Monday, August 31, 2009

Les Grands Pêcheurs

I returned from the wilderness of northern Algonquin National Park in Canada with renewed vigor and a mind clear of all those daily entanglements that modernity creates. Imagine a life of no watch ... no cell phone ... no appointments ... no clients ... just a need to cope with simple living in nature. It was a wonderful trip and I recommend such trips to everyone.

We woke up around dawn every day and went to bed a little after dusk, or a bit later if the conversation and fire were especially enjoyable. We saw the Milky Way and more stars than I've seen at once for years. The call of the loon kept company, as did the "friendly" squirrels. No mosquitos !!!

And ... the promises of the fishermen were fulfilled !

Big Al and Big John proved themselves to be "les grands pêcheurs" - the great fishermen - as they bagged three smallmouth bass on one day. Those fish provided about 5 pounds of fillets that Big John deep fried over an open fire. He used a simple batter to coat the fish and fried the chunks in deep oil. The fried fish was superb, and was accompanied by wine supplied by that epicurean camper, Woody. A marvelous meal in the wilderness. Other fish were caught, including a large smallmouth weighing perhaps six pounds (no "fish story" - there is a photo), but were released.

Actually, all the campers were epicureans, even myself. I took along both ascetic, simple foods such as hardtack and the elegant - two flasks filled with fine Rémy Martin cognac. If one is willing to lug the gear over the portages, one can take a lot of gear in a canoe to enhance the pleasure of the camps.

I'll write more this week about the trip.

Big Events of the Past Week

The big event of the past week must be the re-appointment of Battleship Ben as head of the Fed. That is excellent. I believe that Obama did not want to do that, but the problems he's having with his health care plan led him to want to avoid any market risks that not appointing Ben might create. With Ben at the helm, I think the risks of a repetition of a 1970s style stagflation are much lower. By the way, this indicates that perhaps Barry reads this blog, as I've written for a couple months how important this re-appointment was. Keep reading, Barry.

The overthrow of the LDP in Japan could be a hugely significant event over the long term. What it could mean for economies and stocks, though, is obscure for now, except I expect the yen to weaken.

Pundits were Wrong Again

All those big mouth naysayers seem to have been wrong about the TARP and Fed interventions costing the taxpayer huge sums.

From FT: "The Federal Reserve has made a $14bn profit on loan programmes that have provided hundreds of billions of dollars in liquidity to the financial system since the start of the crisis two years ago, according to Fed officials. The internal estimate is based on the difference between the fees and interest on the lending facilities and the interest the Fed would have earned had it invested the funds in three-month Treasury bills."

From WSJ: "The U.S. Treasury has so far collected a combined $7.3 billion in dividend payments from many of the hundreds of banks to which it has loaned government capital, its latest report shows."

The gain or loss of these programs to save and re-start the economy will not be known in full until a few more years, but the disaster blather of many big mouth pundits and politicians seems to be in the process of being proven wrong .. again.


Doing nothing. I'm noodling over creating a list of exporter stocks to buy for Obama Fund. I see the world economic growth being led by increased world trade among the various emerging regions: China, southeast Asia, India, South American, eastern Europe. US exporters should be able to perform well.

Word of the Day

"Circumambulate" - verb [$10] formal
Circumambulate means to walk around or about.
Sentence: With his guide to the trees of Algonquin Park, Bunkerman spent some free time circumambulating the woods near the campsites identifying trees that he had never seen before: Yellow Birch, White Spruce, Mountain Maple. And the giant Hemlocks were magnificent.

Friday, August 21, 2009

Going into the Wilderness

I'll be on a canoe trip in the wilderness of Canada next week, so there will be no new posts until Monday, August 31. The weather forecasts look OK so far [mostly 70F days & 55F nights with some sun; one day of rain]. I've have just my tomahawk and a big knife to protection, as taking firearms to Canada is a no-no. This trip will be in a Canadian National Park; even the US prohibits firearms in those special places. The location does not have grizzly bears, and we will be camping on islands. Bears can swim, but at least we won't be an easy target.


The markets still have a bid, especially in Europe. How long this can last without more good news is a question. Reports of mutual fund inflows are a good sign. Still, more good news will be crucial to the survival of this bull market.

I'm doing nothing - on a dip to 950 [S&P], I'll re-buy some stocks. On a major rally to 1100 or even my 1200 target, I'll flip more positions in Fido Fund [60% long] and take gains from equities in Krypto Fund to buy TIPs or whatever is needed for its allocations.

Word of the Day

"Eclectic" - adjective and noun [$10]; from the card file
Eclectic means (adjective) 1. selecting what appears to be the best in various doctrines, methods, or styles; 2. composed of elements from various sources; (noun) one who uses an eclectic method of approach.
Sentence: Bunkerman has an eclectic food supply for the canoe trip: pioneer-style pemmican; Civil War hardtack, modern GI MREs, and fine French cognac. A true wilderness epicurean !

