Sunday, September 30, 2007

Leaving Flagsstaff - Last Dinner Before Cave Creek

The Catbird Seat

The catbird is a member of a group of birds called the mimic thrushes; these birds are skilled at imitating other birds, animals, and according to my source even telephones. It’s specifically called a catbird because one of its most impressive imitations is the mew of a cat. Catbirds have a tendency to sit on the highest point in sight and “loudly stake their territorial claim at first light.” Figuratively, the catbird seat is a place of ease or favor.

Credit is generally given to James Thurber for bring the use of "The Catbird Seat" to light in a short story. The entire short story (a 3 minute read) in May posts.

The Catbird Seat is generally thought of as a place where a person sits in a "can't lose" situation!

China is in the Catbird Seat, economically, at this time

Adjustable Rate Mortgages - Real Estate Bubble - and the reality of "the problem"

The following is a discussion - easily understandable - of Adjustable Rate Mortgages - not mentioned here is how people used other sources of funds (credit cards, for example) to line up their downpayments, etc. So the expansion of "the kick-in of new higher rates" affects the marginal monthly payer - and their inability to perform.

Saturday, September 29, 2007

Decide what Definitions you feel comfortable in describing what will be coming in the next 6 to 9 months.

Inflation: Economic condition characterized by an increase in prices and wages, and declining purchasing power.

Deflation: Deflation is the opposite of inflation. For economists especially, the term has been and is sometimes used to refer to a decrease in the size of the money supply (as a proximate cause of the decrease in the general price level). The latter is now more often referred to as a 'contraction' of the money supply. During deflation the demand for liquidity goes up, in preference to goods or interest. During deflation the purchasing power of money increases.

Stagflation: Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stagnation increased the inflationary effects. A decrease in the general price level over a period of time.

Devaluation of the Dollar: For the United States, however, the devaluation serves as a double-edged sword for the US economy.With a devalued dollar, US products are more competitive on the international market, which will cut down its trade deficit and contribute to the further recovery of the US economy.However, another side of the coin is that the confidence of international investors will be severely hurt if the dollar's slump is not curbed.It may result in international capital exodus and dumping of US treasury bond in the market.In that case, Bush's economic policies, which features major tax cuts, may probably fail its target, causing a worse imbalance in the US economy.From the global perspective, devaluation of US dollar will bring about some positive influences.With their currencies rising against the US dollar, European countries and Japan will become less competitive on the international trade market.As a result, they may probably resort to economic restructuring to stimulate their long-sluggish domestic demand.China has obviously suffered a lot from the dollar devaluation. The United States, Japan and European countries have taken advantage of US dollar devaluation to pressure China to revalue renminbi. They have provoked a series of trade rows as a result with China. And with two thirds of its foreign exchange reserve denominated in US dollar, China has seen remarkable losses in dollar devaluation.

Bear Market:
A market condition in which the prices of securities are falling or are expected to fall. Although figures can vary, a downturn of 15-20% or more in multiple indexes (Dow or S&P 500) is considered an entry into a bear market. "A recession has always meant a full blown bear market in the stock market (an average drop of over 40%). But even if there is a recession, there may be reason to argue that the large cap market indexes will not see as severe a drop as has been the case in the past." - John Mauldin

Bull Market:
A financial market of a certain group of securities in which prices are rising or are expected to rise. The term "bull market" is most often used in respect to the stock market, but really can be applied to anything that is traded, such as bonds, currencies, commodities, etc.

Stock Market Crash: A stock market crash is a sudden dramatic decline of stock prices across a significant cross-section of a stock market. Crashes are driven by panic as much as by underlying economic factors. They often follow speculative stock market bubbles.

An extended decline in general business activity, typically two consecutive quarters of falling real gross national product.

Depression: A period of drastic decline in a national or international economy, characterized by decreasing business activity, falling prices, and unemployment.

Economic Expansion
is an increase in the level of economic activity, and of the goods and services available in the market place. Typically it relates to an upturn in production and utilization of resources. Economic recovery and prosperity are two successive phases of expansion.

In a prior post on September 12th I related in this blog:

From Barry Ritholtz and a book by Thomas Gilovich How We Know What Isn't So "...In all too many ways: Humans have a tendency to see order in randomness. We find patterns where none exist. While that trait might have helped a baby recognize its parents (thereby improving the odds for its survival), seeing patterns where none exist is counter-productive when it comes to investing."

Personally, I feel that I see a pattern that leads me to believe (the summary below) - an "order in randomness...and "find patterns where none (may) exist."

My Personal feelings - we are facing: Stagflation, Devaluation of the Dollar, Bear Market and a Recession in the next 6 to 9 months.
There are may who feel that our current economic situation - is a pause in Economic Expansion and that we will avert Recession and a Bear Market and that Inflation will be slight.

Maybe it is the Classic - Optimist vs. Pessimist clash - of course - time will tell

If I ask the question - How do you feel? Most people would say they are not sure - or muddle through a combination of concepts that do not rhyme in sequence. Unfortunately, these times do not allow a person the comfort of Indecision.

