Obama wins. Now we are to get "change". I wonder what that means ? The biggest problem Obama will face is that he has no specific mandate to do anything except raise taxes on high income people. Other than that, he didn't specify what "change" he wanted. That's going to cause him problems building a governing consensus in Congress, even with his majorities in both houses.
Obama won by a rather small margin - just 5% in the popular vote. The nature of the Electoral College system provides a decisive result for small margins. The margin of victory in Ohio was about 4% - 200,000 votes. W won it by about 100,000 votes in 2004. In Florida, the margin of victory was 2% - 200,000 votes there, too. If those two states swung for McCain and a couple smaller ones, too, the result would be different. Obama won, but not by enough for much mandate for sweeping "change".
And expectations are very, very high due to his vague, but sweeping, rhetoric. Well, he will the press on his side for awhile. I suppose we'll soon be hearing of his canonization as a saint or his elevation to demi-god. The press likes to do that when their man wins.
On Blabberg I heard parts of a remarkably hostile and aggressive speech by Russian President Medvedev. They are clearly going to push for more world power. Trouble to come ...
Markets
My guess is that optimistic European buying drove up prices yesterday as they are ecstatic on Obama's election. The afternoon followthru was probably caused by expectations of a very large stimulus package that the Democrats will surely push.
Actions
Doing nothing.
Word of the Day
"Homunculus" - noun [$10]; I saw this word reading Goethe's "Faust", part II.
Homunculus means a little man, a manikin.
Sentence: The coming deification of Obama by his worshippers in the press and the Olympian expectations he has created with vague promises make his probable decent to being merely human quite risky. Will the path of that decent take him straight the status of homunculus in the eyes of the public and DC ruling classes ?
Wednesday, November 5, 2008
Tuesday, November 4, 2008
Election Day
A few years ago in an analysis of American political choices, a writer concluded that American voters tend to choose the person whom they think will best deal with the most important problems the nation is facing. So in 1980, voters elected Ronald Reagan to deal with both the Soviet aggression and expansionism as evidenced in the Afghan war, and the economic sclerosis that was permeating and stifling the nation through high taxes and excessive regulations.
Ronald Reagan proceeded to perform magnificently, creating the base for the boom of the last two decades of the 20th century and the conditions for freeing billions of people from oppressive Leninist communism.
So today the public must choose again in a time of serious economic problems and an insidious terrorist threat.
In 1864, the public chose well in wartime, re-electing Lincoln. So good decisions in times of crisis are possible. A problem today is the pervasive propaganda war in the press has prevented serious discussion of issues. People today really have no idea what Obama stands for except the vacuous notion of "change". So they read into his platitudes whatever they want to hear.
On the other hand, John McCain is an honest man who knows how to make decisions and lead in times of stress. And he favors freedom. And sensible reform. So to me, he's the obvious choice.
Actions
Doing nothing. DRYS reported good earnings and solid cash flows are locked in for several years. The stock popped, but is still quite depressed. Of course if the world's economy ends and we return to a barter system, it will surely suffer. So it's quite risky. My play in the shippers is EXM, DRYS and GNK. These are all very depressed in stock prices, but have reasonable debt levels and substantial contracts locked in at favorable rates. All are high risk, but have very high potential returns.
Quote of the Week
From "The Impossible H. L. Mencken", page 597 re the Scopes trial.
"The sole commentary of the sardonic Darrow consisted of bringing down a metaphorical custard pie upon the occiput [*Word of the Day] of the learned jurist."
Word of the Day
"Occiput" - noun [$10]
Occiput means the back of the head.
Sentence: In six months, will American voters be patting themselves on the back for making a fine choice for President, or rapping their occiput as they puke, realizing what a foolish vote they cast ? Time wll tell.
Ronald Reagan proceeded to perform magnificently, creating the base for the boom of the last two decades of the 20th century and the conditions for freeing billions of people from oppressive Leninist communism.
So today the public must choose again in a time of serious economic problems and an insidious terrorist threat.
