Sunday, December 9, 2012

On Israel

Mother-in-law texted me a FaceBook post someone wrote about the West Bank, UN Resolutions 242 & 338, and some incendiary commentary.

My response:
If a people want war they will have war.  If they want peace it will come.  Neither side has come to the table in a way meaningful to the other and therefore they must continue to inflict pain until the battle has become psychologically untenable for both.  Fuck'em - we have our own issues to deal with here.
Holy War, indeed.

Wednesday, November 28, 2012

A Bit of Philosophy

Perhaps nailing down my economic philosophy while trying to consider actual market machination helped put me on the right track to profitability.  The scars I earned trying to short NFLX, BIDU, GMCR, STI, RCL and kin finally caused me to realize that fundamentals never matter in a 5 day window.  Excepting, of course, known catalysts like HLF being convicted in Europe for running a pyramid scheme.  Were that well known news to be questioned in an American court the stock would rightfully drop 20% in minutes.    More recently, this HPQ scandal was well telegraphed as Chanos has been nothing if not vocal about the accounting issues at Autonomy.  Importantly, across a basket of stocks like the Russell or S&P, no news will materially affect stocks in a way that can't be undone, if trading is withheld until extreme conditions are reached.

Our markets have endured crashes, black days, the flash crash, and Sandy -- they are still open and humans still trade them.  These market events gave off warning signs like chipmunks scurrying around before a storm.  No matter how impersonal computers are, they are still operated by people, and those people leave footprints.  As long as the market data is true, and the fundamentals don't matter on a weekly time frame one can justify technical analysis and quantitative trading strategies.

Further, I agree that there is an ever present tail risk that a syndicate of individuals or, more likely, a sovereign would seek to crash the markets.  Afterall, PIMCO is worth $1.7T AUM and the whole S&P is only worth $13T.  I feel that we are in a place that should such an occurrence take place middle America will wholesale abandon The Street.  The Occupy movement started as a pack of hippies sitting in a park.  If the markets dive in an uncontrolled manner too many Americans will become mattress-stuffers, and everything that Bernake has done will be for nothing.  I believe the Obama victory can be principally attributed to a wave of libertarian (not TeaParty Republican) sentiment in America's middle as evidenced by the marijuana reform movement, and the middle's vote against partisan conservatism.  Libertarians are ready to be less effected by the government and "The Economy."  They are deploying their money locally and that favorably affects the structure of our real economy.  Where Europe is fully developed, America has room for advancement.  Where they are fully indoctrinated in socialism, we still have Animal Spirits.

Since Financialism is the United States' principal economic output, a second crash event like the follow-on to the Great Depression's initial dip would have severe and lasting implications.  At such a point America would be exposed to threat of international imperialistic motives as we no longer produce enough of our own goods to readily sustain society.  There is a risk, I accept it.  I do not think the global elite would allow such a thing to happen as a sheep can only be slaughtered once.  Global civil war suits noone.  Even if we look at the Roman Civilization as an analogue for the United States, we have not over extended our boundaries, or become too heavily reliant on mercenaries above self-defense.  If one chose to look at the Japanese model, we have yet another 50 years before the population begins to meaningfully decline.  Further, I believe that the markets are still anchoring to the relatively fresh memories of the banking crisis.

While the government's actions have been controversial, they have been decisive and of a shockingly large scope.  They have committed to their end of the deal, and now it is the responsibility of the global elite to uphold their end.  I believe they will do so.

Tuesday, November 27, 2012

A Presidential Response


Dear [astrobullish]:

Thank you for writing.  I understand the strong views many Americans have about taxes, and I appreciate your perspective.

This is a make-or-break moment for the middle class and those trying to reach it.  I will not stop fighting to build an economy that works for everyone—an economy supported by a tax code that reflects the enduring American values of hard work, fair play, and shared responsibility.

