I make a lot of jokes about my influential readers and new readers, but today I saw stories in both the Financial Times and Wall Street Journal that seems to imply my readership is truly huge and influential. In June I wrote a blog making recommendations for all CFOs - viz, Chief FInancial Officers of major corporations. Here's the link ->
http://viewfromthebunker.blogspot.com/2010/06/attention-cfos.html
Lo and behold, in today's FT I saw this story: "US banks are taking advantage of improving earnings and growing investor demand to raise billions of dollars in debt at historically low interest rates, a move that could boost the sector’s profits in coming years."
And this story in the WSJ: "The global corporate-bond boom is gathering steam as companies rush to take advantage of some of the lowest borrowing costs in history. Companies from global giants McDonald's Corp. and Kimberly-Clark Corp. to Indonesian telecommunications company PT Indosat Tbk are rushing to sell debt. This month has been the busiest July on record for sales by U.S. companies with junk-credit ratings. Asia's debt market is on pace for a record year."
How about that ! CFOs worldwide read this blog and followed my advice, given many weeks ago. Combining this readership with Ben Bernanke, Rush Limbaugh and many others in the Ruling Class, it seems this blog rules !!!
Now if only my Ruling Class readers would listen and change their despicable behavior !
Investors
Don't buy any of those bonds being sold - they are long term certificates of confiscation. The rates are ridiculously low. Wait.
The stocks of those big companies able to sell such favorable debt for long term maturities will eventually benefit from their issuance. Mrs. B favors the big blue chip stocks that pay fair dividends and are not stagnant. Their earnings yields are excellent now and they are diversified worldwide, thus not unduly dependent on US growth.
Actions
Doing nothing. Krypto is just sleeping on the couch ... she is truly a couch potato dog.
Word of the Day
"Afflatus" - noun [$10] found in Goethe's Faust.
Afflatus means a divine, creative impulse, inspiration.
Sentence: (A) (Goethe, in Faust, Prelude in the Theatre)
"Why talk of mood, divine afflatus
That ne'er to waverers occurs ?"
(B) (Bman) Ideas for blog posts do not come from afflatus, but from much reading, hard thinking and paying attention to the world.
Friday, July 30, 2010
Thursday, July 29, 2010
Slogging in the Mud
IF I was a perma bear and didn't have an optimistic outlook on life, I could get depressed. The Fed's "beige book" shows the US economy is still stuck in the mud, making very slow progress. Unemployment claims show over 400K new job losses week after week. Millions of homeowners are underwater - stuck in houses where they owe more than the house is worth. States are cutting back as their golden egg (the high income person) has gone away. The Federal government is unable to do anything correctly; a huge tax increase is looming in 2010.
Public debates are reduced to sloganeering; no critical discussions are held to try to resolve major issues. Companies have huge cash balances, but are afraid to invest in growth. The Federal stimulus was squandered. Big banks suck all the money in communities to speculate in trading on Wall Street. Monstrous new federal laws on health care and financial "reform" seem to create more troubles and uncertainly.
Is anything being done to truly help the common man and woman ? No. Federal mortgage modification programs were a sham - a propaganda fillip to the masses to help Nancy & Harry & Obama look good. More people are pushed into the cash economy by onerous bank rules on simple things like checking accounts. Looting of those in hardship by payday lenders & check cashing services is rampant and when stopped in one place, spreads to others like auto title loans. Congress and the government do nothing until problems hit the press. Why ? Because the Ruling Class has no idea what's going on in the streets and small towns.
The IRS plans onerous new rules on business, to require 1099 forms be filed for EVERY transaction over a certain size. So if one buys a computer from Dell in a few years, one will soon have to file a 1099 for that. More paperwork clogging the system ! That rule alone is monstrous and its consequences will be huge.
BUT ...
Much of the world is doing fine. Demand for real estate loans in Europe is growing. Emerging markets are reaching critical mass in demand internal to themselves, and rely less on the US & Europe for orders. The US is still a bastion of liberty in the world. People in the US are coping and doing small things to improve themselves and their lives. People living in freedom seem to unleash an innate desire to improve their lives, to grow their economies and make small, incremental improvements in all aspects of their lives. That's what is keeping the US economy going. Not government. The PEOPLE.
Government - get out of the way and stop trying to control the people. If government won't become part of the solution, the PEOPLE need to kick the knaves out. This November they have a chance. Stay focused and vote only for HONEST leaders. Meanwhile, one can't solve every problem at once, but one can solve them one at a time. Stick to that and cope.
Word of the Day
"Inure" - verb [$10]
Inure means 1. (transitive; often in passive; followed by 'to') accustom (a person) to something, especially unpleasant; 2. (intransitive, Law) come into operation, take effect.
Sentence: If and when the new IRS 1099 rules inure, small business in the US will suffer immensely under a new mountain of red tape.
Public debates are reduced to sloganeering; no critical discussions are held to try to resolve major issues. Companies have huge cash balances, but are afraid to invest in growth. The Federal stimulus was squandered. Big banks suck all the money in communities to speculate in trading on Wall Street. Monstrous new federal laws on health care and financial "reform" seem to create more troubles and uncertainly.
Is anything being done to truly help the common man and woman ? No. Federal mortgage modification programs were a sham - a propaganda fillip to the masses to help Nancy & Harry & Obama look good. More people are pushed into the cash economy by onerous bank rules on simple things like checking accounts. Looting of those in hardship by payday lenders & check cashing services is rampant and when stopped in one place, spreads to others like auto title loans. Congress and the government do nothing until problems hit the press. Why ? Because the Ruling Class has no idea what's going on in the streets and small towns.
The IRS plans onerous new rules on business, to require 1099 forms be filed for EVERY transaction over a certain size. So if one buys a computer from Dell in a few years, one will soon have to file a 1099 for that. More paperwork clogging the system ! That rule alone is monstrous and its consequences will be huge.
BUT ...
Much of the world is doing fine. Demand for real estate loans in Europe is growing. Emerging markets are reaching critical mass in demand internal to themselves, and rely less on the US & Europe for orders. The US is still a bastion of liberty in the world. People in the US are coping and doing small things to improve themselves and their lives. People living in freedom seem to unleash an innate desire to improve their lives, to grow their economies and make small, incremental improvements in all aspects of their lives. That's what is keeping the US economy going. Not government. The PEOPLE.
Government - get out of the way and stop trying to control the people. If government won't become part of the solution, the PEOPLE need to kick the knaves out. This November they have a chance. Stay focused and vote only for HONEST leaders. Meanwhile, one can't solve every problem at once, but one can solve them one at a time. Stick to that and cope.
Word of the Day
"Inure" - verb [$10]
Inure means 1. (transitive; often in passive; followed by 'to') accustom (a person) to something, especially unpleasant; 2. (intransitive, Law) come into operation, take effect.
Sentence: If and when the new IRS 1099 rules inure, small business in the US will suffer immensely under a new mountain of red tape.
Tuesday, July 27, 2010
The Ruling Class
The photo shows me in action with my M60 at the Green Mountain Boys Shooting Club. I'm mowing down the Ruling Class metaphorically, as the voters need to do this November in the elections.Who are they in America ?
The Ruling Class in America is the hive of rich and /or powerful people who dominate Washington DC, the major state governments, major corporations, Wall Street banks and investment banks, the major law firms, their media propaganda machine and entrenched foundations. They deal in power. Money is their tool for gaining more power.
People in the ruling class mostly don't know anyone who could be called a common man or women. Their children intermarry. They don't know anyone personally who lives in hardship. They mostly don't know what is takes to start a business. They don't know the tax system in American and how oppressive it is. They've never done a tax return themselves. They go to black tie dinners and socialize with each other and talk with each other about what they want to do to us - the common man & woman.
They use their propaganda machine and innumerable rhetorical fallacies to dominate public discussions and mislead people and misdirect public debate. One almost never hears a direct truthful answer to a question from one of them. They excel in "operation change the subject" to obfuscate their true intent, viz., gain more power. The major media is their propaganda machine - it's a willing partner in maintaining dominance of the ruling class as the media IS part is that class and they want it to retain power.
Why was the $700 billion "stimulus" squandered ? Because the ruling class used the true need for real stimulus to divert all most all the money to their friends and favorites. Why was the health care bill over 2,000 pages ? Because the ruling class thrives in complexity and endless, obscure details to hide their power grabs and disposition of favors. Ditto for why the financial reform bill was over 2,000 pages. Yet that bill did not address the diversion of trillions of dollars of the common man in banks to fund Wall Street trading schemes. Why ? Because the ruling class wanted to protect their co-conspirators in the ruling class.
