fat.tail.event

I am not discounting the political process and voting all together, but it is time to recognize its decreased efficiency (some cases all out failure) to deliver economic necessities. Look at the market right now...this is what it tells you. Career politicians, for too long, have relied upon inflation and credit to produce 'results'. The past two years reveal the cracks in such a foundation. This model is coming to an end, and massive bailouts only accelerate the process -- sweet irony in the current suffering. Most Americans still fail to realize that the tech bubble, housing bubble, commodities bubble are all just demon spawn from the mother credit bubble of them all - US govt borrowing. The founding fathers never intended for there to be career politicians solving our economic woes. You went back to your farm or other profession after you served your country for your term or two. You eliminate the moral hazard because you arrive for a short period and DO WHAT'S RIGHT, not worry about the next election. Banks are the new utilities of the 21st century. Turns out commercial banks were levered more than hedge funds and will be in the penalty box for some time to come. The government is here to help with this process. Thus, the relatively unregulated pools of capital (hedge funds, private partnerships) and offshore funds (sovereign wealth funds) will pull the strings on the other side of this disaster. Think you can control them through regulation too? And always remember...regulations and regulators are only worth what was learned in the LAST crisis. Finance and markets move faster than them. Slow us down too much and capital (and the tax revenues that come with it) will just leave. It will be the people and entities that saved (and preserved) over the last decade who will be the kings of finance and their own economic destiny for the next decade. Our last two presidents have implored that you spend. Finance ministers are doing everything they can to create a lending nirvana right now. The people who ignore them will be better off. The silver lining...once things get bad enough I really do hope we see the welcomed collapse back into our communities and families to help cope with the economic stresses we will face. Whether it be farming co-ops, neighborhoods combining resources to become more efficient, etc. I think we will see a new generation of parents and children living together for the long term, not just the post college, pre death stopovers we see now. You never know...

I am not sure I have ever disclosed my fascination and awe when it comes to this sport. At one point I was going to do a week with dogs up on the Minnesota/Canada border, but never followed through. Many thanks for posting this and planting the seed again. Sometimes I feel like I might be the only mainlander who gets geeked up when this stuff is on ESPN.

The issues we speak of will not be solved through an election process IMHO. That implies a solution with roots in political ideology. No, these issues are not those of Left or Right. They are of Right or Wrong. Robbie's comments speak to the heart of that matter, using entitlement as an example. Put simply, things just arent bad enough yet. Our homeostasis has not been disrupted to the point where it compels citizens to fully engage within this Republic. This is the 'hope' I have for this great country. The day will soon come, after the denial and theft of too many liberties (does anyone else hear 'taxation without representation' soon making a 200 year comeback leap?), when people refuse to look towards politicians to address their needs. Think about how many basic needs the government is now promising to deliver effectively. The lowest elements on Maslow's human needs ladder are: air, water, food, sleep (the next rung is security, stability). The Constitution addresses security. And now we see the government with their hands in air quality, water delivery food growth regulation. It is just a matter of time before Congress meddles in these affairs to the point where citizens are deprived of these elements. It will be a painful period in our history when these deficiencies all come to a confluence, but will mark a significant turning point as well.

I would be curious to hear your father comment on the percentages of peers that were Keynesian vs. Chicago School, or if he even ever bumped into someone from the Austrian School. I bet the numbers would come back 75% Keynesian within the US university econ. departments. At least that's how I felt while attained my degrees. Conservative students would jam the lines trying to seek a seat among like minded professors. So I think your father is highlighting a conflict/bias that has been plagueing our institutions for quite sometime, but now its taking its place with the front page news items. I agree with your father's worries on this, but unfortunately I think its quite the opposite of most sentiments within academia. Sadly, I can see my former professors salivating as they watch private enterprise latch on to the public teat. This is the golden, Keynesian moment they have been waiting for since post-WWII. They are sitting back and taking daily notes on this disaster and the responses for the next case study to present to their students. It was so enfuriating listening to those whack-job theses about how WWII pulled us out of the Great Depression. Ten years from now the poor B-school kids will be hearing about how the Great BHO Plan pulled us out of the Great Recession. But I am hopeful the US Tax Revolts of 2012 and the Global Food Crisis of 2011 will detract from it.