Since I took office, my Administration has implemented numerous tax cuts for individuals, families, and businesses.  The Recovery Act provided a tax cut to 95 percent of American workers, assisting 120 million families.  In February, I signed the Middle Class Tax Relief and Job Creation Act, which extended the payroll tax cut, ensuring no working American will see their taxes go up this year.  This extension prevents working families from losing an average of $40 per paycheck and enables them to keep about $1,000 of their hard-earned money in 2012.  Further tax relief I enacted helps college students, seniors, and first-time homebuyers.  And to uphold our commitments to service members, I signed the Returning Heroes and Wounded Warriors tax credits into law, rewarding companies that hire our Nation’s unemployed and disabled veterans.

I am ready to reform our tax code to eliminate decades of accumulated loopholes for the wealthiest taxpayers and biggest corporations, special interest carve-outs, and other tax expenditures that stack the deck against small business owners and ordinary families.  For too long, our tax code has benefited the wealthy and well-connected at the expense of the majority of Americans.  That is why I am committed to making our tax system fairer for the middle class and to ensuring everyone pays their fair share and plays by the same rules.  I have urged Congress to enact the Buffett Rule, which would prevent millionaires and billionaires from using loopholes and special tax breaks to pay taxes at a lower rate than middle-class families.  As we all come together to make shared sacrifices and crucial investments to grow our economy, we cannot afford to continue allowing some of the wealthiest Americans to avoid paying their fair share.  To learn about our efforts to extend tax cuts for the middle class, please visit www.WhiteHouse.gov/Infographics/Extending-Middle-Class-Tax-Cuts.

Our current corporate tax system is outdated, unfair, and inefficient.  It provides tax breaks for moving jobs overseas.  It is unnecessarily complicated and forces America’s small businesses to spend countless hours and dollars filing their taxes.  That is why my Administration released a framework for reform that simplifies the tax code, eliminates dozens of tax loopholes and subsidies, and promotes job creation right here at home.  To increase competitiveness for companies across our Nation, our framework lowers the corporate tax rate, cuts tax rates further for manufacturers who are creating new products here in America, and includes a basic minimum tax for every multinational company—because no company should be able to avoid paying its fair share of taxes by moving jobs and profits out of the United States.  I have also repeatedly called on Congress to stop giving away $4 billion a year in oil subsidies to an industry that has never been more profitable, and instead pass clean energy tax credits to cultivate a market for innovation in clean energy technology.

The American story is not about what we can do on our own; it is about what we can accomplish together.  Our Nation’s success is possible only because previous generations sacrificed to make investments on our behalf.  We must now join together in the same spirit of mutual responsibility to do what is right for our country’s future.  To learn more about my tax reform plans, please visit www.WhiteHouse.gov/Economy/Reform/Tax-Reform.

Thank you, again, for writing.


Sincerely,

Barack Obama

Monday, November 12, 2012

Notes to The President (4)

Writing to The Administration is easier than ever, go to whitehouse.gov and click "contact us" in the upper right corner.
President Obama -
Congratulations on your second term, I voted for you in this election.
I did so not necessarily because I agree with your policies, but because I am one of an increasingly large contingent of libertarians stuck in the middle of the country that simply wish to be less affected by the government and "the economy."  One needn't look any further than the marijuana reform movement to identify the real voting trend in this country, and it's practical, not progressive.  Try to bear that in mind when negotiating this great Fiscal Cliff contrivance.
How bush league was it for Paul Ryan to back off his pro-choice by individual liberty mandate in the middle of the election?  Were it not for a partisan conservative (Romney headlining the ticket)  you'd probably be cleaning out your desk this month.  Paul Ryan is not a polarizing figure, though his tea-party backers certainly can be.  If he had headlined, and thus remained principled, he would have won the middle.  It is imperative that you not widen the chasm between producers and takers in the country by raising taxes solely in order to create a drop in the bucket toward our debt balance.  Get a tax reform plan done in the next 4 years.  It's all a marketing trick anyway.  Figure out a way to make it simple, sustainable, and reasonable, then do it.  For the individual, it doesn't need to be income focused, but tailored in a way that everyone should be participating in the country.
Rather than let billionaires shake down the rest of the country with steep market index sell offs to garner fear and test the quality of our economy hold their tax sheltering accountable.  They are, after all, the greatest beneficiaries of the swelling debt balance under your administration. 
Charge Geithner and Bernake with getting a good measure of this offsetting debt written off both in the EU and at home.
Finally, a significant contributor to the decline of employment in America can be attributed to technological advancement rendering the human touch obsolete, however we cannot squelch the hunger instinct that drives human ingenuity.  Please strongly consider the implications of a populace that, like Greece, Spain or Italy, relies on government transfers to support more than half of the country.  Please stop giving entitlements to  people that do nothing.  THAT is the most painful specter to economically engaged individuals who have to drop their kids off at day care every morning.  If we need to spend another trillion building a railway to the moon, do it, but make sure that it is human labor intensive. 
Good luck to us all.

