Wednesday, November 30, 2011

New Media Responsibility

Self, with halo.  Believe it!
It has recently dawned on this inveterate blogger the quite awesome responsibility that new media wields.  I started out doing this almost two years ago for fun, on a dare from friends and family as previously noted.  The urge to write has long been a curse for me.  I love it.  Words and word-smithing fascinate me.  ("Ya shoulda been a lawyer, Balf!")  And for some reason, people don't mind reading my blather (whether or not they agree with me) - all dozen or so of you!  But suddenly this week I have come to realize the awesome responsibility that goes with blogging, tweeting, and other forms of "new media".  First, there were several complaints from US politicians about "irresponsible bloggers", followed by similar outbursts from several CEOs whose companies had been tarnished online.  In neither case did I fret too much, as it turned out the bloggers involved were being truthful and their only transgression was that they were scooping the more mainstream "old media".  (Politicians and CEOs seem to love new media when it furthers their cause, but complain like hell when it doesn't.)  Oh sure, I've heard the ads for "Reputation Defender" on the radio ad nauseum, but never really worried too much about that, either.  Then came some tweets about plagiarism in new media.  (I'll be a bit more fastidious about quoting my sources from now on as a result.)  Then came the realization that rumours of rumours from Europe were coinciding exactly with various gyrations on my stock-trading platform.  (I earn my keep these days as a day trader.)  And the final whack to the head came as I watched the World Series.  I had left my netbook on while watching the one-eyed monster, and out of the corner of my eye could see this website's revolving globe (bottom at right).  Every time a new viewer read my blog their location would pop up briefly: New York (New York), Council Bluffs (Iowa), Halifax (Nova Scotia), Eureka (Montana), Victoria (British Columbia), Dresden (Germany), Wichita (Kansas), and so on.  And it strangely was this last experience, that digital orb, that affected me the most - the seemingly person-to-person yet anonymous connection through the ether that made me realize that you folks deserve only the best, most accurate and up-to-date from Yours Truly.  Ye shall have it!

Tuesday, November 29, 2011

Could the B&H 500 Happen?

Soon to be the BH 500?
Could we be looking at a future where Berkshire Hathaway ends up owning a large chunk of every major U.S. corporation of value?  With the billions that roll into his BH coffers quarterly, Warren Buffett can - and does - buy up good businesses on the cheap every time there's a market dip (and there's certainly no end in sight to those given the current economic landscape).  Could this continue until there aren't any good businesses left in the U.S. that Mr. Buffett doesn't own, just so-so ones?  Businesses that do measure up benefit from his "seal of approval" of course - and thereby tend to exhibit even better metrics - while their competitors sometimes get hit where it hurts, in their share price, just because they didn't "make the BH grade".  (That's okay, America needs lots of "#2's", trying harder to be #1, in my estimation.)  In fact, my question is a bit facetious, as you may have guessed.  That's because Berkshire Hathaway staff already constantly assess the companies in the S&P 500 and find many of them wanting.  His approximately 70 insurance, and 68 non-insurance companies as of 2010 have an increasingly international flavour, so the S&P 500 is safe - it will never mirror the B&H 500.  Which begs the question, will the MSCI World index eventually become become the B&H 1600?

Monday, November 28, 2011

How Does a Bail-Out Work?

This bailout's not working.
There's a story circulating around the internet that goes something like this:  "It is a slow day in a little Irish town.  The streets are deserted.  Times are tough, everybody is in debt and everybody lives on credit.  On this particular day a German tourist comes to town, stops at the local hotel, and lays a 100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.  The owner gives him some room keys and, as soon as the visitor has walked upstairs, the hotelier grabs the 100 note and runs next door to pay his debt to the butcher.  The butcher takes the 100 note and rushes down the street to repay his debt to the pig farmer.  The pig farmer takes the 100 note and heads off to pay his bill at the Farmers' Co-op.  The guy at the Co-op takes the 100 note and runs to pay his bar bill at the pub.  The pub owner slips the money along to the local prostitute at the bar who has provided him her services on credit.  The hooker then rushes over to the hotel and pays off her room bill to the hotel owner with the 100 note.  The hotel proprietor replaces the 100 note back on the counter.  The German comes down the stairs, states that none of the rooms are satisfactory, picks up his 100 note, and leaves town.  No one has produced anything.  No one has earned anything.  However, the whole town is now out of debt, and looking to the future with a lot more optimism.  And that, dear ladies and gentlemen, is how a basic financial bailout works!"  Or is it?  This may be an example of the "multiplier effect" of money, and perhaps illustrates "liquidity" in credit markets - perhaps even the concept of "moral hazard" because only this small circle of the town's businesses benefited from the infusion of cash - but real-world bailouts are much more problematic.  First, nobody "antes up" before doing their due diligence (except maybe the U.S. congress), so the whole scenario falls apart at the outset.  However, let's assume the tourist did put down the 100 note as a deposit on the keys.  The biggest problem is that all recent bailouts went to financial institutions (and the auto industry in the U.S. - moral hazard again) who didn't pass it on to businesses as low interest loans to expand and hire, but did fund their own exorbitant executive compensation schemes.  There are lots of other incongruencies in the above fable, but the main point to remember is that bailouts can keep an economy on life support temporarily but a true recovery requires new economic activity - in this case the German tourist staying overnight, and spending money in the town.

Sunday, November 27, 2011

Pardoning a Turkey?

