I hope everyone had a great holiday week. I basically took the whole week off from doing much of anything and it was very nice. Slowing things down can be fun too. I wanted to share a few recent items as well as a few words.
First off, the big snowstorm that came early last week turned out to not be too bad here. Maybe 8 inches of snow, but it snowed for like 18 hours so it seemed like more. Luckily it was the super light stuff, easy to move. Here is the House after the storm looking very pretty all wintered up: Don't bug me about the house color, it is atrocious and will be repainted next year I think.
For Christmas dinner I made a 7 pound Prime Rib on the Big Steel Keg. I had never cooked in the cold air before (it was about 20 degrees) and thus I had some temperature control issues as the cold air was like jet fuel for the lump charcoal! I had wanted to cook the roast for about 4-4.5 hours at 300 degrees, but it was more like 3 hours at 350-375! The meal tasted wonderful, but there was only medium done meat, no medium rare to rare was achieved. What can you do. Here is the roast before: And after it was done: Still looks great at least!
The last news item refers to the new addition to the family! A little kitten was adopted from our local Humane Society! Long time readers may know that I love cats very much. When my last cat died a while back I was seriously hurt and it had taken a LONG time to even think about another cat. After about 6 months of trips to the Humane Society (who do a great job!) I found a new companion, her name is Jessie and she is a torti mix who is as sweet as it gets: Of course all tortoise coat cats have a wild streak and she set out right after the Christmas Tree ornaments as fair game: Little monster!
Our Pug dog Norman was upset for the first couple of days with a new competitor, but he has settled in well now. It is fun to have a cat again.
I know I am supposed to say something memorable or uplifting going into the New Year. I guess I am going to come up short. 2010 was at times great, terrible, successful, a mess, fun, and sad. I would imagine most can say that about any year. All I know is I am committed to getting myself rolling in 2011 and that means some real work on my trading. I kept a bunch of models of various things I had wanted to work on and they would have done really well (what didn't in 2010?) but I was just not into it. In 2011, I want some money! I am looking forward to writing more as well. Who wants Friday Night Blogging back?
Most of all a fresh start is always the promise of New Years, and that is a good promise indeed. I wish everyone a wonderful 2011 and I would hope the promise of a fresh start will help you as well.
I wanted to extend a Merry Christmas to everyone today. For me the only thing bigger than Christmas is some one's birthday, but Christmas is my favorite holiday by far. It is almost enough to make me like winter just a little.
Our tradition here is to open all the presents between the wife and I on Christmas Eve after a Chinese food dinner and so it is again this year. We will have company on Christmas day and I have a nice 7 pound Prime Rib Roast going on the Big Steel Keg tomorrow. I will try and grab a few pictures.
I wanted to say thanks to all the great readers, visitors, and friends that stop by and make this site so much fun. Readers like Watchtower are one in a million and Gawains always can surprise you with his literary talents. I do plan on getting back into things in the New Years so we can all try and make a few bucks.
It was a classic day here in Massachusetts. Banner even, the kind of day that removes any doubt that this state has more idiots than any other two states put together (excluding Washington DC of course).
What happened? How about a quarter inch of snow that's what! While long time residents of the Bay State know snow, there must be a 95% population turnover here year in and year out because everyone goes all mega donkey stupid at the first hint of frozen water falling from the sky as a punishment from the weather gods.
I had a 3.5 hour commute home to move 29 miles! How's that for efficiency?
My only question for my beloved home state is this: Why are you all so stupid? It's a simple question though the answers promise to be complicated.
Heard of Gaussian Distribution? I love that science fact when viewed through the prism of asking people questions. Ask 100 people if they are dumb, average intelligence, or very smart and 9 out of 10 will say they are very smart. Of course we know that is not the case, but whatever.
Anyways, one work day to go. I am hoping for no weather related issues tomorrow.
Sunday Night Football and Christmas Stuff Quiet weekend and I guess that is good. Looking forward to some Sunday Night Football where the New England Patriots can put a strangle hold on the number one playoff seed with a win over the Packers. The Packers will not have their starting QB Aaron Rodgers playing, so a bit of the luster of this game is lost.
The New York Jets played a rough, physical game against the Steelers today and won a huge road game. I told you those Jets were good!
I am hoping the Kansas City Chiefs win out as to keep the San Diego Chargers out of the playoffs!
The New Orleans Saints lost a tough game in Baltimore to the Ravens so any Superbowl defense will come all on the road. Too bad there will only be cold weather outdoor teams in the playoffs except the Falcons!
WTF happened to the Giants in 7 minutes?????? Wow that was bad.
Two work days to go then off until the New Year. I for one cannot wait to swing the calendar to a new start. I need one badly. So badly.
Hello out there! The cold has really moved in here in New England. Luckily I have tomorrow at work, then Monday and Tuesday and then I am off until 2011. I need the time off that is for sure.
I hope all is well for the regular readers and occasional stoppers by. I wanted everyone to know I am fine I just have not been really thinking about things financial for a bit. When i do it seems things remain the same anyway! I am getting pretty excited for the NFL playoff season and the New England Patriots are really doing well. Who knows what can happen this year in the playoffs? It should be wild.
With the time off I will probably write a bit more. At this point I think I am moving away from trying to change things (that worked!) and just going with what is. 3 full years is a long time to hope for change, it ain't happening. As such, my sarcastic biting wit will remain, along with my endless complaints on things government intervention and banking. I think more science, movies, and tid bits will find their way in. I will also share any trades I make as I see plenty of ways to do some damage using my tested system of "using the script" provided by "the things that have to happen". Investing for dummies as it is.
