Sunday, July 31, 2011

What is this, the Food Network?

Perfect weather all weekend. Did some yard work today and watched the most boring Brickyard 400 of all time. Starting to get excited about football season.

Market Operations
On Friday I was debating whether I wanted to buy a position or 10 in some kind of 3X long etf, like TNA (hee hee). Everyone knows a debt ceiling deal was going to happen, I mean everyone. I Twitted this to sum it up:
The big bounce up tomorrow will go down in history as the most telegraphed equity spike in the history of man or animals.
I did not take the position on Friday, not because I was afraid of something going wrong, but because it's not the type of trade I want to start making too often. Not my trading type. Still, looks like an easy up day tomorrow. Will it hold? Who knows and after tomorrow it will probably take a couple days for things to settle out. Annoying really.

Josh Brown wrote a wonderful missive on the debt ceiling and the stupid politics involved in it. You really should read the piece as I can assure you most of the smart players were reading it all day long:
To Stanley Druckenmiller and the rest of the Oldtimers' Game brain trust, let me say this: Your ideas about missing a Treasury coupon "just to see what would happen" are so dangerous that I fear someone's been tampering with your meds. How is it possible that otherwise intelligent people could reasonably believe that the world's reserve debt instrument should be used for a political gambit? Mr. Druckenmiller (and friends), we agree on the need to get our house cleaned up, just not on your plan of swinging a wrecking ball at it to get the maids' attention. Congrats on your retirement, please don't feel the need to ever offer public comment again.
Stop on over.

What is this, the Food Network?
It was a cook intensive weekend!

Last night I posted the pictures of the pork butts I rubbed and set on The Big Steel Keg to cook overnight. I went with apple wood for smoke and put the meat on the smoker at 10:30pm. Temperature had stabilized at 230-260 degrees. I kept an eye on it until 12:30am then went to bed. Checked on it at 7am this morning and the Keg was rock solid still at 250 degrees! Awesome result with the lump charcoal.

Anyways, let's see the pictures!

Here they are about ready to foil; cook time 12 hours:
Internal temp at 195 degrees, into a foil wrap and stuffed in a cooler to finish:
Pulling pork, look at this thing fall apart:
Big tray of meat:
Butt on buns, that does sound exciting:
This cook came out great and it was my first overnight cook.

For dinner I wanted to have something fast so I just made english muffin mini pizzas. If you have kids they LOVE this item and it's super easy to make:

I know plenty of financial bloggers do cooking, we should have an inaugural Blogger BBQ Cookoff and set up a voting poll to see who wins. Any takers?

Have a good night.

Saturday, July 30, 2011

Wired on Saturday Night

Well wireless actually. New modem purchased and I had a new router I had never installed for various reasons. 3 hours of frustration with the crappy directions and trying to do this on a Macintosh computer (longer story) and I was back online this morning. Should be good to go now.

Debt Ceiling
The joke that is the debt ceiling drama continues on. What bothers me about the whole thing is we are side stepping any serious discussion of finance and spending. The focus now is "raise the ceiling or the world ends" or things like that. Another missed opportunity for any kind of change.

Saturday Entertainment
I am going to try and smoke some pork butt tonight. I messed this up the first time I tried it. I am going to put the small butts on the smoker around 10pm and smoke them all night. If I set up the Big Steel Keg correct, it should run all night around 250 degrees. We shall see in the morning if it went ok. These take about 12-14 hours to really be done right.

Random Reads
Broaden your mind with these links.

-Today in 2003 (via Little Bits of History) the last of the old model VW bugs were made. Hated those things, but 65 years in production is a good run.

-I ordered the novel "The Lost City of Z" which is about Percy Fawcett's tragic search for a golden city in the Brazil rainforest.

-The most legendary engine of all time? Maybe the 1969 all aluminum ZL-1 Corvette engine. This was one of the sickest things ever made in the United States.

Visual Cues
They sell these now?:
epic fail photos - Toy Name FAIL
see more funny videos, and check out our Yo Dawg lols!

Who would have guessed?:
funny pictures history - It's nice, but it'll never replace playing outside in the fresh air and getting plenty of exercise.
see more Historic LOL

Film Clips
Stream these movies!

One of the best episodes of the TV series Highlander was the double feature of Something Wicked/Deliverance. Duncan Macloud was overwhelmed by a dark spirit after he took his head and turned into a total badass. I actually liked him this way! In the following clip at the 25:00 mark he tries to get help from an old friend but he is now totally lost:

The film "Gaataca" was a wonderful film that sounded a cautious note about the future of genetic prejudice. The final scene with Ethan Hawke getting set to leave on a space trip is a must see:

Rock Blogging
Some music to roll on the weekend.

Reader C-T was looking for "Personal Jesus" from Depeche Mode because she is in love with singer Dave Gahan. I love this live version:

Watchtower likes Johnny Cash's last tune, "Hurt":

Jim Croce from reader Gawains with "You Don't Mess Around with Jim":

I heard a new version of "Mr. Bojangles" on the radio the other day. I wanted to freaking puke. Instead of a sad song, full of soul and feeling it was changed into some techno pop nightmare for club use. Disgusting and if I were Emperor I would dismiss that version with EXTREME prejudice. Anyways, here is an old version by The Nitty Gritty Dirt Band:

Two songs to go.

I know I have had this on a few times, but I was in the mood for the "Crossroads Duel": so here it is:

Love it.

Close the show with a favorite one of mine, Black Sabbath and "Warning":

Added: Rubbed Butts:
Big Steel Keg after dark, I hope I don't get bit by the fisher cat:

Have a good night.

Friday, July 29, 2011

Wireless Router Funeral

No post tonight as my wireless router died. I am wrestling with an india-based Comcast representative to activate my new modem and its not going well. Sorry.

I am using my Droid to post.

Have a good night.

Thursday, July 28, 2011

Thursday Thoughts

Weekend is almost here! Saturday night we get to baby-sit our friends younger son. He is a chess addict and pretty good so I will have my hands full. If only he wanted to watch fights on YouTube!

Tomorrow is Friday Night, so get requests in via comments, email, or Twitter.

New England Patriots Making the News
Huge day for the New England Patriots! In the morning they secured defensive end Albert Haynesworth from the Redskins for a 2013 5th round draft choice!! IF this guy gets in shape and Coach Bill designs some wild looks to free him up, this is going to be HUGE!

Add to the mix, Chad "Ocho Cinco" will be coming to town. I think he still has something left, and paired with Tom Brady and a full crew of good receivers, this could also be a difference maker. Much more later on closer to NFL season.

Thursday Thoughts
A few ideas and thoughts I had today.

-If the FED sold half of the US gold reserves to pay short term bills, what would happen with the dollar?
-One may think the UK sold all theirs and nothing happened, but it's not even near the same. Or is it?
-If the VIXX can only go down (after a spike) and you can short it, how come every single big money player and bank is not shorting VIXX tonight to the tune of 4 trillion dollars? This trade can never lose, right? Where is it?
-Is Sunday night going to be the "CONgress saved us!" moment? It better be.
-Will Kevin Harvick win again at the Brickyard this Sunday?
-Can the world really end if the US skips a debt payment?
-Will Americans vote out the entire senate and house next election?
-Can interest rates really rise in the next 3 years? Really?
-Albert Einstein once said: "I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones." Will WW3 be fought over oil or water?
-Did you know that the word is "unicorn" because the Latin root for horn is "cornus"? That's why it is not "unihorn".
--Bearish sentiment is highest in 3 months yet everyone I read and know are chomping at the bit to buy. Another market indicator that has become a simulacrum.
-Is copper the same tell on the economy/markets it used to be?
-If it is not, it is for the same reason sentiment is not, a gamed indicator now. Thoughts?
-Is the best show on Twitter Josh Brown answering any and all questions while on a train surrounded by mcnugget gobblers?
-Why do I get physically ill if I drink even a sip of non-diet soda?
-Do I drink more diet soda or beer?
-I have found 16 pre-1965 silver quarters in the last 10 years in my change and not one dime. WHO HAS ALL THE DIMES?
-When we moved into our new home when I was a kid (crappy duplex in south Lowell) the previous owners left an entire set of encyclopedias. My mom found 23 $100 bills, one stashed in each book of the lot. Do you ever forget where you put money?
-What are you thinking about tonight?