Thanks a lot, Jack!
The "pardoning" of a turkey seems a bit ... strange, especially to those outside of the USA.  What, I wondered, did that turkey or any turkey - or all turkeys for that matter - do to so wrong a nation that such a ridiculous event has become a part of its Thanksgiving lore?  Answer: It has nothing to do with turkey wrongdoing, and everything to do with the concept of Presidential "pardons", those end-of-term "get out of jail free" dispensations handed out at the President's discretion as he leaves office.  Turkey producers have apparently donated turkeys to the White House just before Thanksgiving as a publicity stunt since 1947, but until President John F. Kennedy spontaneously spared a turkey on Nov. 19, 1963 (just days before his assassination) they were always cooked up and eaten.  Kennedy apparently uttered the words, "Let's just keep him", and voila! - an American tradition was born.  It remained, however, for President George H.W. Bush, in 1989, to "officially pardon" a turkey for the first time.  (By that time HW had learned not to mess with U.S. food lobbyists.  When word got out that he had instructed the White House kitchen staff that broccoli was not to be served to him under any circumstances, the outcry from broccoli producers was loud and vehement.  He made amends by publicly extolling the virtues of that vile vegetable just days later.)  So it looks like the White House is stuck with bird pardoning from here on out.  Of course, the real turkey pardoning always comes at the end of his term of office.

Saturday, November 26, 2011

An Emily Post Post

Whereas we are all periodically exposed to bad manners, it should be pointed out that usually it is even worse manners to draw public attention to such social transgressions.  Social faux pas should always be allowed to continue without comment (within reason) - and therefore without challenge - assuming no one's health or reputation is seriously at risk.  Etiquette demands it.  However if the situation worsens, an appropriate person should take the offender aside for a friendly (and discreet) admonition.  The transgressor may not appreciate it being pointed out at the time, but most certainly will on the morrow.  We all wish that certain lines of decorum weren't crossed, and each one of us establishes those lines for himself or herself, but when they are crossed the real test is of the host - to see how they handle it.  At times, of course, it will be the host (or hostess) who is the transgressor (I succumbed once back in 1985), and then the host's better half must - and usually does - take the bull by the horns.

Friday, November 25, 2011

And On The Polygamy Front ...

"Tonight?  Eanie meanie mynie moe ..."
In a victory for common sense and human decency, a British Columbia court has upheld Canada's 120 year-old anti-polygamy law, although the case will likely be appealed within days - perhaps directly to the Supreme Court of Canada (presided over by Out Here's very own Chief Justice Bev McLaughlin).  B.C. Chief Justice Robert Bauman found that the prohibition of polygamy prevents harm to women, children and society in general, and is consistent with Canada's international human rights obligations.  The case wound up in B.C.'s highest court after the province botched an earlier attempt to prosecute two leaders of the Fundamentalist Mormon sect in Bountiful, B.C., Winston Blackmore and James Oler.  Perhaps now that Canadian justice is congruent with the U.S. on this issue (Fundamentalist Mormon polygamist Warren Jeffs was convicted of sex crimes last spring), it can throw these two Canadian perverts and their ilk in jail for a long, long time.  Polygamy has no place in Canadian society, and dirty old men are slowly finding that out.

Thursday, November 24, 2011

OH2, H2O, etc.

The U.S. markets are closed today, so even though it's a weekday I can sneak in a diversion from the woes of international finance - a relief to many of you I'm sure.  It was pointed out to me the other day that I use OH2 a lot as the abbreviation for Out Here Two, the second incarnation of this project (originally Out Here Too, referring to the fact that we live way out here in the foothills of the Rocky Mountains). AND I was also reminded that one Oxygen and two Hydrogens together are better known as water.  I never really thought about it much but I like that, both as a certified chemist and as a certifiable blogger.  I realize that reading OH2 everyday has become a necessity - like water - to many of you, but I'll modestly not go down that path.  (By the way, you ask, "Why is the formula for water written H2O, and not OH2?"  Answer: It is conventional to write the positively-charged ion in a chemical compound first, and the more electronegative element last, ie. NaCl rather than ClNa, H2SO4 instead of SO4H2, etc.)  That said, no chemist would be confused if you wrote OH2 rather than H2O, which makes me wonder how many budding chemistry students have ended up out here too by accident.  And what does all this mean in a cosmic sense?  I'm not sure.  OH2 is a labour of love for this early-riser, and I want ya'll to understand where I'm coming from (going to) - so if you find out let me know.  In the mean time, think of OH2 as a waterfall of eclectica, clean, pure and refreshing, but with the odd piece of driftwood and dead fish inevitably coming your way too.  Squitzitensa!

Wednesday, November 23, 2011


Si, Seigniorage! It's magic!
"Anytime a government prints money in order to purchase government debt, it obtains a sort of revenue that economists call "seigniorage."  In effect, the government has gone out and bought real goods and services on behalf of its citizens, paying for them with nothing but paper.  The real "revenue" from that operation is measured simply by the quantity of money issued, divided by the general price level.  Seigniorage is sometimes called an "inflation tax", but that term can be misleading - the inflationary effects can be a long-run process, so people often believe that printing money is costless if they don't see inflation result immediately.  Yet regardless of whether inflation results immediately or not, it is always true that buying government bonds with newly printed money represents a fiscal revenue-generating operation." - John P. Hussman at  An example from Wikipedia: Scenario A: You have one ounce of gold, trade it for a government-issued gold certificate, keep that certificate for a year, and then redeem it in gold.  You end up with exactly one ounce of gold again. No seigniorage occurs.  Scenario B: Instead of issuing gold certificates, the government converts gold into currency at the market rate by printing paper notes.  You exchange one ounce of gold for its value in currency, keep the currency for one year, and then exchange it for an amount of gold, but at the new market value.  This second exchange may yield more or less than one ounce of gold if the value of the currency relative to gold has changed during the interim.  If the value of the currency relative to gold has decreased, then you will receive less than one ounce of gold.  Seigniorage has occurred.  If the value of the currency relative to gold has increased, you will receive more than one ounce of gold.  Seigniorage did not occur.  Seigniorage, therefore, is the positive return on issuing notes and coins, or "carry" on money in circulation.  (The opposite, "cost of carry", is not regarded as a form of seigniorage.)  I hope you're clear on that.