On a macro level, here are the things I am thinking that will come into play. Will they in 2011? 2015? I don't know but they are what they are. Without too much writing about them, here are some central tenets of how I see things after 3 years of on the fly education in finance:
-The Notional Issue is a huge one. What is money, derivatives, options, central bank asset swaps, leverage, and debt guarantees? Heck if I know, but many want to know now. Whether we are talking notional bets on gold which dwarf the actual metal (all hedged of course so no worries!) or just something as simple as all banks being insolvent in 1 nanosecond with mark to market accounting in place this perpetual machine of credit/debt/promises has been shown as hollow as those Palmer fake chocolate figures (chocolate flavored chocolate, gotta love it!) I love so much. In case you had no idea, here is no perpetual motion machine. I feel this is the single biggest issue facing things economic. The Notional, as I have coined it, serves only those that benefit from it. Let's face it, a monster share of all trading that is done is of limited to zero value to anything except those making the trades. They serve no function other than to generate churn and small slivers (chop marks?) of return.
-The Script is another big one. I know bond yields are rising and this means either the economy is about to rocket off past Voyager 1 at light speed or the dollar is about to lose all it's value (notional?) but don't get excited and pass out just yet. A home mortgage at 6% or 7%? Good joke, but no worries. Welcome to QE just add numbers. This of course feeds back into The Notional. Can the FED swap out enough stuff with banks so yields stay low and banks finally deploy the goods (unlimited credit)? Who knows, but that is the script. Either way, it will be more than interesting to watch.
-The Big Lie will also come into play in between the two ideas above. Right now the ECB is peeing their pants in a dark suit over the idea that senior bond holders may have to take a hair cut (just a bit off the top please!). The Big Lie is that this will make raising money impossible in the debt markets. It will, for about 5 minutes. After a restructure and a more believable plan (I did not say really possible, but more believable!) money will rush in to fund a new "hot sector". This was always possible here as well and all the "credit markets would have frozen and the world would have ended" dumb asses would have been right...for about 24 hours. What if debt holders lost big? They would DOUBLE DOWN on the next play! What is so hard to understand here? Banking is older than prostitution for a reason, it makes money when done even kind of right. You have to really mess it up to lose.
I have to say to do miss writing here most nights. Maybe there will be a Friday Night post? Who can say. Until then, sound off and try not to savage me like poor Kid Dynamite got attacked after a few contentious articles! I wanted to make a Youtube video asking "LEAVE KID ALONE!!!!!!!!!!!!!!!!" after all the drama but I know he is good to go.
It has been a really busy weekend so just a couple notes.
So, Is there or is There Not a JP Morgan Short Silver Position? Kid Dynamite makes a cogent, solid case that the JPM silver short is not all that: The Greatest Story Ever Told Persuasive, but of course if anything going on was easily seen what sense does that make? What next? Mark to market accounting, HAHAHAHAHAH!?
New England Patriots - All Weather Foes Not much to say. First place Chicago Bears, in their stadium, in weather that was horrid, and the Pats deliver a blow out. Scary stuff. One win or maybe 2 in the last 3 games and ALL AFC playoff games come through New England. Good luck with that. Did Branch have 160 yards receiving? Really?
New England Patriots Win A stunning 45-3 win last night by the New England Patriots over the rival New York Jets! Tom Brady was in full command of the game, and as I have written before, when he is on like that it is good night.
It was a huge win but no one should get crazy here. The Patriots have a defense with tons of holes and they are much better at home than on the road. The Patriots are a very good team playing good football. The Jets seemed overwhelmed and all the hype before the game may have spooked them. I do not think the Jets are anywhere near as bad as they looked last night.
I want to eat crow about the Randy Moss trade a while back. I thought that move would hurt the Pats, but they have been more dynamic on offense ever since. Moss just goes straight down the field, Deion Branch is able to run all kind of routes to drive cornerbacks crazy. Branch burnt Antonio Cromartie repeatedly last night, while Cromartie usually shuts down Moss. I was wrong.
Real Steel Film Seems I am not the only one who thinks robots will take over the Earth! In a new film that I am very interested in seeing the future boxers are high tech robots! Sounds interesting indeed:
Real Steel Hugh Jackman plays Charlie Kenton, a washed-up fighter who lost his chance at a title when 2000-pound, 8-foot-tall steel robots took over the ring. Now nothing but a small-time promoter, Charlie earns just enough money piecing together low-end bots from scrap metal to get from one underground boxing venue to the next. When Charlie hits rock bottom, he reluctantly teams up with his estranged son Max (Dakota Goyo) to build and train a championship contender. As the stakes in the brutal, no-holds-barred arena are raised, Charlie and Max, against all odds, get one last shot at a comeback.
We were already excited for Real Steel, Hugh Jackman's movie about robot boxers pounding each other to scrap — but now we've read the script, and we're twice as stoked. This is the robo-rumble you've been waiting for. Spoilers below.
It is very rare to have two fine teams playing a divisional game late in the year with so much riding on it. The winner tonight has the inside track to home field advantage throughout the playoffs, the loser will have to grab a wild card spot and go travelling in the playoffs. When looking at the NFC, the winner here would look mighty fine indeed.
So who is going to win? I cannot pick the Jets even if I wanted to! I think the Patriots hold on late for a 27-24 squeaker win. I would not be surprised to see the Jets win, they are playing very well and their defense is a real edge. My man Jake at EconomPic is a huge Jets fan so I wish him luck but not really.
In any case, a special Monday Night Football game is upon us.
The cold air has really moved in now and it feels very much like winter. This is not great, but it is unavoidable of course. Still, A Friday night post is sure to keep things warm, yes?
Views on Things Maybe my last post was spot on with timing. The jobs number today was a mess, and I think it says reams about how things are that the headlines about 5 minutes after the release were that this report was an "outlier" or "not true, sure to revised way higher". Of course we have had two years of strange job loss numbers but those were all just outliers as well. The trend will change at some point, may as well price it in 12 months in advance, right? Exactly.