Since Chief kicked this thread off with a Jim Rogers quote, I will throw this out and paraphrase another one. We also seem to make a lot of medical analogies on here, so it fits well... "The government is putting band-aids all over a cancer patient"

Theoretically, if liquidity is adequate...daily volume is high, float is high...price per share becomes just that, a number. Psychologically, we tend to want more of something, just a human bias. Some companies strive to keep share prices at a certain level to make them seem more 'accessible', but again I think its all perception. If you identify value at 100 and you have more shares outstanding, the same value would exist at 1000 if you reduced the number of shares proportionally. Some companies trading under 5 will reverse split to boost share price...perception of being some start-up penny stock - bad Then you have Berkshire...BRK A which is around 75,000 USD for 1 share...perception of exclusivity.

@ the trading guys... First, I would caution against trading individual equities at first, especially in this environment, right out of the gate. Unless you have some big affinity for a certain sector and you devote yourself to knowing inside out....you love pharma companies and you are going to follow only mega cap healthcare, for example. Take Robbie's advice and concentrate on a broad based index that has TONS of liquidity. Volume is your friend. Read Dr. Alexander Elder's book Trading For a Living. High Probability Trading by Marcel Link is a good book to put you in a proper frame of mind. Reminisences of a Stock Operator is probably the best narrative type book out there about market psychology and crowd psychology....if you read between the lines and ponder, its truly invaluable. If you want to know how big money managers think about the world and look at the market, read books like Market Wizards, Hedge Hunters or Inside the House of Money...they may even give you ideas about how to 'express' (implement) trades properly. When I am not reading the general stuff out there... research, the Economist, FT...I am blogging, chatting in FT's Alphaville Long Room, emailing hedge fund managers with thoughts/trades I have. As far as all the 101 stuff....long, short, futures, options. First, go buy yourself a finance dictionary...you will always need it. Go to the CMEs website...tons of free info, classes, market data. I get the CMEs end of day soft commodities report for free....just another example of free, regular info out there. My firms Reuters data service at home doesnt inlcude FX, so I keep the CMEs E-quivalents running on my monitors at home all night (yes, I get up a couple times a night to check end of asia and UK open). If you are married and you want to be successful at this hobby/career, you will have to make all of this your mistress. There are just too many smart people who live and breath this stuff who stand ready to take your uneducated money. I would say stay away from retail spot FX altogether. These are mainly chop shops because its an unregulated environment with no central exchange or clearing corp. The only way you will get decent service or execution is if you are making an institutional cut off, usually 50 to 100k deposit.

spider and phaedo... I would start by poking around on some forums similar to this one that deal with trading. Try elitetrader.com as a jumping off point. Maybe Robbie has some other hubs of information that he can recommend. I started in 1999 as a prop trader (proprietary) and my initial advice to you is to read, VORACIOUSLY on the subject matter. While you are reading you must also get screen time...just sit back and watch what happens. Paper trade it if you like (but try not to develop biases or force theses on yourself at this point, stay neutral) to start testing small ideas and patterns you observe. If there is a certain market that interests you, immerse yourself in it. The point in all of this is mental exercising and figuring out how your talents and brains mesh with price movements...everyone has their own style and applies it uniquely. No matter how far you go in this venture, never let anyone tell you differently. Eventually subscribe to a data service that allows you to access to historical pricing info and start backtesting some buy and sell parameters that make sense to you. Look at where you would have won and lost. Be humble and thoroughly analyze your failures. Start keeping a journal and just write about trading. Go back and read what you thought, why you thought it, why you bought, sold etc...develop an innate 'market history' in your brain. You will eventually begin accessing it subconciously once engrained. I am not saying I know what Robbie's strategies are, but I do know one thing by reading his posts...they are RULES BASED. Once you know 'your rules' everything becomes quite mechanical and thus unemotional. Mastering your emotions is just as critical as your system. Go read TraderFeed. It is quite therapeutic and thought provoking as it relates to markets, market psychology and your own.

