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Multiplying Dividends

COMPANY	TICKER	MARKET VALUE	SECTOR	DIVIDEND YIELD	10-YEAR DIV GRTH RATE	2008 EPS GROWTH
Buckeye Partners	BPL	$2 billion	Energy	7.10%	5.84%	9%
Enterprise Products	EPD	$13.1 billion	Energy	6.60%	7.16%	39%
Kinder Morgan Energy	KMP	$13.5 billion	Energy	6.60%	7.09%	138%
Pfizer	PFE	$155.4 billion	Health Care	5.80%	17.43%	6%
Integrys Energy Group	TEG	$3.8 billion	Utilities	5.50%	4.11%	50%
Bank of Montreal	BMO	$27.9 billion	Financials	4.90%	16.96%	11%*
Nstar	NST	$3.5 billion	Utilities	4.40%	5.32%	6%
UST	UST	$8.5 billion	Consumer Staples	4.30%	4.01%	7%
Royal Bank of Canada	RY	$64 billion	Financials	4.10%	19.35%	19%*
Bank of Nova Scotia	BNS	$47 billion	Financials	4.30%	17.12%	18%*
Huaneng Power (ADR)	HNP	$10.2 billion	Utilities	4.10%	9.89%	14%
Paychex	PAYX	$12 billion	Technology	3.70%	23.30%	12%**
Genuine Parts	GPC	$6.8 billion	Consumer Discretionary	3.60%	4.97%	9%
Taubman Centers	TCO	$2.6 billion	Financials	3.60%	10.17%	8%
Toronto-Dominion Bank	TD	$47.9 billion	Financials	3.60%	14.75%	17%*
General Electric	GE	$346.4 billion	Conglomerate	3.60%	10.89%	13%
Eli Lilly	LLY	$58.9 billion	Health Care	3.60%	6.74%	10%

*Taken from Barron's.

Investment vehicles

I'm preparing a document that summarizes various investment vehicles.

Here's a good link if you're interested:

http://www.finance.cch.com/text/c20s15d010.asp

How Wall Street Works

If you'd like to understand the current market volatility, you must watch this video. It's 8 minutes long and will be the best thing to have come out of your losses, if any. Really, it's worth it. Do it. Then tell me what you think!

Click here.

http://www.youtube.com/watch?v=SJ_qK4g6ntM

Gold lover

http://prudentinvestor.blogspot.com/

$$$ = :) ?

You decide for yourself here and let me know.

Happy Tuesday!

Raindrops on roses and whiskers on kittens;
Bright copper kettles and warm woolen mittens;
Brown paper packages tied up with strings;
These are a few of my favorite things.

When the dog bites,
When the bee stings,
When I'm feeling sad,
I simply remember my favorite things,
And then I don't feel so bad.

Wanna scream?

If you want to look like the dude on the left, you should read the following predictions by Byron Wien, Pequot Capital Management's Chief Investment Strategist:

Byron Wien's 5 Sure Things for a Turbulent Market

Bob Brinker recap

Bob Brinker recap for Jan 27 - 28, 2008 can be found here.

http://honeysbobbrinkerbeehivebuzz.blogspot.com/

In the Cube

A picture is worth a million words. That's a picture of me.

Any words come to mind?

Power vs Money

This research was retrieved from Bob O'Brien at Barron's. So, those financials may not be so cheap after all, eh? And those energy stocks that have gone up 100% or more... might still go up according to these numbers. You can find the entire article here.

So, power wins.

Is this you?

Taken from: http://www.retro.ms11.net/InvestorMind.gif

Jerome Kerviel

You may have heard by now that the global sell off on Monday may have partly been a result of Jerome Kerviel - the so-called "rogue trader" at Societe Generale in France. He purportedly lost the bank $7.1 Billion. Single-handedly. One man. 31 Years old. Incredible.

This supposedly resulted from placing massive bets that the European markets will go up in January. Until December 2007, he was massively in the black. So, he decided to counter his trading positions in late December, and he was dead wrong.

These are from reports I've picked up over the past two days.

Here's an interesting excerpt from the New York Times:

"But while the revelation of Mr. Kerviel’s fraud is hugely embarrassing to SocGen, the affair has not been entirely tragic, according to the Toronto-based Globe and Mail. On Thursday, The paper gleefully seized SocGen’s fraud-induced crisis as the underlying impetus for Tuesday’s surprise interest rate cut by the Federal Reserve.

“U.S. borrowers, give thanks to an unlikely hero: Jerome Kerviel,” The Globe and Mail’s Boyd Erman wrote. “As you revel in the lower interest charges on your line of credit…think of how one brave Frenchman came to your rescue.”"

The Fed's Grade: 'A.'

Many things have happened since that incredible day when the Fed acted.

There are a few things I'd like to say about the Fed action. Many believe that the Fed is bending over to Wall Street. People in this camp believe that the Fed has one job - to control inflation - and that if the major financial market indices show a weakening economy, the Fed should not take note. Tuesday morning's action was clearly a Fed reacting to the global financial markets.

The Jayhawk believes that is not only okay, it is good. It is vital. It is important and it is crucial for the Fed to listen to the financial markets.

Why?

Let's go back to the reason the Fed was created.

The purpose and functions of the Federal Reserve include:

• to serve as the central bank for the United States
• to address banking panics
  
• to manage the nation's money supply through monetary policy
• fostering a sound banking system and a healthy economy
• facilitate the exchange of payments among regions
• strengthen U.S. standing in the world economy
• to be responsive to local liquidity needs
• to strike a balance between private interests of banks and the centralized responsibility of government

Additionally, let's consider the following facts:

1. The Fed is seen as the big daddy of the finance world. When it speaks, people listen. When it is silent, people listen more and listen harder.

2. The Fed's main goal is monetary policy *and* regulation. (As most of you know, I believe the Fed should focus more on the latter and let the markets dictate the former.) It is clear that monetary policy is great at controlling inflation, but it is not so clear that is is very good at stimulating a contracting economy. The phrase "pushing on a string" is often used in this regard to illustrate that monetary policy has defined limits to accelerating economic growth.

3. The year is 2008. In the US alone, $14 Trillion (that's right, with a 'T') is in mutual funds. An additional $12 Trillion is in pension funds. These figures do not include other investments vehicles such as hedge funds and individual stock portfolios - retirement or otherwise. The point is this: the US financial markets - not just the stock market - have become a savings account for the average American.

4. Today's dynamic financial markets today have a lot more information available to them and are very good at pricing in risk. The markets have been indicating - for several months - that the Fed ought lower its target rate.

When there is a global financial market sell-off after a severe correction like we've had, i.e. 15% in a few weeks, this creates worry and tension in the consumer's mind. Again, the reason is that this affects an unprecedented number of people in unimaginable ways. Moreoever, there is a very large population of 'baby-boomers' waiting to retire, whose life savings are in stocks.

The Fed's action in staving off a panic was necessary. It is clear that an additional 5 - 10% correction to the already 15% would be disasterous to the mindset of the American consumer. There would be rampant fear. Most people act irrationally with money anyway, so many would sell their stock holdings, which would only make the situation worse. With massive losses, consumers would be affected negatively and a potentially severe recession could ensue. Two-thirds of the US economy is consumer driven. We are already dealing with a housing recession - there is no need to make things worse just so that "we can get over it". We may never get over it for decades if the Fed doesn't act when it has to.

The Fed's decision to restore confidence in the markets was important. Additionally, the liquidity created will hopefully restore credit markets back to normal. All this takes time, but it will heal.

To those who are worried about inflation - read my earlier posts. Core inflation remains low. Today's inflation numbers are high primarily due to higher energy prices, i.e. cost-push inflation. The Fed does NOT control oil prices - lowering rates does not automatically cause inflation. It almost sounds like the anti-inflation hawks would rather see inflation at 1% and unemployment at 10% with negative GDP growth for years. Get over it! Once the economic expansion is under way again, the Fed can raise rates to fight whatever inflation exists at the time. After all, it's much easier to slow down the economy.

Take a look at Europe. The ECB has been stubborn about inflation and refuses to cut its target rate. Well, take a look at the GDP growth and unemployment figures of European countries - they're much worse than America's. So what if their currency is stronger right now? Would you rather have a super strong currency and high unemployment?