With the economy roaring as hard as the 2007 highs (well not quite) the stock market thinks it's time to get parabolic. Why not indeed. Even this Sunday on the show "60 Minutes" Boom Boom Bernanke will make it clear the spice, I mean the liquidity will flow! Here is the relevant headline: Bernanke Tells Nation This Sunday: More QE Coming Because I am blinded by my bearishness and refuse to see the stellar data in front of me I would ask why we need any more QE if the recovery is pouring forth like a tsunami of prosperity? I could ask, but I am an idiot after all. The plan has been clear for a while now, but as another reminder, here is Sir Alan Greenspan in case any hotshot stock pickers need a reminder that a rising tide makes everyone look brilliant:
Addressing a gamut of issues, from the European debt crisis to the floundering US housing industry, the former central bank chief said the rising stock market—up more than 80 percent from its March 2009 financial crisis lows—has been pivotal. “There’s a real upward momentum here,” he said. “I think we are underestimating and continuing to underestimate how important asset prices, very specifically equity prices, are not only to shareholders but the economy as a whole.” The point is important in that it as at the center of current Fed Chairman Ben Bernanke’s efforts. The Fed has dramatically expanded its balance sheet in hopes that more liquidity in the economy will help drive up the prices of riskier assets, particularly stocks. Such movement helps create psychological momentum that in turns lifts everything else, advocates of the policy say.
Got it?
Now how many shares of AAPL or AMZN the long term unemployed have or how much is left of many 401k's after all this time probably is not important, someone is making out. As Gordon Gekko said in "Wall Street" though, stock trading is a zero sum game; for all the multigenerational winners of the last big run somebody has to lose. Care to take a guess who that is? Go on, try it.
As always, Ilargi of The Automatic Earth tends to say what I want to better than I do, so I will add this quote to last night's post on how I see things:
As uncertainty has increased, there has been more and more emphasis on gaming the system in order to wring a quick profit out of it and less and less emphasis on productive investment, as productive investments have too long a time horizon to deliver gains in a world proceeding at a frenetic pace. This has been going on for years, and has led to our current milieu of casino capitalism, or ponzi finance.
This system of money chasing its own tail in ever tighter circles is clearly unstable, and I would argue is about to self-destruct under the increasing pressure of its own internal contradictions and the catabolic (self-consuming) process taken past real limits. As it does so, the pace of change will becomes even more rapid for a period of time, and coupled to that will be increasing hardship for a critical mass of people.
Nice.
Friday Night Entertainment Some lighter stuff to get you ready for the weekend. Monday Night Football cannot come soon enough.
We do need social security reform because all those oldies have had plenty of time to buy and hold enough stocks to make them rich a few times over, yes?: see more funny videos Indeed.
Questions Some items worth a ponder.
-What is the purpose of the X-37B and why was it in orbit for 7 months? -How unimaginable is 6,000,000 megatons of TNT (600 times the world's nuclear arsenal) which was the power of the punch comet Shoemaker-Levy 9 delivered to the planet Jupiter in 1994? Wow. -The master puzzle Kryptos is still unsolved, so maybe section 4 was made wrong? -The Anasazi of very early America had awesome houses, how did they do it?:
Rock Blogging A few tunes for the weekend.
A couple of oldies that I have always loved.
The Everly Brothers and "All I Have to do is Dream":
What vocals!
Look I know the Beatles (LMAO) and Elvis are the true kings of rock and roll, or so the story goes. So what about Bo Diddley? Oh, you don't know? Well try this out:
Yeah, that's good.
No I have not been lying that I am 34, just like old stuff too! One more that I have had one before, Sha Na Na and "Those Magic Changes":
Just like that one!
Ok, I will get somewhat modern!
Let's get a little nasty with Rage Against the Machine and "Guerrilla Radio" LIVE on the Letterman show:
SICK!!!!!!!!!!!! If you want to laugh your ass off at a funny cover, here is Alanis Morissette trying and failing BIG TIME! Just stop.
Maybe a top 10 song for me is Black Sabbath's melodic, dark, and moody "Planet Caravan":
Sweet.
Two left.
Ok, I am not religious at all (though I love religion tales and stories!) so I am submitting the kick ass tune "Calling on You" by the 80's band Stryper because it rocks:
Last call!
Evanescence closes the show with "Breathe No More", and a sad tune it is:
Well I had wanted to stay off posting for a bit but I saw a few things over the past few days that either hit me or bothered me and then some nifty science stuff came out today that was wild so a quick post.
Optimism is a Blind Spot Too I have been reading so many victory lap stories and many "it was all so clear what where you thinking?" type posts as of late and it is starting to get me annoyed. There are two sides to my annoyance, one philosophical and one scientific, which have simmered for a few days now. I will present them even though I had wanted to stay off this stuff for a while for holiday spirit reasons.
I don't even want to spend much time on the philosophical objection I have to the shaking with excitement of a bull run folks who endlessly parade "the stock market is up and jobless claims are down 3%, it's a nirvana!" type stuff. Great. Wonderful. Glad you rode it up, you are the greatest investor/trader/gambler/crystal ball watcher/dart thrower perhaps of all time to have ridden a "generational move up in markets" and thus we should all commit all our capital now or whatever. I fully understand many have a profession that requires them to trade and make money for clients. That is your choice. Just know you are part of the structural problem with the big banks and an overweight financial sector. It's the truth. Again, no problem and I respect the talent and the balls you got BIGTIME! But don't complain and write books about how bad the behavior out there is then do it as well, that's pretty lame. Weak even. We all have choices. I work in biotech, but I will not test stuff by jamming it in animal eyes to make a buck, I draw the line. Enough said.
My second annoyance is more practical. Take out your graphical tools and punch up all the "hard data" you want. Match it up with the stock market. The markets have bet on improvement with not much to back it up until very recently. Either markets are priced right now to perfection, a monster explosion of mythic proportions is at hand for the economy, or wishful thinking and dependence on liquidity without end is priced in. Corporate profits are wonderful but most of that is based on: -employment cuts -low input costs (until recently) -ultra cheapo money rates (thanks FED for some disclosure!)
