Wednesday, September 30, 2009

Zzzzzzzzzzzz ...

I overslept. Je me suis réveillé trop tard.

I'll post later.

... later ...

Oh well, it's Wednesday and as usual, not much is happening.


I will try to buy some VVUS today as its price has pulled back and its equity offering is done. I'll pick up a start position of about 1/3 of what I want over time, as long as its price stays in the area of 10+. This company has a very promising weight loss drug with good safety prospects, too.

Word of the Day

"Addlepated" - adjective [$100] A Big Al word !!!
Addlepated means addlebrained [1620-1630 Addle + pate + ed]; used on Gilligan's Island TV show by "the Professor"
Addlebrained [$10] means (adjective) having a muddled or confused mind; foolish, silly, or illogical.
Addle - verb & adjective [$10]
Addle means (verb) 1. to make or become confused; 2. to make or become rotten, as eggs; (adjective) mentally confused, muddled; 4. rotten: addle eggs.
Sentence: Excess consumption of alcoholic beverages can quickly produce an addlepated mind.

Tuesday, September 29, 2009

Seeing A Change

A problem the anointed bear pundits have is seeing when to change and recognize that being right once - even in a huge move - does not make them gods. In the times of the Romans, when a successful military commander had huge power and was adulated by the public during his triumphal parade, tradition had a slave ride in his chariot to whisper in his ear, "you are not a god".

Somehow market pundits need this reminder. Maybe they need a parrot to sit on there shoulder to squawk, "you are not a god" as they go on to their next interview on Bubblevision, or their next speaking engagement for big money. Oh well, they've mostly succumbed to the same sales tactic, "tell' em what they want to hear, sell 'em what they want to buy" and so much of the investing public wants to hear a bearish story.

One simply reading today's newspapers online can find interesting stories of how the world is recovering with considerable strength. Note that I use the word, "world". Bear pundits are also notoriously US-centric. yesterday I posted a story about "world" commerce increasing at the highest pace in five years in July. Today, I find two stories with ground level facts supporting that my thesis of a coming "East and South Asian Co-Prosperity" sphere of self-reinforcing consumer demand leading to huge growth in that area ... and in the rest of the worlds via that growing consumer demand.

WSJ: "With the longtime engine of global growth, the American consumer, pummeled by recession, some of China's hugely productive exporters are eyeing a new market: the Chinese.
"China's ability to consume has now reached a fairly high level. It's at a turning point," says Tandem's general manager, Tom Tseng. Incomes are rising in China and people can afford more high-quality goods, he says, while "in the U.S., people now only want to buy cheap things."

FT: "Asian business leaders are confident about economic recovery, according to a survey of companies that have a market capitalisation of more than $1,000bn. The survey, which will be published this week by the Asia Business Council, an independent grouping for regional chief executives, found that 67 per cent think the economy will improve compared with just 6 per cent fearing it will worsen."

And Japan has a new government that at least says it intends to expand consumer demand and not focus only on exporters.

World population is reported as being 6.8 billion. The highly developed, prosperous US, Europe, Canada, and Japan have about the 0.8 billion people. That leaves 6 billion people striving to attain our standard of living. The rest of the world is going to lead this next tidal wave of economic growth. Investors have to climb onto that trend and sit.

The trends are very strong and positive.


Big rally yesterday. I did nothing, as I made dip buys on Friday. I'll ride this bull elephant awhile, enjoying the view of the landscape and looking for signs of change.

Word of the Day

"Propaedeutic" - adjective and noun [$10]; from the files ... and used by Big Al recently.
Propaedeutic (adjective) means serving as an introduction to higher study, introductory; (noun - especially in plural) preliminary learning; a propaedeutic subject, study.
Sentence: As Obama continues to bloviate, unfortunately he's still doing his propaedeutics for running the government on the job.

Das Wort der Woche

"Machen" - verb, regular
Machen means to do, to make.
Der Satz: Ich machte nichts.
Sentence: I am doing nothing.

Monday, September 28, 2009

More Fraud and Lies

It's remarkable that government and modern "dialogue" is unable to address major issues with simplicity and honesty. Reading the news today, I descried an example that I post below regarding the ongoing scam of wind power.

WSJ: SHANGHAI—"China's ambition to create "green cities" powered by huge wind farms comes with a dirty little secret: Dozens of new coal-fired power plants need to be installed as well. Part of the reason is that wind power depends on, well, the wind. To safeguard against blackouts when conditions are too calm, officials have turned to coal-fired power as a backup.

"... officials want enough new coal-fired capacity in reserve so that they can meet demand whenever the wind doesn't blow. This is important because wind is less reliable as an energy source than coal, which fuels two-thirds of China's electricity output. Wind energy ultimately depends on wind strength and direction, unlike coal, which can be stockpiled at generators in advance.

In simple terms, talk of wind power as a source of energy is hot air. One has to build TWO power systems because the wind doesn't always blow. Do you suppose anyone publicly includes that double cost in their fraudulent claims that wind power is economical ? Nope.


Books contain real, enduring knowledge. Anything on the Internet might disappear overnight or be changed with no notice, hence it's not a reliable reference. Complex topics can be put into a 300 page book. Who could sit at a computer and read 300 pages of serious writing over a few weeks ? How do you keep your place ? Who's really comfortable sitting at a computer ? No one. Paper books rule.

What to read ? I prefer nonfiction for many reasons. But some say it's boring, and they have a point. How can one read a 300 page book on a serious topic to learn something useful ? I've had problems in the past doing that. I might get 1/3 or 1/2 way through, and then get burned out or bored. So I put the book aside on the pile and it sits ... for months. Finally, I'll pick it up again and force my way through it.

Over the past few months, I employed a new system that is working well. I read about ten pages at a sitting. It's simple discipline - one can overcome the feeling of drudgery or boredom by thinking each time, "I'm just going to do ten pages - easy". I try to do two or three sittings a day, but even with only one, a serious 300 page book can be read in one month. At three sittings a day, voilà, it's done in ten days.

I am currently reading "A Pragmatic Theory of Fallacy", a scholarly book about logical fallacies in argumentation and debates. A better understanding of rhetoric and argumentation helps one understand public debates and how the ruling classes are fooling the public. The book has about 300 pages. I had started it a few months ago, but it was tough reading. So late last week I picked it up again and re-started with my new system. I'm now about 60 pages in and enjoying it immensely.

In later posts, I'll list and describe these fallacies and use them to dissect public debate. As a teaser, the global warming "debate" is riddled with these fallacies. The public is being ill-served. I suppose that's what we should expect, as the ruling classes and the media simply run a propaganda machine to have their way with the common man.


FT reported Saturday that global commerce rose in July at the fastest rate in five years. Hmm ...

On Friday on the continued dip, I bought some more MT common stock in 1-2-3 Fund and in Fido Fund I bought a bit more COF and a new name - CLF - a US iron ore company. I think CLF might get taken over at a good price in a year or so as the economy reaches its prior levels of activity.

Word of the Day

"Elenchus"- noun [$10]; plural "elenchi", adjective "elenchic"; to English from Latin from Greek.
Elenchus means logical refutation.
Sentence: A knowledge of the names and proper definitions of fallacies gives one a huge assist in explaining elenchus clearly, without weaker metaphors and analogies. Clearly understood elenchic responses can be decisive in argumentation.

Verbum Diei

"Valere"- verb, second conjugation
Valere means to be strong, to have power, be well. Vale (valete) means good-bye, farewell. Interesting, the Latin term for good-bye literally means "be strong".
Sententia: Ubi leges valent, ibi populus liber potest valere. (from Publius Syrys)
Sentence: Where the laws are strong, there a free people can be strong.

Friday, September 25, 2009

Life as an Anachronism

G20: 20x garbage in, garbage out. What a contrived media event ! Boob bait for the bubbas. L'appât ballot des nigauds ... L'appât nigaud des ballots ... L'appât bête des imbéciles. I need to work out how to say that in other languages.