Have a good night.

Wednesday, July 27, 2011

Calmer Heads in Volatile Times

I think I need to start a poll on whether readers know and have eaten Crispy Crowns! I say they beat tater tots all the way, but each to his/her own.

Calmer Heads in Volatile Times
I closed out all my open positions today (GFIG, CSU, SOXL) for a whopping, are you sitting down?, 1% gain in my trading account! Two weeks of ideas, mistakes, and a sell off and I am right back where I was a while ago. Round trip airfare included!

Debt ceiling issues? Slowing economic data? Summer doldrums? Best guess was a mini TARP like tantrum by traders showing how fast they can hit the exits should the US CONgress not get their act together. For a total disconnect get this from Jake at EconomPic:
With a Treasury closer to default The only ETF on the daily screen I run from time to time in positive territory... Treasuries!
You can't make this stuff up; a flight to US treasuries in case we "default"! It's all funny from a distance.

In tough markets the best writers and thinkers out there often pen some of the best stuff they write. It's called talent. Instead of me boring you I will point out a few good reads today to get you caught up, a clue, and calmed down as the drama goes on until the weekend.

For a great take on what may be happening now, here is Josh Brown's piece from JULY 24Th (SUNDAY!) which postulated the next 2-3 weeks:
So here's my roadmap: We will hear from 180 S&P 500 companies this week, from Ford ($F) to ExxonMobil ($XOM) to Merck ($MRK). Some of the more troublesome reports are already behind us - thanks Bank of America ($BAC) - the industrials and energy companies coming up should all be solid. In the absence of Euro problems (for a brief moment, we hope) the focus should be on three things - US earnings reports, debt ceiling negotiations and the first official estimate of second quarter GDP which is announced on Friday. The latter two are almost guaranteed to put pressure on the markets while the strong profit reports should keep that jittery sell-off from becoming a wipeout. That briefly-panicked move lower will fail, and from this failed move will come the fast move of stocks tearing through the overhead resistance they've toiled beneath these past six months.
Well today could have been the mini panic sell off.

High Chart Patterns Blog sets up the basic trend that has been in place for some time and has not failed yet:
On another note — as we have said repeatedly in our posts, we will stay in the bull camp until a) we stop bouncing where we should bounce (even today even though we closed near lows, we first bounced perfectly from trend-line to 20EMA, where we posted daytrader target had been met) and b) March 2009 trend-line is broken. Basically we won’t get worried until stocks stop bouncing where they should bounce . Then we’ll step back and wait it out.
Way more at the link so check it out.

ChessNwine has market recaps that keep you from getting crazy long when things are good and keep you from moving to a mountain hideout when things get bad. Chess is the calmest player I know ,and here is today's market recap:
Stock #Market Recap 07/27/11 {Video}

So where does that leave things?

I would think the debt ceiling issue will get resolved before the weekend. How much damage is done before then who knows. If you are a long term market player, this is just noise. If you are a short term player the hurt on single names varies from bad to totally broken. We could firm up and rally very hard from here, but playing that is going to be a daily sort of thing, not a swing trade or longer idea. The volatility will be high I think.

I don't have much of a plan right now. I am tempted to get involved looking for a wicked oversold bounce (the iBankCoin PPT is amazing for this!) but most of any move will come right at the open so I would have already had to put that trade on unless a multi day move is at hand. With all the rumors and news from Washington DC now is not that time. Maybe Friday.

In any case, stay sharp out there.

Have a good night.

Tuesday, July 26, 2011

What's Your Problem, Kazanski?

Amazon Sells Stuff
Mega retailer Amazon (AMZN) reported killer earnings after the close. Along with Google (GOOG) this is one company that is "hot" that I love. I buy almost all my stuff at Amazon, the pricing and fast shipping cannot be beat. This further cements the idea to me that big floor space stores are going the way of the dodo bird. No need at all. When I look at commercial real estate funds going bananas to the upside I wonder if this new way forward has even been considered. How many Chipotle (CMG) joints can be built or place din empty mall space? Keep this in mind for the longer term, retail space is entering a long downtrend.

What's Your Problem, Kazanski?

It is always much more fun to report on some killer trade (FURX) than to highlight a mistake I have made. Still, most lessons are learned from mistakes so here we go.

I was stopped out of ASYS today for -2%, and I am looking to drop GFIG for a small gain tomorrow before earnings on Thursday. Those were not mistakes, just trades that did not do what I was expecting.

My mistake was in the CSU trade. Here is a chart for reference:
I talked briefly about CSU two Sundays ago, read it here.

What I saw was a stock at the lower end of an established trading range ($8.60-$9.70) that was at the lower support area. You can see my buy call as volume came in to support the stock and I bought in around $8.80. My target run for this name was to around $9.60-$9.70 which would have been a good 10% gain. All went well, in fact on a scale of 1-10 with 1 being a trade to kill boredom random pick and 10 being insider information from Martha Stewart I would have rated this one an 8. I tend to size my positions based on my confidence in the idea.

So I sold Friday at $9.65 right? WRONG!

As I was looking over the stock on Friday I actually said to myself "What's your problem, Kazanski" from the film Top Gun. Everything was in place and ready to go. What happened? I did what all idiots do when trading, I changed my trading idea while still in the position, directly in the face of facts not in evidence.

I was thinking that this run to the top of the channel may be a breakout possibility with more upside. Was there more volume coming in to push the price up? No. Had the action even broken in to the first resistance area before a breakout, around $9.80-$10? Not really, not with any conviction. So why did I let it ride? No idea, hope or greed I guess.

In any case, I had another shot to sell on Monday but got a bit busy at work and missed it. Right now CSU is looking like it is making a run to the bottom of the channel and a solid 10% win will probably be a small gain or a close out at 0%. Not every mistake will cost you a big loss, but missed gains add up just the same.

If you ever change your idea on a position you need to go through a checklist that will objectively answer your new idea. Had I really looked at the volume and price along with the candles Friday or Monday it was clear CSU was not making a big run. In fact, it may have topped out for the near term and earnings are Monday August 1. Trading is fun, right?

Have a good night.

Monday, July 25, 2011


It rained here in the Boston area right at the afternoon commute time. Of course no one here can drive in rain so I had an extra long ride home. Late start so just a few links, notes, and clean up.

Debt Deal Drama
I really think this is getting overblown. Still it holds lessons on how the new order of things operate. No less than 4 times last night I heard on mainstream news networks that a deal was desired "before the Asian stock markets open". There you are, stock markets are now the only gauge anyone cares about. Jobs, growth, and anything else is a side show to a few ticks of markets all over the world. Thanks financial crisis, now a 3% move in market indices is a reason to invoke national security. What will be the next step? "The War Against Lower Prices"?