Le Mot du Jour

"Portage" - noun, masculine; and "Portager" - verb, regular -er like manger.
Portage means portage - a place where a water traveler must carry the canoe/boat overland a short distance to the next river/lake.
Portager means to portage.
La Phrase: L'homme du bunker espère que le prémiere portage n'est pas trop difficile.
Sentence: Bunkerman hopes that the first portage is not too difficult.

Thursday, August 20, 2009


"Rien" is the French word "nothing"; it's an indefinite pronoun, a masculine noun and an adverb. Reading the news this morning (FT, WSJ, BBC, Briefing online, listening to Bloomberg TV) produced nothing to spark my febrile grey matter.

Nothing happened last night. Nothing is happening now. I am doing nothing.

Il ne s'est rien passé la nuit dernière. Il ne se passe rien maintenant. Je ne fais rien.

I miscalculated the volume of my gear for the canoe trip to the wilderness, so today must go to Dick's Sporting Good to buy a larger pack. In simple, the volume of my spare clothes got larger when I looked at a long range weather forecast and saw likely 45F overnights and some rain. Warmer clothes are bulkier. hence the needs for a larger pack. My old West German Army pack won't hold the gear.

I'll write more about my philosophy reading and the lectures I've heard recently, but I learned that my operating philosophy of everyday life is a true "Epicurean". An Epicurean life style is mostly ascetic, but includes a few items and activities of high culture and refinement. For example, I mostly eat simple food and even thought the MREs yesterday were rather good, but I also enjoy a fine meal of sushi and wine twice a week.


The market rallied to a gain yesterday and futures are up this morning. Europe is up. I'm wary and await better prices for my re-buys. On more good news (which I think will evenually come), though, I think the market will rise significantly to the S&P 1200 area by year end. Krypto Fund has its usual allocations, so will participate even if my smaller intermediate accounts do not.

Word of the Day

"Halcyon" - noun & adjective [$10]
Halcyon means (noun) 1. a mythical bird having the power to calm winds and waves; (adjective)2. calm, peaceful; 3. rich, wealthy, prosperous; 4. happy, joyful, carefree.
Sentence: A bloviating, bow-tied pundit lately is saying that America's halcyon days are over. What he means is vague. Were the Bush II years those halcyon days ? Or the Clinton tech boom & bust ? Or the Reagan years ? I presume he doesn't mean the 1970s or 1960s. Maybe he means the 1950s. Well, that's the thing about pundits. They just blab on and on with no one ever checking the facts or getting a clear definition of their "clever" phrases.

Wednesday, August 19, 2009


My canoe trip to the wilderness next week is the focus of my efforts lately. I'm testing and collecting and sorting my survival gear acquired over the past 25 years to select the best package to take along. Which knives ... which fire starting gear ... which food ... etc., etc. ?

The pemmican I made tastes good, and the hardtack is quite edible with peanut butter. I have some dried fruit, too, for the fish fries I've been assured will occur. Of course, though, I'll be taking some backup food if the fish don't leap onto the hooks of "les pêcheurs" aka the fishermen.

I've always kept a stockpile of MREs for food in case of civil strife or whatever, so I decided to actually eat some today. Mine are about five years old, as I re-stock my supplies every decade. That will let me test their edibility and their heaters - I've never actually eaten or used the heaters to heat the food. Sooooooo ...

For breakfast I'm having the MRE named, "egg omelet with cheese and vegetables". For lunch it will be the "chicken fajita filling" and "shredded potatoes with bacon". I'll also try the other items in the MRE: crackers, dried beverage, etc.

I'll post some "PS" items later as I do this today.

PS: The "egg omelet with cheese and vegetables" was quite edible and tasted OK with a reasonable texture. I'd describe it as a class below the old airline food. Rather than use a heater on my first try, I boiled the pouch for five minutes, which was adequate, but I think six or seven would be better. The pouch required a knife to cut open.

PPS: Just finished the MRE lunch - I thought it was quite good; as good as airline food or better. Lunch was chicken fajita filling (white meat), shredded potatoes with bacon & pineapple pound cake. All very tasty. The heater worked a bit less than the label suggested. I let it heat 15 minutes, but I think a few more would have helped. The food was just warm.

I also had the instant coffee mid-morning. Perfectly good.

Overall, these MREs are a fine source for food on the trail, during civil strife or after a comet hits


Europe and US futures are down about 1%. Maybe "they" will knock stocks down enough to give me some low risk re-buys. Waiting ...