I guess nothing is ever clear - in the middle of a "happening" but will be very clear looking back

A final statement which could cause - certain changes we have never seen before:

From John Mauldin's weekly newsletter:
"This week, the Chinese announced they are going to let one of their larger mutual funds invest outside of China. Local Chinese investors will be able to start to diversify and businesses will start to be able to take their capital and employ it abroad. This is just the start of the process. I expect that in just a few years Chinese will be able to buy a wide range of funds and investments"

Although the dollar is severely lower against other currencies - not the Chinese currency which is tied to the dollar by the Chinese government.

The Chinese have driven up their markets to an enormous bubble - and it is opined that the Chinese love to gamble in markets - and this change may allow them to invest in our markets.

So how do we combine this with - inflation/deflation - bull market/bear market/economic expansion - lots to think about for sure.

Some say that investing in large international companies are the best investment - as they are tied to the international monetary systems rather than the dollar.

Friday, September 28, 2007

What happened in the Middle East on Sept. 6?

Israel did some surgical bombing in Syria. Israel flew over Turkey to do it. North Korea sent something to Syria - Who's talking - Israel, Turkey, Syria, Iran (who knew)
The USA - no none of them! - According to a leaked report, the operation was carried out by Israeli commandos supported by Israeli aircraft, under the direct management of Israeli Defense Minister Ehud Barak. It had been planned since June, just after Barak took office, and had been approved by the United States after some hesitation. The target was in fact nuclear "material" provided by North Korea, according to that leak. - Israel, Syria and the Glaring Secret By George Friedman

Did they even have to ask?

"A new Gallup poll reveals that, as the organization puts it, Americans now "express less trust in the federal government than at any point in the past decade, and trust in many federal government institutions is now lower than it was during the Watergate era, generally recognized as the low point in American history for trust in government."

Among the findings: Barely half trust the government to handle international problems, the lowest number ever. And less than half express faith in the government handling domestic issues, the lowest findings since 1976.

Faith in the executive branch has fallen to 43% -- only 3% higher than it was just before President Nixon's resignation in 1974. At the same time, trust in Congress, at 50%, is its lowest ever." - Wall Street Journal -

Thursday, September 27, 2007

Palm Update $99 with 2yr (competitive) contract - Sprint

If you go to May postings where I post my extended writing and observations - I have posted my reasons to be adding call positions to Palm.

Wednesday, September 26, 2007

What a perfect time to be in the Dark - The Harvest Moon - and the plenty it brings.

I have been reading many of my favorite writers - in economic terms. Some believe that the Fed should have raised the interest rates rather than lowered them. Some believe that we are in a far greater inflation rate than the pronounced 2% (I agree with that.) Some believe that you should invest in foreign currency. (I agree in the short run). Some believe that investment in commodities - oil, copper, zinc, iron, lead, platinum, silver or gold - as a hedge against inflation. (like foreign currencies.) Some believe that the Fed was behind the curve and did 1/2% to catch up. Some believe that underlying all of this - is a way to shake the Chinese away from our $1 - they have tied their currency to our $ come hell or high water - because we are their biggest consumer - and - they are our biggest supplier - and tying the currencies - keep "their game going well!" - among other things. Some think that if our economy falls - so does the world economy (I sort of agree with that.)

This is what I believe:
1. That everyone is guessing and the more knowledge they have in this area - the more that knowledge gets in their way - These are new times - probably the best people to ask what they think are our, brightest and best, 12 to 15 year olds. Lay the facts out for them - let them talk between themselves - and come with some thoughts...they'll be no worse than the entire George W administration - Congress and the Fed.

2. Markets have a way of working themselves out - without interference - from the guy peddling something on the corner - to the multi-national behemoth Corporation that deals in 194 countries.

3. We are in unknown times - without historical perspective - why do they keep punching buttons and pounding on the side of the machine - thinking that something will happen - but - don't have the patience - to let what they fear happen - happen!

4. As most of you know, I am "off the grid" in my head and in my lifestyle. Yes, I have to go to town - and get some things - "in the market place" but I'm flexible.

5. We all know that 70 to 90% of what we fear never happens - so let's go on with our business and daily routine - and see what knocks on the door.

One law for the rulers and another for the ruled

“the masters make the rules for the wise men and the fools"
- Bob Dylan

Monday, September 24, 2007

3AM PST Monday Morning pre-market

This chart shows that the Euro costs $1.39+ on Saturday, today Monday it is currently trading at $1.41+...since March 24th (6 months ago) almost $.10 more to buy a Euro - a deflated dollar of 7.5% over 6 months.

1.Goldman Sachs and Lehman says that the Interest - mortgage - Financial crisis has bottomed and we have seen the worst. Read September 20th post below: Satyajit Das is laughing obviously Goldman and Lehman are What?......Bull Shit comes to mind

2.All of the Pacific Rim Markets have just closed at all time highs up 2% average.
3.The Dollar has reached a new low against The Euro-dollar. $141.15
4.The United States Markets are poised to open up reaching new highs.
5.Oil is still above $80 as they convert the refineries to increasing Heating Oil
6.Gold is up in early markets to $747
7.The Canadian Dollar has finally reached parity $1 = $1 Canadian
8.Although Wheat has increased 78% during the year - Farmers are planting everything September 2007 wheat futures settled at $8.40 on September 7, nearly $1.00 above the previous record established in 1996. Assuming no crop disasters and increased to capacity planting it is estimated that Wheat will go down to $6+ in 2008 - inflation adjustment is anyone's guess.