So, let's reconsider the Fed's goals and see if it met them or not in Tuesday's action:

1. To address banking panics - CHECK.
2. Fostering a sound banking system and a healthy economy - CHECK.
3. To be responsive to local liquidity needs - CHECK.

The bottom line: Bravo Ben, Bravo! The Fed acted correctly - it gets an A grade. Had it been sooner, I'd have awarded it an 'A+'.

What grade do you give the Fed?

Helicopter Ben is flying

The past day and change has been incredible. Yesterday the global markets lost between 5% - 8%. The S&P 500 futures were down about 5% since the markets were closed for MLK day.

Today, the Fed FINALLY reacts: at 8:20 AM they announced an emergency rate cut of 75 bps. This is the first inter-meeting cut since Sept 17, 2001, and the first 75 bps cut since October 1984. We had a jerk reaction with a nice 40-point move on the S&P but a quick sell off. The attached chart indicates this.

So, what the heck is going on? As the Jayhawk's Nest has been saying, the Fed has been slow to react. They have been "behind the curve" so to speak. What's more shocking about the latest cut is that William Poole of St. Louis Fed voted against the Fed. That's right, Bill Poole voted against the cut! He needs to joint he ranks of Kaptur. I'm going to create a special club for these people called the "Block Head Club."

Anyway, this is not the end. The Fed is finally where it should have been 3 - 6 months ago. Now, that it has caught up with reality, i.e. Jan 22, 2008, we can focus on the meeting next week and beyond.

I maintain that the damage done over the past few weeks is so large that we still need another 75 bps in the next few weeks.

For now, Helicopter Ben is flying. I hope he doesn't crash. Would you ride with him?

The age of hedonic marriage

Taken directly from The Economist (www.economist.com)

"THE INSTITUTION of holy matrimony is sacred if anything is. But nothing, nothing is immune from the profane transformative power of market forces! In a new essay in Cato Unbound, University of Pennsylvania economists Betsey Stevenson and Justin Wolfers show that the traditional marriage of Mike Huckabee's dreams was a contingent adaptation to economic conditions long past. "So what drives modern marriage?" the Penn duo asks...

We believe that the answer lies in a shift from the family as a forum for shared production, to shared consumption. In case the language of economic lacks romance, let’s be clearer: modern marriage is about love and companionship. Most things in life are simply better shared with another person: this ranges from the simple pleasures such as enjoying a movie or a hobby together, to shared social ties such as attending the same church, and finally, to the joint project of bringing up children. Returning to the language of economics, the key today is consumption complementarities--activities that are not only enjoyable, but are more enjoyable when shared with a spouse. We call this new model of sharing our lives “hedonic marriage”.

So is marriage doomed? Marriage in which one person specializes in the home while the other person specializes in the market is indeed doomed. The opportunity cost of having women stay out of the labor force is likely to continue to rise — particularly as young women are surpassing men in educational attainment and higher education is becoming more important for market success. The reach of markets will continue to expand, allowing individuals and families to reap the returns to specialization through market-mediated trade with other specialists, rather than requiring a domestic specialist in each home

This "hedonic marriage" business sounds decadent. Can we count on overgrown teenagers seeking only self-actualisation and bound only by puppy love to take seriously their duty to fill the nation's wombs with enough future taxpayers to meet pension liabilities? Probably not! But there's always immigrants. Or pension reform.

Ms Stevenson and Mr Wolfer's last point above reinforces one of my favourite strategies for ramping down the gender war. Men don't need to do more housework and childcare to achieve equality. Women just need to do less. My dad used to change the oil in our family cars. I certainly don't. I suffer exactly zero shame from the fact that I don't even know how. There are specialists who do this sort of thing. Real women's liberation and gender equality will come when social expectations shift enough to allow families to guiltlessly take full advantage of the returns to specialisation."

Bob Brinker recap

This is really just for me. I ought to start an account at del.iciou.us

http://honeysbobbrinkerbeehivebuzz.blogspot.com/

UPDATED S&P 500 forecast for 2008

All ye traders: UPDATED S&P 500 forecast for 2008.

We will trade sideways to down and test 1170.

There's still potential for a test of 1550, but only AFTER the 1170.

Enjoy making your broker richer!

Marcy Kaptur is a joke

Are you from Ohio? Is Marcy Kaptur your Congresswoman? You should NOT vote for her. She is an idiot. A complete moron who has no business working in DC representing you. None. It's a shame that people even vote for her. Surely, she'd at least hire someone who does her homework for her and knows who she's talking to - in a formal hearing!

What an idiot.

Click this link and see it for yourself here.

http://www.youtube.com/watch?v=JwnQZFJ8Q3o

Fighting the good fight in a bad street: Jim Cramer

Cramer speaks the truth like none other. He really does.

http://www.cnbc.com/id/22706231

He knows the financial industry, he knows Wall Street, he's an insider and he's not afraid of speaking out against the cronies who dine in the parlor next door.

See it for yourself.

Make Your Loved Ones Get It

http://www.fwallstreet.com/blog/99.htm

Which boat are you in?

"Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks." - Warren Buffett

Sometimes it's important and even necessary to ponder the words of the wise. This is a good one. Let me know what you think. You have no choice but to know know what I think, just not today!

2008 Predictions

I ought to jot these down before it's too late. My predictions for 2008:

1. I do not think we will see any negative GDP growth this year, contrary to expectations of a recession.

2. The S&P 500 will retest 1350, at least intraday. At year end, I see the S&P at around 1550, attempting to retest the highs of 2007.

3. Hillary Clinton will win the 2008 election.

4. KU will put on a good show at the NCAA basketball tournament and win the tournament.

5. The Patriots will win the Super Bowl - duh.

6. Notre Dame will have another abominable football season and their coach will be fired.

7. Gold will reach the $1000 / ounce mark.

8. Oil will touch $130 / barrel. The average gas price will reach $4/gallon.

9. Iraq will be stagnant.

10. E-Trade will be acquired.

What are your predictions for 2008? Did I miss anything?

The Obstinate Fed

The Jayhawk's Nest believes that the Federal Reserve Board must no longer have the power to govern and dictate overnight interest rates, aka 'Fed funds rate'. Instead, this rate should be determined by the marketplace, in the marketplace. The rationale for this is fairly straight forward and was stated in an earlier post.

Over the past few years of monitoring the financial markets, it has become increasingly clear that the Fed is too slow to react to the current economic environment. In the most present time, for example, the Fed has been extremely slow to provide liquidity to institutions that are running dry. The mortgage debacle that began in the early summer of 2007, and showed signs well ahead of that time, was simply met with a shrug and a couple of blinks from the Fed. Their chief concern amidst the crumbling of credit was inflation.

The cost-push inflation seen over the past few years has been a result of higher oil demand and higher food prices. This cannot be controlled by over night rates as these goods are price inelastic, i.e. they are necessities. Over the long run, they may indeed become price elastic with technological advances and as consumers get more used to the prices. But, in the short run, this inflation should not be the concern. In fact, the higher oil prices have acted as a tax on consumers as their disposable incomes decrease. Indeed this is what the retail sales data shows - a weakening consumer.

And, so, finally last week the chairman of the Fed admitted to a substantial weakening of the economy and promised substantial liquidity, i.e rate cuts. What's he waiting for?! Rates cuts take at least 9 - 12 months to stimulate the economy and sticking to a rigid FOMC meeting schedule to take policy action, is at best, a dumb idea. They ought to act (as they know they should), and they ought to act now.

So, what should be the Fed's new role? Regulating banks and financial institutions as the currently do, only with greater focus, so that the financial companies are not tempted to sin, i.e. get greedy SIVs and other exotic derivative debt instruments. The actions of the masses on Wall Street indeed pose systemic risks to the economy at large as we've seen.

Kenya

I must admit I was a little surprised to see two comments to my last post - I have readers?!

So, first: Kenya.

Before I move on, I'd like to point out that The Economist was factually wrong in an article titled "More Instability" dated Jan 11, 2008. It does not seem to up anymore. They stated that the chairman of the opposition party ODM was Anyang Nyongo. This humble author sent them an email correcting their error. Anyang Nyongo is the secretary general of ODM; Henry Kosgey is the chairman of ODM. So, even The Economist gets it wrong sometimes. I must admit it's a little disturbing and makes me believe all those who always said the public should always question the media.