Word of the Day

"Palatine" - noun & adjective [$10]
Palatine means 1. high officer of an imperial palace; 2. a feudal lord or official exercising sovereign authority over his lands or region (which would be the 'palatinate'); 3. a title of various administrative officials of the late Roman and Byzantine empires. [The term is often seen in writings about Germany, central and eastern Europe in the middle ages.]
Sentence: Why do so many CEOs think of themselves as a palatine and not as working for shareholders ? The problem arises from weak boards of directors and SEC rules the keep them weak.

Le Mot du Jour

"Qui-vive" - noun, masculine, invariant
Qui-vive is mainly used in expressions: être sur le qui-vive.
La Phrase: Soyez sur le qui-vive !
Sentence: Be prepared ! ... or ... Be on the alert !

Tuesday, August 18, 2009

More Evidence on Aristocracies

History is littered with the wrecks of nations destroyed by the growth of power & wealth of their aristocracies at the expense of the common man and the central government. Examples are the Roman republic, Byzantium, the Mameluke empire, and the Commonwealth of Poland-Lithuania.

My recent readings on ancient Sparta show it to be another victim of them. To be a full citizen of Sparta, a man had to be able to contribute a fixed amount to the common mess - essentially his military-social unit. Originally land was held in common by the state and worked by state slaves called Helots. A male child deemed healthy was given a plot of land to support him and his family. The slaves worked the land while he trained as a full time soldier.

Over time, this land became inheritable. Through marriages and attrition in wars, the rich families gained control of more and more land. Casualties in war left wealthy widows and removed that land from the support of soldiers. Fewer and few men could make the required contribution to the mess, resulting in fewer and fewer full citizens of Sparta. Land and citizenship reform could have solved this serious problem, but the aristocracies prevented it to keep their power.

Around 490 BC at the time the Persian wars began, there were 8,000 Spartan soldiers. A bit over 100 years later, there were only around 1,000. This was a disastrous decline in manpower of group that sustained the "Spartan way of life". Weakened, Sparta was defeated for the first time in battle by Thebes and lost control of one half of its territory and eventually its allies melted away.

Sparta was destroyed by the greed and lust for power of its own aristocracy.

One "unintended consequence" of this financial crisis has been a serious weakening of the growing wealth and power of the nascent US aristocracy. That class began to grow in the 1990s in the technology boom. Tech billionaires began to buy up all the beautiful land and sites, often fencing them off from the common man. And in this last boom, the hedge fund billionaires were doing the same thing. They lobbied for repeal of laws preventing perpetual trusts so they could create family dynasties. This was a serious, developing problem. Perhaps now some changes can be made to prevent them from seriously damaging US social cohesion.


I am doing nothing. Je ne fais rien. The futures are bouncing a bit this morning. On a further drop to 950 for the S&P, I'll build a list of re-buys.

Word of the Day

"Oliganthropy" - noun [$1000]; from the Greek combining form, "Oligo-"
Oligo- means small, little, few in forming nouns.
Oliganthropy means the state or quality of having few men.
Sentence: Growth in power of the aristocracy in ancient Sparta created increasing oliganthropy over the decades for the fifth and early fourth centuries BC, eventually fatally weakening the nation.

Monday, August 17, 2009

Climbing out the Windows

Eliot Ness must have bashed down the doors of the market's speakeasies last evening, as the beefers are climbing out the windows this morning, having all hit the sell buttons at the same time. I wrote about this behavior a few days as a reason that I don't like being leveraged long when the markets are making intermediate term highs.

And they are acting according to the book on their behavior.

Chinese markets were down over 5% last night, Europe is down about 2% this morning early and US futures are down about 2%. Commodities are down, too.

Any news ? Nope.

FT: "Japan has climbed out of recession after the economy returned to growth in the second quarter, raising hopes that the worst of the financial crisis is over in the world’s second-largest economy. Data released on Monday showed that gross domestic product expanded 0.9 per cent quarter on quarter on a seasonally adjusted basis, following four quarters of contraction. On an annualised basis, the economy grew 3.7 per cent.

The Street is reverting to its foolish overpayment culture as Barclays is offering some commodity traders in London huge pay packages to lure them from JPMorgan.

I was thinking this morning of the proper names for this economic slowdown and conclude that the Panic of '08 fits best. The world economies were going into a plain mid-cycle slowdown until the beefers and shorts started the raiding in the summer of 2008, culminating in the full bore financial panic of September and October. The second wave of that panic occurred in February and early March of 2009 over fears that Obama was failing to lead.

Hmmm in French, that name is a rhyming La Panique d'Zéro Huit.


I am doing nothing. Je ne fais rien. Often these selloffs take a few days to run their courses unless some fundamental change is being recognized. Thus, for now, I wait. Fido Fund has plenty of cash as does Obama Fund. If nothing fundamental seems changed, I'll target some names and groups that I've been noodling over.

