Monday, August 31, 2009

The Mortgage Refinance Deadend

Like many others, I own a home which potentially had it's value fall substantially. When I bought it, I got a first and second mortgage at an interest rate much higher than rates available today.

The obvious and 'smart' thing to do, not to mention what I had plan to do from the beginning is to refinance, and pay off the loans sooner and cheaper. And then this crisis hit. And the value of the home is assumed unimaginable. Banks refuse to consider refinancing - because they can't calculate enough equity ratio to debt.

My bank said - try the 'Obama plan', so I checked it out - and this is what it would result in: You send in forms, not knowing how long it takes to get a response, and not knowing what kind of 'discount' you'd get on your interest rate. And that rate would be temporary. You'd also have to prove that somehow your financial situation has worsen, loss of wages or other such issues.

It is obviously not a 'refinance' option. It's a temporary - send a lottery ticket - hope for a government delay.

To my taste - it is not what I'm looking for. I was looking for a responsible upgrade to my debt, which would allow to eventually pay off my mortgage - and it is evident that this door is shut. Banks will not cooperate - and the government solution is anything but.

The only valid action I can foresee - is to plan for paying down my mortgage fast and soon on the expense of potential personal savings and family related goals. It seems apparent to me - that one has to take his own fortune in his own hands. Making use of time tested debt pay down techniques.


Saturday, August 29, 2009

Is hosting a website on a free service a good idea?

I've been playing with's service for a while, figuring out if it fits my needs. Although I'm a programmer I've never dealt much with PHP and PHP related services, I usually develop desktop products. Anyway's I've been playing with that site's capabilities while using a free account and have created two sites with one account:


Right now they are both showing static web pages. The pages for trueelse were made with microsoft publisher, and the one for withinmymeans was made with word. High tech laziness in all it's glory. The 'withinmymeans' site was up until now using a version of word-press. It had many bugs and CPU usage issues (limited server CPU usage on free account). I have no real need for it, so for now I deleted the wordpress application and just placed a static page.

The free account allows directing from a domain, which you pay some fixed amount a year and can buy from any domain registration service.

There are plenty of different PHP applications you can install, I don't know any of them except wordpress. I intend to try some over the next couple of days.

Current verdict: Either their service isn't very reliable, or the CPU usage limitation is a killer for any practical usage. So perhaps it's best used for planning a website, building up PHP applications, and not actually creating a web presence. I have no need at this point to 'go public', so I'm not trying the paid service.


Friday, August 28, 2009

Friday not so funny, had a wisdom tooth pulled

Ouch, let's see what can be mildly amusing to sooth my pain.

First, the happiest turtle in the world.

Second, good vs. bad drank, sample bad:

(been there, done that - haven't done it again since)

Last, a really funny site - but since I'm in agonizing pain, I'm merely bitterly smiling.
Little did Kirk know, The population of Homokaltron was Gay


Thursday, August 27, 2009

High Frequency Programmed Trades - Yes, the markets are set up against investors

This story sounds too good to be true for the owners of the private equity firm milking high volume situations with programmed trades. There's no 'free money', no 'free lunch' and no 'sure thing' - unless the playing field isn't leveled for all players. It's either a 'sophisticated' Madoff scam II, or they are exploiting loop holes on the expense of normal investors and traders. If a normal person would try to do this penny profit within seconds he'd lose money on commission, and would have his account blocked for day trading and lack of appropriate securities for his obvious leverage. Who is watching out to verify they aren't 'false trading' (not a real term for naked shorts/naked trades). That is, buying and selling without ever committing real cash? SEC? HA!

Meet Getco, High-Frequency Trade King
One of the biggest players in the hot area of high-frequency trading is one of the least known.

Getco LLC, a private company with fewer than 250 employees, often accounts for 10% to 20% of the daily trading volume of many U.S. stocks, the company has said, including highly traded names such as General Electric Co., Oracle Corp. and Google Inc.

Since its founding a decade ago, the firm has risen to become one of the five biggest traders measured by volume in stocks and other instruments that trade electronically on exchanges, such as Treasury bonds and currency futures, according to firm executives, who spoke with the Journal this week, and other people in the industry.

"They are probably the biggest market maker in the U.S. stock market," said Justin Schack, a vice president at Rosenblatt Securities Inc. who closely tracks high-frequency trading. A market maker is a firm that always stands ready to buy or sell a stock.

High-frequency trading, in which traders use powerful computers and algorithms to trade at lightning-fast speeds, has grabbed attention after it produced stellar results during the financial crisis and amid estimates that it now accounts for more than half of U.S. daily stock trading.

Critics say high-frequency traders can trade ahead of less fleet-footed investors and squeeze pennies out of their pockets. Defenders say high-frequency shops help markets operate more efficiently by constantly stepping in to trade securities when investors wish to buy and sell. That, in turn, makes trading cheaper for individual investors.

The Securities and Exchange Commission has increased its scrutiny of high-frequency trading, even as exchanges rush to attract the high volumes the trading firms bring. In turn, Getco has increased its contact with the SEC and others as it seeks to influence policy decisions on matters such as rules governing options markets.

Getco's founders, former floor traders in Chicago's futures and options pits, say a lot of confusion surrounds the industry they helped pioneer.

"Electronic markets have been the best-performing parts of the financial markets" in the past few years, said Dan Tierney, a co-founder of the company with Stephen Schuler, in a rare interview. By contrast, many securities and derivatives traded over the counter, such as credit default swaps, malfunctioned amid the credit crisis, with devastating consequences.

Mr. Tierney, a 39-year-old who favors jeans, T-shirts and tennis shoes for work, points to volatile stock markets in late 2008 as a way high-frequency trading helps grease the market's wheels. As investors scrambled to sell stocks, high-frequency outfits such as Getco stepped in to buy.

One day last October, Getco juggled about two billion shares, representing more than 10% of the volume in U.S. equities, according to a person familiar with the firm.

Without high-frequency traders, Mr. Tierney says, the market's losses could have been much steeper. The Dow Jones Industrial Average plunged 14.1% that month.

All this has been profitable for Getco, which earned about $400 million in 2008, trading mostly with its own money, people familiar with its finances say. Getco, which stands for Global Electronic Trading Co., declines to comment on its profit.

In 2007, private-equity firm General Atlantic LLC invested about $300 million, a deal that then valued Getco around $1.5 billion.

At Getco, traders stare at enormous high-definition screens stacked to the ceiling that display trades in virtually every financial instrument traded electronically on exchanges. Large white boards, thick with scribbled formulas and intricate diagrams, line the walls of its expansive trading hub on the second floor of the office tower that houses the Chicago Board of Trade.

Unlike traditional Wall Street firms, the company holds relatively few securities by the time markets close for the day. Nor does it use much leverage, or borrowed money, to amplify the effects of its trades.