Tuesday, November 22, 2011

Consequences of a Weakened U.S. Military

This ain't no video game
"Republicans on the U.S. House and Senate defense committees say they’ll work to block $500 billion in defense budget cuts resulting from the failure of the deficit "supercommittee" to reach agreement yesterday.  President Barack Obama said he’d veto any attempt to void the automatic cuts.  Under the law, automatic spending cuts for all departments and agencies would take effect in 2013.  The Pentagon already is cutting about $450 billion over the next decade as a result of the budget control act of Aug. 2, the same measure that created the supercommittee.  Thus the Defense Department’s budget would face reductions of about $1 trillion over a decade, the most of any department.  If Obama exercises his authority to exempt military personnel from cuts, other Pentagon programs could be slashed in 2013 by 23 percent." (Bloomberg)  Ever since man emerged from caves the first responsibility of government has been the common defense.  But the U.S. doesn't just defend the U.S., as we all know it polices the world.  (Some might say for better or worse, but I'd say for the better.)  From WWII to post-war communist expansionism, and cyber/biological/chemical threats to an increasingly malevolent China, the U.S. - warts and all - has provided the only credible deterrent to evil-doers.  Just ask yourself, "If the Nazis, Russians, Iranians, or Chinese were running the show what would life be like?"  Answer: it would be just as it was/is inside the borders of those regimes - ugly.  Back in the 60's we used to talk about the "military-industrial complex", and one has only to spend a little time south of the 49th parallel to realize how true that is.  Yet, despite the lobbyists and Teapublican rhetoric, I believe there's enough fat in the system that these reductions can be accomplished without compromising the effectiveness of the U.S. military.  Perhaps if the military looked on such cuts as a "patriotic duty" to "save the economy" they'd embrace the concept of budget cuts more enthusiastically.

Monday, November 21, 2011

Forced Repatriation (Theft)

Ya, I'm EC. So what?
On Saturday I read an article about the effective confiscation (theft) of private (in this case, Greek) money being negotiated by (the European Commission) government that scared (the hell out of) me.  An article that shows how dangerous the current European crisis is to the worldwide financial system - and that means you and I - right now.  An article that takes some time to read and think about.  If you don't think you need to protect your money, that there is nothing to worry about, after you read this article by Bruce Krasting about "capital flight", then I don't know what will convince you.  (Yes, even you non-financial types need to read it.)  An essential right in a democracy is protection from capricious seizure (theft) of private assets by the government.  Things are rapidly worsening in the Eurozone, and it's time to pay attention.  This guy is not some nut case, make sure you read his biography (About Me).  And then tell me everything is okay.

Sunday, November 20, 2011

Hepatoscopy, Colonoscopy & You

The Famous Bronze Sheep Liver of Piacenza
"Hepatoscopy, which predicted by examining the sacrificed liver of an animal, was one of the earliest popular techniques of prophecy among the Assyro-Babylonians.  It seems to have been used in China in the Bronze Age.  Then the Romans and many others continued the practice.  The liver impressed the diviners by its large size, its interesting shape, and its heavy burden of blood.  An elaborate bronze model of a sheep's liver, which survives from Piacenza, Italy, is covered with inscriptions indicating what was to be foretold by the condition of each part.  Every conceivable human activity - from the knotting of strings to the interpretation of dreams - has become an oracle, witnessing man's desperate eagerness for clues to his future."  (The Discoverers by Daniel J. Boorstin)  Yeah, but hepatoscopy?  So is there a bronze model of a sheep's colon out there somewhere too?  And if so, is that the original "colonoscopy"?  There is a parallel there, I suppose, in that your physician is trying to divine the likelihood of colon cancer.  My point?  Colonoscopy saves lives, have you had one recently?

The Good News:  Congrats K&T!

Saturday, November 19, 2011

Tighten Our Borders!

That's not a border, that's a pathway!
"It took a few hours riding in a car and a short muddy walk that ended with $4,000 in cash passed to a pair of alien smugglers, but those were the only obstacles Shaid Uddin faced in getting into Canada despite a previous deportation.  'With the help of my friend I met a Pakistani smuggler in a restaurant in New York.  He promised to bring me to Canada in exchange for $4,000,' Mr. Uddin told Canadian immigration officials later, when the Bangladeshi national tried to make his presence in Canada legal so he could settle with his wife in Montreal, whom he married over the telephone.  Mr. Uddin’s cross-border jaunt, revealed during his immigration fight in the Federal Court of Canada, highlights the porous nature of Canada’s long, unsecured border with the United States and the easy success of a thriving illegal alien smuggling business." (National Post)  Okay, time to beef up our Canadian border against those damn drug-runners and people-smugglers from south of the border I say!  How long must we put up with such infiltrations from the U.S. side?  It's a threat to our national security, dammit!  These illegal aliens from the States could be terrorists after all!  Roll out the chain-link fence and razor wire!  Enough is enough!  Put our drones in the air, build a shark-filled moat sea-to-sea, whatever!  Outrageous!  Egregious!  This has gone on long enough!  Just don't interfere with my Black Friday shopping down there, eh?