I work on a team that runs money within a large investment bank. Sparing all the technicals, the fund is global in nature and focused on the macroeconomic environment. There are micro specializations that I do not deal with, but safely said we dont own anything micro, only traded....once you have served your short-term purpose, you are jettisoned. Aberrations are hard to befriend so we dont invite them into our house to stay. Put simply, my specific job is to monitor trends; when do you get on a certain train, when do you get off, and when do you give your train to someone else to play with (this generally means that train is broken). Macro means the trains I play with are broad in nature....sovereign debt, currencies, commodities, real estate, SP500. The only train we are on is debt, and probably not for much longer. The broken trains are SP500 and foreign equities...and car loads of poop keep getting added on to those burning trollies, still no caboose in sight.

By far the best strap combo you could pair with this...nice taste you have.

I believe it was Credit Suisse today with a note that said SP500 to 650 based on 'policy confusion'. What it really means is that we will get to 650 a little bit faster due to this comedy of errors. We are/were going down to that range irregardless of who was at the helm. Wasting $75B (drop in the bucket) on home mortgages...Where's the total US housing market now? About $15-17 Trillion I think. Geithner now wants to get in bed with the hedge funds??? ...loan them the money to go out and purchase distressed debt. The true lenders of last resort, because we will want 15% Obama is on TV everyday (even another prime time spot this week, right) pumping the US market like its some kind of penny stock, and it still cant find any traction. Scariest part of all...it seems like when I speak to our traders that all of this selling semi-orderly and somewhat lethargic. You get this sense that market participants are just packing it in, and not trying to even go out and make money. When we tested these lows back in Nov 2008, there was at least a sense of panic in the air...as if there was some minor bloodletting going on. Not this time. It feels like the market is in a comfort zone of sorts. So the real question is, how/when/where can we get some true fear? That will help build in another bottom. My bones tell me that something big is imminent. Someone or something is going to lay a very large egg here, sooner or later. Anyone have thoughts on that? Maybe it originates in Eastern Europe and sends shockwaves into Western. It looks like former USSR countries wont be able to roll over their short-term debt and the AustroHungarian banks are going to get whacked holding their bags. Maybe thats where the next liquidity or currency crisis begins. disclosure: still short, massively short

Interesting...is your acquaintance on 'risti? A few weeks ago I thought I saw someone put up new pics of the combo you reference. Maybe give a search there and see if you can dig it up...

I have done my fair share of digging on the history of Panerai. One thing that I have not encountered, however, is an authoritative post, article, reference etc. that discusses the terminology specific to "Black Seal". I do not own any of the expensive Panerai books, so maybe I am missing it in there. Anyone have links, passages to paste, or anecdotes to share to enlighten the community? Thanks, Fat Tail

Indeed. Your point can be magnified beyond the Beast (SP500 futures) to the US economy, to the global economy. There are a lot of assets that WANT to go to zero right now. But we emote, turn the quantitative data into heartbreaking narratives for the nightly news and then prop assets up under the guise of 'doing good'. This is what politicians call 'results'. Ultimately, we only end up distorting value, which makes it difficult to form the consensus Robbie, and all of us seek, and need to build better things. Creative destruction. If we choose to operate the way we have over the last couple of weeks, my only request is that Congress hosts a morning equity call where they tell me whether or not they want to make the market go up or down that day. Or, if the US Treasury could publish their 12 month SP500 target. That would be nice too.

Take a step back and laugh a little....I wish one of the House Reps would have used their 5 minutes the other day for this.... Wall Street Executive Airlines

I am quite a bit more down than you. In medical terms this is like a 'barber' recommending to bleed the patient. (yeah, I'm in the middle of the John Adams HBO series)

Some other thoughts on this... Listening to Geithner yesterday was like listening to my high school valedictorian's send off speech, except replace do great things in life with do great things with the capital markets/economy. Maybe its that he's just too young and I have a bias for grey hairs at this point. Watching the House get so frustrated with Bernanke and Geithner only reinforces their lack of understanding of this grand scenario. At one point a woman on the House Fin Services Comm. was just railing on Bernanke about TARP. Barney Frank had to interrupt to remind her that TARP was administered by the Treasury, not the Fed. Ron Paul is dead on about lack of transparency at the Fed. We are putting all of our force and hope in one institution that has minimal oversight and accountability to Congress let alone the citizens. There is a tidal wave coming. And I feel like we are putting on our Sunday best, digging our feet in the sand, and just peeing in front of it. You may look heroic, presidential up until the point you get crushed. Time is better spent thinking about the aftermath and beyond. No one wants to recognize that something so dark can be so beautiful at the same time. But thats exactly what I think of bankruptcy system in this country. Ramp it up. It has greatly contributed to the success of this country and makes recoveries more efficient.