Great Visual Aid
If you are into trading or just follow along with things financial you would do well to check out this post over at Dragonfly Capital:
Market Topography
Top shelf chart artist Greg Harmon gives you clear examples of some great trading formations like:
-Bull Flag
-Higher Highs and Higher Lows
-Symmetrical Triangles
And some more. Check it out!

To all the Genes I've Cloned Before
I had the project tracking system we use open today so I sorted it by my completed projects to see how many clones I have done since I started at my current job.

1078 complete expression constructs in 5 years.

Wow. What is funny is I can remember almost all of them at least a little bit.

Looking back over 12 years in molecular biology I can only guess that I have cloned about 2500 or so single genes, and made around 3500 expression constructs.

Here is what a vector map looks like:
Trust me it's not that complicated.

My favorite project? Cloning a novel aminoglycoside pathway with antibacterial properties from a soil sample. These things are HUGE and complex, very tough to find and harder to get expression. This one was arranged like the streptomycin pathway. For a general reading see Wikipedia's entry for Streptomycin and go from there.

Have a good night.

Sunday, July 24, 2011

Chasing Plump Skirts

The heat has finally let off around here. About 80 degrees, dry and a nice breeze. Good stuff.

Market Operations
Usually I do homework on Sunday night for stock ideas but I am skipping today. Why? Because I am up to my ears in long positions that's why! No real room to deploy more cash. Add in the debt ceiling drama and who knows how the early part of the week will go. My positions are:
-SOXL (maybe a tad overweight)
I am not of the opinion that some monster sell off is at hand should a debt deal be reached or not. I think this is noise, but you cannot pretend that our CONgress and Wall Street are not hyper-reactive people so stay sharp this week.

Chasing Plump Skirts
Now that I have your attention!

Today I made stuffed skirt steaks. This is a favorite of the wife's so I can score points if I make it. It is somewhat involved to do, but not too hard. The end result is tough to beat.

You will need:
-skirt steaks
-baby spinach
-Some kind of shredded cheese
-mushrooms (regular or portabella)
So the first step is to pound your meat. It's ok, it's for a purpose. To minimize the mess you can lay saran wrap over the skirt steaks as you use a mallet to pound the steaks as flat as you can:
After you have the steak flat, cut it into strips for individual stuffing. Layer on the baby spincah first, then the other stuff finishing with the shredded cheese:
Roll up the package and tie off with twine. You can usually get away with just going around once, but I will add a tie length wise to keep the goods from spilling out on the grill.
Get your grill going but do not go thermo nuclear, you don't want a super high heat as these take a bit to cook fully through. I use the Big Steel Keg and lump charcoal and get the temp up to about 400 degrees:
This should take about 20 minutes total, but keep moving the stuffed steaks around so they cook on all sides. I threw on some asparagus as well. Here it is near the end:
Dinner plate for me:

I brushed the rolls with some Stubbs Beef Marinade during the cook for an added punch, but you do not have to. These come great and the baby spinach actually crisps up during cooking so you get a nice crunchy texture along with the gooey goodness of the cheese and meat. What did you all have for dinner tonight?

Have a good night.

Saturday, July 23, 2011

Great Clashes in Cinema History

Note: Please check out the previous post which features reader Gawains' essay on real estate.

Great Clashes in Cinema History
Who does not love a big dust up? In film, epic battles and clashes between immovable forces are some of the most exciting moments for me to watch. Maybe it's a guy thing. Here are a list of some of my favorite film battles, add some of your own in the comments.

Achilles vs. Hector (Troy)
The fight between Achilles and Hector is one of the better battles in recent memory:
Very well performed by Bard Pitt and Eric Bana.

Ripley Uses Robot Suit, Fights the Queen (Aliens)
When character Ripley comes out of the hanger wearing the robot suit to fight the queen alien, you know you jumped out of your chair at the movies and yelled "OHHHHH YEAHHHHHHH!":

Darth Sidious vs. Grandmaster Yoda (Revenge of the Sith)
Perhaps the most epic clash in the Star Wars films, Yoda goes toe to toe with Darth Sidious and sees the full power of the darkside:
When the senate discs start flying the fight went to a whole new level.

Ramirez vs. The Kurgan (Highlander)
Two old immortals go all out, destroy an entire castle, and provide one of the best movie fights of all time:
If you have not seen this film you cannot read my blog anymore, sorry.

Apollo Creed vs. Rocky Balboa (Rocky)
Creed knocks down Balboa in the 14th round and the fight should be over. Rocky gets up and launches a body attack that finishes Creed for the 15th round (Creed wins the decision). This classic never gets old, I can watch that sequence over and over again:

Neo vs Agent Smith (Matrix Revolutions)
A new era classic, this fight was all you thought it would be and then some more:

Jake Lamotta vs Sugar Ray Robinson (Raging Bull)
In real life this was the 6th fight between the two legends (Robinson 5 wins, Lamotta 1 win). You can find a YouTube clip of the real thing, but in the film Robinson finishes Lamotta in the 13th round and it was as brutal on film as in the fight. Nasty:

Conan vs. Rexor (Conan the Barbarian)
A perfect mix of revenge, brutal blade work, and music to die for makes the Conan vs. Rexor fight an all time great:

Bruce Leroy vs. Sho'Nuff (Berry Gordy's The Last Dragon)
Leroy fights the villain Sho'Nuff and finds he is the master:

Martin and Felix in the Hallway (Grosse Pointe Blank)
In one of the more brutal real life like fights I have seen in movies, Martin (John Cusack) fights for his life against a hit man in his old high school:
Very much how a real life drag out fight feels and looks like.

Add your own in the comments.

Have a good night.

Real Estate Process - A View from the Inside

Tough day at the beach. It started off raining and heavy overcast this morning around 8am when we arrived. It was not until 10:30am when the Sun finally broke through, but when it did it was almost unbearable hot. I burned the tops of my feet, that sucks. Anyways, back home now and staying cool.

Real Estate Process - A View from the Inside
I have a pretty cool treat for the readers tonight. Long time reader Gawains wrote up a fine essay about the real estate business as he sees it and sent me the final write up. Why should you care? Maybe because Gawains has been doing this for a LONG time, that's why. There are some great historical insights in the piece as well as a complete rundown on some of the things we all talk about all the time but maybe do not really know all that much about. It's a long essay so please take your time and let me and Gawains know what you think. Here is Gawains:

The Dirty Little Secret about Price Opinions

Real estate rears its distressed head and once again intrudes on the news. As if it’s done anything else since, oh I don’t know, 1086. That was known as Domesday, when the survey of England, which determined property lines and established title, was completed for William the Conqueror. It was a dark day in history, but it has influenced real estate to this day.

Those who do not know history are doomed to repeat it, as the old saying goes. Or as Mark Twain more eloquently put it, “History does not repeat itself, but it does rhyme.”

One would do well to read up on what was going on in real estate in the late 1800s, after the Civil War, during the great Western Expansion. Land grabs, people selling property they didn’t own, people buying property they didn’t get title to, squatters, looters, walkers. Sound familiar? Something had to be done; it was madness. The first real estate commission was founded in California, the second in Texas, in the early 1900s. Contracts were formalized, agents were licensed, properties were surveyed, and title was insured. The rest of the states soon followed suit.

These days, it’s a return to madness. Or as Yogi Berra once famously said, “It’s déjà vu all over again.” We read all these stories about mortgage fraud, appraisal fraud, securitization fraud, ratings fraud, foreclosure fraud, the list goes on but it always end with fraud. I don’t want to talk about any of that. Rather, I intend to explain how to write a price opinion. This is a subject of some concern to many Americans who are concerned about the value of their homes. But before I go into detail, I digress.

