fat.tail.event

Good stuff thanks, snagged that satellite image.

For your first PAM, I would do a nicely modded 177 and call it a day. From payment to truly enjoyable wrist time, its the shorter road. The 36 project is time consuming and eventually there will always be something nagging to make it better.

Never bot here...but this looks like a pretty good selection. watch cufflinks

You are killing me...that looks incredible. I havent had breakfast yet and just felt my stomach start...

On a similar note do any of the vintage followers know the date of issue and production numbers by chance?

Realize I dont have the complete details and picture....But I guess I am wondering why the watch needs to go back to a dealer/or declared a loss rather than repaired? Maybe some of that cost could be divided? I think that is the path I would prefer to pursue, personally. For all you know, he wore it for a full week while operating a jackhammer....just presenting another point of view....I think thats quite a bit of time to call foul on a trade without having some skin in the game. As far as taking risks with one another, it sounds like there's no sharing of risk in this case. Your are quite a gentleman; definite karma points in your bank.

Fat Tail Event...a lot of global economic events over the past trailing year have been classified as such. I spend a fair amount of my work time and personal time reading about these. Examining fat tail data alongside the fallacies associated with behavioral finance is terribly interesting to me (and not many others). So a good layman's definition....Fat tails are basically a statistical distribution phenomena. Most people who are familiar with the well-known

Putting aside color, religion or gender involved in politics over the past year, one thing was clear: We the people just succeded in installing the Therapist of all therapists. I believe the USA is in the midst of one massive grieving process, socially, politically and economically. No matter who you are as a citizen, parent, worker...something of yours has been damaged in one of those categories. He is helping us admit our faults and deficiencies...and it feels good. The remainder of the 12 step program will become increasingly more difficult, however, because it goes beyond speeches, slogans and group therapy rallies. And the more progress made, the more painful the inevitable setbacks will become. Do we have the constitution (pun intended) to really right this ship? Obama's carrot is hanging on a terribly long stick. I fear that Today is the day that Yes We Can becomes Yes Me Can. You ask yourself, could something so ironic occur out of this administration? It dawned on me this morning that the surge of greed has now gone beyond Wall St. to Main St. The million people in the Mall were no doubt there to celebrate, but dont think that they dont want SOMETHING, even if punitive damages related to their dented American psyche. With trillions of dollars on the ready to be disbursed out of a congressional firehose, do you really think the patient (instant gratification junkies we are) will wait around on the couch for that carrot with the good Doctor, or just go buy 'theirs' with the free money. I would be licking my chops today if I were a lobbyist. Thoughts running through my head as I watched the ceremony on Bloomberg this morning...

Your 'guy' at GoldMorganBarney wont mention this idea, but it is imperative to begin building a tangible asset components within personal holdings. My wife is considering doing some formal coursework in precious gemstones; so she just signed up to be the point person on that portfolio segment, and I am looking forward to it. The cause/effect spectrum of this USD decline, US indebtedness, interventionsit posture will be large and varied, and no one can predict the future. But an interesting thing occured recently when S&P reconstituted the S&P500 index....about a handful of well-respected US companies made the decision to headquarter elsewhere (such as Switzerland), thus requiring their exclusion in the index. This is one of those 4th/5th ripple effects that will gain significant steam, in my opinion, as the USD weakens significantly and over-regulation becomes the norm. Yes, a 'declining' USD makes US goods cheaper for foreigners. But how about a straight-line, multi-year plummet? At what point to you stop doing business with a country/currency displaying those characteristics? Well, just one example... Dubai is gladly welcoming Wall St. and London corporate refugees. My take: Over the next decade multi-nationals will question the benefit of operating on US soil, go elsewhere, list on other exchanges, and eventually conduct capital markets activities off-Wall St. Think about the loss of corporate tax revenue to the US coming down the pike. It will be staggering. Right now about 45% of top line revenue among S&P 500 companies comes from overseas, and is climbing. So if you're a CEO/CFO sitting in NYC and 65% of your top line comes ex-US, and your assistant treasurer cant even figure out net earnings due to USD FX volatility, and you're choking on your 3rd iteration of SarbOx, or Basel 4, why put up with all of the BS NYSE/NASDAQ listing requirements (when half your shares are traded off the exchanges in dark pools anyhow)?