True reform will come only when outsiders gain power by elections. If honest people are elected in sufficient numbers, they can break the grip on power of the ruling class. The people need to speak this November and vote for honest people. The people must do this now, since the ruling class is planning huge new taxes that will fund a quantum leap in their power next year.
Welcome New Reader
I welcome Rush Limbaugh as a reader. Driving to an appointment yesterday I listened to him a bit for the first time in years (Mrs. B had tuned into his station to listen to another local talk show). And I heard him talk about the "Ruling Class". I had once listened to him a lot in the 1990s, and he never used that term. Where did he get it ? In this blog, of course. Welcome Rush (or your producers) !
Actions
Doing nothing. Krypto is waiting to sell at higher prices, perhaps closer to 1200 S&P. Or buy TIPs on a significant pullback.
Word of the Day
"Eschew" - verb [$10]
Eschew means to avoid habitualy especially on moral and practical grouns: shun.
Sentence: Voters must eschew any candidate tainted by any connection with the Ruling Class or any dishonesty.
Monday, July 26, 2010
More Reform Needed
The financial regulatory reform law is now in effect. It contains over 2,000 pages. As reported in the press, the big parts seem to be improvements, but I wonder what's buried in the fine print. That's where the lobbyists work their "magic" aka corruption. A lot of the responsibility for how this law will work falls to investors. Investors need to reject any taints of sleaze on Wall Street and to stop swallowing the smooth talking sugar offered by Street salesmen. Today's FT provides a good example.
FT: "Private equity groups were accused on Monday of producing disappointing returns while charging their investors fat fees amid glaring conflicts of interest in one of the most scathing critiques of the industry published to date. The attack makes the case that the industry has underperformed stock markets, taken excessive risks and overcharged investors. ... Buy-outs are “just another variation on the theme of ‘heads they win, tails you lose’, says Peter Morris, its author and a former Morgan Stanley banker."
Most "private equity" is a sham and does nothing except leverage up a company to extract tax benefits of debt, pay a fat fee to the fund managers, and then flip the company back out to the public. Nothing significant is done to improve the company's operations. If the deal is poor, the fund managers still get their 2% "management" fee while investors gets stuck with the losses.
The proper investor response is to NOT invest in private equity and don't buy IPOs from ANY buyout group. Stop playing their game and don't be a sucker for their snake oil.
Banks ?
Are the big banks really 'banks' any more, or are they just trading houses ?
FT: (re information requested by Congress from Goldman Sachs about derivatives) "Mr Angelides [the crisis investigative committee chairman] said he remained sceptical that Goldman did not have the derivatives information, given the bank’s reputation for risk management and its discipline in marking the value of every position daily. “It’s not credible that that’s a black hole,” Mr Angelides said. “It defies logic that these institutions have no clue of how much money they are making or losing from these derivatives.”
The information was vital, he said, because it would help explain how Wall Street had evolved along with the use and complexity of derivatives. “These banks have become trading operations,” he said. “This is essential information. It’s the centre of their business.”
That is the problem, said Brad Hintz, an analyst with Sanford Bernstein. The ubiquity of derivatives changed the way banks tracked trading risks and, eventually, how they structured their businesses.
“Over the years the model of a separate derivatives book became a very dated model for trading,” Mr Hintz said. “Can I really take the profitability of the corporate bond desk out of the derivatives desk?
These 'banks' suck in a huge share of deposits of the public and corporations then use the money to speculate and trade in Wall Street. Their loan departments are mostly a sham. The 'banks' core operations are now trading securities and speculating in derivatives. Public money on deposit that should be loaned to small business in communities is being sent to Wall Street to fund "trading operations". I worry that Congress missed this diversion of money and the new law will not help resuscitate lending to small and medium business that creates the jobs in America.
Actions
Doing nothing. Krypto waits to sell higher or buy lower. The S&P year to date return is 0.24% Krypto is beating that handily. Good doggie, here's your fee - a tasty dog biscuit.
Word of the Day
"Eschaton" - noun [$10]
Eschaton means the final things in the order of time. [Often used in theology regarding what is to happen at the end of time.]
Sentence: Despite both being over 2,000 pages and the subject of countless hours of Congressional bloviation, neither the financial regulatory reform law nor the health care reform law comes close to containing the eschaton of their subject matters. Congress forgot the KISS principal: Keep It Simple, Stupid.
[ Bman stumped the Google spell checker again with 'eschaton' and 'bloviation' :)) ]
FT: "Private equity groups were accused on Monday of producing disappointing returns while charging their investors fat fees amid glaring conflicts of interest in one of the most scathing critiques of the industry published to date. The attack makes the case that the industry has underperformed stock markets, taken excessive risks and overcharged investors. ... Buy-outs are “just another variation on the theme of ‘heads they win, tails you lose’, says Peter Morris, its author and a former Morgan Stanley banker."
Most "private equity" is a sham and does nothing except leverage up a company to extract tax benefits of debt, pay a fat fee to the fund managers, and then flip the company back out to the public. Nothing significant is done to improve the company's operations. If the deal is poor, the fund managers still get their 2% "management" fee while investors gets stuck with the losses.
The proper investor response is to NOT invest in private equity and don't buy IPOs from ANY buyout group. Stop playing their game and don't be a sucker for their snake oil.
Banks ?
Are the big banks really 'banks' any more, or are they just trading houses ?
FT: (re information requested by Congress from Goldman Sachs about derivatives) "Mr Angelides [the crisis investigative committee chairman] said he remained sceptical that Goldman did not have the derivatives information, given the bank’s reputation for risk management and its discipline in marking the value of every position daily. “It’s not credible that that’s a black hole,” Mr Angelides said. “It defies logic that these institutions have no clue of how much money they are making or losing from these derivatives.”
The information was vital, he said, because it would help explain how Wall Street had evolved along with the use and complexity of derivatives. “These banks have become trading operations,” he said. “This is essential information. It’s the centre of their business.”
That is the problem, said Brad Hintz, an analyst with Sanford Bernstein. The ubiquity of derivatives changed the way banks tracked trading risks and, eventually, how they structured their businesses.
“Over the years the model of a separate derivatives book became a very dated model for trading,” Mr Hintz said. “Can I really take the profitability of the corporate bond desk out of the derivatives desk?
These 'banks' suck in a huge share of deposits of the public and corporations then use the money to speculate and trade in Wall Street. Their loan departments are mostly a sham. The 'banks' core operations are now trading securities and speculating in derivatives. Public money on deposit that should be loaned to small business in communities is being sent to Wall Street to fund "trading operations". I worry that Congress missed this diversion of money and the new law will not help resuscitate lending to small and medium business that creates the jobs in America.
Actions
Doing nothing. Krypto waits to sell higher or buy lower. The S&P year to date return is 0.24% Krypto is beating that handily. Good doggie, here's your fee - a tasty dog biscuit.
Word of the Day
"Eschaton" - noun [$10]
Eschaton means the final things in the order of time. [Often used in theology regarding what is to happen at the end of time.]
Sentence: Despite both being over 2,000 pages and the subject of countless hours of Congressional bloviation, neither the financial regulatory reform law nor the health care reform law comes close to containing the eschaton of their subject matters. Congress forgot the KISS principal: Keep It Simple, Stupid.
[ Bman stumped the Google spell checker again with 'eschaton' and 'bloviation' :)) ]
Thursday, July 22, 2010
The Second Amendment
A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.
I was asked yesterday late in the comments if I had any positive comments about Barry - Sulla - Obama. My answer follows: "Nope. He's a poor leader, has no administrative ability, no ideas, no understanding of the problems of the common man, and appoints poor people." I can add to that this morning. He violates the Constitution by targeting US Citizens for assassination. That's pretty bad.
If asked that same question about George W. Bush, I would answer that he chose fine justices for the Supreme Court and made up for the mistakes of his father (Souter) & Gerald Ford (J. P. Stevens). Without John Roberts and Steven Alito, the Second Amendment could have been tossed into the wastebin. But with them, it's been upheld in full. Thank you, W.
Today I travel to Vermont to my annual MG shooting event (with lots of proper BATFE paperwork in hand which approves the trip across state lines). Here's where I'm going ->
http://greenmountainboysshootingclub.com/
It's great fun. !
And I will fully exercise my Second Amendment rights as a free man :)
[No post Friday]
Word of the Day
"Grange" - noun [$10] and "The Grange" - proper noun [$100]
Grange means 1. (British) a country house with farm buildings; 2. archaic a barn.