Kenya, as you all well know by now, is in a mess. The city I once lived in, Kisumu, looks worse than the pictures of Baghdad. My sources tell me that the city has lost 10 years of development. Most of the shops have been looted and there were some reports about water supplies being cut off. It truly is a complete disaster area. All of this, of course, is very sad.

However, was the unprecedented violence, mass killings, and complete destruction of property necessary?

As you may know, the reason for Kenya's current mess is that the sitting president, Mwai Kibaki, rigged the election in his favor. At this point, just about everyone - including the country's Electoral Commission (ECK) - has stated in some way that the election was not a fair deal. Polls going into the election and the numbers before the rigging show Raila Odinga - the ODM candidate - as the true winner. Kenyan politics, like many other African countries' politics, is tribally dominated. Kibaki is from the Kikuyu tribe (the largest in Kenya), whereas Odinga is from the Luo tribe, which based in Kisumu.

So, what are citizens to do when they see massive injustices take place in broad daylight? I certainly do not believe that killing each other or destroying property will solve anything. The people's reponse in Kenya, I believe, are a by product of lack of corruption and lack of education.

In a corrupt society, the average citizen does not get the protection or rights he or she deserves. This was evident in the killings and destruction seen across the country. Furthermore, it is the poor that continue to suffer the most as they are unable to protect themselves and are the most vulnerable in very way - politically and economically. Additionally, due to a lack of understanding of the consequences of revolting in the manner they did, it is the poor who will suffer the most as the economy crumbles and unemployment soars.

I have been rather distraught and shocked at the country's reaction to the election. While some violence may be expected, the violence seen in the past weeks is at a level not seen since the fight for independence. The country, as it currently stands, is highly divided and its future remains unknown. Kenya was one of the best countries in the African continent for several decades - with a booming economy, relatively stable political environment, improving living standards for its citizens, and in many other ways. The current events have rocked questions the country's temperament.

Unfortunately, there is no end in sight to the madness. Hopefully there will be one sooner than later.

More to come

Oh, how the days go by and I don't write. I have so many things to share with you, it's not even funny.

So, where do I begin? Well, how about this. I'll list the issues I'd like to talk about and then over the next few days I'll talk about each one.

1. Kenya - the mess it is.
2. The US elections
3. The Federal Reserve and the financial markets
4. 2008 in general and a few predictions
5. 25 years as a human
6. Harry Potter
7. Something novel

You better have something to share with me too - how about your time as I cover these topics from coast to coast, from the east to the west, from shining star to shining planet, it's all coming your way, right here, same place, same time. Stay tuned...

Condemning Cowards

I would like to take this opportunity to condemn the cowardly acts of the terrorists in Pakistan that led to the assassination of Benazir Bhutto. In a sad sense it comes as no shock that she was murdered by Islamic fundamentalists. They had already tried to kill her at least twice before and failed. It is very unfortunate that these violent cowards know no way in which to face a problem and simply resort to mass injury, mass destruction, and nothing short of inciting and executing terror. You cannot fight fire with fire and this is precisely what the terrorists do not understand. I have come to think of them as modern day savages.

Bhutto was a moderate who was the hope of many in Pakistan. She was the hope who would create change for the better - economically and politically. For the world, she was a better candidate for her fight against terrorism within Pakistan. (I strongly believe that Pakistan is a key breeding ground for Islamic fundamentalism, i.e. terrorism.) Yet, the modern day savages do not see that. Instead, to them, the song of brain-washed wackos continues to ring.

Don't let the song of the brain-washed wacko savages ring in your ear.

Location, location, location

First off - Merry Christmas everyone!

A shout out to Reno Ranger in Seattle, Washington - thanks for your response to my last blog! I'm having a Starbucks Grande Chai Latte just for you man - help keep the Seattle economy going.

I'm now on my way back to the frozen tundra of northern Indiana. Sad. Very sad. It is currently 80 degrees, sunny, and absolutely beautiful here in West Palm Beach. As you may have guessed, I'm at the airport, PBI. It is surprisingly busy and crowded for Christmas day. We had a wonderful and relaxing time by the beach as we watched surfers take advantage of some rather large waves (large for us).

The entire time I was here, I kept thinking to myself, why the heck do I live in the cold?! You see, America's a great country with choices. Yet, I choose to live in the frigid ice-covered permafrost of northern Indiana! Irrational human I am. Well, perhaps the beach would not be as glorious if I did in fact live here.

Why do you live where you do?

Florida flight

How do you know you're on a flight to Florida? 80% of the passengers have one of the following: a wheelchair, a walking stick, balding or very gray hair... i.e. they're old by most definitions. Seriously, it's quite amazing. We're at the Cleveland Hopkins waiting to board our flight and there are a disproportionately more retired / old citizens than usual. Just interesting, that's all!

A new addition!

Upon the verbal request of one of my more devoted followers, I've finally added a counter (on the right). Now I can finally tell just how popular this blog is. So far, not so good. But then again, I'm not really writing for a particular audience. It is nice, though, to have feedback.

Tomorrow I'm headed to sunny, wonderful, beautiful, and most excellent Chad land. The country of pregnant chads, bad ballots, where all sorts of funny things (corruption?) took place in 2000 and brought this lunatic president - Bush - into power. In case you're unfamilar with this circuitous language, it is Florida of which I speak.

I have been thinking of a few things, but I'll have to save it for a later post. In the mean time, if you're bored and hate your job, read this.

Probability of being you

Have you wondered about your odds of being who you are? Since I feel somewhat unhappy, I should remind myself of the odds of being where I am. I hesitate to give out all my personal information, so I'll make up some generalizations.

Odds of being born as an American about two to three decades ago: 230,000,000 / 4,500,000,000 = 5%
Odds of being born to a family that is not divorced, is happy, and generally functional: 50%
Odds of having average or better financial means: 50%
Odds of having a college education: 25%

Total odds based on these factors alone = 0.3125%

So, there was a 0.3% chance that I would be born as me. In other words, if I were given the chance to be conceived again, i.e. to become a random egg and sperm again, would I take it? Of course not. Well, then, I shouldn't really complain, should I now?!

What are your odds of being you?

"And if I count all my blessings, I get a smile on my face
Still it's hard to find faith" -- Sugarland

Rants and raves of a hopeless operations associate

As you may know, I thoroughly hate my job. It's absolutely useless. At the end of the day, I hardly achieve anything. In fact, in theory since I'm a shareholder of the company, I should either ask for a drastic pay cut or resign altogether knowing that eliminating my job makes the company better off financially and therefore increases the value of my handful of shares. My job can be done by a monkey and it shocks me how well I'm compensated for it. Essentially, it's a computer operations job and involves pressing a few buttons every so often to run programs written by programmers in-house, logging the results into an Excel spreadsheet, attempting to isolate the problem if one occurs and then either solving it or contacting the right person to solve it, running database queries (SQL), and a rare bit of self-initiated analytical work. It makes me wonder how many people out there are in my position and if most people's job is like mine, except that they make it seems majestic and the world's panacea. I do wonder.

At the same time, I do feel very fortunate to have gotten the job, given my circumstances. I know I was praying fervently (literally, to the Judeo-Christian God in case you're curious) when I wanted the job. Now that I have it, perhaps I don't appreciate it as much. But perhaps that's part of being human - to want to grow. I've been here six months... we'll see how much longer I can hold onto this sinking ship. After all, they did call me Anchor for a reason.

A Few Responses

And now for the responses to the Dream Job post below.