What has Happened to Canadians that are Holding US Securities
Here's a monthly chart of the S&P 500 Index in Canadian dollars. You can see that the Index is still down almost exactly a third from the dot com bubble high in March 2000, and only up around 30% from the bear market bottom in March 2003. You have to feel sorry for Canadian investors in the US who have been getting killed lo these many years. The worst possible position for anyone to be in - think of retirees or marginally employed single mothers - would be having to meet CAD expenses with USD income.
From MaoXian (
Click to Enlarge

Sunday, September 23, 2007

au revoir, mon ami

marcel marceau

Every Breath You Take

While you are watching and listening to this video it will continue to play on this page. This site uses video and pictures to relate to the times - This is an excellent Video relating to the week in review - Sting's song Every Breath You Take - Excellent!
(Thanks to Ronsen for bringing this back from last year. (

Saturday, September 22, 2007

Digest of Weekend Articles "Sea Change"

"Regardless of what the Fed does, eventually, the Wall Street-Main Street disconnect will eventually correct itself. Just like back in 2001, when the stock market continued to fall in spite of an aggressive, and sustained shift to an easier monetary policy. There are simply too many tsunamis bearing down on the U.S. economy for policymakers to turn them all back with policy moves that offer little real aid to most individuals, and businesses" -Michael Panzer

"Ironically, the clear inflation warning emanating from the gold and currency markets finds no sympathy in the official inflation statistics published by the United States government. On Wednesday, the Bureau of Labor Statistics reported that consumer prices fell in August by 0.1%. Rarely has gold run up so quickly, and sharply in the face of officially stated deflation. For the moment, at least, this divergence is in the running for the mother of all statistical disconnects in the field of economics and finance.

It requires no great insight to realize that someone's wrong about future inflation. CPI and gold can't both be right. One side or the other is headed for a massive dose of attitude adjustment. No one can be sure who's going to get stuck, or when, but we have our suspicions." -James Picerno

"We are obviously being lied to by our government on inflation - take a vote - no one knows more then the paying public - Period." - peachin

"Of his bones are coral made:
Those are pearls that were his eyes:
Nothing of him that doth fade,
But doth suffer a sea change
Into something rich and strange"

(The Tempest - Shakespeare)

"The term "sea change" has come to mean a profound transformation ever since Will Shakespeare used it in The Tempest.

Bernanke addressing the problem of moral hazard faced by Central Banks.. "try to get out ahead of the situation " relating to the "over clout of a .50 rate adjustment".....".to try to get out ahead of the situation..." Hello?

And so we get a sea change. We get a Fed that is pro-active instead of reactive. That makes Fed-watching a whole new ball game.

A couple of side points. In 1998, the Fed cut rates 75 basis points in response to the Russian bond crisis and LTCM. When the crisis subsided, they took those cuts away fairly quickly. While I do not think this crisis subsides in a few months, if it does, and inflation even remotely ticks up, they will take the recent cut, and the ones they are going to make in the future, off the table just as quickly.

Even with a proactive Fed, I think we do not avoid a recession." - John Mauldin

Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.

There is now a growing danger that global investors will start to shun the US bond markets. The latest US government data on foreign holdings released this week show a collapse in purchases of US bonds from $97bn to just $19bn in July, with outright net sales of US Treasuries.

Jim Rogers, the commodity king and former partner of George Soros, said the Federal Reserve was playing with fire by cutting rates so aggressively at a time when the dollar was already under pressure.

The risk is that flight from US bonds could push up the long-term yields that form the base price of credit for most mortgages, the driving the property market into even deeper crisis.

"If Ben Bernanke starts running those printing presses even faster than he's already doing, we are going to have a serious recession. The dollar's going to collapse, the bond market's going to collapse. There's going to be a lot of problems," he said.

George W and the Republicans, will historically be remembered as causing a "Sea Change" In our Economy and our lives - not for the better!

The definition of IQ: "The speed at which a person handles information - "Correctly" - a prior friend

"Woe is Me" - also Shakespeare
"To have seen what I have seen, see what I see!" - Hamlet.

Thursday, September 20, 2007

What will they Call this period in our Economic times

Click to Enlarge - if you wish

It's the decline of the Dollar since January - just shy of 10%

So Will they call it:

A readjustment of the American Dollar for a healthier future?

A slight recession coming and going in a few months?

A Recession?

The Greatest Recession of our Time?

Dumb and Dumber or Twikie Wabbits?


"Satyajit Das is laughing. It appears I have said something very funny, but I have no idea what it was. My only clue is that the laugh sounds somewhat pitying.

One of the world's leading experts on credit derivatives, Das is the author of a 4,200-page reference work on the subject, among a half-dozen other tomes. As a developer and marketer of the exotic instruments himself over the past 30 years. He seemed like the ideal industry insider to help us get to the bottom of the recent debt crunch -- and I expected him to defend and explain the practice.