All of these are sure long term dependable strategies. They all back up my point about structural low rates being market guarantees, not short term props. Thanks, it's hard being right.
Finally, I submit my fianl evidence, Krispy Kreme Donuts. Can a market be driven by excess easy cash (liquidity that needs a home?), algos, technical bots, and momentum players looking to "sell to you sucka!" to borrow a phrase from Kid Dynamite? Via FINVIZ: Well the latest rating on this stock had a price target of $5! Blew up past that by a mite, yes? Up 20% in one day? Is the donut business recovery better than the rail traffic recovery? WTF?
Oh, don't bother leaving a comment about the double top on the chart breaking the double over the shoulder boulder holder pattern or other crap, 20% moves in 5 minutes are not normal nor reasonable unless market players are either: -Retarded and got super surprised -Playing games Occam's Razor argues for the latter reason.
I can imagine this post is coming off a bit nasty, and I would ask anyone offended to maybe re-read it later and think about it before ripping me (all 6 of you that read it, LOL). In any case I welcome all input.
Arsenic as a Phosphate Substitute I was super excited when I read a week ago about NASA's press conference to come today concerning a "find" in the astrobiology field. Of course I was dreaming of weird bacteria, water bears, or other strange life that maybe hitched a ride here on a Mars meteorite (hint to you rich guys; chicks will dig holding a rock that came all the way from the planet Mars and enjoy the tale more than a ride in Porsche!) or other pathway. Most scientists accept that the Earth's water came here via comet impact, why not life as well that adapted?
I was a little let down to find out that a new bacterium was fully studied (it was known before) and had unusual abilities. After I read about those abilities, I was excited again!
It seems the GFAJ-1 strain of the Halomonadaceae can fully utilize arsenic to form DNA backbones (hence RNA as well) and use arsenic as an ATP coupler too! Ok, I know that sounds like a big who cares but it's huge! Here is a DNA molecule and I trust readers here know what DNA is: Ok, in the diagram, every P with the O's attached is a phosphate backbone of DNA, the helical secret of life. Arsenic is of course very toxic as it is reactive with proteins in the bad way! But this bacteria can affix As as the DNA/RNA/ATP backbone! This is bigger news than you may think.
One of the basic tenets of science is that for life to exist elsewhere, the basic molecules we use must be in place. I always have found this to be both limited and Earth centric. Today we see a species on Earth that can use an alternate to phosphate for the building blocks of life! HUGE CAVEAT: This bacteria lives at a pH of 10! This is super basic (think TUMS antacid times 10!) so this may remediate the charges on arsenic in some way, but lets have fun!.
Arsenic is Phosphorous' next neighbor, as Silicon is Carbon's! This news is big, much bigger and more important than ECB stealth bond buying (which everyone knows, but pretends they don't to make a buck, it's all about who's richer right?) and it is bigger than the FED laying out trillions on bad collateral because in the long run we are all dead and that stuff will make par value.
The Cost of Capital There has been a strange dynamic in play for about a year now in regards to the cost of capital. In normal markets rates are set by various inputs that in the end give both the borrower and the creditor a feeling that they are getting "fair value" both in taking the loan and in making it.
That is not how things work anymore. What would a mortgage written by a bank cost right now if they were left alone to set rates? With the double dip in home prices already here and a slew of inventory on the books, I think the 10 year US Treasury number would not even be in the ball park. Of course policy now is to make sure those rates stay ultra low.
CDS spreads have gone crazy for many European countries, but I have been watching CDS spreads for some time and they fail to make me take them too serious. What is serious is even a troubled state like Portugal is looking at rates going up to the 7% level(up from 4% in March) but along comes the ECB and they say "that is not right, we will lend money at 4% or 5%". The US FED has done much the same here. Add to this troubled US states like California have been taking advantage of US backed muni debt sales at rates far below what a open market would demand.
Now I think we all know that distortions cause problems....eventually. Easy money has a nasty habit of finding poor places to live. You can get things like bubbles or woefully miss priced instruments of all kinds that imply a lack of risk that simply does not exist. I think this should be clear. But let's look at another point.
If creditors are forced by the will and actions of government to lend at lower rates than they might want to, they are going to push rates where they can much higher. I would ask you all to review your credit card rates over the past year and see how they are moving. I just got a huge letter from my bank explaining the monster fees and penalties that will result now if I go into overdraft or miss any kind of payment on anything. Of course no one speaks for the little guy here, we will all just pay high rates and fees because that is where the banking system has pricing power now. They will chase return where they can.
Taking a step back, when you read that Ireland or whomever simply cannot pay debt back at such "high rates" as 7%, or even 10% there is an issue there. If a US state is on the verge of going bust over a 2% difference in a loan rate that is really walking a fine line. Yes, I know we are talking big bucks and it adds up, but really? I have argued that artificial low rates are now a structural necessity, not a short term support mechanism. Can the 10 year really be at 6% in 2 years without major issues? I would ask that the readers ponder what steps will be needed to keep rates of all stripes at all time lows for the next 5 years at a minimum and write them down or write them in the comments. Going further, ponder what avenues will be used by creditors to balance out their "fake risk" book with their "real risk" book. I think the answers will be useful in making investment decisions going forward.
I spent the better part of the last two days fixing up the half bathroom on the first floor. New counter vinyl covering, new light fixtures, and new bathroom sink and faucet. The sink was quite an issue as the supplied gasket for the drain would not seal and I went all over creation trying to find a larger gasket to fit the larger sink. I think I have it done now, but what a path to get there. At least the bathroom looks good and I also changed the hallway ceiling lights as well. Time for a break!