In 1864, the public chose well in wartime, re-electing Lincoln. So good decisions in times of crisis are possible. A problem today is the pervasive propaganda war in the press has prevented serious discussion of issues. People today really have no idea what Obama stands for except the vacuous notion of "change". So they read into his platitudes whatever they want to hear.
On the other hand, John McCain is an honest man who knows how to make decisions and lead in times of stress. And he favors freedom. And sensible reform. So to me, he's the obvious choice.
Actions
Doing nothing. DRYS reported good earnings and solid cash flows are locked in for several years. The stock popped, but is still quite depressed. Of course if the world's economy ends and we return to a barter system, it will surely suffer. So it's quite risky. My play in the shippers is EXM, DRYS and GNK. These are all very depressed in stock prices, but have reasonable debt levels and substantial contracts locked in at favorable rates. All are high risk, but have very high potential returns.
Quote of the Week
From "The Impossible H. L. Mencken", page 597 re the Scopes trial.
"The sole commentary of the sardonic Darrow consisted of bringing down a metaphorical custard pie upon the occiput [*Word of the Day] of the learned jurist."
Word of the Day
"Occiput" - noun [$10]
Occiput means the back of the head.
Sentence: In six months, will American voters be patting themselves on the back for making a fine choice for President, or rapping their occiput as they puke, realizing what a foolish vote they cast ? Time wll tell.
Monday, November 3, 2008
A New Month
After those fine breakfasts of fried eggs, Spam and Valveeta this weekend, I realized how I felt about the markets after the events of the past six weeks. I felt just like I did after the Crash of 1987 - a bit stunned and even more disgusted with the markets and the panic. My guess is that huge numbers of "investors" have similar feelings. Hiding in cash was the wrong move then. Is it different this time ?
Economically, the time periods are quite different. This was mostly a panic of the rich, but the underlying economic problems were twofold: (I) a gross overvaluation and overbuilding of housing primarily in CA, FL, NV, AZ and a few places like DC, and (II) an oil and commodity bubble caused by pension fund and hedge fund speculation. Both events caused real economic shocks that in normal times would have, and were, causing a slow growth period. Toss in the panic of the rich and foolish pharisaic libertarian Republicans and ... voilà ... a harsh bear market, credit crisis and recession ensue.
What is left to fix ? The price of residential real estate in CA, FL, NV, AZ is getting close to true values based on incomes of the residents. Oil prices are back to longer term trend values. To fix is whatever damage was caused by the six week credit panic and the momentum and expansion of that damage. Perceptions are damaged, too.
Perceptions can change quickly. Damage caused from the credit panic can be quickly cured with extensions of credit. The cures and cash are really being pumped rapidly into the economy. The Fed rate cuts help anyone with floating rate loans, such as Prime Rate home equity loans. And the lower oil prices save people money at every fill-up.
I think this malaise will quickly dissipate as the reality of the damage is that it's not as bad as the talk nor is it permanent. But of course, I'm an optimist.
Actions
Doing nothing. Alpha Fund had a good week and is about 150% long.
Word of the Day
"Monad" - noun [$10]; also monadic (adj.) and for sense 2. monadism (n) = monadology (n).
Monad means the number one; a unit; 2. (philosophy) any ultimate unit of being (e. g. a soul, an atom, a person, god); 3. (biological) a simple organism, e. g. one assumed as the first in a genealogy of living beings.
Monadism = Monadology means 1. the doctrine of monads as the ultimate units of being; 2. (sometimes upper case 'M') the philosophy of Leibnitz.
Sentence: The monad of the US Presidential election is the electoral vote, which was created by the framers of the Constitution as a compromise among the larger and smaller states to balance population with regions.