I started by asking the Calcutta-born Australian whether the credit crisis was in what Americans would call the "third inning." This was pretty amusing, it seemed, judging from the laughter. So I tried again. "Second inning?" More laughter. "First?"

Still too optimistic. Das, who knows as much about global money flows as anyone in the world, stopped chuckling long enough to suggest that we're actually still in the middle of the national anthem before a game destined to go into extra innings. And it won't end well for the global economy." - John Markman - MSN Money

Wednesday, September 19, 2007

Star Wars: Fix You

The Fed now has a third problem to deal with: They have become Wall Street's bitch... They may find that's a difficult condition to wriggle out from . . .Barry Ritholtz 9/18/07

The words Pride, Integrity and Trust - come to mind - What a great Country

Is this a US congressman quickly leaving his girlfriends apartment so he will not be noticed?

Can you imagine working for a company that has a little more than 500 employees and has the following statistics:

- 29 have been accused of spousal abuse
- 7 have been arrested for fraud
- 19 have been accused of writing bad checks
- 117 have directly or indirectly bankrupted at least 2 businesses
- 3 have done time for assault
- 71 cannot get a credit card due to bad credit
- 14 have been arrested on drug-related charges
- 8 have been arrested for shoplifting
- 21 are currently defendants in lawsuits
- 84 have been arrested for drunk driving in the last year

Can you guess which organization this is?

Give up yet?

It's the 535 members of the United States Congress.

- Tim Knight (

Tuesday, September 18, 2007

Am I the last one to know that Canola is Poison?

Since Bernanke gave the store away - lets talk about me waiting in check out line at the grocery store. Well In my basket were several things including Spray Canola Oil
and the cutest, from stem to stern, from top to bottom - college girl says to me "you're not going to buy that spray canola oil - it's poison" Being 65 - I related, " that's some pick-up line" she said " go back and get olive oil spray and when you get home throw anything out that says it has canola oil as an ingredient - then, you know how to use a computer? - well look up Canola Oil Health Issues." Ok, so I did, and I did and then I did.

Beware of Canola Oil, Canola Oil is an Industrial Oil, Not Fit For Human Consumption.

Before you read the following article, here is a summary of a few facts regarding Canola Oil:
# It is genetically engineered rapeseed.
# Canada paid the FDA the sum of $50 million to have rape seed registered and recognized as "safe". (Source: Young Again and others)
# Rapeseed is a lubricating oil used by small industry. It has never been meant for human consumption.
# It is derived from the mustard family and is considered a toxic and poisonous weed, which when processed, becomes rancid very quickly.
# It has been shown to cause lung cancer (Wall Street Journal: 6/7/95)
# It is very inexpensive to grow and harvest. Insects won't eat it.
# Some typical and possible side effects include loss of vision, disruption of the central nervous system, respiratory illness, anemia, constipation, increased incidence of heart disease and cancer, low birth weights in infants and irritability.
# Generally rapeseed has a cumulative effect, taking almost 10 years before symptoms begin to manifest. It has a tendency to inhibit proper metabolism of foods and prohibits normal enzyme function. Canola is a Trans Fatty Acid, which has shown to have a direct link to cancer. These Trans Fatty acids are labeled as hydrogenated or partially hydrogenated oils. Avoid all of them!
# According to John Thomas' book, Young Again, 12 years ago in England and Europe, rape seed was fed to cows, pigs and sheep who later went blind and began attacking people. There were no further attacks after the rape seed was eliminated from their diet.
Source: David Dancu, N.D.

These are interesting Times - we may be at the beginning of the most interesting time in the last 80 years - A Miracle or A Disaster?

This Afternoon the Federal Reserve Board has a choice in making an interest rate adjustment. This Decision will have a major effect on the Economy, the lives of most citizens of United States - and our position in the economic world.

Take the politics out of Economic Advisers - looking at taking the bitter pill now to be healthier tomorrow - The Fed should be raising rates. That is out of the Question. (It's what Paul Volker would have done - he was the chairman before Greenspan)
It's always interesting when we are at critical points - the people who make the hardest decisions are booed first and applauded later. Bernanke raising rates, will be applauded first and sent a message later..."What Happened?" and the "spin" will begin.
If the Federal Reserve Board neither raiser or lowers - they will be booed by Wall Street, and at least given recognition of making a good decision - it's a put-off, but still good. We are already in an Inflationary Economy - the dollar has been discounted against foreign currency from 10 to 30% over the last few years.

This is not a time to make any major economic decisions that require RISK - Safety but not damage is a proactive move at this time.

Friday, September 14, 2007

Taking Time off until September 24

The previous post relates the reason

(More on Ayn Rand and a discussion of Black Swans
look to the upper right "archives" hit May - where I post extended reading)

The Next Week - FRB - OED - Alan Greenspan

They’re just dicking around with numbers in a system that’s so complex it defies quantification — this is probably worse than doing nothing. - The Chairman MaoXian

Sept. 13 (Bloomberg) -- Alan Greenspan trusted his instincts. Ben Bernanke trusts the MAQS.

For the past several days, the MAQS -- a group of analysts in the Federal Reserve's Macroeconomic and Quantitative Studies unit -- have run a series of what-if scenarios on the U.S. economy that will play a critical role in next week's interest- rate decision.

