Redirecting

Wednesday, August 05, 2009

Mish Mash - Quality Readings

The Dude texted me today to chastise me for not blogging enough. Unfortunately, our computer crashed, which leaves me to scamper to the laptop for quick intervals while my wife steps away or eats lunch, so I haven't had time to write anything of substance this week. If you want a conspiracy theory, our pc died after we shut it down to install Windows updates. Perhaps the government mandated that MSFT activate the doom switch during the software updates, so that people have to buy new computers and juice GDP... Even more conspiratorial was the fact that our warranty had expired FIVE days before the pc death.

Here's what I enjoyed reading this week:

MISH on Cash for Clunkers:

"All the program does is shift demand forward. Those clunkers were going to die at some point. Now sales are up this year which will cut into next year's demand, at the expense of everyone not getting free money.

Why anyone should be surprised at the "success" in generating demand for free money is beyond me. There is always demand for free money. Yet, interestingly, everyone seems surprised by the "unexpected success".

If the government wants more "success", it can give everyone $4,500 for a car. Short-term demand will soar. But long-term demand for cars would crash for the next few years, taxpayers would be stuck with the bills, and valuable resources would be wasted on cars rather than productive assets.

Thus, the "absolute success" touted by AutoNation is in reality a tragedy. Handing out free money always is. Indeed, the more free money handed out, the bigger the ultimate tragedy. The housing crash is poof enough."


Floyd Norris on Trump: If The Donald can get credit, the credit crisis must be over!
"So why do I feel joy at the news?

If a casino company run by Mr. Trump can get credit, then the credit crunch must surely be over.

Have you defaulted on a mortgage loan? Or maybe two? Fear not. That leaves you with a better record than Trump casino companies."


Goldman's $100MM trading days
: 46 separate times in Q2 GS earned $100mm in trading (Across all products). Wow.

John Hussman on the markets.

"Such analysts have no intellectual difficulty with non-equilibrium concepts, such as “government resources” (which they seem to think is just money from heaven, but is in fact merely a redistribution) and “cash on the sidelines” (which represents a mountain of money-market securities that somebody has to hold “on the sidelines” until they are retired, because they were issued in return for funds that have already been borrowed and spent).

Such analysts are often able to do what we can't bring ourselves to do, which is to risk other people's financial security on raw price momentum, or on speculative themes that are contradicted by historical data, or that logically cannot be true.

If I knew we could speculate on these themes and still get our shareholders out unharmed, I would do it. But I don't know how. It's frustrating to have missed what has turned out in hindsight to be a significant rally. We simply have not had the evidence to say “Yes, the conditions we observe now have historically been associated with a satisfactory expected return, on average, given the risks involved.”


Martial Law in Alabama? Can't be bullish...

NY Mag - the Hot Waitress Economic Index

"The indicator I prefer is the Hot Waitress Index: The hotter the waitresses, the weaker the economy. In flush times, there is a robust market for hotness. Selling everything from condos to premium vodka is enhanced by proximity to pretty young people (of both sexes) who get paid for providing this service. That leaves more-punishing work, like waiting tables, to those with less striking genetic gifts. But not anymore.

A waitress at one Lower East Side club described to me what happened there: “They slowly let the boys go, then the less attractive girls, and then these hot girls appeared out of nowhere. All in the hope of bringing in more business. The managers even admitted it. These hot girls that once thrived on the generosity of their friends in the scene for hookups—hosting events, marketing brands, modeling—are now hunting for work.” A Soho restaurateur I know recently received applications from “a couple of classic Eastern European fembots. Once upon a time, these ladies must’ve made $1,500 a night lap dancing. At my place, they’re not going to make that in a week.”


Scott Locklin: The Three Stooges of the High Frequency Trading Apocalypse

"I’m pretty sure all this news buzz around the evils of “High Frequency” started with Joe Saluzzi, who appears to be a sort of liquidity provider himself. His fund, Themis, apparently manually gets the best price for his customers. At least, that’s what it looks like on their website. A noble profession, though very likely a dying one. It seems the “high frequency” guys are picking his pocket, because computers are better at finding liquidity than human beings are. Joe blathers on about a lot of things, and I don’t feel like picking apart all the points in his various white papers on the subject. Joe appears to have a lot of time to go on television and indignantly blather about the evils of “high frequency” trading, despite the fact that his company appears to do exactly what “high frequency” traders do. The only difference between Joe and his tormentors seems to be that firm does it manually and in slow motion. I can’t let his nonsense about “false trading signals” pass uncommented though. Since when is anyone entitled to “true trading signals?” Gee, Joe, I’m sorry your crappy old signals don’t work any more; maybe you should invest in developing some new ones? Joe would probably be better off staying home, learning C++ and figuring out how to deal with these high frequency fannullones on a mano de mano basis, you know, sort of like all the other shops like his are doing."


-KD



2 comments:

Anonymous said...

Oh, and stick with that short, it's working well for you. Delete this one too.....

Kid Dynamite said...

anon - i deleted your prior post because it said i was whining about Obama's policies, while this post has absolutely nothing to do with me whining about Obama's policies. This post is a snippet of several articles which i found accurate and informative. i am quite certain there are no Kid Dynamite editorial statements in it.

you are correct - my short is not working - i hope if you are long you don't get caught holding the hot potato - get rich and prosper.

and you're also right that i tend to "whine like a girl" - that's because there is no painless solution - that's the whole point with my other criticisms of Obama's policies - they are extending the problem and making it worse, instead of solving the problem (painfully) by recognizing the debt losses.

by the way - if you want to join the intelligent crew, you can leave intelligent comments here on my blog. if you want to stay in the ignorant monkey crew, you can leave them over with the ignorant monkeys who comment on my posts at SeekingAlpha