1. Hard attributes

a) I don't really think these are as important, necessarily, as the soft attributes. Often, I think it's the people around you that may make a place worth your time and energy. However, several layers of management certainly play a role. Having worked primarily at large, overly-structured organizations, I only have one perspective, and my conclusion is the proverbial response most economists will give you: it depends. At my current job, the organization and its structure is rather annoying - but that has more to do with the people than the structure of the organization. I believe I would like like to try an organization in which there are relatively few layers between the big boss and me.

b) Geography - ideally, of course, a beach and mountains within close proximity would be best. If I had to choose one topography over the other, the beach would it as I love to scuba dive.

c) Company size: not a priority, but too large and you're another minion; too small and the organization may not be firing on all cylinders. But, then again, Warren Buffett's Omaha headquarters has no more than a handful of people - I believe it's about 15 if not fewer.

d) Local vs Global: Of course, a company with a global reach is much more dynamic and has the potential for a far greater positive (or negative) impact. But, local companies have the ability to reach out to individuals with faces and people you may know. If preference is a must - it would be global as therein lies growth opportunities, and most importantly, challenges that are fun and interesting. For example, trying to understand the mindset of Indian consumers in northern India would require a study of the region, its history and the mindset of the area's residents, along with countless others. Such situations present unique opportunities that would allow me to learn and grow on a personal level. But, this does not mean local companies do not pose such opportunities. Rather, given the world in which we live, it is increasingly important to have a global vision.

e) The work environment. This is a tough one. I want an environment that fosters independent thinking, forces you to think analytically, is accepting of new out-of-the-box ideas, and one in which my decisions will have some impact or meaning to the society at large. For instance, in one of my former jobs, I did a lot of statistical data work. The end result - after about 2 years, about 50% of my work was ever used in a meaningful way. Of that 50%, not more than 10% had any sort of impact - on anyone - in my opinion.

f) The manager. I've had one super manager - Mike Gibson - and one absolutely horrible manager (currently my manager). The nice thing about the latter is that I now know how not to treat employees and what not and never to do. The bottom line: I dislike having a boss. If I do have one, which more than likely is always going to be the case at least for the foreseeable future, I would like them to be more of a mentor than a boss. Mike G is awesome, for instance. I have a tremendous amount of respect for the man: humble, super intelligent, unselfish, good-hearted, high-spirited, helpful... great guy. It's my hope that I'll get someone like him again and be able to develop a longer lasting professional relationship that is meaningful to both parties.

g) Coworkers. This a *huge* portion of it. I think coworkers ought to be happy about their work. They should not only display enthusiasm for the work, but give it their best. Some qualities include: personable, unselfish, intelligent, helpful, friendly, caring, enthusiastic (about life in general), dedicated, and high integrity. Adam, for example, gets a shout out - a great example of a great colleague.

h) Salary. This is tough. Tough, tough, tough. Let's face it, there's no amount that's too much. Yet, there is a minimum threshold. We all need to live and life is expensive. Period. No one needs $10 million a year - yes all you corrupt CEOs who eat shareholder money like it's ice-cream (for you it is, for us it's blood, sweat, and tears). But, at the same time, earning $20,000 a year is not going to cut it, even in Guthrie, OK. Factor a family of five, mortgage payments, car payments, college tuition, emergency funds... it's an endless list. So, salary is an important factor for me. As far as amounts go, however, it's silly to write any down. But, a decent salary that allows a family to live comfortably is nice to have, i.e. you should be able to eat out once a month, take a two week vacation if desired, own a home large enough for your family, and be able to donate to charity if you choose to do so. You get the picture - it's not a factor to discount.

Finally, I think every job has its ups and downs. But, what do you tell yourself during the down swings? Is that when you come to a realization that what you're doing is meaningless, or is that when you realize that you have an important job function in society and that if you didn't do your job, there were would be negative consequences?

Good-bye Fed Funds Rate

I have come to a new conclusion today: The Federal Reserve should not have the ability to control the overnight lending rate and the discount rate. Rather, these rates should be determined in the marketplace. This is certainly not an original idea, but it simply makes sense in today's global financial markets. The Fed should, however, maintain full control of banking regulation.

Yesterday was a great example of the power a small group has in controlling the destinies of millions of people. The markets were expecting a 50 basis points (.50%) cut in the Federal funds rate, which is the overnight lending rate banks charge each other. Instead the Fed delivered a 25 basis points cut. The logic behind having the markets determine this is that the market is made up of countless individuals - generally very smart people who are a lot quicker acting and thinking that the economists at the Fed. We already use the marketplace mechanism to determine the price of commodities, which includes food (wheat and milk for instance), oil, lumber, and metals such as gold. In fact, just about any commodity you can think of has its price determined in the market - it's not only about stock prices. And, we also have a market for predicting the Federal Reserve's moves - the fed funds futures market. And then, there is the bond market which determines interest rate on government lending - short and long term.

The problem with the current system whereby a small group at the Federal Reserve determine the rates is a lack of transparency. The marketplace is always trying to guess what the Federal Reserve's next move will be. The Federal Reserve, on the other hand, constantly watches the marketplace to determine what they should do, but often lags significantly or acts in a manner that is unexplained. Yesterday's move, for instance, was made under the guise of inflationary fears. I have news for the smart people at the Fed: there is no indication of inflation. People don't have money to pay their mortgages, and many are worried about their home values falling faster and quicker than ever. The consumer is weak - this is not news, even to the Fed. Higher oil prices have acted like a tax - taking away more money from people's disposable income. This has helped curb inflation, ironically.

If the overnight rates were determined by the marketplace, I believe that the current credit crunch would be a lot farther ahead in terms of being solved than at the current pace. The reason is that the markets are lot more dynamic and quick acting than the Fed, which only meets 8 times a year. The overnight lending rate would have come down at the beginning of the summer and the current elevated LIBOR rates would probably not have been an issue.

One way in which this could work is that the Fed would control liquidity based on the market rates. So, open market operations would continue as they do now, except that they would use the market determined rates as the targets and thereby add or remove liquidity accordingly.

I am probably missing a plethora of important technical details, but that's for the so-called experts to sort out. The basic idea is that we need a lot more transparency. The financial markets have become almost a bank for most Americans as most savings through various financial products, e.g. 401Ks, IRAs, and many others, are in securities whose prices are determined in the marketplace. These prices fluctuate dramatically when the Fed makes unexpected moves and hurts the very people it is trying to help. Simply put, to have an organization that is:

a) not transparent enough,
b) constantly lagging in its ability to react to the current economic environment,
c) has tremendous power in determining individual wealth effects and individual financial decisions,

is simply not acceptable in today's extremely fast moving global financial markets.

I hate the markets

I hate the markets. Hate them. With a passion too.

I don't know why I'm always tempted to go back to them everyday. I've been here before and I always tell myself this is it, I'm done. Then, before I know it, I'm back. It's an addiction. I must stop this crap and adhere to buy and hold and homework.

No more futures.

No more options (after I get out out of my current positions).

No forex.

No derivative trades.

The only participation in the financial markets will be through the use of stocks, and only going long with sound theses.

I need to quit being a dumbass.

Your Dream Job

An excellent article about finding your dream job from BusinessWeek can be found here.

Key points (direct quotes):

1. Your task is first to understand what you're looking for, and decide which elements in your wish list are most critical for you; and then to make and execute a plan to go out and find that job. The very worst way to land a dream job is to wait for it to find you.

2. Think about your wishes in two separate categories. In your first category, you'll list the "hard" attributes you're hoping to find in a dream job—company size, industry, job function, local or global enterprise, level of management, division vs. headquarters role, etc. [In the second category list the "soft" attributes - below].

3. What makes a work environment appealing for you, including items like: How mature an industry do I want to work in?

4. What kind of manager do I want?

5. What kinds of people do I prefer to work around? Some of us need, above all, to work with smart and intellectually curious people who zip through the New York Times Sunday crossword over a half-cup of coffee, while others need a friendly, supportive team and couldn't care less about intellectual heft.

6. How important is salary? Would other forms of compensation, from time-off to business travel to your favorite location to tuition reimbursement, affect the equation? How do you define "well compensated" at this stage of your career, and how important is that to you?

Or you could take the ole Warren Buffett approach and say "Which job would I do even if no one paid me for it?"

I'll answer these questions soon!

Mmmm, I want...mmmm, yes, I like!

This morning I got an email from Costco with the subject "Saving the best for last". If I were a girl, I would demand this gift. If I didn't get it, I'd cry.

You can view the gift here.

Absurd!

Loopy Lupin

I've been reading the third book in the Harry Potter series: Harry Potter and the Prisoner of Azkaban. In an effort to keep my devotees fulfilled, I'll attempt to forecast what happens.