The Grange means the Patron of Husbandry, a farmers' organization that had been formed for social and cultural purposes. The Granger Movement (U. S. History) was a campaign for state control of railroads and gran elevators, esp. in the north central states, carried on during the 1870s by The Grange.
Sentence: Outwardly, to the uneducated eye, the Bunker appears as a grange in encroaching woods, but on very close inspection, ...
Sentence:
I was asked yesterday late in the comments if I had any positive comments about Barry - Sulla - Obama. My answer follows: "Nope. He's a poor leader, has no administrative ability, no ideas, no understanding of the problems of the common man, and appoints poor people." I can add to that this morning. He violates the Constitution by targeting US Citizens for assassination. That's pretty bad.
If asked that same question about George W. Bush, I would answer that he chose fine justices for the Supreme Court and made up for the mistakes of his father (Souter) & Gerald Ford (J. P. Stevens). Without John Roberts and Steven Alito, the Second Amendment could have been tossed into the wastebin. But with them, it's been upheld in full. Thank you, W.
Today I travel to Vermont to my annual MG shooting event (with lots of proper BATFE paperwork in hand which approves the trip across state lines). Here's where I'm going ->
http://greenmountainboysshootingclub.com/
It's great fun. !
And I will fully exercise my Second Amendment rights as a free man :)
[No post Friday]
Word of the Day
"Grange" - noun [$10] and "The Grange" - proper noun [$100]
Grange means 1. (British) a country house with farm buildings; 2. archaic a barn.
The Grange means the Patron of Husbandry, a farmers' organization that had been formed for social and cultural purposes. The Granger Movement (U. S. History) was a campaign for state control of railroads and gran elevators, esp. in the north central states, carried on during the 1870s by The Grange.
Sentence: Outwardly, to the uneducated eye, the Bunker appears as a grange in encroaching woods, but on very close inspection, ...
Sentence:
Wednesday, July 21, 2010
Another Blank Wednesday
Nothing is happening, just the usual blather & bloviation by the press and the empty suits who are our "leaders".
AAPL reported good sales & earnings; the stock traded up in the afterhours. I saw an iPad on Monday - looked good and I confirmed it's compatible with the wireless modem in the bunker. Normally I used hard wired Internet since it's more secure, but for my planned applications with an iPad, wireless will be OK. I think I'll buy one in August.
Krypto is doing nothing but sleep on the couch. No new orders for the Krypto Fund.
Word of the Day
"Thrasonical" - adjective [$100]
Thrasonical means boastful, vainglorious.
Sentence: Although her performance year-to-day is superior to most hedge fund managers, Krypto is anything but thrasonical; she just likes to sleep quietly on the couch and collect her fees - dog biscuits.
AAPL reported good sales & earnings; the stock traded up in the afterhours. I saw an iPad on Monday - looked good and I confirmed it's compatible with the wireless modem in the bunker. Normally I used hard wired Internet since it's more secure, but for my planned applications with an iPad, wireless will be OK. I think I'll buy one in August.
Krypto is doing nothing but sleep on the couch. No new orders for the Krypto Fund.
Word of the Day
"Thrasonical" - adjective [$100]
Thrasonical means boastful, vainglorious.
Sentence: Although her performance year-to-day is superior to most hedge fund managers, Krypto is anything but thrasonical; she just likes to sleep quietly on the couch and collect her fees - dog biscuits.
Tuesday, July 20, 2010
Energy Efficiency
The world pundits like to beat up the US as the world's biggest consumer of energy and point accusatory fingers at America for its per capita energy usage. The US per capita usage is rather high, but well below places like Saudi Arabia, Bahrain, Iceland and Luxembourg. It's on par with Canada and Finland. But what to American get for their energy usage ? Americans energy use per unit GDP is rather good: many other nations perform more poorly by this measure.
Today the newspapers trumpet that China now consumes more energy in total per year than the US. Per today's WSJ reporting of IEA numbers, China consumption is 2.252 billion equivalent tons of oil equivalent in 2009, while the US consumed 2.170 billion tons of oil equivalent. US GDP for 2009 was $14.2 trillion. China GDP was $4.9 trillion. Thus Americans produced $6,540 GDP per ton of oil equivalent, while China produced only $2,170.
The US is 3x more efficient than China !!!
USA USA USA
Stop the Guilt-Mongering - we are doing a good job getting good value from our energy usage.
Word of the Day
"Ineffable" - adjective [$10]
Ineffable means 1. unutterable, too great for description in words; 2. that must not be uttered
Sentence: One ineffable fact of the energy debate is the high relative efficiency of US energy usage: it's three times better than China per unit GDP produced per ton of oil equivalent.
Today the newspapers trumpet that China now consumes more energy in total per year than the US. Per today's WSJ reporting of IEA numbers, China consumption is 2.252 billion equivalent tons of oil equivalent in 2009, while the US consumed 2.170 billion tons of oil equivalent. US GDP for 2009 was $14.2 trillion. China GDP was $4.9 trillion. Thus Americans produced $6,540 GDP per ton of oil equivalent, while China produced only $2,170.
The US is 3x more efficient than China !!!
USA USA USA
Stop the Guilt-Mongering - we are doing a good job getting good value from our energy usage.
Word of the Day
"Ineffable" - adjective [$10]
Ineffable means 1. unutterable, too great for description in words; 2. that must not be uttered
Sentence: One ineffable fact of the energy debate is the high relative efficiency of US energy usage: it's three times better than China per unit GDP produced per ton of oil equivalent.
Monday, July 19, 2010
Lender Piranhas
The US seems to be flooded with vampire lenders preying on the poor and unlucky. To me, it's rather clear that usury laws need beefed up. Here's the WSJ story that sparked my thinking on this matter.
WSJ: "Several states are putting curbs on loans backed by car titles—short-term, high-interest debt that critics say too often results in consumers losing their vehicle when they can't keep up with the payments. Auto-title lending, where the owner of a car hands over its title as collateral, will become illegal in Wisconsin later this year. Virginia will impose new regulations Oct. 1, structuring the loans to keep consumers from falling into a cycle of debt. Illinois last year capped car-title loans at $4,000 and slapped numerous restrictions on the industry.
"Many states have banned auto-title loans historically by capping the interest rates that can be charged at relatively low levels or through other restrictive laws. The new batch of states cracking down on the lenders—which often charge triple-digit interest rates—comes as more cash-strapped borrowers turn to the industry amid economic hard times." [my emphasis]
Did you notice that - TRIPLE DIGIT INTEREST RATES ?
The WSJ story describes a guy who borrowed $1,500 and ended up paying about $8,000 total to get his car back after falling behind.
Apparently the recent restrictions on payday loans - another form of vampire lending - caused the bloodsuckers to more to less regulated car title loans. Even the new Virginia law seems ridiculously flimsy: "The Virginia law will institute a tiered cap on interest rates for loans, up to 264% a year. " 264%/year !!! That's ridiculous ! That rate is comparable o loans shark rates where the "vig" was canonically 3% a week, for about 150% a year.
The financial industry seems littered with vampires at all levels from Wall Street to the back alleys off Main Street. Congress might think that the new Consumer Financial Protection Bureau will help. I wonder ...
My solution is to simply bring back usury laws and cap loan fees. Frankly, I'd limit lending at 24% a year (with inflation adjustment) and fees at no more than 10% of the loan amount (no new fees on refinancings, and late payment fees at fixed $ amounts like $10 to cover administration). That's enough for any true "lender". Anyone else is a Dracula and should be equity and take equity risks.
The penalty - any usurious loans becomes void and the lender loses 100% of principal.
Actions
After Krypto's timely sales Thursday, we wait to either re-buy lower or sell more higher.
Word of the Day
"Carious" - adjective [$10]
Carious means (of bones or teeth) decayed.
Sentence: Dental fillings do repair carious teeth, but they don't last forever. As one ages, one finds that either new fillings need installed or one needs a crown on the tooth. Today I enter dental purgatory to start to have two crowns installed. Ugh....
WSJ: "Several states are putting curbs on loans backed by car titles—short-term, high-interest debt that critics say too often results in consumers losing their vehicle when they can't keep up with the payments. Auto-title lending, where the owner of a car hands over its title as collateral, will become illegal in Wisconsin later this year. Virginia will impose new regulations Oct. 1, structuring the loans to keep consumers from falling into a cycle of debt. Illinois last year capped car-title loans at $4,000 and slapped numerous restrictions on the industry.
