Archive for June 2007

To the right is the current list of books I’m reading and studying. Is the American American Dream Killing You, a real pessimist pisser of a book in my opinion — but well written — is authored by a longtime very close friend. I have no idea what to do about him (nor he with me), but things go that way, sometimes. He and his family live in the Canary Islands, now, and it seems to suit him just fine. Maybe someday when he finds that the world hasn’t exploded at all, he’ll rejoin it. Maybe not, and I wouldn’t blame him. Also contained in that list up until a moment ago was actually Nassim Nicholas Taleb’s more recent book, The Black Swan: The Impact of the Highly Improbable. I was aware of his earlier book, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, which is now in a 2nd edition with lots of edits and additions that make it a third bigger (I think in response to some of the criticisms of the 1st edition). I thought I’d read the second one and then the first if I wanted to. But events compelled…

Here’s the Shanghai Composite Index over exactly the last year of action. From 1600 to 4300…that’s just a hair under 170%. You know, I have to wonder whether guys like Greenspan are paid by the pros to issue “warnings” about China…oh, wait…that’s from 2004…here you go. Well of course there’s going to be a contraction at some point. Lots of people and institutions are riding on profits of 200% and more, and at some point they’re either going to want to take them, or the fear of being the last out the door is going to tip the balance and there’s going to be selling (heavy distribution), which, of course, is going to be in excess of what will be able to be absorbed. So if there aren’t enough buyers at the prevailing prices for stocks and people still want to sell, then the bids (prices) drop until there are sufficient buyers to take on all sellers. (Sometimes I get the impression that people think there’s some other sort of mechanism going on, other than a very simple market mechanism writ humongous.) At any rate, my speculation right now is that the pros are still buying, which means that they…

OK, Houston: So this is going to be a rant. I don’t have time to look it up, but I’m on record as “calling a top” on the anthropogenic global warming theory fictional hysteria the very moment I saw Al “fuckface” Gore in an interview (in answer to a question about skepticism and dissenting views) completely dismiss the idea with a shit-eating, presumptuously condescending grin, stating, “No, the science is settled.” That worthless mutherfucker of a shitbag needs to settle in the bottom of a six-foot hole in the ground; that’s what needs settling. Yea baby; and then everyone jumped on the “consensus” bandwagon and that was the beginning of the end. I’ve told you so; I’m telling you so; and I’m pretty sure it will be so — though anything can happen. So what’s next? Why, global cooling, of course. Not only does this article give a good explanation as to the history of the warming debate hysteria, it notes the history of the dissenters, how their dissent was qualified by its supporters dickbreath opportunists, and how it finally got cracked. But don’t expect your mainstream shit peddlers media outlets to pick up on what’s going on right under…

As I’ve been saying, my own experience bears this out, and in different ways. Competitive runner and personal trainer finds out the hard way. Take a look.

Radley Balko via Fox News: They arrested Kelly on charges of violating an outdated Pennsylvania wiretapping law that forbids audio recordings of any second party without their permission. In this case, that party was the police officer. Kelly was charged with a felony, spent 26 hours in jail, and faces up to 10 years in prison. All for merely recording a police officer, a public servant, while he was on the job. … Last year, Massachusetts Attorney General Tom Reilly threatened Internet activist Mary T. Jean with arrest and felony prosecution for posting a video to her website of state police swarming a home and arresting a man without a warrant. … Michael Gannon of New Hampshire was also arrested on felony wiretapping charges last year after recording a police officer who was being verbally abusive on his doorstep. … Photojournalist Carlos Miller was arrested in February of this year after taking pictures of on-duty police officers in Miami. … Philadelphia student Neftaly Cruz was arrested last year after he took pictures of a drug bust with his cell phone. While certainly not justified, perhaps we can understand why they don’t like being filmed in an unscripted and controlled manner….

Though I’ve had my share of unfounded worries in life, one bug I’ve never caught is hand wringing over state video surveillance. I suppose it’s primarily because “privacy” is only a right as it relates to being free to pursue my own values in peace, free from preemptive interference from the state. Get the essential right, and privacy takes care of itself. The other reason is that it’s only out in public, where — for the time being, at least — they’re talking about state surveillance and you simply don’t have any reasonable expectation of “privacy” there. People see you, in case you didn’t notice. Your image is embedded into the photographs of potentially hundreds of people worldwide who have happened to catch you in the background while snapping a picture of something else (and with higher and higher mega-pixel resolution, it’s going to be less and less relevant how far away or “small” you are as a function of the photo’s size). And now this. Seven minutes and change. You’ll think the first part is way cool but you haven’t seen nuthin’. Wait until you get to the punchline. Next up: video, of course. And after that? Integrating facial…

For whatever reason I was thinking about how my brother likes to haul this out every now and then so my wife can pretend she’s mad at him for hauling it out again. The music is by Ogden Edsl.