I'm currently almost half way through the book. Thus far, Sirius Black - the prisoner of Azkaban who epsconded - has somehow made it into Hogwarts. A few questions loom:

1. Who exactly is he and what did he do? The word on the street is that he wanted to be second in control after you-know-who. Moreover, he wants to kill Harry Potter. It is clear that he does not kill Harry Potter - that would end the series. Unfortunately, I also know that Black appears in later books - so, what happens to him in this book? I'm utterly confuzzled on the matter.

2. Who let Black into Hogwarts? Professor Severus Snape alluded to the new Professor Lupin. I think there might be something there. While demonstrating the boggart to his students, Lupin did not allow Harry to participate because Lupin feared the boggart would turn into you-know-who as it takes the form of the person its victim is most fearful of. So, my conjecture is that you-know-who resides in Lupin and that if Harry had been allowed to participate, the Boggart would have turned into Lupin. The irony, though, is that Harry does not fear you-know-who, but rather he fears the dementors. Lupin had simply assumed that Harry heard the dark one.

3. So, what about Lupin? I think he will be destroyed by the end of this book.

That's all for now!

My needs... extended

This is what I want for Christmas this year: best-thing-ever click here to see it.

Tower, Beechcraft Baron 58 ready for take-off

I'm back for a second consecutive dose - whoa!

As some of my devotees (is that blasphemous?) know, I love to fly. The only problem is that I've never taken flying lessons or been instructed. I've learned to fly all on my own. I used to crash a lot initially, but thankfully due to the God-given powers I have in Microsoft Flight Simulator X, I emerge alive every time. For a very long time, I only knew how to take off and control the aircraft in the air. Last night, I finally managed to land safely - twice! In case you're wondering, I flew from Chicago's O'Hare to South Bend Regional Airport, and made a second flight from Kansas City International to Forbes Field in Topeka, Kansas. By the way, I flew a Beechcraft Baron 58. Lovely, just lovely. Now only if my most lovliest wife would allow me to purchase a gaming machine, I'd be closer to heaven! And here I was going off on how I have everything I need. The key is need. I simply just want a gaming machine!

On a more serious note, I encourage you to read this article on Bush's new plan to freeze certain subprime mortgage rates to avoid complete default: click here.

Thanks again for reading. Current temperatures remain low at 29 degrees farenheight, overcast skies and winds calm. You are now free to leave this blog.

A few notes

It's really quite strange how I just vanish. One day I'm here then I'm gone. But, I do return. I'm glad most things in life are not this way, i.e. disappearing at whim.

I've learned many things since I last posted. What I haven't figured out, however, is what this blog is really for. Is it for me to post any of my personal random thoughts? Or to focus on a particular topic? As the ShadowTrader (Peter) says, "Vot is the purpose of this?!"

An event of note: Kansas football. 11-1 Kansas has finally made it into a BCS Bowl game for the first time in 69 years. They're playing the Virginia Tech Hokies.

Over the past two days, I've been pondering changing career tracks completely and trying out education, i.e. becoming a high school teacher. It's a very strange thought for me as I've never really envisioned myself teaching 16 - 18 year olds. There are numerous hurdles associated with teaching, but I wonder if any of them are legitimate concerns for me or simply egotistical ones.

Something else I've been pondering: free will. It's a much discussed and debated topic amongst philosophers and theologians. The gist of it is that we all have free will, granted to us by God. We can choose to accept God or we can choose to not accept Him. I think free will is a great thing and allows us to truly become the humans we are as opposed to robots controlled by our creator. However, I think we ought to have the ability to choose to turn off free will after we have decided to follow a particular ideology. Of course, we'd have the ability to turn it back on too. But, to limit mindless play, you should only be allowed to change it no more than 2 or 3 times during your lifetime.

Moving on. Christmas is near and it's frigid outside, here in South Bend: 21 degrees at 2:00 pm EST. I'm coming to thoroughly dislike the time leading up to Christmas in America. Why? Because it has no meaning anymore than a gigantic season of worrying about getting stuff for people. Give gifts to the needy - great. Volunteer and help the poor - lovely. But worrying about buying this or that for people who already have more than enough is beyond my comprehension. Personally, I have everything - yes, you read that right, everything, I need at this time in my life. Accumulating more stuff - aka junk - only makes my already complicated life even more so. I might be the only who feels this way, but I think if you're thinking of giving people who already have plenty of stuff more stuff, forget about it. Rather, donate your time or money on their behalf to a needy cause, and then tell them you did it thinking of them. For instance, if a friend is passionate about animals, volunteer to clean the animal shelter; or, if a friend believes in a particular cause or supports a particular charity, donate your time or resource to it and tell them about it on Christmas. Americans probably give each other more stuff than any other country, yet divorce rates remain high, overall happiness is lower than many industrialized nations, the list goes on. So, the bottom line: stuff does not equal love, happiness, or unselfishness. It probably just propels the desire for more stuff.

And, finally, on a much lighter note. The next time you come across statistics, think of the following:

"Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital. " ~Aaron Levenstein

Of course, do have a Merry Christmas!

Words from the Oracle

I recently watched a talk by oracle of Omaha - Warren Buffet. There are some incredible points made, and to be honest it's really shaken my world view a little bit. It's not necessarily that I've never heard or read about his view of the world, in particular the financial world, but there's something about hearing it from the man himself.

While I'll continue to ponder what he says, I feel it's important to note some of the points down for now.

1. Don't risk what can't afford to lose for a reward that will not make you any better, i.e. leveraged options plays for me.

2. Sigma 6 and 7 events do happen, i.e. LTCM.

3. Even the smartest people - geniuses - make mistakes, i.e. LTCM.

4. Buy what you know and understand. If you can't tell what will happen to a company in 10 years, don't bother buy it.

5. Buy businesses that you won't have to get a quote on if the exchanges went down for 5 years because they're great companies, not tickers, i.e. Coke (and not KO!).

6. Only Wall Street makes money from activity, individuals make money from holding.

7. Don't take a job for the sake of building your resume; work in a job you would if you were independently wealthy.

Enjoy and keep tinkering.

You can watch the video here.

Random

She tells me she knows when I don't write,
I chew gum because it's just right,
tasty and minty,
it's all a little dingy.


.... My attempt at creating poetry, or rap, I'm not too sure.

The markets are on fire,
I'm a little dire,
But I certainly ain't no liar.

Alright, that's all.

Hello SB: Initial thoughts

As many of my most devoted readers may know, I recently moved to the South Bend, IN area from DC. I'd like to take a few minutes to capture my initial thoughts of the place. Contrary to most moves, I had never been to the SB area before, so it was quite interesting to drive in and know this would be it, at least in the short-run.

My first stop was the mall. I generally think a mall in any city is one good way get a feel for the place. What a cultural difference! It was shocking and almost seemed as though I'd migrated to a different country. I was surrounded by mothers in their early 30s, at the latest, walking with several of their children. I realized I had lost touch of the family concept since moving to DC, where having one child in your late thirty's and early forties is a huge deal. Here in SB, having kids is a welcomed way of life. In DC, having kids is almost something that is put off until the most perfect and convenient time, as one pursues their career aspirations. While I do not condemn the DC way of life nor condone the former, it's good to know that people are happy once they have children and that life for parents does not end when that happens - a seemingly popular belief amongst the night-hawks in the capital.

Next, I took a quick stroll around the city, or I tried. I was a little disappointed with the city's overall condition. The infrastructure, particularly the roads, seemed rather old and run-down as did a lot of the city's homes and buildings. I'd always heard that due to outsourcing of many industrial jobs, many in this area were left unemployed over the years. If that is true, it is certainly visible.

A quick ride into Notre Dame's campus later, though, seemed to redeem a few of the city's dilapidated qualities. While I have yet to visit the main campus, it certainly seems very lush and very well maintained.

Aside from individual instances and examples, the overall mood of the city certainly seems laid back and people seem content. Strangers are very nice to each other and sales people in the stores are exceptionally helpful, at least compared to DC. The lack of compactness is also noteworthy for this former DC-area resident. Most of the major stores are large square boxes spread out over several acres, with lots and lots of vacant parking spaces.

This will certainly be a change from the bustling and crowded life I lived for the last 2 years. The pace will be slower, reasons for a heart attack will decrease, and hopefully I'll grow to be a better blogger!