Sunday, June 17, 2012

If you had to do with the miracle that happened to me over the weekend.

It is well received.  You may have changed my life forever.

Thursday, May 31, 2012

Friday, May 25, 2012

I need to elaborate.

At the end of the second paragraph in the last post I concluded,
But with the monetizing of JPM liabilities, and all that euro trash, I hardly see concern for deflation at the operational level.
 My thoughts are as follows:
  • The "derivative" industry sometimes called shadow banking is a parallel universe of leverage and risk.  In theory, the principal behind the risk should not be monetized - it is the leverage that produces the return by collecting premium.
  • By defaulting Greece in CDS while also bailing out Greece and other nations with the LTRO, both parties win and are winning.  This is the same with bailing out Goldman, et al through AIG nationalization.
  • The IMF (http://www.imf.org/external/np/sec/pr/2010/pdfs/pr10418_table.pdf) has agreed to back the ECB, who has agreed to fund the LTRO and Greece, who has agreed to fund it's insolvent banks through the Bank of Greece.
  • In these examples money has entered the system in a way that should be more binary.  Zerohedge does enough with M2, but suffice to conclude that the problem is that a capitalist economy is predicated on "there is no such thing as a free lunch."  No longer the case.
  • Any government dispensing money, whether through corporate subsidy (Solyndra), bailout (GM), or social engineering (food stamps) is decidedly ham-fisted.  As such, the markets for inputs become less competitive as the governments have no theoretical competitive limitation while brandishing the keys to a printing-press.  Therefore, the price of labor but especially food becomes more expensive.

Thursday, May 24, 2012

Free Form Ruminations

The positive correlation between crude and the SPX is senseless.  Oil is the base of the pyramid, the hub of the wheel.  For every dollar the price of crude increases, earnings power on the part of every other industry is impaired.  It says something when OPEC indicates that oil is overpriced vs. supply.  Whether you believe that they are scared of the slow down in China, or that the lunacy in contract pricing has choked American growth, you decide, but with a full year of increasing prices to combat inputs, many stand to benefit from this pullback in Texas Tea.  Look at SBUX and the three price increases they rammed through before contract coffee imploded last year.

So what's going on with gold?  Does the drop in crude imply deflation?  Is everyone so hungry for UST's that even gold goes out the window?  Wrap my wallet with eurobonds?  Look, if you actually care about the game of trading stocks, and enjoy the stories behind all this wackiness you know that for the Greek negotiating tactics you need look no further than ONAV and DRYS.  You're either going to get a Greek exit after the summer elections, or you're going to get money flowing into the black hole with no visible end.  Greeks are expert tacticians, greedy motherfuckers, and lovingly cling to their "scorched earth" composition.  To be Greek is capitalism incarnate.  So if I'm Greek I see inflation down this path and disorderly exit down that one.  Your choices become debt jubilee or confidence collapse.  Will the ECB's LTRO have a hard drive malfunction in the next 6 months?  But with the monetizing of JPM liabilities, and all that euro trash, I hardly see concern for deflation at the operational level.