"Many states have banned auto-title loans historically by capping the interest rates that can be charged at relatively low levels or through other restrictive laws. The new batch of states cracking down on the lenders—which often charge triple-digit interest rates—comes as more cash-strapped borrowers turn to the industry amid economic hard times." [my emphasis]
Did you notice that - TRIPLE DIGIT INTEREST RATES ?
The WSJ story describes a guy who borrowed $1,500 and ended up paying about $8,000 total to get his car back after falling behind.
Apparently the recent restrictions on payday loans - another form of vampire lending - caused the bloodsuckers to more to less regulated car title loans. Even the new Virginia law seems ridiculously flimsy: "The Virginia law will institute a tiered cap on interest rates for loans, up to 264% a year. " 264%/year !!! That's ridiculous ! That rate is comparable o loans shark rates where the "vig" was canonically 3% a week, for about 150% a year.
The financial industry seems littered with vampires at all levels from Wall Street to the back alleys off Main Street. Congress might think that the new Consumer Financial Protection Bureau will help. I wonder ...
My solution is to simply bring back usury laws and cap loan fees. Frankly, I'd limit lending at 24% a year (with inflation adjustment) and fees at no more than 10% of the loan amount (no new fees on refinancings, and late payment fees at fixed $ amounts like $10 to cover administration). That's enough for any true "lender". Anyone else is a Dracula and should be equity and take equity risks.
The penalty - any usurious loans becomes void and the lender loses 100% of principal.
Actions
After Krypto's timely sales Thursday, we wait to either re-buy lower or sell more higher.
Word of the Day
"Carious" - adjective [$10]
Carious means (of bones or teeth) decayed.
Sentence: Dental fillings do repair carious teeth, but they don't last forever. As one ages, one finds that either new fillings need installed or one needs a crown on the tooth. Today I enter dental purgatory to start to have two crowns installed. Ugh....
Friday, July 16, 2010
A Superior Fund Manager
Here's a photo of Krypto languishing on the couch, contented after making some more well-timed trades in her Krypto Fund. Yesterday she put in sell orders for some US, European and Emerging Market stocks. She had been wanting to do those trades for a few days, but I was being a bit too patient. So she growled at me yesterday AM after some poor manufacturing news data, and I complied at once.
Krypto likes being a couch potato. When not playing with her nephew, Sky, or herding sheep, or running agility trials, she just loves to spend all her time sleeping on the couch. [Those are dummy shells in the background near the fireplace - a 3" Naval training round and a dummy 90 mm recoiless rifle shell.]
News
Super-beefer piranha GS [Goldman Sachs] settles with the SEC, pays $500+ million. I hope the SEC keeps the investigation going at other firms. These sleazy deals must end.
GOOG misses earnings. They are spending a fortune on what ? Wasting it on fruitless efforts to enter new market. They've morphed in another MSFT.
Word of the Day
"Eponymous" - adjective [$10]
Eponymous means 1. of or relating to the person for whom something is named; 2. of or relating to one whose name is so prominently connected with something as to be a figurative designation for it.
Sentence: The eponymous Krypto Fund is outperforming many, many hedge funds year-to-date; the beefer managers are rather overpaid as Krypto provided superior performance for dog biscuits.
Thursday, July 15, 2010
No Surprise
Here's what caught my eye this AM reading the WSJ:
"U.S. senators or Senate employees received 30 loans—far more than had previously been known—under a controversial lending program at Countrywide Financial Corp. that provided cut-rate terms to favored borrowers. The information is contained in a letter sent to the Senate Select Committee on Ethics by Rep. Darrell Issa (R., Calif.), who has been spearheading the House Oversight and Government Reform Committee's investigation into Countrywide's so-called VIP mortgage program."
...
"Mr. Issa's efforts to investigate the VIP loan program were stymied for a time by the unwillingness of the House oversight panel's chairman, New York Democrat Edolphus Towns, to issue a subpoena to Bank of America for the VIP program records. Last August, The Wall Street Journal reported that public loan documents indicated Rep. Towns had received two mortgages from the VIP program"
The knavery is endless and shameless.
Hey Voters ! Find some honest candidates and back them. Any liars, knaves ... kick them out.
Word of the Day
"Veracious" - adjective [$10] an old one from the file
Veracious means 1. truthful, honest; 2. market by truth: accurate.
Sentence: Voters should select only the most veracious candidate and ignore the bankrupt, "bringing home the bacon" selection criteria.
"U.S. senators or Senate employees received 30 loans—far more than had previously been known—under a controversial lending program at Countrywide Financial Corp. that provided cut-rate terms to favored borrowers. The information is contained in a letter sent to the Senate Select Committee on Ethics by Rep. Darrell Issa (R., Calif.), who has been spearheading the House Oversight and Government Reform Committee's investigation into Countrywide's so-called VIP mortgage program."
...
"Mr. Issa's efforts to investigate the VIP loan program were stymied for a time by the unwillingness of the House oversight panel's chairman, New York Democrat Edolphus Towns, to issue a subpoena to Bank of America for the VIP program records. Last August, The Wall Street Journal reported that public loan documents indicated Rep. Towns had received two mortgages from the VIP program"
The knavery is endless and shameless.
Hey Voters ! Find some honest candidates and back them. Any liars, knaves ... kick them out.
Word of the Day
"Veracious" - adjective [$10] an old one from the file
Veracious means 1. truthful, honest; 2. market by truth: accurate.
Sentence: Voters should select only the most veracious candidate and ignore the bankrupt, "bringing home the bacon" selection criteria.
Wednesday, July 14, 2010
Summer Rally Continues
Another big up day occurred yesterday, and Intel's good earnings overnight is leading to substantially higher futures this morning.
I guess the permabears were wrong. Someone is buying all those chips. I wonder ... companies buying technology to increase productivity and avoid hiring people ... hmmmm. Could be.
Obama has reinforced the trend of government impositions that make people a big liability for companies - not good for job growth. That health care bill makes employment costs look worse as far as the eye can see, particularly for small business. Why force all that cost onto companies ? It simply makes no sense. A company can off-shore jobs and avoid that cost. It can buy technology to produce services in India. Who loses ? The US worker.
I have no problem with a national health care benefit for the people, but it should be funded directly and not foisted onto companies. Get rid of ALL the taxes on jobs and replace them ALL with a value added tax. This would make consumption of imports bear part of the cost. This must be done or US job growth will stagnate for years.
Actions
Krypto has the same sell order for me. It's still a weak signal, but getting stronger. Waiting ...
Stupidity of Billionaires
I heard a billionaire speak ... the press likes us to bow down them like gods. Not me. John Malone said that he respects Al Gore's intellect and that Al Gore really did invent the Internet with his work in Congress.
What a FOOL !!! The Internet was created by the Defense Department in the late 1960s and early 1970s ARPANET - Advanced Research Project Agency Network by MIT and the Department of Defense. I personally remember graduate students and postdocs at Harvard using it in the mid 1970s.
By his own words, billionaire John Malone is a FOOL !
Word of the Day
"Sesquipedalian" - adjective [$10]
Sesquipedalian means 1. long and cumbersome: polysyllabic; 2. tending to use long words.
Sentence: The more vocabulary one learns, the more one becomes sequipedalian. Here's an example of chiasmus (an AB:BA structure) - Using a word like 'sequipedalian' is sequipedalian word usage.
[ Bman stumped the Google spellchecker again :)) ]
I guess the permabears were wrong. Someone is buying all those chips. I wonder ... companies buying technology to increase productivity and avoid hiring people ... hmmmm. Could be.
Obama has reinforced the trend of government impositions that make people a big liability for companies - not good for job growth. That health care bill makes employment costs look worse as far as the eye can see, particularly for small business. Why force all that cost onto companies ? It simply makes no sense. A company can off-shore jobs and avoid that cost. It can buy technology to produce services in India. Who loses ? The US worker.
I have no problem with a national health care benefit for the people, but it should be funded directly and not foisted onto companies. Get rid of ALL the taxes on jobs and replace them ALL with a value added tax. This would make consumption of imports bear part of the cost. This must be done or US job growth will stagnate for years.
Actions
Krypto has the same sell order for me. It's still a weak signal, but getting stronger. Waiting ...
Stupidity of Billionaires
I heard a billionaire speak ... the press likes us to bow down them like gods. Not me. John Malone said that he respects Al Gore's intellect and that Al Gore really did invent the Internet with his work in Congress.