And, on a final note, everyone seems to wear 'ND' attire in some form or another. Go Irish!

American Dream

All work no play may have made Jack a dull boy
But all work no God has left Jack with a lost soul
But he's moving on full steam
He's chasing the American dream
And he's gonna give his family finer things

“Not this time son I've no time to waste
Maybe tomorrow we'll have time to play”
And then he slips into his new BMW
And drives farther and farther and farther away

Cause he works all day and tries to sleep at night
He says things will get better;
Better in time

[Chorus]
So he works and he builds with his own two hands
And he pours all he has in a castle made with sand
But the wind and the rain are comin' crashing in
Time will tell just how long his kingdom stands
His kingdom stands

Well his American Dream is beginning to seem
More and more like a nightmare
With every passing day
"Daddy, can you come to my game?"
"Oh Baby, please don't work late."
Another wasted weekend
And they are slipping away

'Cause he works all day and lies awake at night
He tells them things are getting better
Just take a little more time

[Chorus]
So he works and he builds with his own two hands
And he pours all he has in a castle made with sand
But the wind and the rain are comin' crashing in
Time will tell just how long his kingdom stands
His kingdom stands

He used to say, "Whoever dies with the most toys wins"
But if he loses his soul, what has he gained in the end
I'll take a shack on the rock
Over a castle in the sand

Now he works all day and cries alone at night
It's not getting any better
Looks like he's running out of time

[Chorus]
'Cause he worked and he built with his own two hands
And he poured all he had in a castle made with sand
But the wind and the rain are coming crashing in
Time will tell just how long his kingdom stands
His kingdom stands

All they really wanted was you
All they really wanted was you
All they really wanted was you
[Fading]was you

-- Casting Crowns

Want to be a trader?

Then you better think and act like one. Learn more here.

Want to see Wellington, NZ?

Check out traffic in major cities around the world, in real-time, and free!

http://www.trafficland.com/

This is an incredible concept. Do check it out at some point. The website has live camera feeds in various cities around the world and you can click on available locations to check out the action at the time! Super awesome stuff.

Getting There

Well the sun sets in the west
But as fast as you go, how would you know
You're a busy boy, I guess
Who just wants the gold at the end of the road
Think of all you miss
Passing through like this

You want an answer as soon as you say a prayer
You want to land the moment you're in the air
Baby the living is all in the getting there

Don't be the first in every line
Now and then you can be at the end
'Cause there's only so much time
And you can't get back every minute you spend
You're not even sure
What you're running for

You want an answer as soon as you say a prayer
You want to land the moment you're in the air
Baby the living is all in the getting there

Think of all you miss
Passing through like this

You want an answer as soon as you say a prayer
You want to land the moment you're in the air
Baby the living is all in the getting there

The living is all in the getting there
Getting there

-- Terri Clark

"Spread love everywhere you go: first of all in your own house. Give love to your children, to your wife or husband, to a next door neighbor... Let no one ever come to you without leaving better and happier. Be the living expression of God's kindness; kindness in your face, kindness in your eyes, kindness in your smile, kindness in your warm greeting."

- Blessed Mother Teresa of Calcutta

A simple love

Understand this, my friend, and you'll have understood more than most:

He loves you, forgives you, and accepts you just as He made you.

With arms wide open, He showed you His love. Now, He awaits to embrace you with the same open arms. It is your turn to respond. So, go forth, go towards those wide open arms. I can hear Him call you, go ahead.

Our Father...

Our Father, who art in Lawrence,
Hallowed by thy game.

Thy bracket come,
Thy upset will be done, in Syracuse as it is in Allen Field House.

Give us this day our deserved game,
and forgive us our turnovers,
as we forgive Roy who double-crossed against us.

And lead us not into defeat,
but deliver us from East Coast bias.

For Kansas is the basketball kingdom,
And the tradition,
And the glory,
For ever and ever.

Amen!

What should I do with my life?

The answer lies here.

This is an incredible article that I think should be mandatory reading for everyone at some stage of their life.

I hate everything

He was sitting there beside me
Throwin' doubles down when he ordered up his third one
He looked around, then he looked at me
And said I do believe I'll have one more.
He said I hate this bar and I hate to drink,
But on second thought, tonight I think I hate everything.

Then he opened up his billfold and threw a 20 down
And a faded photograph fell out and hit the ground
And I picked it up he said Thank ya bud.
I put it in his hand, He said I probably oughta throw
This one away, 'cause she's the reason I feel this way,
well, I hate everything.

I hate my job, and I hate my life.
And if it werent for my two kids, I'd hate my ex-wife.
I know I should move on and try to start again,
But I just can't get over her leaving me for him.
Then he shook his head and looked down at his ring,
And said I hate everything.

He said, That one bedroom apartment where I get my mail,
Is really not a home, it's more like a jail,
With a swimming pool and a parking lot view. Man, it's just great!

I hate summer, winter, fall, and spring,
Red and yellow, purple, blue and green.
I hate everything.

I hate my job, and I hate my life.
And if it werent for my two kids, I'd hate my ex-wife.
I know I should move on and try to start again,
But I just can't get over her leaving me for him.
Then he shook his head and looked down at his ring,
And said I hate everything.

So I pulled out my phone and I called my house
I said Babe, I'm coming home we're gonna work this out.
I paid for his drinks and I told him Thanks, Thanks for everything

--George Strait

"To your Mercy, O Lord, I entrust my past. My present, to your Love, and my future, to your Providence." ~ St. Padre Pio. Taken from Adoro te Devote

Income Inequality: Why you should care

I recently came across a great article written by Charles Wheelan, PhD, Why Income Inequality Matters. I urge you to read it.

Wheelan compares the poverty he recently experienced in Brazil to the $50 million bonuses Wall Street paid out recently. Some fine point in the article are:

1. The income inequality in America has increased between 1970 and 2005 as measured by the Gini coefficient - an index that measures income inequality across nations, where 0 represents perfect equality and 1 represents absolute inequality. The U.S. score jumped from 0.39 to 0.47 between 970 and 2005.

While one can argue about the merits of the coefficient, it would be a useless exercise as this number - while not perfect - is widely accepted as a good measure of income inequality amongst those in academia. Moreover, if there are any other measures that you deem better than this one, please let me know.

2. Our sense of well-being is determined more by our relative wealth than by our absolute wealth. In other words, we care less about how much money we have than we do about how much money we have relative to everyone else. In a fascinating survey, Cornell economist Robert Frank found that a majority of Americans would prefer to earn $100,000 while everyone else earns $85,000, rather than earning $110,000 while everyone else earns $200,000. (Directly quoted from Wheelan).

3. Although the "tournament effect" (i.e. higher salaries not only motivate those who receive them, but also those who hope to receive them) provides a good argument for the rags-to-riches story, many nations such as Brazil, do not have the infrastructural mechanisms to support such paths. In so doing, then, illicit behavior and activities may be encouraged as all hope to share the pie is lost.

A fascinating article, one I strongly encourage you to look at.

Merry 2007!

And so ends the Christmas break, New Year's celebration and a host of other parties. So long 2006 - you brought times of great joy, fascinating challenges, deep sorrow, and even mystery.

Most of all, 2006, you created a historic year for the world's equity indices. I applaud your hard work and thank you for it. As for the rest of us - we were the people who made 2006 what it was - according to Time magazine. We, the people, were Time's Person of the Year. Yay us!

To all my readers: may you have a superb 2007; may it bring you great joys you have not imagined, love you have always wanted, and wisdom you have always lacked!

Merry Christmas!

Have a Merry Christmas my dear friends!

An empty luggage rack

I bought a lottery ticket after several months. I had the feeling today - I knew I was going to win, something at least. So, on my walk back home this evening I purchased a Mega Millions ticket. The winning jackpot: $40M.

Well, here are the results: 9, 32, 37, 42, 48 Mega Ball = 7
My numbers: 1, 8, 16, 20, 46, Mega Ball = 14

In other words, I did not win... a few bucks. I must say, though, that the entertainment of waiting for the winning numbers was worth the cost. By the way, did you know that 50% of the revenue goes to winners, 35% goes to fund government interests in participating states, and 15% is commission for the sellers.