The distinction between Bernanke and Greenspan, 81, has roots in their different resumes and competing views about managing risk and uncertainty. Greenspan was a business economist before he became Fed chairman in 1987 -- one of his offices was on Wall Street -- and he read the economy like an income statement. His decisions were often based on close readings of disparate data, and his methods defied quantification. Greenspan's memoirs of his years at the Fed will be released on Sept. 17, the eve of the rate decision.

Bernanke, a former head of the economics department at Princeton University, has spent most of his career in academia. His analysis is based on models, and he has greater confidence in forecasts and statistical methods

The simulations will supplement the forecast handed to policy makers at the start of their Sept. 18 meeting and may determine the size of the rate cut almost universally predicted by Wall Street economists.

Statistical modelers such as Bernanke have their own icon to draw on: the 18th century British mathematician and Presbyterian minister Thomas Bayes. Bayesians are more likely to quantify uncertainty by deriving probabilities. There is also a role for constant updating with new information to hone a forecast. Bayesian theory is used in hurricane tracking, for example.

NOTE: This will finally be hashed in Wednesday's Stock Market - EXCEPT - it's not that simple - Friday, next, is Options Expirations Day - Large options traders and writers (big brokerage houses, etc) will try to "pin" stock prices - pinning is trying to freeze a certain price until sometime near the end of Friday's trading.

So, next week is a good week to stay in Cash (Cash is a position) and The Monday, after Monday Next, after All the big publications do their thing, and the talking heads swear they never said what they said the week before - So Monday September 24th would be a good time...OH? The large funds will be doing window dressing for their 3rd quarter ending 6 days later. Then we are officially in 3rd Quarter Earnings Season October 1st......It's effect will change everything...Then - we should (Maybe) begin one of the great recessions and devaluation of the $1, and maybe we'll finally see $100 oil. Oh, it's not that dark, things have a way of working out.

Poor Maria What'sherface will be stepped on Sunday night.

Update: Alan Greenspan - if he misses something or makes a small mistake on Friday Night he will be on Sunday Night - 60 Minutes - to double talk the problem

PALM - has been upgraded this morning by someone - a real no brainer - I think I'm giving my only grandson some shares of this on Xmas. Why is Austin smiling?

Calm before the Storm: That's how the market opened this morning

General Motors has 4 retirees for every employee - Wow That's a 3rd world country!

Thursday, September 13, 2007

Tomorrow Night Alan Greenspan and Maria whatsherface

Firday evening (tomorrow) at 9PM eastern - 6pm here in Arizona - Maria Bartiromo, of CNBC fame, will be interviewing "The Great One" - let's digress for a moment - a week or so ago Bernanke was going to speak...the day before "The Little One" (George W.)preempted him with - we'll just guarantee all the folks who have mortgage problems - with the FHA. So, now Greenspan is being interviewed by Maria, as I said, on Friday, on subjects of the economy. Alan will get paid back by presenting his just released book to the exact audience who is most likely to buy it. Alan has made statements in the past few weeks about "now" looking like 1987 and 2000 just before their respective crashes. Bernanke is making a statement on Tuesday,next, that will be the catalyst of the markets, etc. in the days to follow. Greenspan whose statements can crush pyramids - may say something tomorrow evening, that may deflate one of Bernanke's greatest moments.

"The Fly" ( said it the best: "I hope Greenspan gets up and pimp smacks Maria Bartiromo tomorrow, exclaiming: "bitch, don't you ask me about 1987 or 2000."

Tune in....

UPDATE ON PALM: A private investment company has purchased a 25% interest in palm - the money to be used for a special dividend to the shareholders of $9 a share. There will be three new executives and officers (board members) one of which an ex-Apple executive with lots of poussée

Wednesday, September 12, 2007

Rosh Hashanah - Day of Judgement - The Story Begins To Unfold

The Rosh Hashana liturgy depicts God sitting upon his throne, inscribing each of his creatures in the Book of Life; each person's livelihood is determined for the coming year, as well. Rosh Hashana inaugurates a ten-day period culminating in Yom Kippur, or the Day of Atonement. These are days of heightened introspection, efforts at self-improvement, and pleas for forgiveness from those we have wronged. These days are especially relevant to those for whom the Day of Judgment did not produce a clearcut verdict - everyone.

"God tells me that when he wants to teach everyone a lesson he picks a wonderful surrounding and fills it with a story to spin. He carefully selects the protagonist, the antagonist, the victims, the martyrs, and the bystanders who will say their peace. Then he leans over and whispers in my ear..."my most careful selection is in the people I choose to remain silent...for they are the "chosen" who will reap and will be regarded."
- "One Small Word of Advise" - Notes to a Friend - Paul Peachin

Morning Update on some previously mentioned items

Morning Headlines: Markets down on Tech announcement of lowered high-end earnings:
Texas Instruments announced "..............."

Probably not enough to close the "Mine" down - Let's look for another live Canary

From Barry Ritholtz and a book by Thomas Gilovich How We Know What Isn't So "...In all too many ways: Humans have a tendency to see order in randomness. We find patterns where none exist. While that trait might have helped a baby recognize its parents (thereby improving the odds for its survival), seeing patterns where none exist is counter-productive when it comes to investing."

