What does this dude make you think of? Do you know the source of this picture? Do you know the dude?!
Tuesday, March 11, 2008
What does this make you think of?
What does this dude make you think of? Do you know the source of this picture? Do you know the dude?!
Friday, March 07, 2008
Thursday, February 28, 2008
Dante's Prayer by Loreena McKennitt
When the dark wood fell before me
And all the paths were overgrown
When the priests of pride say there is no other way
I tilled the sorrows of stone
I did not believe because I could not see
Though you came to me in the night
When the dawn seemed forever lost
You showed me your love in the light of the stars
Cast your eyes on the ocean
Cast your soul to the sea
When the dark night seems endless
Please remember me
Then the mountain rose before me
By the deep well of desire
From the fountain of forgiveness
Beyond the ice and the fire
Cast your eyes on the ocean
Cast your soul to the sea
When the dark night seems endless
Please remember me
Though we share this humble path, alone
How fragile is the heart
Oh give these clay feet wings to fly
To touch the face of the stars
Breathe life into this feeble heart
Lift this mortal veil of fear
Take these crumbled hopes, etched with tears
We'll rise above these earthly cares
Cast your eyes on the ocean
Cast your soul to the sea
When the dark night seems endless
Please remember me...
And all the paths were overgrown
When the priests of pride say there is no other way
I tilled the sorrows of stone
I did not believe because I could not see
Though you came to me in the night
When the dawn seemed forever lost
You showed me your love in the light of the stars
Cast your eyes on the ocean
Cast your soul to the sea
When the dark night seems endless
Please remember me
Then the mountain rose before me
By the deep well of desire
From the fountain of forgiveness
Beyond the ice and the fire
Cast your eyes on the ocean
Cast your soul to the sea
When the dark night seems endless
Please remember me
Though we share this humble path, alone
How fragile is the heart
Oh give these clay feet wings to fly
To touch the face of the stars
Breathe life into this feeble heart
Lift this mortal veil of fear
Take these crumbled hopes, etched with tears
We'll rise above these earthly cares
Cast your eyes on the ocean
Cast your soul to the sea
When the dark night seems endless
Please remember me...
Monday, February 25, 2008
Genius Dad Award
As many of you may know, I find much amusement in the financial markets. I generally share this enthusiasm with a few close friends and family. I'd like to give a shout-out to my father-in-law for two fantastic stock picks: DVN and CHK. These two have been on absolute fire since he mentioned them to me almost 3 years ago - up 70% and up 50% respectively, not counting any dividends during this time. You might think that he has mentioned many other companies that I have disregarded. But, in fact, no - these are the only ones. So, a 100% accuracy with an average return in excess of 60% in just under 3 years. Nice, very nice. My only regret: I never acted on his recommendations. But, the good news is that I'm waiting for the next one.
Thursday, February 21, 2008
Are you an, er, investor?
"We believe that according the name ‘investors’ to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a ‘romantic.’" --Warren Buffett
Sunday, February 17, 2008
Mount Tabor vs Mount Calvary
As you can see, I didn't give up blogging for Lent. Today, our priest - Father Bill - preached a most excellent homily, drawing a parallel in Jesus' life that struck me as incredible.
Three disciples - Peter, James, and John - join Jesus on Mount Tabor where they experience the Transfiguration of Christ. Here, Jesus is clothed in an all-glowing and majestic white garment that reveals His true identity (God); He is surrounded by two of the most regarded Jewish 'fathers' - Moses and Elijah; and, God conspicuously tells the disciples "This is my beloved Son".
Let's contrast this to what happens soon after they descend and Jesus' suffering begins. His life ends on Mount Calvary. Here, His clothes are stripped away from Him; on the cross, Jesus is now surrounded by two criminals; and, His executioner says "Indeed this man was the Son of God."
Isn't that parallel amazing?! Clearly, I think so!
(Ironically, Peter denies knowing Jesus three times, even though he had been with Jesus during the Transfiguration.)
Three disciples - Peter, James, and John - join Jesus on Mount Tabor where they experience the Transfiguration of Christ. Here, Jesus is clothed in an all-glowing and majestic white garment that reveals His true identity (God); He is surrounded by two of the most regarded Jewish 'fathers' - Moses and Elijah; and, God conspicuously tells the disciples "This is my beloved Son".
Let's contrast this to what happens soon after they descend and Jesus' suffering begins. His life ends on Mount Calvary. Here, His clothes are stripped away from Him; on the cross, Jesus is now surrounded by two criminals; and, His executioner says "Indeed this man was the Son of God."
