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The other day was a perfect sign of the doldrums we’re in at the moment.

No. it wasn’t the boring day in the stock market that I discussed yesterday. And sure, today was more of the same.

Regardless of how boring these first two days of the week have been, no one that I know is about to complain about the extra 200 points that have been tacked on to the Dow in the absence of any tangible news. Since I don’t consort with short sellers for the most part, everyone I know has been happy with the relative calmness of the past two days and happily accepted the added bonus of gains.

Actually, as I look at my Google+ circle I guess I really don’t consort with anyone, unless geometry now allows you to define a circle on the basis of a single point.`

In what seems a lifetime, I haven’t heard anyone mention the word “volatility” or use the phrase “risk on/risk off.” For that matter, “catch a falling knife” and “rip your face off rally” have also taken much needed breaks. Although that, too, may be related to my lack of circle size.

But I do watch lots of TV and those sounds have been silent.

What could have been a day of great excitement on Tuesday turned into just another great yawner as Italy failed to live up to diminished expectations.

Conrad Murray guilty of involuntary manslaughter of Michael Jackson?

Yawn.

Silvio Berlusconi, Prime Minister of Italy, set to resign once economic reforms are passed?

Yawn.

But the real sign of the boredom that’s set in centered on the latest Republican dynamics in their contest for the 2012 GOP Presidential nominee.

Had you not known better, you would have thought that the debate a few nights ago from Las Vegas was part of the process of coming down to the wire with the last remaining and surviving candidates.

Bloodied from the previous grueling debates all that were left from the once huge pool of Presidential wannabes were Newt Gingrich and Herman Cain.

Clearly at this point it would have to be a battle of gladiators to fight until the death, if only two of the standing candidates are there to debate.

Much like ancient Greek gladiators who knew no fear and retired only upon the time of their battlefield death.

Instead it was the meeting of the two sausage kings, Newt Gingrich, sausage by stature and shape and Herman Cain, sausage provocateur du jour.

Obviously, they had nothing better to do, while the likes of Ron Paul, Michelle Bachmann and the rest all had reasons for not getting involved with what promised to be a verbal blood bath.

Given that previous debates have seen the moderators criticized for asking questions that sought to elicit differences among the candidates, you would have expected more of those kind of fireworks, but not between the candidates.

Instead, the Republicans, led by Newt Gingrich in a combination Kumbaya/Rodney King moment urged his fellow combatants to resist the goading of the moderators who were clearly allied with the Democrat enemy in attempting to get the Republicans to bicker in public.

In the world of politics it’s not surprising to find words nuanced, but most people seem to have the same understanding of the meaning of “debate”.

In the past, the meaning of that word hasn’t been open to debate.

What is this thing you call “debate?” is a question that’s rarely asked, except at GOP debates.

Instead, this most recent debate was just a lovefest, so well suited for the likes of Bill Clinton’s biggest detractor on the morals front, Newt Gingrich, who had proven himself to be quite the player and illicit lover.

Not that there’s anything wrong with that.

 Not on the same plane as Democrat John Edwards, but still, pretty scummy and hypocritical. Even for a politician.

Not to be left out, Herman Cain, deacon of his church, is battling allegations daily of seeking to insert unwanted sausage into each and every order.

Papa John’s doesn’t have to be the only one playing the Sausage Fest game. 

 And why not? As Godfather’s Pizza CEO, he knew the great value of extra toppings and great customer service.

Back in those lonely Washington DC days, lobbying for the NRA, not to be confused with the other NRA, which was once led by an actor who knew how to quiet the desert dwelling and commandment craving crowd with his own staff, Cain was just a good servant.

Even if you have something better to do, you can’t just leave your sausage unattended for any length of time. Otherwise, it will go bad from disuse.

Cain knew that all too well and was proud of that sausage. Listening to his comments this afternoon, how could you not possibly believe that his attentions to an increasing number of women were anything other than pushing his fine product.

On a real positive note and demonstrating the entrepreneurial spirit that is still alive, Godfather’s Pizza announced their new limited time special offer. The Herman Cain. An extra large pizza with unwanted sausage.

With nothing much better to do this day, I at least got a couple of “yawner” kind of trades off. The kind that will barely be enough to cover Wednesday’s trip to New York City. I sold some calls on Goldman Sachs, Halliburton, British Petroleum and Amazon.

Although not on the agenda, if the boredom continues, I may just stop off to see the Occupy Wall Street phenomenon and maybe snap a picture or two.

Unfortunately, I’ll be competing against Wednesday’s GOP debate.

While they’ll be lining up for another debate, this one sponsored by CNBC and taking place in Michigan, I’ll be appearing on Bloomberg Rewind, hosted by Matt Miller, who is bravely growing out his mustache on air, in honor of “Movember” in order to help raise awareness of prostate cancer.

I’m hoping that I’ll be asked my opinions on debates and the candidates, but I don’t think that’s in the cards, although I did warn the producer that I suffer from a variant of Tourette’s Syndrome and may occasionally blurt out details of my tax plan.

Although I’ll miss the CNBC sponsored debate, because I do have something better to do for a change, that excuse won’t last very long.

The next debate is being sponsored by the Cartoon Network and any number of GOP candidates seem to have an inside track to be the crowd favorite on that one. You can never go wrong with Paul or Bachmann in that regard, but watch out for that Gingrich. He cuts a pretty cartoonish figure, reminiscent of Humpty Dumpty.

Hopefully, by then volatility will be back and Italy will entertain us in the manner that we had come to expect.

I’m tired of yawning these past two days and am pinning all hopes on the dysfunction that everyone has been expecting to come out of Italian politics to lead us back into the promised land of uncertainty.

But in a nod to the contrarians, so far, Berlusconi is letting us down by avoiding the theatrics that we’d come to expect.

It’s not as if he has anything better to do, after all. Why can’t he upstage Papandreou and make Merkel and Sarkozy do slow boils as they try to save the European Union despite their “challenged” Meditteranean brethren.?

Besides, what’s a 75 year old billionaire going to do? Go out with a couple of underage hookers?

Exactly. So he does have something better to do.

Yawn.

 

November 7, 2011

No matter how selfless any one of us may make ourselves out to be, there is no escaping the fact that we all have an ego. In fact, the mere act of thinking one’s self to be selfless is feeding into that ego.

You don’t have to be Sigmund Freud to know that ego is indispensable and the source of many of our problems. Those problems can be self-inflicted, but more likely are those that we inflict upon others in pursuit of satisfying an ego.

An example of a self-inflicted problem related to ego is when you believe that sometimes a cigar is not a cigar. The inevitable comparison is ego deflating and may lead to ED.

Ego dysfunction, which in turn to can lead to another kind of ED.

To become everything that you believe that you were destined to be typically requires that some collateral damage be done along the way.

Sometimes that collateral damage may be in the form of a missing $600 million of client funds, sometimes it may take the form of diminishing shareholder value.

Sometimes it means making you and your nation look like babbling idiots.

The delicate balance between instincts, moralistic oversight and pragmatic approach to life is what distinguishes us from one another every bit as much as DNA aids forensic scientists and our scent alerts a dog.

In the name of ego we do great things, but also terrible things.

There’s no doubt that ego has been front and center this past week.

Jon Corzine comes to mind. Jerry Yang? Yeah, him too, but for much more than a single week.

By all accounts, Corzine believed that he was not only the smartest of the smart, but also charmed. He ventured into an area of great risk and reward, but without the requisite knowledge, as his ego blinded him to the reality of the situation.

Thrown out by Goldman Sachs, nearly thrown out of a speeding car, losing a Gubernatorial election, Corzine needed a big win to satisfy a big ego.

They never deflate, you know. They constantly need to be fed and the stakes just get higher.

Yang’s ego took the form of a paternalistic attitude toward investors that blinded him to the reality of the situation. What he still hasn’t realized, being somewhat stuck in the pre-1500’s world, is that Yahoo! does not revolve around him, but rather around its universe of shareholders.

Even Pope Clement VII was able to understand that God’s law is not inviolate. Copernicus was not burned at the stake.

Copernicus, who proved that the earth was not the center of the universe, interestingly was also the first voice to proclaim what 75 years later became known as “Gresham’s Law” and formed the basis for monetary policy 600 years ago.