Since it constantly buys and sells, it can move in and out of hundreds of millions of dollars' worth of securities every day with a relatively small amount of capital. It favors shares that are the most heavily traded.

Exit question: Is this the Office Space or the Superman III scheme being legally allowed to take place without government interference?

Recession not over, despite signs of improving economic environment

Simply put, GDP has declined - ergo the recession is not over. Since GDP is measured quarterly, we can't tell if in the last few months GDP has pointed upwards, only that the decline was not 'that bad'. Since globally there are countries which have recovered, there's enough reason to assume that 3 months from now the recession would be declared 'over'. That is, unless a sudden more horrific decline will occur - which is very possible considering enough negatives and potential hazards including political ones.

GDP declines 1 percent in 2Q, better than expected
The economy shrank at an annual rate of 1 percent in the spring, a better-than-expected showing and more evidence that the recession is drawing to a close.

Many analysts believe the economy is growing in the current quarter, but they caution that any rebound will not be accompanied initially by rising employment. Jobless claims figures released Thursday were better than expected, but remain well above levels associated with a healthy economy.

The Commerce Department's new estimate for the gross domestic product was unchanged from the initial figure it released last month. The drop, while representing a record fourth consecutive decline, was far smaller than the previous two quarters. It also was stronger than the 1.5 percent decline that private economists expected.

Intriguing, dangerous times

Wednesday, August 26, 2009

Google's Youtube to share ad money with uploaders

Making the southpark episode about 'internet money' - a little bit less relevant (a little, still always relevant satire)

YouTube Making Ad Money Available to Viral Videos
Producing an online viral video may bring you notoriety, but can it bring you cash? In most cases, not at all, but that could soon change.

Google announced Tuesday that it would expand its YouTube partnership program (YPP) to include single viral videos. The YPP, which kicked off in December 2007, allows YouTube users to share in the revenue Google earns by selling ads against your video.

Until now, it was reserved for particular users whose videos regularly reached a wide audience. YouTube has occasionally extended the YPP to single videos (like "David after dentist") but will now have a more formal program to monetize individual videos.

"Now, when you upload a video to YouTube that accumulates lots of views, we may invite you to monetize that video and start earning revenue from it," YouTube wrote in a blog post. " If your video is eligible for monetization, you will receive an email and see an 'Enable Revenue Sharing' message next to your video on the watch page, as well as in other places in your account."

YouTube will examine number of views, the video's virality and compliance with the YouTube Terms of Service to see if your video deserves an invite


Mega Million lotto jackpot: $325 million !!!!

Let the lotto mania begin

No Mega Millions winner, so jackpot up to $325 million
There were nearly half-million winning tickets in New York alone following the much-anticipated Mega Millions drawing Tuesday night.

But no one won the jackpot in the 12-state lottery, a pool that was worth an estimated $252 million, officials said.

Officials now estimate the Mega Millions jackpot will be worth $325 million when the lottery is drawn Friday at 11 p.m. The largest jackpot in U.S. history was the $390-million Mega drawing on March 6, 2007, officials said.

Mega Millions has now gone 14 consecutive draws without a jackpot winner. The last winner was drawn on July 7.

It's exciting, until you realize the odds... don't get your hopes up.


Introducing my wife's Etsy store

My talented wife has posted a few listings on
The site includes 19 items right now.

Among other things, you will find these two:

Handmade Cross Stitch Pincushion

Most cool, IMHO:

Reusable leak proof sandwich wrap - placemat.

Shamelessly promoting... all my 20 a day visitors - will surely make us wealthy... ;-)


Recovery News You Can't Ignore: New Home Sales Up 9.6%

Recovery - DESPITE potential political malpractice...

July new US home sales up 9.6 percent
New U.S. home sales surged 9.6 percent in July, rising for the fourth straight month and beating expectations as the housing market marches steadily back from its historic downturn.

The Commerce Department said Wednesday that sales rose to a seasonally adjusted annual rate of 433,000 from an upwardly revised June rate of 395,000. Sales are now up 32 percent from the bottom in January, but off 69 percent from the frenzied peak four years ago.

Last month's sales pace was the strongest since September and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 390,000 units. The last time sales rose so dramatically was in February 2005.

Hoping for more improving and much better times.

Tuesday, August 25, 2009

Either google launched new 'bots' or someone is picking on me

First, the good news: Google unblocked me from posting again in this blog. Thank you. The bots mistaken my site for spam - gee, thanks for the vote of confidence.

Second, another 'bot' today had issues with adsense, not specifically in this blog. Not sure why, but I'm trying to get some response back from Google.

So I'm suspecting that either Google launched new 'spam/terms of usage bots', or someone is actually annoyed by me. I hope to get some answers. I also hope that the occasional visitors to my blog are enjoying what they find - and my freeware applications are appreciated by their users.

Here's to another day blogging!


Yes - drink up, it's good for your bones...

Monday, August 24, 2009

Millions face shrinking Social Security payments

Is this the beginning of the end for "relying on social security" as your source of income at golden years?

Millions face shrinking Social Security payments
Millions of older people face shrinking Social Security checks next year, the first time in a generation that payments would not rise.

The trustees who oversee Social Security are projecting there won't be a cost of living adjustment (COLA) for the next two years. That hasn't happened since automatic increases were adopted in 1975.

By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.

"I will promise you, they count on that COLA," said Barbara Kennelly, a former Democratic congresswoman from Connecticut who now heads the National Committee to Preserve Social Security and Medicare. "To some people, it might not be a big deal. But to seniors, especially with their health care costs, it is a big deal."

Cost of living adjustments are pegged to inflation, which has been negative this year, largely because energy prices are below 2008 levels.

Advocates say older people still face higher prices because they spend a disproportionate amount of their income on health care, where costs rise faster than inflation. Many also have suffered from declining home values and shrinking stock portfolios just as they are relying on those assets for income.

"For many elderly, they don't feel that inflation is low because their expenses are still going up," said David Certner, legislative policy director for AARP. "Anyone who has savings and investments has seen some serious losses."

About 50 million retired and disabled Americans receive Social Security benefits. The average monthly benefit for retirees is $1,153 this year. All beneficiaries received a 5.8 percent increase in January, the largest since 1982.

More than 32 million people are in the Medicare prescription drug program. Average monthly premiums are set to go from $28 this year to $30 next year, though they vary by plan. About 6 million people in the program have premiums deducted from their monthly Social Security payments, according to the Social Security Administration.

Millions of people with Medicare Part B coverage for doctors' visits also have their premiums deducted from Social Security payments. Part B premiums are expected to rise as well. But under the law, the increase cannot be larger than the increase in Social Security benefits for most recipients.

There is no such hold-harmless provision for drug premiums.