Isn't that parallel amazing?! Clearly, I think so!
(Ironically, Peter denies knowing Jesus three times, even though he had been with Jesus during the Transfiguration.)
Thursday, February 07, 2008
A tale of two rates
Just an expansion to my response earlier. Most so-called frivolous spending that seems to be the topic of discussion within many circles is arguably the result of of easy credit and hence credit cards. Whether the Fed funds rate is 3%, 3.5%, or 5%, it will not affect how the American consumer spends on his/her credit card. Credit card rates have astronomical rates - 18%, 25%, 29% amongst other incredible numbers - and *that* in itself should be a deterrent to bad spending habits and debt.
The Fed funds rate is more of a response to stimulate business capital spending which in turn creates employment. I think it's fairly clear at this point that we have a weakening labor market.
Here's a perfect example of increasing credit card interest rates while the Fed funds rate is decreasing. So, this should give you some hope that Fed rate cuts fear do not automatically mean there will be an increase in frivolous spending!
The Fed funds rate is more of a response to stimulate business capital spending which in turn creates employment. I think it's fairly clear at this point that we have a weakening labor market.
Here's a perfect example of increasing credit card interest rates while the Fed funds rate is decreasing. So, this should give you some hope that Fed rate cuts fear do not automatically mean there will be an increase in frivolous spending!
Tuesday, February 05, 2008
The second Fed cut
Pat asks: "I'm curious what the Jayhawk thinks about the Fed's further 50 basis point reduction in the rate. Are we nearing the point of overcompensating? Will cheap cash encourage more irresponsible spending on the part of the American consumer? My vote for the Jayhawk presidency may depend on his answer!"
Given your last statement, I probably shouldn't say anything!
To answer your question directly, I do not believe the Fed's actions will necessarily "encourage more irresponsible spending on the part of the American consumer."
You can't choke the economy, allow high levels of unemployment, and kill economic growth in an effort to teach people how to save. That's like severing a kid's finger every time he or she makes a mistake!
Instead, we need to promote growth and simultaneously educate people on personal finance. Bernanke has blatantly spoken about the latter.
Looking at the ISM Services data point that came in today, we're in deep trouble already. The Fed's job now is to worry about economic growth before inflation. As far as the American consumer and spending goes, it can't be fixed overnight. Over time, though, I believe there are awareness efforts currently in place that will encourage more saving, including the housing correction.
Pat, I think you should hand out flyers at Farragut West that encourage people to save!
Given your last statement, I probably shouldn't say anything!
To answer your question directly, I do not believe the Fed's actions will necessarily "encourage more irresponsible spending on the part of the American consumer."
You can't choke the economy, allow high levels of unemployment, and kill economic growth in an effort to teach people how to save. That's like severing a kid's finger every time he or she makes a mistake!
Instead, we need to promote growth and simultaneously educate people on personal finance. Bernanke has blatantly spoken about the latter.
Looking at the ISM Services data point that came in today, we're in deep trouble already. The Fed's job now is to worry about economic growth before inflation. As far as the American consumer and spending goes, it can't be fixed overnight. Over time, though, I believe there are awareness efforts currently in place that will encourage more saving, including the housing correction.
Pat, I think you should hand out flyers at Farragut West that encourage people to save!
Money and Happiness: A response
A frequent and enthusiastic reader of Jayhawk's Nest, Pat, responds to a post earlier, so aptly titled "$$$ = :) ?":
"How many times must we be told that money does not equal happiness? I am thinking about an economic model in which households seek to maximize gratitude (as opposed to profit), because the link between a sense of gratitude and happiness is MUCH more robust than that between money and happiness.
Practical consequence of an economy that seeks to maximize gratitude as opposed to profit?: buying locally, especially from people you know. I am not anti-trade... I'm anti-anonymity. I am not pro-protectionism... I'm pro-personal transactions."
Pat - Great thoughts, as usual, and thanks for checking in.
Just a few minor points - it's firms that maximize profits, not households. Households, which are made up of individuals, are "utility" maximizers. Supposedly, utility would include money. And, if so, households would save money. Strangely, they generally have not.