I am on the record for a long time endorsing a neo-WPA.  All this doodoo bandied about on the European continent serve as a lesson in what not to do when America's card gets called.  We have bailed out banks, the auto industry, the insurance industry, and by extension every other industry, with the sad exemption of the American people.  Lo, they take their bail out in the form of food stamps.  But I say, when and if Germany shows the hair on its ass and cuts Greece out of the picture, there's nothing left but spiraling crime into civil war as people go hungry.

Here, as there, it would be more favorable to pay people to walk on hamster wheels 8 hours a day than give them food money for doing nothing.  On the one hand, hamster wheels may be viewed as demeaning, while on the other, governments pay their people to procreate and scheme.

Finally, I believe that the Western Financialization of Africa, and quite possibly this trans-Asian train system will continue to furnish spurts of global growth, but we must embrace the notion of commercial space flight and extra-terrestrial habitation.  Labor efficiency is the enemy to growth because more can be done with less manpower, and therefore progress must be achieved by undertaking labor intensive tasks, or through purely notional exercises like inflation, and social engineering.  Excusing war, which itself has become more efficient with long-range guided munitions and drones, and bubble activity like proprietary frozen yogurt shops, our own nation would be well served to construct a nationwide rail system and pay people to drive each individual rail spike rather than focus on miles of progress per day by automated cars.

The FT wrote an article today about how Allianz sees no benefit in allocating to equities.  That's funny because I was visiting with a quant yesterday who showed me some contrarian charts that have triggered 3 times since the 1950's that then lead to a decade of robust bullish performance.  On the other hand, this Facebook trainwreck highlights the fact that our hallowed exchanges are now viewed as exit markets by the National Venture Capitalist Association, and others.  With the rise of Second Market there is less reason than ever to "invest" in a big name IPO.  It used to be you came public to raise equity, now there are 8 layers of bonds and convertible preferred securities before you even get to equity.  For shame.

It must be tricky when you have $1.7T AUM.  Fucking hell, you could build a railway to the moon for that. I always get a rofflecopter out of Pimco's marionettes pontificating economical on government stimulus with the amount of jack they control.  If they told their people to take some of their goddamn money back and invent something we'd all be better off.

Hope is not getting by.  Hope is accomplishment.  You give people something they can put their name on and it's as if they were baptized in rain.


Tuesday, May 15, 2012

Thursday, May 10, 2012

A Bone to Pick with Reality.

Everyone's writing books these days.  I credit James Altucher (@jaltucher) with getting me off the fence, but having a son really helped get over the hump, too.  The problem has always been subject matter.  You see, no one really gives a fuck about what anyone else has done.  There's always a schadenfreude or smug "I could do that" attitude that goes into reading autobiographies.  For me anyway.  And maybe that's the problem.  To my thinking the truest virtue of all is follow-through, and when a car ride with Buttercup turned into a conversation about some friend of her parents dying, it occurred to me that I simply wanted to be remembered as a philosopher - and philosophers write philosophy.

Here's the opening paragraph of Sur le Pontification:  Shit I Learned the Hard Way for Ego and Id:


First and most importantly, branding yourself hurts like a motherfucker, for a protracted period of time.  We're not talking tattoo here.  I did make it through the first week.  And the second.  But she found out today, and that was not ideal - and there's the rub.

She asked me what I would tell my son, as if he'd ever have occasion to see the upper third of the outside of my thigh.  I'd tell him it hurt like a motherfucker, just like I told you.  But beyond that, is it any of his fucking business what I had done or why?  Libertarian isn't a convenience.  Individual will and desire aren't to be labeled.  This is why Waffler-in-Chief Obama's statement on gay marriage was even hollower than it sounded.

The true fact is that your rights end at my nose.