The Good News:  The secret will be revealed today!

Friday, November 18, 2011

The Problem With OWS

Occupy Wall Street has a problem (well, it probably has a few if the truth be known - principally not being co-opted by a bunch of anarchists, commies, and deadbeats).  Its other major problem, however, is that while many people across the country and indeed around the world probably sympathize with drawing attention to the out-of-control bailed-out fat-cat bankers and asleep-at-the-switch financial regulators responsible for the 2008 meltdown and the ensuing economic malaise, the burden of protest is falling on a thousand or so who continue to show up in downtown NYC.  (Let's face it, occupying Oakland, Calgary, and Great Falls entirely misses the point about Wall Street in my view.)  As time goes on, it is apparent that the core protest group is becoming an elite 1% itself, losing 99% of its followers and potential supporters because the good people in Livingstone, MT, and Palm Harbor, FL, don't have a meaningful way to participate (and frankly don't want to be associated with dreadlocked druggy drummers).  What is needed is a more thoughtful approach to encourage national protest, such as the recent "Bank Transfer Day" - or OWS will become increasingly irrelevant.

The Good News: is still a secret.

Thursday, November 17, 2011

David Rosenberg: Deflation Coming

"What is the next major macro theme? Deflation. Just a short four months ago, we were discussing how the macro backdrop was becoming ‘recessionary’. The U.S. economy may not have moved into recession yet, but the pressures beneath the system are building. We have been emphasizing high-quality bonds and defensive income-oriented stocks - recommendations that were made even before it became clear that, not only was a recession coming, but we were confronting the next leg of the most intense deleveraging cycle in modern history. Many of these themes have played out rather well. The next crucial issue, especially now that so many assets and securities have moved to price in a recession scenario, and a global one at that, is to identify the next major macro theme and the appropriate investment strategy to deploy." (David Rosenberg is Chief Economist & Strategist at Gluskin Sheff. Prior to joining Gluskin Sheff in 2009, Mr. Rosenberg was Chief North American Economist at Bank of America-Merrill Lynch in New York and prior thereto, he was a Senior Economist at BMO Nesbitt Burns and Bank of Nova Scotia.)

The Good News:  is a secret!

Wednesday, November 16, 2011

The Only Poll That Matters ...

... is a poll where you have to put your money where your mouth is:  "Intrade is an online trading exchange website. The website's members speculate on the outcomes of non-sports-related future events. Intrade is a prediction market which allows individuals to take positions (trade 'contracts') on whether future events will or will not occur. An example event is a political election, which is almost always settled in a well-defined and easily verifiable manner. The contract might be "Barack Obama to win 2012 U.S. presidential election." Other events include financial predictions, such as "NASDAQ average to close higher today." Intrade facilitates trades between members, charging varying commissions and fees on trades, but does not participate in trading itself. Trading positions are provided in the common nomenclature of long (will happen) and short (will not happen). The trading unit is a contract with a notional settlement value, typically $10, and the contract may trade in range of 0-100 where 1 point equals US$0.10 in value. If the event specified in a given contract occurs, the contract settles at 100 points or $10; otherwise, the contract settles at 0 or $0 in value. Thus, the current price of the contract can be imputed as the market's global opinion of the probability that the specified event will occur. Because most events take place over a well-defined time span, traders can trade both before and during an event.  Intrade provides both real money ( and play money ( prediction market trading. Intrade allows bets on a wide range of future outcomes, but does not predict stocks or sports competitions. In the 2004 presidential election, the market favorite won the electoral vote in every state. Intrade offers its market data to prediction market researchers. At one time it assisted the U.S. Department of Defense in a controversial scheme (ultimately canceled) to assess probabilities of future terrorist attacks. Intrade supplies market data at significantly discounted fees or free to academics. While Intrade operates legally from the Republic of Ireland, it does not comment on the legality of trading for customers in other countries." (Wikipedia)

The Good News:  Operation successful!

Tuesday, November 15, 2011

Bunga Bunga!

Stuff like this makes me wonder where I've been the last few years (Out Here, I guess) but obviously I haven't been following Italian events as closely as I should have been. "Bunga bunga is a phrase of uncertain meaning that dates from 1910, if not earlier. By 2010 the phrase had gained popularity in Italy and the international press as well, when it was used by the Italian Prime Minister Silvio Berlusconi to refer to his alleged sex parties, which caused a major political scandal in Italy. In an 1852 issue of Hogg's Instructor, it is stated that "bunga bunga" is the name given by local natives to a location near Moreton Bay on the eastern coast of Australia. In 1910 a group of English friends, including Virginia Woolf and her brother Adrian Stephen, pretending to be the Prince of Abyssinia and his entourage, obtained permission to visit HMS Dreadnought, then one of the world's most powerful warships, in what became known as the Dreadnought Hoax. Each time the Commander showed them a marvel of the ship, they murmured the phrase "bunga, bunga!" This became a popular catchphrase for a time. Bloomsbury hoaxers would have known the words bung, bunging, and bunged that refer to the pouring and draining of liquid through a hole in a cask. The hole, a bunghole, is plugged with a cork, peg or spigot. A century later, the term bunga bunga became popular again as a joke on the internet. This joke was then narrated by Italian Prime Minister Silvio Berlusconi at his dinner parties (in a version which featured, as prisoners, former ministers from the center-left opposition party led by Romano Prodi). This expression was then frequently quoted by the Italian and international press during the 2011 investigation surrounding Silvio Berlusconi's underage prostitution charges, acquiring a quite different meaning as "an orgy involving a powerful leader"; as such, it was allegedly taught to Silvio Berlusconi by Muammar al-Gaddafi. In Italy, the term bunga bunga "has become an instant, supposedly hilarious, household expression". Descriptions of bunga bunga disagree on its meaning ... An alternative explanation for its origins was proposed by actress Sabina Began, who claimed that it was a nickname based on her surname and that she had organized the parties. The lexicographer Jonathon Green does not expect the term to make much headway, or to last, in English."  (Wikipedia)  Oh yeah?