Word of the Day

"Zeitgeist" - noun [$10]; a German word now used in American writing.
Zeitgeist means the spirit and outlook characteristic of a period or generation.
Sentence: If a phrase reflects the zeitgeist of the Great Depression, it was "buddy, can you spare a dime". I wonder what phrase will reflect the zeitgeist of the Panic of '08?

Verbum Diei

"Fortuna" - noun, first declension, feminine; its genitive is fortunae.
Fortuna means fortune, luck.
Sententia: Fortes fortuna iuvat. [from Terence]
Sentence: Fortune helps the brave. [alternate: Fortune favors the bold.]

Friday, August 14, 2009

A Two-For-One

This blog post provides two good lessons from one simple example - a learning bargain. And it's multi-lingual, too.

Yesterday I was doing a bit of preparation for my upcoming canoe trip to the distant Canadian north, viz., looking up French words for some of the activities our group will be doing. This is a good way to improve one's vocabulary. One of the group has guaranteed that he will catch plenty of fish for food for a few meals. Another fellow seems skilled at fishing, too, as he speaks of various lures, etc., that should work. So I looked up the word for "fishing" in French. Lo and behold, I found that it's quite similar to the word for "sin". And for "peach", too. Here they are:

Le péché - noun - meaning "sin" and pronounced "payshay".
La pêche - noun - meaning "fishing" and pronounced "pesh" [The word for "peach" is identical, but I'll stick with fishing and sinning.]

Lots of derivative words exist, too: pécher - verb for "to sin", le pécheur - a male sinner; And pêcher - verb for "to fish", le pêcheur, a male fisherman.

So what does this mean ? Do the concepts of sin and fishing have some connection in French culture ?

Hmmm ... speculating lazily, one could wonder if the Christian religion that dominated French culture and society for centuries might have produced some connection, via the notion of Christ "fishing" for souls, or from St. Peter being a fisherman, or the ancient sign for Christians being a fish. That's what a slothful pundit or blogger would bloviate. Not your writer.

I decided to check the facts - French is a romance language and many words derive from Latin. As I am re-learning Latin, I looked up the Latin words for "sin" and "fish". And lo and behold, here is what I found.

Latin for "to sin" is "peccare", thus "I sin" is "pecco". this is pronounced "pekko".
Latin for "a fish" is "piscis", pronounced "piskis" with the 'i' as in "pin" and the 's' as in "sin".

The similarities in the classical Latin of 2000 years ago can be no accident.

Over the centuries, classical Latin became the vulgar Latin of the common man, then became 'fratin' in Gaul, then Old French and now modern French. The spelling and pronunciation changed. Voilá - the two words independently converged. Modern French uses the acute accent é and the circumflex ê to distinguish the now minor spelling difference and modest pronunciation difference.

What are the two lessons ?

1. Independent, unconnected events, characteristics and traits CAN and DO evolve into near identities. Even two nearly identical things or events do not necessarily have a causal connection.

2. Check your facts, or risk a blunder.


I am still doing nothing. Je ne fais encore rien.

Word of the Day

"Perchance" - adverb [$10]
Perchance means 1. by chance; 2. possibly, maybe.
Sentence: Similarity may be due to a connection, or perchance be a mere accident.

Thursday, August 13, 2009


Empiricism is the name philosophers give to theories of knowledge (viz, epistemologies) that look to actual facts from senses and the world to access what one knows. When examined deeper, this concept can get complex, but for the use I intend to give it, that definition is good enough.

Viewers and readers of the financial press probably have never heard of this nor seen it in use. That media always seems to rely on mere theories and / or seers to tell us what is happening. Good past performance is not necessary as no one ever checks on whether a theory or a seer was wrong.

Today's FT has a good data point for us. "Germany and France on Thursday delivered a boost to hopes that the eurozone is clawing its way back from recession as the region’s largest members said their economies grew in the second quarter after shrinking for a year.
Robust consumer and public spending - buoyed by large government stimulus programmes - helped both economies grow 0.3 per cent in April, May and June, according to data released by both countries’ statistical offices. "

"The trends surprised economists, who had been expecting both economies to contract again – by 0.3 per cent - after German gross domestic product plummeted 3.5 per cent and French GDP shrank by 1.3 per cent in the first quarter. “The recession has ended. Not just in Germany,” said Jörg Krämer, an economist at Commerzbank in Frankfurt, adding that the “post-Lehman global confidence shock” had receded and companies appeared to be investing again." [my emphasis]

What does this tell us ?

1. All bearish seers and economic theorists prognosticating more pain and serious declines ahead were wrong.
2. Decoupling is partly happening now. Ten years ago the coupling between other regions and the US was very strong. Now it's much less. Soon it may be nil. It's not a binary, static concept.
3. This blog has prominent readers worldwide [that's a joke!].