Kennelly's group wants Congress to increase Social Security benefits next year, even though the formula doesn't call for it. She would like to see either a 1 percent increase in monthly payments or a one-time payment of $150.

The cost of a one-time payment, a little less than $8 billion, could be covered by increasing the amount of income subjected to Social Security taxes, Kennelly said. Workers only pay Social Security taxes on the first $106,800 of income, a limit that rises each year with the average national wage.

But the limit only increases if monthly benefits increase.

Political punch line:

Critics argue that Social Security recipients shouldn't get an increase when inflation is negative. They note that recipients got a big increase in January — after energy prices had started to fall. They also note that Social Security recipients received one-time $250 payments in the spring as part of the government's economic stimulus package.

No cheer, messy government malpractice - and train wreck is still in the making.

Friday, August 21, 2009

Intriguing book: 'The Penny Pinchers Club'

Recession escape reading?

Intriguing book: 'The Penny Pinchers Club', description from Washington-post:
Sarah Strohmeyer's "The Penny Pinchers Club" (Dutton, $25.95) offers a playful look at that No. 1 relationship killer: money. Kat Griffiths is a spender; her economics professor husband, Griff, is not. But they're madly in love and have made it work for 20 years. Until Kat finds condoms in Griff's pockets and damning e-mail correspondence with his pretty research assistant. All signs indicate Griff is leaving her. To save her future -- and maybe just her present, too -- Kat has to change her ways. She joins up with the Rocky River Penny Pinchers Club, a frugal-living support group filled with eccentrics who teach her to shop in bulk, get wicked deals on tampons and face her financial demons. But it's not just the credit cards that haunt Kat. An old love reappears who offers adoration and total financial freedom. Bills are a buzz kill, but Strohmeyer deals handily with this subject, injecting a very real problem with humor and charm. She even leaves the reader with a few practical tips on cutting expenses -- the perfect recession escape.

Mmmm... frugality, and depressing divorce/cheating/new love in one. Sounds like it's directed mainly at women (come on - husband is a villain here).


Frugality brings coffee makers success?

Interesting combo article:
Frugal Consumers, Cheaper Commodities, Give Smucker a Jolt
While not the sexiest of the corporate titans, J.M. Smucker Co. is nevertheless one of the most high-profile earnings reports today.

Best known for jams, jellies and peanut butter, Smucker has seen coffee become one of the most important contributors to the company’s earnings since it bought Procter & Gamble Co.’s Folgers coffee business in November for $2.65 billion.

The decision to scoop up Folgers by the Orrville, Ohio company has looked especially savvy, since it coincided with the economic earthquake that radically reshaped behavior among U.S. consumers.

Last quarter, Smucker’s fiscal fourth-quarter earnings more than doubled, juiced by the purchase of Folgers. The Journal wrote at the time that the coffee segment’s results suggested shoppers could be making a frugal switch from buying their coffee at specialty shops to brewing it at home.

And... a 2.8% dividend yield: Smucker ticker: SJM

Jittery Caffeine Induced: CHEERS!!!!

Massive exodus from cash and money market - but where to?

Bubbly situation brewing?

US money market fund assets fall $22.6 bln-iMoneyNet
U.S. money market fund assets fell by $22.6 billion to $3.524 trillion in the week ended Aug. 18, the Money Fund Report said on Wednesday.

Taxable money market fund assets fell $19.8 billion to $3.078 trillion, while tax-free assets fell by $2.8 billion to $446.1 billion, according to the report, published by iMoneyNet.

Yields on taxable money market funds were unchanged at a record low of 0.07 percent, while tax-free yields slid to a record low of 0.10 percent from 0.11 percent the prior week.

While it might be intuitive to think that people are rushing to dividend paying blue chips as alternative to luck laster US money market, there's potentially a buildup of counter US Dollar action here, which globally respected currency is it?


Thursday, August 20, 2009

Bespoke, others speculate oil might break resistance and rally

Summer isn't really over - and usually a hurricane hitting US land causes seasonal increases in oil costs. However, this season was very mute... current oil price is very-very speculative. I expect it to touch and breach resistance, right before it crashes hard again. November prices should be consumer friendly IMHO.

Will Oil Break Out Or Fail At Resistance?


Video: Don't trade UNG!!!


To clarify - UNG is the exchange traded fund supposed to track the price of natural gas.

But seriously, an important video to watch:
TheStreet TV on Yahoo: Stop Trading UNG


Wednesday, August 19, 2009

Blogger asks which letter represents housing recovery

A brilliant title:

Is It A “U” or “V” Shaped Housing Recovery? Or, Is It Some Other Letter?

Might I suggest Q...


CNBC/Reuters hyping China correction?

Seriously, market related commentary on major outlets seems to be the most awful type of unprofessional guesswork sometimes.

As China Stocks Retreat, Fears Grow About Economic Impact
China's stock market crashed before the economy's steep slowdown last year, and it soared before the strong recovery earlier this year. So does the current sell-off presage fresh economic troubles?

China's benchmark share index fell 4.3 percent on Wednesday and is now down 20 percent from two weeks ago, sending tremors through equity markets worldwide.

European stocks tumbled and US stocks opened lower in reaction to the China selloff. Some market pros think that China is a good indicator of where stocks are headed.

"They seem to have peaked out before we did," Art Cashin told CNBC. "They're a bit of a leading indicator."

The collapse in Chinese share prices came at the same time as analysts from Goldman Sachs to Citibank were upgrading their already bullish forecasts for China's GDP growth.

Also, on bespoke investment group: Bear Season in China

OK - so traders pushed it down below 50 DMA, where's 200 DMA? How about the old proverb: 'every trend has a counter trend'? Notice that FXI did not break - or bounced right of 50 DMA, and the 50 DMA is way above the 200 DMA - so this could still be considered a correction. A strong correction, as strong as the bubbly rally the Chinese market saw. No one can be considered an expert to China's market - because it is not a 'normal stock exchange' market. It's a speculators/casino/government intervened one. Everything related to it should have a 'toxic' sticker on it.


Tuesday, August 18, 2009

The 'recession is over' news bits keep popping

Unavoidable reality - many say recession is over, but economic woos remain.

Global recession over, but will leave scars: IMF
The global recession is over and a recovery has begun, Olivier Blanchard, the top economist for the International Monetary Fund, said Tuesday. "The turnaround will not be simple," Blancard wrote in an article released by the IMF. "The crisis has left deep scars, which will affect both supply and demand for many years to come." Growth is coming for most countries, he said, but it won't be strong enough to reduce unemployment for a while. Potential output may have been permanently reduced. Growth is still highly dependent on government stimulus from fiscal and monetary policies. Sustaining growth "will require delicate rebalancing acts, both within and across countries," he said

Sample 'reader response' on market watch:
Are you freaking crazy???????? What are you people ON???"

