After kicking around a few interesting emails from a portfolio-manager friend in London, I went negative on Mosaic Company (MOS). Here’s why (note, this was longer, but my computer just crashed so we’re doing the cliff-note version):
Ray Kurzweil is an interesting guy and certainly his thoughts on an exponential rate of technological advancement are relevant to everyone from West Bum Fuck Texas to West End London and everywhere in between. It’s one reason why people are constantly underestimating the rate at which advances are made (they are estimating linear growth when exponential applies). Here’s his book on Amazon: The Singularity Is Near: When Humans Transcend Biology. Now on to the articles (two of them):
WIRED MAGAZINE: 16.04
Med-Tech : Drugs RSS
Futurist Ray Kurzweil Pulls Out All the Stops (and Pills) to Live to Witness the Singularity
By Gary Wolf Email 03.24.08 | 6:00 PM
Photo: Rennio Maifredi
Ray Kurzweil, the famous inventor, is trim, balding, and not very tall. With his perfect posture and narrow black glasses, he would look at home in an old documentary about Cape Canaveral, but his mission is bolder than any mere voyage into space. He is attempting to travel across a frontier in time, to pass through the border between our era and a future so different as to be unrecognizable. He calls this border the singularity. Kurzweil is 60, but he intends to be no more than 40 when the singularity arrives.
Kurzweil’s notion of a singularity is taken from cosmology, in which it signifies a border in spacetime beyond which normal rules of measurement do not apply (the edge of a black hole, for example). The word was first used to describe a crucial moment in the evolution of humanity by the great mathematician John von Neumann. One day in the 1950s, while talking with his colleague Stanislaw Ulam, von Neumann began discussing the ever-accelerating pace of technological change, which, he said, “gives the appearance of approaching some essential singularity in the history of the race beyond which human affairs as we know them could not continue.”
Sure sounds like it here:
The Fed and Treasury created the mother of all moral hazards by the way they resolved the Bear collapse: they did not fully wipe out the Bear shareholders; they did not fire any of the senior management; they bailed out the creditors of an insolvent Bear; they subsidized heavily JPMorgan’s purchase of Bear; they provided a $30 billon lifeline that subsidizes Bear shareholders and management, Bear creditors and JPMorgan; and they provided – for the first time since the Great Depression – a new massive lender of last resort support to all non-bank primary dealers in the form of two new lending facilities (the TSLF and the PDCF).
Should Securities Firms be Regulated and Supervised like Banks?
Nouriel Roubini | Mar 23, 2008
The events of the last few weeks – including the collapse of Bear Stearns and of other highly leveraged, illiquid and insolvent institutions that are members of the shadow financial system – have shown that non bank financial institutions are at risk of liquidity runs in the same way as banks are. The response of the Fed to this bank-like runs on non-bank institutions has been the most radical change in monetary policy and lender of last resort support by the Fed since the Great Depression
March 21, 2008
The Wall Street Journal’s Web site is already (secretly) free
Late in January, Rupert Murdoch put an end to speculation that he would set free the Wall Street Journal’s subscription-only Web site.
While he planned to “expand” the site’s free offerings, “the really special things will still be a subscription service, and, sorry to tell you, probably more expensive,” the News Corp. head told a crowd in Davos, Switzerland. The pay wall, in other words, would stay up.
But Murdoch, quel surprise, wasn’t telling the whole truth: The Wall Street Journal’s Web site already is free. Every article that the paper publishes is available to anyone, for no money at all.
Those fund flows I bolded in the second paragraph are what prime the pump. Did the technicals trigger last week, is the question. That question will be settled soon. Will there be a follow-through day this week, or will the rally fail. We are certainly due for a bear market rally soon. And there’s been a few false starts already. So we will see. Now on to the article!
March 20, 2008
by Aaron Pressman
Whether it’s Peter Lynch loading up on Chrysler in 1982, Wilbur Ross buying steel mills in 2002, or Warren Buffett opening a bond-insurance unit in February, great investors have a habit of rushing in where others fear to tread. And with ugly subprime surprises cropping up everywhere from Bear Stearns (BSC) to American International Group (AIG), there’s plenty of fear in the markets right now.
That’s prompting investors to head for the exits. So far this year they’ve pulled $75 billion from mutual funds that invest in U.S. stocks, including $9 billion in just the past two weeks, according to TrimTabs Investment Research.
According to the following Comptroller of the Currency report (you can download it below), JPMorgan Chase has $91.7 trillion of total derivatives on $1.2 billion of equity, for a ratio of 416x.
Now, I’m no expert, but this sounds just a titty bit excessive. I don’t think I’m going out on a limb when I say we are well passed critical mass. At this point, it sounds like one of those mountains of sand Mark Buchanan talks about in his book Ubiquity: Why Catastrophes Happen.
Talk about the ultimate Butterfly Effect! This thing is primed and ready. I mean, if anyone even blinks in this Mexican standoff, let alone a major counterparty fails, it’s going to come down faster than Paris Hilton’s panties on a Saturday night. Shit, at this point, something as mundane as a mouse farting in the maid’s room at some hedge fund manager’s leafy estate in Greenwich, Connecticut could trigger the “event.”
An interesting take on money managers in general, and hedge fund managers in particular.
March 18, 2008
Why today’s hedge fund industry may not survive
By Martin Wolf
Hardly a week goes by without the implosion of a hedge fund. Last week it was Carlyle Capital, with an astonishing $31 of debt for each dollar of equity. But we should not be surprised. These collapses are inherent in the hedge-fund model. It is even conceivable that this model will join securitised subprime mortgages on the scrap heap.
