Wednesday, November 30, 2011

Shop 'til you drop

"There is a point in our culture beyond which camp and kitsch no longer make the least ironic sense, where consumerism loses its last mooring to civilization, where even seemingly legitimate protest devolves into farce. That point is Black Friday.

Let me be clear. I am not opposed to vigorous sprees of retail spending. For the sake of the U.S. economy, I would love to see a robust Christmas shopping season and I plan to do my part.

But there’s also a point where healthy consumerism becomes out-of-control marketing-driven commodity fetishism, and when we find ourselves checking our smartphones for last minute online deals while standing in line for a chain store opening at midnight on Thanksgiving, we are clearly too far gone. That’s insanity."

Black Friday: Consumerism minus civilization - Salon


via Geekdad

Virtual friends

"Did these folks really fit my definition of “friend”? Why would they want to read my day-to-day prattle? How did I know them and why should we stay in touch?

Photographer Tanja Hollander asked herself those questions and more. And rather than aimlessly ponder, she’s taken camera in hand and is visiting each of her 626 Facebook friends, removing “virtual” from their relationships and creating a portrait to document the moment. To further personalize their meetings, Hollander uses film and natural light to capture images of her FB friends and their family members in intimate settings — gathered around kitchen tables and lounging on living room sofas. She’s dubbed her efforts “Are You Really My Friend? The Facebook Portrait Project.”"

Are you really my friend - Etsy

Tuesday, November 29, 2011

Tipping Point of Doom

"THERE is an inescapable sense that the euro zone is accelerating toward an uncertain and terrible end. At the Financial Times, Wolfgang Münchau writes that the euro zone has but days to save itself. At Bloomberg, Peter Boone and Simon Johnson say that the beginning of the single currency's end is upon us. And of course, The Economist continues to warn of the rising possibility of a break-up, and explains how one might occur, in the latest print edition. Everywhere one looks, there are portents of doom.

Except, that is, in the markets. Equities are soaring today, perhaps as a result of technical factors like short-covering but perhaps, some suggest, on hopes that the euro zone is finally rising to the challenge facing it. From whence cometh this hope?

Hope is not yet dead. But markets will soon turn sceptical again as they wait for details to materialise. Unless euro-zone leaders can deliver the goods and fast, it won't be long—mere days, perhaps—before panic is once again ripping the single currency apart."

Could this be the plan? - Free Exchange

Already skeptical over here in the cheap seats.

"The U.S., U.K, and Japan should also view what is happening in Europe as their Sputnik moment and motivation to get their own fiscal house in order. There is no doubt, at least in our mind, a version is coming soon to each of these countries. Sovereign risk is all about confidence and the lesson of the European crisis is that confidence is fickle and fleeting, here today, gone tomorrow. Nobody knows the tipping point.

Watch to see if this rally has legs, which we doubt it will. Our sense is the Europeans will view it as a gift of the Magi and use it to exit. Stay tuned."

Euro Fracture: It’s the Politics, Stupid! - The Big Picture

2011 Christmas Price Index

"A sluggish economy coupled with weak demand has kept the 2011 PNC Christmas Price Index® (PNC CPI) to a moderate gain of 3.5 percent in the whimsical economic analysis by PNC Wealth Management based on the gifts in the holiday classic, “The Twelve Days of Christmas.”"

via PNC

Who killed the euro zone?

"No one disputes that Italians are responsible for the long-run potential of their economy and for their country's fiscal decisions. But the ECB alone regulates euro-zone demand. By engineering a contraction in demand to fight inflation, it likely coordinated a shift in market expectations concerning the solvency of several threshold economies. It's dangerous to walk alone at night in dodgy neighbourhoods, and it's dangerous to carry large debts within a system of fixed exchange rates. But just because a victim lived dangerously doesn't exonerate the fellow, or the central bank, that stuck in the knife."

Who killed the Euro Zone? - Free Exchange

Buffet on Europe

“The system as presently designed has revealed a major flaw. And that flaw won’t be corrected just by words. Europe will either have to come closer together or there will have to be some other rearrangement because this system is not working,” Buffett said in an interview.

“17 countries in the world gave up the right to issue bonds in their own currency. That is 100 degrees away from being able to issue them in your own currency like the United States,” he said. “The situation there is fundamentally different.”