I am a Luddite. I don't Twitter, I don't do text messages. I don't accept cell phone calls (unless pre-arranged). I cook food. I fix things myself. I know how to use tools, and do use them. I prefer paying cash for anything under $100. I don't go to the movie theater. I drink hard liquor on ice, red wine and real beer - no sweetened, "light" beverages.

I like fried eggs, Spam, Valveeta cheese, McDonald's food, big, rare steaks, homemade apple pie, hardtack with peanut butter & jelly, MREs, and turnips.

I read books - physical books, not electronic. I read newspapers - both physical and online. I read magazines - in paper. Mostly I read non-fiction, but lately I've been reading well-known classic works of fiction.

I'm trying to learn a foreign language as an adult - six, actually: French, German, Polish, Italian, Spanish and Latin. So far it's working. The human mind is the greatest tool by far.

I lift weights - the real, iron weights; practice boxing and knife fighting; and shooting all types of firearms.

I don't watch much TV. Everything I know about 21st century "new modernity" comes from South Park.

I have four dogs as pets - and I treat them as important parts of the family, not as stuffed animals or slaves.

I think the controlling ruling classes is the principal political problem to be solved. I want maximal freedom for the common man, and tight controls on antics of the rich & powerful - the ruling classes. I am neither a Republican nor a Democrat. I am a Populist Libertarian.

Modern life hasn't changed much in its large scale structures since 1925. Read "Main Street" by Sinclair Lewis. Watch "Thoroughly Modern Millie". The social issues facing people aren't much different.

With a few exceptions, no good music has been written since December 31, 1947 and no truly good recording has been made December 31, 1954.

I walk through a mall perhaps once a year and see so much crap I can't imagine ever wanting to buy.

I like movies with happy endings.

Fine, call me an anachronism. I admit it. I like the old ways better.

PS: Mrs. B points out correctly that I am using a computer to proclaim myself as a Luddite - a bit of inconsistency. I am modernizing the use to mean a rejection of superfluous equipment, machinery and software that mostly distracts from real, physical life: nintendo, video games, gameboys, wii, cell phones, Twittering, texting, on and on and on.


It's good I listened to my fears and the warning of an astute commentor by selling RIMM. It got crushed last evening after reporting disappointing numbers, particularly its gross margins. That probably reflects the high defect and return rate. Not good - that makes for poor word of mouth as consumers do talk.

Otherwise I am sitting and waiting. No changes in my thinking ... yet.

Word of the Day

"Dolorous" - adjective [$10] literary or jocular
Dolorous means 1. distressing, painful; doleful, dismal; 2. distressed, sad.
Sentence: Looking across the human landscape of the world, I feel dolorous that so much human capital is being wasted on so much nonsense.

Thursday, September 24, 2009

Is It Summer ?

Outdoor temperatures here are over 70F. It's humid. I hear hoards of crickets. Signs of summer ...

The ennui of news flow is marked. Babblevision talks about the next "trade" endlessly. It sure seems like the summer doldrums.

Ms. Market slapped her latest beau after the post Fed rally and sat down to skip the dance. What does this mean ? My guess is that the bears used the rally to put on more shorts and beefer traders took profits. The signs: the biggest losers were the strong stocks which had broken up into new rally highs.

This pullback could be the "Sell Rosh Hashanah, Buy Yom Kippur" trade, delayed a few days. That's my "guess". The traders couldn't find buyers higher after the Fed, so they sold. Real buyers are continuously nibbling at lower prices like a plethora of hungry squirrels eating fallen acorns.

The Bloviator continues to bloviate. Will he ever "do" anything ? It's just remarkable that having huge majorities in both houses of Congress somehow seems to have drained the energy from his party. Perhaps they are busy plotting their next earmark raid for payoffs & bribes ?


I am doing nothing. Estoy haciendo nada. Je ne fais rien. Robię nic.
[more languages to come ... Italian, German, Latin]

Word of the Day

"Louche" - adjective [$10]; from French, rhymes with "douche"
Louche means 1. disreputable, shifty; 2. [from OED] oblique, not straightforward, dubious.
Sentence: Rankings of the most louche professions: used car salesman, real estate developer, US Congressman.

Le Mots du Jour

"Loucher" - verb, regular -er
Loucher means 1. to squint, to have a squint; 2. (~ sur + object) to eye, to ogle.
La Phrase: Un homme louchera souvent sur une belle femme.
Sentence: A man will often eye a beautiful woman.

"Louche" - adjective
Louche means shifty, dubious, shady, fishy
La Phrase: Il y a du louche dans cette affaire.
Sentence: This business is a bit fishy. [idiomatic translation from dictionary]

[Thanks, Woody, for this $10 bi-lingual word]

Wednesday, September 23, 2009

Another Blank Wednesday

Why does nothing ever seem to happen to make interesting news for Wednesday morning ? I suppose I could infer some paranoid conspiracy in the ruling classes to manipulate news for either early week - to get maximal coverage all week - or bury stories on Friday to weekend oblivion. That would be eisegesis and I'm no dirty eisegete ! I merely interpret what actually happens according to what it really "is" in the sense of its telic immanence , away from the propaganda of La Grande Bouche.

[See what one can think and write when one tries to use these more sophisticated $10, $100 and $1000 words more often.]

OK, here's the translation to the American dialect of the hill country: I tell what I see as I read the signs, stripped of fakery.

Enough preamble. What significant happened ? One thing. We know know that Battleship Ben means business when it comes to ripping out that rotten core of Wall Street excess, namely, paying traders for phony unrealized gains that later cost the firm huge sums. Unlike the eternally co-opted SEC, he intend to force true reform.

From FT: "US regulators have intensified efforts to gather intelligence on banks’ trading positions in a move that could herald a drive to ensure traders’ bonuses are based on real profits rather than unrealised gains. ... The authorities wanted to know what proportion of a bank’s balance sheet was held in more liquid positions and how much was held in derivatives and other trading positions whose profitability might not be known for years, they said.

"New rules could enable an overhaul of the tradition of paying traders bonuses based on paper gains on positions at the end of each year before it is known whether they have made a loss or a profit in cash terms. By determining the extent of realised and unrealised gains, regulators would be able to judge whether traders’ bonuses were in line with the profitability and risk profile of their institution, bankers said.

"“Bankers’ pay has been out of whack for the last four or five years,” said Jonathan Finger of Finger Interests, which owns shares in financial groups including Bank of America. “Traders got the money, but shareholders were left holding the bag.” "

Hallelujah !!! Go get 'em, Ben.

Obviously, hedge fund manager pay should similarly be based on only realized gains. If one wants to pay for paper gains, pay in paper - viz., restricted stock with clawbacks.


I am doing nothing. Je ne fais rien. Robię nic.

Word of the Day

"Confect" - verb, transitive [$10] literary
Confect means to make by putting together ingredients.
Sentence: As the Senate confects a national health care plan, one cannot help expecting a Frankenstein monster to appear in the end.

Les Mots du Jour

"Appât" - noun, masculine
"Ballot" - noun, masculine & adjective
"Nigaud, e" - adjective and noun, both M, F [NB: pronounced, this word sounds close to a "forbidden" word in American, except as used by Black Americans.]
Appât means bait (literally and figuratively].
Ballot means (noun) 1. bundle, packet; 2. nitwit, dumdum; (adjective) silly, daft.
Nigaud means (adjective) silly, simple; (noun) simpleton.
La Phrases: L'appât ballot des nigauds ... L'appât nigaud des ballots ... L'appât bête des imbéciles.

All translate in modern idiom to Sen. Patrick Moynihan's famous phrase, "boob bait for the bubbas" to describe slogans tossed to the rabble to motivate them or collect contributions for a phoney cause. In my opinion, this is what all the "Tobin Tax" talk is, about putting taxes on all financial transactions.

Tuesday, September 22, 2009

Morphing, Mutating ...