A very scarey report. Indeed. But glad to hear you are well enough to share and smile with us. We noticed the drop in volume as of late, and has now been accounted for. Hopefully, after the shave, you did a show and tell definition of BSD with the nursing staff.

To be more on topic about the USD specifically, I always think this is always interesting to note. Ask a news anchor what the US 'deficit' is and they will talk about 1.5T. Ask a politician and they will say a figure about 10T. Ask a biased US academic/professor they might venture out as high as 20-40T. The underlying theme from them is that we are always A OK...dont worry about. Someone is worried about it though...the countries that essentially control USD reserves. They see things from a completely different lens. 12/19/2008 U.S. debt approaches insolvency; Chinese currency reserves at risk Maurizio d'Orlando In a few months, America's public debt has grown to more than 100% of GDP. Fear of a valuation crisis for the dollar, with tremendous consequences for Asian countries, major exporters to the United States. Milan (AsiaNews) - In the United States, the danger of debt insolvency is growing, putting at risk the currency reserves of foreign countries, China chief among them. According to new figures published by Bloomberg in recent days (Nov. 25, 2008 [1]), the American government has employed a total of 8.549 trillion dollars to stop the financial crisis. This means a total of about 24-25.4 trillion dollars of direct or indirect public debt weighing on American taxpayers. The complete tally must also include the debt - about 5-6 trillion dollars - of Fannie Mae and Freddie Mac, which are now quasi-public companies, because 79.9% of their capital is controlled by a public entity, the Federal Housing Finance Agency, which manages them as a public conservatorship. In 2007, public debt in the United States was 10.6 trillion dollars, compared to a GDP (gross domestic product) of 13.811 trillion dollars. Public debt in 2007 was therefore 76.75% of GDP. In just one year, direct and indirect public debt have grown to more than 100% of GDP, reaching 176.9% to 184.2%. These percentages exclude the debt guaranteed by policies underwritten by AIG, also nationalized, and liabilities for health spending (Medicaid and Medicare) and pensions (Social Security)[2]. By way of comparison, the Maastricht accords require member states of the European Union (EU) to reduce their public debt to no more than 60% of GDP. Again by way of comparison, in one of the EU countries with the largest public debt, Italy, public debt in 2007 was equal to 104% of GDP. In 2007, 61.82% [3] of America's public debt was held by foreign investors, most of them Asian. So the U.S. public debt held by nonresident foreigners is equal to about 109.39% (113.86%) of GDP. According to a study by the International Monetary Fund, countries with more than 60% of their public debt held by nonresident foreigners run a high risk of currency crisis and insolvency, or debt default. On the historical level, there are no recent examples of countries with currencies valued at reserve status that have lapsed into public debt insolvency. There are also few or no precedents of such a vast and rapid expansion of public debt. The United States also runs large deficits in its public balance sheet and balance of trade. Families and businesses are also deeply in debt: in 2007, American private debt was equal to a little more than 100% of GDP. At the moment, it is not clear how much of America's private debt has been "nationalized" with the recent bailouts. In the early months of next year, when the official data are published, the United States will run a serious risk of insolvency. This would involve, in the first place, a valuation crisis for the dollar. After this, the United States could face a social crisis like that in Argentina in 2001. A crisis in U.S. public debt would likely have a severe impact on the Asian countries that are the main exporters to the United States, China first among them. Chinese monetary authorities, thanks to a steeply undervalued artificial exchange rate, by about 55%, have limited imports (including food) and have achieved an export surplus. This has allowed them to accumulate a large stockpile of dollar reserves. In a currency crisis, China risks losing much of the value of its accumulated currency reserves. At the same time, pressure on imports (wheat, other grains, and meat) have led to inflation in the prices of food, the most important expenditure for more than 900 million Chinese. This is nothing more than a small confirmation of the recent statements of the pope, in his message for the World Day for Peace, where the pontiff calls the current financial system and its methods "based upon very short-term thinking," without depth and breadth (nos. 10-12), preoccupied with creating wealth from nothing and leading the planet to its current disaster.