What a FOOL !!! The Internet was created by the Defense Department in the late 1960s and early 1970s ARPANET - Advanced Research Project Agency Network by MIT and the Department of Defense. I personally remember graduate students and postdocs at Harvard using it in the mid 1970s.
By his own words, billionaire John Malone is a FOOL !
Word of the Day
"Sesquipedalian" - adjective [$10]
Sesquipedalian means 1. long and cumbersome: polysyllabic; 2. tending to use long words.
Sentence: The more vocabulary one learns, the more one becomes sequipedalian. Here's an example of chiasmus (an AB:BA structure) - Using a word like 'sequipedalian' is sequipedalian word usage.
[ Bman stumped the Google spellchecker again :)) ]
Tuesday, July 13, 2010
Nothing
Nothing is happening.
Krypto has a sell order for some emerging market stocks via VWO, the Vanguard Emerging Market ETF. It's a weak signal, so I think I'll wait a bit, as I did last time on that one. This is just a rebalancing trade at the 5% level, meaning that the asset class of emerging market stocks has 5% move money in it that a perfectly balance portfolio would have. A strong signal is 10%.
A second effort for a summer rally is in progress. Perhaps this time it will get further along. Futures are up this AM after being flat overnight.
Word of the Day
"Simulacrum" - noun [$10] the 'i' is short as in 'bit'; the 'a' can be either long or short.
Simulacrum means 1. an image or a representation; 2. an unreal or vague semblance. ALT: 1. an image of something; 2. a. a shadowy likeness, a deceptive substitute; b. mere pretense.
Sentence: Obama is a mere simulacrum of a leader. All talk, no substance.
Krypto has a sell order for some emerging market stocks via VWO, the Vanguard Emerging Market ETF. It's a weak signal, so I think I'll wait a bit, as I did last time on that one. This is just a rebalancing trade at the 5% level, meaning that the asset class of emerging market stocks has 5% move money in it that a perfectly balance portfolio would have. A strong signal is 10%.
A second effort for a summer rally is in progress. Perhaps this time it will get further along. Futures are up this AM after being flat overnight.
Word of the Day
"Simulacrum" - noun [$10] the 'i' is short as in 'bit'; the 'a' can be either long or short.
Simulacrum means 1. an image or a representation; 2. an unreal or vague semblance. ALT: 1. an image of something; 2. a. a shadowy likeness, a deceptive substitute; b. mere pretense.
Sentence: Obama is a mere simulacrum of a leader. All talk, no substance.
Monday, July 12, 2010
Another Singular Moment
I was reminded over the weekend of another singular moment in the space-time path of the United States. This one chose a path towards a unified nation where freedoms of the people - at the level of the individual human - were to dominate over the powers of the States.
Gettysburg was the place, specifically on Little Round Top, and on July 2nd, 1863 was the time. The 20th Maine regiment held the extreme left of the Union army line and the Confederates were attacking uphill in the forest amid the rocks time and again in substantial force and vigor. To prevent being outflanked, the regiment's commander, Col. Joshua Lawrence Chamberlain, had his extreme left line curve back to form an "L" to "refuse the line. That worked awhile as it make the Confederates go further & further to try to outflank. But ammunition was running out.
Chamberlain ordered a bayonet charge, swinging the short side of the "L" down like a hinged door into the flank of the advancing Confederates. Then the main line charged, downhill. The tired, thinned and weakened Confederates were swept from the field and the battle was won. This saved the Union flank and entire line, permitting them to hold the excellent ground and eventually win the battle.
Had Chamberlain been flanked and overrun, the entire Union line would have been rolled up and the army would have been force to retreat, ignominiously defeated on home ground in Pennsylvania.
BUT by winning that battle the Union army capped the Confederate advance into Pennsylvania; the Confederates retreated to Virginia.
Why is this a singular point in space-time ? Had the Confederates won, it's very likely that Lincoln would have lost the election in 1864. Grant & Sherman could not have had the time to win the needed victories in 1864 because they would have had much weaker tactical positions. Lincoln's opponent, McClellan would likely had negotiated a peace letting the Confederacy go.
Imagine the 20th century with a separate USA and CSA. All the Civil War constitutional amendments imposing the Bill of Rights onto the states would never have been enacted. The conflict between the USA and CSA likely would have continued in minor conflicts over the western territories. What about World War I and World War II ? No "united" nation, but two with different values. The likely changes are enormous. Little Round Top was a singular point in the future path of the United States, where the path to unity and individual freedom was selected over fragmentation and aristocracy.
The movie, Gettyburg, made in 1993 starring Tom Berenger, Martin Sheen and Jeff Daniels shows the key events in the battle in marvelous detail and drama. I recommend it highly.
Word of the Day
"Milieu" - noun [$10] an old one from the card file
Milieu means environment, setting.
Sentence: Some day I want to visit Gettysburg to experience its milieu, to walk on that hallowed ground, to see the fields of fire and scope of the terrain, and to see the monuments put in place by units that fought there.
Gettysburg was the place, specifically on Little Round Top, and on July 2nd, 1863 was the time. The 20th Maine regiment held the extreme left of the Union army line and the Confederates were attacking uphill in the forest amid the rocks time and again in substantial force and vigor. To prevent being outflanked, the regiment's commander, Col. Joshua Lawrence Chamberlain, had his extreme left line curve back to form an "L" to "refuse the line. That worked awhile as it make the Confederates go further & further to try to outflank. But ammunition was running out.
Chamberlain ordered a bayonet charge, swinging the short side of the "L" down like a hinged door into the flank of the advancing Confederates. Then the main line charged, downhill. The tired, thinned and weakened Confederates were swept from the field and the battle was won. This saved the Union flank and entire line, permitting them to hold the excellent ground and eventually win the battle.
Had Chamberlain been flanked and overrun, the entire Union line would have been rolled up and the army would have been force to retreat, ignominiously defeated on home ground in Pennsylvania.
BUT by winning that battle the Union army capped the Confederate advance into Pennsylvania; the Confederates retreated to Virginia.
Why is this a singular point in space-time ? Had the Confederates won, it's very likely that Lincoln would have lost the election in 1864. Grant & Sherman could not have had the time to win the needed victories in 1864 because they would have had much weaker tactical positions. Lincoln's opponent, McClellan would likely had negotiated a peace letting the Confederacy go.
Imagine the 20th century with a separate USA and CSA. All the Civil War constitutional amendments imposing the Bill of Rights onto the states would never have been enacted. The conflict between the USA and CSA likely would have continued in minor conflicts over the western territories. What about World War I and World War II ? No "united" nation, but two with different values. The likely changes are enormous. Little Round Top was a singular point in the future path of the United States, where the path to unity and individual freedom was selected over fragmentation and aristocracy.
The movie, Gettyburg, made in 1993 starring Tom Berenger, Martin Sheen and Jeff Daniels shows the key events in the battle in marvelous detail and drama. I recommend it highly.
Word of the Day
"Milieu" - noun [$10] an old one from the card file
Milieu means environment, setting.
Sentence: Some day I want to visit Gettysburg to experience its milieu, to walk on that hallowed ground, to see the fields of fire and scope of the terrain, and to see the monuments put in place by units that fought there.
Friday, July 9, 2010
255
years ago today on July 9, 1755 a singular event occurred that created the path to the future of the United States of America. In the wilderness outside Fort Duquesne one man - a French officer named Captain Daniel Hyacinth-Marie Lienard Beaujeu - stripped to his shirt like an Indian, prayed, and speaking to Indians reluctant to fight the huge British army approaching, said he alone would fight them. His courage, words, and news of a favorable location for a battle on a narrow trail, motivated them all to attack. Stripped for battle, Beaujeu ran from the fort leading a frenzied mob of mostly Indians to make history.
That's how the battle that led to the massacre of the huge, multi-thousand man column of Gen. Braddock began. This was observed by a young captive American. I reprise my recent review of a fine book covering this critical event. Here is link to the original post ->
http://viewfromthebunker.blogspot.com/2010/04/monday-meandering.html
"A new book just out - Braddock's March, by Thomas Crocker - is very good. This book covers that organization for and the actual march by a large army into the wilderness to attempt to drive the French from the area where Pittsburgh now is, to prevent the French from strangling the English colonies with a string of forts. Braddock's army is eventually crushed by the French and Indians. This battle started the French and Indian War which determined the future path of North America.