La Grande Bouche aka The Bloviator [aka Obama] has been in fine form, appearing on many Sunday talk shows and Letterman last night. However, he seems to be borrowing from the propaganda techniques of totalitarian regimes in trying to not call a duck, a duck. I just heard a lecture on that fine book, "1984" by George Orwell, so got a refresher. Whether one calls his spiel - lying, or sophistry, or propaganda - doesn't matter. It's just logically false. Why must we have Presidents who think they must be false to the people ? Here's what prompted my subject today.

***WSJ Quote Follows***
The health bill drafted by Senate Finance Committee Chairman Max Baucus (D., Mont.) would fine families up to $3,800 annually if they don't buy health insurance. In an interview with ABC's "This Week" that aired Sunday, President Barack Obama said he rejected the notion that the fee represents a tax increase. "You can't just make up that language and decide that that's called a tax increase," Mr. Obama told host George Stephanopoulos.

In describing the penalty, Sen. Baucus's proposal says: "The consequence for not maintaining insurance would be an excise tax." ...

Mr. Obama has pledged not to increase taxes on families earning below $250,000 a year.
"If it looks like a tax and is enforced like a tax, it's a tax," said Sen. Orrin Hatch (R., Utah).

The White House on Monday reiterated that it doesn't view the fee as a tax.
***End of Quote***

This Obama plan is becoming worse and worse as the details emerge. How will they collect this "fine" aka "tax" from all those persons working for cash ? Of course, they'll appear as "poor" and get a subsidy, while those working on the books will get a fine - a tax penalty. What utter unfairness !

Scrap it, start over as a simple "Shared Benefit" with the funds raised fairly with a shared burden.


Ms. Market sat down yesterday for a needed rest. This morning I see green in Europe and in US futures. I am doing nothing.

Word of the Day

"Ecceity" - noun [$1000]
Ecceity means the quality of being present. From "ecce" of Latin for "behold". Pontius Pilate said, "Ecce Homo" - "Behold the man" upon seeing Christ. [John xix 5].
Sentence: During the August canoe trip, I experienced great pleasure from my ecceity in pure nature - the wilderness.

Słowo Tygodnia

"Widzieć" - verb, imperfective, second conjugation
Widzieć means to see.
Zdanie: Widzę zielony dziś rano.
Sentence: I see green this morning.

Monday, September 21, 2009

Another Reader Revealed ...

Perusing the Wall Street Journal weekend paper edition on Sunday morning, I was shocked to see that multi-decadal bear as author of a bullish article. James Grant, editor of Grant's Interest Rate Observer and noted bear since the 1980s, is looking for a surprisingly vigorous economic recovery.

***Selected Quotes Begin***
"As if they really knew, leading economists predict that recovery from our Great Recession will be plodding, gray and jobless. But they don't know, and can't. The future is unfathomable.

"Not famously a glass half-full kind of fellow, I am about to propose that the recovery will be a bit of a barn burner. Not that I can really know, either, the future being what it is. However, though I can't predict, I can guess. No, not "guess." Let us say infer.

"The very best investors don't even try to forecast the future. Rather, they seize such opportunities as the present affords them. ...

"Americans are blessedly out of practice at bearing up under economic adversity. Individuals take their knocks, always, as do companies and communities. But it has been a generation since a business cycle downturn exacted the collective pain that this one has done. Knocked for a loop, we forget a truism. With regard to the recession that precedes the recovery, worse is subsequently better. The deeper the slump, the zippier the recovery. To quote a dissenter from the forecasting consensus, Michael T. Darda, chief economist of MKM Partners, Greenwich, Conn.: "[T]he most important determinant of the strength of an economy recovery is the depth of the downturn that preceded it. There are no exceptions to this rule, including the 1929-1939 period. ...

"To the English economist Arthur C. Pigou is credited a bon mot that exactly frames the issue. "The error of optimism dies in the crisis, but in dying it gives birth to an error of pessimism. This new error is born not an infant, but a giant." ...

"I promised to be bullish , and I am (for once)—bullish on the prospects for unscripted strength in business activity. So, too, is the Economic Cycle Research Institute, New York, which was founded by the late Geoffrey Moore and can trace its intellectual heritage back to the great business-cycle theorist Wesley C. Mitchell. The institute's long leading index of the U.S. economy, along with supporting sub-indices, are making 26-year highs and point to the strongest bounce-back since 1983. A second nonconformist, the previously cited Mr. Darda, notes that the last time a recession ravaged the labor market as badly as this one has, the years were 1957-58 —after which, payrolls climbed by a hefty 4.5% in the first year of an ensuing 24-month expansion. Which is not to say, he cautions, that growth this time will match that pace, only that growth is likely to surprise by its strength, not weakness.

"And that is my case, too. The world is positioned for disappointment. But, in economic and financial matters, the world rarely gets what it expects. Pigou had humanity's number. The "error of pessimism" is born the size of a full-grown man—the size of the average adult economist, for example. "
***End of Selective Quotes***

It's nice to have a silent reader pick up my thinking and add to it with his own research.


The environmental crypto-fascists have discovered the secret to meeting carbon limits: poverty. Watch out, common man, you and your relative prosperity are the target.

From the FT: "The recession has resulted in an unparalleled fall in greenhouse gas emissions, providing a “unique opportunity” to move the world away from high-carbon growth, an International Energy Agency study has found. "

By increasing poverty and lowering GDP, carbon limits can be reached. What a wonderful admission ! The battle of Man vs. The New Pagan Religion is on.

Word of the Day

"Proselytize" - verb [$10]; an oldie from the card file
Proselytize means to convert to a belief, life style, religion, etc.; to recruit
Sentence: As I daily proselytize my populist libertarianism and economic thinking in this blog, one of the joys is to see prominent writers accept and go on to propagate my ideas. Welcome, James Grant to the bunker !

La Parola della Settimana

"Benvenuto" - interjection (singular); "Benvenuti" - plural
Benvenuto! means welcome! Addressing more than one person, use Benvenuti!
La Frase: Benvenuto, James Grant, al Fortino.
Sentence: Welcome, James Grant, to the Bunker.

Friday, September 18, 2009

TGIF and Hmmmm ....

Some interesting facts in today's newspapers (online):

FT: "Two new luxury flats in Hong Kong have been put on the market for a record per square foot price of HK$75,000 (US$9,640) as the buoyant economy and stock markets on the Chinese mainland lift demand for exclusive properties beyond pre-crisis levels."

Notice that phrase, "beyond pre-crisis levels".

Is Obama morphing in Jimmy Carter ?

FT: "Barack Obama’s decision to scrap Bush-era plans for a missile defense shield on Thursday triggered dismay in central Europe and among Republicans on Capitol Hill, amid claims that it amounted to a major security concession to Russia. Unveiling one of the biggest reversals on national security since coming to office, the US president said that he would abandon predecessor George W. Bush’s plans for ground-based interceptors in Poland and a related radar site in the Czech Republic, deploying instead a new system that could hit shorter-range Iranian missiles."

By the way, Polish news noticed that this decision occurred on the anniversary of Russia's invasion of Poland on September 17, 1939, grabbing its spoils from the Molotov-Ribbentrop treaty. Rather poor timing for US-Polish relations indeed. Why would anyone expect the youngsters on Obama's staff to know anything about history or Eastern Europe ?

And the march of technology goes on ...

FT: "After five years of scanning books electronically, Google is finally entering the print publishing business for the first time. Through an arrangement with a printing company unveiled on Thursday, Google will offer 2m out-of-copyright books that can be picked up or shipped from libraries, universities and other spots around the world. It has struck the deal with On Demand Books, makers of the Espresso Book Machine that can print a 300-page book in less than five minutes, complete with a cover and a bound edge.

"The editions are likely to cost about $8, with Google keeping a dollar, On Demand Books keeping a dollar and the retailer keeping $3. The remaining $3 should cover the cost of materials and labour."

That's great news ! Those old books were being lost to the intellectual knowledge of humanity. With Google, if one finds interesting references in a search, one can now buy the book. Too bad copyrights last so long.