Robbie asked me for some general comments on currency strategies we are seeing. They are all logical based on global events, but its expressing the trade where most of the magic is created. Unfortunately, I think mainly insitutions, FX desks will be the only entities truly able to express them most purely. First, be aware the currency markets are extraordinarly thin this time of year. But what usually occurs in latter Q4 has basically been happening all of Q4 and is expected to continue into Jan/beyond. So there have been extraordinary moves compounded with super thin liquidity. Quantitative easing has obviously wreaked havoc with technicals. So some of the basic strategies out there....EUR is likely to stay more stable (not go ZIRP and not as much effect from QE) The exact opposite for GBP and CHF...expect moves to ZIRP if necessary and debt monetization. So possibly long EURGBP (gravitate towards parity), EURCHF Keep the commodity producers in mind for the short end of crosses. So a logical one would be EURAUD. NOK probably has more to fall given where oil is camping out. Volatility will continue to reign supreme, so if FX options are available to you, set some wide strikes especially firm to the upside (long gamma). Most popular one I have heard range from 1.60 to 1.80 EURUSD for '09 The toxic combo of headline risk and low liquidity makes spot trading a very deadly game, IMO. So FX derivatives offer better risk management.

Just like JFK, Challenger explosion, 9/11...we will all one day be sharing tales around 2020 of where we were/what we were doing when the first "United States Dollar Devaluation" occured.

First, congrats...I hope that the vision and joy of the day have/will not be shaken by this awful situation. It sounds like you have been a pure gentleman throughout and that your karma points remain positive. I have some crazy family members and occasionally have to step back, take stock and ensure I am conducting myself at a higher level. Serenity now, rinse and repeat... Your feelings aside for a second, I worry about your wife. Doesnt sound like this will be one of those things thats swept under the rug. A jacka** indeed, but still a player in an event with much long-term, emotional gravity.

The positives? The Fed and Treasury are pumping this patient so full of medicine that not only will he eventually get up off the table immediately after this utter financial labotomy, but he will actually begin running out of the room and down the hall. What the government isnt telling you is that this patient will blow up before he gets to the doors of the hospital. While our patient is still alive and 'running' we should all be able to profit immensely from the unintended consequences of the charts you guys put up. We should see some spectacular spikes (up and down) in many assets over the next few years. FX volatility is just the tip of the iceberg. Use your profits to buy a lot of fertile land. Your harvest in 2011 will make you look like a genius before the US Food Riots of 2012

The real start of it all? 1907 Financial Panic leading up to.... 1913 Federal Reserve Act - The year a Democratic controlled Congress and Presidency anointed themselves smart enough to manipulate money supply for the idealistic goal of creating sustainable long term growth. This will all continue until Presidents, investment banks, or you name the man/institution directly involved in the creation and/or distribution of assets, necessary goods, services and capital...stop promising something for little or nothing.

Chronus, I dont know if this helps, but some of my non-finance friends struggle with this concept inherent to investment banks. Unlike a typical business that has a product and sells it to the public (end of transaction), an investment bank is creating a product to sell and after it sells it, it is trying to create another product to sell that is the inverse of that original product. So one product attempts to offset the 'risk', market exposure of the other, thus doing its best to remain risk neutral. There are many different ways investment banks and even insurers, take AIG for example, have gotten into trouble by not obeying this inherent concept. AIG is an insurer, it does a lot of life insurance contracts, right? Well, in order to take out a life insurance contract, you need to demonstrate that you, the policy holder, has an insurable interest. You cant go out and enter into a life insurance contract for your neighbor who is a stunt man. Well, AIG did the exact opposite. Many insitutions held GM or Ford bonds and they went to AIG to take out insurance on their insurable interest (getting paid on the bond principal if gone bust). They wrote 'insurance contracts', Credit Default Swaps (CDS) on these bonds and bond owners paid a 'premium' for this contract. But AIG took it many many steps further. Speculators, without demonstrable insured interest (not actual bond holders), wanted similar contracts to simply bet on the death of GM and many other companies. AIG didnt charge high premium (nor maintained adequate cash reserves if the trade went against them, which it did), and it most certainly sell a product on the other side of the trade to hedge its risk. So now AIG, hypotetically (insert any bond, debt instrument), has $150B in counterparty risk (they were making a market for speculators), even though a bond issues' total value is only $1B. This is why AIG went from needing 85B to an additional 70B in about 30days. Your tax dollars are facilitating the payment of speculators with no insurable interest. A simple idea that insurance companies follow, but woops, that went out the window when it comes to bonds, CDOs etc.

Sorry to hear the bad news TJ.