Economically, the time periods are quite different. This was mostly a panic of the rich, but the underlying economic problems were twofold: (I) a gross overvaluation and overbuilding of housing primarily in CA, FL, NV, AZ and a few places like DC, and (II) an oil and commodity bubble caused by pension fund and hedge fund speculation. Both events caused real economic shocks that in normal times would have, and were, causing a slow growth period. Toss in the panic of the rich and foolish pharisaic libertarian Republicans and ... voilà ... a harsh bear market, credit crisis and recession ensue.
What is left to fix ? The price of residential real estate in CA, FL, NV, AZ is getting close to true values based on incomes of the residents. Oil prices are back to longer term trend values. To fix is whatever damage was caused by the six week credit panic and the momentum and expansion of that damage. Perceptions are damaged, too.
Perceptions can change quickly. Damage caused from the credit panic can be quickly cured with extensions of credit. The cures and cash are really being pumped rapidly into the economy. The Fed rate cuts help anyone with floating rate loans, such as Prime Rate home equity loans. And the lower oil prices save people money at every fill-up.
I think this malaise will quickly dissipate as the reality of the damage is that it's not as bad as the talk nor is it permanent. But of course, I'm an optimist.
Actions
Doing nothing. Alpha Fund had a good week and is about 150% long.
Word of the Day
"Monad" - noun [$10]; also monadic (adj.) and for sense 2. monadism (n) = monadology (n).
Monad means the number one; a unit; 2. (philosophy) any ultimate unit of being (e. g. a soul, an atom, a person, god); 3. (biological) a simple organism, e. g. one assumed as the first in a genealogy of living beings.
Monadism = Monadology means 1. the doctrine of monads as the ultimate units of being; 2. (sometimes upper case 'M') the philosophy of Leibnitz.
Sentence: The monad of the US Presidential election is the electoral vote, which was created by the framers of the Constitution as a compromise among the larger and smaller states to balance population with regions.
Sunday, November 2, 2008
Fried Eggs & Spam II
A successful experiment always makes me feel good.
Last week in the comments on my "Fried Eggs and Spam" post, I theorized that putting a slice of Valveeta cheese onto the eggs might really taste good. This weekend I had fried eggs and Spam and the slice of Valveeta on both days. There is no doubt that adding the slice of Valveeta makes a significant improvement.
Very, very tasty !
Friday, October 31, 2008
TGIF and more
Perhaps the credit crisis is ending. LIBOR is falling. The Fed seems as focused as a laser on easing the shortage of dollars around the world. The new dollar swap lines with Brazil, Mexico, Korea and Singapore were cheered in those areas and emerging market stock prices rose explosively. Time will tell, but the pattern of steady improvement now seems positive.
Now we all know that the "moral hazard" gripe is truly a canard of the pharisaic libertarians who want to let the beefers and ruling classes turn the common man of the world into serfs to be ruled.
Battleship Ben is truly showing fine mettle and is using his ammunition - an endless supply - with great effect now. His grade last year - 2007 - was about "D". He started out this year with a "C" and has been acing exam after exam, so it's now perhaps even a B+. I guess he reads this blog as the parsimonious growth of the monetary base prior to September has been replaced with a massive increase since then. That's needed to make up for a few years' of slow growth in that crucial measure that probably created part of this mess. Those errors were caused by that silly infatuation with "fighting" non-existent inflation.
Actions
None. I was jocularly accused of being a perma-bear in yesterday's comments. Sheesh ... my Alpha Fund is long about 150% with a number of extremely economically sensitive stocks, viz., CVX, DVN, RIG, FCX, BHP and smaller positions in EXM, DRYS, GNK, JOYG and MBI. As soon as this wave of beefer liquidations and misguided public selling of mutual funds runs its course, a grand new bull market should commence. Perhaps it has already begun.
Word of the Day
"Apropos" - adjective, preposition and adverb [$10]; this word we use a lot but not might know its precise meaning; also, the final 's' is silent.
Apropos means (adjective) to the point or purpose; appropriate; (preposition, often followed by 'of' colloquial) in respect of, concerning; (adverb) 1. appropriately, 2. by the way, incidentally.