Buffett Doubts Euro Survival; Says System Is Flawed - CNBC

I am a bit flummoxed at the STRONG overnight rallies in Europe and the US, based on Thanksgiving retail sales and SPECULATION that European leaders will boost efforts to end the debt crisis. The first point is silly, the second, what do you expect them to try and do? I think more to do with short covering after a week of weakness than renewed optimism. A rise in the Japan October jobless rate to 4.5% (made up number - IMHO) has put a dampener on things here this morning. It's all a LOTTERY and has been since the politicians got involved. Good luck. We will all need it.

"No, retail sales did not climb 16%."

No, Black Friday Sales Were Not Up 16% (not even 6%) - The Big Picture

William Hill Sports Book of the Year Award 2011


1. Among The Fans: From Ashes to the Arrows, a Year of Watching the Watchers
by Patrick Collins

2. Into The Arena: The World of the Spanish Bullfight
by Alexander Fiske-Harrison

3. The Ghost Runner: The Tragedy of the Man They Couldn’t Stop
by Bill Jones (Mainstream Publishing)

4. Engage: The Fall and Rise of Matt Hampson
by Paul Kimmage (Simon & Schuster)

5. Racing Through The Dark: The Fall and Rise of David Millar
by David Millar (Orion)

6. A Life Too Short: The Tragedy of Robert Enke
by Ronald Reng (Yellow Jersey Press)

7. 32 Programmes
by Dave Roberts (Bantam Press)

"Celebrated journalist Ronald Reng was today announced the winner of the William Hill Sports Book of the Year Award 2011, for A Life Too Short: The Tragedy of Robert Enke. One of the greatest honours in sportswriting, Reng's biography of Robert Enke, the German national goalkeeper who suffered from depression and took his own life two years ago, was praised by the judging panel for its powerful and insightful nature as well as its sensitivity and sincerity.

A Life Too Short examines the tumultuous life and untimely demise of a man who, from the outside, appeared to have it all. It tells the tragedy of Enke's struggles against his own demons and brings into sharp relief the demands and fears faced by those who play top-level sport.

First published in Germany (as Robert Enke: Ein allzu kurzes Leben), Reng's book was met with widespread praise and soon became an international bestseller. Translated into English by Shaun Whiteside and published by Yellow Jersey Press in the UK earlier this autumn, it represents the first translated title to have won the prize."
William Hill Press Office

Plenty of stuff for the book TAC Masters Book Club to get their teeth into over the holiday season... click any of the images above to go to Amazon, most links are for Kindle books, although a couple are not available in that format as yet.

Monday, November 28, 2011

Italian Tapioca

"Some stories in European press suggest that Italy is working on a very big loan package from the IMF. I have no doubt that there are ongoing discussions. There has to be. Either someone puts a finger in the dike or Italy goes tapioca.

That thought is difficult for me to fathom. How could we be so close to the brink? At this point there is zero possibility that Italy can refinance any portion of its $300b of 2012 maturing debt. If there is anyone at the table who still still thinks that Italy can pull off a miracle, they are wrong.

I think the Italian story is make or break. Either this gets fixed or Italy defaults in less than six months. In my opinion a default by Italy is certain to bring a global depression; one that would take many years to crawl out of. The policy makers are aware of this too.

So I say something is brewing. And yes, if there is a plan in the works it must involve the IMF. And yes, it’s going to be big.

Please do not read this and conclude that some headline is coming that will make us all feel happy again. I think headlines are coming. But those headlines are likely to scare the crap out of the markets once the implications are understood.

I don’t see a way out of this box. The liquidity crisis in Italy is scaring us to death, the solution will almost certainly kill us."

Italy next week - Zero Hedge

It's always extreme from ZH but it is scary stuff indeed.

Friday, November 25, 2011


"Many different types of crowd disturbance have bubbled up during 2011, but perhaps the oddest category has been the “flash mob robbery,” or “flash rob.”

It’s a fad that started in Washington, D.C. back in April, when around 20 people filed into a high-end jeans store in Dupont Circle and quickly made off with $20,000 in stock. Since then, the practice has spread — Dallas, Las Vegas, Ottawa, and Upper Darby, Pa. have all reported incidents since then — though the targets have gotten a bit more downscale, with most of the thefts taking place in convenience stores.