Ah, but what do I care! After all, I ain't never seen a hearse, with a luggage rack.

Bragging Rights

About a year ago I blogged about creating technology to create picture searches, i.e. instead of words, search using pictures. See the blog titled "Google This: A Picture" written on Nov 8, 2005.

Somebody listened and now there's a company doing just that - read it here.

Or perhaps I just thought about it after someone else...

Some days I really wish I knew how to program - we'd be at Internet 7.7 by now!

Visit her!

I feel the need to advertise for this God-granted talent:

www.rsjames.com

Brian Littrell and Rebecca St. James

Rebecca St. James

Brian Littrell: "Welcome Home"

Rebecca St. James

This woman is amazing - just incredible. Professional, extremely talented, a real woman of faith.

I went to her concert last night - it was an absolutely fantastic show.

She was there with Brian Littrell - recognize him? He was one of the Backstreet Boys! "What! A Jayhawk now goes to Backstreet Boys concerts?" You might ask yourself. Brian was there with Rebecca. But, he's incredibly talented as well, and I'd go to his concerts too!

Pictures coming soon!

A New Breed: Extreme Workers

I recently came across the following article on Marketwatch: "The rise of the 'Extreme Worker'.

I've always believed that America is a great country for many reasons. One of these is that any legal individual has the opportunity to work as hard as they'd like, so long as the work is legitimate. Moreover, there is an incentive to work. Of course, Uncle Sam will take some of your earnings away and progressively more the more you make, but you are still given the opportunity and incentive to work hard. And, the harder you work, the better off you'll be financially.

However, there is a cost to this - as in all things. You're health and social life, for one, may suffer.

Now, there's a new term for people who work over 70 hours a week, must be available at any time of the day or night to serve clients, and hardly take vacation: extreme workers.

Some of the consequences of being an extreme worker include:

1. 46% say family relationships (with spouse and children) are sacrificed.
2. 50% say it makes it impossible to have satisfying sex.
3. Their kids eat too much junk food.
4. Women see it and feel it's all their fault.
5. Women feel there is a direct line between the kids' underachieving in school and the oppressive hours that Mother puts in on the job.

These are just some of the negative social and personal consequences. Of course, there might be positives as well, but what's a life worth living if you can't spend time with your loved ones and, equally, show them that love? After all, I ain't never seen a hearse, with a luggage rack.

So, conclusion:

Resolved that I, a Jayhawk, do not want to live the life of an extreme worker!

Global Warming = Irrational Hysteria?

http://releases.usnewswire.com/GetRelease.asp?id=77195

Thanks pmf for the above link. First it was the financial markets that were exhibiting "irrational exuberance"; now, it is global warming concerns that are exhibiting "irrational hysteria"!

Either way, cut the carbs (CO2 that is!) - see the article below.

Discouraged?

Don't give in to discouragement....... If you are discouraged it is a sign of pride because it shows you trust in your own powers. Never bother about people's opinions. Be obedient to truth. For with humble obedience, you will never be disturbed.

-- Blessed Mother Teresa

Thanks Kate for this!

What is a Place?

One of my many devotees requested that I respond to his comments left on 11/27/2006 at 10:20:00 AM in the now-famous column "Strangers: the Bad, the Ugly, and the Kind":

We now run into greater complexity in the problem of human behavior. The "kind strangers" in Charlotte can partially be explained by the fact that there still exist geographic cultural differences within the United States. Charlotte, though increasing rapidly in size and financial strength, is still a "southern city". As a southern city, filled by at least a plurality of people from a southern culture, manners and common courtesy are more prevalent. DC on the other hand, located on the border of North and South, is a hybrid -- a city of Southern efficiency and Northern hospitality.

My devotee, pmf, makes several interesting points that remind me of a geography class I took in college in which we did nothing but discuss what the word "place" meant for about 8 weeks! While it may appear somewhat strange to discuss a word as simple as 'place' at first, one later realizes that indeed any place is not simply defined by its physical construct at any given moment in time. Instead, there are a plethora of elements that make up a place: the physical, the human, and the interaction between the two are inextricably intertwined. And this leads to both human and physical geographical complexities which are alluded to above such as the cultural differences between two geographically distant locations.

If you are interested in delving into this topic further, I suggest you begin by looking at some of Robert Sack's publications.

By the way, did pmf mean DC is a city of Northern efficiency and Southern hospitality?

So what if it's not CO2 - cut it off anyway!

Today I'll take the other side of my last blog and assume that excessive release of carbon dioxide or other greenhouse gases is not the root cause of global warming. Indeed many would argue that this is a fair assumption.

I still believe that it is a good idea to be vigilant of our consumption of fossil fuels and control the amount of CO2 emission. Doing so helps us in at least two ways: reducing foreign dependence on oil and reducing health risks.

I don't live in the Middle-East and do not support being dependent on them. We've all heard the argument and know the implications - depending on others for a resource as vital as crude oil is simply a ticking time-bomb. Rather, if policies encourage the research and the use of alternatives to crude oil, not only does it decrease aggregate demand (and possibly price assuming the cartel does not also cut supply drastically), but it also reduces the emission of CO2 amongst other gases that pose a longer-term health hazard. Have you been to Los Angeles or perhaps seen the air above a major city during the day, for instance during take-off or landing on an airplane? The revolting sight of brown smog will be enough to change your mind on our love affair with burning fossil fuels.

Global Warning

Over the past several months, I've come across several articles addressing global warming. Several articles in the recent issues of The Economist and Fast Company - two of my favorites - have discussed the issue at great length. Both magazines have had articles that accept global warming as a reality and encourage policies and practices on a national as well as personal level that may help reduce carbon dioxide emission - the chief cause of global warming.

In particular, I urge you to read "How Many Lightbulbs Does it Take to Change the World? One. And You're Looking At It." that may be accessed here (http://www.fastcompany.com/magazine/108/open_lightbulbs.html).

I came across a short article by Jeremy Siegel (found here) - an economist at the University of Pennsylvania - that sheds more light at the issue and, more importantly, the consequences if global warming continues at currently projected paths. The impacts are devastating to say the least:

The seas could be 10 feet higher in a mere 60 years. Of the five largest cities in the United States (New York, LA, Chicago, Houston, and Philadelphia), only Chicago and... Philadelphia would not be seriously impacted.... And goodbye to New Orleans and trillions of dollars of real estate that lines our coasts. The economic consequences of rising waters would be catastrophic.

(Note: Kansas will not be affected!)

Solving global warming, on the other hand, is no easy feat. But, we've got to start somewhere and the relatively small cost to avoid complete destruction is worth it - call it cost/benefit or risk/reward analysis or whatever else.

Naturally, then, I've come to believe that this is a serious issue and a solution lies in our everyday actions.

Where am I?

Most of you know this by now: I'm engaged! Hence, I'm occupied for now, but will return here later!

By the way, if you own ANN - I feel your pain!

Oops, I goofed!

Well, I was off on my ANN analysis. The stock tanked after my posting. Actually, what happened was that it failed to breakthrough and as I had cautioned the RSI was getting into overbought territory. The kicker was the weak retail sales that came in from several chains. That, my friends, is the market for you - a roller coaster ride!

ANN: Breakthrough!

This is a very bullish chart for ANN. Since early July when it made a high above 44, it's had a hard time breaking through the price level, forming a fairly substantial resistance level. The price level was re-tested in mid September only to retrace. Over the past three sessions, we've seen above average volume and some great action today to break above the resistance level. MACD is also very bullish.

So, what should a trader do here?

Set stops and watch this baby carefully. The RSI is approaching overbought levels, but we may get an "over 70 RSI burst" move up... sit tight, this could be a nice long trade.

Strangers: the Bad, the Ugly, and the Kind

A devoted reader recently responded to my criticism of the city's unfriendliness by saying:

It seems to me that one of the major problems of urban life is that we are surrounded by strangers. We constantly interact with people we don't know, and this creates (or allows for) a little less kindness than we'd experience if we all knew our neighbors.

My response:

While I do agree that we increasingly interact with strangers in very large cities, why are the dynamics a lot different in smaller cities, but still of a decent size? For example, on a walk in the city of Charlotte, NC, I was greeted with more than one smile and 'hey'. Charlotte, of course, is no village. There, too, you run into strangers, but perhaps friendly strangers?