The book is very well researched, drawing mostly on letters and diaries and other first hand sources of the people involved. The crucial importance of this march and battle arise from several factors: its own significance in the start of the war, that many American leaders of the Revolutionary War got their initial military experience in it, including George Washington, and that this close contact between British officials and Americans started the tensions between Americans and British persons as Americans began to recognize their freedom would be lessened by more British control."
The book also argues convincingly that without the battle and the massacre, the future path leading to the creation of the United States of America might not have occurred. Had the British won, British power in North America would have consolidated very early, tensions that arose between colonists & the British might not have arisen, and the 13 colonies might not had started working together. Without a long war, Britain would not have needed the taxes on stamps, tea, etc. that later sparked recognition of encroachment of British power. America might have evolved like Canada.
Elsewhere I've written my thoughts on why the American Revolution occurred when it did. See -> http://viewfromthebunker.blogspot.com/2007/07/independence-day.html
I now must modify those thoughts to include this battle and the tensions and events that arose from it. The world travels in bundles of space-time paths which usually meander along in predictable paths, but singular events can change their trajectory. One such bifurcation was at the site of this battle on July 9, 1755. At that critical space-time region, the American revolution and the path to create the United States of America began.
You now know the time. What is the place ?
It's now called Braddock, Pennsylvania, about seven miles south of downtown Pittsburgh. "Today much of the site [of the battle] is occupied by the defunct U. S. Steel Edgar Thompson Monongahela Valley Steelworks". Nothing commemorates the site. "Today, however, the battlefield is empty. It is utterly forgotten except by the few pilgrims who each year go out of thier way to walk the deserted streets." [Quotes are from the book aforementioned.]
Braddock, Pennsylvania is one of the most depressed areas in Pennsylvania. This near-sacred place was featured recently on the CBS Sunday morning news -> http://www.cbsnews.com/stories/2010/07/04/sunday/main6646176.shtml
The town has lost 90% of its population in recent years. But the town has a leader - a fighter, much like Beaujeu. Here's a quote from him: "I like to think if there's nothing else that can be taken from the Braddock story, it's that no community deserves to be abandoned, no community deserves to have their back turned on it," he said. "And that there's always an ability to increase or enhance the quality of life for the residents. In fact, I think it's, if anything, it's a moral imperative to do so."
We need to know our history, why we are who we are, and what we have now that we can build on to restore America for a better future. We all need to work for "the economic and physical restoration of the competitive spirit in the heart of America, re-instilling the 'can do' attitude in the heart of her people." Places like Braddock, PA should not depress us - they should and can motivate us when we know what they truly mean. That quote is from the mission statement of a new not-for-profit organization that two like minded friends and myself have created recently. More later on our efforts.
Word of the Day
"Juvescense" - noun [$1000] rare
Juvescense means the state of becoming young.
Sentence: (A) [from T. S. Eliot's poem, 'Gerontion'] "In juvesence of the year / came Christ the tiger." (B) In juvescence of the day July 9, 1755, the United States of America also entered juvescense, if only then a twinkle.
That's how the battle that led to the massacre of the huge, multi-thousand man column of Gen. Braddock began. This was observed by a young captive American. I reprise my recent review of a fine book covering this critical event. Here is link to the original post ->
http://viewfromthebunker.blogspot.com/2010/04/monday-meandering.html
"A new book just out - Braddock's March, by Thomas Crocker - is very good. This book covers that organization for and the actual march by a large army into the wilderness to attempt to drive the French from the area where Pittsburgh now is, to prevent the French from strangling the English colonies with a string of forts. Braddock's army is eventually crushed by the French and Indians. This battle started the French and Indian War which determined the future path of North America.
The book is very well researched, drawing mostly on letters and diaries and other first hand sources of the people involved. The crucial importance of this march and battle arise from several factors: its own significance in the start of the war, that many American leaders of the Revolutionary War got their initial military experience in it, including George Washington, and that this close contact between British officials and Americans started the tensions between Americans and British persons as Americans began to recognize their freedom would be lessened by more British control."
The book also argues convincingly that without the battle and the massacre, the future path leading to the creation of the United States of America might not have occurred. Had the British won, British power in North America would have consolidated very early, tensions that arose between colonists & the British might not have arisen, and the 13 colonies might not had started working together. Without a long war, Britain would not have needed the taxes on stamps, tea, etc. that later sparked recognition of encroachment of British power. America might have evolved like Canada.
Elsewhere I've written my thoughts on why the American Revolution occurred when it did. See -> http://viewfromthebunker.blogspot.com/2007/07/independence-day.html
I now must modify those thoughts to include this battle and the tensions and events that arose from it. The world travels in bundles of space-time paths which usually meander along in predictable paths, but singular events can change their trajectory. One such bifurcation was at the site of this battle on July 9, 1755. At that critical space-time region, the American revolution and the path to create the United States of America began.
You now know the time. What is the place ?
It's now called Braddock, Pennsylvania, about seven miles south of downtown Pittsburgh. "Today much of the site [of the battle] is occupied by the defunct U. S. Steel Edgar Thompson Monongahela Valley Steelworks". Nothing commemorates the site. "Today, however, the battlefield is empty. It is utterly forgotten except by the few pilgrims who each year go out of thier way to walk the deserted streets." [Quotes are from the book aforementioned.]
Braddock, Pennsylvania is one of the most depressed areas in Pennsylvania. This near-sacred place was featured recently on the CBS Sunday morning news -> http://www.cbsnews.com/stories/2010/07/04/sunday/main6646176.shtml
The town has lost 90% of its population in recent years. But the town has a leader - a fighter, much like Beaujeu. Here's a quote from him: "I like to think if there's nothing else that can be taken from the Braddock story, it's that no community deserves to be abandoned, no community deserves to have their back turned on it," he said. "And that there's always an ability to increase or enhance the quality of life for the residents. In fact, I think it's, if anything, it's a moral imperative to do so."
We need to know our history, why we are who we are, and what we have now that we can build on to restore America for a better future. We all need to work for "the economic and physical restoration of the competitive spirit in the heart of America, re-instilling the 'can do' attitude in the heart of her people." Places like Braddock, PA should not depress us - they should and can motivate us when we know what they truly mean. That quote is from the mission statement of a new not-for-profit organization that two like minded friends and myself have created recently. More later on our efforts.
Word of the Day
"Juvescense" - noun [$1000] rare
Juvescense means the state of becoming young.
Sentence: (A) [from T. S. Eliot's poem, 'Gerontion'] "In juvesence of the year / came Christ the tiger." (B) In juvescence of the day July 9, 1755, the United States of America also entered juvescense, if only then a twinkle.
Thursday, July 8, 2010
Whither Now ?
On Tuesday Krypto went shopping for US stocks and yesterday Ms. Market rewarded her patience. Is it party time - will Ms. Market start dancing on the tables for a summer rally ?
To this person sitting in his bunker in the deep woods, that outcome seems quite possible. The world has been treated to months of doom & gloom; the permabears have been feeding for too long. Newsletters seem rather extreme now. Why can't the US and world just muddle along and start a decent recovery late this year ? IF SO, a summer rally to price in a better outcome can occur.
The future is not certain - nothing is written. BUT barring new bad news, I want to be long & strong and hold my stocks for awhile.
Word of the Day
"Cacochromatic" - adjective [?] a Mencken word
Cacochromatic means having or displaying a jumbled, unpleasant mixture of colors. The word is formed with the [Greek] combining form, caco-, meaning bad, and chromatic, meaning colors.
Sentence: Perhaps I am truly an anachronism, but to me, lights shows are cacochromatic crap, to be enjoyed only if one hits the bong hard, like the cacophony that is much modern jazz.
To this person sitting in his bunker in the deep woods, that outcome seems quite possible. The world has been treated to months of doom & gloom; the permabears have been feeding for too long. Newsletters seem rather extreme now. Why can't the US and world just muddle along and start a decent recovery late this year ? IF SO, a summer rally to price in a better outcome can occur.
The future is not certain - nothing is written. BUT barring new bad news, I want to be long & strong and hold my stocks for awhile.
Word of the Day
"Cacochromatic" - adjective [?] a Mencken word
Cacochromatic means having or displaying a jumbled, unpleasant mixture of colors. The word is formed with the [Greek] combining form, caco-, meaning bad, and chromatic, meaning colors.
Sentence: Perhaps I am truly an anachronism, but to me, lights shows are cacochromatic crap, to be enjoyed only if one hits the bong hard, like the cacophony that is much modern jazz.
Wednesday, July 7, 2010
Sweltering ...