The Good News:  The king of bunga bunga has been deposed!

Monday, November 14, 2011

The Teapublican Debate

CNBC's "Your Money, Your Vote" debate had it all.  Newt "Retread" Gingrich arguing with Maria Bartiromo instead of answering the question she asked about health care (twice). "Great White (undershirt) Hope" Mitt Romney stuttering through an answer to John Harwood on health care, despite giving advice on it "around the world".  (Mitty also defends the Bush tax cuts and says he'd download federal programs onto state governments.)  "Smiley" Santorum ... well, smiling.  "Slick" Rick Perry committing the Gaff of 2011 when he couldn't remember that third agency he wants to definitely shut down if elected.  (Oh yeah, the Dept. of Energy - hey I'm from Texas, energy isn't that big out here - gimme a break!)  Herman "Perv" Cain 999-ing every question, boldly.  He totally ignored Cramer's question about restoring Mom and Pop's trust in the stock market (and Jim let him get away with it!).  The "Other White (undershirt) Hope" Jon Huntsman non-answering Rick Santelli (who was on his best behaviour), and then proposing the nation be run like Utah (of course) where trust is apparently running rampant.  Michele "Tax 'em" Bachman sounding the most reasonable by far on tax reform ("everyone needs to pay something, even if it's just enough to buy two Happy Meals").  Ron "Doc" Paul saying the Constitution doesn't allow the feds to even have a Dept. of Education, and - of course - he'd "audit the Fed and then End the Fed".  (Read the book.)  He sympathized with Occupy Wall Street, and says everything that's wrong with America stems from the Fed (is there an echo in here?).  Most interesting point of the night: Romney wants to take on China full force, while Huntsman (who has by far the most experience as former U.S. Ambassador there - and a Chinese speaker to boot) admitted he has no pat answer on the China problem.  (A serious distinction between the two, above and beyond the fact Mormons rarely disagree in public.)  The winner of the debate, hands down: Michele Bachman, too bad she's a religious crazy.  Loser: CNBC talking heads, other than Bartiromo, for being too tolerant of non-answers.

The Good News:  Had a great weekend!

Sunday, November 13, 2011

Weekend Diversion

I don't know who labelled this an Alzheimer's Test, but it's kind of fun on a wintery Sunday, and a diversion from Eurocalypse.  Click on the link and put the puzzle together:    
The Good News:  The winter tires are already on!

Saturday, November 12, 2011

Do I HAVE to Watch the Video?

Computer "hacking" Out Here
Let me admit right off the bat that I am not a "techie" (that's what we used to call "geeks" back in the olden days).  I tend to drag my feet on technology; first and foremost because I'm concerned about privacy, and secondly because the cost of IT goes down over time.  (To wit: my favourite e-mail program was Netscape up until a few months ago, and THE BEST investment in computers I ever made was the recycled netbook I bought for $150 that I am typing this on.)  Finally, we live out here in the foothills of the Rocky Mountains, and get our internet via radio waves that seem, ahem, a bit tardy at times, thus potentially thwarting any cutting-edge technology even if I had it.  (Let's just say High Frequency Trading is not for me.)  My pet peeve for the day is that most sites I visit these days - be they financial, political or whimsical (sometimes it's difficult to tell which is which) want me to watch a video of some event or speech rather than just giving me the description or text of same.  I'm not talking here about family pics and vids (those grandkids truly are the brightest and best looking on the planet, nice too, smart too ... but I digress), I'm talking about the serious stuff - where the written word should be paramount.  I hate waiting for a video to load, only to watch it play for 5 seconds while I'm trying to adjust the volume in two of two sliders, then deciding to full-screen it or not, wait for another ten-second "loading", watch for 5 seconds before being interrupted again, etc.  Just give me the text to read, dammit!  And bring back Netscape!

The Good News:  Those grandkids are here for the weekend!

Friday, November 11, 2011

Remembrance Day

Canadian field ambulance WWII
Lest you forgot, today is Remembrance Day.  There are always forces of evil out there.  Our forefathers fought some particularly nasty ones, and died so that we could live in freedom.  Don't ever forget it.  This will be my first November 11th without my favourite Veteran, my father.  From an early age he taught the three of us kids to honour this day, and those it remembers.  Well, Dad, we remember them - and we remember you.