Asset management-absolute return strategies- at an investment bank...by way of another beloved investment bank that ceased to exist this year. And who knows, maybe next year I will add another 'by way of' on my resume....just kidding. You have to have a good sense of humor during these times in my industry. Back in 2001 I remember watching the fancy coffee machine and state of the art water system get wheeled off of the trading floor...surely something like that wouldnt happen again... It sounds like a lot of folks are insulated from current turmoil, and even making strides with their careers here. Good stuff.

Its good to see some optimism relating to selected equities. I think there are some ultra long term bargains right now in energy and hard commodities, but for now would rather momentum trade the physicals, nothing to do with corporate structures. Across the board we are still massively short no matter the country or company and the earliest we are talking of pulling these off is Q1'09. Listening to our equity analysts every morning is like having breakfast with Jekyll and Hyde; one day the world is ending, the other is table pounding BUY. We are heavy equity option volatility right now. There seem to be a lot of gems in the debt space, its so distressed...certain bonds, hybrids, preferreds. This is the only area where I have seen us make truely directional commitments in this market (meaning hoping it will go up). We are ramping up a convertible arbitrage segment. You can almost read into that and say that no one is hoping for more than a few percent next year, best case scenario. LIBOR plus 2 or 3 would be pretty nice in '09. Keeping this somewhat on thread topic...its the currency traders who made out this year. Our FX desk will likely take home the lion's share of bonus. Keeping it very on topic...I really feel for the folks who are just trying to simply buy a timepiece, and its like shooting a moving target with exchange rates. We have crossed into a realm of irrationality with these markets (speaking from a daily volatility standpoint) and its never fun/pretty to see it add another layer of BS into life, pleasures etc.

Chief- It sounds like you need to plug into some Peter Schiff, if you already have not---- http://www.europac.net/video.asp BTW, there's an excellent video clip of Peter on Youtube highlighting his market/economy calls going back to 2006 where he foretells everything thats happened over the last year. You get to see pundits literally laughing at him, saying he's crazy, even Ben Stein saying that MER @75 is so cheap that it should be given away in cereal boxes...really good stuff I do agree with the comment below. A 'collapse' wont occur in the sense that we are used to. It will be a slow bleed, maybe slightly more accelerated than the 1970-present...just like inflation robs us slowly over time. Eventually we will hear terms like currency deval, debt downgrade, IMF, 'bailout (and more palatable synonyms) in the same sentence with USA. Central bankers and finance ministers are working hard, and QUIETLY to make a controlled migration out of USD.

If you like the author's style, do take a look at the book that put him on the map, Liar's Poker...not heavy on the technical jargon and a very very funny read. RobbieG recommended another book that is similar in the Trader Talk thread....Traders, Guns, Money that addresses the derivatives issue on Wall St. Also, a Liar's Poker rip-off (same style, genre) purely about derviatives as well is a book called FIASCO.

I had to make a choice long ago....whether to be great at sailing on the weekends, or golf. I chose sailing, but had to comment and say that those look marvelous. Nice work on making those happen.

The operative word going forward for the coming quarters will be 'whipsaw'. When the proverbial 'S' hits the fan, the USD/Treasuries is still considered the safe harbor. Investors were borrowing the JPY at 1% to invest in riskier assets when the name of the game was 'risk on'. Well, its a 'risk off' environment at the moment, so there's Yen selling to go to USD. The commodities boom is temporarily on hold, so the benefit the Aussie dollar was seeing comes to a quick halt. The Eurozone was laughing at the US for a few quarters before they realized we buried a lot of our dead bodies in their back yard, and we come to find out their banks are levered even higher than ours were...woops...unload the Euro. The US is printing money and Treasury issuance over the next couple quarters is unlike anything we've ever seen. Such an abundance of USD/USD denominated assets will soon mean oversupply, making them cheaper. Compound all of this with a possible .5% interest rate environment and the USD could get REALLY cheap, and fast. When 'risk on' comes back into vogue and the world realizes the USD is the same USD + a crap load more national debt and carnage over its shoulder, things should go back to regular scheduled programming (commodity currencies benefiting, shun the high debt:GDP currencies, Pound included). The question is when the big reversal will come...things could look pretty bad for a while, maintaining this artificial high in the dollar.

quite impressive Pietro, appreciate you sharing