Jeremy Grantham from GMO had the best, quick response to all of this nonsense. Since the housing bubble popped private citizens and enterprise have gone from $50T in assets to approximately $30T. This is personal assets, home and investments, same for business, corporate real estate etc. The $50T was supported by $25T in debt/financing. Now the $30T is supported by the same amount of debt. Not the most ideal debt ratio to begin with and now that ratio completely unacceptable...maybe now people will understand why banks wont lend. So how does a $900B put a dent in $20T of losses? Economists wouldnt have a job if their answer was to do nothing.

Great post, thanks for that compilation. I always find myself revisiting Oscar Wilde quotes...here are some more. Oscar Wilde on the subject of women * Women are never disarmed by compliments. Men always are. That is the difference between the sexes. * All women become like their mothers. That is their tragedy. No man does. That's his. * Men always want to be a woman's first love - women like to be a man's last romance. * A man can be happy with any woman as long as he does not love her. * If we men married the woman we deserve, we should have a very tedious time of it. * In married life three is company and two is none. * A man who desires to get married should know either everything or nothing. * Bigamy is having one wife too many. Monogamy is the same. * Men marry because they are tired; women, because they are curious; both are disappointed. * As long as a woman can look ten years younger than her own daughter, she is perfectly satisfied. * A woman will flirt with anyone in the world, so long as other women are looking on. * She wore far too much rouge last night and not quite enough clothes. That is always a sign of despair in a woman. * A man's face is his autobiography. A woman's face is her work of fiction.

Until proven otherwise...EMPTY SUIT Pretty clear he's not managing, rather being managed. The opposite of what his disciples expected. I heard transition period approval high % was 83, now its 68. Pretty big drop for a couple of weeks.

My sentiments exactly...I would also add: His track record of murdering innocents in the Middle East isnt starting off so well. He is really laying the groundwork for a potential conflict ranging from Afghanistan all the way down to India. Nice job on the Guantanamo decision making process. Woops, these guys are very bad, been tortured illegaly and are sources on how many leads our intel folks are pursuing. Sure, just let them go immediately. Thanks for starting a trade war by saying you dont want to start a trade war. Before the Treasury Sec. is even on the job he's calling one of the largest holders of US Treasuries a 'currency manipulator'. Good plan a couple months before you need to flood that market with $900B+ of Treasuries. Or, what if they start dumping Treasuries (might happen anyhow as demand falls through the floor)? Your low interest rate policy is then shot to hell. I was willing to give this guy some slack too, but these things are HUGE F'ups right out of the gate.

Overall, I disagree with this statement. Thus far, year-over-year sales have decreased no matter the sector. Does anyone know what percentage of the replica market would be considered superior copies vs. the average/below average goods? Without any evidence behind my opinion, I would wager to say that lower end replica goods are getting slammed harder due to lack or foot traffic, travelling to places like China or even Canal St. Not saying higher end replica gear is up, just possibly less down. I also wonder about geography. An American's idea of saving money is shopping sales.

I may have spoke about a half a day too soon...Little Hero is (was?) a dealer on RG who offered modded H movements and very near to gen dials for the 111H. I suppose you could pop one into your 177H? Anyhow...the dial runs $200, the H movement all reworked, white gold plated brideges etc, about $500. But it sounds like he is pulling down all of his threads on the boards as we speak. It is also possible that he is just editing...no one seems to be certain at this point.

Bork, I own the DSN 36 (not the latest dial however). You dont need to worry about a CP fix, its done. However, the one thing I would recommend is doing research on DSNs dial coloring vs. gen. It is too purple for my taste and I think his latest dial suffers from the same issue. On the other hand, I am really happy with his case. Do some searches on the board about the lengths other members have gone to for accurate 36s.

Depends on your personal definition of REALLY nice. REALLY nice can range from $650 to $1300 depending on a lot of factors. LH parts could push it higher...can always take things further until you're content. Enjoy the 177H