And the reforms begin:

WSJ: "Policies that set the pay for tens of thousands of bank employees nationwide would require approval from the Federal Reserve as part of a far-reaching proposal to rein in risk-taking at financial institutions. The Fed's plan would, for the first time, inject government regulators deep into compensation decisions traditionally reserved for the banks' corporate boards and executives. Under the proposal, the Fed could reject any compensation policies it believes encourage bank employees -- from chief executives, to traders, to loan officers -- to take too much risk. Bureaucrats wouldn't set the pay of individuals, but would review and, if necessary, amend each bank's salary and bonus policies to make sure they don't create harmful incentives."

So speculating with depositors' money and bank capital will finally have some "adult" supervision. I'd prefer the shareholders do it, but until the SEC gives them such power in proxies, we'll have to rely on the Fed's extant regulatory powers over bank holding companies.


Ms. Market stopped dancing yesterday, being a bit tired. She needs a rest before the band starts up again. Based on its sluggish action and some fears of a poor quarter noted by a respected commentor on this site, I sold RIMM from Fido Fund and also sold its call options from 1-2-3 Fund, locking in good profits on both positions. If RIMM drops on earnings and I think its prospects are still good, I might re-buy it.

Word of the Day

"Perdurable" - adjective [$10]
Perdurable means (I) very durable, or (II) extremely durable: PERMANENT.
Sentence: Regulatory reform of the financial system needs several layers to be perdurable. Any single regulator is likely to eventually be co-opted and become part of the problem, as the SEC is now.

Verbum Diei

"Errare" - verb, first conjugation
Errare means to err, to wander, to go astray, make a mistake, to be mistaken.
Sententia: Errare est humanum. (from Seneca, the famous Stoic philosopher)
Sentence: To err is human. [Any stock speculator must accept this or go crazy.]

Thursday, September 17, 2009

On the Trail II

Yesterday the market gods continued their "symposium" - in the ancient Greek sense of a drinking party - as the steady rally ground higher. Gold rose, too. Copper is close to cracking through $3 per troy ounce upward. The trading seems to rotate from group to group, but the resource stocks are pushing to recovery highs, hence must be considered leaders. I suppose some financials are "leaders", too, but I have a very hard time seeing significant further growth there as the recovery continues to gain steam.

The action didn't seem to be a blow-off, rip up that would certainly cause me to sell some of the calls options in the 1-2-3 Fund. Fido Fund's resource stocks are doing very well. Thus, I continue to sit.

Europe is up this morning. Europe and the emerging markets continue to lead the recovery in both the markets and in the real economy. Thanks, Obama & Congress, for giving us a wasteful, ineffective stimulus plan. What knaves !


On the trail one needs a good, sturdy, sharp tomahawk. That was proven by centuries of trappers and mountain men in exploring and opening up the North American wilderness. I suppose many people do not realize that the American Indians did NOT have the ability to manufacture their own tomahawks. The American Indians before the white man were a neolithic* [Word of the Day] culture with no metal tools or weapons - not even copper or bronze - and no horses or any other draft animals. They did not use the wheel for transportation. The tomahawk was sold by the white man as a trade good - it was a simple, useful iron hand ax that the Indians quickly adopted and extended its uses.

What are the characteristics of a useful, modern tomahawk ? Light, sharp, a hammer rear head, and a simple, easily replaceable handle. Lightness is important as one must lug it over portages or when backpacking. I have a special replica tomahawk crafted by and to replicate one found in Virginia and used in the French & Indian War. My paternal ancestors fought the Indians then (circa 1764) on the frontier, which was then the eastern Appalachian mountain areas, hence I treasure this particular model which I purchased based on a review in Muzzleloader magazine years ago [see ]. I took it on the canoe wilderness trip and found it very, very useful. BUT its handle is rather well crafted as a true replica and would not be easy for me to replace.

After the trip I began looking for a more common but effective tomahawk that I could use without fear of loss or damage, being easily replaceable. I found one quickly from another review in Muzzleloader magazine. They are both available from [mine is the "Ft Turner Camp tomahawk"]. I see the tomahawk is handmade in the US and also available from the manufacturer at for the same $60 price - see "Camp Tomahawk".

I bought the version named "Ft. Turner Camp Tomahawk" and the related sheath. It came yesterday and I am very, very happy with it. It's just a bit heavier than my exact replica, but the extra weight is in the head and would add to chopping power. I'm going to buy another one today and some replacement handles, too, as I like to practice throwing it.

Word of the Day

"Neolithic" - adjective [$10]
Neolithic means of or denoting the cultural period beginning around 10,000 B. C. in the Near East and later elsewhere and marked by by the invention of farming and the making of technically advanced stone implements.
Sentence: In 1492, American Indian culture and technology was neolithic, far, far behind the culture and technology of western Europe, China and India. For practical purposes, at best the more advanced Indian cultures in the western hemisphere were roughly at the level of 3,000 B.C. in the Near East, hence were 4,500 years behind the most advanced Eurasian cultures. Isn't it odd how modern revisionists forget this simple fact when assessing the impact and migration of the white man to the New World?

Le Mot du Jour

"Sortilége" - noun, masculine
Le sortilége means a (magic) spell.
La Phrase: Parfois pour rire, je jete un sortilége vaudou influencer les marchées. Quelquefois, il marche, quelquefois, il ne marche pas.
Sentence: Somtimes for fun, I cast a voodoo spell to influence the markets. Sometimes it works, sometimes it doesn't work.

Wednesday, September 16, 2009

On the Trail

Today is another slow news Wednesday. The 1-2-3 Fund is doing well - it's up about 12% in total asset value since I purchased the call options positions about ten days ago. The options themselves are up around 36%, but I deployed only 1/3 of the fund's assets into them. I'm just holding as the moves so far don't seem to have blow-off characteristics. The stocks are just big, "boring" companies with substantial overseas revenues: UTX, PG, CAT, MT, RIMM, MMM, BA, ITW, GOOG and HBC. If no "blow-off" actions occurs sooner, I'll consider paring back the positions around S&P 1100.

Trail Food

In the canoe or on the trail in the wilderness, one needs good backup food supplies if the fishing and hunting is not productive or if you are just enjoying the scenery and fresh air. On my recent canoe trip I experimented with three traditional sources. Also, I tasted some of the supplemental food of the Epicurean Campers and will comment on it today. My trail food experiments come from three centuries: 18th, 19th and late 20th centuries.

18th Century - The very early pioneers in the wilderness of North America - trappers and mountain men - carried pemmican as a staple food. The food traditionally was a combination of dried meat, crushed berries and nuts, and rendered fat. It was made into chunks or strips that could be eaten on the move or in camp and would last forever on the trail.

My pemmican was made this way: (1) take equal parts good quality beef jerky, dried fruits and nuts; (2) process each individually until the bits are small; (3) put all in a bowl, mix & add some honey, then add peanut butter (not an oily "all-natural variety - I used Jif reduced fat) until the mixture holds its shape well when you grab a handfull and squeeze. Then form it into little rolls like a Chinese spring roll and wrap individually in wax paper. I put about a dozen pemmican rolls into a plastic zip lock bag. The pemmican easily kept for a month, tasted great, and very filling and nutritious in camp.

19th Century - My 19th century food was hardtack. hardtack was a staple in the Civil war in the Union Army. It's just a large 3 inch square cracker about 1/2 inch thick. The ingredients are wheat flour & water. I bought mine made from this site - it made hardtack in the Civil war and its product is very authentic:

My hardtack for the canoe trip had been part of my survival stores for years and was about 20 years old. I had it for breakfast every day, making a few experiments to find the best way to eat it. The Union Army soldiers used to fry it in bacon fat or just smash the hardtack with their pistol butts to add to coffee, plus sugar. Alone, hardtack is very, very flat tasting - like baked paste.