PALM - and Vodaphone announce a release for a 3G PDA throughout europe for 10/1, interesting to note that european sales relate to the euro over the $ at 1.3+ to 1.

Premarket Trading: After an hour + of trading - the premarket is slow and quiet and has a very small downside bias.

Tuesday, September 11, 2007

There may be another "shaft" with a live Canary

TI said its revenue would be in the range of $3.56 billion to $3.72 billion, which equates to growth of 4% to 8% over the three months ended June 30. The company's previous forecast called for sales to be in the range of $3.49 billion to $3.79 billion, or growth of 2% to 11% from the June ended quarter.

Double Talk? If I were the CEO of this company - either sales are going to be down from $3.56 to 3.49 or up from 3.72 to $3.79 - then doing a criss-cross 356 to 372 or 349 to 379 (lower low to higher high) - this guy either needs a glass of water or needs to get laid - but more than that...needs to keep his mouth shut. I call this statement "Negative!" Poor Canary - waiting for what? Texas Instruments made this statement at the close of the regular market. I does not trade in the after-market

So...we'll have to wait until tomorrow to see if the Canary lives...or dies.

Palm + NUAN? .....Who?

Yesterday, I purchased Calls on PALM and may continue to do so. Although this is a Blackberry using Latte sucking country, Many Hand held manufacturers - from cellphones to sophisticated mini-computers need certain technology to continue to flourish and continue. Do you develop it or purchase that technology? Because, we as a people tend to flush the toilet on some (not deserving) products - the American attitude - either you are with us or against us - doesn't mean the technology and special attributes of the mentally flushed products don't have excellent attributes that another company could take advantage of. I believe Palm is an excellent example - of a most desired takeover. The stock now sells for 14++ and generally had a recent range of 15 to 20. A call option is a better vehicle, for a bet, than purchasing the stock. RIMM (Blackberry) is a one-trick-pony - it's price on the NASDAQ is up at a "perfection" high - looks to be a good option Put or short sale.
PALM has a positive cash flow, and many tax attributes (along with cash) that gives it an overall cash value of $10 per share + has earnings to increase the value to maybe $20 to $25 per share (as a buy out) vs. the current stock price of under $15.
Last February there were potential takeover roomers that faded. Now this concept is dormant - a wonderful time to see what evolves. Lehman Bros. has cut it's recommendations from equal weight to under weight. That means they are either telling their customers to avoid buying PALM or they are telling the financial world to get out so they can get in at a lower price. Wall Street is notorious for trying to manipulate a stock for their own benefit - nothing personal, it's just Business!
If you are interested search "Palm Takeover" on Google and read the first 10 entries.

So Who is Nuance Communications, Inc. (NASDAQ: NUAN) today 9/10/07 released initial usage statistics of the Nuance® Voice Control™ speech application pre-loaded on the new Palm® Treo™ 755p smartphone. Preliminary findings have already surpassed expectations with usage levels averaging 48 transactions per user, per month. The results are indicative of both the simplified mobile experience and productivity enhancements that Nuance Voice Control provides mobile consumers when using today’s more advanced mobile devices such as the Treo 755p.Treo users can easily dictate and send email or text messages, create calendar entries, dial a contact, and search the Web for business listings, news, weather, stock quotes, sport scores and more. The application icon is pre-loaded on the Treo 755p application menu, enabling Sprint subscribers to easily activate and start using Nuance Voice Control. SO CAN YOU IMAGINE - TALKING TO YOUR PDA AND GETTING ALMOST ANYTHING YOU WANT AND SENDING ANY MESSAGE - WITH YOUR VOICE. Voice recognition requires your training the machine to recognize the way you talk - after several training sessions - you'll be using your thumb punching keyboard much less. The next stage of equipment will minimize the use of a keyboard and mouse - and eventually all of our equipment can be appreciably
smaller - ie. talk to the "Screen Size" of your choice. BEWARE: All of the computer companies, PDA companies, etc. are working furiously on Voice Recognitions software - the difference - PALM is out with it and they have tracking software to monitor it use - with that information - Let's look at PALM, today 9/11 differently.

9/11 changed the world forever. The day is a reminder, for all, how precious life is! God Bless America and no matter which way you feel about this war - our people are in harms way - bring them home.

Monday, September 10, 2007

Effect of projected Fed Cut - will it do the Job

Will rate cuts serve as a panacea to the price action? We've discussed how the past, while not an absolute prologue to the future, often offers valuable reminders, such as how the market reacted after the first rate cute in January 2001 (Chart below) I believe that's an important context to keep in mind after the initial, requisite rally.

The other important elements, and again, these are dynamics that we've discussed, is the elasticity of debt and the velocity of money. While the former storm is coming to bear, the latter matter is seemingly scarce. The Fed can pump money into the system but if they can't churn it around—which is why they're engaging Fannie Mae and Freddie Mac—it'll be all for naught. -

Sunday, September 9, 2007

Don't you Love Rumors - Let's Try This

If perception becomes widespread that the Fed is "behind the curve" and not indeed the masters of the universe, if it becomes apparent that one man, even if he did teach at Princeton, cannot micromanage interest rates and money supply to avoid a major recession...then watch out bond market, and watch out stock market.