The first thing I thought of when I saw this was to wonder how long it will take before nobody in Massachusetts can remember — or cares to think of — a time when health care (“for one’s own good”) wasn’t mandated by the state as a matter of law; you know, like imagine the funny blank stare you would get if you talked about a time when a person could just hop in an automobile and take off, and as long as he didn’t hurt anyone — except himself, which was presumed to be his right to do — nobody would have even considered that he ought to be stopped, and even if so, certainly not by someone brandishing a truncheon and a gun. How the times change. I do note, however, that the requirement seems to apply only to “taxpayers,” with the loss of a (pitiful) standard deduction as penalty for non-compliance with state diktat. Clever, eh? Just “insignificant” enough as to not make it worth anyone’s while to fight — until such time as nobody remembers when it wasn’t. (link: beck)

I have in mind to write a series of posts along the lines of a recent comment from Greg Swann on this post and in reference to others surrounding it. In the immediate, what calls my attention is Billy’s comment. No bullshit: you’ve got your head completely up your ass about China. There’s a tie-in to it all in my mind (my posts, Greg’s & Billy’s comments) which I generally think is our belief that we can somehow predict the future. Not in any precise way, but we do seem to think and we strive to calculate what’s ahead. In the markets (in which I’m involved day in, day out) it’s manifest in fundamental analysis of companies, industries, and economies (profits, management, contracts, deals, commodity prices, competition, analyst ratings, markets…the list goes way on) and in technical analysis of price and volume action, chart patterns, relationships, ratios, oscillators, moving averages, divergences, stochastics, probabilities, deviations, statistical regression analysis and so on. At once I am prepared to say it’s all bullshit, and at the same time realize that it’s the only data we have. As poor as it is, we’ve got to have some idea of where to place our bets…

I don’t know about anyone else, but I’m paying a lot of attention to China. I find myself continually surprised at both the enormity of the horrible conditions that were once widespread but have now diminished substantially, to the enormity of what quasi-private capital investment is doing over there. It is truly astounding and I don’t think I’ve yet seen an estimate of the potential worldwide beneficial side-effects that even comes close. Sure I’d love to see their political class put out to pasture (as I would over here) but it’s good that people aren’t still starving over there (where once 30 million people starved to death, China is now a net exporter of food). It’s good that China has allowed the organic development of thousands of millionaires over the last decade, millions of middle class, and allows the pursuit of tens of thousands of self-financed small entrepreneurial ventures every year. Yea, it sucks that people ultimately have to get permission to produce values, but they increasingly think that over here, too. If I knew a way around it that didn’t involve tossing my potential away, I’d love to undertake it. The only way I know to deal with it…

It got built; it can be taken down I was going to make a note about this 10-minute video interview of Regina Kelly by Radley Balko when I saw it yesterday. Events got ahead of me, but Billy does a usual fine job of commentary — as he does any time he takes the time to do it. He did; and now I don’t have to. Read the whole thing (not very long) and see if you can grasp the underlying point in it. My angle was going to be that all this new media is just the thing to make people aware of what’s going on, and I’m actually optimistic it will do some good in the medium term, like perhaps the next decade or so. Unfortunately, there will be many Regina Kellys who get chewed up in the meantime. You may get chewed up, or some part of you, or someone you love and perhaps depend on will get chewed up and in so many cases the damage will be irrevocable — if not financially, in terms of a crushed soul. The state will always make laws and exercise them, and yes, there is a peaceful process for…

It’s hard not to get a chuckle out of this. The Toyota Prius has become the flagship car for those in our society so environmentally conscious that they are willing to spend a premium to show the world how much they care. Unfortunately for them, their ultimate ‘green car’ is the source of some of the worst pollution in North America; it takes more combined energy per Prius to produce than a Hummer. I owned a Hummer H2. Fabulous vehicle. Expensive to run, but very dependable and truly very tough (unlike most owners, I actually used it in very adverse terrain). I used to run all Jeep Cherokees but they went to a unit body and ruined that vehicle as a serious 4×4. But I like change and so I ultimately got rid of it and got a BMW X5 SUV (4.4 liter V8), which, all around, is probably the best car I have ever owned (’86 ‘Vette was still the funnest, though). German engineering: now I get it. Of course I have no problem with hybrids either, though the smug moral superiority of so many of their owners is a bit off-putting. I know plenty of hybrid owners and…

All you voters are going to sort it out however you go about it, but it smells more and more to me like you all are going to try and make the ludicrous argument that Fred Thompson is the next Reagan, or thereabouts. Though Bruce doesn’t address that specifically, he does provide ample evidence that nothing could be further off. He also quotes from another article and comments… Thompson’s biggest challenge will likely be cementing his image as a conservative country lawyer fixin’ to shake up Washington — before his opponents brand him as an influence peddler and trial lawyer. The good news for Thompson is if he strikes back quickly and effectively, he can neutralize these attempts to characterize him. I would point out to Bruce: Thompson is an “influence peddler and trial lawyer.” So why would any libertarian thinks it’s good news if anyone can “neutralize attempts to characterize” the god dammed truth? But like I said, you all are going to do what you’re going to do. I just hope I don’t see much of that Thompson is Reagan crapola. Yea, Reagan ended up just as big a compromiser as they all do, but at least he…