Copernicus was the first to address the phenomenon that debasing currency would drive undebased currency out of circulation. “Sovereigns” debase currency at the expense of the citizenry.

Yang? Center of universe. Yang? Debased currency?

He is the anti-Copernicus. 

Corzine dealt with his stunning descent into reality by leaving his ego behind, especially as ego is often measured in terms of money. He declined to accept any contractually due payments, although it’s not terribly likely that a bankruptcy court would have made that gesture necessary.

Yang, on the other hand, continues to be blinded to the reality.

That sometimes is the paradox of ego. Freud described it as the pragmatic component of the troika, further composed of id and super-ego. But for all of its pragmatic qualities, ego sometimes makes us do some really stupid things, most of all, neglecting to understand events on the ground.

Every investor has an ego, as well. In it’s most simple form it’s measured by portfolio performance.

Sometimes, a well trained ego will consider performance relative to some standard and will keep himself in check if his performance doesn’t meet the standard.

Other times, an investor will focus solely on the one great trade. The one that made lots of money, while forgetting the big picture and the fact that the rest of the portfolio may have woefully underperformed.

Celebrating that victory, though, and pointing it out to others, serves to embolden for the next battle. Without being emboldened, who would ever take risks?

I don’t know what Jon Corzine’s recent victories have been, but he sure was emboldened, although maybe it’s easier to be so when using other people’s money.

It’s still not clear what role ego played in this past week’s doings in Greece.

When both your father and grandfather served as Prime Minister before you, there’s no doubt that there has to be an incredible clash of egos at whatever the Greek equivalent of Thanksgiving Day dinners are, in the Papandreou household.

In that kind of household probably the only way to have a chance of survival is to see to it that your own ego can withstand the obvious comparisons and intellectual debates. No doubt that American born and educated PM Papandreou the Third, still has to prove his Greek “bona fides.”

So what do we make of the political events in Greece last week?

Where was Papandreou’s paternalistic streak? Third generation Prime Minister, you’d think that he would have a patrician air, and as best as possible in the nation that gave us democracy, rule by fiat.

No doubt that his ego and that of all of Greece was stoked by the thought that they could possibly unravel the European Union by following their collective id and ignoring their national super-ego.

But as a politician, did Papandreou put his ego on hold by putting the decision to accept the 50% haircut to a referendum or was he, as the former deputy finance minister said, an emotional wreck, incapable of leading?

Or maybe he was crazy. Crazy like a fox.

Instead, you have to marvel at an ego that played second fiddle to politics and political strategy.

As news came on Friday that a new coalition government was about to be formed in Greece, but not being led by Papandreou, the markets rallied.

What does that do to your ego?

Ask any CEO who after a dismissal or retirement sees their stock price rally. Was anyone more pilloried than Leo Apotheker recently? How’s that ego doing, Leo?

That must not be the best of feelings. Luckily, since money, even from severance, serves to inflate ego, the net result is elevated ego.

Was the past week of high drama and what appeared to be dysfunction all carefully coordinated plans to promote personal and national ego?

Did Greece get everything it wanted and needs without really having given up much in return? In fact, what seems like an selfless act by its leader may be anything but, as he gives the appearance of putting state before self, while being available to return and “save” his nation from themselves and the EU when the coalition fails.

In the meantime, it’s off to Italy, where the next ego has a sense of buffoonery.

After the last couple of months, my ego is doing reasonably well.

I really only need to fool two people. Myself and Sugar Momma and don’t have much need or chance to inflict collateral damage, unless you believe that everything done in the market is part of a zero sum game.

In that case, I hope to litter the streets with undeserving citizenry and will occasionally leave some cigar ashes on the carcasses.

That would make anyone feel good.

And besides, it’s time to give that super-ego a rest.

  

 

I must have missed something in life. I grew up at a time when The Beatles were just beginning their “US Invasion” and can still remember their first appearance on The Ed Sullivan Show.

It was a time of free love and drugs, although the option to pay was always available.

Do you remember the song “Daytripper”?

If you really grew up at that time and took in all of what was going on, you likely can’t remember that song, but you can still probably take a guess and be right.

I took a guess and was totally wrong. I just assumed that it referred to LSD trips. The actual lyrics said otherwise, although McCartney said otherwise to the otherwise. According to him, Daytripper” was an example of playful wordplay in an attempt to mask the true meaning and escape the wrath of more prudish critics.

Whatever.

It’s sad as I sit in the Nashville Airport, ready to return home, after having just arrived this morning, that for me, at least, today “Daytripper” just refers to a nameless and faceless traveler, blending into the scenery with the ubiquitous blue blazer and laptop.

Fortunately, the Nashville Airport seems to have the highest concentration of guitar toting passangers of anywhere in the world and served to break the sea of faceless daytrippers..

I never was much of a “daytripper” of any sort, but I am of the nameless and faceless variety right now, along with what appear to be travel weary salespeople.

You know the kind. The ones with the crisply pressed shirts and corporate logos. The ones that are told to always smile, lest their sorrows be a bad reflection upon the home office.

A life of that kind of daytripping doesn’t have as much appeal as the kind that The Beatles had characterized. I don’t even think that there are sad country and western sings paying tribute to those traveling cowboys.

But then, there’s also that other variety of daytripper.

Lord knows that the trading variation of “daytripper” seems like a good idea these days. But unlike a few years ago, when a large population of those day traders was wiped out, who needs to play for pennies here or there anymore?

Instead, think big. Sort of like why think a joint when it could be THC, to borrow from The Beatles post-Yogi phase of mind, if you buy into that interpretation of the song.

I usually spend Thursdays going after different kind of pennies. I usually am looking to sell some call options of 1-2 days duration, just to pick up a few of those errant pennies.

And do on Thursdays I scour my old maid holdings, those that aren’t already paired with a short call option, looking specifically fpr those that are below their cost basis and have shown some price recovery, but aren’t expected to get back to their cost by the time of option expiration.

I know. I had to read the paragraph over a few times, as well.

But lately, even those price moves that seemed unlikely to occur in such a short time frame have been occurring on a regular basis. When that happens, I lose my shares.

On top of that, the old conventional wisdom that smart traders wouldn’t stay long into the weekend, especially when there were economic overhangs, seems to have died a quick death. So instead of being able to count on a nice Friday plunge, thereby bringing my shares below their strike prices, lately they’ve just moved further away.

Luckily, just like in this past week, I can often count on “down Mondays. Those are the natural consequence of too many unwarranted moves up. They help bring share prices back to a more reasonable level so that I can re-purchase thoise shares.

Hopefully, at a lower price that they had been assigned for.

 Today, once again, I was totally shut off from all human contact. By that I mean that I was with people and that prevented me from being glued to anything electronic.

Although I was fully equipped with my trusty little travel modem, batteries and chargers to spare, all tucked into the blue blazer, since I didn’t need baggage, I was still unable to do anything other than get an occasional glimpse on the puny screen of a smartphone.

That’ not terribly satisfying. Size matters.

Leaving home this morning before the market opened, I did at least hear about the surprise move to lower EU interest rates.

This one was no rumor. Only made sense for the market to react in an appropriate way and accept that news with fully open arms.

Maybe even a hug.

On top of that the world learned that when Greek Prime Minister Papandreou was calling for a referendum, he really meant “concensus,”

When will we ever learn that whenver we try to translate from thr original Greek to Grrk, something important is always lost in the translation.

Since there is no video proof in English of the Prime Minister ever suggesting a referendum, the market just assumed that it was all a misunderstanding and proceeded to squeeze the shorts just a bit more.

Despite the fact that a former deputy finance minister from the opposition party referred to Papandreou as basically an emotional wreck who was unable to deal with the stress of the situation, talk has now turned to the idea that Papandreou simply outmaneuvered his opponents.

Who cares?

Simply add another 200 points to the Dow, go right past S&P 1250 and all’s good in the world.

What’s fascinating is that these days facts seem to be daytripping, too, although it’s sometimes difficult to distinguish between facts and rumors.