My thesis is, though, that the Fed is beginning to lose credibility. #1- They have been instrumental in making the US dollar fall badly since 2001...this is stealth stimulus, and de facto inflation to much more are they going to be able to get away with before they crash the bond market? #2-their forecasts and jawboning of the financial markets has been both egregiously wrong (how many housing bottoms have they called this year?) and dangerous...they WILL at some point make things much worse. #3 check out the Bloomberg story about rumours of China starting to dump US treasuries...doesn't sound like they believe Bernanke, does it?
- Jonathan Benjamin via tim

la grande poussée (the big push) - Monday

The Market is in a "no way to go" (zugzwang) position without groups pulling or pushing - the volatility. What is apparent:

All the false Wall Street "injections" of spin have become wearing

The Plunge Protection Team headed by Hank Paulson is out of tools

Bernanke - can do something but he is losing his ability to affect the market for more than 3 days. Many think he will hold back (whatever the cost) until September 18.

Apple is over sold, Rim is over bought - the markets are somewhere between Denial and Fear. Denial holds a market...Fear is the prelude to Panic. Early Fear will bring the markets down 2%, in one day, Panic 4-6% in a day followed by 10% the next week.

There being very little inflation is a fantasy. As it goes now - Holiday sales are going to be pathetic. Business Failures will increase, unemployment will increase and the Punch Line will be January 1st, 1988.

Large Traders who can move the markets long enough to make them crazy (an hour or two) in the short run will create more fear.

There use to be a rule of thumb that the markets project 6 months down the road. I guess I remember that from the 1970's - I would say in the 21st century that would and should be between 2 and 3 month - trading now reflecting October - November economic conditions.

A long-term investor is never wrong being in "Solid Gold" companies: INTC, MSFT, CSCO, MMM, PG, MRK, GOOG, Johnson + Johnson, AMGN, BRK.A, BRK.B, GLW, Walgreens, Target, and Finally, S&P Diversified Financial Index - to name a few. There are ETF's that have many of the above - in one security - for example Profunds Technology Fund (It however, performs a 150% gain or loss - it's a leveraged fund)
The securities that are mentioned above will be my diversified portfolio "after the fall." I own none of the at this time.

Short-term investors should be in cash at the end of every day

The Markets Tomorrow, Monday September 10, will be very exciting - only to be outplayed by Tuesday, September 11 (9/11). The New Moon and Solar Eclipse...faster and more exciting than International Soccer.

It' all going to be an illusion (focus on the following - for a few moments - are the circles in the image turning? - or is it an illusion - Don't be fooled by the "spin")


Don't Think Twice, It's Alright - Bob Dylan (Old Version)

It ain't no use to sit and wonder why, babe
It don't matter, anyhow
An' it ain't no use to sit and wonder why, babe
If you don't know by now
When your rooster crows at the break of dawn
Look out your window and I'll be gone
You're the reason I'm trav'lin' on
Don't think twice, it's all right

It ain't no use in turnin' on your light, babe
That light I never knowed
An' it ain't no use in turnin' on your light, babe
I'm on the dark side of the road
Still I wish there was somethin' you would do or say
To try and make me change my mind and stay
We never did too much talkin' anyway
So don't think twice, it's all right

It ain't no use in callin' out my name, gal
Like you never did before
It ain't no use in callin' out my name, gal
I can't hear you any more
I'm a-thinkin' and a-wond'rin' all the way down the road
I once loved a woman, a child I'm told
I give her my heart but she wanted my soul
But don't think twice, it's all right

I'm walkin' down that long, lonesome road, babe
Where I'm bound, I can't tell
But goodbye's too good a word, gal
So I'll just say fare thee well
I ain't sayin' you treated me unkind
You could have done better but I don't mind
You just kinda wasted my precious time
But don't think twice, it's all right

Saturday, September 8, 2007

Oranges, Orange Juice - Prices to Skyrocket

Dozens of dead orange trees lay stacked here among vast green rows of grove.

Farmers felled them still bearing fruit, but these trees were really killed some time ago. All it took was a tiny insect's bite to deliver a fatal crop disease called citrus greening, a bacteria harmless to humans but deadly for the thousands of trees infected since its recent arrival in Florida.

The disease has set off a fervor among researchers and growers, already weary after weathering the hurricanes of 2004 and 2005 and two decades battling a less-severe bacteria called canker.

Florida's $9 billion, nation-leading citrus industry has been suffering some of its worst harvests even before greening showed up, sending juice prices skyrocketing. The disease's further spread makes them seem unlikely to recede any time soon.

So Let's see Gasoline, Heating Oil, Milk(butter,cream, cheese) now Oranges and Orange Juice, Corn, Grain, Bread - and cost of transporting these basics-Inflation? I guess feed will affect Livestock and poultry - let me think? Wages to offset inflation, cost of living index (the true ones) affecting Social Security costs...let me think? Inflation? Naaa......

canary in the coal mine

In warning that third quarter shipments and full year 2007 and 2008 earnings would be lower than expected - while withdrawing guidance for 2009 altogether - the company, which has left its tire marks on more than its share of critics and short-sellers, cited "a difficult time for the consumer." Well, duh! Especially in the wake of the credit crunch.