The heat here is stunning - about 95F and very humid in the day. Even when the sun goes down, temperatures cool very slowly to 80F at midnight. Why do I know that ? Because the power went out yesterday from around 3PM to about 11:30PM. Sleeping at 80F and humid is a lost art for me. I discovered a flaw in my summer survival plans. The generator circuits do not run my air conditioners. Ughhhhhh.
I have to get the electricians in here to fix that - at least for part of my bunker. Otherwise I'll have to prepare to survive these events on pads & sleeping bags in the deep parts of the bunker - aka the basement. The concrete floor & walls make that very cool.
Why was the power out so long ? The power company says problems with overhead lines, BUT the real reason is high demand surprising them. When power demand stretches and pushes supply to the very edge, any small problem gets magnified greatly. That's what happened here yesterday. By today I hope the power company will have obtained more power from outside the region, or restarted some peak power plants.
By the wind, for wind power advocates ... there was no wind yesterday.
This is why my blog is sparse today - I overslept, making up for the poor early night's sleeping conditions.
Word of the Day
"Concitation" - noun [$1000] archaic, used in T. S. Eliot's poem, "Gerontion".
"Concitate" - verb [$1000] obsolete, rare
"Concite" - verb [$100]
Concitation means stirring up, rousing or exciting; agitation, excitement, esp. of the mind.
Concitate means to stir up, rouse, excite.
Concite means to excite or stir up [appears to be a spelling alternative for concitate.] The word seems to come from "con + cite", with the "cite" root based on Latin citare and the root "cite" relies on old usages of that word meaning to summon or call, rouse to action. The "citation" for military gallantry used this meaning.
Sentence: If a few more days of this poor power service occur, public concitation for better power supply might reach critical point. The power companies should focus less on wind, etc. and more on new natural gas peak power plants and nuclear base load plants. Those are proven to be reliable.
I have to get the electricians in here to fix that - at least for part of my bunker. Otherwise I'll have to prepare to survive these events on pads & sleeping bags in the deep parts of the bunker - aka the basement. The concrete floor & walls make that very cool.
Why was the power out so long ? The power company says problems with overhead lines, BUT the real reason is high demand surprising them. When power demand stretches and pushes supply to the very edge, any small problem gets magnified greatly. That's what happened here yesterday. By today I hope the power company will have obtained more power from outside the region, or restarted some peak power plants.
By the wind, for wind power advocates ... there was no wind yesterday.
This is why my blog is sparse today - I overslept, making up for the poor early night's sleeping conditions.
Word of the Day
"Concitation" - noun [$1000] archaic, used in T. S. Eliot's poem, "Gerontion".
"Concitate" - verb [$1000] obsolete, rare
"Concite" - verb [$100]
Concitation means stirring up, rousing or exciting; agitation, excitement, esp. of the mind.
Concitate means to stir up, rouse, excite.
Concite means to excite or stir up [appears to be a spelling alternative for concitate.] The word seems to come from "con + cite", with the "cite" root based on Latin citare and the root "cite" relies on old usages of that word meaning to summon or call, rouse to action. The "citation" for military gallantry used this meaning.
Sentence: If a few more days of this poor power service occur, public concitation for better power supply might reach critical point. The power companies should focus less on wind, etc. and more on new natural gas peak power plants and nuclear base load plants. Those are proven to be reliable.
Tuesday, July 6, 2010
Krypto Wants ...
to buy some US stocks. She's sitting next to me with a paw on my lap and is licking her chops and giving me a nudge. She ran her computer model this AM and sees that US stocks are now under allocated significantly. She want some, so we'll buy a good bit of VTI in the morning. VTI is the US Total Market Index Fund offered by Vanguard. The funds will come from cash which she piled up by selling stocks at much higher prices a few months ago.
One intriguing thing about mechanical asset allocation models: they sure like buying when the fear is palpable and they sell when the greed is infectious. And a model run by a dog is even more impervious to human emotions. Krypto doesn't really know what the model is doing. She just presses the button, generates the trade orders, and gets a dog biscuit as a fee.
No machines running machines here - I use my good doggie, Krypto, as a biological cut-out.
Just imagine what a big "wealth management" firm would charge ? They like to get at least 1%, preferably 1.5% or even 2% of "managed" assets. Per $1 million under management, that's $10-20,000 a year. Krypto is beating the benchmark index [the S&P 500] by more than 5% year-to-date. And for what fee ? Dog biscuits. Hence the true value of all those asset management firms is ... zero. And most of that asset management advice is worth ... zero.
Notice I said "most" advice is worthless. A good broker who listens and helps a person who knows nothing about investing and who guides the person to good, diversified investing (and doesn't try to churn) and helps education a person in meeting financial goals and avoiding emotions or foolish moves, is worth a lot. Those are valuable fees for worthwhile services. I have arranged for Mrs. B to have a good broker for her Sky Fund and she's done very well. The fund pays full commissions for its investments. And it's worth it.
BUT all the "wealth management" hype about finding superior performance is utter garbage. Excellent performance can be obtained for almost free. Just follow Krypto and pay dog biscuits. Those firms who want to charge you to find that "superior performance" guarantee nothing. If they fail, you lose, but still pay. If they succeed, you'll like pay more especially if they put you into hedge funds.
Word of the Day
"Equipoise" - noun and verb [$10]
Equipoise means (noun) 1. equilibrium, a balanced state; 2. a counterbalancing thing; (verb) to counterbalance.
Sentence: [joke] Krypto has superior equipoise for her investing. Is that from her biological advantage - viz. having four legs ? Nope. She equipoises moves up with sales, and moves down with buys using a mechanical model.
One intriguing thing about mechanical asset allocation models: they sure like buying when the fear is palpable and they sell when the greed is infectious. And a model run by a dog is even more impervious to human emotions. Krypto doesn't really know what the model is doing. She just presses the button, generates the trade orders, and gets a dog biscuit as a fee.
No machines running machines here - I use my good doggie, Krypto, as a biological cut-out.
Just imagine what a big "wealth management" firm would charge ? They like to get at least 1%, preferably 1.5% or even 2% of "managed" assets. Per $1 million under management, that's $10-20,000 a year. Krypto is beating the benchmark index [the S&P 500] by more than 5% year-to-date. And for what fee ? Dog biscuits. Hence the true value of all those asset management firms is ... zero. And most of that asset management advice is worth ... zero.
Notice I said "most" advice is worthless. A good broker who listens and helps a person who knows nothing about investing and who guides the person to good, diversified investing (and doesn't try to churn) and helps education a person in meeting financial goals and avoiding emotions or foolish moves, is worth a lot. Those are valuable fees for worthwhile services. I have arranged for Mrs. B to have a good broker for her Sky Fund and she's done very well. The fund pays full commissions for its investments. And it's worth it.
BUT all the "wealth management" hype about finding superior performance is utter garbage. Excellent performance can be obtained for almost free. Just follow Krypto and pay dog biscuits. Those firms who want to charge you to find that "superior performance" guarantee nothing. If they fail, you lose, but still pay. If they succeed, you'll like pay more especially if they put you into hedge funds.
Word of the Day
"Equipoise" - noun and verb [$10]
Equipoise means (noun) 1. equilibrium, a balanced state; 2. a counterbalancing thing; (verb) to counterbalance.
Sentence: [joke] Krypto has superior equipoise for her investing. Is that from her biological advantage - viz. having four legs ? Nope. She equipoises moves up with sales, and moves down with buys using a mechanical model.
Friday, July 2, 2010
234
Sunday is Independence Day in the USA; 234 years ago the Continental Congress, which the 13 colonies had organized to coordinate resistance to encroachments on the freedom of the people over the prior decade, declared those 13 colonies were henceforth free and independent States.
Why ? The Declaration of Independence was not a propaganda screed. Reading it, one sees a reasoned argument. The document states principals of liberty, fundamental concepts of human liberty and then a long list of actions of the English king and government that violated those concepts. "But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security." Wonderful language, no ?
And if you read history, you'll find that all those claimed "abuses and usurpations" truly did occur and some were occurring at the time of the Declaration. A scholar could put footnotes to every one of those violations. I found myself the other day explaining one of those events to an intern who is working for me this summer. It arose as we discussed the rights & powers of juries.
Here's the applicable quote from the Declaration of Independence: "For depriving us in many cases, of the benefit of Trial by Jury". American juries in Boston and neighboring towns had been refusing to convict colonists who were engaged in resistance. The King then ordered those trials to be held in Halifax in Admiralty courts. This deprived the colonists of the rights to jury trial that went back over 500 years to the Magna Carta in 1215.