The way our mindset is working these days, if something is rumored to be factual, that’s good enough. If the previous rumor is contraindicated by a new rumor, that’s good enough, as well.

Think of it as playful wordplay.

In fact, the daytripping of rumors is considered in and of itself to be a new age manifestation of fact,

As a Harold Ramis inspired character would say, “That’s the fact, Jack,” and you’d be very hardpressed to counter that unless someone else saluted you and shouted out “That’s not the fact, Jack.”

How likely is that to happen?

Very likely, if recent events are any measure.

The words may be different, but the outcome would be the same.

So even though I was fully isolated from the world, I know that today’s market response will surely lead us to Friday and recently, there’s been no negative rumors coming out of the EU on Fridays. That can only lead to more unwarranted buying, because it’s already too late to sell on the news.

Or not.

So that then brings us to Italy and the sense of deja vous will hit yet again.

The characters will be different, the politics are a bit different, but regardless of what side of the Atlantic you’re on, it’s clear that there’s lots of dysfunction going on.

We’ll probably never truly know what Lennon and McCartney had in mind when they colloborated on that song, just as well never know what was really going through Papandreou’s mind.

Either way, enjoy the outcome, because sometimes it’s just best not to know.

 

　

I rarely get bored.

That explains why I can sit all day and stay glued to the TV screen watching and listening to various “experts” spread their wisdom.

Today, though, as good as it was, turned out to be very boring.

For a change, not only was there no news to move the markets, but there weren’t even any rumors.

To make matters worse, even though I am a big fan of Ben Benanke, Federal Reserve Chairman, his press conference, which now can no longer be referred to as “unprecedented”, came to pre-empt CNBC’s “Street Signs,” which for me has been a reincarnation of the old NBC concept of “Must See TV.”

To put that into perspective, I felt the same way today as when episodes of COPS and America’s Most Wanted are pre-empted by NASCAR, except I don’t like NASCAR.

Instead of dealing with the boredom, I did something that I really dislike. I went to the Mall to pick up some more stylish accessories to complement my typical daily outfit, as I was making a business related day trip to Nashville on Thursday.

While driving there it was either pay attention to the road or think about anything else. So I chose anything else, but focused on the earlier thought this week regarding “expertise”, but now I was focused on “at what cost” should we bow to expertise?

Each day I seem to wonder why we don’t hear more people speaking out on the clear and constant assault on our intelligence.

Listening to the barrage of statements whose contradictory nature is masked by the passage of time, it would be nice to see the occasional use of that modern miracle to objectively measure expertise.

Video, or at least its digital counterpart.

These days nothing happens without someone having captured it on video of some sort.

Since I do nothing else in life these days than sit and watch, I maintain my intelligence by trying to recall everything I’ve heard and seen in the process. That includes the local cable advertisements for computer repair and pest control.

A rodent prancing on your motherboard will cause great damage, but at least I think I can remember where I put the piece of paper with the shop’s phone number on it.

But when memory is lagging, video is great.

 A number of years ago, Joe Kernen offered to drag out the video that he inferred would contradict the statements that an esteemed guest was making, regarding his personal exemplarly prediction track record. That individual was giving the strong impression that he had called for market caution just prior to the collapse of the markets. He was equally clearly upset with the suggestion that he was massaging the past.

So much so that he passed away not too long after.

Kernen will do that to people.

In that sense, I guess Kernen got the last laugh, although that was a bit extreme. The official party line is that the two events were unrelated, but the mysterious disappearance of the DNA evidence certainly leaves room to wonder.

There’s no question that there’s some very high priced talent out there willing to manage your assets and provide your portfolio tending loving guidance, while playing a revisionist version of history.

I don’t totally understand the “2 and 20” nor the concepts of “high water mark,” but I certainly understand the proven concept of closing a fund when losses make it improbable that the “2 and 20” will ever kick in. Doing that also erases all memory, other than for those that get left holding the bag with losses from the old fund.

Yet, amazingly, high priced losers always seem to live yet another day. There’s a whole other world of investors out there who likely are unaware of the real performance they are buying into.

Now that’s a nice concept. Walk away from your failures and start anew.

The unsaid, or more likely loudly stated concept is that “you get what you pay for.” That’s somewhere along the lines of “it takes money to make money”.

That appeals to lots of people. So much so that many mega-church pastors are able to convince their not terribly worthy parishioners that God will like them more if they donate more lavishly to the church.

Only then will they become more worthy, while in the process becoming less wealthy, which is a stopping point for becoming more wealthy.

Inferences being what they are, if you should lower your self-respect by paying less, you will get less. Like say, a lesser Hindu God.

Since there’s no equivalent measurement to Price – earnings ratio in the world of portfolio or hedge fund managers it’s really difficult to critically assess if you really do get what you pay for when your portfolio is managed.

 No doubt that there is truth to almost everything that’s said or left unsaid. After all, how many absolutes are there in life? Even the Ten Commandments have some wiggle room. Even those absolutes have back door escapes.

Don’t want to commit adultery? Fine, bigamy for you.

But I think I’m beginning to understand why we’re so accepting of such clear and blatant contradictions. In fact, they really don’t insult our intelligence, they help hone and maintain it. Besides, we’re surrounded by contradictions and never think twice about tehir co-existence in what should be a mutually exclusive relationship.

Beyond that, axiomatic sayings, the ones that we simply accept as being true, often have their own axiomatic, yet polar oposite counterparts.

“The best things in life are free.”

How does that even begin to square, especially when you get what you pay for?

With time, I’ve come to very strongly believe that the science of stock picking is neither art nor science.

It’s either blind luck or access to very special and timely information.

Given the ferocity of market moves and the rapidity with which they occur or change direction, it’s not terribly likely that anyone can really fare well by simply picking stocks. Obviously managing positions through the use of derivatives is increasingly important to manage risk, but that just further confirms that even the best and brightest have no clue what will happen to their favorite stock fromr one moment to the next.

So, do you really have to pay for the expertise that is every bit a hostage to external forces as you, a lonely individual investor is?

Clearly, when there are massive moves, it’s not legions of little guys who are creating or perpetuating the waves.

The little guys, though, are still to often led to believe that the deck is stacked against them. As such, the only way to have a fighting chance is to pay for it without regard to performance. There’s also much more prestige to having a managed account at Morgan Stanley than one at E*Trade.

That’s the suburban equivalent of class warfare and snobbery

Obviously, when all of the chips are ready to be cashed in, prestige has lots more cache than bottom line.

I bring all of this up because among the reasons I maintain this blog is to sell books. For that purpose, I have a publicist.

He is paid nothing and worth every cent.

Alright, I paid for his college education and may have fed him on occasion, but otherwise, he gets nothing.

Best of all, he has nothing to work with.

I’m anti-social, lazy, content to be sitting in my La-Z-Boy and watching TV.

In the meantime, I do find some time to make some trades. Today they were simple ones and not terribly rewarding as there’s only two days left until this week’s options expire. When you subtract what I pay my publicist for his services from the premiums I received today, I still have all of the premiums.

He has the memory of meals past.

After about 500 points of loss, today was a gift that allowed me to sell calls on Riverbed Technology, Netflix and Amazon.

I didn’t get much for the effort, but it was something that I could throw into the box that holds all of those other meaningless trades.

My publicist, in the meantime, was doing some real work. He’s informed me that I’ll be appearing on “Bloomberg Rewind” next week.

I was watching Bloomberg Rewind tonight and the guest, John Ryding, Chief Economist of RDQ Economics disparaged Twitter when asked if he participated in that social medium phenomenon. His position was that his clients expected more than what could be delivered in 140 spaces.

Newsflash: Clients don’t want verbosity. They want performance. They’re not paying premium fees because they want your wisdom in doses of greater than 140 spaces.

But still, all of a sudden, my publicist is earning his way. I hope he’s not expecting a little extra in his envelope.

But here’s the problem.

When you start getting more than what you paid for you can go one of two ways.

Either you congratulate yourself on the great fortune of faring so well, or you wonder “what if?”

For me, there’s no “what if?”

There’s nothing better than not needing to have your hand held and then topping it off with the hand you held for so long giving it back.

There’s no price on that. And I still have about 120 spaces left. Now that’s economical.