Sith Lords of the Star Wars Expanded Universe Most of you know I am a monster Star Wars fan, especially for all things Sith related. I understand that not many know of the characters of the Expanded Universe, so here is a gallery and quick note on some Dark Lords of the Sith you may not know.
Darth Sion One of the three members of the Sith Triumvirate in the game Knights of the Old Republic: The Sith Lords, Darth Sion was held together by his embrace of the darkside of the force:
Darth Traya Another member of the KOTOR Triumvirate, Darth Traya is as cool a character as there is in Star Wars:
Darth Bane The Sith Lord who made "The Rule of Two", Darth Bane is perhaps the greatest Sith in the Expanded Universe: My personal favorite.
Darth Zannah Darth Bane's apprentice and eventual conqueror, Darth Zannah is a master of Sith Alchemy and uses a double bladed lightsaber:
Darth Plagueis The master of Darth Sidious, it is thought that Plagueis was the first to create life through influence on midichlorians (Anakin Skywalker) and next year there will be a new novel about this mysterious Sith Lord:
Naga Sadow An ancient Sith Lord, Naga Sadow pictured here with his meditation Sphere: The ancient Sith used Sith Swords which were created with alchemy and could withstand lightsaber battles.
Freedon Nadd One of the first Sith Lords to have the ability to imbue his spirit to remain, Freedon Nadd is a curious Expanded Universe character:
Of course the Sith used Holocrons like the Jedi, but Sith artifacts were triangle in shape: Nifty.
Of course the greatest of all the Sith, Darth Sidious, was a master of influence. Here is a picture I love of Sidious and the future Darth Vader:
Happy Thanksgiving Could not ask for more today. Weather is about 50 degrees, not cold but still cool like this time of year should be. All the grub is on schedule to be cooked (sorry, wife said NO to a turkey on the smoker) and plenty of football on the way.
Darth Vader and Lord Voldemort: A Comparison Here is a contest of supervillains! Via NerdBastards (click over or click picture for better view): Enjoy!
US Debt in Perspective Found this gem of a post over at Ptak Science Books. Click on over for the ultra cool graphs of US debt from the later 1800's.
Key summary by the author:
What we see here is a history of American federal indebtedness from 1791 (when the public debt stood at 75.1 million dollars) to 1881 (about 2 billion). Using the CPI (consumer price index) as a factor to translate that number in 2008 dollars (or so), the 2 bil grows to about $40 billion (a nickel then is about a dollar now). The interesting part of the legend--and what drew me to this graphic even before its somewhat unique shape--state "1"--370 millions", that is one inch of pink horizontal bar stands for about $370,000,000, and the last bar on this graph is about 6 inches long, which, adjusted for inflation, would now be about 10 feet long. .That said, the really interesting part comes next--if we use this measure to graph a horizontal bar for the American debt as it stands in 2008, it would pink a pink bar that was about a HALF MILE long to express our 10(+) trillion dollars of debt. OR, somehow, the old debt of 1881 would be about 1 story of a house, while the 2008 version would be up one side of the Empire State Building and down the other (and yes that includes the aerials). I don't know how to put this comparison in context, the differences are so staggering.
Again, go there for the graphs, it is worth the stop.
I guess it is true, some have worried about the US debt for a long time but it never matters! This is excellent news. Soon I am thinking a new 100 year roll over of all national debts of the world will happen and we can deal with it then.
The New England Patriots held on for a huge win in a huge game against the hated rivals Indianapolis Colts. 31-28 and the difference was a slight jam against Peyton Manning on his final pass that resulted in a game ending interception. Tom Brady has now won 25 games in a row at home and the Patriots are 8-2. Shocking really.
My second love, the New Orleans Saints have caught fire and are looking very stout indeed. Who in the NFC can beat them? Exactly.
In racing news Jimmie Johnson won his 5th straight title which would make him the greatest driver of all time, but allow me to be blunt; those fuckers cheat and everyone knows it. Johnson is a pansy and a bore. Where the hell is Dale Earnhardt when you need him? How many IROC races has Johnson won (in identically prepared cars against the best drivers???? NONE.) Sad really.
I have to work Monday and Tuesday then off until the next week! That will work.
Cover That! I ran across some great stuff on YouTube today and so a short post is in order.
One of my favorite songs is "Tears of the Dragon" by Bruce Dickinson (front man of Iron Maiden) when he had one of his solo albums, Balls to Picasso. The song is really wonderful and you can see the original here.
Now of course the wonders of YouTube can bring you covers of said song. Some are terrible, some not bad, and some are really good. I of course have zero music talent and the dream of playing the guitar was not to be, even with my Dad's best efforts to help me.
Here is a fellow, jesustcbtv, who plays his heart out on acoustic and does his best with a tough vocal song:
Right on! Great effort.
Here is an amazing acoustic cover of the song played by a lady named Yves:
When I heard that today I was stunned silent. Very nice playing.
Of course if you play a sick cover a tune like Crazy Train, you may get Ozzy's attention and get to play a live show like 7 year old Yuto Miyazawa:
The kid is good!
How about an all time classic tune like "Hotel California"? Well, julianaeveryday has you covered and then some:
Most impressive.
Here is oooopmymom wailing out Van Halen's ultimate rock tune "Atomic Punk":
Nasty!
A band named Sabre tries out Dokken's ballad "Alone Again" and it is not bad! Posted by CompGEED:
I like it.
How about a father and son playing my favorite Journey song, "Wheel in the Sky"? Here is tonedr:
Great stuff.
If you know the guitar duel from the film "Crossroads" then you may like this cover of Eugene's winning riff by bolajunky:
Wow!
See, you can find most anything if you want to look.
What about "Personalized Medicine"? Reader Watchtower asked a question about how having genomic information may play a role in possible treatments for people. This is an area that I have tons of experience and knowledge about so you can imagine I wanted to go all out! For the sake of brevity and simplicity I will just use a few links and offer some commentary.