The latest crowd theft took place Saturday night at a 7-Eleven in Silver Spring, Md., and it fit the familiar pattern. Kids pour into the store, calmly help themselves to merchandise, and then stream out again:

Incredibly, in a poll taken in August, the National Retail Federation reported that a full 10 percent of businesses surveyed had experienced a “flash mob”-style theft."

‘Flash Robs’: Trying to Stop a Meme Gone Wrong - Wired

A few days in Greece

"There was a lot of talk about ‘convergence’ in the run-up to Greece joining the euro, as if swapping a weak currency for a strong one would magically turn a corrupt, nepotistic economy of olive groves and tourist beaches into a transparent, meritocratic Bavaria-on-the-Aegean. It seems obvious now that letting Greeks borrow, spend and import in what was taken internationally to be a pan-European Deutschmark would delay, rather than speed up, the kind of changes to Greece the North Europeans always said they wanted.

The other metaphor that vexes Manolopoulos is the expression ‘bailout’, implying rescue, when the bailouts for Greece have involved new loans to the country which, with unemployment rising and the economy depressed, it is somehow expected to pay back. Given that nobody forced foreign banks to lend money to Greece, and given that Greek governments haven’t invested the money but spent it on hiring extra civil servants, increasing wages and raising pensions, Manolopoulos argues that there is a case for regarding the money as ‘odious debt’ – a legal concept that suggests the people of a country shouldn’t have to pay back money their government borrowed and wasted."

Diary - Athens - James Meek - LRB

Worthwhile read..


"Global financial markets prepared for the euro's endgame after the sovereign debt crisis spread to Germany, the "stability anchor" of the single currency, and investors shunned its government bonds.

Europe's biggest economy suffered what analysts called a "complete and utter disaster" as it managed to sell only two-thirds of its 10-year bonds at auction. "It's a vote of no confidence in the entire eurozone," one said.

Amid widespread investor anxiety about the future, the European commission president, José Manuel Barroso, admitted that it would be impossible to save the euro unless eurozone countries agreed to strict controls from Brussels and the European Central Bank in their tax-and-spend policies.

German government officials tried to play down the scale of the abortive Bund auction, pointing to the lowest rate – 1.98% – ever recorded for such a long-term bond. A finance ministry spokesman said the abortive auction did not mean the government has refinancing problems.

But the federal finance agency (debt office) was forced to retain almost €2.4bn of the planned €6bn sale "for another day" and analysts said the weak demand indicated that eurozone contagion was now afflicting even Europe's strongest economy or what FT Alphaville calls "the only first-class passenger on the Titanic"."

Shock as €6bn German bond sale ends in failure - Guardian

In the aftermath of today's so-called failed 10 Year Bund auction, the number of explanations seeking to goal seek some preconceived theory as to what happened has soared with justifications ranging from the amusing to the bizarre to the outright ridiculous. Here is the bottom line: "failed" Bund auctions, in which the Buba (Bundesbank or the German monetary authority) steps in to "retain" an unbid for amount and hit a maximum issuance happen all the time. This has nothing to do with implicit or explicit monetization. It has everything to do with lack of demand at a given price. Nothing more, nothing less. And while it is intriguing to fabricate complex theories about broken secondary conduits or what have you, the explanation is far simpler. As SocGen puts it: "The fact that the Buba was forced to retain the biggest share of the sale in recent memory (see chart) is clearly a sign that some investors are no longer showing up or have started to buy considerably less, preferring other fixed income or alternative safe havens." No need to conceive an explanation where simply supply and demand will suffice. And in this case there was not enough demand at prevailing yields. And that in itself is the most ominous explanation because as SocGen concludes, "certain investors are starting to overlook the eurozone altogether"."

Revisiting Today's "Failed" Bund Auction: Less Than Meets The Eye - Zero Hedge

Thursday, November 24, 2011



If it scares, it airs

"To most journalists, a good story is defined in large measure by how much attention it will get. A story that makes page one, or leads the newscast, is better than one buried inside the newspaper or that runs after the third commercial. A story that people talk about for days, or ‘goes viral’, is even better.

All of which helps explain why the dramatic and alarming aspects of stories about risk often get played up, and the ameliorating or neutral or balancing aspects that might help do justice to the truth but which could ‘weaken’ the story, get played down, or left out altogether. A recent story by the Associated Press regarding radiation from the Fukushima nuclear disaster illustrates what this looks like, and offers an instructive lesson about how the news media contribute to fears that don’t match the facts, excessive worry that contributes to unhealthy choices for us as individuals, and as a society.