I can still think back to those days when my kids would be put to bed each night with a story.

“Moo. Baa. La La La.”

That phrase will be stuck in my mind until the day I die, as like most parents, I found myself reading the same story over and over, night after night, because that was the story that wanted to be heard.

Whatever it took to get the little darlings to sleep. Whatever it took. Even Moo. Baa. La La La.

I was only talked off the ledge because the nice policeman promised me I’d never have to hear those sounds again.

Instead, it was a book devoid of silly sounds, but sadly chronicling the deaths of brave, hungry, thirsty, polite, sleepy and explorers, leaving only a single smart explorer to survive.

“Six brave explorers came to Egypt alive, one discovered a rare bird and then there were five.”

Different kids, different tastes. Different stories, but with the same need for the comfort that comes with repetition.

It was always so nice when one was ready to move onto a new book. I don’t really recall, but I may have occasionally hastened that process by telling the kids that their mother threw out their favorite book in a moment of unrestrained rage.

Not trusting a parent is part of healthy childhood development. You can look it up.

Even “Atlas Shrugged” would have been a welcome change from some of the Berenstain Bears adventures, especially the dentist one. The Berenstain Bear loving kid of mine didn’t have the same love for my attempts to read to him from more legitimate dentistry textbooks to try and offset the inaccuracies of the Berenstain version of teeth.

Fast forward some 15+ years and that brings us to today.

And here it is. The same old story. Instead of reading the book, all I hear is the constant repeat of the musical refrain, “Greece is the word, Greece is the word, is the word that you heard…”

Greece, the nation that gave the gift of democracy to the world also showed that it could lead the way in abandoning electoral responsibility, as Prime Minister Papandreou called for a national referendum to get approval for the austerity measures necessary to prevent a “hard default.”

I’ve already forgotten what the root cause of the market’s Monday downturn was ascribed to, but today everyone was on the same page.

“Greece is the word, Greece is the word, is the word that you heard….”

I’ve never really gotten to the point of being apoplectic, but I can imagine that Angela Merkel is at that stage.

Have you ever seen what happens when a German head of state gets upset?

What was really a sight was watching the former Greek deputy Prime Minister of Finance, who by the way was part of the more conservative opposition party, refer to the current Prime Minister as being emotionally and psychologically a basket case.

My words, not his, only because he didn’t have the same fluency with American idiomatic expressions as I have.

So today’s market was a reflection of all of the pent up anxieties of the past few weeks that were falsely put to rest late last week.

I’m not certain that InTrade is making book on the likelihood of the Greek populace voting to take the austerity measures that are part of the now infamous “Greek Haircut”, that apparently requires shaving 50% of the head.

I’m guessing that if the vote can ever get pulled off before the Greek government falls, there not much of a chance that people are going to vote themselves into a life that they’d rather not live.

The good news is that each person can decide for themselves whether they want heads shaved in sagittal or transverse planes. If they play their cards right and perhaps use some entrepreneurial spirit, the “Grecian” may yet come to replace the “Brazilian.”

See, you never got that kind of detail out of those stupid Berenstain Bears stories.

The Greek story was so dominant that even Jon Corzine was moved to the back burner. Any other day and news that MF Global may have violated some very basic elements of trust by using some $700 million of their client’s funds for their own in-house and ill fated pursuits.

Sometimes it’s a good thing when some other story pops up.

To this day, ex-Congressman Gary Condit is no doubt grateful for the timing of 9/11. His role in the disappearance of young intern and romantic liaison was all but forgotten as he quietly stepped away from the spotlight.

Of course, the opposite can just as easily occur. Just ask Farrah Fawcett.

Figuratively, of course.

He fame long ago faded was rekindled with the effort to document the ravages of her anal cancer and subsequent death.

Unfortunately for her, her producer didn’t clear her passing with Michael Jackson’s itinerary for that day.

So Corzine got a pass and may still be on the short list to replace Timothy Geithner as our next Treasury Secretary, unless of course someone on the search committee has an “aha moment” and remembers that Corzine was the guy in charge when MF Global went bankrupt and stole their clients’ money.

That may be a bit harsh and things still remain to be sorted out.

What is clear is that Corzine bet and he bet big and he bet wrong.

Corzine used to be one of the big boys at Goldman Sachs, co-CEO with Hanry Paulson. There’s a reason that the Goldman people are called “the smartest guys in the room.”

What Corzine failed to take into consideration was that he had left the room and apparently the other kids took all the smarts with them. People marching up and down Wall Street may disparage Goldman Scahs and may blame them for the financial meltdown, but last I looked, no one was accusing them of stealing money or dipping inappropriately into anyone else’s pockets, as your old weird uncle used to urge you to do with him.

While Corzine was being trivialized, news from Greece threw the market into spasms of optimism interrupted by spasms of pessimism.

Word that the idea of a referendum would never occur helped the market recoup about 100 points from its low.

Further word that Papandreou might be psychotic or having some kind of a breakdown was comforting to the markets.

When it was all said and done it looked as if only some form of chaos was in the near term crystal ball, so the market just gave up.

Not capitulated, just gave up and called it a day. A bad day.

I picked up some more shares of Riverbed Technology and marveled at how the ProShares UltraShort Silver ETF that I owned, some of which is hedged, has been serving as the perfect antidote to both the fleeting feelings of elation and depression.

Those feelings come and go because it’s just a reflection of the same old story that is the big picture. The book, as it were. The book that encompasses Greece, Corzine, the Yen Carry Trade, High Frequency Trading and so much more.

That story of that book is that what goes up must come down and must then go up again, only to come down in time to do it all over again.

Strangely, I never tire of that book, only the stories in it.

To me, the details of each breaking business or economic story now all sound the same.

Moo. Bah La La La.

All I care about is that at the end of each day I’m not one of those investor explorers who doesn’t live to see another day.

I’ll do like that smart explorer who just stayed in bed and avoided the predictable traps. Who needs excitement?

Just make mine a La-Z-Boy and make certain the Moo Lah, Moo La La stays safe with me.

  

  

The past week was all about superlatives. Best of all, the superlatives were all headed in the right direction.

It really didn’t matter that so much of that direction was dictated by rumor after rumor. People who were smart enough to do the stupid thing and not take profits when common sense dictated otherwise were well rewarded on paper.

With the close of trading on Friday we were hearing all kinds of statistics centering around the market’s performance this October.

By all accounts we had seen the single best performing month since 1618, or in meteorological terms “ever since records have been kept”

It was that good. You actually had to go back to when Native Americans were occupying Wall Street to have had as good a month as we’d just experienced.

Even the old adage “buy on the rumor and sell on the news” couldn’t bring the market down after the rumor of breaking an impasse over the Greek financial crisis came into being.

At least to a degree, as today the Greek Prime Minister announced that the final details of the debt agreement will be put to a referendum. So, that certainly makes it a done deal.

What could possibly go wrong?

But in October jut about everything went right, as long as your standard is that you need at least a 17% gain.

Shorts were reportedly being squeezed, talk of IPO’s was beginning to burn up the airwaves and people were clicking on the ads on this site.

That final indicator seems to be a very accurate one. People click on financial related ads when they’re feeling good about multiplying the wealth. When the market is going down no one in their right mind clicks on an “Open an E*trade Account” ad.

Even Groupon was looking rehabilitated and in some corners was being compared to LinkedIn, with regard to the reception its IPO would be expected to receive.

 

 By some measure, those all may be sufficient to mark a near term market top. And so, today, perhaps befitting the fact that it’s Halloween, the market just gave a middle finger to those superlatives and proceeded to lose almost 2.3%.

The diagnoses for the drastic response today came quickly.

“Risk aversion is once again taking hold in markets,” said Brown Brothers Harriman & Co. strategists in a market commentary following this anti-climatic end of the month day.

That’s why those guys get the big bucks. They are able to instantly recognize once they’ve been run over by a truck.

There must have been a really sharp curve in the road, because clearly none of us ever saw that truck coming. Otherwise we would have stopped buying and buying and stopped driving stock prices higher and higher.

The really good analysts can even identify the source of the tire tracks on their back.

I assume that some of those wild horses now roaming the floors of the NYSE are left over from the original occupants who only remembered to close the gate after the horses had escaped.