I was at a company when I first started working that was at the forefront of thinking about "personalized medicine". Today it even has it's own Wiki entry!:
Personalized MedicinePersonalized medicine is a medical model emphasizing the systematic use of information about an individual patient to select or optimize that patient's preventative and therapeutic care. Personalized medicine can broadly be defined as products and services that leverage the science of genomics and proteomics (directly or indirectly) and capitalize on the trends toward wellness and consumerism to enable tailored approaches to prevention and care.
This sounds complex but it is not too bad. Every person has a unique genome. While maybe 99.9% of it is just like anyone else's there may be differences (as small as single nucleotide polymorphisms, SNP's or as large as gene fusions or re-arrangements) which can be used to predict how various treatments may impact that person. This is especially true in the case of cancer cell genomics. Some treatments may target a certain pathway to kill the cancer, but if that patient's cancer can side step that pathway or has a mutation in that gene then the treatment may not work at all and would be a waste of both time an resources.
Pharmacogenetics is a large area of interest right now as companies are looking to find their target markets ever more tightly. Clinical trials will often screen a patient group for markers that have been shown to be important for a drug's activity. One can focus on patients that will see a benefit this way.
I think the question was more in a broad sense and in that way having the genomes of various types of people (Norther European, Asian, African, etc) can help the choosing of treatments. We are still a ways away from being able to sequence a person's genome quickly, but luckily most time just small sections need to be looked at to determine the best treatment options. This goes on right now, no waiting for the future! Looking ahead I think the focus will result in better treatment on a patient to patient basis and cut down on dead end treatments. Still, there is a long way to go. Hope this helps!
Writing Sample I have often teased that I sort of work on a possible long short story (novella?) that has been in my head for some time. I do try and think about it from time to time, but it never seems to come out right. I wanted to put what I had written down for the prologue section on here and see if it grabs anyone. No title, that's in flux, but here is how it would be set up:
Prologue Look, I never set out to make "the device".
I was a kid in second grade with a new set of colored pencils. One day I sat down and started drawing. This led to the first schematics of the machine I imagined. It all made sense at the time, very useful, and I even thought it was possible. I was in second grade!
Don't ask me if I had a vision. I was not visited by aliens. No God whispered in my ear. I was just doodling and something appeared from no where. If I had it to do over, I would have drawn a fucking rainbow or a pony.
But I didn't.
Let me know what you think!
Good Joke Caught this over at the Big Steel Keg cooking board. Men, do we need to enroll?: CLASSES FOR MEN Southwest Tech is offering a new 2 year associates degree: Becoming a Real Man. That's right, in just six mini-mesters, you, too, can be a real man as well as earn an associates degree in MA (Male Arts). Please take a moment to look over the program outline. FIRST YEAR Autumn Schedule: MEN 101 - Combating Stupidity MEN 102 - You, Too, Can Do Housework MEN 103 - PMS: Learn When to Keep Your Mouth Shut MEN 104 - We Do Not Want Sleazy Under things for Christmas Winter Schedule: MEN 110 - Wonderful Laundry Techniques MEN 111 - Understanding the Female Response to getting in at 2AM MEN 112 - Pa renting: It Doesn't End with Conception EAT 100 - Get a Life, Learn to Cook EAT 101 - Get a Life, Learn to Cook II ECON 001A - What's Hers is Hers Spring Schedule: MEN 120 - How NOT to Act Like a Buttface When You're Wrong MEN 121 - Understanding Your Incompetence MEN 122 - YOU, the Weaker Sex MEN 123 - Reasons to Give Flowers ECON 001C - What Was Yours is Hers SECOND YEAR Autumn Schedule: SEX 101 - You CAN Fall Asleep without It SEX 102 - Morning Dilemma: If It's Awake, Take a Shower SEX 103 - How to Stay Awake After Sex MEN 201 - How to Put the Toilet Seat Down Elective (See Electives Below) Winter Schedule: MEN 210 - The Remote Control: Overcoming Your Dependency MEN 211 - How to Not Act Younger than Your Children MEN 212 - You, Too, Can Be a Designated Driver MEN 213 - Honest, You Don't Look Like Tom Cruise MEN 230A - Her Birthdays and Anniversaries Are Important Spring Schedule: MEN 220 - Omit! ting %&*! from Your Vocabulary (Pass/Fail Only) MEN 221 - Fluffing the Blanket After Passing Gas Is Not Necessary MEN 222 - Real Men Ask for Directions MEN 223 - Thirty Minutes of Begging is NOT Considered Foreplay MEN 230B - Her Birthdays and Anniversaries Are Important 2 Course Electives: EAT 101 - Cooking with Tofu EAT 102 - Utilization of Dining Utensils EAT 103 - Burping and Belching Discreetly MEN 231 - Mothers-in-law MEN 232 - Appear to Be Listening MEN 233 - Just Say "Yes, Dear" ECON 001C - Cheaper to Keep Her
Money tends to stay in certain geographic areas. Check out how closed up New England is with the cash!:
Very interesting.
Video Killed the Radio Star Some items of possible interest.
Here is how all that genomic sequencing gets done in an easy to see sort of way:
There are newer ways that this is done as well, but this covers the basic idea. Here is a PCR reaction.
I think the film "The Fountain" could have been an all time great, but they missed the mark a little. Still, it is well worth a look and I can recommend it:
Just picked this classic up and will probably watch it tonight, "American Werewolf in London":
Awesome!
Rock Blogging A few tunes to send you off for the weekend.
Gawains provided quite a list to choose from, so let's take a trip with KISS and "Room Service":
World War II Axis Invasion Plans for the United States This kind of stuff always catches my attention.
As a thought experiment or real fear, possible Nazi invasion plans for the United States were fabricated for Life magazine. From the article over at io9:
These diagrams from the March 2, 1942 issue of Life detailed the Nazi invasion of America shortly after the attack on Pearl Harbor. Check out such alternate reality battles like the bombing of Detroit and invasion of Norfolk, Virginia.