Sentence: Apropos suggestions that Bunkerman is a perma-bear, he was bearish for about two weeks after the idiotic libertarian Republicans first defeated the Paulson plan. Going to cash in the Alpha Fund on that event did, however, him quite a bit of money, though.
Now we all know that the "moral hazard" gripe is truly a canard of the pharisaic libertarians who want to let the beefers and ruling classes turn the common man of the world into serfs to be ruled.
Battleship Ben is truly showing fine mettle and is using his ammunition - an endless supply - with great effect now. His grade last year - 2007 - was about "D". He started out this year with a "C" and has been acing exam after exam, so it's now perhaps even a B+. I guess he reads this blog as the parsimonious growth of the monetary base prior to September has been replaced with a massive increase since then. That's needed to make up for a few years' of slow growth in that crucial measure that probably created part of this mess. Those errors were caused by that silly infatuation with "fighting" non-existent inflation.
Actions
None. I was jocularly accused of being a perma-bear in yesterday's comments. Sheesh ... my Alpha Fund is long about 150% with a number of extremely economically sensitive stocks, viz., CVX, DVN, RIG, FCX, BHP and smaller positions in EXM, DRYS, GNK, JOYG and MBI. As soon as this wave of beefer liquidations and misguided public selling of mutual funds runs its course, a grand new bull market should commence. Perhaps it has already begun.
Word of the Day
"Apropos" - adjective, preposition and adverb [$10]; this word we use a lot but not might know its precise meaning; also, the final 's' is silent.
Apropos means (adjective) to the point or purpose; appropriate; (preposition, often followed by 'of' colloquial) in respect of, concerning; (adverb) 1. appropriately, 2. by the way, incidentally.
Sentence: Apropos suggestions that Bunkerman is a perma-bear, he was bearish for about two weeks after the idiotic libertarian Republicans first defeated the Paulson plan. Going to cash in the Alpha Fund on that event did, however, him quite a bit of money, though.
Thursday, October 30, 2008
Zzzzz ...
I overslept, so will write something later.
Philadelphia Phillies win the World Series ! A loquacious poster of comments should now be happy after a lifetime of frustrations.
Words of the Day
"Somniferous" - adjective [$10] an old one from the card file
Somniferous means inducing sleep, soporific.
"Soporific" - adjective and noun [$10] another old one from the distant past
Soporific means (adjective) tending to produce sleep; (noun) a soporific drug or influence.
Sentences: Watching CSPAN has a somniferous influence on Bunkerman. Nothing is more soporific than a large meal of roast turkey and stuffing.
Philadelphia Phillies win the World Series ! A loquacious poster of comments should now be happy after a lifetime of frustrations.
Words of the Day
"Somniferous" - adjective [$10] an old one from the card file
Somniferous means inducing sleep, soporific.
"Soporific" - adjective and noun [$10] another old one from the distant past
Soporific means (adjective) tending to produce sleep; (noun) a soporific drug or influence.
Sentences: Watching CSPAN has a somniferous influence on Bunkerman. Nothing is more soporific than a large meal of roast turkey and stuffing.
Wednesday, October 29, 2008
Gangocracy, Oil and Pericles
Gangocracy
Newspaper reports say Russia is using its rescue fund to rescue some billionaires who margined their stock in big Russian companies. Whether Russia "saves" the billionaires or just uses the opportunity to re-take the valuable holdings looted by those same billionaires in the 1990s, time will tell. Does the Boss of the gang save the Capo when he gets into trouble, or does he liquidate him and take his territory back ? The Russia = Gangocracy model suggests the billionaires will soon be outcasts and economic power in Russia will become even more centralized.
Oil
From FT: "Output from the world’s oilfields is declining faster than previously thought, the first authoritative public study of the biggest fields shows. Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent, the International Energy Agency says in its annual report, the World Energy Outlook, a draft of which has been obtained by the Financial Times.
"The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as those in the North Sea, Russia and Alaska, and meet long-term demand. The effort will become even more acute as prices fall and investment decisions are delayed."