But beyond that, they get the big bucks because they can also see well into the future, discounting all unforeseen obstacles.

You and I need a straight road ahead of us.

The really good ones see it coming and take decisive action before the apocalypse.

“Although encouraged by what we consider to be a good start, we suspect Europe will require other measures going forward to effectively deal with its sovereign debt problems,” said USAA Investment Management Company in another note.

The rest of us totally forgot that there’s more to the EU than just a faltering and puny Greek economy

To be so talented is such a gift and needs to be shared with the world.

That was the kind of talent that just oversaw the bankruptcy announcement on Monday of MF Global Financial.

Before overseeing the bankrupting of a one time proud company, the guy who got the big bucks oversaw its evolution from an important cog in the wheel to the wheel.

But not any kind of wheel. More of a freestyle wheel. You know the kind. The one unrestrained by shape and form and without knowledge of the road.

Besides losing billions in European bond speculation, an area where reportedly MF Global had little experience or expertise, it now also seems that some $&00 million of client money is missing.

No matter. Just another opportunity for Jon Corzine to reinvent himself, although it’s not too likely anymore that he’ll be heading to become Treasury Secretary anytime soon.

I suppose that was an anti-climactic end to that much envisioned and predicted journey.

The news of MF Global’s descent didn’t seem to hit the markets terribly hard. For the most part the market just stayed in a tight range until the final hour when it just added another 100 points to its losses.

Why did the market do that? Why did it suddenly reverse direction?

Didn’t you read the earlier paragraphs? Investors suddenly became risk adverse and learned that other countries in the EU were basket cases, as well.

The fact that Halloween also marked Jean Claude Trichet’s last day on the job may have led to some sympathy selling.

For me, I just love “down Mondays”.

Those are the days when the market heads downward sharply right after I’ve had lots of options exercised.

In this case, I had the opportunity to repurchase shares of Caterpillar, Home Depot, Mosaic and Netflix below where they had been assigned and British Petroleum and JP Morgan at prices slightly above the assigment level.

That’s like getting things you really wanted on sale.

The fact that the market didn’t reverse course mid-day, as I so smugly believed was also anti-climactic. Even worse, it led to the feeling you get when you buy something and then as soon as you walk out the door, the going out of business sign goes up.

At least for a number of the share repurchases I did get to sell call options as they were on a short lived climb upward. Caterpillar and Mosaic behaved nicely, but for the most part, the other opportunities didn’t materialize.

Sometimes it’s amazing what opportunities do materialize. Sometimes, though it’s hard to understand why they existed in the first place.

Let’s go back to the case of MF Global again.

No one hates bankruptcy more than common stock holders.

Right?

Well, generally that’s true, but there’s another class of investor that may not fare too well, either.

Those are the holders of unsecured loans.

Reportedly, JP Morgan Chase held about $1 Billion of those notes and its shares got hit very hard. All the better time to repurchase shares.

Then, word came out that all but $900 million had been packaged up and sold to investor syndicates.

You know the kind. The kind that bought CDO’s. The kind owned by people in that evil 1%, mindful of the fact that even the original occupiers of Wall Street had their own 1% folk.

That JP Morgan was involved was no surprise. That fact that it repackaged its assets and palmed off the liabilities on others whose own investing greed was exploited, isn’t too much of a surprise.

So, does any of this sound familiar yet?

But what did come as a surprise was that among the unsecured MF Global creditors was CNBC.

Say again?

CNBC is on the line for about $850,000. Peanuts by any measure, but why exactly is CNBC in that kind of position?

Shades of Jon Stewart.

Did that in any way influence or steer its coverage of MF Global prior to this crisis? Once you’re in that kind of position are you any longer an independent arbiter or free to report wherever the facts take you?

I’m not certain I really need to know those answers. Whatever they are, compared to my imagination, the reality would probably end up being the most anti-climactic of all.

My guess is that it represents some payments owed to CNBC for ad time, although that seems like a relatively large accounts receivable for basic cable advertising, but then again, onMonday I was the lone voice defending Sallie Mae, as it, coincidentally enough was one of only a handful of gainers in a 270 point down day.

As far as MF Global’s tentacles go, back in the ancient Lehman bankruptcy days it was the contagion that killed us.

Now the contagion watch is on Europe with little to no concern about what other blocks may fall here in the US.

As nice as it would be to have MF Globals woes end with MF Global, the Schadenfreude that will all suffer from has to believe that lack of contagion is equally anticlimactic.

We all love a good collapse, but “been there and done that” describes the prevailing attitude.

It’s time to return to those great first 30 days of October, get some risk on and ignore reality.

That’s a climax we could all enjoy.

Warning.

I’m starting the week off with a rant of sort.

When I first got started with Twitter about 6 months ago, one of my earliest Tweets was about Sallie Mae.

I really don’t remember what that Tweet was about, but I did get an eye opener in the process of trying to find just the right tone for my stock related Tweet.

Not really being familiar with the world of “hashtags” and not knowing that a stock was represented by the “$” sign, I searched for Sallie Mae Tweets.

I wanted to know how to do this Tweet thing properly, after all. I wanted to do my research, make certain that I had appropriate references and citations and be cogent and poignant within the contxt of 140 spaces.

Oh, and funny, too.

I certainly didn’t want the Tweet to be frivolous or to waste anyone’s precious time.

I was stunned to see the venom out there about one of my favorite stocks. There was nothing funny about Sallie Me in the eyes of people Tweeting about it.

To me, Sallie Mae was beautiful. I wasn’t really prepared to learn just how ugly it was in the eyes of some many others.

I had owned shares, on and off, for about 3 years, always selling call options in the process.

During that time, I’d gone along for the ride from about $6 to $16. It wasn’t straight line, but that’s how I like things. So much better to make money raking in call options that way.

But people hated Sallie Mae. Not the stock, but the company.

When you consider that the word “Shylock” has been around for 400 years, as a sign of society’s contempt for those who seek to earn by lending, it’s not too surprising to learn of the contempt modern day debtors have for those that provide capital at a cost.

They hated the loan process, they hated the bureacracy and they hated the fact that they had to pay back the money they had borrowed for their education. There may have been other reasons, as well, but I gave up reading through the Tweets, I’d gotten the message.

The message was that there really was much interest on Twitter for reading about the merits of the stock, itself.

As the Occupy Wall Street phenomenon finally drew media attention after about a month of toiling in obscurity, there was still lots of uncertainty over the goals of the demonstrators.

Not surprisingly, like the Tea Party protestors and those that participate in World Bankapalooza, there are many people with their own agenda just looking for someone to break wind for them.

You know what I mean. Not that kind of breaking wind.

Among the many posters and placards out there the ones that caught my attention and that of the media were those complaining about their financial plight, post-college.

The refrain was that among the 99% were those with large school loans and either unemployed or under-employed.

And sure enough, the plight of that portion of the Occupy Wall Street protestors made it to TIME Magazine. Not quite important enough for a cover, but still, 5 pages in an ever shrinking magazine is a considerable allocation of space in the post Jobs and Khaddafi worlds.

Sallie Mae, the one time sibling of all deceased things Mae and Mac is in the business of educational loans. One time they were the executors of all of those federally subsidized loans, but when they dropped the “quasi” in the relationship with the government, the moved to the world of private and uncapped student educational loans.

So the bottom line is that people owe Sallie Mae money.

They just don’t like Sallie Mae, at least not the part of Sallie Mae that requires loan repayment.

Sound familiar? If not you need to see some of Marek Fuchs’ work. He does an excellent video series on TheStreet.com,  “They Just Don’t Get….”, fill in the blank with eBay, Microsoft, Netflix or whatever big hitter is in the news, He has the ability to see beyond the moment and emotion. My only complaint is that the bookcase appearing behind him in those videos lacks a certain balance that only a copy of Option to Profit could remedy.

If I ever get a bookcase, the first thing going on it would be “A Cold Blooded Business.” Probably the only thing, because I don’t read very much.

 Homage? Maybe so, but perhaps I should apologize for using the same concept. I least I spared you the video presentation of my face. Also, I could care less about the business prospect component of Sallie Mae.