I'm not sure people understand the meaning of the word recession, and are simply being emotional. Investors should note that the 'recession is over' statements are happening just around the same time as we've crossed the 200 DMA in the stocks market - Is this the mother of all buy signal - coming at the end of a massive 50% plus rally?


Fool Says: 9 Things To Do Instead of Buying Stocks

It's - the financial site, and the only mistake they made was write 'instead of', which I would replace with 'before you buy stocks'.

Anyhow - a good article. I'll just quote the punch line - click to read it all.
9 Things You Should Do Instead of Buy Stocks
  • Make a will.
  • Pay off your credit cards.
  • Get term life insurance if you have a family to support.
  • Fund your 401(k) to the maximum.
  • Fund your IRA to the maximum.
  • Buy a house if you want to live in a house and can afford it.
  • Put six-months' worth of expenses in a money-market account.
  • Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker, and never touch it until retirement.
  • If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner.


Monday, August 17, 2009

Rainy Night in Georgia - Music to fit Market mood

It was raining all over the world...

All 3D channel to debut in UK, meanwhile Comcast still sucks ass

Seriously, if it weren't for them being my only available broadband internet option - I'd dump Comcast in a heart beat by now.

Reason for future TV sales:
After Conquering the Movies, 3-D Viewing Makes Its Way Toward Home TVs
With 3-D movies popping up more frequently at the cinema, several companies are working through significant challenges to make 3-D viewing available in the home too.

Satellite-TV operator British Sky Broadcasting PLC is preparing to debut a 3-D television channel in the U.K. next year that will require specially-equipped TV sets. The venture may be the most ambitious yet toward a large-scale 3-D television rollout, which remains absent from most big markets outside of Japan.

In the U.S., satellite-TV provider DirecTV Group Inc. and cable network owner Discovery Communications Inc., among others, are working on or exploring 3-D offerings, spokesmen ...


Is Japan out of recession?

Perhaps this would be a buying opportunity after the correction ends:

Exports, Stimulus Lift Japan Out of Recession
Japan's economy grew 0.9 percent in the three months to June, marking the first expansion in five quarters on the back of exports and government stimulus spending, but analysts say it will be a long road to a sustained recovery

The growth in the world's No.2 economy provided further evidence that the worst of the damage wrought by a global financial crisis may be over, but analysts and policy-makers are wary about the outlook, which depends on a recovery in world demand.

The preliminary figure, which fell slightly short of a median market forecast of a 1.0 percent increase, puts Japan in the first camp of G7 countries that have pulled out of recession, along with Germany and France.

It follows a revised 3.1 percent contraction in January-March and a 3.5 percent decrease in the final quarter of last year, which was the biggest drop on record.

On an annualized basis, Japan's economy grew 3.7 percent from the first quarter, the fastest since January-March 2008. That compared with a 1.0 percent contraction in the United States in the same quarter. The euro zone economy shrank 0.1 percent after a 2.5 percent fall in the first three months.

I counted two countries claiming to be out of recession: Israel and Japan. Considering Japanese related stocks - Toyota and Japan ETF-s: TM, DXJ, EWJ, Israel stocks: Partner, Cellcom, Teva, EIS


Always separate political commentary from economic: China Buys Treasuries, Proving Dollar Demise Overdone

Over the last year, political interests have been mixed far too often with economic and business reporting, accelerating collapses, prolonging crisis, and causing many people to make false choices. The economic situation is still bleak - but one should consider that inflation has not hit yet, and the Dollar has not collapsed despite political motivated op-eds and commentary. People should invest based on what is happening now - not what they hear in radio that might happen.

China Buys Treasuries, Proving Dollar Demise Overdone
For the first time since the start of the global financial crisis, the U.S. government is breaking its reliance on short-term debt as foreign buyers pile into longer-term securities.

When the U.S. raised $75 billion last week, a group that includes international investors purchased a record amount of 3- year notes, the biggest share of 10-year notes since 2005 and almost half of the 30-year bonds sold, according to Treasury data. That helped extend the average maturity of U.S. debt from a 25-year low in the second quarter and showed diminishing concerns over the record U.S. budget deficit and inflation.

“Long-dated Treasuries are fantastic assets to have,” said Stuart Thomson, a fixed-income fund manager at Ignis Asset Management, which oversees the equivalent of $100 billion from Glasgow. “I have every reason to believe long bonds will rally. Inflation is subdued, and the Fed made it very clear they expect it to remain low.”

Treasury Secretary Timothy Geithner locked in long-term borrowing costs at rates near the lowest in six decades just days before the government said the consumer price index was unchanged in July. Costs fell 2.1 percent from a year earlier, the biggest 12 month drop since 1950, even as reports on employment and homes sales showed the economy is recovering from the steepest contraction in more than six decades

For the record - once again - not a political blog, and no political opinion expressed here. It might just be that my political beliefs are in direct opposite to my investing/economic/business perspective at this moment. Also, please consider my disclaimer. I'm not a professional - just a guy thinking out loud.


Friday, August 14, 2009

Foxnews poo-poo-es on economy optimists

The only absolute truth is that the recession will eventually end. JPM are the optimists I've read thus far, and if you want to feel warm and fuzzy over the weekend, take their word - for now.

For Economists Declaring an End to the Recession, Some Signs Suggest 'Not So Fast' (notice it's under their politics section? political economic reportage)
Surging productivity. A drop in the unemployment rate for the first time in 15 months. And a forecast of growth in gross domestic product this quarter.

What recession?

That's what many economists are saying as they point to those signs as evidence that the longest recession since the Great Depression has ended.

"Most economists who are saying the recession ended, what they mean is the economy will grow in the third quarter," Chris Varvares, president of Macroeconomic Advisers, told

But other data suggest those declarations may be premature.

First, before it can be determined whether a recession has ended, it's important to note how to define a recovery. According to the Economic Policy Institute, the economy must grow at least 3 to 3.5 percent to keep unemployment from rising and 4 to 4.5 percent for unemployment to drop 0.5 percent.

The National Bureau of Economic Research, the group charged with making the official calls, says on its Web site that it marks recovery from the date that it sees the economy hitting rock bottom. It looks at that trough through the lens of employment, personal income and growth in the gross domestic product.

However, the bureau doesn't make the call on a recovery until long after it began. For instance, the bureau did not announce the November 2001 end of recession until July 2003.

In July 2003, it wrote that the NBER did not conclude that in economic conditions since November 2001 "have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month."

The bureau's silence hasn't stopped economists from weighing in. Many believe the current recession is on the verge of ending. If the economy starts to grow in the second half of this year, companies are expected to switch from layoffs and trimming workers' hours to boosting employment as demand for their products increases.

Evidence showing that the recession is easing continued to emerge Friday. The Federal Reserve said production from the nation's factories, mines and utilities rose more than expected in July, with the first gain in nine months driven by increased output from auto companies.