Just a quick note for the evening. No real posts for a bit.
Sunday Night Football I was shocked by the New England Patriots last night. One week after they could not do much of anything right, they put it all together for a huge road win against the Pittsburgh Steelers.
I think last night was about the third time I saw Tom Brady in "the zone" and when he is on like that you are witnessing something special. I don't care about Peyton Manning and all his baloney numbers; there is no better big game quarterback than Tom Brady. There is not, get over it.
Speaking of Manning, the Indianapolis Colts travel to Foxboro next week for another big game with playoff implications. The season is getting very interesting indeed.
Why So Nervous? All of a sudden muni bonds are getting hammered. Why? I have no idea, why does anything happen these days? Does someone know something? Is this frontrunning the FED who may be looking to buy this crap in QE 23? No idea, but it is kind of funny to watch.
Jeff over at The Housing Time Bomb goes over other bond news tonight. Check it out, maybe Mr. Market is about done with Boom Boom Bernanke? Credit markets tend to lead stocks but this has not been true for some time. Who knows.
Big Game Sunday Economic Disconnect has had a constructive Sunday and is feeling pretty good tonight.
The New England Patriots travel to Pittsburgh tonight to play the Steelers. I think it is a TALL order for the Pats to be able to handle the Steeler running game and I have a feeling the passing game of New England will have a hard time as well. I think the Steelers win this game tonight, but I want to see how the young players on the Patriots react to a rough environment and harsh conditions in a road game.
Any way you look at it, this game is between two of the best teams in recent history. I am hoping for a good tilt.
Thanks to many for the kind words in the comments last post and a few very nice emails. I can assure you I am ok and that the break I need is not due to burn out or being frustrated by markets or policy. Sometimes personal issues require attention and that is all I want to say. Thanks again.
I am Ambivalence A few not-quite-poetry verses to sum up ambivalence.
Stocks have raged 80% since the lows; The market is never wrong so I should buy; Should I hedge that position or go all the way long?; Do that.
Silver and gold are real money; Always have been and always will be; Get physical or keep paper shares?: Indeed.
I am worried about retirement; Everything is so volatile; What can I do to protect what I have?; Wear a cup.
The Republicans won the election; Only 48% of voters are happy about a GOP majority; Why isn't anyone excited about this?; I missed the question.
QE adds no new money to the system; Commodities were flying until margin increases; If there is no new money, why is this happening?; Yup.
If it is best to be contrarian; But a contrarian will know the contrarian view; Is it better to be the second contrarian in the chain?; 6th would be best.
The I-phone rules; The I-pad is genius; Apple is god?; The dinosaurs are extinct, killed by a huge meteorite.
I have doubts; I have fears; Will it always be this way?; So.
Friday Night Entertainment Ok! After that it may prove difficult to salvage a post, but here goes.
Quantitative Easing Cartoon This was making the rounds and these things crack me up to no end. Enjoy this one, it is a classic:
"What is 'The Deflation'? Its not two funny it's three funny.
Film Clips A few movies you may have seen or not but should.
Not too many Stephen King novels translate well to film, but "The Dead Zone" certainly did. Big scene:
You can catch a young Jason Gedrick in the touching film "The Heavenly Kid":
I have always loved this film.
Rock Blogging Even in bad times, rock and roll is good. That is good for something.
Watchtower, the longest running reader of Economic Disconnect was interested in Journey's song "The Party's Over" so it leads off the show:
I think I heard this song one time before. Not bad.
Scharfy noted a neat Johnny Cash tribute that you can check out here. I wanted to run a Cash clip, so let's go with "Sunday Morning Coming Down":
I love that one.
From the film mentioned above, enjoy "Out on the Edge" by Jon Fiore:
Not bad.
Pardon the dark selection, but "Down in a Hole" is a great one by Alice in Chains:
Ouch.
I have had this up before, but I was in the mood for The Cranberries and their heavy duty tune "Zombie":
Nasty good.
Last two for the night. What's on tap?
Found a sick as all get out live video of No Doubt and "Don't Speak" that is well worth the time:
Wow.
Last call.
Look, it's my blog and I am sorry to replay but the writer was going to watch "Streets of Fire" in a bit so you get "Tonight is What it Means to be Young". Sorry:
I am thinking about taking a bit of a break from writing for a little bit. I think I will post short takes and links, and the Friday Night fun is always a nice time for me at least. Again, I am sorry but you have to do what you have to do.
Had to Post This Saw something today that made me feel that I do know what the f%ck I am talking about! From Mish:
“We do also need creditors to be involved in the costs of restructuring,” Merkel said today in Seoul, where she’s attending a summit of the Group of 20 leaders. “There may be a conflict here between the interests of the financial world and the interests of politicians. We can’t constantly explain to our voters that taxpayers have to be on the hook for certain risks, rather than those who make a lot of money taking those risks. I ask the markets sometimes to bear politicians in mind, too.”
Trichet’s Stance Trichet says such talk risks exacerbating the situation for indebted nations as they struggle to cut their budget deficits.
“The more you talk about restructuring debt, the harder it is to obtain debt,” Irish Finance Minister Brian Lenihan said Nov. 2. “That is the reality.”
Thank you! Thank you!
If there was ever a more clear picture of the reality we are now in please show me. As long as debt can be rolled and everyone pretends it's all good then no problems! Like I have written, if anything happens that demands real money in today's system it's all gone in about 10 minutes.
Blog Note I want to apologize to the readers. I am having some problems concentrating and being motivated due to a personal issue. Add to this the clock change now guarantees it to be dark when I go to work in the morning AND when I come home and you get a blogger more than a bit off his game. Just when I had a grand plan to get some work done. Thanks for your understanding.