It’s hard to believe that at one time I used to march and make my voice heard, but I have a hard time feeling much for that portion of the Occupy Wall Street crowd that is complaining about high professor salaries and high college indebtedness.

Granted, I was lucky to have gone to college and professional school at a time when scholarships were plentiful and loan money could be cheaply obtained.

Eight years of private college and professional school left me with a bill of only $24,000 and 10 years with which to retire the debt. For purposes of this blog I didn’t bother to do a “Future Value” calculation, so let’s just leave it at $24,000.

Even more fortunately, my kids will have no school related debt and they will probably never do a “Future Value” calculation in their lives.

So why do I have a hard time understanding the complaints since I understand the hurdles?

No one delves into the necessary questions behind the protestor posters. Exactly how many years did it take for you to get your degree in a major that has no job prospects, after having changed your major 2 or 3 times?

Really, you turned down an opportunity to go to your local community college while you were still in the process of discovering your true self, thereby turning down the opportunity to get a guarantee transfer of all credits to one of your state university’s 4 year programs?

And save lots of money in the process?

Taking 6 years or more to get an undergraduate degree was funny in Van Wilder, when it wasn’t too common. But it’s all too common now. Tim Matheson, who was a rebel in Animal House, was the establishment in Van Wilder and he laid the law down.

No more free ride.

Once you decided to eat up that low interest rate limit on loans by going more than 4 years you’ve entered into the world of those uncapped interest rate loans.

Hello Sallie Mae

Partied too much to pick up a few extra dollars with a part time job? What, your parents wouldn’t contribute to your educational bills? That seems fairly common, at least you might believe so if you’d read the TIME article.

Why take it out on the poor people at Sallie Mae? They didn’t hold a gun to your head forcing you to change majors, or take that year overseas drinking Dutch beer. That would have been Gunnie Mae.

They didn’t harden your parents’ hearts and wallets. That would have been Uncompassionate Mac.

For that matter, they certainly didn’t shame you into going to college in the first place.

I know that’s been an area of recent controversy. James Altucher has commented and written about how a college education may be quite worthless for some people, as have some successful entrepreneurs.(See Altucher’s “Don’t Send your Kids to College“)

The wisdom there is that if you have the money to pay for college, use it instead to launch yourself into a career, business venture or otherwise.

Of course, if you don’t have that kind of money you can either consign yourself to the predictable path of lowered expectations or indebtedness, for a degree of your own choosing, based on the rants above.

Of course, tuitions are much too high and woefully little is done to prepare students to set their sights on a goal of graduating within the life span of a Great Dane. Colleges don’t offer guidance and neither do parents.

But why blame Sallie Mae?

Oh, I know, because the other option is taking personal responsibility.

In fact, Sallie Mae, in all likelihood, helped many, many people attend college, who perhaps would have been unable to do so in  past and present generations and who ultimately went on to be contributing members of society.

Maybe even in that hated 1%.

Probably quite a few of the protestors have parents in that category, or who at least benefited from Sallie Mae in the past.

Equally likely is that for those having parents who were unable to attend college, thereby likely to earn less over their productive work lifetimes, there would be less ability to pay for their own children’s college education.

I now that all of the above suppositions are unfair. Obviously there will always be significant exceptions to every stereotype and there will be many deserving and well meaning people tagged by that broad brush.

So too should protestors come to understand the facts that indicate that the hated 1% is made of very few of the hated people that they are targeting. Wall Street, banking and hedge fundies are just a speck within that one percent.

Doctors, lawyers and other professionals who worked through the system, paid their dues and paid their bills, while having sights set on a higher goals than just looking to palm off responsibility for bad decisions.

And then there are the lucky ones making truly obscene amounts of money and skewing just about every statistic you can imagine. For every Warren Buffett, there are 100 George Clooneys and Tom Bradys.

As it turns out in a time of economic distress and joblessness, the marketplace has less need for a 6 year educated college graduate with an emphasis on “Classics” and “European Art.”

Now, Sallie Mae will still be hated, regardless, because you always hate “The Man.”

But the crosshairs are pointed in the wrong direction. Lenders have no incentive to see their clients default. They like money too much to accept unacceptable risk.

It’s unlikely that Sallie Mae or the banks holding those student loans have any interest in taking a Greek style haircut, even if a portion is federally guaranteed. Sallie Mae may be “The Man”, but it is decidedly in the long hair camp.

Instead, aim those crosshairs a bit to the right, to draw from the Sarah Palin imagery.

Those who have conveniently forgotten the agreement some 10 years ago to have the Bush era tax cuts sunset. Take some aim in that direction.

Those who cling to the theory of “trickle down” economic theory, which has now had nearly 30 years of laboratory experience to prove that it is not a strategy for all times and situations.

Yeah, aim there, too.

While I agree with the notion that a small segment of our society has helped to compound the economic meltdown, it’s just too easy to place all blame at their feet.

Sure, march around, but do something constructive.

Vote. Call your Congressman and demand an end to dogma and stalemate.

If they don’t move on those demands, then point those crosshairs at their feet and make them dance to something other than loud-mouthed pledge pushers.

But don’t take the crosshairs thing literally, please. That’s just for those on the right.

  

 

Like most people who have a vested interest in life, I woke up this morning to the apparent good news that some kind of an agreement had been reached on the Greek crisis.

Most other natural laws were not being violated, according to the early morning news, but this was a real shock to the sytem of universal truths that we count on to make it from day to day. Otherwise, we’d all be stuck to the ceiling.

You’d be more inclined to believe that had Newton discovered the parachute before the Law of Gravity, things would be very different today for all of us.

Reportedly bond holders of Greek debt will take a 50% haircut. I still don’t completely understand what that means, especially since I’ve always been a bit mystified by the world of bonds and currencies. (See: I Don’t Understand Currencies)

 Britain, which is putting up nothing in the bailout, simply called the EU’s key players “morons”, offered their advice and went back home. Much like Geithner did last month, except without the bangers and mash awaiting him at the airport.

That I understand.

I assume that when it comes to understanding words spoken with a British accent, the EU ministers are every bit as befuddled as when I watch such a movie without sub-titles. This past week it was “Another Year” at the Columbia Film Society.

Good movie, bad teeth

I think. At least about the former. As far as the latter goes, I’m quite certain of it.

So after a series of will she or won’t she episodes, it appears that Greece is safe for now, but will require restraints and some kind of a padded environment.

It’s so difficult to protect one from one’s self.

That final requirement was a victory for the French who demanded that Greece use French drywall in its renovation of the Parthenon and those other crumbling architectural blights, as undersurfacing for the padded elements. Besides, fixing up those walls should pull in lots of international tourist dollars into the Greek economy.

As most people in that upper 1%, upon hearing the news my first thought was obviously related to how can I benefit from this moment in history?

I knew that the answer was “not that much” since many of my holdings were spoken for by the lively options premiums I received on their behalf. Besides, I don’t think Netflix has large European exposure and doesn’t stream much across the pond.

It would have been nice if the EU Finance Ministers at least threw Netflix some sort of bone, perhaps endorsing its plan to split the subscriber base in two.

But that’s fine, because there’s always tomorrow.

Tomorrow is typically when details come and euphoria fades. Reality has a way of dashing hopes and dreams.

Just ask Kim Kardashian.

Sometimes, tomorrow is 30 minutes after earnings are released and guidance is given during the conference call. Tomorrow can come at any time, but it always gets here eventually.

At any rate, today is another of those rare days that I’m working. No windows, no streaming CNBC and no clue what’s going on other than the numbers on the screen, the preponderance of “greens” and an occasional glance at the New York Times website, which by the way, was brave enough to have an article today entitled “Banks Calmed, but Italy Still a Worry.”

I did try streaming, but had no speakers on the computer available to me. I watched the Herb Greenberg segment with Howard Lindzon, founder of StockTwits, but couldn’t read anyone’s lips, other than the one “motherf**ker” that I believe came from Lindzon’s lips as he was probably discussing someone who he believed didn’t understand the concepts of momentum and trend.

That may have been directed toward me, but you can never be certain.

As everyone back in Europe is self-congratulating themselves for a job finally done, we’ll probably skip the details and wonder what’s going to happen next.