Rambo said, "I always believed the mind was the best weapon." This is true. One must hold the financial press and seers to a higher epistemological standard. Empiricism has seen use for about 500 years, perhaps beginning with Galileo. Let's use it. Don't believe anything on the financial press unless they provide some facts and proofs.


Doing nothing. I'm just riding this bull elephant to the next waterhole. Fido Fund and Krypto Fund have plenty of longs. Of course I wish I had more longs [arghh that July blunder due to distractions and taking counsel of my fears], but I don't and accept that. I do not like to be leveraged or too long when the market has broken out to new intermediate highs. I just like parity then and ride along. On rips up, I'll sell some. On big drops, I'll buy the dips unless circumstances change.

I do not trust Obama and fear that he will not re-appoint Ben. If he replaces Ben with the wrong person, risks of inflation and / or stagnation rise considerably.

Word of the Day

"Vicissitude" - noun [$10]
Vicissitude means 1. the quality of being changeable; mutability; 2. sudden changes or alterations.
Sentence: Economic outlooks over time must endure vicissitudes as people and data are not fixed physical constants. Human economics do change and one must accept that as an axiom. Pundits often can't make two good forecasts in a row as they ignore this simple epistemological truth.

Wednesday, August 12, 2009

800 done, more to come ...

I see I've written 800 posts since this blog began in early 2007. That's a lot of words and thoughts.

Today I slept in a bit. I had planned to write about a report of Obama's response to a question about the private insurance competing with the government, but upon fact checking this morning, I saw that the report was simply miss-stating his reply. One needs to check facts or serious errors can happen. Too bad the press doesn't do this much.

Russia continues to act like the gangocracy it is. Two more rights activists are murdered in Chechnya. Russia did fight a war to keep that region part of its nation, yet seems to be unwilling to enforce the law there. And Russia's president is openly interfering in Ukraine's presidential election. You would think that he had enough to do in restoring Russia's economy and helping its people, but I guess restoring the old empire is a priority.


Je ne fais rien ... is French for -> I am not doing anything ... or ... I am doing nothing.

Word of the Day

"Sedulous" - adjective [$10]; "sedulously" - adverb.
Sedulous means involving or accomplished with careful perserverence.
Sentence: Bunkerman works on his blog sedulously.

Tuesday, August 11, 2009

Remarkable ...

Reading the Financial Times online this morning, I was flattered to find another prominent reader, viz. the leader of the opposition party in Japan. Recently I wrote again about the growing consumer-driven and self-reinforcing regional economies of East and Southern Asia, which I facetiously named the "East Asian Co-Prosperity Sphere". And lo, what was said yesterday ?

FT: "Yukio Hatoyama, the leader of Japan's opposition Democratic party who is strongly placed to become prime minister after elections this month, has condemned “US-led market fundamentalism” and vowed to shield his nation from the effects of untrammelled globalisation.
With the era of US unilateralism ending and worries about the dollar’s future role growing, Japan should also work towards regional currency union and political integration in an “East Asian Community”, Mr Hatoyama wrote in an essay published Monday in the Japanese magazine Voice."

Well, I like my name better. It's a play on the name that WW II era Japan gave to the empire their war goals were to create.

Lots of talk worldwide about "US-led globalism" might be local politics - boob bait for the Japanese bubbas. That talk is misguided, as US-style consumerism and economic freedom is the key to future world growth and better lives for the world's billions. The focus of reforms needs to be reining the big, evil funds and ruling classes that cause so much turmoil. The rich and powerful seek to create a new world aristocracy. That's where regulation is needed. The common man should be completely unfettered in his drive to better his life. His efforts are the tail wind for economic growth.


Nihil. That's Latin for nothing.

Word of the Day

"Sardonic" - adjective [$10]; this word needs to be distinguished from the more common "sarcastic".
Sardonic means disdainfully or skeptically humorous: derisively mocking; (alternate) 1. grimly jocular; 2. (of laughter, etc.) bitterly mocking or cynical.
Sarcastic is from sarcasm which means 1. use of bitter or wounding, esp. ironic remarks; language consisting of such remarks; 2. such a remark.
Distinction: Sardonic includes elements of humor; Sarcastic includes more bitterness and irony.
Sentence: The fine book, "Elmer Gantry", by Sinclair Lewis, the first American winner of the Nobel Prize for literature, is a sardonic novel about an evangelical preacher. I'm about 2/3 through it and highly enjoy the book. I wonder why this book wasn't recommended for reading in high school. It's certainly retain much applicability to modern life.

Monday, August 10, 2009

More Readers ...

This most influential blog seems to have quite a following at Barron's now. Mike Santoli at Barron's borrowed my thinking for his column in this week's edition, titled, "Can the S&P handle 1200?" I have written for months that 1200 was a logical place for stocks to go in a "return to normalcy" Here's how he phrased it: "Tough as it may be to place much faith in such a target, the 1200 level is of particular interest and importance. That's about where the market was when Lehman Brothers failed. Other indicators have reverted to pre-Lehman levels, as popularly noted -- including the pace of job losses, interbank lending conditions, spreads on auto-loan securities and volatility indexes."

