a man with so much heart and caring that he was selected to carry his nations flag at the 2008 Olympics will only command a few headlines after his death, but he will command many here on my part of the universe.
Via Con Dios Alexis Arguello and thank you for everything.
Unemployment Graphical Analysis
While there are many ways to gauge unemployment, a great parameter to look at was brought up by David Rosenberg in piece published over at The Big Picture (click for larger view):
Number of Unemployed per Number of Job Openings
I can back this up.
A while back we were looking to fill a 6 month contract job in my working group. We put an ad out and were inundated with over 300 resumes for the position. While the job spot was an entry level lab support position, we had over 30% of applicants were PhD level scientists looking for something, anything to earn some money.
While everyone is expecting the "V" shaped recovery to start any day now, consider that graphic and wonder where all the jobs are going to come from for all those applicants.
No Debate on the Extension of Taxpayer Backing of 125% LTV Mortgages
I could spend some time on the future debacle of expanding Fannie/Freddie loans out to 125% LTV, but at this point I give up. There was no debate on this. The massive extension of risk backed now 100% by the taxpayers further proves my point that THERE IS NO MORTGAGE MARKET SAVE THE US GOVERNMENT. This is so dumb and this market segment so fake that I am lacking any real desire to even think about unless I want to puke. Yves Smith of Naked Capitalism has a relevant discussion up if you want to read more.
California IOU's: Paper Backed by Nothing to get Bailed out by Paper Backed by Nothing
Today California is in the end stage of their deficit spending collapse. The state will resort to issuing IOU's to workers and servicers instead of dollars. California will of course not be allowed to fail, and will be bailed out by the US government. In a thought experiment one may wonder why California IOU's backed by nothing more than an empty promise are any less valuable than US dollars backed by the same, but I am a tin foil hat kind of guy.
May Be Nothing
Karl Denninger continues with torrid pace of important stories with this gem from the banking sector:
BOOM! More Obfuscation
"Someone" paid 7% for overnight money on the Fed Trading system last night (that "someone" was a bank, by the way.)
This will be claimed to be "ordinary" end of quarter distortions for closing the books.
Don't believe it for a second.
Let's put this in plain language: The discount window is open for any bank that has good collateral at less than 1/10th of that interest rate.
Therefore there is absolutely no reason for any institution to go into the Fed Funds market for overnight money at 7% unless they have no good collateral to post against it and thus cannot go to the window.
So who is it? No idea. And while the amount borrowed overnight at that rate may be tiny, that's not the point - the point is that the last time we saw anything that dramatic was just before it all went "boom" last year.
Yes, I'm sure that end-of-quarter had something to do with it. In fact, I'd be stunned if it did not.
However, as I noted, there's no reason for anyone to pay that if they have good collateral to post at the discount window, given that you can do so for 1/10th or less the price.
Keep your nose to the ground and your eyes open.
Someone (or more than one someone) is in trouble.
While there certainly may be a reasonable explanation for this (reasonable is a relative term these days) it could be very important. While the FED is accepting anything for collateral, not having anything is very bad. My uninformed guess: a larger regional bank with heavy exposure to hotel commercial paper is about to go bust. Obvious candidates are some Las Vegas regional banks. And no I have no idea which if any it is, I am just speculating.
Gold and Silver Short Positions
The Mogambo Guru has a great piece up today which dives into the massive short positions in gold and silver:
The details are that “Despite the price decline in gold during the prior week, the bullion banks in the Commercial category only decreased their net short position by 1,474 contracts…a number hardly worth mentioning”, so you wonder why he does, unless there it is a secret code that, when run through a Junior Mogambo Ranger (JMR) secret decoder ring, gives the secret message, “The Mogambo was right! Buy as much freaking gold as you can get your hands on because this is bizarre!”
But before we could ask, he provides the answer that “The Commercial [bullion bank] net short position in gold is now at a staggering 22.5 million ounces…almost at record levels.”
And in silver, the situation is about the same, as “bullion banks continue to add to their short positions”, and the “bullion banks added a whopping 3,976 contracts to their net short position. As of Tuesday’s cut-off, the net short position in silver was 46,950 contracts…that’s 234,750,000 ounces.”
No conspiracy, just highlighting that the metals are aggressively short. it is very hard to get a bubble in something so universally bet against. Unless of course it breaks out. Not to worry, should gold bust out to $1500 an ounce and silver break out above $35 an ounce I am assured that the US government will either cancel gold and silver contracts or modify rules to protect the banks. I know, I am crazy, except this happened on "Silver Thursday" already so we have had a warm up exercise.
Have a good night.