One report I read said that this $1.3 trillion bailout sends the message that there’s resolve to battle the same demons in Italy, Spain, Portugal and Ireland, too.

I’m sure that the Germans love that thought.

They still believe that Mussolini was a drain on their glory and they’re probably anxious to help out an old and reliable ally.

All they would ask in return would be for Berlusconi to give them a few telephone numbers of some of his “aides”. Not for anything fiendish or inappropriate. Perhaps just to see if any needed escorts to their high school proms.

So with all of the difficulty and the various fit and starts to try and resolve the Greek crisis, where are the voices reminding us that the Greek economy is like a guppy in the fish bowl?

I certainly understand the concept of starting small and then exporting the knowledge base and experience to larger, but similar projects, but where is the capital coming from?

With recent reports that US banks are awash in capital, a natural consequence of not lending, and the lure of some lofty European bond returns, I hope that the enticements are recognized for what they are likely to be.

The nomination of Angelo Mozilo, as the United States non-voting representative to the European Central Bank is probably not a good sign.

Just in case, I’ve diverted my non-invested cash into something more safe than our own banking system.

I’ve just stuffed it into those coffers maintained at the Occupy Wall Street rallies, that presumably will be used for food and lodging over the winter, as Occupy Wall Street becomes a profession for some protestors. I’m even happy to support their annual trek down to warmer winter climates, as befits New Yorkers of all percentiles, as they take “Occupy Boca” to heart.

See? College was worth it, after all.

You’d really get that feeling if you bought Sallie Mae after the big hit it took on Tuesday. You would have been nicely rewarded as the reality hit.

Sometimes reality tells us that things are going in the right direction, or that at least things aren’t quite as bad as unbridled imaginations made them out to be.

Sallie Mae may be all that is evil in the world of higher education, but I can guarantee that there are at least some protestors somewhere that have benefited from Sallie Mae’s climb from a few dollars per share up to its current share price.

Of course, that conveniently overlooks the days when it was in the $50 range.

With the market spending much of the day in the 300 point higher vicinity, I did take some time to sell some more options. Halliburton, Rio Tinto, Cheasapeake Energy, Riverbed Technology, Freeport McMoRan and even Netflix.

I also bought some more ProShares UltraShort Silver ETF shares, demonstrating precisely the mechanism that I became so top heavy in these shares. Just little by little, with each rise in silver’s price, ‘ve been accumulating the short shares.

Up until the past few days that’s been a very good strategy, but so far, for this options cycle, I’ve only been able to hedge about 30% of my shares, so the precipitous drop in those shares in now limiting my portfolio gains.

Just a couple of weeks ago it was precisely the opposite.

The reason for the big difference?

Who knows?

But even with silver and gold, it’s appropriate to ask “Now what?”

Although working, I do have Twitter going and occasionally stop by to check.

There are lots of very happy people and only the occasional complaint.

That may be the kind of thing that Lindzon may have been talking about this afternoon, if only I’d had sound.

Although I understand the concepts of trend and momentum, I also understand the inviolate physical law of inertia. It takes a major event to stop momentum, but in the case of the markets, it only takes a trivial and unsubstantiated rumor.

And then there’s gravity, as well. Throw that into the mix.

At the very least, there’s probably little reason to ask “what’s next” when it comes to physical laws of the universe. Remember, Newton never did discover the parachute.

Unless someone corroborates the Italian demonstration of particles faster than light, there’s good reason to believe that there’s nothing next on the universal truths spectrum.

Instead, we’re off to Italy with a discerning and questioning eye, as there’s reason to doubt both the speed of neutrinos and the ability of the Berlusconi government to put forward a fiscally responsible plan.

What’s next? Not the basement, but I don’t think we’re headed for the penthouse quite yet, either.

Reality will be back, as will doubts, finger pointing and cold feet.

What’s next?

Tomorrow. And there’s no telling what that may bring, although trade for disappointment and pain.

 

There’s been so much talk about “haircuts” lately.
Wall Street is good when it comes to descriptive terms that may or may not describe anything. We’ve had quantitative easing (1 and 2), risk on/risk off, kicking the can down the road, dead cat bounce, rip your face off rally and now haircuts.
As best as I can figure, in financial terms, the extent of a “haircut” refers to how much give back is necessary to achieve something resembling financial solvency.
As opposed to the real world of hair cutting where there is no cost differential based on the amount of hair shorn, it appears that the extent of the haircut elicits fevered opinions as the perceived costs are culturally unsettling.
Greeks, apparently are a hairy bunch. Thank goodness Armenia isn’t a member of the EU.
As soon as talk centers on the possibility of Greece perhaps needing to take a bigger haircut than initially thought, there’s more rioting on the streets of Athens.
Retiring at age 27 instead of 25 makes some people very angry. Angry enough to toss Molotov cocktails made from the strange green antiseptic liquid that cleans the instruments of haircutting.
Haircuts do that sort of thing to people.You know how irrational people can be when they get a haircut that doesn’t suit them or that doesn’t satisfy their preconceived notions.
With the remnants of my Jew-Fro, I still aspire to look like Jennifer Ansiton after each haircut, but am serially disappointed.
Speaking of haircuts and serial disappointments, look at poor Jon Corzine, CEO of MF Global.
On Tuesday, MF Global had the fine distinction of losing even more, on a percentage basis, than even Netflix.
Did I mention that Jon Corzine was follicularly challenged?
First he was forced out as CEO of Goldman Sachs, then he leaves after a single term as New Jersey Senator, to use his hands on organizational skills to lead New Jersey during the beginning of the area’s financial meltdown.
Depending on your perspective, Corzine either gets a demerit for bad timing or a slap on the back of the head.
For bad timing.
Did I so neglect to mention that New Jersey was perhaps every bit as much dependent on the health of Wall Street as is Wall Street? The state didn’t fare terribly well during the Corzine administration as Wall Street melted down.
If you want to talk about where Main Street meets Wall Street, look no further than the newly rehabilitated cities of New Jersey.
Of course, there’s always the embarrassing evening when Corzine was at the Islamic Society of Central Jersey and was mistakenly characterized as being Jewish.
That’s not going to help your election chances, at least not among the Central Jersey electorate. It doesn’t matter how often you deny it. His problem was that he didn’t vehemently deny it. He should have had his publicist add an “h” to “Jon”.
 That he was voted out in favor of Chris Christie, who is fully maned and obviously not Jewish, is just coincidental. But you don’t find very many Jews that use the name of the Savior as both their first and last names
After trying his hand at politics, it was back to Wall Street for Jon Corzine.
For a guy that doesn’t have much on top, he took another huge haircut on Wednesday, as shares of MF Global, with many financial interests in Europe just got hammered again.
I feel badly for Jon Corzine, although the worst may be yet to come.
That is, if Dick Bove, who is not one of my favorites, is correct in the suggestion that Goldman Sachs is a possible buyer of MF Global.(See: I Never Liked Dick Bove)
In that case, Corzine may request a cut starting at the neck.
In the wake of Netflix and now Amazon, I’ve gotten a haircut well beyond what I had asked for.
You can’t even begin to tell that there’s a Jew Fro in there somewhere.
I hate haircuts of all kinds.
When I first moved to the Maryland area, I had to find a replacement for the Faleri Brothers, the two raging anti-semitic haircutter brothers, with horrid gingivitis and a penchant for overly small Qiana shirts. To their credit, they did an admirable job with my difficult to maintain mane.
One thing that I learned during that period was that when one makes distasteful comments and has a sharp instrument in their hands, disagreeing is really a question of proper timing.
It had taken me years to get used to them, although I’m not certain why that was the case.
After my first haircut in my new home at one of those mall franchise places, I was asked by the “stylist” how I liked the haircut.
I always say that I liked it, despite the fact that I could never see what  was looking at without my glasses being placed back on.
Upon telling her that it did, in fact, like the haircut, she then proceeded to ask me if I would be willing to sponsor her brother so that he might emigrate from Hait to the United States.
That seemed like a reasonable reuest, so upon thinking about it for a brief nano-second, instead, I gave her an extra 5% in the tip and never returned.
For the next 15 years I just continued being ill at ease having my hair cut and being handled by people with very sharp instruments near the organ  of mine that I treasured the most.
No. I don’t get Brazilians.
I rarely would go, only doing so when Sugar Momma would threaten not to go out with me in public until I made myself presentable.
About 6 months ago, by special request, Sugar Momma gave me a haircut. She had never done so before, but I had it with trying to make small talk, reading totally uninteresting magazines and constantly being peddled all kinds of hair products.
Long story short? Best decision of my life. In return, I vowed to trim my beard on a regular basis.
No conversation. No tipping. All I need to do is sweep up the curls and sleep with the girls.
Now, Sugar Momma refuses to be seen in public with me because of the tee shirts I choose to wear. They’re not even made of Qiana, but they tend to be Malt liquor centric, as hand me downs from my son, whose friend’s father owned a liquor store.She doesn’t think it appropriate that I be seen in public with such attire.
What can I say? It’s all a work in progress.
As the trading week itself was progressing to the mid-point, Iwas adjusting my selt belt for Green Mountain Coffee Roaster’s earnings announcement in anticipation of yet another haircut. Instead, word came that the announcement wouldn’t come today, as planned.
Given the warnings this week from David Einhorn and others, that can’t be good news.
At the very least Netflix showed a bit of a bounce after Whitney Tilson, the oft wrong Netflix short of past, announced that he was now buying Netflix shares. That sent shares up by about 4%.
4 down and 30 to go, but you still can’t even see a 5 o’clock shadow on my skull.
The one thing that was really reinforced for me after these few days of overly speculative play is that I really don’t like getting my hair cut.
I don’t mind a little trim, as long as my new growth exceeds the removal.
Someday, and that day will come, maybe for Jon Corzine, as well, that I’ll be able to look into the mirror and see the perfectly layered shag so wonderfully worn by Jennifer.
But until then, despite Sugar Momma making the whole process a little more tolerable, haircuts will remain well down my list of favorite things, along with Netflix, Amazon, Green Mountain and any Wall Street words du jour.
But unlike Jon Corzine, I know that when I get clipped, literally or figuratively, it’s coming back.
So no matter how bad the cut, I just take the glasses off and it looks great.
Netflix will be just fine and so will Amazon. Once they come back, or I make up the difference between buy and sell price with options premiums, they’ll be gone.
If it doesn’t work out that way for Jon Corzine, I’d like to be among the first to invite him to me in my personal Hair Club for Men, where no one cares what length of hair you have, the length of your beard or what tee shirts you sport.
Things can only get better.
 