Friday Funny: What is Love? Cats!

Personally, not a cats fan. My wife is, and we have our very own...


JPMorgan predicts robust recovery, lashes against 'new normal' pessimists

Wow, didn't see that one coming. I'm prestty sure this is the first "rosy picture" prediction I've seen in a long-long while. Don't dismiss it and accept another - future tellers are still crystal ball and card readers after all. Just consider the option.

No New Normal JPMorgan Sees V-Shaped Recovery in U.S.
Instead of a so-called New Normal of subdued growth, the U.S. may be heading for a robust recovery.

The worst recession since the 1930s has created a reservoir of demand that will buoy the economy, say a growing number of economists led by James Glassman at JPMorgan Chase & Co., former Federal Reserve Governor Laurence Meyer and Stephen Stanley at RBS Securities Inc.

“Whenever we have plunged off a cliff and fallen into a deep hole in the past, for a while the economy has a tendency to bounce back very quickly,” said Glassman, a senior economist at JPMorgan in New York. Glassman and his colleagues this month said forecasts of 3 percent to 4 percent growth in coming quarters may be too low given “pent-up” consumer demand.

JPMorgan’s outlook contradicts the view popularized by Mohamed El-Erian at Pacific Investment Management Co. that elevated unemployment and record wealth destruction will keep growth at 2 percent or less for years. The divergence highlights the dilemma for policy makers, who must decide whether to maintain record fiscal and monetary stimulus or begin to pull back and prevent a surge in inflation should growth accelerate.

El-Erian, chief executive officer of Newport Beach, California-based Pimco, said “the indicators we follow continue to point to sluggish medium-term growth in the U.S.,” when asked to respond to arguments for a so-called v-shaped recovery.

Retail Sales

A report from the Federal Reserve today added to signs of recovery as industrial production rose 0.5 percent in July, the first increase in nine months. A separate government report showed consumer prices were unchanged, emphasizing companies lack pricing power after the biggest drop in U.S. gross domestic product in any recession since the 1930s.

Confidence among U.S. consumers unexpectedly fell in August for a second consecutive month as concern over jobs and wages grew, according to the Reuters/University of Michigan preliminary index of consumer sentiment today. The U.S. has lost 6.7 million jobs in the recession that began in December 2007.

The New Normal theory predicts that the recession will leave unemployment, forecast to reach 10 percent for the first time since 1983 early next year, higher for years. Glassman and Meyer dispute that.

“The thing I object to most about the New Normal idea is that we are stuck and have to accept higher unemployment -- if you look at the Fed, they are doing everything they can to fight it,” said Glassman, who formerly worked as a Fed economist in Washington.

Meyer’s Projections

Meyer, who served as a central bank governor from 1996 until 2002, said he and his colleagues “don’t find any evidence” that the unemployment rate consistent with stable inflation is now higher. Meyer is now vice chairman of St. Louis-based Macroeconomic Advisers LLC, whose economic estimates are monitored by the National Bureau of Economic Research panel charged with dating U.S. recessions.

Meyer expects GDP to jump by 3.6 percent in 2010 and 3.9 percent in 2011. Annual growth surpassed 3 percent only once so far this decade, in 2004, and has averaged just 2.2 percent.

“The big driver of that is home prices,” said Meyer, referring to his recovery forecast. “If home prices stabilize, that is a tremendous boost to housing that dominates every other variable in our equation. There is a lot of pent-up demand in that particular area.”

Home construction has subtracted from GDP growth for a record 14 straight quarters through June 2009. Consumer spending has also dropped in four of the past six quarters, and is down 2 percent from its peak in July-to-September 2007, the biggest retrenchment since 1980.

‘Very Depressed’

Housing and automobile sales are at “very depressed levels” and are likely to contribute to growth even if they don’t reach prior peaks, said Stanley, chief economist at RBS Securities in Greenwich, Connecticut, who used to work at the Richmond Fed.

“Consumers are holding off on practically all of their discretionary purchases,” said Stanley, who sees the expansion picking up from 2.9 percent next year to 4.4 percent in 2011 and “about” 3.5 percent in 2012. “There is a lot of pent-up demand.”

Recoveries from the past two recessions were weaker than in previous decades. After the 2001 recession, the economy expanded just 1.6 percent in 2002, picking up to 2.5 percent the next year. The 1990-91 recession was followed by 3.3 percent growth in 1992 and a 2.7 percent gain in 1993.

U.S. Roared

By contrast, the U.S. roared out of the 1981-82 recession. In 1983, GDP rose 4.5 percent, accelerating to a 7.2 percent pace in 1984, when Ronald Reagan won re-election with victories in 49 of 50 states.

Alan Blinder, the former Fed vice chairman who is now an economics professor at Princeton University in New Jersey, has described himself as “skeptical” of the New Normal scenario.

“To accept a 2 percent trend, you have to believe in about a 1.2 or 1.3 percent productivity trend -- I don’t,” Blinder said in an e-mailed response to questions. He added that he sees growth sustained at “closer, but not quite, to 3 percent” in coming years.

Fed policy makers in their latest projections submitted in June anticipated an expansion of 2.1 percent to 3.3 percent from this year’s fourth quarter to the same period next year and 3.8 percent to 4.6 percent in 2011.

‘Leveling Out’

Chairman Ben S. Bernanke and his Federal Open Market Committee colleagues two days ago said the economy is “leveling out.” The central bank has pumped about $1 trillion into the banking system in a campaign to end the crisis, triggered by mortgage defaults, that has caused more than $1.6 trillion in losses and writedowns among financial firms worldwide.

President Barack Obama last week said: “We are pointed in the right direction,” in remarks at the White House. “We’ve rescued our economy from catastrophe.” The administration anticipates a gathering impact from its $787 billion fiscal stimulus into next year.

Some companies are also seeing signs of a turn in the economy.

Karen Hoguet, chief financial officer at Macy’s Inc., the second-biggest U.S. department store chain, said on a conference call Aug. 12 that the Cincinnati-based company is “cautiously optimistic” its sales trends will improve.

A rebound in equities in recent months will help repair households’ balance sheets and buttresses the outlook for spending, said Glassman at JPMorgan.

The Standard & Poor’s 500 Stock Index has climbed about 50 percent from its low in March. U.S. stock-market capitalization has increased by almost $4 trillion in that time.

Economists’ Forecasts

Economists this month lifted their projection for third- quarter growth by 1.2 percentage points to 2.2 percent compared with July, according to the median of 55 forecasts in a Bloomberg News survey. That is the biggest such boost in surveys dating from May 2003. Forecasts for 2010 were raised to 2.3 percent from 2.1 percent.

Neal Soss, chief economist at Credit Suisse Group AG in New York, played down concern that the economy may suffer a “double dip” recession.