The story ran under various headlines. Most said something like this one from Boston. com; “Future cancers from Fukushima plant may be hidden” on Essentially, the story is that a broad public health study of the population affected by Fukushima probably won’t detect any cancers, because there will be too few to show up compared with the much higher general cancer rate. In other words, the number of cancer cases from Fukushima will probably be pretty low.

Of course, “Nuke disaster might cause few cancers” doesn’t sound all that bad, and might not attract as many readers as something more alarming. But the AP reporters, working on a story about the health study of Fukushima’s effects, stumbled into an answer that doesn’t make for page one play; the relatively low radiation doses most people got (except for the workers who brought the melting reactors under control) probably won’t cause that many cancers at all. Possibly none!

That’s the point of this little critique. Risk reporting that overplays the scary and underplays the neutral or ameliorating can actually hurt people. Fear fueled by alarmist coverage that goes beyond the evidence of the actual danger can lead to unhealthy choices by individuals, and by society (fear of nukes has contributed to an energy policy that relies more on coal burning for electricity, the particulate emissions from which kills tens of thousands of people per year). Fear certainly adds to stress, which is bad for our health in all sorts of ways.

Setting aside the health harms, alarmist coverage that distorts the facts also damages the public’s already shaky trust in the news media. I understand the realities of motivations of a daily journalist. I was one for 22 years and, mea culpa, I did this a lot during my reporting days. Alarming stories get people’s attention, which is after all what reporters want and how news organizations make their living. But journalism that goes too far and inaccurately overplays fear to attract attention is contributing to a big risk to the news industry itself, the risk of losing readers and listeners and viewers by abusing the trust they put in us to do a fair job with the truth."

False Fukushima Fears. If It Scares, It Airs. - Big Think

Fear sells!

India's Got Talent

Tuesday, November 22, 2011

Calculated Risk

"Dismissed as a “nobody” by Japan’s nuclear industry, seismologist Katsuhiko Ishibashi spent two decades watching his predictions of disaster come true: First in the 1995 Kobe earthquake and then at Fukushima. He says the government still doesn’t get it.

The 67-year-old scientist recalled in an interview how his boss marched him to the Construction Ministry to apologize for writing a 1994 book suggesting Japan’s building codes put its cities at risk. Five months later, thousands were killed when a quake devastated Kobe city.

“What was missing -- and is still missing -- is a recognition of the danger,” Ishibashi said, seated in a dining room stacked with books in his house in a Kobe suburb. “I understand we’re not going to shut all of the nuclear plants, but we should rank them by risk and phase out the worst.”"

Nuclear Regulator Dismissed Seismologist on Japan Quake Threat - Bloomberg


"Quick, were Egyptian protesters successful in their bid to overthrow longtime president Hosni Mubarak earlier this year?

According to a new poll (PDF) from Fairleigh Dickinson University, if you watch Fox News you are significantly less likely to know the correct answer to that question than if you mostly avoid news shows and newspapers all together.

After controlling for factors like partisanship, education, and other demographic factors, the pollsters found that Fox New viewers were 18 points less likely to know that the revolt was successful than their non-active news consuming counterparts. Fox News viewers were also 6 points less likely to know that the Syrian uprising has yet to succeed.

Fox News, however, wasn't the only cable news network to confuse some of its viewers. Watching MSNBC, for instance, was associated with a 10-point increase in the likelihood of misidentifying the Occupy Wall Street protesters as predominantly Republican."

Study Shows Fox News Viewers Less Informed on Major Stories - Slate

Ferrari Coffee Table

Sorry.. CRUSHED Ferrari coffee table.

Thursday, November 17, 2011

Educational debt

"Education is as close to a secular religion as we have in the United States. In a time when Americans have lost faith in their government and economic institutions, millions of us still believe in its saving grace.