Things to Keep in Mind Today featured quite a few things we have discussed over the past few months so no reason to beat them to death. A few things to keep in mind going forward are presented below.
Margin Issues not Just for Old School Companies? I am not sure how much I can read into one report, especially with the idea that Cisco (CSCO) may well be pulling a fast one by lowering guidance so much, but a billion dollar revenue shortfall is not a small matter. Market Ticker has some ideas on were the pressure is coming from:
Companies talking about input cost margin problems (remember the commodity ramps from late 2007 into 2008?) and forward guidance cuts. Folks, you buy stock on tomorrow's earnings expectations. You've been buying 'em lately on the premise of multiple expansion driven by The Fed. I said you would get destroyed doing this, and it might have started this evening. If you remember this article, I said that it is my thesis that economic Depressions come not from credit collapses so much as they do from margin collapse. That is, the inability to make a profit due to input cost ramps while you are unable to pass through those costs to the consumer of your product or service. This in turn forces you out of business, and you then lay off all your workers. They now have no money, and thus can't buy as much as they used to. That in turn tightens the spiral on others in business - they have the input costs but can't drop prices to what people with damaged incomes can afford. Cisco seems to have been "blindsided" by public sector, cable company and consumer softness. How could they be? I've been charting this in durables for the last two months!
This bears watching if technology companies are seeing end user issues due to cost problems.
Retail is Aggressive At both Home Depot and Lowes this weekend all the Christmas stuff was already up and looked like it had been for some time. It is not even Thanksgiving yet! As a kid I never even considered Christmas until after Thanksgiving, but now the holiday sale season lasts for months. Another data point, old warhorse Sears will be open on Thanksgiving for the first time ever to try and increase sales: Sears to be open Thanksgiving for first time
Might as well I guess.
Year End POMO is Almost Every Day The 2010 POMO schedule was released today and if you think Silver is a crowded trade, this thing is 10X worse!
That said, no reason at this point to doubt the magic effects of the FED bond buys. Some commentary better than mine:
Tim Knight
How to Get on POMO's Side With today's announcement of over $100 billion POMO purchases in the coming weeks, I gave some thought as to how to try to get on the Right Side Of Ben, since I'm kind of sick of griping about POMO and would rather benefit from it.
Evil Speculator
Ben’s Middle Finger Well, there you have it, folks – do I care about those POMO auctions? Not really – I’ve long given up on the notion of final justice for either Mr. Bernanke or the fat cat banksters he’s feeding cookies on a daily basis. But what I care about is downside risk and that’s pretty much eliminated if you can lever $105 Billion by a factor of 100 and throw it into the equity maelstrom.
Trader Mark
Holy POMO In the grand mass psychology experiment i.e. the herding of rats through a maze the conventional wisdom is you can no longer bet against the market on POMO days as the Fed lifts treasuries off the primary dealers hands in return for mad money and the primary dealers...well magical things happen to assets. If you take out the middle man (primary dealers) you are just left with the Fed and the magic of a market that jumps when commanded and asks how high. And now that the rats are trained to front run the primary dealers it has become self reinforcing. There is so much money coming down the pike and if the next months schedule is reflective of the ensuing 7 months bears apparently will have 2 days a month to operate in a free market.
I think you get the idea. Now that the banks have returned to their perfect or near perfect trading day records it would take some kind of major event or shock to stop this animal from running until years end. None of this is trading advice, you have to be brave and/or crazy to be playing on this field but I wanted to cover it once again.
I Have No Idea What this is But Somebody Does I have seen the videos and the pictures of the "mysterious" object that was in the air of the coast of southern California. I don't know what it is to be 100% honest, but I am leaning towards it not being a simple contrail from an airplane.
Rising Costs Hit Bottom Line The Reformed Broker covers some stories about rising input prices having an effect on bottom lines. While prices has been on the uptrend since summer, only now is that making it's way into reports. From TRB:
The Cow in the Coal Mine How do dairy and packaged foods companies like Endless Zero interest rates and the dollar/commodity one-way seesaw? Well, they do not like it at all judging by their big earnings misses. Commodity costs are now eating up their profits....
...My pal Barbarian Capital notes that the company saw its EBIT margin drop by 40% in Q3 vs. Q3 last year: 3% vs. 5%. As someone who knows this industry cold, it's not encouraging to hear him say "Thanks for playing and welcome to QE2 wonderland."
"And That's the Bottom Line, Cuz Stone Cold Said So!"
Silver Isolated for Higher Margin Requirement As we all know speculation in stocks and houses = AWESOME and speculation in gold and silver = Not Funny. The dichotomy is a puzzler because I am sure metal holders will feel more wealthy and spend their money in the economy should prices rise so what is the difference? I think you know the difference. Via Zero Hedge: When JPM/HSBC Don't Like The Results, The CME Just Changes The Rules: Full Revised Silver Margin Schedule Hypocrisy, hallowed be thy name.
Back to SLW - it's fast approaching that gap at $30, but the whole commodity complex to be is one big Silver Wheaton. When these trades reverse this market is going to enjoy very ugly skid marks... all shorts have been eviscerated (hence they cannot provide support by 'short covering' i.e. buying on the next downturn) & huge air pockets exist on countless charts. I can only find one blogger out of about 40-50 blogs I scanned this weekend (ex daytrader types) who is actively shorting this market on the intermediate term...
The farther we go up, in non stop fashion, the higher the risk for people who are buying with no thought process and little risk control. Maybe the selloff will be from here... or S&P1300 or 1800 or 2500; I don't know because this type of market is foreign to me - but once again we live in an artificial atmosphere, no different from NASDAQ 99 and housing 2006. The only question is, are these days more like April 1999 or February 2000. I wonder how many Fed induced wealth destruction cycles we need to go through before anyone not named Ron Paul points at the Fed.
Spot on.
Hubble Capture An edge-on look at the Galaxy NGC 4452: Great stuff.