“Historically these double dips are routinely forecast and actually very rarely come to pass,” Soss said in a Bloomberg TV interview this week. “Once the economy tends to get some upward momentum, it tends to keep going that way.”

And flowers and rainbows and unicorns... (or not)


Intresting: CNN says married couples disagreements on investing may get better returns

I think it's a balancing act. I believe both the husband and the wife should be involved, to discourage any side from making too foolish moves. When they are not, usually the case is that following a disastrous financial move, the husband is blamed/shamed - and is always reminded and prohibited from making any decision. These sort of things can end up in divorce (for a good reason). I'm a strong believer in joint financial decisions balanced by opposing point of views and risk appetite.

My wife is an investing wimp
Question: I'm 49 and my wife is 50. We agree on most things, except how much of our investment portfolio we should keep in cash. She is completely risk-averse and focuses only on the "spanking" we took in the market last year. I feel that by letting so much money sit in CDs earning 1% to 2% we're missing out on better opportunities. Currently, we've got about $500,000 in cash as part of an otherwise well diversified portfolio. Can you help me convince her to take half that money and buy into some dividend-paying blue chips? --Garry, Atlanta, Georgia

Answer: I'm shocked -- shocked! -- that you and your wife don't see eye to eye on risk and investments. I'm joking, of course, since there's tons of research showing that when it comes to investing, women are from Venus (whose denizens tend to trade less frequently and hold more conservative portfolios) and men are from Mars (where residents thrive more on pedal-to-the-metal investing strategies and focus more on an investment's reward potential than its risks).

Research by University of California-Berkeley finance professor Terrance Odean, for example, shows that men trade far more frequently than women -- and earn far lower returns. Interestingly enough, however, when Brooke Harrington, a research fellow at the Max Planck Institute and a former assistant professor at Brown University, looked at investment clubs, she found that mixed-gender clubs performed better than men- or women-only groups, largely because they tended to pick a more diversified group of stocks.

So what does this have to do with the situation you and your wife face?

Well, to me it suggests that rather than you trying to convince your wife to do what you think is best (or have me try to persuade her), you and your wife might be better off working together to come up with a compromise that you can both agree on.

After all, it's not like there's only one right answer here. You're trying to manage and invest your money in a way that provides a reasonable return for the amount of risk you're willing to take. And this tradeoff of risk and return is a subjective matter. What's comfortable for you may not be comfortable for your wife.

So I think you and your wife need to sit down and make your respective cases. But both of you need to realize that "winning" in this case isn't talking the other person over to your point of view. It's coming away with a portfolio you can both live with.

Now, part of this discussion can, and should, be touchy feely. By this, I mean that you should let your wife know why it bugs you to be giving up opportunities, and she should explain to you why she puts such a premium on safety and wants to avoid another spanking, in the market.

But you and she should also go over some numbers so that your eventual cash position isn't decided on gut feeling alone. You can start, for example, by figuring out how much of a cash reserve you need. At a minimum, you probably want three to six months' living expenses in cash so you have enough ready money to see you through a job loss or emergency. If you know you'll be buying any big-ticket items like a car or spending on large projects, like a home refurbishing, within the next few years, you should probably set aside those funds as well in a bank money-market account, CD, or high-quality money-market fund.

Once you've figured out how much you need as a liquidity reserve, the next question is how to divvy up the rest of your investments among stocks, bonds, and cash. I'm guessing that at your ages you and your wife are investing primarily for retirement. In that case, the main issue is how aggressively or conservatively you want to invest given the number of years you still have until retirement and how much income you'll eventually need to draw from your assets.

As a rule, the more of your portfolio you devote to stocks, the higher the returns you'll earn over the long run and the larger your nest egg (and eventual retirement income) will be. But as anyone who lived through the last year well knows, a big stock stake means the possibility of big setbacks too. So you and your wife need to understand how different mixes of stocks, bonds, and cash might affect your future retirement security.

You can get a pretty quick sense of that by trying the Morningstar Asset Allocator tool. You can use the interactive sliders to create different portfolios and then see how large a nest egg or retirement income each is likely to generate, as well as how large a loss you might suffer in the short term. This will help you and your wife see what you may be gaining and giving up by investing more aggressively or more conservatively.

If you're willing to put a little more time into this, you can also check out more sophisticated calculators such as T. Rowe Price's Retirement Income Calculator or the myPlan Retirement Quick Check or Retirement Income Planner tools at Fidelity's site. These tools allow you to factor more information, such as 401(k) contributions and projected Social Security payments, into your analysis and give you a more nuanced view of the pros and cons of different investment strategies.

If you and your wife have the kind of confab I suggest and follow it up by running a few numbers, I think you should be able to come away with a mutually agreeable answer to how much of your assets should be in cash. What's more, you'll each come away with a better understanding of how your partner thinks and feels about key financial issues, and that's important not only for achieving economic security but maintaining domestic tranquility too


Thursday, August 13, 2009

Beer May Strengthen Bones

Forget Boniva... let's just get shit faced.

Beer May Strengthen Bones, Study Finds
Here’s another reason to have a beer – a recent study suggests that females who drink beer on a regular basis are less likely to suffer from osteoporosis, London’s Daily Telegraph reported.

The medical journal Nutrition says that beer has a high level of silicon, which slows down the thinning that leads to broken bones and helps form new ones.

Beer also has phytoestrogens, which are also good for keeping bones healthy and strong.

Scientists asked more than 1,000 women in their 40s about their drinking habits. They then scanned the women’s hands, and found the women who drank beer had denser hands.

“Silicon plays a major role in bone formation,” the researchers said. “Beer has been claimed to be one of the most important sources of silicon in the Western diet."

Here's one for our health ;-)

(image from here)

Wednesday, August 12, 2009

WSJ: Recession Is Over

Let's all go dancing in the streets... except for those of you who are some of the 10% unemployed, or those of us who abandoned their homes, or those of us still paying mortgage for more than our homes are worth...

On second thought. Skip the celebrations. Please.

Economists Call for Bernanke to Stay, Say Recession Is Over
Economists are nearly unanimous that Ben Bernanke should be reappointed to another term as Federal Reserve chairman, and they said there is a 71% chance that President Barack Obama will ask him to stay on, according to a survey.

Meanwhile, the majority of the economists The Wall Street Journal surveyed during the past few days said the recession that began in December 2007 is now over. Battling the downturn defined most of Mr. Bernanke's term, which began in early 2006 and expires in January, and economists say his handling of the crisis has earned him four more years as Fed chief.

"He deserves a lot of credit for stabilizing the financial markets," said Joseph Carson of AllianceBernstein. "Confidence in recovery would be damaged if he was not reappointed."

The Journal surveyed 52 economists; 47 responded.