Thursday, November 10, 2011

Advice From Artemis Capital

At a lunch the other day I was asked what future trends made me so gloomy about the market, and how to protect one's assets against those trends.  It reminded me of this very succinct recent advice from Artemis Capital at the end of a long and logical assessment of current economic trends: "The global currency regime will face significant changes in the ensuing decade.  The self-reinforcing cycle between Debtor-Developed and Emerging-Creditor nations is likely to unravel, perhaps violently.  The European crisis may tip us into a second global recession.  Global policy makers are out of stimulus options.  Dollar hegemony may be challenged in the future."  And what to do? "Prepare your business for the potential of a second global recession.  USD is historically strong when the economy is weak - watch for reversal.  Evaluate your portfolio returns against a global basket of currencies and commodities.  Diversify exposure during periods of dollar strength and de-leveraging into: a) Nations with healthy finances and commodity driven economies (e.g. Canadian Dollar, Norwegian Krone, Australian Dollar), b) Tangible assets like real estate and metals (but not on leverage), and c) Alternative asset classes (e.g. volatility and managed futures)."  Good advice, I think, from people more knowledgeable than I.  Do your own due diligence.

The Good News: The Canadian markets are closed tomorrow, Remembrance Day.

Wednesday, November 9, 2011

R.I.P. Laptop

Another dinosaur.
The writing is on the wall.  "The laptop is dead."  And it's not just that medical authorities have concluded that laptops should be used anywhere but your lap because the heat generated has reproductive and possibly cancerous consequences for ... well, laps.  No, it's because of the advent of the "tablet" computer.  From the iPad to the Playbook and beyond, if you watch TV at night without a tablet to tap on - you're in the minority these days.  They will soon be as ubiquitous as cellphones.  As Joe Kernan said, Steve Jobs invented "something we didn't even know we needed" - but in the process he inadvertently killed off another whole product category.  (Towers are probably safe for now as employers might not want some computers leaving the premises, and hardcore gamers might even want something stationary as well, although admittedly I risk showing my ignorance of the latter here.)  No, it's the laptop that is the endangered species, folks.  Oh sure, you may love your laptop now, but when it needs replacing - or your sister lends you her tablet for the weekend - that's it, you'll be hooked and tablet-bound.  I guarantee it, because it happened to moi.

The Good News:  The investing crowd can take this to the bank.

Tuesday, November 8, 2011

That Mask

"A cartoon-like man with a pointy beard, sly smile, and mysterious eyes - The Mask is a stylized version of Guy Fawkes, an Englishman who tried to bomb the British Parliament on Nov. 5, 1605.  But history books didn't lead to the mask's popularity: a nearly 30-year-old graphic novel and a five-year-old movie did.  "V for Vendetta," the comic-based movie whose violent, anarchist antihero fashions himself a modern Guy Fawkes and rebels against a fascist government has become a touchstone for protesters.  Yet whether the inspiration is the comic, the movie or the historical figure, the imagery - co-opted today by everyone from Wikileaks founder Julian Assange to the hacker group Anonymous - carries stronger connotations than some of the Occupy protesters seem to understand.  While Fawkes' image has been romanticized over the past 400 years, he was a criminal who tried to blow up a government building.  It would be hard to imagine Americans one day wearing Timothy McVeigh masks to protest the government or corporate greed.  Fawkes was a Catholic insurrectionist executed for the bombing attempt.  In the years immediately following his execution, Nov. 5 was England's official celebration for defeating Fawkes. Gradually over the centuries, the meaning has dramatically changed. Nearly two years after the film was released, the hacker group Anonymous wore the Guy Fawkes masks depicted in the movie during protests against the Church of Scientology.  Then came Wikileaks and the Occupy movement.  Few wore them Thursday afternoon because of the arrests of masked activists.  But they weren't gone - just hidden." (T. Lush, AP)

The Good News:  We arrest masked protesters but not those wearing the full-face niqab.

Monday, November 7, 2011

Cyberwar Salvos

"cool wall, great noodles ..."
By Jonathan E. Skillings, CNET News:  "It's like the Cold War never ended: US intelligence agencies see Russia and China as the most significant threats to the nation's interests.  The difference this time is that the field of engagement isn't proxy states in Eastern Europe and Southeast Asia, but in the vast reaches of cyberspace.  The Office of the National Counter-Intelligence Executive (ONCIX) points to those foes from the Cold War decades in their report.  Chinese actors are the world's most active and persistent perpetrators of economic espionage.  US private sector firms and cyber security specialists have reported an onslaught of computer network intrusions that have originated in China.  ONCIX has released a number of economic espionage posters intended to promote greater counterintelligence awareness.  One that clearly has China in mind features a computer chip labeled "Made in the USA" and the coy but pointed phrase "Stolen and transferred to an unnamed country with a cool wall, great noodles and countless cyber hackers."  As for the threat from Russia - which comes across as a distant second compared with China - the report cites, among other things, the arrest in June 2010 of 10 Russian Foreign Intelligence Service "illegals" who it says were tasked with collecting economic and technology information.  The report also points to threats from "disgruntled insiders" who may leak corporate trade secrets or critical U.S. technology to the likes of WikiLeaks and other "hacktivist" groups.  Cyber espionage and other surreptitious online activities can be notoriously hard to document, but some high-profile examples have emerged in recent months.  In August, for instance, security company McAfee reported on Operation Shady RAT, which it described as a "historically unprecedented" operation in which information was stolen from scores of public and private companies in 14 countries.  Earlier in the year, McAfee called attention to what it termed the "Night Dragon" attacks that sought to steal e-mail and other sensitive information from companies in the oil and energy industries.  And also this year, a breach involving RSA's SecurID authentication devices apparently led to cyber-snooping at three big U.S. defence contractors.  A common thread in each of those incidents?  Strong suspicions that China was lurking somewhere in the shadows."

The Good News:  Some of the best cyber-sleuths in the world are Canadian, at the U of Toronto!

Sunday, November 6, 2011

Will You Live to See 80?