Improvement will require breaking down our large institutions as often as possible into smaller groupings of learners by creating first-year learning communities, salting in more seminars into the curriculum, capping upper-division courses, encouraging undergraduate research, and requiring senior projects. In these ways, teachers and students can learn to know each other again. Improvement will also mean stiffer requirements in fields that have severely lowered their expectations for learning. In larger classes, it will require many more opportunities for students to participate in class, both in old and new ways. (One promising new way is through “clicker” technology, which allows all students to answer questions posed by the professor, providing immediate feedback to the professor about how many students understand lecture points). It will require more opportunities for students to be held publicly accountable for performing what they are learning — not just in anonymous tests and clicker polls, but in the presence of their classmates — much as musicians and athletes publicly perform what they learn in practice. And it will require an end to the all-too-prevalent attitude among under-motivated students that “the only thing that matters is the credential.”

In short, we will need to turn our backs on assumptions of our most fervent boosters of universal higher education: that access alone is the primary purpose, and that when students and teachers are co-present, education occurs. The challenge will be to reweave the uneven and tattered undergraduate experience in more durable and vivid patterns."

The Educational Lottery - Los Angeles Review of Books

Great essay, good read.


"During the operation this morning, the bankers were told that they could return to the economy after it had been thoroughly cleaned, which it has not been since the 1930s. They were informed, however, that they could not bring their exotic financial instruments with them. As for instruments removed today by the Sanitation Department, these are being held at the Manhattan District 7 Garage on West 56th Street between 11th and 12th Avenues and may be recovered on presentation of proof of ownership and a valid bank debit card."

Bankers Evicted From Nation’s Economy -

Swim in Lake Ignorance

"The pinnacle of conservative ignorance was, of course, the never-ending support of an obvious moron in the guise of George W. Bush for president.

“It is an ‘Animal House.’ It’s a food fight,” said Kenneth Duberstein, a chief of staff to President Ronald Reagan. “Honestly, the Republican debates have become a reality show. People have to be perceived as being capable of governing this country, of being the leader of the free world.”

Too late, geniuses. You’ve ingrained ignorance in the modern GOP and the conservative movement. You deny verifiable science. You deny obvious facts. You attack those who use intelligence over their “gut.” And on and on and on.

This is the world you made, conservatives. Swim in Lake Ignorance."

Elevating Ignorance Comes Back To Bite The GOP - Oliver Willis

Not sure it's just the GOP...


"I was having a conversation with a friend recently about what it’s like to be a parent. He has older children, so he’s a little ahead of the game compared to me. We were talking about how difficult it is to make the transition into parenthood — how it’s such a big lifestyle change; how suddenly you have this little human who is completely dependent on you for every need, physically and emotionally.

My friend compared it to the changes that happen when your child transitions into adulthood. Suddenly this kid who has depended on you for everything doesn’t want to depend on you for anything. He wants to learn how to go it alone, to prove that he’s an adult. At both age 12 and 2, they are learning to cope with the changing dynamics of their bodies, while having to learn emotional self-maintenance and stability.

And in both cases, my friend said, despite what is happening with our children, they are the ones inviting us to grow up.

I worry so much about Miles’s growth and development that I’ve never stopped to consider how much I’ve grown since he was born. I’ve learned to set my everyday wants aside, while gaining a greater understanding of the importance of self-care. I’ve learned how incredibly patient I can be, and the signals my body sends me when that patience has run out. But most importantly, at least to me, I’ve learned to be content in the everyday nuances of a seemingly “dull” life, finding joy in small victories as much as in grand adventures.

When Miles reaches that arc of adulthood, I know he’s going to invite me to grow up in different ways. He’s going to encourage me to let go of him and let him make mistakes. He’s going to increasingly invite me to see him as an equal. And it’s going to be really hard. But growing up always is."

How Our Kids Invite Us to Grow Up - Caleb - Etsy

Couldn't agree more.

Dilbert for President

"As President, I would remain deeply committed to flip-flopping. If new information or better thinking changes my opinion, so be it. That's how brains are supposed to work.

I can also promise that I won't try to remember the names of other world leaders, federal agencies, or even my own staff. Only an idiot believes a president can remember all of that stuff.

I'll commit one gaffe after another to keep the media busy with nonsense. I'll appear to confuse China with Japan, suggest withdrawing troops from North Korea, and let slip some ethnic insults around live microphones. The public loves that stuff, and I would not disappoint."

My Presidential Bid - Scott Adams blog

Wednesday, November 16, 2011

Dalua Downhill

Another video to make you pucker. Nutters.

