It's time to pray again

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

Thy bracket come,
Thy upset will be done, in San Antonio 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 Roy tears.

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

Amen!

Life Inc.: Suffering

On my way to work this morning, I had a strange but non-unique thought. Given the choice, would most people choose to live, i.e. be born and go through the whole life sha-bang? For most people, perhaps as many as 80% of people it seems, when looked at from a superficial standpoint, I think the answer is no. That's a rather depressing thought and statement - don't you think?

Most of the reasoning stems from the purpose behind our lives and the juxtaposition of suffering in the world that comes with it. When I think of the billlions of people who toil day and night (and in between) to simply make ends meet, the unquantifiable amount of poverty, disease, hunger, injustice... around the world, I start to wonder what really is the purpose of all this. And, then, on the opposite spectrum, we have private islands, pristine private beaches, personal attendants, private jets... you get the picture. It really sucks to suffer.

So, why bother with the whole life thing (if given a choice at the beginning)? What's the purpose of living anyway, and more importantly of suffering through all of it? It doesn't make the sufferer happy, it doesn't make those watching the suffering happy, it doesn't create any value - or does it? Are you actually doing a disservice by having kids? After all, they are prone to the same suffering existent today, aren't they?

It is impossible to answer why suffering exists to fully please every person with the question. Your guesses are as good as mine. Why did God create suffering? It's an extremely hard question, if not an impossible one, to answer. However, I think we can look at the meaning of love in order to find some solace and the beginnings of an answer.

When our hearts ache and our minds are numbed by all the suffering around us, we are melted and brought to our knees in an effort to love the victim of this suffering. For instance, when we see a family go through unimaginable trials e.g. a gruesome death of a loved child, we - almost instinctively - react with compassion. Whether we act on that instinct and do something about it is a different story altogether. But, for a split second, I think it is fair to say that there is an outpouring of love to those in need of it - at the very least in spirit. This love that emanates from us is a natural instinct that fills a void and a vacuum that lacks it or has just lost it. In this example, the family has lost a source (and receiver) of love.

It is probably fair to say that seeing others suffer brings out the sympathy, kindness, compassion, charity, and unselfishness that lies in the deep abyss of each one of us. In essence, all these 'feelings' are a derivative of love. Every one of us, regardless of talent, intelligence, race, religion, gender, family background, hair color, political leaning, wealth, title or health, has the ability and inclination to react to suffering in the ways described above, in some form or another. Furthermore, this 'love' is one for which we constantly thirst to give and to receive. To give a few examples: we want to have "meaningful careers", "create change in the world", "help others", "have a happy family", etc. In the case of watching suffering, we want to give love to others; when we suffer, we seek love from others.

Love, then, is a primary element that makes us human, as opposed to simply an object of existence or a "living thing." Suffering is the lack of love, internal or external. It exists to bring about the love that is intrinsic in each one of us and exists within us. Whether we exercise it or not is a matter of choice. It unifies people beyond any boundary imaginable - racial, religious, cultural, political, hobby-based, any one. Everyone of us no matter who we are or how cruel we are - today, in the past, or in the future - has the capacity to love and to receive love.

God is love. His first two commandments are: love Him, and love others. In order to appreciate Him and His love for us, suffering must exist. Without it, we are unable to love, or to receive love. And, as a result, we are unable to know God.

F'd on Facebook

Do you post your life on Facebook? You may want to think again. Recently, a computer techie was able crack into pictures posted on the site, but to which he had no legal access. The bug has since been fixed. However, there are generally more cockroaches in such cases and there's no reason to believe a second and much larger hack attempt won't be successfully disasterous to its victims.

For the entire article, click here.

Bernanke's Rhapsody?

SING TO THE TUNE OF 'BOHEMIAN RHAPSODY' BY QUEEN

Is this the real price?
Is this just fantasy?
Financial landslide
No escape from reality

Open your eyes
And look at your buys and see.
I'm now a poor boy (poor boy)
High-yielding casualty
Because I bought it high, watched it blow
Rating high, value low
Any way the Fed goes
Doesn't really matter to me, to me

Mama - just killed my fund
Quoted CDO's instead
Pulled the trigger, now it's dead
Mama - I had just begun
These CDO's have blown it all away
Mama - oooh-hoo-ooo
I still wanna buy
I sometimes wish I'd never left Goldman at all.

(guitar solo)

~~~

I see a little silhouette of a Fed
Bernanke! Bernanke! Can you save the whole market?
Monolines and munis - very very frightening me!
Super senior, super senior
Super senior CDO - magnifico

I'm long of subprime, nobody loves me
He's long of subprime CDO fantasy
Spare the margin call you monstrous PB!
Easy come easy go, will you let me go?
Peloton! No - we will not let you go - let him go
Peloton! We will not let you go
(let him go !)
Peloton! We will not let you go - let me go
Will not let you go
let me go (never) Never let you go - let me go Never let me go – ooo
No, no, no, no, No, NO, NO ! -
Oh mama mia, mama mia, mama mia let me go
S&P had the devil put aside
for me
For me, for me, for me

~~~

So you think you can fund me and spit in my eye?
And then margin call me and leave me to die Oh PB - can't do this to me
Just gotta get out - just gotta get right outta here

Ooh yeah, ooh yeah
No price really matters
No liquidity
Nothing really matters - no price really matters to me
Any way the Fed goes.....

Penned by a Bear Stearns (BSC) guy.

It's Game Time

Are you ready for the show down?!

This says it all

"In an apparent foray into gallows humor, a $2 bill is pasted to the main entry of Bear Stearns' headquarters." - Marketwatch

The Mystery Man

Thanks for chiming in - a shout-out to Mel, Mo and Pat. Reno Ranger - please notice that you don't get a shout out because you didn't opine. You should next time.

So, who is this mystery man? Here are the possibilities:

1. A Bear Stearns shareholder watching his wealth plummet by the second, wait, there's no more to watch;

2. A Ralph Lauren model;

3. My alter ego;

4. A Barack Obama supporter listening intently to Jeremiah Wright's drivel - although he doesn't seem that aghast;

5. Ralph Nader's campaign adviser;

The truth: This picture was sent to me via email in a Ralph Lauren ad of some sort. I was so disturbed by the look on the dude's face, the seemingly complete lack of character, and the drab and boring background that I had to post it. Why on earth would I want to buy a Ralph Lauren suit if I'd look like him!? But then again, I didn't go to fashion school, don't live in NYC, and only hope to visit Milan some day... how would I know!

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?!

Looks cute, doesn't he?

Until he comes at you like this...

Still confused? May be this will help...

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...

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.

India - still a buy?

http://www.wisdomtree.com/bannerads/india/SA/ad1c.html

Christmas 2008: iToilet

Taken from here.

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

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.)

Where are you in this cycle?

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 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!

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.

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.