This is why I like the oil stocks with major exploration and production opportunities in good deep water sites like the US Gulf of Mexico. CVX and DVN have major finds there. RIG supplies equipment to them and to other majors like Petrobras.
Pericles
The panicking rich are cutting back spending on luxury good, per FT story. Hmmm ... let's see. They are so dumb they invest trillions in hedge funds and also spend idiotic amounts on simple items like purses. Perhaps the quote from Pericles should be required reading:
"We cultivate refinement without extravagance and knowledge without effeminacy; wealth we employ more for use than for show ..."
Perhaps a change in behavior is in order: from endless striving to become richer than Croesus and showy spending to doing something to improve humanity, such as providing a young scientist or mathematician or artist with a stipend to create something enduring for the human race would be a better use of such wealth.
Newspaper reports say Russia is using its rescue fund to rescue some billionaires who margined their stock in big Russian companies. Whether Russia "saves" the billionaires or just uses the opportunity to re-take the valuable holdings looted by those same billionaires in the 1990s, time will tell. Does the Boss of the gang save the Capo when he gets into trouble, or does he liquidate him and take his territory back ? The Russia = Gangocracy model suggests the billionaires will soon be outcasts and economic power in Russia will become even more centralized.
Oil
From FT: "Output from the world’s oilfields is declining faster than previously thought, the first authoritative public study of the biggest fields shows. Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent, the International Energy Agency says in its annual report, the World Energy Outlook, a draft of which has been obtained by the Financial Times.
"The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as those in the North Sea, Russia and Alaska, and meet long-term demand. The effort will become even more acute as prices fall and investment decisions are delayed."
This is why I like the oil stocks with major exploration and production opportunities in good deep water sites like the US Gulf of Mexico. CVX and DVN have major finds there. RIG supplies equipment to them and to other majors like Petrobras.
Pericles
The panicking rich are cutting back spending on luxury good, per FT story. Hmmm ... let's see. They are so dumb they invest trillions in hedge funds and also spend idiotic amounts on simple items like purses. Perhaps the quote from Pericles should be required reading:
"We cultivate refinement without extravagance and knowledge without effeminacy; wealth we employ more for use than for show ..."
Perhaps a change in behavior is in order: from endless striving to become richer than Croesus and showy spending to doing something to improve humanity, such as providing a young scientist or mathematician or artist with a stipend to create something enduring for the human race would be a better use of such wealth.
Other News
GM and Cerberus seem to be working on deals together to merge GM and Chrysler and separately to restructure GMAC into a bank. Government help to come. I support this, as said yesterday, as the auto industry with its myriad parts suppliers and dealers really is an important part of the real economy. Management change is a necessary condition, however.
Porsche smartly offers to sell some VW shares to help reduce the short squeeze it created ... at a huge profit. Smart move, as it helps stave off government intervention. Still, the short beefers are doomed.
Actions
Nothing. Holding Alpha Fund stocks with modest margin: CVX, DVN, RIG, FCX, BHP are largest; DRYS, EXM, GNK, JOYG and MBI are smaller. The shippers particularly stink now. Obviously my chronic "buyearlyitis" hurt me. I really have to learn more patience. Mrs. B has a lot, I should follow her style more.
Word of the Day
"Agnate" - adjective & noun [$10]
Agnate means (adjective) 1. descended esp. by male line to another male ancestor; 2. descended from the same forefather, of a clan or nation; 3. of the same nature, akin; (noun) a person who is descended esp. by male line from the same male ancestor.
Sentence: As the line of the Bush-Cheney Republican ruling class seems soon to be extinguished, the practice of the Republican party to select leaders from its agnate line must be changed. Big John McCain could be a fine regent for his sidekick from the distaff side*, Sarah Palin, to breathe some fresh ideas into that moribund party.
["distaff side" means the maternal branch or female side of a family]
Did you notice the subliminal message in the title to this post ?
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