I grew up in this business, not out of choice mind you. When my parents moved down here to South Texas, I was a small child of 8. My father had accepted a job as the systems analyst at the only computer company in the county, the one that all the banks and businesses ran their account statements on. My mother took a job, for a modest salary and free rent, as the apartment manager at the complex where we lived. And she immediately put me to work. “You’re the grounds keeper and pool cleaner.” But I don’t know how to keep a ground or clean a pool. “You’ll learn.”

Then the developer, this millionaire out of Minnesota, decided to open a real estate company, mainly for tax purposes. My mother took a second job as his secretary and proceeded to get her license. It didn’t take her very long, because her father had started his own real estate company in San Antonio after he retired, so she already knew the business. This is when the real fun began. On weekends, during summers, she used to pick me up in the morning and drop me off at some house. “Mow the lawn, wash the walls and windows, mop the floors, vacuum the carpet, clean the kitchen and bath, take this lamp and plug it into every socket to make sure the electricity is on, then put this sign in the yard.” She would leave and come back at the end of the day to inspect my work. “Good job. Here’s $20.” That’s it?! I bust my ass all day, and all I get paid is a lousy twenty bucks? “You’re learning.”

Moreover, because my father was on call 24/7/365—if the computer crashed, the entire economy collapsed—whenever my mother had to attend a function, she took me instead. There I was, barely a teen, sitting with bankers, brokers, realtors, investors, developers, builders, title company owners, listening to them tell their tales of misery and woe. What did they all talk about? Their failed deals. It’s just like in poker. Nobody remembers their big pots; everybody remembers their bad beats. So when I went to college, the last thing on my mind was going into this business. All those nightmare stories convinced me of that. I became a teacher.

Hey, paid summer vacations are a beautiful thing, you know. During this time my mother made so much money that she bought the company. (That’s a whole other story.) All that meant was every time I came home to visit, she had work for me to do. I’ve seen this sordid movie before. In the early 80s, there was the peso devaluation, which pretty much wrecked the economy down here for almost two decades. There were over 44,000 foreclosures in the first month alone. One out of three real estate companies went bankrupt and disappeared. But my mother prospered, because she had already cornered the repo market. Then in the late 80s, there was the savings and loans debacle. That’s when Congress changed the law so that only licensed appraisers could valuate a property. Prior to that, any licensed realtor could write an appraisal. I know, because my mother used to write four or five a week, at $200 a pop, for the local bank. Not any more.

Unfortunately, ten years ago my father passed away from cancer, and I had to resign from teaching, give up my dream summer vacations, to help my mother run the company. I took all the courses—contracts, agency, principles (I, II and III), marketing—passed all the tests and got my license. I am now a third generation realtor. But enough of that.

Every discipline has its own specific vocabulary. Suppose I came up to you and said, “I have an STD.” What would be the first thing that comes into your mind? Substitute Trustee’s Deed. I’m a realtor. (Yeah, I know, an STD and an STD are two of a kind, but you get my point.) It’s the same with the article that GYSC linked to some weeks back, about several states wanting to pass laws so that appraisers can’t use “foreclosure sales” for property valuations. That term means something completely different to me than it does to most people. And this is why I don’t pay any attention to what the media and most blogs have to say about real estate. They don’t know what they’re talking about. What’s really going on is these states are desperately trying to prop up property values to preserve tax revenues. I know that because our junior partner happens to the head of the county appraisal district. Two years ago, thousands of people protested their property taxes, and he had to be hospitalized for high blood pressure.

Technically, a foreclosure sale occurs on the courthouse steps, the first Tuesday of every month in Texas. Basically, it’s an auction. The minimum bid is the amount owed on the note, plus attorney’s fees. Anyone can make a bid, but you have to have proof of cash or proof of financing and be able to close in two weeks. That would be a risky venture though, because you are not allowed an inspection or even a walk through; you’re buying sight unseen. After maintenance, repairs, and taxes, by the time you sell, you’ll be lucky to earn $500. More likely, you’ll lose thousands. Flip This House was an Unreality Show. Usually, the bank or lender or mortgage company or Fannie or Freddie buys the note from itself. At that point, the house becomes repossessed. Then the new note holder contracts with a realtor for the marketing and sale of the house. This is where I come in. The sale of a repossessed home is not the same as a foreclosure sale. The former is based on fair market value; the latter on the amount owed. If these states intend to prohibit appraisers from using the sales of repossessed home in valuations, then it’s an act of lunacy. Only a complete idiot would use a foreclosure sale to value a property.

Repos are the only houses that sell in a down economy. What you need for a price opinion is the nearest, most recent sales. That’s the only indication of value. Otherwise, the appraiser has to go further away and farther back in time to find comparables. But then the appraiser doesn’t work for the seller, you. He works for the lender, and gets paid by the buyer. If you intend to sell your house, the last thing you want is an appraisal; what you need is a broker’s price opinion.

Over the last decade, I’ve probably been in over 2,000 houses. Everything from shacks that weren’t worth the land they were on to million dollar mansions, which weren’t worth a million dollars. I mean, really. The high ceilings, open living areas, how much does it cost to air condition one of these monstrosities? Obviously more than the buyer, who’s supposedly a millionaire, could afford, or else the house wouldn’t have been repossessed.

I get an assignment. Normally, it’s the borrower’s name and a physical address, both of which are practically useless. It’s not like the county clerk doesn’t make mistakes, misspell the name or invert a number. And it’s not like cities don’t change street names and numbers on a whim. Some assignments are more difficult than others. I’ve actually been to houses that have one number on the mail box and another on the curb. But let’s assume the borrower’s name and street number are correct, just to keep it simple. This is the process I go through to write a price opinion. (These are subscription services that are only available to licensed agents; which is why contracting with a realtor for the sale of your house is of the utmost importance. We have access to search engines that you do not. You cannot try this at home.)

First, I go on to Land Title to get the appraisal district print out. There I can find the legal description, the subdivision name, phase and lot number. That’s what I need. I can also get the tax records and a sketch of the house. Second, I go on to Carson Maps. There I can print a map of the subdivision, so I know exactly where the house is located. Third, I go on to MLS to see if the house has been listed and at what price, also to see what other houses in the same subdivision are listed or have sold for. Sometimes I go on the county clerk’s website, which is free as a matter of public record, if I’m curious about the original loan amount. There I can find the deed of trust, which won’t show the sales price but will show how much is owed on the loan, depending on when the note was foreclosed on. Not that that matters in determining a price opinion, just that it’s interesting. Finally, I look up the address in the road atlas (never leave home without it), so I know where I’m going. Now I’m ready to find the house. Let’s assume it’s vacant. If not, I simply inform the eviction attorney and wait for the sheriff to do his job. (A lockout or forcible eviction is an ugly thing.) Then I’ll call the locksmith and have the house rekeyed. I do a walk through inspection, taking pictures and notes. Now it’s time to write the price opinion. This is when the real research begins. What I want are the nearest, most recent sales, preferably in the last six months, of similar homes. That’s the only indication of fair market value. List prices of houses for sale are irrelevant. A house is only worth what someone is willing to pay for it. But how am I supposed to know what that is? I’m not a psychic. I have no way of knowing what a buyer is willing to offer or what a seller is willing to accept. All I can go by is what the market is telling me. I start my search on MLS narrowly and gradually expand—subdivision, neighborhood, school district, city. Sometimes comparables are hard to find. I’ve walked through houses where the first thought that came to me was, “What the hell was going on in the mind of the idiot who designed this house?” I mean, seriously, a rock garden in the living room and a poodle room in the master suite--are you kidding me? (Surprisingly, that house sold in a few weeks. It was in an established neighborhood in a good location.) This is what I’m talking about, personal taste. Paint schemes, flooring, décor, these things matter. A house is very personal. For an owner occupied home, many times the buyer will fall in love with the furnishing. But that doesn’t come with the house. So when the buyer moves into an empty house, it’s a disappointment.