But, putting peanut butter on it made the hardtack quite good with coffee. And even better was adding BOTH peanut butter AND jelly. Woody of the Epicureans gave me some jelly on the last couple days and that combination made the hardtack sit up & cheer. It's very filling, too - I usually just had 1.5 crackers each breakfast.

20th century - that was MREs - Meals, Ready to Eat. I have quite a large stockpile for the risk of Armageddon or civil strife, and decided to use some of it on the canoe trip. The MREs were simply superb. Excellent taste, good variety, complete with heaters. The only drawback is they are a bit heavy. But as we were traveling mostly by canoe, the weight was less important.

I bought mine about seven years ago from Long Life Foods here:

They seem identical to the military versions, except the name on the package.


The snack food of the Epicurean Campers was designated GORP - "good, old raisins & peanuts" as Grand Jean said. I'd didn't take any, but sampled the fare of the Epicureans. In my humble opinion, that of JR (borrowing the signature nickname of oilman JR Ewing of the old TV show, Dallas) was the best. It had plenty of tasty nuts, raisins, other dried fruits and just enough M&Ms, from memory. Other campers' GORP was good, too, except for one: Big Al might be one of Les Grandes Pêcheurs, but putting coconut into GORP got an F in my opinion, and others, too. He came in last in the GORP contest. My pemmican was deemed not an entry.

Word of the Day

"Lief" - adverb[$10] archaic, from Shakespeare
Lief means gladly, willingly
Sentence: I would lief eat the GORP of any of the Epicurean Campers except that of Big Al. He might make a superb pancake, but putting coconut into GORP was downright wierd. Yuck.

Tuesday, September 15, 2009

Declare Victory ...

A brilliant new idea has broken onto the front pages on how to improve the national mood: let's just have the State declare that national happiness has been achieved. Here's how the French are doing it -

From FT: "France to Count Happiness in GDP - Happiness, long holidays and a sense of well-being may not be everyone’s yardstick for economic performance, but Nicolas Sarkozy believes they should be embraced by the world in a national accounting overhaul. France’s president on Monday urged other countries to adopt proposed new measures of economic output unveiled by a panel of international economists led by Joseph Stiglitz, the US Nobel Prize winner. Mr Sarkozy, who set up the Stiglitz-led commission last year, said the world had become trapped in a “cult of figures”.

"One consequence of the commission’s proposed enhancements to gross domestic product data would be to improve instantly France’s economic performance by taking into account its high-quality health service, expensive welfare system and long holidays."

And here's how Bhutan does it: "Bhutan has warned its citizens over cutting down thousands of young trees every year to make prayer flags, a threat to the tiny kingdom’s lush scenery and the government’s duty to bring “Gross National Happiness”. Himalayan Buddhists put up prayer flags for good luck or to help the dead find the right path to their next life. The more flag poles put up for the departed the better, and Buddhist monks say fresh poles must be used each time.
Having failed to convince its citizens to switch from wood to steel for prayer flags, the government of the Himalayas’ last Buddhist kingdom is growing bamboo, which it hopes will be an attractive alternative. "The pressure on forest is from all sides – from flagposts to hydropower. We are discussing this every day,” agriculture secretary Sherub Gyaltshen, said.
Bhutan’s constitution, which emphasises the importance of Gross National Happiness over Gross Domestic Product, stipulates the country must have at least 60 per cent forest cover.
Himalayan Buddhists believe winds will carry positive vibrations of tantric symbols written on the prayer flags in yellow, green, red, white and blue to represent the five elements, and 108 prayer flags are put up when someone dies."

Can it be long before La Grande Bouche declares that the US GDP numbers will be adjusted for the "benefits" of his National Health Care plan ?

Why not ? The US already adjusts GDP and the CPI for the "value" of alleged safety and environmental mandates. So why not for that squishy feeling of security that the nanny state will provide ... as long as you obey it.


Doing nothing.

The official new name for my most aggressive fund is The 1-2-3 Fund. It's named after that boxing staple, the 1-2-3 combination of punches, viz., a snappy left jab, a powerful straight right and the finishing left hook: by punch numbers, it's 1-2-3. The 1-2-3 Fund is doing OK on its options book ... so far.

By the way in French, the fund's name will be the Bonjour Fund, as idiom in French uses "simple comme bonjour" for "simple as 1-2-3"

Word of the Day

"Euphony" - noun [$10]
Euphony means 1.a. a pleasant of sound, especially of a word or phrase; harmony; 1.b. a pleasant sound; 2. a tendency to make a phonetic change for ease of pronunciation.
Sentence: Perhaps the new National Health Plan will mandate that we all start the day with some euphony by saying "ommmmmmmmmmmm" as we thank heaven for the new god that has entered the pantheon, viz., Ted Kennedy.

Le Mot du Jour

"Heureux, -euse" - adjective
Heureux means (after noun) 1. a. happy; b. pleased; (before noun) 2. fortunate, lucky, propitious.
La Phrase: Obama dit, "ne vous inquiétez pas, soyez heureux."
Sentence: Obama says, "don't worry, be happy."

Monday, September 14, 2009

More Unintended Consequences

Last week's WSJ had an interesting story that provided more proof that (a) environmentalists are truly ignorant (or arrogantly uncaring) of the impact of their fanatical policies, and (b) governmental programs really do not consider the welfare of the people as an objective to promote - contrary to the preamble of the US Constitution.

"The U. S. has succeeded in cutting back acid rain. But that's presenting an unexpected problem for farmers in the Corn Belt of the Midwest. For years, farmers didn't have to worry about adding sulfur to their fields. Before power plants added scrubbers and federal regulators cut the amount of sulfur permitted in diesel fuel, the nutrient literally fell from the sky." For free, I might add.

The decline in sulfur deposition is hurting corn crop yields by as much as 15 bushels per acre, which is a lot considering that the average yield is about 150-160 bushels per acre. So farmers have to go out and buy sulfur to add as fertilizer. There are shortages more and more shortages are emerging.

So the consumer pays twice: first in higher costs for his electricity and diesel fuel, and then again in the cost of sulfur fertilizer for food. Doesn't this resemble digging a hole and filling it up again? Guess what ? This nonsense ADDS to GDP. Sighhh ....

And another so-called "pollutant" is really beneficial to plant life in moderation. Just like carbon dioxide, I might add.

PS: The WSJ search capability is really crappy. I tore out the paper article this weekend from one of last week's paper editions and saved it for this post. Then this morning I tried to find it online so I could avoid manually typing the quotes. But the search couldn't find the story online with any of the key words. That newspaper is really declining in utility.


Doing nothing. Europe and US futures are down. The market needs a breather to consolidate and move stock to stronger hands.

PPS: Why does gettting a Nobel Prize in economics cause a professor to think he's become an expert on financial markets and all related matters ?

Word of the Day

"Lascivious" - adjective [$10]
Lascivious means lewd, lustful
Sentence: I had heard tales of the lascivious nature of Catherine the Great, Empress of Russia, but never saw a documented account until I read of her torrid affair with a Polish nobleman later to become King of Poland in an excellent, well-researched biography of Thaddeus Kosciusko, the Polish patriot who helped the US gain freedom in the Revolutionary war.

Verbum Diei

"Iuvare" - verb, first conjugation
Iuvare means to help, assist, aid
Sententia: Audaces fortuna iuvat.
Sentence: Fortune helps the bold.

Friday, September 11, 2009


The first post-summer Friday is here. Ms. Market had a fine week, dancing an optimistic, elegant waltz of ever higher prices. Europe is up this AM. The underlying bid to stock prices recurs on each bear raid ... so far. They'll try again, no doubt.

From my "Memorable Quotes" file:

The Emperor – Return of the Jedi: “Everything is proceeding as I have foreseen.”

Hannibal Hayes – The A Team: “I just love it when a plan comes together”

The call option play is working, as some of its staid stocks like PG made strong moves up. To reiterate the fundamental theory, in my opinion the rest of the world's economies are stronger and growing quite well now. The US is lagging due to the poor structure of Obama's stimulus plan. The dollar thus falls as demand for it is lower than for other world currencies. Companies with substantial overseas revenues will outperform and eventually beat earnings forecasts and raise 2010 estimates. Hence, the stock selections for the call option speculation include such companies as best I could determine.