Vince is a senior? You're kidding!
Here's something to think about.  A sixty-something acquaintance of mine recently picked a new primary care physician, and told me this story: "After two visits and exhaustive lab tests, he said I was doing 'fairly well' for my age.  A little concerned about that comment, I couldn't resist asking him, 'Do you think I'll live to be 80?'  He asked, 'Do you smoke tobacco, or drink beer, wine or hard liquor?  'Oh no,' I replied.  'And I don't do drugs, either!'  Then he asked, 'Do you eat t-bone steaks and barbecued ribs?  I said, 'Never ... my other doctor said that red meat is unhealthy!'  'Do you spend a lot of time in the sun, like playing golf, skiing, sailing, hiking, or bicycling?'  'No, I don't,' I said, 'I stay right out of the sun as much as I can.'  Then he asked, 'Do you gamble, drive fast cars, or have sex often?'  'No,' I said...  He looked at me and said, 'Then, why do you even care?"

The Good News:  Yes, to all of the above - save tobacco and drugs!

Saturday, November 5, 2011

Black Licorice

Lowers testosterone?

I have no idea when or how I got hooked on black licorice, although my mother - and her brother my uncle - were always big fans so I'll attribute my addiction to them.  However I may have to cut back on what I previously considered a harmless organic treat, based on some facts heretofore unknown, at least to me.  "Much of the sweetness in liquorice comes from glycyrrhizin, a compound between 30 to 50 times as sweet as sucrose, and which also has pharmaceutical effects.  Black liquorice contains approximately 100 calories per ounce.  The good:  The compound glycyrrhizic acid is now routinely used throughout Japan for the treatment and control of chronic viral hepatitis.  Hepatoprotective mechanisms have been demonstrated in mice.  Recent studies indicate that glycyrrhizic acid disrupts latent Kaposi sarcoma, exhibiting a strong anti-viral effect.  Liquorice affects the body's endocrine system.  It might lower the amount of serum testosterone slightly, but whether it affects the amount of free testosterone is unclear.  Consuming liquorice may prevent the development of hyperkalemia in persons on hemodialysis.  Large doses of glycyrrhizinic acid and glycyrrhetinic acid in liquorice extract can lead to hypokalemia and serious increases in blood pressure.  To decrease the chances of these serious side effects, deglycyrrhizinated liquorice preparations are available.  The disabling of similar enzymes in the gut by glycyrrhizinic acid and glycyrrhetinic acid also causes increased mucus and decreased acid secretion.  It is used as an aid for healing stomach and duodenal ulcers, and in moderate amounts may soothe an upset stomach.  Liquorice can be used to treat ileitis, leaky gut syndrome, irritable bowel syndrome and Crohn's disease as it is antispasmodic in the bowels.   It inhibits an enzyme that is highly expressed in liver and fat tissues, where it plays a role in metabolism, and in the brain, where the same enzyme is involved in stress response that has been associated with age-related mental decline.  The bad:  Excessive consumption of liquorice or liquorice candy is known to be toxic to the liver and cardiovascular system, and may produce hypertension and edema.  In occasional cases blood pressure has increased with excessive consumption of liquorice tea, but such occasions are rare and reversible when the herb is withdrawn.  Most cases of hypertension from liquorice were caused by eating too much concentrated liquorice candy.  Doses as low as 50 grams (2 oz) of liquorice daily for two weeks can cause a significant rise in blood pressure.  A European Commission 2008 report suggested that “people should not consume any more than 100mg of glycyrrhizic acid a day, for it can raise blood pressure or cause muscle weakness, chronic fatigue, headaches or swelling, and lower testosterone levels in men.”  A 56-year-old Yorkshire woman was hospitalized after liquorice overdose (200 grams or 7 ounces a day), which caused muscle failure.  The hospital restored her potassium levels, by intravenous drip and tablets, allowing her to recover after 4 days.  Comparative studies of pregnant women suggest that liquorice may also adversely affect both IQ and behaviour traits of offspring." (Wikipedia)

The Good News: I was unaware of the above for sixty years!

Friday, November 4, 2011

Georgia WMD Geezers

Or maybe blow off some ricin!
From the Los Angeles Times:  "Federal officials arrested four members of a Georgia militia group Tuesday, alleging that the men were planning to attack state and federal buildings with guns and explosives.  They say the men also intended to deploy the deadly toxin ricin in some cities, including Atlanta; one suspect described a plan to blow the substance out of a moving car on the freeway.  The four men ... 73, 67, 65, and 68 ... were "members of a fringe group of a known militia organization" called the "covert group," which held clandestine meetings in the northeast Georgia foothills.  Unbeknown to the men, the group was being monitored by a government source who recorded its meetings, and, later, by an undercover federal agent pretending to be an arms dealer.  One described a "bucket list" of government workers, politicians, corporate leaders and members of the media who he thought needed to be "taken out" to "make the country right again," according to the document. "When it comes to saving the Constitution, that means some people gotta die," he allegedly said at one point.  In a September meeting of the group, Crump said he wanted to make 10 pounds of ricin to "disperse ... in various United States cities, including Atlanta," and "described a scenario for dispersing the ricin ... in which the toxin would be blown from a car traveling on the interstates." Last month, [the agent] allegedly provided Crump with a sample of the beans used to make ricin.  On Saturday, Crump told the informant he was going to "shell the beans that week." The Federal Bureau of Investigation arrested all four men Monday.  Two were charged with conspiracy to receive unregistered firearms.  Two were charged with attempting to produce a biological agent for use as a weapon."