The Sword Maker

"Korehira Watanabe is one of the last remaining Japanese swordsmiths. He has spent 40 years honing his craft in an attempt to recreate Koto, a type of sword that dates back to the Heian and Kamakura periods (794-1333 AD). No documents remain to provide context for Watanabe’s quest, but he believes he has come close to creating a replica of this mythical samurai sword." via Etsy

USS Carl Vinson

Top Gun for real. Boyhood dream was to fly jets. Short-sightedness put paid to that. Driving a Bloomberg doesn't quite match it somehow. :)

Tuesday, November 15, 2011

Staring into the Abyss

via The Economist

Two tier system

"How do you buy $10bn worth of stock in a big blue chip like IBM without alerting the market? 
If you’re big enough to move the market, you can get special dispensation from quarterly reporting rules."

via FT Alphaville and WSJ

"CBS’ flagship 60 minutes programme carried a feature Sunday night that looked at whether Congressmen have been trading stocks based on insider information.

CBS didn’t allege any illegal behaviour — Congressmen aren’t subject to the same legal rules around the use of material non-public information as the rest of us — but it did refer to circumstantial evidence that members of the House may have taken advantage of confidential information they received. 
For what it’s worth, we found the Spencer Bachus (R) and Nancy Pelosi (D) allegations the most disturbing. But to repeat, no laws have been broken."

via FT Alphaville and CBS

Friday, November 11, 2011

This is my winter

Holy cow.


Sovereign debt is by far the worst credit


Michael Milken – The Milken Institute
  • Milken noted that he would not be making specific predictions, but a thematic view of how he sees the world
  • Thinks it’s valuable to understand history, and, unfortunately, we never learn from history
  • Churchill said that when a solution to a problem is manageable it is always neglected
  • It is no surprise why Germany is winning in the EU, their unit labor cost are much less than all the PIIGS
  • Germany’s unemployment level is less than 6% vs 21% in Spain
  • Northern Europe has routinely the least amount of problems, and Southern Europe has the most
  • Valuable to look at 1) Perception vs Reality and 2) Capital Markets
  • Perception: What came first the chicken or the egg? The correct answer is egg. Reptiles were laying eggs before chickens existed, and the birds that layed the egg to the first chicken were not chickens.
  • You just need a different perspective on the problem to find the solution. Are we asking the right questions?
  • The U.S. surprisingly has grown it’s oil production more than any other country in the past 3 years. Volatility created alternative production. North Dakota is the 4th largest producing state. ~ 6% of crude output
  • Digital real estate is the important real estate. 6 billion digital phones in the world. Who is going to control the real estate?
  • Brazil: Manaus Brazil use to be the rubber capital of the world. Now it is an electronic manufacturing powerhouse. Foxconn is investing 12 billion in Manuas.
  • The world is moving east. Of the 50 largest GDP cities, 20 will be in Asia. Half of the European cities will drop of the list.
  • Asia has 59% of their population that is 20-34 years old. This is where production and demand will be.
  • The middle class is booming in China, Malasia, Thailand, Indonesia, Phillipines and India -This is where you need to invest.
  • Milken then moved on to his view of the capital markets by beginning with: What is the American Dream?
  • Access to capital is based on ability and not on social status.
  • Profit is a function of Financial Capital * (Human Capital + Social Capital + Real Assets)
  • Give capital to the productive people and employment booms. Figure out how to empower human capital. It is our largest asset as a nation.
  • In the 1920’s the automobile was innovation. 60% of the cost was raw materials and energy. Now innovation is the microchip which is less than 2% materials and energy.
  • It is too difficult to get into the U.S. which means we are losing the top minds. Other countries are getting the students that we will not let in. Australia and Canada, Singapore, and the U.K. are developing the best technology because they are talking more students from Asia.
  • An example of this is Hollywood. All of the 6 largest film studios were started by someone from within 50 miles from Warsaw, Poland. Think if we would not have let them in the country.
  • ½ of all growth is from medical research
  • 70% of health is lifestyle, 30% hereditary
  • The U.S. is the heaviest country on Earth 36.5% obese
  • 1 trillion spent annually on obesity in this country. Think if we could save this just by eating less and changing lifestyle (Apparently we can deep fry butter and dip it in bacon fat. That is why we are fat)
  • Education: U.S. spends 2% of income on Education (33% on housing), Asia spends 15% on education
  • Moving on to Credit: Credit is what counts. Not leverage. Equity is too small a fraction of assets. This has all happened before. All banks in Texas were AAA, but when the energy cycle busts they all defaulted. We need to be extremely careful how we deleverage because it is a multiple factor on the economy.
  • Loans to real estate: Real Estate does not always go up forever it never has. No one knows when interest rates will go up but they know that they will and the cost of homes will go up.
  • 4 companies are rated AAA. However, S&P found away to rate 1600 leveraged securities AAA.
  • Sovereign debt is by far the worst credit. They always default. Adam Smith noted that countries never pay their debts after they reach a certain point of leverage. Greece defaults 1 of every two years before they were in the euro zone.
  • 1974 is important year to study. Interest rates doubled. The market feels like 74. The Nifty Fifty went from a P/E of 66 to 11. Investors lost half their money. Investors flocked to money managers to manage their money. (They could no longer just get by investing int the Nifty Fifty)