That's also where the market was before the panic caused by the beefers and shorts. Now that Ben has dealt with most credit market problems, with commercial real estate being last and in process, a return to normal economic conditions should be at hand barring new troubles.

Worldwide economic conditions are improving. From FT: "Business confidence is surging across European manufacturing, with the UK and Italy taking the lead, according to reports on Monday that also highlight the turnround in countries such as Brazil and China. Optimism about production trends is back at levels seen before the intensification of the global slowdown late last year, and points to a clear growth in manufacturing activity by the middle of 2010, the latest KPMG business outlook survey shows. The results are the latest evidence of a synchronised global rebound, possibly at a faster pace than expected until recently."

Copper prices seem to have a clear uptrend for now. At some point they'll level off, but if US housebuilding ever recovers - maybe another year - that metal will surge to the old high, in my humble opinion.

And one more sign of a return to normalcy: (WSJ) "Yanks Get Their Swagger Back
With Red Sox Streak Broken, Planets Are Realigned. ... How do we know the Yankees are playing well again? Because they're annoying. That's how it is with the Yankees: When they're playing poorly, they're strangely lovable in their vulnerability and fear of failure. But when they're rolling, like they are now after four straight wins against the Red Sox, they're ruthless."

I read that A-roid made a game winning hit. It's about time he earned his pay. The Red Faces ... oops ... Sox need to loosen their collars. Hmm David Roidtiz says some bad supplements caused his positive drug test. Sure ...


Doing nothing. Krypto Fund is doing well. Lately it's significant real estate holdings and REITs (via VNQ - the Vanguard real estate ETF) have perked up. In the last bull market (out of the 2002-3 bottom), those stocks performed very, very well. Real estate is a distinctive asset class and needs to be treated as such. If conditions just return to normal, VNQ will provide excellent gains.

Word of the Day

"Ersatz" - adjective [$10]
Ersatz means being a usual artificial and inferior substitute.
Sentence: The SEC has announced more hearings on short selling. I expect that corrupt agency will provide the same ersatz regulation as it has done for years as it operates out of the pockets of Wall Street.

Le Mot du Jour

"Conjoncture" - noun, feminine; and "Conjoncturel, -elle" - adjective.
Conjoncture means situation, circumstances (economic).
Conjoncturel means linked to the present economic climate.
La Phrase: La conjoncture dans le monde entier s'ameliore.
Sentence: The economic situation all over the world is improving.

Friday, August 7, 2009

Hog Feeding .... Again

The ruling class in DC is feeding again, in a particularly invidious and hypocritical manner. After posturing for the public by attacking corporate CEOs using private jets, they slip a purchase of eight more for themselves to be pampered around the world.

WSJ: "WASHINGTON -- Congress plans to spend $550 million to buy eight jets, a substantial upgrade to the fleet used by federal officials at a time when lawmakers have criticized the use of corporate jets by companies receiving taxpayer funds. The purchases will help accommodate growing travel demand by congressional officials. The planes augment a fleet of about two dozen passenger jets maintained by the Air Force for lawmakers, administration officials and military chiefs to fly on government trips in the U.S. and abroad. The congressional shopping list goes beyond what the Air Force had initially requested as part of its annual appropriations. The Pentagon sought to buy one Gulfstream V and one business-class equivalent of a Boeing 737 to replace aging planes." "

Wonderful. Don't the antics of these hogs make you sick ? or angry ? Is there any more sleazy, disreputable, unethical passel on Earth ? Well, maybe ... in that gangocracy, Russia.

The Republic is never safe while Congress is in session.


None. I await a screaming buy or an idea on which sector or stocks will lead this bull market back to S&P 1200.

Word of the Day

"Minatory" - adjective [$10] from the novel, "Elmer Gantry" by Sinclair Lewis.
Minatory means threatening, menacing.
Sentence: North Korea relies on minatory stances and actions to generate foreign aid in the manner of an extortionist. I wonder if Obama will pay up.

Le Mot du Jour

"Exiger" - verb, transitive, regular -er conjugation like manger
Exiger means to demand, to require, to call for.
La Phrase: Exigeons des réformes dans le Congrès.
Sentence: Let's demand some reforms in Congress.

[sheesh, I just fixed a stupid error (noon ET)]

Thursday, August 6, 2009

Corruption and Unintended Consequences

Today's news has four examples of this. As government extends its tentacles into the affairs of private people and business, there is an inevitable increase in sleaze, favors, bribes and pain inflicted on innocent parties. This is why government intervention should be directed only at controlling the rich & powerful, and not at the behavior of the common man. Populist libertarianism is the way to get it right.