Harley, has long been stuffing its distributors with excessive inventory while sparking sales through its its internal finance operation, which it turn has sold the good, bad and ugly loans via securitization.

Don't be surprised if You See Repos on sale for cheap - competing with lower new bike sales.

Zugzwang - Monday Morning at the Market

A player is put at a disadvantage because he has to make a move — the player would like to pass and make no move. The fact that the player must make a move means that his position will be significantly weaker than the hypothetical one in which it is his opponent's (The Market) turn to move. In combinatorial game theory, it means that it directly changes the outcome of the game from a win to a loss. When all possible moves weaken the position.

"I'm not concerned about the return on my money but the return OF my money."
- Will Rogers

Friday, September 7, 2007

Alan - always has been skewed and dumped on

Alan has made some bold statements: "what we are seeing in the economy is similar to what we saw before 1987, et. al." Bernanke is working behind the scenes to discredit this statement. We really don't have to know who is right - we'll see soon enough.

Clint Eastwood

Tuesday, September 4, 2007

Sunday, September 2, 2007


The following 4 post have been created in my mind. An imaginative creation or a pretense that does not represent actuality but has been invented - FICTION! - And it's just too early to have a glass of wine - but I have looked at the bottle several times.

It's what I do when I have time to kill - just working out some thoughts - Fiction!

Ayn Rand

The current "bail-out" suggestions for this country's "Mortgage Disaster" affecting new homeowners purchasing homes they could not afford and lenders who "knew and assisted them" - should me made whole. The Lenders handled these mortgages like "hot potatoes." They packaged these mortgages, into investment vehicles and sold them to unsuspecting investors looking for "just a little more" interest return on their investments.The original lenders walked away with dollars(profits) free and clear of the problem. The new home owners are waiting to be helped by the government assistance in forgiveness of a good part of the debt they could not afford in the beginning. Looping the entire fiasco - the government will take the bite for the original lenders walking away with taxpayers money.

Ayn Rand:
Conscious and individual life, she believed, formed the standard of all values, and "rational selfishness" was a living being's appropriate motive. In addition, Rand advocated laissez-faire capitalism as the only truly moral economic system.

The traditional American values of individualism, self-reliance, self-discipline, and hard work had their roots, in part, in the fact that this country began as a frontier nation where nothing was given and everything had to be created. To be sure, most Americans exhibited a strong sense of community, and they certainly practiced mutual aid. But this was not seen as a substitute for self-responsibility. Independent people helped one another when they could, but everyone was expected to carry his or her own weight. People were not encouraged to believe they enjoyed special “entitlements.”

The Following is one example:
If a man wanted to be a farmer, the fact that his farm could not support itself need not be an impediment: Agricultural subsidies could make his desire attainable. The Man, as a farmer, was allowed the right not to fail in a free market - and became supported by the government for decades.

This concept along with others formed - what Ayn Rand called "Objectivism." There were and are many off shoots - but they have (in my opinion) been led off by followers intentions of becoming the major focus of a concept (the new leader of a concept, if you will.) Objectivism is not Libertarianism - although the followers of the latter, would like you to believe it.

Our Capitalist society - Good and Bad - is at a major crossroad - as a result of Government's willingness and control of the concept of not allowing:

1. Home owners to take a loss on bad judgment
2. Banks, Investors and Other lenders - to get punished for greed
3. The Stock Market to go down from its highs - "The Plunge Protection Team"

Our Government is willing to increase it debt to protect everyone at some level especially those who profit from the markets mostly.

(Some of the above paragraphs were paraphrased from other blog and websites including (definitions) Ayn Rand Institute and Nathaniel Branden"Reflections on Self-Responsibility and Libertarianism")

Saturday, September 1, 2007

Government Interference with the Markets - A Solar Eclipse on the Full Moon...coming 9/11...familiar date?

"The aspects between September 3 and September 9 are amongst the most powerful geocosmic correlates to trend reversals. On Monday, September 3 Mars will form a waxing square to Uranus, while the Sun will begin its 6-day trek of forming a T-square with Jupiter and Uranus. You may remember previously that this column suggested that big point moves and possible crashes tend to happen when Mars, Jupiter, and Uranus are all active. Accordingly, this period becomes vulnerable to a possible sudden and huge sell-off. On Friday and Saturday, September 7-8, both Pluto and Venus will turn stationary direct, which will behave like a heavy conjunction between those two planets. Venus rules the value of currencies, and Pluto represents a potential threat of danger to human life or costly damage. In earlier reports we also mentioned that so many aspects to Uranus can coincide with high winds, hurricanes, fires, electrical storms, and/or earthquakes. The thing is that with signatures like this, something sudden and unexpected could happen that disrupts the normal flow of human activity. It could be another financial panic, or a natural disaster, or something completely unexpected and shocking. But since we are focusing on the equity and financial markets of the world, don’t be surprised if events happen that cause sudden eruptions in these realms in the next 1-2 weeks."

From Ray Merriman

September 11, will be a new moon - solar eclipse, solar eclipses are usually all about beginnings. New Moons are about acceleration of what is immediately preceeding it.