Eventually I'll have to trade around these positions, but for now, I'll sit on this bull elephant and ride to the next waterhole.

Word of the Day

"Dulcify" - verb, transitive
Dulcify means 1. to make sweet; 2. to make agreeable: mollify.
Sentence: Obama's speech changed nothing in the factual content of the health bill; all he did was spread some rhetorical sugar onto it to dulcify its sour contents.

Thursday, September 10, 2009

A Fundamental Question

WSJ: Under Obama's plan, "Most individuals would be required to purchase health insurance."

Can someone explain to me how a requirement that each and every American buy health care coverage is constitutional ? Where in the US Constitution is the Federal government given the power to impose this on individual persons ? Where is this even implied ?

The Tenth Amendment states that "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." The Ninth Amendment has been interpreted to include a right to privacy, among others, which I certainly do not dispute. So isn't one's choice of funding one's health care a matter of privacy ?

I suppose those reading a "broad" interpretation might find some fig leaf under the Commerce Clause to support such a mandate. By the way, those with a "broad" interpretation really just make it up as they go along.

So what is to be done to improve the health care system - which is indisputably a mess for anyone who has any serious experience using it. First recognize what I proved yesterday, viz., that health care is NOT a fundamental right; it's a shared benefit.

The shared benefit: just provide every person a voucher - the shared benefit - expressed or implied, to buy health insurance or some kind of health care. Then make it law that if a person does not choose or exercise or spend his voucher, his voucher is randomly or somehow exercised automatically to cover him. That's it. No mandate.

The next questions are what is covered, and how to pay. You'll have to wait for those ... I've got to save something for future writings.


Doing nothing. I'm sitting on the call option positions and waiting.

VVUS is interesting as a drug speculation, IF the diet drug works and is safe. I might buy 100 shares as a marker/reminder note once the hub-bub dies off. Approval is a couple years off, so there's plenty of time to get a serious position.

Word of the Day

"Descry" - verb, transitive [$10] literary
Descry means catch site of, discern.
Sentence: Reading accounts of Obama's speech on health care last evening, I was unable to descry anything new or substantive; it was all mere rhetoric, typical of The Bloviator.

Das Worte der Woche

"Hören" - verb; past participle is gehört.
Hören means to listen, to hear.
Der Satz: Ich habe Obama heute machte nicht gehört.
Sentence: I did not listen to Obama last night.

Wednesday, September 9, 2009

More Bloviating

La Grande Bouche aka The Bloviator will speak to Congress ... again. Perhaps my memory is off, but didn't past Presidents just speak to Congress directly at the State of the Union and at crucial times such as declarations of war ? All Obama ever seems to do is give speeches. It's September and what has he done ? A crappy stimulus plan was passed that now causes the US to lag the world in recovery. Otherwise, zippo zilch. That nickname fits.

I officially drop the name, "Obama Fund" for my speculative investments. No longer do I expect him to succeed and my speculations are now "Obama-free".

The summary of the current bill under consideration for health care reform shows a convoluted mess. Here are some excerpts from WSJ online today:

"Democratic plans call for requiring most Americans to carry health insurance. Failure to comply could cost families as much as $3,800 a year, according to a new Senate proposal. ... The plan includes some of the stiffest penalties Congress has proposed for Americans who don't carry health insurance coverage. ... For taxpayers with incomes above 300% of poverty, the penalty starts at $950 a year and reaches as high as $3,800 for families. Nearly 12 million people fit in this category, according to the National Institute for Health Care Management. The idea behind the penalty is that those who can afford insurance but don't buy it are imposing costs on the entire health system. "

Anyone paying for their own health care insurance knows that it costs a LOT more than $3,800 per year for a family. So where's the penalty for the free-loaders ?

How is that going to work ? How can one collect from cash workers ? What is going to be covered ? What type of plans are suitable for avoiding the penalties ? Does anyone know what's in these bills ?

Even though states require insurance, there is still a big problem of uninsured drivers. How is the health plan to solve that problem?

For the record, I favor some reform. The current system is a mess. No one knows what things cost. No one knows that the capricious insurance system covers. Huge dead-weight loss is incurred from administration and reimbursement games. Legitimate coverages are denied. Getting insurance is hard - why is it so connected to a job? How are pre-existing conditions covered?

Why isn't this part of the debate?

For the record I favor a huge reform that would somehow cover everyone and provide some freedom and flexibility. I've been noodling over the details - what is practical and what is philosophically right.

And for the record: health care is not and cannot be a fundamental right. It's simply a shared benefit of an advanced society. No fundamental right of persons can impose an obligation on others. This is metaphysically certain. Imagine a society of two people. If "health care" was a fundamental right, one person could do nothing and the other would be a slave to take care of him/her. Then what if that person refused to be the slave. No one provides it, hence it does not exist. Obviously that's a contradiction and the proof that health care is not and cannot be a fundamental right of natural persons is complete. QED.


I bought the call options yesterday as described. Effectively, my speculative fund is about 300% long. I used about 35% of my total equity to fund the calls. This is a very risky strategy, but I'm backing my thinking on (a) a return to normalcy in 2010, and (b) such recovery will be led (now) by Europe, Asia and the emerging markets.

I bought calls in the money by one strike and mostly with November and December expirations, so that I am covered through Q3 earnings. The premiums were quite reasonable. I have calls in UTX, CAT, MMM, BA, ITW, RIMM, GOOG, PG, HBC and MT.
I'll trade around these positions, but not too often.

I also bought a small position in COF for Fido Fund. I think the other banks raising fees and rates will let COF gain market share. I might add on a dip.

Word of the Day

"Coruscating" - a present participle from "Coruscate" - verb, intransitive [$10]
Corsucate means 1. to give off flashing light: sparkle; 2. be showy or brilliant.
Sentence: The speeches of La Grande Bouche may sound like of coruscating gems of intelligence, but in substance they are mere rhinestones, not real diamonds. Nothing valuable or useful arises from them.

Słowo Tygodnia

"Istnieć" - imperfective verb, first conjugation
Istnieć means to exist, to be.
Zdanie: From "O Co Nas Pytają Wielcy Filozofowie" by Leszek Kołakowski, page 131, writing the famous philosophical question of Leibniz in Polish:
"... dlaczego istnieje coś, zamiast by raczej nic nie istniało ...?"
Sentence: Why is there something, rather than nothing ...?
[That is a free translation ... literally it's more complex.]

Tuesday, September 8, 2009

Paying China to Play

The Green Prophets of doom are laying the groundwork to pay Red China about $300 billion per year to submit to their human caused global warming delusion.

From FT: "The cost of reducing China's total greenhouse gas emissions is likely to reach $438bn a year within 20 years, and developed economies will have to bear much of that cost, according to a group of Beijing's leading climate economists. ... In May, Beijing said developed countries should spend 0.5 to 1.0 percent of GDP to help poorer countries cut emissions - a contribution that would cost the Group of Eight developed more than $300bn a year."

The theory that humans caused the current multi-century global warming is complete nonsense - a fact that anyone honestly looking at the historical record for the past few thousand years or even million of years knows. This is just another of those natural cycles; why do you think it was just as warm as today in the 12th century ? Did the Crusaders use SUVs to go to the Holy Land ? Maybe Genghis Khan's secret weapon was SUVs ? Scientists runnning giant computer models can make them produce whatever results they wish to get more grant money, and almost no one bothers to check. They are all want to stick their snout in the trough.

Meanwhile, Obama and his believers in their cowls are preparing a giant carbon tax and will soon want you to send an annual check to Red China. Get ready to write that $1,000 check.


