Thursday, December 2, 2010

Optimism is a Blind Spot Too

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.

Have a good night.


Jeff said...

Krispy Kreme Donuts??

I thought they went BK a long time ago.

I am as annoyed as you are Get.

Just read in the WSJ that options volume is up 20%. Tells me the retailers are about to get involved.

The algos will slaughter these poor fools.

Rally on!

GawainsGhost said...

I'm going to recommend a book for you to read, GYSC.

Thinking In Complexity: The Complex Dynamics of Matter, Mind, and Mankind. By Klaus Mainzer. 3rd ed, Springer, New York, 1997.

It's a fascinating read and will change the way you think.

In order to understand markets, donuts, DNA, you must first understand complex systems. They are dynamic and capable of spontaneous self-organization.

It doesn't suprise me in the least that there is a bacteria capable of replacing phospherous with arsenic in its DNA. Hell, there are bacteria living on the rims of undersea volcanoes, at temperatures no other living being could survive. There have even been bacteria found growing on the coils on nuclear reactors.

The point being, anywhere it is possible for life to exist, eventually life will exist. Be it here or there on Earth, or anywhere else in the cosmos.

But what is life? Well, it's a complex system, capable of spontaneous self-organization. Technically, it's a biological entity that metabolizes energy, grows, develops, and reproduces. This is why a virus is not considered a living thing--it does not meet all four of these criteria but rather uses a living cell to perpetuate its own existence.

On Earth, life is carbon based, because carbon is unique among the elements in that it is a tetra-hedron, capable of forming long chains that make up the large molecules necessary for life. Is silicon capable of doing that? We don't know, mainly because we haven't observed it.

But like the existence of Sasquatch, absence of evidence is not evidence of absence.

Donuts doing better than rail traffic? Surely you jest. (And, no, I'm not calling you Shirley.)

insanity shelter said...

Saw some cat tell Larry Kudlow the other day that 10% unemployment was something we were just going to have to get used to. As in, just stop mentioning that, we have a bull market to get rich on.

Made me think about some of the posts at Automatic Earth about just letting 10+% of the country fall off the planet and being alright with that. The vermin they allow on camera.

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