However, I don't think the reason we have a negative savings rate is that people don't want to save. In fact, they believe they are saving when they invest in their homes and their 401(K)'s etc. Elaborate investment vehicles were not easily available 30 - 40 years ago, e.g. IRAs. The stock market was way too expensive for the average Joe, i.e. commissions were high and minimum requirements to stocks (or better put partnerships in companies) were astronomical. Competition and technology has changed that over the past decade or so, and for the better. The only problem is that education has lagged. People do not realize that their investments are not a ticket to purchase the world.
I think the issue is that we went too far with credit and have hit extremes. The availability of credit anonymously had never been experienced before and it's likely that we - as a society - simply went too far using it, and profit-maximizing firms went too far issuing it. The intent was not criminal, but the consequences seem to be that way. It's simply a process or learning a new way of thinking, i.e. how to effectively use credit. I believe we're now in the process of correcting back to equilibrium.
The problem is that money does matter when it comes to making people happy. (See this study by Firebaugh and Tach.) However, the correlation between money and happiness is not linear, but rather it has diminishing marginal returns. After so much dough, you have enough. The question is: what's the threshold? And that is the problem. At some point, one has to say enough is enough. For most people, though, it's a hard thing to do since we're naturally inclined towards greed.
So, where does that leave us? I believe that the current system is fine. It's impossible to measure gratitude or utility. As a society, we need to educate people, especially the youth, about credit. It is *not* free money. Instead, it's simply a means of convenience. I see personal credit as a substitute for cash. I'd rather carry one credit card than cash. In this way, I can track expenses, not worry about emergency funds on the road, etc, etc.
I'm not convinced about buying local, etc. I'll refer you to Ricardo's competitive advantage argument. I'll buy from the moon if it's cheaper and my goal is to maximize savings. I don't see any reason to buy from the local dude if Wal-Mart has the same item for half the price (which it generally does).
In relation to the article I initially posted, I think my take-away is this: forget the past (after seeking forgiveness of course!), don't worry too much about the future, and make the most of the present for it is a gift!
Suzi Orman says it best: people first, then money, then things.
"How many times must we be told that money does not equal happiness? I am thinking about an economic model in which households seek to maximize gratitude (as opposed to profit), because the link between a sense of gratitude and happiness is MUCH more robust than that between money and happiness.
Practical consequence of an economy that seeks to maximize gratitude as opposed to profit?: buying locally, especially from people you know. I am not anti-trade... I'm anti-anonymity. I am not pro-protectionism... I'm pro-personal transactions."
Pat - Great thoughts, as usual, and thanks for checking in.
Just a few minor points - it's firms that maximize profits, not households. Households, which are made up of individuals, are "utility" maximizers. Supposedly, utility would include money. And, if so, households would save money. Strangely, they generally have not.
However, I don't think the reason we have a negative savings rate is that people don't want to save. In fact, they believe they are saving when they invest in their homes and their 401(K)'s etc. Elaborate investment vehicles were not easily available 30 - 40 years ago, e.g. IRAs. The stock market was way too expensive for the average Joe, i.e. commissions were high and minimum requirements to stocks (or better put partnerships in companies) were astronomical. Competition and technology has changed that over the past decade or so, and for the better. The only problem is that education has lagged. People do not realize that their investments are not a ticket to purchase the world.
I think the issue is that we went too far with credit and have hit extremes. The availability of credit anonymously had never been experienced before and it's likely that we - as a society - simply went too far using it, and profit-maximizing firms went too far issuing it. The intent was not criminal, but the consequences seem to be that way. It's simply a process or learning a new way of thinking, i.e. how to effectively use credit. I believe we're now in the process of correcting back to equilibrium.
The problem is that money does matter when it comes to making people happy. (See this study by Firebaugh and Tach.) However, the correlation between money and happiness is not linear, but rather it has diminishing marginal returns. After so much dough, you have enough. The question is: what's the threshold? And that is the problem. At some point, one has to say enough is enough. For most people, though, it's a hard thing to do since we're naturally inclined towards greed.
So, where does that leave us? I believe that the current system is fine. It's impossible to measure gratitude or utility. As a society, we need to educate people, especially the youth, about credit. It is *not* free money. Instead, it's simply a means of convenience. I see personal credit as a substitute for cash. I'd rather carry one credit card than cash. In this way, I can track expenses, not worry about emergency funds on the road, etc, etc.
I'm not convinced about buying local, etc. I'll refer you to Ricardo's competitive advantage argument. I'll buy from the moon if it's cheaper and my goal is to maximize savings. I don't see any reason to buy from the local dude if Wal-Mart has the same item for half the price (which it generally does).