Over the weekend I developed a speculation strategy for Obama Fund. I have had much difficulty coming up with US companies that make a significant, growing amount of their revenues from overseas sales. maybe I'm just lacking the research tools. All my names are big companies: UTX, MMM, CAT, BA, ITW, PG. I'm still looking. But for now, to get the multiple return that my speculative fund, I will buy call options with about one strike in the money and dated past Q3 or Q4 earnings releases. I might ladder in some out of the money calls, too, for more zip. Most of my risked capital will be deployed in the "in the money, long-dated" calls, though.

My thinking is that these companies will significantly beat expectations and they will also proved upside guidance as their overseas sales roar. Europe and the emerging markets are coming out of this recession much faster than the US, so I think these companies will outperform. This will send the S&P to 1200 by year end, which is my target.

I plan to buy options representing about 3 to 5x value of my equity capital as measured by the underlying stock values. For example, a call option on a stock priced 75 is counted as $7,500 in total value. The call option might cost just 7.5 points for a 70 strike dated in January. So for example, if there was $$10,000 speculative equity for that name, I'd want options amounting to $30,000 stock value, or four calls. [$30,000 / $7,500 = 4 ] My equity capital risked is 4 x $750 = $3,000 in this example.

Another benefit of this strategy is I don't have to pay the exorbitant margin interest rate that Ameritrade is currently charging. And I don't have to go through the hassle of changing brokers.

Don't do this with your savings or retirement money or any money you can't afford to lose if you are wrong. This is a SPECULATION.

I also intend to rename Obama Fund. It no longer relies on his success, which I now doubt.

Word of the Day

"Desinence" - noun [$100]
Desinence means 1. a termination or ending, as the final line of a work; 2. (Grammar) a termination, ending or suffix of a word.
Sentence: The desinence for the comparative of an adjective is usually '-er' in English. In Polish for adjectives with stems ending in a consonant, one adds '-sz-' plus the usual case desinence. For the masculine nominative singular case, ciekawy means 'interesting' and ciekawszy means 'more interesting'. Aren't you glad English doesn't use desinence to mark word usage in a sentence?

Das Worte der Woche

"Verstehen" - verb
Verstehen means to understand.
Der Satz: Verstehen Sie mich, Punker ?
Sentence: You understand me, Punk ? [said emphatically]

Sunday, September 6, 2009

The Files

Life under an omnipotent government or even a collusive private sector is quite dehumanizing.

For an good example of such in Red China, see this fascinating example from FT:

In the US, the "credit score" system seems similar to me. Those services for the banks report much false and inaccurate information about people, which can then hurt individuals not only for obtaining credit but also for employment, getting insurance and many other things. I've often wondered why, if the service reports incorrect information, it isn't liable for defamation.

In fact, the entire "identity theft" issue seems a case of defamation by the credit services, banks and other lending services. They get scammed and then proceeded to defame an innocent person, forcing him to clean up his record. That's just wrong. The credit services and banks SHOULD be liable for defamation.

I've complained to a well-positioned US senator about this, but the message just doesn't get across. Or the banks have too much power. I suppose they have some secret legal protection.

Medical information is another problem about "The Files". Who can see them, who can check them, are they accurate, and who corrects errors ? I once asked for a medical file, but was told that they could only send it to my doctor. I became very forceful, but the insurance company would not relent. So I ordered it sent to my then doctor and he proceeded to show me the information. Infuriating.

Obama Care promises to continue the process of nationalizing this data. Are safeguards in place ? I suspect not, regardless of all that "Privacy" baloney we are, in effect, forced to sign to gain services.

Friday, September 4, 2009

Sayonnara Summer

Summer was minimal here. June was all rain & cold. Some pleasant days occurred in July, but then August was mostly rain or horrible hot and humid weather. The past few days plus perhaps another two weeks was all we had for a pleasant summer. With the Labor Day weekend approaching, it's over. Often a bad winter is offset by a good summer. Not this year. Last winter had enduring extreme cold. This summer had excessive rain and cold. Uh ... I guess global warming took a break.


My language self-learning program re-started successfully yesterday with hour-long lessons in German, Polish and Latin. Having previously scoped and explored the entire grammars over the past few months, I am now going back to the foundations and doing a multi-sense approach: reading, listening speaking, and writing all together slowly with simple sentences and concepts first (except French gets more complex sentences as it's a year further along). Today I'll hit French and German and Polish again. This weekend, Italian and Spanish are re-started. Over the next year I hope to get all six languages on good learning paths. This is a five year plan for fluency in all six by age 60.

Here's a tidbit. All my languages derived from old Indo-European. Let's explore this a bit. Below I list the word for third person plural of "to be" in all seven (including English).

English: are
Latin: sunt
French: sont
Italian: sono
Spanish: están or son in different senses.
German: sind
Polish: są (pronounced 'so' with a bit of nasalization of the 'o')

The similarities are obvious, but English is the odd one. I wonder why ? There are other peculiar aspects of English, such as its "do" constructions and its mandatory progressive verbs in present tense. These can be traced to old Celtic, but then, where did Celtic get them ? They are not Indo-European. From an aboriginal people in Europe before the Indo-Europeans ? Genetic data suggest this is possible. More to come in a future blog ...


A decent rally occurred yesterday after a few down days. This is how the prior pullback ended. One might note that the levels of support here are higher than for the last pullback. My list for buys is not progressing well. I'm not having ideas for good, individual names. Most of my ideas are large cap stocks already in Mrs. B's Sky Fund (UTX, MMM, ITW, etc.). I'll keep working, though.

Perhaps I'll do nothing, except ride this bull elephant to the next waterhole.


This weekend I make my world famous spring rolls - a few dozen. I'll post the recipe sometime, but as they are reminiscent of a pile of gold bars, they are totem for much future good fortune.

Word of the Day

"Abreaction" - noun [$10]; and "Abreact" - verb [$10]
Abreaction means (psychology) the free expression and consequent release of a previously repressed emotion.
Abreact means (psychology) release (an emotion) by abreaction.
Sentence: The August town hall meetings seemed to cause large numbers of the American people to abreact their fears of being dominated by an oppressive government. I've wondered for awhile whether this quality of Americans is learned or has a inherited component from self-selection of their ancestors to move to the new world.

Thursday, September 3, 2009

Some Books

Recently I've revised my opinion of the value of fiction over non-fiction books. In the past my thinking was that fiction was mostly worthless - perhaps a lowly three on the ubiquitous 1 to 10 scale (10 being the best/top/most valuable). My reasoning: the writer of fiction could manipulate and concoct any situation or events to drive the reader to his line of thinking, all possibly based on false, unreal scenes in the writing. Hence it was totally unreliable compared to non-fiction. Some modern fiction I read in the 1970s and 1980s supported this thinking. That writing was a waste of time.

[By the way, I always excluded potboilers like the mystery, spy and murder writing of people like Mickey Spillane, Raymond Chandler, Ian Fleming and Le Carré: those are read for fun, not learning.]

Mrs. B and some friends have battered away at that old prejudice for a couple of years. And then a few lectures on philosophical thinking of David Hume and Richard Rorty on matters of empiricism and pragmatism made the point convincingly that one must read "good" fiction" to understand the minds and feelings of others and also situations that one cannot experience with one's own senses. This thinking made sense to me, as my prior experience in reading Uncle Tom's Cabin supported it. To reduce the risks of being mislead by a fiction writer, the suggestion was made for me to just read older, established, well-regarded fiction. And I tried it, using suggestions of H. L. Mencken and some friends to make my selections.

Over the past two months, I read four books by winners of the Nobel Prize for Literature written before World War II and a few other well-regarded works. Of books by Sinclair Lewis, the first American to win that prize, I read Main Street, Babbitt and Elmer Gantry. Prior to these, I read the classic American novel, Winesburg, Ohio by Sherwood Anderson. I also read a collection of short stories by Joseph Conrad. Finally, I just finished Buddenbrooks by renowned German writer and Nobel laureate, Thomas Mann.