White Noise?

I've been quite bothered by the sirens and random distracting noises that exist within the city. Aside from the common ambulances and VIP Cadillac that zoom through loudly, there are several very obnoxious grates on the streets like the one on the corner of Virginia Avenue and E Street NW by the CVS. Do you know why they make such a deafening sound? It's like there's a supersonic jet preparing for take off underneath! My latest strategy is to avoid such routes.

'Homo Sapiens' or 'Homo Serpents'?

I feel the serious need to address an observation: the people of DC need to live a little and ease up. They are as hard as rock and think those who look like them are strange animals as opposed to simply fellow homo sapiens!

What am I talking about?

A friend and I went on a bike ride on one of the many trails in DC. We went north from Georgetown to Bethesda on the Capital Cresent Trail and back. It was an absolutely beautiful sunny October day, but the people on the trail - runners, joggers, and bikers alike - had a stern and very serious look on their faces. We tried to smile and wave at some of them, but either didn't get a response or received an unfriendly gesture. I don't get these people on the East Coast! Or, is it simply the demographic we came across - mostly wealthy city folk who are too consumed by themselves?

Hopefully, someone who's more familiar with these DC types will read this and let me know what's up.

Find Some Peace Here

This picture was taken in Rochers de Naye, Switzerland - a small resort town near Montreaux on Lake Geneva - visible in the picture.

Murder, Corruption, Sex, and the Economy

I, once again, have been absent for a while. However, I return. And this time, I hope to continue writing more frequently. I partially blame the fine weather over the past five months or so for keeping me away.

I'd like to address two serious matters that seem to be ubiquitous in the media lately: murder and corruption on Capitol Hill.

Let's start with murder. There are now at least four killing rampages to come to mind immediately that have occurred over the past two months. Two of these occurred in schools (in Colorado and the Amish community in PA) and the other two, most recently, involve entire families being shot. What the heck is going on? Why is this happening? Last night I read about a family that was shot to death on the side of I-95 in Florida. The reports included the following description: "The mother... was found clutching her two sons in an apparent effort to protect them." This is horrific. Simply gruesome. Why?

And, most recently, a family in Iowa was found shot to death - both parents and three children. What for? Why?

Is the second amendment at fault here, or is it simply an America that just doesn't get it? Or, have these things always been happening and because of the ease of communication today, I know about them? Peace be with the souls of all these individuals.

And then corruption and sex scandals on the Hill - Abramoff & Ney (see my post going back several months ago regarding the K-Street gutter), Foley's nasty sex addiction to pages, and most recently, Curt Weldon - a PA Republican congressman, is charged with using his influence to direct lobbying business to his daughter. Should elected officials, or just congressmen families or close relatives even be allowed to be lobbyists? Of course there's a conflict of interest bound to develop. Regardless, that's a topic for a different time. For now, what's important to note is that these are elected officials in the world's purportedly best democracy. I suppose we wouldn't know about the crimes if the democracy wasn't real, and it would be impossible to punish their crimes. The bottom line: it all amounts to greed for power and greed for the green.

This just in: there are, unbelievable but fortunately, good things happening too. The economy seems to be faring well, corporate earnings are coming in strong (I don't know whether that's necessarily a good thing, but it does mean the economy is strong), the Dow Jones Industrial Average continues to make record highs and doesn't look like it will stop any time soon (I hope!). On a more personal note, there are always a plethora of things for which to be thankful.

I'll leave it at this for now and attach a picture for you to enjoy!

Some Favorite Stock Quotes

Theater Churches - Everywhere!

In Focus magazine did an article on theater churches. Much to my surprise, the article's picture captured your humble author!

Here it is: http://www.infocusmag.com/06march/multitasking.htm

Go Bradley... I mean Bucknell... what do I mean?

The Jayhawk family mourns the second straight loss in the first round of the NCAA tournament of their not-so-mighty basketball team, albeit 2006 Big 12 Champions. This time, it's Bradley. Does anyone see a trend? Last year it was Bucknell. Small school, relatively unknown, both start with B and are the underdogs.

I'm beating buy-and-hold

Once again, the path of least resistance, i.e. non blogging has taken root. Although, not really. I've been updating my trading thoughts.

Thought of the day is: my analysis on the market has been right. While I can't let hubris overcome me, I'm equally amazed!

Just a Note

  

Golfing on a Battle Site

 

The picture speaks for itself - a dude golfing at a Chancellorsville battle site. I really will not understand some people! 

Chancellorsville

 

At this site, a soldier was killed every second for five staight hours. It was an extremely bloody battle. The Confederates, however, maneuvered extremely well. Although outnumbered by Union troops, the brilliant General Thomas J Jackson helped bring victory to the Confederates. It is also here that Gen. Jackson was killed by his own men (from North Carolina, by the way!).

Date(s): April 30-May 6, 1863

Principal Commanders: Maj. Gen. Joseph Hooker [US]; Gen. Robert E. Lee and Maj. Gen. Thomas J. Jackson [CS]

Forces Engaged: 154,734 total (US 97,382; CS 57,352)

Estimated Casualties: 24,000 total (US 14,000; CS 10,000)

Result: Confederate victory - Lee's greatest victory?

* Above stats taken from http://www.cr.nps.gov/hps/abpp/battles/va032.htm 

Wilderness

 

There are two important Civil War battlesites between DC and Charlottesville, VA. After several months of promising myself I'd stop by one day, I finally did. This is one of the sites where the Battle at Wilderness took place - Saunders Field. Please note that the vegetation was extremely dense during the war, which made it an extremely difficult fight.

Battle dates: May 5-7, 1864 (I.e. after Gettysburg, towards the end of the war).

Forces Engaged: 162,920 total (US 101,895; CS 61,025)

Estimated Casualties: 29,800 total (US 18,400; CS 11,400)

Result: Inconclusive

*Above stats from http://www.cr.nps.gov/hps/ABPP/battles/va046.htm 

Here It Is - Day of Love

Dear devoted blog reader,

Merry Saint Valentine's day!

With lots of like,
A Jayhawk

DJIA - 2/11/2006

 


Here's the DJIA 6 months chart. Things to note:

1. Negative divergence on MACD, RSI indicated by the blue lines ("Take Note"). This indicates a downward bias and indeed that's what we've seen over the past 3 weeks.

2. Notice the 10,700 - 11,000 tight range over the past 3 months.

3. 50-day MA tested on 02/10/2006 intraday.

4. Note the support and resistance... the 10,730 support also coincides with the 38.2% Fibonacci retracement, i.e. 10700 is very critical!

So what now?

Let's look at fundamentals for a moment.

1. Profits - a few misses on the tech side, GOOG, AMZN, QSII.

2. Fed - doesn't look like they'll stop here even though the economy is exhibiting weakness - weaker GDP and productivity numbers.

3. Oil, Iran, Iraq - it's a mess. There's fear.

4. The yield curve - it is flat and NOT inverted - all y'all bears out there who keep saying it's inverted, get your fact right! Here are the most recent yields from Yahoo Finance:

Maturity Yield

3 Month 4.33
6 Month 4.48
2 Year 4.67
5 Year 4.58
10 Year 4.58
30 Year 4.55

The spread between the 3 month and 30 year US treasury is +22 basis points.
6 Month & 30 Year spread: +7 basis points.
2 Year & 30 Year spread: -12 basis points.

At worst it's inverted between 2 year and 30 year. But when you consider the 6 month, it's not. So, I'd say it relatively flat.

But, the bias certainly seems towards inverting. What does this mean? There's more confidence in longer term bonds than there is in shorter term bonds, i.e. investors are more confident of the US economy longer term than shorter term.

So, here's my take: I think the range continues, perhaps with a downward bias for the near-term. We could make it back to 11K but I don't see any reason to push above it - I expect 11,000 to continue to be a resistance, with 10,700 a near-term support. 

And the winner is...

...Pittsburg Steelers!

But can someone explain the "world champion" title to me please?! "World" seems to imply more than just the United States. However, the Steelers haven't played any team outside of the United States! I think the rest of the world should sue the Superbowl for misusing the title "world champion"!