In relation to the article I initially posted, I think my take-away is this: forget the past (after seeking forgiveness of course!), don't worry too much about the future, and make the most of the present for it is a gift!
Suzi Orman says it best: people first, then money, then things.
Sunday, February 03, 2008
Dollar slide over?
There are some out there who think Bernanke's rate cuts were a dumb decision because it hurts the dollar. So to my cassandras of dollar doom and gloom, I present the following article. You may want drum rolls.
From Bloomberg.com: "Ben S. Bernanke's decision to lower interest rates 1.25 percentage points last month will end the dollar's two-year slide, according to the world's biggest currency traders."
Read more here.
From Bloomberg.com: "Ben S. Bernanke's decision to lower interest rates 1.25 percentage points last month will end the dollar's two-year slide, according to the world's biggest currency traders."
Read more here.
Incredible Giant WIN!
WHOA! AMAZING! WHAT?! DID THEY WIN? THE PATRIOTS LOST?!!
WOW!
I'm stunned. By far the best Super Bowl game I've watched, ever. Go Manning brothers!
Now, what does this mean for you and me? It means invest your money in the S&P index fund and there's a good probability you'll make the big bucks by the end of the year. And perhaps at the end of the year, we'll have another wow - a wow year. Perhaps the Super Bowl was just a glimpse of the volatility and final outcome we can expect for stock returns in 2008.
Congratulations NY Giants!
By the way, Belichick is class-less and deserves to lose. Did you see him run away when the game was not even officially over? How lame!
WOW!
I'm stunned. By far the best Super Bowl game I've watched, ever. Go Manning brothers!
Now, what does this mean for you and me? It means invest your money in the S&P index fund and there's a good probability you'll make the big bucks by the end of the year. And perhaps at the end of the year, we'll have another wow - a wow year. Perhaps the Super Bowl was just a glimpse of the volatility and final outcome we can expect for stock returns in 2008.
Congratulations NY Giants!
By the way, Belichick is class-less and deserves to lose. Did you see him run away when the game was not even officially over? How lame!
Saturday, February 02, 2008
Looking for Dividends?
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.
Friday, February 01, 2008
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
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
Click here.
http://www.youtube.com/watch?v=SJ_qK4g6ntM
Thursday, January 31, 2008
Wednesday, January 30, 2008
Tuesday, January 29, 2008
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/
http://honeysbobbrinkerbeehivebuzz.blogspot.com/
Friday, January 25, 2008
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.
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.
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.”"
Thursday, January 24, 2008
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.
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?
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
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?
Tuesday, January 22, 2008
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?
Sunday, January 20, 2008
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...
"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."
Saturday, January 19, 2008
Bob Brinker recap
This is really just for me. I ought to start an account at del.iciou.us
http://honeysbobbrinkerbeehivebuzz.blogspot.com/
http://honeysbobbrinkerbeehivebuzz.blogspot.com/
Friday, January 18, 2008
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!
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
What an idiot.
Click this link and see it for yourself here.
http://www.youtube.com/watch?v=JwnQZFJ8Q3o
Thursday, January 17, 2008
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.
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.
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!
Monday, January 14, 2008
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?
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.
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.
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.
Thursday, January 10, 2008
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...
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...
Thursday, December 27, 2007
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.
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.
Tuesday, December 25, 2007
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?
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?
Thursday, December 20, 2007
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!
Wednesday, December 19, 2007
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.
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.
Friday, December 14, 2007
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
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.
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.
Thursday, December 13, 2007
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?
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?
Wednesday, December 12, 2007
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.
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.
Tuesday, December 11, 2007
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.
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.
Monday, December 10, 2007
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!
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!
You can view the gift here.
Absurd!
Sunday, December 09, 2007
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!
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!
Friday, December 07, 2007
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.
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.
Thursday, December 06, 2007
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!
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!
Monday, October 15, 2007
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.
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.
Tuesday, October 09, 2007
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.
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.
Saturday, June 16, 2007
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!
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!
Saturday, April 28, 2007
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
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
Saturday, April 07, 2007
Friday, April 06, 2007
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.
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.
Wednesday, March 28, 2007
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
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
Tuesday, March 27, 2007
"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
- Blessed Mother Teresa of Calcutta
Thursday, March 15, 2007
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.
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!
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!
Tuesday, March 06, 2007
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.
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
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
Thursday, February 22, 2007
"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
Thursday, January 11, 2007
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.
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!
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!
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