Thursday, November 10, 2011


Some years ago a small rural town in Italy twinned with a similar town in Greece.

The Mayor of the Greek town visited the Italian town. When he saw the palatial mansion belonging to the Italian mayor he wondered how he could afford such a house. The Italian said; "You see that bridge over there? The EU gave us a grant to build a two-lane bridge, but by building a single lane bridge with traffic lights at either end this house could be built".

The following year the Italian visited the Greek town. He was simply amazed at the Greek Mayor's house, gold taps, marble floors, it was marvellous. When he asked how this could be afforded the Greek said; "You see that bridge over there?"

The Italian replied; "No."

Mike Tyson as Herman Cain

Lord Monckton

Wednesday, November 09, 2011

Tuesday, November 08, 2011

David vs. Goliath?

Gulls are utterly fearless via New Scientist

Train Wreck

Scott Minerd, chief investment officer at Guggenheim Partners, says, “We’ve reached a stage where we all understand that a train wreck of some sort is coming,” he says. “The question is what will the wreck actually look like, how much damage will it do, and the markets have already priced in a lot of damage.” As far as the Greek crisis goes, he says, there appears to be worse to come, though it may not be as bad as the market anticipates.

For Clues to U.S. Stocks, Look at Greek Bonds - NYT

I don't think the market is pricing in the worst case scenarios...

Monday, November 07, 2011

Don't worry

via BB


NSFW or Kids

Download song here

Saturday, November 05, 2011



Friday, November 04, 2011

Comeback of an underdog

Crushed by forces greater than themselves

"There is a decent chance that the G20 summit will somehow muddle through in Cannes. There’s even a possibility that Greece will manage to extract itself from its current political mess, implement the reforms that Merkel and Sarkozy are insisting on, and live to collapse some other day."

Europe’s doomed fate - Felix Salmon

"The bottom line – Greece is still on board with the German plan. And that means more austerity, more economic pain, no budget fix, continuing turmoil, and likely a bigger crisis later this year or in 2012 as the crisis grows even hotter. Even more frightening, this episode proves that the true fix is even further out of reach than previously thought. That virtually guarantees continuing turmoil. It’s the crisis that won’t go away because the leaders in Europe can’t come to grips with the idea that they’re all Europeans now. And the lack of unity is increasing the risk that the whole thing craters in front of them…."

AND THE REFERENDUM IS OFF…. - The Pragmatic Capitalist

Thursday, November 03, 2011

Culture Day Ride

Autumn definitely here, almost cold up at Okutama after a storming climb up to the dam. Culture Day holiday on the bike...

Wednesday, November 02, 2011


Tuesday, November 01, 2011


"Not only are the details of the grand European plan still in flux, but so are the broad brushstrokes! Clearly, the Greeks have just brought back into play all the uncertainty last week's summit was meant to dispel. It is not unreasonable to think the Greek electorate is more willing to technically default and start from scratch than their leaders. Indeed, shouldn't this be our baseline scenario?

Bottom Line: Last week's European Summit accomplished far less than even the reduced expectations going into last week. The cracks began appearing before the ink was dry. More worrisome is that the Greek leadership didn't even believe they were on board in the first place. Simply put, the world economy is no less fragile than it was a week ago. And in that fragility still lies the recession risk for a still struggling US economy."

"Did The European Deal Just Collapse?" - Economist's View

And let's not forget the referendum that Prime Minister George Papandreou wants to hold in Jamuary.