Getting away with producing adulterated milk is hard; getting away with an investment strategy that adds no value is not. That was the point made by John Kay, in a superb column last week (this page, March 11). With the “right” fee structure mediocre investment managers may become rich as they ensure that their investors cease to remain so.
The old story was if you owed a bank $1 million, you had a problem, but if you owed $1 billion, then the bank had a problem. The question now is: who’s got the problem if banks owe $750 billion?
–Morgan Stanley Australia
My answer: If you has to ask whose the sucker, it’s you.
Down 80% in a year, then down the other 99% overnight. Is this the wake up call? Will it end the denial? Probably not? It’s a nasty and stubborn lot that seems to have taken root in “power” in general in the USA. As my favorite idiot likes to say, we need to smoke them out of their holes. One more bubble burst for “Sir Alan”: GreenspansBubbles.com.
To put this in perspective, the infamous Long-Term Capital Management (LTCM) Federal Reserve organized in 1997 was $3.63 billion. This time, to “save” Bear, the Fed agreed to provide up to $30 billion in financing. Talk about desperate.
True, the bottom this crisis will probably be put in place a big collapse LIKE this one, but I suspect that we are not there yet. The pain is not yet great enough. Corporate profit margins are not done falling, the layoffs are not done, the bear market is not done, the perp walks are not done, the witch burnings are not done, and, finally, the “regulators” closing of the barn door after the cows are gone is not yet done.
Here’s a couple of links before we get to: 1) a MarketWatch article about the “saving” of Bear Stearns, and 2) a New York Times article on the coming massive bailout.
A nice article from the New York Times.
March 14, 2008
The Long Run
A Free-Spirited Wanderer Who Set Obama’s Path
By JANNY SCOTT
In the capsule version of the Barack Obama story, his mother is simply the white woman from Kansas. The phrase comes coupled alliteratively to its counterpart, the black father from Kenya. On the campaign trail, he has called her his “single mom.” But neither description begins to capture the unconventional life of Stanley Ann Dunham Soetoro, the parent who most shaped Mr. Obama.
Kansas was merely a way station in her childhood, wheeling westward in the slipstream of her furniture-salesman father. In Hawaii, she married an African student at age 18. Then she married an Indonesian, moved to Jakarta, became an anthropologist, wrote an 800-page dissertation on peasant blacksmithing in Java, worked for the Ford Foundation, championed women’s work and helped bring microcredit to the world’s poor.
She had high expectations for her children. In Indonesia, she would wake her son at 4 a.m. for correspondence courses in English before school; she brought home recordings of Mahalia Jackson, speeches by the Rev. Dr. Martin Luther King Jr. And when Mr. Obama asked to stay in Hawaii for high school rather than return to Asia, she accepted living apart — a decision her daughter says was one of the hardest in Ms. Soetoro’s life.
Could the be the end of denial? The first step on the path to recovery? Let’s hope so.
March 13, 2008
Paulson Admits Deregulation Has Failed Us All
Commentary: Mortgage proposals spell end to decades of looking other way
By Rex Nutting, Washington bureau chief
WASHINGTON (MarketWatch) — You know things are very very bad on Wall Street when a guy like Henry Paulson — Treasury secretary, solid Republican, and former Goldman Sachs CEO — joins the crowd calling for more regulation over the financial markets.
Paulson spared no one in his criticism Thursday of the excesses of deregulation that has now created the worst global financial crisis in a generation, threatening the health of the U.S. economy, the savings of millions of Americans, and the survival of some of the biggest financial institutions in the world.
UPDATE (2008-3-12): It was a tough decision, but the judge ruled. Nice work all around!
Here is today’s clue:
1. The year the first ARPANET link was established.
2. The first name of the director married to a woman murdered in a high-profile case in the year of #1
3. The year AD, that Cappadocia became a province of the empire in #2.
4. Country with the rank of the number in #3, in 2005’s (published in 2007) HDI rankings
5. Pseudonym of a cartoonist born in the country in #4, whose most famous cartoon means “Achilles’s Heel” in English.
6. Company cofounded by a person with first name the same as the answer in #5, and last name the same as the leader of the Turks in Final Fantasy VII.
7. Scramble the name of the Website (minus top-level domain) into a noun. That’s today’s clue.
Be sure to leave your guess at the Hub for this clue, not here at chrisco.us.
Words of wisdom:
- Never ask the barber if you need a haircut.
- Never ask the Realtor if the house you are considering buying is a bargain at the price offered.
- And never ask the government to calculate the rate of inflation when it can save millions of dollars in cost-of-living adjustments.
Tonight, I did my first fashion shoot, and I learned a lot of things I’ll improve next time! Still, I managed to get a few decent shots. There were many more clothes and models, but my other images didn’t make the cut.
Get in touch with me if you’re interested in modeling for our startup, BuzzPal – The World Is Your Party! We’ll be doing shoots for web and print images to promote the site. The pay isn’t so great, but you will get exposure, credit, link, portfolio shots, and free t-shirts.
The photo at the end is of Gustaf, an up and coming designer and photographer here in Gothenburg. Get in tough with Gustaf for design work, especially print, interior design, and photography. The location was Erik Dahlbergsgatans Festvaning, which was happens to be where Susanne and I had our wedding reception. For more information and bookings there, get in touch with Mikael and Martina, who run the space, hosting everything from wedding receptions and parties to meetings and, as you see, fashion shows! Besides a great space, Mikael and Martina are known to be two of the best chefs in Gothenburg.