After months of uncertainty, economists are finally seeing a break in the clouds. Forecasts were revised upward for every period, with 27 economists saying the recession had ended and 11 seeing a trough this month or next. Gross domestic product in the third quarter is now expected to show 2.4% growth at a seasonally adjusted annual rate amid signs of life in the manufacturing sector, partly spurred by inventory adjustments and strong demand for the "cash for clunkers" car-rebate program.

A better-than-expected employment report for July, where employers cut 247,000 jobs and the jobless rate fell for the first time in 15 months, suggests the worst is over. The unemployment rate is still expected to rise to 9.9% by December, but economists forecast that the economy will shed far fewer jobs over the next 12 months than they had forecast last month.


AIG Chief, Two Days on the job, Leaving for vacation

In other news, dear AIG bosses (US government I guess), here's my resume - please hire me as the next AIG Chief...

AIG Chief Benmosche, Two Days on the Job, Said to Be Leaving for Vacation
-- Robert Benmosche, the chief executive officer of American International Group Inc., plans to spend part of his first month leading the insurer in Croatia on vacation, according to two people familiar with the situation.

Benmosche, 65, who started yesterday as CEO and president of the bailed-out company, will leave for about two weeks, according to one of the people, who declined to be identified because the plans were private. Mark Herr, an AIG spokesman, said the New York-based firm wouldn’t comment on CEO travel.

“It’s probably not a propitious time for an incoming CEO to begin with a vacation,” said Steven Seiden, president of New York-based executive recruitment firm Seiden Krieger Associates. Seiden said that while the absence won’t hurt the company’s financial position, “from a public relations standpoint it’s probably not the wisest thing to do.”

Benmosche, named last week as AIG’s fifth CEO since 2005, has to retain customers and employees to preserve the value of operations that will be sold to repay loans included in AIG’s $182.5 billion U.S. rescue. The insurer posted its first quarterly profit last week after more than $100 billion in net losses in the six prior periods, and said that subsidiaries “remain challenged.”


Micrsoft blocked by patent suit from selling Word/Office/Vista?!

Perhaps I'm not reading this right:
Microsoft ordered to pay over $290 mln in patent case
* Microsoft ordered to pay in excess of $290 mln

* Judge grants permanent injunction in favor of i4i

Aug 12 (Reuters) - A U.S. federal court ruled that Microsoft Corp (MSFT.O) would have to pay more than $290 million in damages to Canadian software firm i4i Ltd for infringing a patent.

Toronto-based i4i, a privately held maker of software for manipulating documents, had claimed in a 2007 suit that Microsoft knowingly infringed one of its patents in its Word processing application and its Vista operating system.

The final judgment from the U.S. District Court for the Eastern District of Texas followed a jury verdict issued in favor of i4i on May 20. [ID:nN20530462].

The judgment also permanently enjoins Microsoft from selling any products that can open a .XML, .DOCX or .DOCM file containing custom XML.

"i4i will do its utmost to support custom XML users, which is particularly important to implement the ISO 29500 OOXML standard," Michel Vulpe, i4i's founder and an inventor of the patent, said in a statement.

Microsoft officials could not immediately be reached for comment.

Patent laws are insane. IMHO. The implications if I did correctly read this are far-far reaching.

I'm skeptic Microsoft would be barred from selling any of their flagship products. This is pure insanity and piracy through the court rooms.

Please consider:
Examine the patent that made selling Microsoft Word a crime

Injunction on Microsoft Word Unlikely to Halt Sales

Pure insanity... Did this idiot court rule XML as a dead technology due to a vague patent?

Monday, August 10, 2009

Now that most of us missed a 50% rise in the market - where should we guess this titanic is heading?

Common sense: When the market rallies 50% in 6 months - it's unsustainable. But then again, the chart might tell you a different story - it's all a question of vantage points. The market - those who trade there - are trying to price companies based on future outlooks, and be it a trough or a peek - it's pure speculation. No one knows "what it's really worth". I claim no "market brilliance". I'll direct you to plurality of opinions.

The Bears:
What Growth is the S&P 500 Pricing In?
Rosenberg suggests there will be no recovery without the consumer. I suggest there will be no recovery in consumer spending, discounting of course "free money" programs like "cash for clunkers".

Of course this all depends on the definition of "recovery". At best, I think we have a "Recoveryless Recovery" before the economy slips back into a double or triple dip recession. Regardless, the stock market is priced for perfection while the odds of perfection are close to zero

The "Trader"/ technical optimist:
Is It Still Okay to Buy?
Long-time readers will undoubtedly recall our discussions of breadth surges and the long-term buy signals associated with such an event. The idea is that when the breadth of the market surges to the upside and advancing issues swamp decliners over a 10-day period, the resulting overbought condition is actually healthy and not something to be feared. As we’ve detailed in the past, history shows that such surges in breadth lead to solid advances over the next one, three, six, and twelve month periods.

So, why bring this up now? Didn’t these signals already occur? The answer is yes; we did get breadth surge buy signals in late March of this year. And in keeping with history, the market’s ensuing climb actually exceeded the average gains projected over the next three months.

But without further ado, the point is that the blast from the July low has triggered another round of breadth surge buy signals from a wide variety of indicators. And cutting to the chase, this means that the outlook for the stock market going forward definitely favors the bull camp.

For example, our old standby, the 10-day advance/decline ratio of an equity-only universe flashed a new buy signal on July 21st (the S&P closed at 954.58). History (and the computers at Ned Davis Research) show that stocks have outperformed the normal returns for the S&P 500 over the next months (+3.4% average gain after the buy signal versus the gain of +0.7% for all one-month periods), the next three months (+6.4% vs. +1.9%), the next six months (+12.2% vs. +3.9%), and the next twelve months (+17.2% on average vs. +8.2%).

The "Options Speculator" - (your bookie):
VIX Signals S&P 500 Swoon as September Approaches
Options traders are increasing bets that the steepest rally in the Standard & Poor’s 500 Index since the 1930s won’t survive September, historically the worst month for U.S. equities.

Traders were betting the VIX, a gauge of expected stock swings, would increase 13 percent in the next five weeks, according to futures prices at the end of last week compiled by Bloomberg. That’s the biggest spread since August 2008, before the S&P 500 suffered the steepest two-month plunge in 21 years. The indexes have moved in the opposite direction 81 percent of the time over the past five years, Bloomberg data show.

VIX futures above the level of the index show investors expect fluctuations to widen and stocks to retreat. The S&P 500 has rallied 49 percent in five months, pushing valuations to the highest levels since December 2004. The S&P 500 gained 2.3 percent last week as reports showed home sales rose and the unemployment rate fell.

“It’s a danger sign,” said Ronald Egalka, a 36-year options trader who oversees $8 billion as chief executive officer of Rampart Investment Management in Boston. “People expect volatility to pick up in the future, and that implies that there’s going to be a downward movement in the market.”