I now hereby, publically and unequivocally, state that I was wrong in my low valuation of fiction. All these works were very, very good and believable and helped me understand much about culture and experiences of peoples in different times and places and social settings. I'll raise the value of fiction to a 6 for now. Next on my list: Oliver Twist, David Copperfield, Huckleberry Finn, all in audio book form for the iPhone/Pod.

By the way, my qualification on sticking to only old, established and well-recognized fiction stands.

Word of the Day

"Omphalophysite" - noun [$10,000]; a Mencken word
Omphalophysite is pejorative word from the Greek-based combining form, omphalo- meaning navel, boss, hub. Hence an omphalophysite would be an ivory-tower intellectual with no practical experiences who focusses on his navel (metaphorically) aka obscure core fields. A synonym might be a pedant.
Sentence: (from The American Language by H. L. Mencken, page 63 top referring to attempts to bring American into harmony with English) "To the latter, the humorless omphalophysites of the American Academy of Arts and Letters address themselves periodically, and with great earnestness."

Wednesday, September 2, 2009

Superior Coffee

Right now I am drinking cup #2 of fine, black American-style coffee made with an incrementally improved technique that I learned on my wilderness camping trip and experimented with over the past few days. Perhaps it was around breakfast at camp that the subject of coffee came up. Big John, aka Grand Jean [which nearly rhymes in French], had brought a real aluminum percolator along and thus we had fresh perked coffee every morning made with good quality ground coffee.

Another of the epicurean campers, nicknamed Condor, was discoursing on how very fine coffee can be made. I already did most of his process on my normal mornings, but when he said that using a French press or simply a fine wire filter instead of paper permitted the natural oils to get into the coffee, my ears perked up. I've had negative experiences with French presses, as they let a bit of the grounds into the brew, and the coffee cools off too quickly. But the fine wire mess ... I remembered that my home "Gourmet Thermal" Mr. Coffee maker had such. In the past I had placed a paper filter into it. So I resolved to try this technique on arriving at home.

Today is the third day of this experiment. I can confirm the flavor is superior. Another friend says that this technique also reduces the caffeine content as the hot water flows more quickly through the wire filter than a paper filter. Caffeine can be a problem if I go on to that fourth cup in the morning, so a reduced amount is a dividend of the process.

Here is the my entire method in full.

1. Use high quality, whole beans from Central America, Africa or Southeast Asia. No Mexico/Columbia/Brazil (those are too plump and less tasty in my opinion). I prefer a medium roast. Mrs. B buys them for me from Community Coffee on a subscription basis.
2. Grind them fresh in the morning.
3. Use a coffee maker that drips the coffee into a thermos to preserve heat, and not a simple pot heated on a hot plate (which overcooks the coffee quickly). While grinding the beans, put hot water into the thermos to heat the glass - this preserves the heat of the coffee longer. [Of course, empty the thermos before starting the brewing.]
4. Put the fresh ground coffee into the wire basket - no paper filter.
5. Brew normally.

This coffee is really, really good in my "humble" opinion. Btw, rinse the wire basket with hot water every day as you dump the old grounds and wash it periodically.


Big drop yesterday on "good" news. To my thinking, this indicates a "sell on the news" pullback, not a change in character. Traders sold, investors pulled bids to get stock lower, and bears became emboldened, believing that persistent blather of fears of another bad September. I suspect few real sellers are lower, and some real buyers lurk to scoop up shares.

As I've said many times, the beefers [aka big, evil funds] can make Ms. Market dance to any tune they wish for a short time. Wait a few days to see if bad news occurs. I'm preparing a list of US stocks that rely on overseas revenues. I had erroneously characterized them as "exporters" but I don't care if they truly export or they make the stuff overseas. I see the next bull market as lead by stocks firms selling to industries and consumers in China, India, southeast Asia, South American and eastern Europe. That's where the big growth will be.

Word of the Day

"Wen" - noun [$1000]; a Mencken word
Wen means (I) 1. a benign tumor of the skin especially of the scalp; 2. an outstandingly large or congested city; (II) (also wyn) a runic letter in Old and Middle English, later replaced by "w".
Sentence: The entire east coast of the US from Maine to northern Virginia has coalesced into a single sprawling wen.

Tuesday, September 1, 2009

Hogs on a Diet

The hogs at the trough in the finance industry seem to be on or going on a forced diet. For decades these hogs slurped down huge pay in bonuses and "profit" shares while eventually running their firms into bankruptcy or huge losses that wiped out all the "profits" their prior pay purportedly compensated them for generating. Lehmann, Bears Stearns and quintessentially, Merrill Lynch, are public examples. Large numbers of private hedge funds and buyout funds are other private examples.

Their bosses were supposed to be promoting the firms' long term value, but they had their snouts in the trough bigtime, too.

As a proponent of populist libertarianism, readers know I favor regulating the ruling classes while letting the common man have maximal freedom. And somehow regulating the hogs of finance is part of that. Europe is imposing government rules on bonuses in the finance industry.

From FT: "[UK Prime Minister] Gordon Brown has pledged tough action to clamp down on excessive remuneration for bankers as part of an international effort to rectify the systemic weakness that led to the global financial crisis. The prime minister said in an interview with the Financial Times that pay and bonuses should be based on long-term success not short-term speculative gains; banks should “claw back” bankers’ rewards if their performance suffered in subsequent years; and regulators should be able to impose higher capital requirements on financial institutions."

And: "Banks will be barred from lucrative French government mandates if they fail to abide by new international guidelines on pay, President Nicolas Sarkozy warned on Tuesday as he unveiled tough domestic rules on rewards for traders. “We will not work with banks that do not apply the rules,” the French president said after a meeting with the country’s top bankers, who were summoned to the presidential Elysée Palace."

How can this be done in the US, with our tradition of individual freedom inherited from the pioneer days ?

Shareholders and investors need enhanced powers. For decades the SEC has emasculated shareholders, letting boards of directors become pawns of the CEO hogs. Large investors now know the costs of letting the hogs eat too much. I suspect given powers they will act now. There is evidence of this.

FT: "Private equity groups are facing mounting opposition from investors over their attempts to raise annex funds, which buy-out firms hope will provide fresh cash to bail out many of the companies they bought during the debt bubble. Apollo Management had been forced to drop plans to raise an annex fund, after opposition from some of the US private equity group’s biggest backers, according to people familiar with the situation. Apollo declined to comment."

These annex funds are a particularly sleazy way for the hedge funds and buyout fund to grab more fees. The managers are supposed to work hard to get the funds back to the "high water" marks before getting more fees. But what do they really do ? Create a "sister" or "annex" funds and divert all the good ideas and deal there, so they can grab for fees. Their greed and sleaze knows no bounds of propriety.

Investors now know how this is crucial to their long term profits. They'll act, if given the powers.

SEC, Congress, Fed and Treasury: get on the ball and follow Europe's lead in working out how to give shareholders and investors real powers to limit these and align them truly with the long term investors.


Today is the 70th anniversary of the beginning of World War II in Europe, as Nazi Germany invaded Poland on September 1, 1939. In Asia, World War II began in 1931 when Japan invaded Manchuria. Let's remember the dangers of totalitarian or militarist regimes. They are true enemies of humanity and deserve no quarter.


Doing nothing. Je ne fais rien. The sell-off is orderly so far. No significant bad news has appeared. More tidbits of evidence than economic growth is returning continue to appear. This is likely a minor pullback in a bull market. Buyers are taking a breathers and perma-bears are getting a bit bolder. I'll continue to buy dips and sell rips. This week I'll prepare a list of ten or so exporters to buy in Obama Fund or Fido Fund.

Word of the Day

"Crepuscular" - noun [$10] from reading of Conrad's "The Tale"
Crepuscular means 1.a. of twilight; 1.b. dim; 2. (zoology) appearing or active in twilight.
Sentence: During crepuscular light mosquitoes become especially active as they can target one's body better.

[btw, "twilight" is the period of partial light just after sunset. Dusk is the darker period of twilight.]

[Soon I'll recommence "Word of the Day" for the other langauges I am learning.]