That’s why with repos, whenever they need repainting, it’s always off white, sort of like a blank canvas. After purchase, the buyer can do whatever he or she wants with it. Of course, the problem with that will come later when it’s time to sell. Not everyone shares your tastes. And every seller thinks the house is worth more than it really is; it’s personal. Every buyer thinks a dream home can be bought cheap. It’s complicated.

Anyway, let’s assume that I can find some comparable, recent sales. Now I have to make adjustments: positive if inferior, negative if superior. That’s the rule. For example, suppose the subject has 1,500 square feet. One comparable has the same; the other two have 1,300 and 1,700 respectively. Okay, if I assume $20 a square foot, that means I would add $4,000 to the sales price of the former and deduct $4,000 from the sales price of the latter, to arrive at a fair market value. See how that works? If the subject needed repairs, and it could be anything like fresh paint, new carpet, sheetrock holes, fallen down fence, whatever, I estimate the cost of those repairs, double it and adjust for the comparables by the same rule. If the subject has been stripped, missing cabinets, commodes, wiring, that’s a little more problematic, but the rule still applies. The easiest price opinion I ever wrote was some years ago. I got a call from some company and was asked to give a valuation on a house. I did the research, drove over there, took the necessary pictures and notes, then went back to the office to find comparables. Oh, look, here’s one across the street and another two houses down and another on the next block. Same subdivision, same builder, these were basically the same house. All sold in the last three months and the average price was $85,000. There were also six comparable listings in the subdivision between $80,000 and $90,000. What is a reasonable estimation of the fair market value of this subject? I submitted my price opinion, and everyone threw a fit.

I got a call from the company. “We were expecting a price opinion of around $120,000.” (This was at the height of the bubble, and the valuation was for a home equity loan.) They even sent a copy of the appraisal—this guy was using sales of new homes in a gated community ten miles away! (His job is to justify the loan.) “Can’t you change your comparables?” No, I cannot. I’m using next door comps. Then they called my mother and complained. She came up to me and asked what I was thinking. So I showed her my research, the pictures, and the comps. She said, “You’re right.” Then she stayed up until 4:00 AM writing a blistering response to this stupid company, explaining that we do not change our price opinions. We provide accurate comparative market analysis. Another time, I wrote this price opinion for a house. Let’s say it was for $100,000. I showed it to my mother, having learned from prior experience. She said, “That house isn’t worth $100,000. I couldn’t sell it for $70,000.” But these comps show. “I don’t care about the comps! Make more adjustments.”

This is the dirty little secret about price opinions. They’re all subjective. I don’t care what you think your house is worth. If you want to know what it might sell for, ask an experienced broker, preferably one who’s been in the business for at least twenty years. She’ll tell you what you don’t want to hear. Prices are going down. I laugh at these people who say that the economy won’t recover until the housing market recovers. That’s a disconnect if there ever was one. The housing market won’t recover until the economy recovers. And that will take a while.

Great job, thanks so much Gawains.

Have a good night.

Friday, July 22, 2011

Overheating Friday

I hardly ever get too hot, but it was 107 degrees here today!! The air is so heavy breathing is a cardio workout. Stay cool this weekend folks.

Market Operations
I was busy at day's end then left work early for the drive home so I am still holding everything; GFIG, SOXL, CSU, ASYS. ASYS finally woke up today, thanks pal:
Would like to hit that gap.

I would have liked to sell CSU at $9.70 but I missed it. Debt deal drama may make Monday a lower day, but does anyone doubt this CONgress is going to get the spending caps as big as they need to be? Did not think so. Why have I not really written about this? Because it is a gross joke that's why.

Friday Night Entertainment
After a lights out trading week and a heat wave it is time to chill out and get set up for the weekend.

Ebay Dreaming
Some times I like to troll on Ebay and see the things I would buy if I could:
-afford it/rationalize the purchase
-convince the wife it was a good idea
Here are my top 3:
1955 Chevy Bel Air 454 Big Block:

Samurai Sword from Nihonto Australia

A Date with Lil Kim
Ok that one is not an Ebay item! Any rich readers want to grab any of these for me I am not shy about accepting gifts at all.

Picture Pages
Let's shoot for upper level photo's yes?

Mars robotic rover Spirit doing doughnuts on planet Mars 2004:
You know what I say; when in doubt, lay it out!

T4 Phage Infecting Bacteria:
Phage therapy as an antibacterial element?

Film Clips
Some movies you may want to check out?

I would say "The Ringer" was not that great a film ....except for one scene that is too funny. Here it is "When the fuck did we get ice cream!!!":


Been a while since I featured the best scene from "Bladerunner"; here is the "I've seen things.." monologue:

Permanent classic.

Rock Blogging
Rocking the free and communist world since 2007.

Reader Watchtower pinged me with this wonderful rendition of "The Ecstasy of Gold" which you would remember from the final sequence in the film "The Good, The Bad, and The Ugly":

Unreal pick, I love it!

Another great film song, Gheorghe Zamfir with "The Lonely Shepherd" from Kill Bill vol I:

'That woman deserves her revenge. And...we all deserve to die.'

Speed things up with a little Ratt's classic "Round and Round":

I so love that song. Still one of the best guitar solos around.

It's been past the 1 year rule for song repeats so I can go with Joan Jett doing "Cherrybomb":

Love that lady!

Two songs left to go.

For all you old school skaters (Tommy Guerrero rulz!) here is the Chili Peppers making a cameo in the cult film "Thrashin":

Indeud. And yes that is Josh Brolin from "No Country for Old Men" as the lead star!

Last call, here we go.

Closing the show with Motorhead and "Ace of Spades":

Sick as all get out.

Have a good night.

Thursday, July 21, 2011

Action Review and Weekly Decisions

Still hot here! Tomorrow will top out over 100 degrees. Going to hit the beach on Saturday and hope to get into the cold North Atlantic ocean.

Tomorrow is Friday night and you know that means requests are honored for the big show; music, films, books, you name it but you have to submit a request in the comments or by email.

Action Review and Weekly Decisions
This week I was thinking about all the kinds of traders there are. You can do most anything from scalping a few pennies on a monster position in a liquid stock within seconds to holding a position for 10 years or more. Everyone has to find what works for them.

For most of my assets readers know I am a long term holder of things I think will move up long term. Minimal turnover and time spent managing those things, I like that for the most part. With my trading account I do like to pick spots and see if I can find winners, but the daily in and out is not possible time wise, so my basic set up is to find stocks I can play for about 4-7 days and then make a decision on whether to keep them or dump them. I call this kind of trading predictive trading where I am looking for a set move and set target area before it happens. Reactive trading to me is seeing something happening then piling on or riding the wave. Nothing wrong with that, but not my kind of fun.

This week I also did something not like my usual style, I got pretty nasty aggressive on a risky position. chessNwine had an interesting call in the 12631 on Friday about the semiconductor sector. Both the thesis and chart were attractive and when I thought more about it sector rotation into semi's made so much sense I was in. Best way to go bananas? Why the 3X leveraged bull semiconductor ETF SOXL of course! And with a large part of the trading account to boot. Lack of beer makes me more risk seeking I think, weird. I bought on Friday and I am still holding today. Up over 8% so far. Do not try this at home.