The politicians:
Obama trumpets signs of improvementa
President Obama, armed with welcome - and somewhat surprising - evidence of an economic recovery, declared yesterday that “the worst may be behind us.’’

While many economists predicted, and White House officials feared, that the jobless rate would top 10 percent for July, the national rate declined slightly to 9.4 percent last month from the 26-year high of 9.5 percent in June - the first decrease since April 2008. The Labor Department reported that employers cut 247,000 jobs, the fewest in a year.

“Today, we’re pointed in the right direction,’’ Obama said in brief remarks in the Rose Garden hours after the unemployment report. “While we’ve rescued our economy from catastrophe, we’ve also begun to build a new foundation for growth.’’

He asserted that job losses are at half the rate when he took office in the worst recession since the Great Depression and noted that a week ago, the government reported that the economy shrank by just 1 percent in the second quarter, also better than forecast.

I'm not an optimist. Just a realist, I think the worst is behind us economically - and that the recovery is going to be very mute. No bang here. As such, I don't think it's a great time to speculate on "rocket" stocks. Keeping portfolios in balanced/growth portfolio makes some sense to me right now.


Friday, August 7, 2009

Friday Funny: Can your car be too 'fuel efficient'?

Yes it can. The body trap... one gallon of gas will last you a life time.

Related story: (not funny though)

'Cash for Clunkers:' One senator thinks it's welfare for the rich (USA Today)
Apparently, too many Mercedes-Benz, Lincolns and Lexus luxury barges are showing up on Cash for Clunkers lists. Now one senator wants to make reauthorization of the program, costing taxpayers another $2 billion, contingent on making sure only lower-income people benefit.

Sen. Tom Harkin, D-Iowa, would limit the program to individuals with adjusted annual gross income of less than $50,000 or joint filers earning less than $75,000, the Washington Post reports. It's one of several amendments likely to get voted down.

Yea... he was voted down. No limits, luxury cars are still traded for 'clunkers'.


Thursday, August 6, 2009

Yahoo Finance: Policymakers "Got It Right": Why Free Market Ideology Is Wrong

I completely disagree with the headline, though the person speaking in the video is very knowledgeable and does make sense. I don't think the 'free market ideology' is wrong - rather that risks were allowed to grow unchecked to the level where they were unknown even to those managing the big banks. It reached a pivotal moment where major "publicly owned" banks were too central to the entire nation and global economy - to the point that had they failed - a global calamity would ensue. So in my view - it was a government oversight failure, and legislative malpractice that caused and sustained the crisis. The "too big to fail" situation should have never been allowed, neither should have any of the risky default swaps AIG was issuing, as well as those mortgage loans to dead beats the government was imposing on banks. It's definitely a mixed bag.

One might misunderstand what is said by this guy - which is not that socialism is good. The headline is just too misleading.

Policymakers "Got It Right": Why Free Market Ideology Is Wrong [Click for video]
Just like the market's mood, economic orthodoxy moves on a pendulum - only the swings come far less frequently.
Generally speaking, from the 1940s to the 1970s, the prevailing wisdom in economic circles was that government was a force for good. Then came the Reagan Revolution of the 1980s, which steadily led to the dominance of free market ideology until the present day.

After the credit crunch of 2007-08, even free market stalwarts like Alan Greenspan admitted the ability of markets to self-regulate was a "flaw" in the prevailing view of capitalism.

But even after the implosion of Wall Street, a "high degree of residual [free market] ideology" remains, says Mark Dow, fund manager at Pharo Management, a global macro hedge fund with about $2 billion of assets.

This view that government isn't the solution, it's the problem is "impeding progress" and limiting policymakers' abilities to bring about necessary reforms to reduce the odds of another systemic crisis, Dow says.

Being a former staff economist at IMF and Treasury, it's not surprising Dow believes government has a role in keeping the market's "animal spirits" in check; but he's not advocating socialism -- far from it. Nor does he believe the Obama administration wants to maintain such a high degree of government involvement as currently exists, noting Tim Geithner and Larry Summers (particularly) are big believers in free market capitalism.

Whether the government and the Fed can get the "exit strategy" right is to be determined, but Dow has faith in policymakers and believes they've mainly "got it right" so far. It may not be perfect but he says actions taken to date "saved the system" - arguably from itself.

Well... politics aside, always aside on this blog - I do hope government will step back when it should, one can't blame those who see what is happening as alarming for raising flags and saying so.


Monday, August 3, 2009

How to download Yahoo historical stock quotes and store in a local database

I'm happy to introduce some sample code to demonstrate how one can use C# to download and evaluate historical stock prices from Yahoo finance services.

You can download the sample here:

The sample uses my Reflected Data C# Library (included in the demo zip)

The following code is just the main function:

static void Main(string[] args)


            // step 1: build url, download and parse data

            string ticker = "JCI";

            DateTime fromDate = DateTime.Parse("1/13/2007");

            DateTime toDate = DateTime.Parse("7/22/2009");

            Console.WriteLine("Downloading from yahoo: for stock '" + ticker + "' " +

                fromDate.ToShortDateString() + " to " +


            string builtUrl = buildUrl(ticker, fromDate, toDate);

            var readWeb = readUrl(builtUrl);

            if (readWeb == null)


                Console.WriteLine("Failed to contact yahoo web service");



            Console.WriteLine("Parsing web results");

            var parsedLines = (from txtLine in readWeb.Skip(1)

                              select new HistoryLine(txtLine, ticker)).ToArray();

            // step 2: analyze line by line to identify divedends and splits

            // the order by which records are download is known and assumed to be ascending date order

            Console.WriteLine("Looking up dividends and splits");

            for (int i = 0; i < parsedLines.Length - 1; i++)


                parsedLines[i].priorDayAdjClose = parsedLines[i + 1].AdjClose;

                parsedLines[i].priorDayClose = parsedLines[i + 1].closeValue;



            // step 3: pour new data into a database

            Console.WriteLine("Opening DB and inserting data");

            var dataFile = new DataFileSource(StartupPath + @"\stock history demo.accdb");

            var historyTable = dataFile.Table<HistoryLine>();

            historyTable.DeleteByDateRange(fromDate, toDate);


            // step 4: quickly do something with the data

            var chkData = historyTable.DateRangeSet(fromDate, toDate);

            Console.WriteLine(chkData.Count + " records imported, records web page:" + parsedLines.Length);

            Console.WriteLine("Max:" + chkData.Function(SqlFunction.Max, "High"));

            Console.WriteLine("Min:" + chkData.Function(SqlFunction.Min, "Low"));

            var lastRecordByDate = chkData.Sort("TheDate desc").First;

            Console.WriteLine("Last value:" + lastRecordByDate.closeValue + " on " + lastRecordByDate.TheDate.ToString("g"));