With Apologies to Kanye

Now, I ain't saying she's a gold digger, given it's likely fake, but I laughed. Kinda funny, even if I can't at all empathize...

In Defense of Bears

In case anyone is yet not aware, it is my considered opinion that bears tend to be better informed, if furrier and possibly less palatable, than bulls. There's more of a barrier to entry in terms of a) the basic mechanics, 2) unlimited downside risk, iii) limited upside potential, and 5) danger of margin call. Not to mention the societal and Wall Street bias in favor of buy first, ask questions later, if at all. Anyway, today there's a decentish Bloomberg article debunking the myth of evil short-sellers featuring Bill "Hair" Fleckenstein.

Sometimes It Takes a Physicist

I'm usually one of the first to spout off about the Dow Jones Industrial Average being too small and imperfect of an index, but be that as it may, there's a new twist on reading it, which of course could be applied to the other stock indices with no loss of generality or somesuch. The all-too-obvious how-long-ago-were-we-first-here sorta rule, bar-charted. Why didn't I think of that? Oh, yeah: no treat was in the offing...

I Iz Smarter than Ben Stein?

Ok, so maybe I'm not actually more intelligent than the guy, but on the other paw, I don't misrepresent a simple concept like insolvency while pretending to know what it is, and that in general I know what I'm talking about--in fact, I'm pretty sure that in some sense I literally have no idea what I'm going on about. On the other other paw, he gets nationally published and I don't. Oh, and as recently as last December he was arguing that subprime wasn't a big problem, without any mention of Alt-A or prime, each the sum of which is a bigger crap sandwich (ambiguous?) than subprime, and of course not a peep (mmm...) about the larger credit derivative and institutional solvency problems, all of which those of us dutiful Grant's readers had pretty well quantified--as in, Really Really Big.

Addendum: sorry, but this stuff was just too good/bad--you decide which--not to add. From as recently as May 2008:

...it's now crystal clear that we're not in a recession...

The beautiful part is that because we're not meeting the definition of a recession -- two consecutive quarters of negative economic growth -- the pundits are trying to rewrite the definition, to make it just about anything they feel like making it. (Or, as I like to say, the new rules allow liberals to call a conservative administration's tenure a recession any time they have the urge.)*

I hope you've been buying while the market was down.

...the direction [of the market] sure looks like it'll be up for a while now.

*The partisan recession jab is especially rich, given that his "definition," while widely believed, certainly doesn't fit the official NBER's:

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.

I have to agree with Ben here, though:

I wouldn't say business journalism is all bunk.

With the corollary that, sadly, most of it is.

Analysts: Worth Their Weight in Water?

At first I thought Bill Fleckenstein called sell-side analysts "dead fish" as a term of endearment, since I figured, who doesn't like dead fish, right? Especially when they've been sitting around a while; mmm hmmm...

Well, now there's this gotta-see graphic by SocGen's James Montier posted on the FT Alphaville blog that shows how analyst forecasts have actually been very clearly lagging actual earnings for, oh, the last two decades or so.

I respect Fleck, and have always loved fish--in fact I was sorta kinda named after dried salted cod--though now know why I've never really cared for analysts. But, importantly, if analysts are dead fish, do they float? Because then they'd be witches...

Volvo Sees a Slowdown

So I'm back from having one of my knees cut open and stitched up and then spending a week locked up at the vet for a lucrative (not for me) TPLO procedure. Can't imagine going back in for the other one. Ouch, and ouch again. Anyway, doing pretty well other than that.

This, though, is one of the most staggering current economic statistics I've yet seen, courtesy The Financial Ninja:

Volvo said it received 115 order bookings for heavy trucks in Europe in the quarter, down from 41,970 trucks a year earlier.

I've looked at that for some time now, and somehow trying to think about some 42k bits of kibble shrinking to a mere 115 warps my fragile little mind way more than Eric Cartman's sometimes-amusing shtick ever could. I've seen cliff-diving before, and even imagined some steep ones, but never quite so steep.

Actually, the follow-on sentence just really clears everything right up:

Customers in Europe are taking a "wait and see" attitude amid turmoil in global financial markets, Volvo said.

Gee, you think?

The Perils of Paper Gold

If one were to watch CNBC (in spite of Financial Media: Worse than Useless), one might see one Jurg Kiener talking about the paper gold market possibly cracking. Which naturally raises the question in one's mind of whether one desirous of the shiny yellow stuff might actually want to take some delivery of some sort, custodial or otherwise. Of course one might also wonder why anyone would want anything to do with anything that utterly inedible. Yuck!

A Modest Proposal: The Food Standard

There's this nicely-done animated video of the fractional-reserve system which shows how basically what is thought of as money isn't actually value, but instead is intrinsically debt, and magically created out of thin air, at that.

So I have a modest proposal (no, not like J. Swift's--and no, I haven't tried it: kids are friends, not food!): why not go on the Food Standard? You can't just instantly print food from nothingness, and it has value, as everyone needs to eat, especially those of us who especially need to...

What's Maps Got to Do with It?

"Watch money. Money is the barometer of a society's virtue. When you see that trading is done not by consent, but by compulsion--when you see that in order to produce, you need to obtain permission from men who produce nothing--when you see that money is flowing to those who deal not in goods, but in favors--when you see that men get rich more easily by graft than by work, and your laws no longer protect you against them, but protect them against you--when you see corruption being rewarded and honesty becoming a self-sacrifice--you may know that your society is doomed."
--Ayn Rand, "Atlas Shrugged"

I don't see what any of this has to do with maps, or food, or for that matter anything meaningful going on nowadays, but there it is.

Why Public Education Is Gonna Be Hurting Even More

From "Ask Fleck" today:

"One of the consequences of the failure of banking institutions is that many public entities such as cities, counties, school districts and mosquito abatement districts were invested in their debt. For example, Menlo Park City School District, which has a reputation for fiscal responsibility, is furious that they were hit with a $3.5 million loss when Lehman Brothers collapsed. By law school districts are required to keep their money with the county who acts as their banker. San Mateo County, who had invested 5.7% of its funds in Lehman Brothers debt, held funds for 1000 such entities including San Mateo Community College District which lost $25 million, Sequoia Union High School District which lost 5.5 million and Redwood City School district which lost 1.1 million. Public schools here in California have already been cut to the bone financially. It is extremely difficult for these organizations to raise money because any new tax requires a 2/3 majority vote."

Heh. "Mosquito abatement district" sounds so much like an insult of a podunk exurban aspirational SUV-commuting McMansion bedroom community now overrun by brown lawns and green pools. Not that there really exist such things, but if there were I guarantee you I would be first in line to contribute to said dead grass as a consequence of drinking from said pools. Mmmm... Greenwater...