Added: Please note the charts tonight are not the same detail I like to present. I used the camera function but it compresses the charts so much. It's quicker than using the sniping tool, but the lack of detail even on the larger versions if you click them suck. Sorry about that.

Plays I made this week include a day loss of 3% on GPRO (poor headline killed the stock this week) and the following ideas:
CSU +7%:
Getting close to decision time on this one, was looking for 10% but may be getting extended here.

GFIG +4%:
I actually think this one could have some legs to it.

I am still in ASYS for 0% move, this has to move tomorrow or I am dumping it.

I missed out on NI this week, you can't buy them all:
Had I bought at $20.40 like I wanted to, I would be up 4% on this one. Bangs head on wall.....

Looking to make some room for new ideas next week.

Ok, time for my first beer in 10 days!!!!!

Have a good night.

Wednesday, July 20, 2011

Asked and Answered

We are in a major heat wave up here in Massachusetts. Looks to be over 100 degrees tomorrow then add in humidity. I like the heat but this is going to be a little too much. Stay cool!

Market Operations
Quiet day overall in the markets. Still holding GFIG, CSU, ASYS and the semiconductor play. Intel (INTC) beat earnings but the stock is falling this evening on last look. The semiconductor play is still alive as it is an overall rebound call on the entire sector, not just the big companies. We shall see.

Asked and Answered
From time to time I find it refreshing to get an outside opinion on things economic. For that I tend to interview my dog, Norman the Pug. His insights are highly valued and it never hurts to get a new pair of eyes (googly ones at that) to look at things.

Last May Norman granted an exclusive interview and after some convincing he has agreed to once again offer his wisdom to the world. What a dog.

Here we go!

GYSC: Hello again Pug, thanks for taking the time.
Pug: Hard up for material again huh? Geez all that tapping on keys has real benefits.
GYSC: Let's keep this civil, yes?
Pug: If you say so. Please begin, it's your milkbone.
GYSC: Last May you said that a Euro breakup was impossible, and yet here we are in July 2011 and Greece looks ready to fall. Thoughts?
Pug: Has Greece left the Euro?
Pug: So I was right. Not going to happen. I hope we have some new questions tonight.
GYSC: What is your take on Social Media and all the excitement over names like Facebook, LinkedIn, Twitter, and Groupon?
Pug: Humans like to feel important; they like to feel that people give a hoot what they are up to. Social Media fills that need. All I need is some food and a blanket and I am good to go.
GYSC: What about the benefits of greater communication? Greater connectivity?
Pug: This from the guy that pretends he is on vacation if his mother calls! Communication, that's rich!
GYSC: Come on...
Pug: Ok, what you have is a creation that has resonated with people. What has really brought the excitement? All the talk about how great these things are, that's what. Add in the never ending drama over how much a social media issue will price over it's IPO offering and you have a combustible brew.
GYSC: What about a Groupon dog biscuit offering?
Pug: Well that may be ok.
GYSC: Fickle much?
Pug: Not since this morning.
GYSC: What? Nevermind. Lets move on.
Jessie the Cat: This is so boring!
Pug: No one is talking to you evil spirit!

GYSC: What about making money trading the market? With all the chop going on what advice do you have for the readers?
Pug: Compression.
GYSC: How do you mean?
Pug: Sentiment is all over the place, volume is way low, and a small number of "big"stocks tend to decide market direction. You have to compress your time frames down into smaller scales to capture trends if you are moving in and out. Longer term holders should just ignore the chop.
GYSC: Wow, that was a value added answer!
Pug: Better than what you do.
GYSC: And what is that?
Pug: I thought you were making a wig when you pulled all that hair out looking at computer screens with your stock losers, I mean picks up.
GYSC: Well that was that one time when that stock flashed crashed on me....
Pug: Excuses are like squeaky toys fool, everybody has a bin of them.

GYSC: Do any reading lately?
Pug: Well I did check out this book written by Twits or something:
GYSC: What did you think?
Pug: The biographies were interesting, yet no one mentioned having a pug.
GYSC: Well, I don't think that was the purpose of the book.
Pug: Well, you cannot trust a person without a dog, or if they just have a cat.
GYSC: How insightful, amazing really.
Pug: Thanks, the wisdom flows like waterfalls through the jungle or some crap.
GYSC: Nice. Ok, final question; Will the S&P 500 be higher in December than right now?
Pug: What is this, the price is right? Higher it will be, bet you a box of biscuits on it.
GYSC: How high?
Pug: Never give a time frame AND price silly man. I just said higher that's all. We have a bet?
GYSC: You are on like Donkey Kong!
Pug: Oh, someone save me....

Summer Dinner
Made lump charcoal grilled kielbasa tonight:
Sliced it up and mixed with rice pilaf, very good and a very summer dinner.

Have a good night.

Tuesday, July 19, 2011

Times They are a Changing

Is it Thursday yet??????

Market Operations
I think it is because I feeling so much better, but I am getting juiced for market action again. I am back in the trading turret for sure. Armed with iBankCoin's PPT system and the 12631 Trading room I am getting back in a groove. Special thanks to my man chessNwine as well.

The Good
CSU is behaving well. I may be looking at my target area of $9.70-$10 by weeks end if the euphoria sticks around. I bought ASYS today and the chart is shaping up nicely for a higher move. In the 12631 I went full bore on an idea concerning semiconductors as a whole. You DO NOT WANT to know how hard I got positioned for this, it's not like me and I am really overweight one idea. It felt right though. In time I will reveal the play.

The Bad
Torn between WM, NI and GPRO this morning, I went with a small position in GPRO. This was based on technicals and such, but a news event cratered the stock and I ate a 3% loss. Not a mistake per se, but a missed opportunity on a day when almost everything went bananas.

The Second Chance
Still have my eye on WM, but I had mentioned NI as a possible break out idea (close over $20.50) earlier in the week. Here is today's look:
I have to admit this one is a blind spot for me as NI has not seen $25 since 2007 and $30 was last printed in 2001. I thought this one was a new all time high! Still, making headway into new recent territory is a tough trade for me. I may buy it on any test of $20.50 this week anyway. I am feeling that froggy.

I hope that was enough market action for the readers, I know it was for me!

Added: Around 1pm I Tweeted "1324-1325 for SP500 close today seems about right.". Of course it closes at 1326.7, ugh!!! I was trying to make a splash!

Shocking Headline of the Day
3 monster headlines today, shocking as they can be:
-Apple beats Estimates, Shares Rise
-Sun Will Rise Tomorrow
-An Apple Fell from a Tree, Hit Ground
You can't believe any of it, I know!

Times They are a Changing
Apple earnings (just amazing how much cash that cult company generates!) got me thinking today.

For a long time I have always equated the stock market with the US economy. Record earnings by large multi-national firms and great earnings growth by all other firms tends to come from cheaper labor abroad and SALES abroad. The US economy is in the middle stages of serious deleveraging but now there may be critical consumer mass out there around the world to replace that demand. I saw that 60% plus of Apple earnings were retrieved from overseas. That is a shocking number for a US centric thinker.

To be sure there are currents of hot money, free liquidity, and animal spirits pushing many stocks to levels that make no sense. At this time I cannot see a reason not to go after the best ideas and the best setups one can work out***. The stock market may be off in it's own world, but that does not mean it cannot be touched.

***NOTE: EconomicDisconnect is the ultimate contrarian indicator. A close for the S&P500 under 1000 tomorrow cannot be ruled out after this post.

Have a good night.