I. WSJ: "Former Louisiana congressman William Jefferson was convicted Wednesday of bribery schemes aimed at enriching him and his family in a trial that featured a freezer full of foil-wrapped cash in alleged bribe money. ... They accused Mr. Jefferson of essentially shaking down businessmen who would come to his office looking for help brokering deals in Africa. He served on a trade subcommittee."

II. WSJ: "Two University of Illinois trustees have resigned and a commission appointed by Gov. Patrick Quinn is expected Thursday to recommend that the remaining seven step down following charges that trustees eased admissions for hundreds of politically connected students."

III. WSJ: "Who doesn't like the government's "cash for clunkers" program? Your mechanic, for one. Owners of automotive repair shops say the program to help invigorate sales of new cars is succeeding at their expense." The Obama-Pelosi clique takes business from the working man to pay off the greenies.

IV: FT: Elevated from call girl to parliamentary candidate but then ostracised by those who feared she would reveal her secrets, Patrizia D’Addario’s story as the escort who went public about her night with Silvio Berlusconi has aspects of a soap opera. There is also a dark side to the experience of the 42-year-old single mother who sees herself as part of the “system” in Italy, where businessmen pay women to entertain politicians. “The system is like that. All of Italy functions like this,” Ms D’Addario says in a matter-of-fact way, speaking to the Financial Times."

So let's stop it. Use government only to control the growth in power of the ruling classes. History proves that such excess growth eventually destroys a country. Last evening I read another example of this, viz. ancient Sparta. The growth in its aristocracy after 400 BC led to fewer and fewer Spartan soldiers and citizens, so that eventually it succumbed to outside enemies. Similar forces caused the downfall of Byzantium and numerous other empires.


I sold JPM in Fido Fund yesterday, getting a bit over 41 and an 85% gain. My reasoning ? I see it now as simply following the market up or down. The easy money is made in that name, in my "humble" opinion. I speculate for the easy money and otherwise let my asset allocation Krypto Fund do the work. When a stock gets close to fair value, I let is go and keep the cash to look for the next "screaming buy"

Word of the Day

"Purblind" - adjective [$10] from the card file
Purblind means lacking in vision, insight or understanding.
Sentence: Is any group of people more purblind than Congress ?

Verbum Diei

"Nihil" - noun, indeclinable
Nihil means nothing.
Sententia: [Imagine Sgt. Shultz of that great TV show, Hogan's Heroes, as a Roman centurion] Nihil video.
Senttence: I see nothing.

Wednesday, August 5, 2009

Continued Stimulus

From "Reuters reports China will stick to its loose fiscal policy for at least three years despite a growing budget deficit, a government economist said in comments published on Wednesday. "Even by conservative estimates, the timeframe for this round of proactive fiscal policy should cover at least three years," Gao Peiyong, a researcher with the Chinese Academy of Social Sciences, wrote in the People's Daily, the ruling Communist Party's mouthpiece. Gao said China's economic recovery was not yet on a solid footing, so an early end to the stimulus now coming from tax cuts and massive fiscal spending could lead to a new downturn. "It is both necessary and urgent to seek stable economic development at the cost of fiscal imbalance," Gao said. "It is inevitable that China's fiscal situation will run into difficulties in the not-too-distant future."

I wonder what that last sentence means ? Perhaps that China will print more renminbi / yuan ? Or run a deficit and be no longer able to buy US Treasuries or any other foreign currency ? That's something to ponder.

And this from the WSJ: "WASHINGTON -- Stimulus spending on infrastructure projects is moving slowly and many projects won't get started before the summer construction season ends, complicating the Obama administration's efforts to tout the impact of the $787 billion economic recovery act. ... The White House Recovery Office said Tuesday that government agencies have decided how to spend about $31 billion of the $73 billion going directly to construction projects, but it couldn't offer a figure on how much has actually been spent. "The Recovery Act was designed to ramp up over time with more spending later this year and early next, ensuring that we're steadily laying the foundation for a real, long-term recovery," said Ed DeSeve, senior adviser to the president for implementing the recovery act." "

In other words, those expecting a double dip recession might find they are wrong. The long, time-delayed stimulus spending here and in China would tend to lessen the growth off the bottom, but then give more staying power to keep going until the negative behavior of the private sector changes to positive outlooks. That would mean sustained growth and no double dip.


Surprisingly, stocks held over S&P 1000. If they can hold for a few more days to the end of the week, sidelined bears will surely be sweating terribly.

Word of the Day

"Transhumance" - noun [$10]
Transhumance means the seasonal moving of livestock to a different region.
Sentence (metaphorical usage): Study of the transhumance of beefer elephants in the stock markets can be a rewarding. On what do they graze ? Where are their water holes ? In the boom of the 1990s, their sustenance were technology stocks. In the 2003-2007 rebound, financial, energy and commodity stocks provided their feed and water. Will those alpine pastures be re-used or will new pastures be found over other ridges?