Also this: "For quartering large bodies of armed troops among us: For protecting them, by a mock Trial from punishment for any Murders which they should commit on the Inhabitants of these States."
What is quartering ? Quartering is a mechanism that a King-tyrant could use to avoid raising taxes to support troops. For taxes, a King needed Parliament. But if he simply quartered troops in people's homes and forced them to pay for their food & shelter, then he didn't need Parliament. This had occurred in the English Civil war. Here's the quote from the English Bill of Rights of 1689: "By raising and keeping a standing army within this kingdom in time of peace without consent of Parliament, and quartering soldiers contrary to law"
This is a real abuse and a very dangerous one as it sidesteps legislature's taxing power (and its obligation to pay for government by taxation) by imposing those costs directly onto the people. That's why the Third Amendment of the US Constitution prohibits quartering of soldiers. "No Soldier shall, in time of peace be quartered in any house, without the consent of the Owner, nor in time of war, but in a manner to be prescribed by law." There's never been a precise case to date as no President has tried to sidestep Congress to quarter troops, but it's there. By the way, here's an intriguing analogy. Obama's health care bill contains a provision that would (initially) fine people for not using their own money to buy health insurance. Is that not a different form of the abusive power prohibited by the Third Amendment ? "Quartering " is a direct imposition of cost obligation onto people, avoiding the power (or obligation thereto) of taxation in Congress. In my analysis (presented on this site in prior posts), this is a strong argument from principals that Obama's health care requirement is a violation of the spirit of the Third Amendment.
And here's another abuse: "He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance." I think we all agree that abuse is ongoing now and has been occurring, on & off, for many decades.
Re-reading the Declaration of Independence and thinking over its words imbues us with sense of our heritage and freedoms and the reasons why our nation's founders declared their Independence. The US is a nation built not on ethnicity nor religion nor nationalism, but on words and ideas applied in one place. Anyone of any ancestry, ethnicity, religion, place of birth, race or creed can be an American equal in rights to any other American. We have a written Constitution and written founding documents. Abraham Lincoln saw the Declaration of Independence as a crucial founding document. Many Constitutional scholars say the Civil war amendments to the Constitution (13th, 14th and 15th) effectively incorporated its concepts into the US Constitution (written 11 years later in 1787).
For this Independence Day, if you can, fly the flag and read the Declaration of Independence.
Word of the Day
"Evince" - verb [$10]
Evince means 1. indicate, to make evident; 2. show that one has (a quality).
Sentence: (from Declaration of Independence quoted above) "But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security."
Why ? The Declaration of Independence was not a propaganda screed. Reading it, one sees a reasoned argument. The document states principals of liberty, fundamental concepts of human liberty and then a long list of actions of the English king and government that violated those concepts. "But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security." Wonderful language, no ?
And if you read history, you'll find that all those claimed "abuses and usurpations" truly did occur and some were occurring at the time of the Declaration. A scholar could put footnotes to every one of those violations. I found myself the other day explaining one of those events to an intern who is working for me this summer. It arose as we discussed the rights & powers of juries.
Here's the applicable quote from the Declaration of Independence: "For depriving us in many cases, of the benefit of Trial by Jury". American juries in Boston and neighboring towns had been refusing to convict colonists who were engaged in resistance. The King then ordered those trials to be held in Halifax in Admiralty courts. This deprived the colonists of the rights to jury trial that went back over 500 years to the Magna Carta in 1215.
Also this: "For quartering large bodies of armed troops among us: For protecting them, by a mock Trial from punishment for any Murders which they should commit on the Inhabitants of these States."
What is quartering ? Quartering is a mechanism that a King-tyrant could use to avoid raising taxes to support troops. For taxes, a King needed Parliament. But if he simply quartered troops in people's homes and forced them to pay for their food & shelter, then he didn't need Parliament. This had occurred in the English Civil war. Here's the quote from the English Bill of Rights of 1689: "By raising and keeping a standing army within this kingdom in time of peace without consent of Parliament, and quartering soldiers contrary to law"
This is a real abuse and a very dangerous one as it sidesteps legislature's taxing power (and its obligation to pay for government by taxation) by imposing those costs directly onto the people. That's why the Third Amendment of the US Constitution prohibits quartering of soldiers. "No Soldier shall, in time of peace be quartered in any house, without the consent of the Owner, nor in time of war, but in a manner to be prescribed by law." There's never been a precise case to date as no President has tried to sidestep Congress to quarter troops, but it's there. By the way, here's an intriguing analogy. Obama's health care bill contains a provision that would (initially) fine people for not using their own money to buy health insurance. Is that not a different form of the abusive power prohibited by the Third Amendment ? "Quartering " is a direct imposition of cost obligation onto people, avoiding the power (or obligation thereto) of taxation in Congress. In my analysis (presented on this site in prior posts), this is a strong argument from principals that Obama's health care requirement is a violation of the spirit of the Third Amendment.
And here's another abuse: "He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance." I think we all agree that abuse is ongoing now and has been occurring, on & off, for many decades.
Re-reading the Declaration of Independence and thinking over its words imbues us with sense of our heritage and freedoms and the reasons why our nation's founders declared their Independence. The US is a nation built not on ethnicity nor religion nor nationalism, but on words and ideas applied in one place. Anyone of any ancestry, ethnicity, religion, place of birth, race or creed can be an American equal in rights to any other American. We have a written Constitution and written founding documents. Abraham Lincoln saw the Declaration of Independence as a crucial founding document. Many Constitutional scholars say the Civil war amendments to the Constitution (13th, 14th and 15th) effectively incorporated its concepts into the US Constitution (written 11 years later in 1787).
For this Independence Day, if you can, fly the flag and read the Declaration of Independence.
Word of the Day
"Evince" - verb [$10]
Evince means 1. indicate, to make evident; 2. show that one has (a quality).
Sentence: (from Declaration of Independence quoted above) "But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security."
Thursday, July 1, 2010
Watching ...
Krypto is watching this market now as intently as she watches a herd of sheep. She's getting ready to deploy some cash. The model is close to giving her a re-allocation buy signal for US stocks. She sold a good amount of those at much higher prices and looks to re-buy soon. I think S&P around 1000 to 1011 will give a good signal.
I'm also questioning the size of holdings in TIPs now. Those are getting to ridiculously high prices. Krypto has targeted 10% of assets in TIPs, 2.5% in cash. She recenlty cut TIPs from 12.5% to 10%. I wonder if some more of the TIPs should go to cash, for eventual redeployment. Thinking ...
Stock prices are down in Europe - more fears.
Anecdotally, New England business seems improving. I saw another new private construction project in my little town's center. Permabears are likely soon to be caught short.
Economy
Today we get another look at unemployment claims. I expect nothing good. The jobs picture and economy cannot improve until the weekly new unemployment claims falls under 400,000, preferably to under 300,000 per week.
PS: 472,000 new jobless claims. There is no "recovery". Still slogging in the swamp. Here's 472,000 new "thank you" messages for Pelosi-Obama-Reid ... hmmm ... that acronym is POR - guess it fits their performance and the status of far too many people in America.
Word of the Day
"Marasmus" - noun [$10]
Marasmus means a wasting away of the body.
Sentence: The world economy is not suffering from marasmus; the productive assets and human capital are still there and simply need to be put to use by people with vision and will.
I'm also questioning the size of holdings in TIPs now. Those are getting to ridiculously high prices. Krypto has targeted 10% of assets in TIPs, 2.5% in cash. She recenlty cut TIPs from 12.5% to 10%. I wonder if some more of the TIPs should go to cash, for eventual redeployment. Thinking ...
Stock prices are down in Europe - more fears.
Anecdotally, New England business seems improving. I saw another new private construction project in my little town's center. Permabears are likely soon to be caught short.
Economy
Today we get another look at unemployment claims. I expect nothing good. The jobs picture and economy cannot improve until the weekly new unemployment claims falls under 400,000, preferably to under 300,000 per week.
PS: 472,000 new jobless claims. There is no "recovery". Still slogging in the swamp. Here's 472,000 new "thank you" messages for Pelosi-Obama-Reid ... hmmm ... that acronym is POR - guess it fits their performance and the status of far too many people in America.
Word of the Day
"Marasmus" - noun [$10]
Marasmus means a wasting away of the body.
Sentence: The world economy is not suffering from marasmus; the productive assets and human capital are still there and simply need to be put to use by people with vision and will.
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