Monday, July 18, 2011

747 Taking Off, or There Goes Another Load?

The air here was so heavy today it was like a blanket. Pretty gross and sticky. Doctor visit went very well, I am cleared for all normal activities, such that they are. Green light on beer as well, come to papa Thursday night!

Market Operations
Last night I went over the stocks that I was going to consider playing this week. The morning open brought a nasty drop which complicates buying positions. Looking things over I pulled the trigger on CSU at $8.90. Both NI and WM still are on watch, but the weak day overall kept me from getting aggressive. Turnaround Tuesday may happen tomorrow and so I can rethink an entry at that time. Other names I am interested in for tomorrow:
I still hold GFIG.

747 Taking Off, or There Goes Another Load?
Today reminded me of a passage from the short story "Rage" by Stephen King:
'High school toilets are all the same; they sound like 747's taking off. I've always hated pushing that handle. It makes you sure that the sound is clearly audible in the adjacent classroom and that everybody is thinking: Well, there goes another load.'
You are probably asking if this is all going to make sense. It might.

At this point the markets are all over the place. Big rallies give way to sustained selling. Selling gets mauled by fast rocket ship rallies. This is a sign of a real tussle between the bullish and not so bullish (I may cut bears from my vocabulary). One of my least favorite aspects of things economic is the glacial pace of movement and the Kid Dynamite maple syrup dripping slowness of market resolution.

As such, I am sticking to my plan of trading individual names and maybe sectors while the general market goes all Royal Rumble on itself. If earnings come in good and some kind of can kicking can be done for Euro debt and the US debt ceiling, today may have marked a bottom where the 747's are cleared for takeoff. Markets can finally trend higher.

The financials are looking dead and should forward guidance sound the wrong note, well, there could be a big WHOOOOOSH and that will be the market getting flushed for the rest of the summer.

How is that for a stance? Maybe this, maybe that. I want to put my foot down here, but it's really in flux. I wish I could feel strong one way or the other.

For a great big picture technical view, I would strongly encourage anyone interested in the markets to check out iBankCoin's chessNwine with the market recap video from today:
Stock Market Recap 7/18/2011
It's the best 5 minutes you can use this evening to get a handle on where things are.

I have long held that for QE 3 to be rolled out a significant market drop would have to occur. Recent action does not even come close. How about a scare to get the debt ceiling done? Two for one? Be mindful out there.

Have a good night.

Sunday, July 17, 2011

Sunday Night

I ran out of time today! Went fishing on the kayak this morning at 6am. Caught a bunch of little smallmouth, nothing worth taking a picture of.

I have my follow up doctor appointment tomorrow, everything feels really good. That was a rough span of 2-3 weeks. I am dumb for not going to the doctor earlier.

Did a bunch of homework tonight. Best ideas for the coming week:
-I hold GFIG from last Friday.

I used the PPT Hybrid scores on my other charts (CSU, WM) so I cannot include them here. Here is the chart for NI that I was looking at tonight:
The big volume spike may push NI over the topping price of $20.50. Of course it could get turned back like before as well. If you are feeling froggy, then LEAP!

Shipped out all "Creep" book winners on Saturday morning. I used priority mail so the books should arrive by Wednesday. Let me know when they show up.

That's about it, sound off in the comments if you have something to say.

Have a good night.

Saturday, July 16, 2011

Sports Saturday

The wife is looking for a new car.  We checked out the Nissan Juke and that thing is sick as all get out!  If it came with a V-6 option I would be interested, but the only engine is an inline-4 cylinder with a turbo charger.  What's funny too is Nissan underestimated how these new models would catch on, they have not made many!  Go long Nissan stock??

Joining Twitter
Ok, I have joined Twitter. You can see my feed on the right sidebar. It is a whole new world but it does seem cool. If any readers use Twitter and want to add me, my handle is GYSC16. Some fool stole GYSC, for real?

Sports Saturday
A few sports clips for hanging out on a Saturday night, again without beer due to antibiotics. Next Thursday cannot come FAST ENOUGH!

John Starks Dunks for the Win (1993)
Even though I am from Boston, I was in love with the early 1990's New York Knicks. The defense and attitude that team had went so far beyond what talent they lacked. Some of my favorite players were on that team; Ewing, Starks, Oakley and more. In the NBA playoffs against the hated Chicago Bulls, Starks goes for the big dunk to seal the win:

Yes I know the Knicks lost the series.

Marshawn Lynch Rumbles for the TD
Even though this was against my beloved New Orleans Saints in last years playoffs, this run is amazing:

Wow, make a tackle!

Cha-Cha Muldowney Beats Former Mentor Connie Kalitta for the US National Drag Racing Title
Big feud between the two ends with the lady winning it:

A pink dragster?

Ok, let me remember the New England Patriots in their finest game (blew it too early) vs. the Jets in week 12 2010:

We still got hammered in the playoffs, dang.

Have a good night.

Friday, July 15, 2011

Recovery Friday

A Friday night without beers, I think I was in second grade the last time I did not have a beer on Friday night!

Market Operations and Observations
I did some work last night using the iBankCoin PPT because I am feeling better than I have in two weeks. I built a new screen that I think will be pretty cool. I did not find a stock that was quite what I was looking for (screens reset every day) but a close one was GFIG. I figured close enough and opened a position today. Maybe over the weekend I will go over what I was looking for.

I opened another position today, but this one was 100% based on a great observation, then a big time call by the best market operator I know. The idea was found in the iBankCoin 12631 Premium section of the PPT so I cannot disclose what it was, it is a paid service. Should the maker of the call disclose it later next week, I will let you know what it was. It was a long position.

A couple of observations today. The first was a chart found at TRB and FT Alphavillewhich showed that after fake AAA rated debt about killed the financial system a couple years back, it is now moving down in size exploding in size as sovereign debt goes parabolic. In case you don't know, sovereign debt is the old toxic debt just bought by central banks but masked as newly rolled out AAA stuff. Unreal, games only real adults can play with the lights on. Here is the chart:

Second observation is from an article on Minyanville that finally captures what I think has been so strange about markets since the big bottom in 2009. Ask Atlantic Capital Management:
It used to be said that stocks climb a wall of worry under constant pressure of potential bad news that could derail the risk appetite of a broad spectrum of the investor class. When bad news came, corrections used to be much sharper and far more compressed than the upward moves that preceded them.

In so many ways, we are now living out a Far Side cartoon, including the general inversion of process and logic. For six consecutive weeks, stock sellers rode the wall of worry; not over news, but over the idea of missing out on the next massive rally. That downward trend was the cautious move, the slowly developing inclination developed by actual data. Rather than the traditional trend of investors deploying capital capriciously and carefully, yanking it out quickly at the first sign of trouble, we now see investors sell carefully at a very measured pace and then rapidly buy at the first sign of a potential rally. Just like bad news that used to jolt the old market into correction, Greece happened to get “fixed” and stocks were off to the races.
Worth thinking about.

Friday Night Entertainment
Is it really July 15th already?

Screen Test
With the "Harry Potter" films wrapping up now may be a good time to check out a screen test for the 3 major stars back when they were just little kids:
Io9: Harry Potter Screen Test

Debt Ceiling
If the debt ceiling is not raised, this will happen and there will be tanks on the street and stuff:
epic fail photos - Price FAIL
see more funny videos, and check out our Yo Dawg lols!

For Josh Brown and Dinosaur Trader
If I could submit a tune for the TRB Mixtape Section, this would be my pick:

For shizzle.