Verbum Diei

"Turba, -ae" - noun, feminine; first declension.
Turba mean the crowd.
Sententia: Vitate turbam.
Sentence: Avoid the crowd.

Tuesday, August 4, 2009

Expand Your Horizons

This applies to literature, culture, history, languages and ... investing. Today's FT makes a point rather simply - US-centric pundits and investors pay attention.

***Beginning of Quote***
Emerging stock markets have reached levels last seen before the collapse of Lehman Brothers in the latest sign of investor expectations of improving global growth. The FTSE All-World Emerging Index on Monday reached 433.2 in late London trade – the highest since the week before Lehman’s demise sent markets into a tailspin.

Then, the index dropped almost 48 per cent in a little over five weeks but, from an October 27 low, has now rallied 90.1 per cent. Strategists said the rally was because of a returning belief in "decoupling" – the theory by which emerging markets will in future be less dependent on the fortunes of developed markets because they will be able to rely on stronger domestic demand.
Michael Wang, emerging markets strategist at Morgan Stanley, said: “Previously, emerging markets were seen as a geared play on developed markets because of their dependence on exports. But this is different.

Asia and Latin America haven’t had the fundamental problems in the banking sector that the developed world has had, so lending and credit growth has resumed rapidly and this is helping drive growth.”


Manufacturing output, a particular concern for the emerging world, reached an 18-month high and new orders hit a 20-month peak."
***End of Quote***

A couple years ago I wrote sardonically about the emerging new "East Asia Co-Prosperity Zone" - a zone of self-supporting consumer driven demand in China, India, and the rest of East Asia. It's really larger than this, including all South America, too. When looking for the recovery and where future growth will be, I think it will be there.

In the money-mouth department, Krypto Fund has a quite oversized position in emerging market stocks at 6.67% allocation.


I took some profits on extra pieces of FCX and HBC yesterday. The FCX was the bit added around 55. I got a little over 64 for it, thus making up the 10 points lost on the other half when I made the Obama dump in early July. I also sold about 1/3 of HBC in Fido Fund - that position had gotten too large. HBC reported surprisingly strong earnings and I took advantage of the rip. My average gain was 75% on that stock.

Word of the Day

"Espantoon" - noun [$???] a Mencken word not in any dictionaries
Espantoon was the term used in Baltimore in early 1900s for a policeman's stick - a nightstick with a long leather strap for twirling. The word perhaps derives from Spanish, "espanto", a noun for fright or threat.
Sentence: Timmy yesterday used the verbal espantoon to try to get the financial regulatory heads to back financial reform and to stop their turf battles.

Multi-lingual Department

I overslept, so nothing today here.

Monday, August 3, 2009

A Bid

Ms. Market is getting a lot of bidders every morning. I start watching the financing news on Blabberg around 4AM ET. For a couple weeks, the green in the European market prices and US futures early in the morning has been striking. Money flow is definitely there.

Copper prices are strong again early today.

I guess the GS fig lief is gone at last. FT: "Goldman Sachs reputation among both the general public and financially sophisticated Americans has been damaged by the events of the past year, according to research conducted for the Financial Times." They are finally seen as the greedy passel of hogs they've always been. How can a firm that makes almost all its profits raping its own clients in trades be anything but a piranha ?

Of course, all Wall Street "trading profits" are just that.


I read the Democrats' health care "plan" has 1,000 pages. Anything that big has to be a disaster waiting to happen. And it must be laden with payoffs and favors for their supporters. What a bad joke !


HBC reported a surprise profit this morning. A loss was expected, but this major bank with probably the most exposure to the emerging market came through.


I've started re-learning Latin. I like it - and it seems rather easy. That's probably due to all the work I've done with French ... and Italian and Spanish and the three years of Latin I had in high school. I also think the Latin helps me on the French, Italian and Spanish as it connects them and makes them seem more logical. The first problem I have is that my unabridged Latin dictionary just has Latin to English, not the reverse. I'll have to find one that has both.

Word of the Day

"Pecuniary" - adjective [$10]; and "Pecunious" - adjective [$10] from the Latin, pecunia, a feminine noun meaning "money".
Pecuniary means 1. of, concerning or consisting of money (pecuniary aid, pecuniary considerations); 2. (of an offense) entailing a money penalty.
Pecunious means abounding in money, wealth, rich.
Sentence: Pecunious powerful people dominate American - and world - governments.

Verbum Diei [that's 'word of the day' in Latin].

"Regere" - verb, second conjugation.
Regere means to rule.
Sentencia: Pecunia reget.
Sentence: Money rules.