 

One of the problems with getting older is that you don’t dream quite as frequently , vividly or with as much imagination.

Maybe you just don’t have the same ability to recall, but something is different. There’s a strong correlation between erosion of dreams and ear hair.

I happen to have been trained and educated as a Pediatric Dentist, but I rarely think about teeth during the course of the day. I certainly don’t dream about teeth or even hygienists, who were often the punchline of a Woody Allen joke.

I’m certain that some people may have dreams, more appropriately, nightmares about me or my ilk. Maybe even about Woody Allen.

There’s no accounting for the excess baggage that some people carry with themselves throughout life.

In what I can only describe as a nightmare, I awoke a bit earlier this morning than usual with a dream freshly painted in my mind.

For some reason, I was actually a Dentist in the dream. I even was wearing one of those short white coats that I never wore in real life. But there I was, left with the responsibility of explaining to someone why they had cavities, but I wasn’t allowed to draw any cause and effect between their horrid diet or lack of anything resembling hygiene and their acquisition of cavities.

I think it was for reasons of national security and the information was on a “need to know basis” only.

Hard as I tried to rationalize a need to disclose the true cause and effect for the odontogenic malady, I just couldn’t connect the dots.

I like cause and effect.

It explains a lot.

Yesterday, I proudly laid out for Sugar Momma my theory on why dogs, our dachshund Laszlo, specifically, bark at joggers, cars and delivery guys.

Getting into a dog’s mind, it occured to me that being somewhat protective of his terrritory, Laszlo’s second instinct is to bark. But that instinct gets repeatedly reinforced as the jogger always keeps on running and the delivery guys never stop and stay for a spot of tea.

In Lazlo’s mind, those intruders weren’t going about their usual activity, they were chased away by his barking.

So, I don’t even like suspending basic laws of cause and effect for my own dreams.

Cause and effect was probably a good way to describe my waking nightmares through Tuesday’s trading and the afterhours.

No doubt, the cause of Netflix’s 35% trading fall was due to the poorly conceived strategy to send DVD renters off into the sunset. Although that strategy makes more sense, than say, The Gap splitting itself into a streaming jeans business and a mail order jeans business, the market didn’t like the fact that the normal attrition of subscribers wasn’t replaced by new subscribers.

The fact that there’s no really good alternative to Netflix for those that chose to leave really points at the serious nature of their corporate miscalculation.

Did I mention that my Doppleganger bought Netflix shares yesterday? I’m not certain which of us bought more shares today, but depending on the outcome of those shares, I still reserve the right to blame “evil me.” The fact that Whitney Tilson, who has been bearish on Netflix since the days of SONY Beta-Max, has now indicated that he is now buying shares can only mean one thing.

Just as everything can only mean one thing. It remains to be seen what that one thing will turn out to be.

The same evil me bought Amazon and Green Mountain Coffee Roasters yesterday, as well.

In what can only be described as a bad case of “deja vous,” Amazon released earnings that exceeded expectations.

Normally that’s a good thing, unless it’s in the wrong direction.

Can you guess the direction?

Green Mountain is on deck for tomorrow and there’s no shortage of reasons to expect disappointing results, so I’m expecting a climb upward.

In yesterday’s blog, I pointed my finger and placed all blame for making these very uncharacteristic trades on some evil Doppleganger.

But in reality, let’s face. I may be in denial and not really want to take the responsibility for breaking some of my own fundamental rules, but the trades were based on something.

No doubt they were based on some sort of dream.

Not the kind that necessarily required deep slumber, but more the kind borne out of wishful thinking. The dream that you would catch an earning’s report just in the right direction and make a quick hit.

My dreams used to be about hitting home runs, now they’re not.

Obviously, neither of those dreams are likely to happen.

But the actions that I took just made certain that today turned out to be another dream turned into a nightmare.

But Netflix, as culturally key as it is, just isn’t enough to move the markets.

Texas Instruments, which also reported disappointing numbers on Monday used to be able to move markets. But no more.

So I can’t really blame the Doppleganger and I can’t blame Reed Hastings or Jeff Bezos for the rest of today’s nightmares.

Silver and Sallie Mae both did their best Freddy Krueggers and I can’t begin to see their association with streaming or peddling online.

Silver skyrocketted, so my ProShares UltraShort Silver ETF’s did the opposite, although I was lucky to sell some calls near today’s high.

But then there’s the Sallie Mae debacle. There’s some rumor about a consolidation of college lenders out there. That was the same rumor that circulated about 3 years ago, as being on the Obama Administration hit list.

In those 3 years, I’ve done reallly well with Sallie Mae and selling its calls. Those days may be coming to an end, but even that has a sense of “deja vous” about it.

If Sallie Mae stays in the $12 range I may join some of the Occupy Wall Street protestors to complain about how worthless all of the education I have is, in the face of my relatively high cost basis on shares of the stock that many borrowers love to hate.

Today’s market as a whole seemed to be surprised that the rumor of a meeting between EU Finance Ministers to talk about a plan, wasn’t going to happen on Wednesday.

That’s what its all come down to.

Rumors are a little like dreams. They don’t necessarily have a basis in reality, but they can become their own reality, shaping our actions and creating expanded borders for our fears.

At some point, it might be nice if the rumors would become as rare as the dreams.

I’m perfectly willing to give up dreams of teeth, hygienists and even cotton candy unicorns if it meant that I wouldn’t succumb to the unrealistic dreams of waking life and the man made dreams fired by rumors.

To the Doppleganger out there that has made the past two days somewhat hellish, I have the inner strength to admit that you don’t exist.

I alone am responsible for falling prey to my unrealistic dreams, but I dream of the day that will no longer happen.