High Speed Internet
Reader Watchtower has joined the new era and upgraded to high speed Internet. Welcome to the monster cable bill world bro! He must have been using it to answer the trivia last week as he won a copy of "Creep" (shipping in the morning). Anyways, Watchtower is armed with a new power, what should he watch?

Here is a quick list:
-Hagler vs. Hearns Round 1
-Hagler vs Leonard Round 9 (skip to 6:54 mark)
-Ward vs. Gatti Round 9
-Randy Rhoads does Revelation Mother Earth on the Tribute album. Entire song is magic, but go to the 4:50 mark to get crazy!
That should get you started.

Films and Stuff
Couple clips.

One of my all time favorite films is "3 O' Clock High". In this scene the "wimp" Jerry Mitchell hires the school football jock to fight the bully, Buddy Revell. It does not go as planned:

Yes, that's Charlie form "Young Guns".

How about the wormhole scene from "Contact"?:


Rock Blogging
Rock for the ages.

My friend Au Soleil Levant is the toughest person I know. It happens to be her birthday today and so she gets the lead off spot. Why don't the readers swing on by and drop a happy birthday message? I am sure it would mean a lot.

For the birthday girl, The Dixie Chicks perform "Some Times You Gotta Dance":

Happy Birthday!

Gawains was looking for "Out on the Weekend" by Neil Young and it's a good one:

Seeing that we had some live Ozzy/Randy above, here is the studio version of "S.A.T.O":

Short show tonight. Had this up a while ago, but heard it today so you are stuck with "Jar of Hearts" by Christina Perri:


Have a good night.

Thursday, July 14, 2011

One Day to Go in Wild Week

I would be excited for Friday except I cannot have any beers at all until after Monday!!!!! As is, I think there will be Friday Night stuff so get some requests in.

On the wireless front I was looking for info on my computer and many places said to install the supplied antenna for better results. Went to the basement and checked the box, there was an antenna there! It screws into the wireless card at the back of the computer. This works pretty well but still need to overhaul the system.

Google Beats Estimates
After the bell Google (GOOG) beat estimates by "a mile" or some stuff. I have no idea how estimates are made, and the employee options stuff gets me confused. In any case, ad revenue was rocking and the company is getting things going in all kinds of spaces, like my Android Revolution phone. I am actually a big fan of Google as they are best positioned to beat up on Facebook and Apple. Should inject some more drama into an already wild week that ends with options expiration. Which I think really happened today as I have read many times. I know, confusing.

Ben Bernanke "Don't Let me be Misunderstood"
After 3 days of similar statements and markets hanging on every word as if it was from Zeus, Bernanke must be listening to this Santa Esmeralda:


For all the cheap seats:

Bernanke said there would have to be a real drop in things economic before new measures would be taken. As in, not today or next week.

Got it? After the wicked beat by the ISM last week, GOOG blowing it out of the water, and initial jobs claims dropping a monster 5k today things are on track for 3.5-4.5% GDP growth in quarter 3 and 4.

Still, had to grab this capture of a FINVIZ news feed today:
Damped speculation on new stimulus, what a guy.

Clearing Things Up
Last night I noted that I am more of a macro investor. But have I not been trading actively this year? Yes to both. I have large parts of my VAST (lol) personal wealth spaced into different ways of making returns. Long term accounts (where my physical metals reside and other stuff) which make up about 70%, and then my trading account which is 30% or so depending on what I want to put in play. I can operate shorter term with this, and it's more fun to lose to try and make money. I have big picture ideas that may make me more bearish on things, but for the swing trades I can move quick. It is not incompatible. As of now after being sick and not good at trading crazy wild markets the trading account is all cash. Looking to try some things next week I hope.

Have a good night.

Wednesday, July 13, 2011

Land of Confusion

The good news:  I am finally feeling much better! Like MUCH better. Energy is coming back online and feeling pretty good. Nice.

Land of Confusion
I have always been more a macro kind of investor. By that I mean I try to find things that will persist for a long time, get positioned, and basically forget about that stuff unless something major happens to change my mind. In that sense, not much has changed in 10 years; easy money is now a structural part of the world (predominantly the US) and this cannot really change without severe consequence. Lack of political will and a close alliance between big money, government, and central banks makes any reform and associated "pain" impossible. Of course this kind of wait and see thing is boring!

On a more immediate term time scale, the last 2 years have been absurd and exciting more so than any time since I have been following markets. Maybe some of the more seasoned players can name another time that has featured so much "never before seen" kind of stuff.

In any case, this blog started as a critique on the disconnect between perception and reality. Today we have none other than the Federal Reserve Headmaster himself, Albus Dufusdore Ben Bernanke, making a fool of himself and the US central bank on a grand scale. As this happens market players the world over cling to every word and action as if Bernanke can accomplish anything.

First up, a screen shot of the headlines running yesterday on FINVIZ after the FED minutes were released:
A "sliver" of hope for more stimulus! Joy!

I read the release and it was a twisted hunk of confusion, though that part missed CNBC:
On the one hand, a few members noted that, depending on how economic conditions evolve, the Committee might have to consider providing additional monetary policy stimulus, especially if economic growth remained too slow to meaningfully reduce the unemployment rate in the medium run. On the other hand, a few members viewed the increase in inflation risks as suggesting that economic conditions might well evolve in a way that would warrant the Committee taking steps to begin removing policy accommodation sooner than currently anticipated.
Got that?

Given the backdrop of a FED that has maintained that any inflation anywhere and the unemployment rate being high as transient, and seeing they believe growth will accelerate in the second half of the year it seems early to call for more stimulus. You see the problem? They say one thing then set up another.

Bernanke was in front of CONgress today and he has now changed his tune to one more apt to declare QE 3 than call for GDP growth of 4% in the second half of the year. That was fast! Josh Brown notes the following words that would be hard pressed to inspire confidence in anyone:
"The sense is that employers are becoming more willing to hire and I think we'll start seeing some stronger payroll reports and some lower unemployment rates pretty soon."
"Pretty Soon" is one of those non starters that mean "fugget about it!". "Hey hunny, when can we do that crazy-sexy thing we did on vacation with the feather duster and the lighter fluid?" "Pretty soon dear, really". Yeah sure.

Today was lauded as a QE 3 green light, but it was not quite that bold in statement. What gets me is that the FED has maintained the second half recovery line, as has many analysts, yet a few words about more easing is seen as a needed policy right now. Where is the consistency? What can you believe?

Short term I am confused. The whipsaws going on daily are just too much for any trader not glued to the screens and ready to pounce to do much about. One day Greece is saved, the next it's not and neither is Italy. Until noon, then both are fine. On a Friday we get an ISM that beats expectations so the accelerated growth is at hand so things rally, then on a Tuesday poor economic performance is cause for QE 3 so we rally again. You cannot square this thought process, it is imbalanced.

I am not the only one seeing the confusion, here are a few links:
Kid Dynamite - So, FED members Said Some Stuff

Cullen Roche - QE 3 and the FED's Policy Options

Trader Mark - LOL Market

Macro Story - Today's Market Recap

Remember that QE 2 was hinted at in August 2010, then rolled out in November. Using UGA as a gas price proxy, lets see what we can see (click for larger view):
Notice that when QE 2 was hinted at, UGA was around $33. In November it was around $36. It then took off, hitting the upper bollinger band for a LONG time and still sits at $50 or so now. So the FED wants to add on to the pressures here, now? Ok.

In any case it seems a bull market is upon us because either things ARE great or QE 3 WILL make things great. At least a bull market in equities and commodities anyway. Don't expect any change in anything that may mean anything to a normal person anytime soon. Well, maybe pretty soon.

Have a good night.