Yesterday, my wife Beatrice completed her last day of teaching fifth graders — probably forever. This brings to a close a 25-year chapter that I believe is most distinguished by her day-to-day insistence on completely ignoring the political debate surrounding the general mess that is public education; getting up at 5 a.m., preparing her lessons and hitting the ground with the sole purpose of meeting her solemn responsibility to the kids with whom she is charged to educate. Well done, love. Damn well done. I never, ever had the slightest doubt that her kids were getting the best deal that could be had anywhere — in spite of what might be going on elsewhere, here and there, around this and that, turning on this issue and that. For Bea, that was all for others to concern themselves with. She was too busy worrying about how Johnny, Juan, Pham, Karesh, Omar, Quan, Cindy and Samantha were going to exceed the requirements she placed on them. She commands the utmost respect of peers, subordinates, and seniors; not for her work for the teacher’s union (she does none, and pays no attention); not for her work in showing parents who’s boss (they are,…

Yea, we’re about eight months behind “schedule” on my little project to force a bit of appreciation. Who wants to buy and hold property when you can buy and build, and achieve a leveraged return on investment of 100, 200% or more in a fraction of the time? Nothing wrong with doing either, of course, and the former — provided you pay some attention to location, location, location — is the closest thing to dummy-proof investing you’re ever going to find. Here’s what one of the two buildings is going to look like, which we’re certain is far superior to those units we modeled this project after (and which are pictured at that link, above). Those units have all sold now, and for prices that would provide us with excellent returns if we only do that well. (Click on the image for the larger version.) Needless to say, I’m pretty jazzed about all this. Just today, we received the first of two bids by well-known, recommended, verified competent (I stood in one of their current projects last Friday) contractors and the price knocked me over. It’s very nearly as low as our wildest dream price and far below our make…

I think now that one reason for my increasingly sanguine outlook over the last some months can be represented by the piece of the chart of the S&P 500 (SPX) that you see to the left. I’m in this stuff every day: I watch the action in various time frames; I watch it on multiple indexes, futures, commodities, currencies, bonds and I see the same thing over and over and over. This is exactly the last two weeks action, with each candle representing the day’s open, close, high and low. White means the close was higher than the open, and red the opposite. The largest of those red candles was last Thursday’s, a week ago. It prompted a market note from me. At the risk of seeming to be whatever distasteful thing it is to be when one quotes himself, I wrote: When we next enter a bear phase, you’ll know it soon enough by all accounts. You’re not going to predict it ahead of time (no one is, except by complete accident; or, predicting so often that they eventually have to be right), so why guess? Wait until you know… If you hold appreciating assets, what’s materially different today,…

An email out at 12:03 a.m. last evening, last thing before hitting the rack: Subj: Potts B: Thanks for that, man. Did you catch the female judge have to catch her breath and composure? R Listen for that line from Simon Cowell after Paul Potts completes his performance. Turn up your volume and watch particularly for the rapturous response from the audience and the judges too, particularly the pleasant looking Amanda Holden. Speaking of opera and how I believe that anyone could love it if they gave it a chance (and listened to the right stuff), I told you that these guys were going to be big. They have achieved 26 # 1 chart positions internationally, sold over 13 million albums, and achieved some 104 gold and platinum awards around the world. With Il Divo, their first album, which was released in October 2004, they smashed Led Zeppelin’s 25-year record of being the only band to achieve a number 1 album without a commercial single release. It was even the highest charting debut album for a UK signed act ever in America. Here you go: twenty-three minutes of pure joy and splendor.

I’d wager that virtually every politician at least at the state level and above — and even too large counties and cities — knows and understands this completely. They may not understand that “price gouging” is a non-concept. But they do understand that it’s political gold and they’re very bullish on political gold. So don’t expect to be hearing clarity on the topic any time soon. I suppose we can fault the average guy (as usual) for not really thinking through things very well at all, which is probably unlikely to change. As soon as the general public realizes they’ve been scammed (again) with “price-gouging” hysteria (clue: hysterias are generally scams) the lay of the economic and political landscape will be such that there will exist new phenomena possessing sufficiently complex interactions for the cunning (politicians) to exploit the clue deficient (general public). And time marches on. Maybe they should just get it over with repeal the law of supply and demand. There are places where that’s the case and indeed, it completely solves the “gouging” problem. At the extreme end, the disequilibrium gets resolved in ways other than via price action, like, for instance, enough people starve to death…