The Good News:  And I thought our golden years might be too sedate!

Thursday, November 3, 2011

Poker With Pappy

Ya can't "double or nothing" with no money, Georgios!
Twenty-four hours later and Prime Minister George Papandreou of Greece is starting to look like a very shrewd - albeit high stakes - politicopoker player.  After a) driving the EU to the brink so that they (almost) came up with a (sort of) credible rescue (as yet unfunded) plan, and then b) surprising everyone - including his EU benefactors and his own finance minister - by announcing that a referendum would be held to see if the Greek-on-the-street would "accept" the terms of the now famous 3am EU plan, he was unceremoniously subpoenaed to a pre-G-20 meeting yesterday where he received a tongue-lashing from that old tag-team of Merkel and Sarkozy.  Unrepentant, Pappy didn't back down on his referendum plan, except to move it up to December 4th (ostensibly as a condescension to Merkozy, but also because he knows he'll be out of bailout bucks by then).  Et voila!  By snubbing the EU northern know-it-alls twice in one week, he is now a hero instead of a bum to the beleaguered Greek public, including importantly a few opposition members in parliament, and will probably win a make-or-break non-confidence vote on Friday as a result, thus retaining power.  As for that referendum?  A 3/5ths majority of parliament is required to hold it, and I don't think G-Pap will get it.  In fact, I think he secretly knows it is out of reach.  Thus, with no referendum (through no fault of his own, you understand), Greece will end up having to accept the EU bailout money and terms (decades of severe austerity) but the PM gets to stay PM and comes out smelling like an Athenian rose (or shot of Ouzo) to his people.  All of which incidentally fits nicely into the EU schedule - not only because Greece will be out of euros about then, but because, according to The Economist: "Europe's bailout capacities may fall apart in a matter of weeks".  And if Pappy loses?  Watch out below.  Never have the stakes been higher for all of us.

The Good News:  VIX rules, er, VXX rules!

Wednesday, November 2, 2011

Greek Tragedy or Greek Farce?

Yes, we say no!  No, we mean Yes!
So Greek Prime Minister George Papandreou first comes hat-in-hand to the European Union, lies like the sidewalk to get another bailout tranche, and then throws the very fate of his rescuers to the whims of the Athenian mobs by promising them a referendum on whether to "accept" the conditions upon which the EU Greek bailout was predicated.  (It has since morphed into a referendum on staying in the EU).  Take the money and run, as the song goes. Needless to say, Merkozy was totally caught off-guard, and must be tearing their hair out.  (As was Pappy's own finance minister who was admitted to hospital with abdominal pain within hours of the announcement.)  Of course the reason for G-Pap's duplicity is easy to conjure up: he'd like to be able to walk down the street to buy his next bottle of Retsina without a platoon of bodyguards protecting him from his own countrymen.  This is a massive populist gamble on Georgios' part - a gamble that could bring down the whole eurozone by triggering defaults on sovereign debt and igniting civil unrest throughout the continent.  You can't blame him, though, for trying to quell domestic violence by polling the average Greek on his way out.  And if you're headed for decades of austerity, why have to put up with those northern know-it-alls anyway?  It's just that a little warning would've been appreciated by everyone.  Merkel and Sarkozy are pissed (to say the least) that Europe is once again held hostage by a Papendreou (G-Pap's father taught him well).  Referendums are funny things though, and much depends on the phrasing of the question.  Merkozy's hoping Pappy can make "no" sound like "yes".  And given the Greek propensity for lying (that's the way they got into the EU in the first place), maybe he can.

The Good News:  The VIX is gyrating overtime!

Tuesday, November 1, 2011

WMD's in Syria?

The bioweapon warning symbol
Is the reason that NATO and the Arab League tolerate the daily slaughter of Syrian protesters the existence of chemical and biological weapons in that country?  The thought crossed my mind recently while re-reading Richard Preston's The Cobra Event. (Published in 1998, it is not a book for the squeamish by the way.) Preston also wrote The Hot Zone, and did voluminous research for both projects, but his several references to Syria in TCE were hard to miss.  Last week's warning by Assad that the whole middle east would "burn" if outsiders interfered to help protesters may have been referring to his rogue nuclear program - but it seems like a strange choice of words, and might be construed as referring to means non-nuclear, but just as insidious.  WMD's took a real credibility hit, of course, after Bush and his neo-conservative wacko henchman Rumsfeld, Wolfowitz and Co. pressured the CIA to prepare highly speculative reports regarding Iraq's WMD capability (sucking Colin Powell and the UN Security Council in as well as the rest of us), but the fact remains that such weapons probably do exist in a handful of countries.  This, from "Syria has a robust biotechnology infrastructure and [it] is ... highly probable that Syria also is developing an offensive BW [bioweapons] capability.  Nearly all assessments of this program point to Syria having difficulty producing biological weapons without significant outside assistance both in expertise and material.  A facility near Cerin is the only reported facility suspected as being used for the development of biological agents.  Syria is a signatory of the Biological Warfare Convention but has not ratified it."  And apparently they've been getting some help too: "American diplomatic cables revealed that Indian firms had aided Syrian chemical and biological weapons makers with obtaining equipment.  The cable reminded India that it "has a general obligation as a Chemical Weapons Convention State Party to never, under any circumstances, assist anyone in the development of chemical weapons".  I'm sure Syria sent their bioreactors, etc. back to India right away when they got that little rebuke from Uncle Sam!

The Good News:  The first light dusting of snow arrived yesterday but didn't last long!