Remember that.

book's coming this fall, get excited.

Thursday, March 1, 2012

I had this idea.



note - the cover is designed and converted to pdf as below, but for some stoopid reason has that gray border after uploading to scribd;  i do not have a license to use Sprint, The PGA, or any other names or logos

Wednesday, February 29, 2012

Thursday, February 9, 2012

Spring Cleaning the Olde Inbox

Dangerous Knowledge by Dan Colman via openculture
The Kirby Theory Explained by Ron "the goat" Roll (@gtotoy)
Letters to a Young Analyst by Tom Brakke (@researchpuzzler) via NYSSA

Finally ... a Classier Keg Party by Julia La Roche via businessinsider << pay attention to how the inventor talks about business
February 3rd Gameplan Review by Steve Spencer (@sspencer_smb) via smbcapital

Top 5 Regrets of the Dying by Susie Steiner via guardian
Spectacular Aurorae Erupt over Norway by Ian O'Neill via discovery
MPAA ... Threatens Politicians by Mike Masnick via techdirt

Longitudinal Weight Distribution (snow skiing) via mechanicsofsport
Lateral Weight Distribution (snow skiing) via mechanicsofsport

The Holy Grail Setup Explained by @traderstewie via theimpatienttrader
Homeless Teen is Intel Competition Semifinalist posted by Jacob Wolinsky via valuewalk
Stocktiger's Lazy Trader Technique by Richard Crockett (@stocktiger) via chart.ly

How to Maximize Your Memory by Jon Simons via guardian
Candlestick Pattern Dictionary via stockcharts
10 Key Differences Between Bull and Bear Rallies by TradersLog

How to Trade the News by Andrew Hall via itradepod
Ohio Quake ... Won't Stop Oil and Gas Work by Mark Niquette via bloomberg
OptionsHawk Blog by Joe Kunkle (@optionshawk)

30 Things to Stop Doing to Yourself by Marc via marcandangel
People Are Awesome by derDon1234 via capitalogix
You Don't Live in the World You Were Born Into by Mark Cuban via businessinsider

2011 is the Year I Started Over by Michael Bigger via biggercapital
After Abuse Scandal ... Wife Files for Divorce by Josh Chin via wsj
Here's What a Failed Bond Auction Looks Like by Gus Lubin via businessinsider

Value Trading Basics by Rodney Lalgie with Andrew Hall via itradepod
Business Booms and Depressions by Tension Envelope Corp [old skool] via stlouisfed

Tuesday, January 24, 2012

SPX Seasonality


Thanks to vcutrader for tweeting this diagram.

Wednesday, January 18, 2012

The Japanese Debt Model

A few days ago Twitter must-follow BarbarianCap commented on the rising trend in unfunded union pension obligations.

So then I start to wonder:

If, rather than diversify for the sake of diversification, a union were to use its pension strictly for purchasing its parent company's secured debt;

then a more direct system of accountability would be in place [access to financials, corporate leadership],
then it would always have control over the deployment of company cash [loan covenants],
then legacy liabilities would be better protected [by priority and security of operating assets],
then employees would always have "skin in the game,"
then the market would be forced to take unsecured risk.

Then I start to think about the Japanese debt model whereby its citizens hold most of its country's paper.

Then I say to myself, that is exactly what is going on in the world.  While China and Russia move large volumes of US debt (zerohedge), yields continue to plunge.  So while it may not be clear at first blush who owns all this debt, the only obvious answer is that the Fed must be purchasing it with its thinly veiled broker / front operation Pimco, and all their $1.3T AUM.

Then I see these videos on ibankcoin about the ESF, and further consider what the ECB is doing through the EFSF.

Is this good or bad?  Could the same supposed benefits of a union pension funding its parent company be achieved on a scale as large as the US and Europe?  Is it right to try?  Who can say, but if there's one lesson that we learn, then forget, then learn again, it is that Confidence is a cruel mistress, indeed.