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Showing posts from February, 2009

Peak Boomers

You have heard of peak oil, I give you peak boomers. I believe demographics are a driving under-current of this crisis. Boomers, the generation born between 1945-1960 are now 50-64. The middle at 57. Peak boomers have finished buying ever bigger and bigger houses, theirs kids gone to college. They are done taking debt nearing retirement. Peak debt was reached and I believe that the straw that brought the proverbial camel's back is peak boomers going in reverse, deleveraging, helping trigger the current crisis. Of course the banking excesses took a life of their own, with endogenous money creation, but a driving force may have been peak boomers. The same case can probably be made for Japan 1990. Demographics...

The TARP explained

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My father sent me this series of pictures explaining the TARP, hilarious.






















And so on and so forth...

Cult of the Damned, Vampires, Children and Literature

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Why put up with high school and family life when you can live in eternal bliss with your demon lover? This is the question posed by Stephanie Meyer’s "Twilight" series, which apparently is very popular among teenage girls—and their mothers.

My friend Abby has read it and offers the following critique: “I'm on book Three now, basically like watching crappy TV: a relaxing waste of time. The heroine, Bella, falls in love with the school bad boy: Edward, a vampire who is bad, but good at heart (albeit controlling and dominating). He is perfect at everything and she is human and flawed, but bless his little heart, he loves her anyway. Isn't that nice? It's so nice that Bella quickly decides she needs to become forever damned herself so she can leave her human life and be with him forever even though this sets a whole bunch of things into motion (four long books worth).

Stephenie Meyer clearly has read the classics and name drops stuff from Wuthering Heights, Romeo a…

Winter Garden, February 2009

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Thanks to my father for taking these pictures, from our garden in Atlanta. There is something I love about the delayed gratification of a garden. All these specimens were planted last Spring, and this is the first time they have bloomed for us. There is something so cheerful about plants that will flower during the dreary month of February. With the exception of the daffodils, these are all fragrant plants--all suitable for the Southeastern US.


Edgeworthia close-up

Edgeworthia in its container

Sweetbox

Daffodils

Cinnamon cindy camellias.

Madrid Blog--Caprichos I, Taxi Driver and Philosopher

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In 1799, Francisco Goya published a series of 80 prints titled “Caprichos.” Per the Diario de Madrid, the subject matter was chosen from

"... the multitude of follies and mistakes common in every civil society and from the vulgar prejudices and lies authorized by custom, ignorance or self-interest, those that he has thought most fit to furnish material for ridicule, and at the same time to exercise the artist’s imagination..."

The fact that I don’t drive in Madrid has altered my perceptions in daily life. Whereas, in Atlanta, the car provided a little climatized bubble transporting me, my music, my drive-through Starbucks decaf mocha and my progeny from one place to another; here I walk, take taxis, buses and the metro. This brings me into contact with all kinds of people, none of them from any exalted social, political or business plane. They do, however, have plenty to say.


Taxi Driver and Philosopher


Taxis in Madrid are plentiful, reasonably priced and most often driven by n…

Ugly comments from FT

3 articles in the FT comment section this morning each in its own way harbinger of bad news.

1- Obama's lonely quest for consensus
On the one hand the dems are throwing every pet project they had floating around in that bag. On the other the republicans are trying to block based on ideology and size (too big they say! more tax cuts! after years of Bush that one made me chuckle). So they appear as ideological radicals and not ready to compromise. All in all a shameful and a wasteful spectacle for the rest of us. Politicians are failing to raise up to the occasion for lack of pragmatism across the spectrum.

2/ Narrow-minded leadership hurts Europe
In here munchau lambasts the europeans for defaulting to what they can do: regional stimulus packages that beggar thy neighbor. Sarkozy is talking bullshit across the board and appeasing the french voters. The Austrian banking system in imploding the Germans are refusing to bail them out "not our problem" etc etc. Protectionis…

Fair value of SP is 450?

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Via the big picture, a collapse of earnings on the SP 500. By putting a 15x multiple on it it gives us a SP at around 450. Now that is truly scary.

Of course Earnings are hit because the assets are going down and it shows up on the balance sheet in mark to market. Cash flow from operations is another measure of health that is not dependent on asset prices and something tells me a lot of people are going to start looking at that in short order since earnings will be bad with a vengeance. There is also this meme to announce all bad news at once because when you are in a horrible market like this one it hurts you less. So yes I want to believe the market will hover above those depths, but fair value is fair value and it demands a lot of luck and suspension of disbelief to avoid fair value in a bear market. Bear markets are notorious in that they revert valuations to fundamentals and unfortunately fundamentals of earnings look very impaired.

The bottom line is that markets are still ve…

We hate you guys

The FT has interesting coverage on China's position re: US Treasuries.


Luo Ping, a director-general at the China Banking Regulatory Commission, said after a speech in New York on Wednesday that China would continue to buy Treasuries in spite of its misgivings about US finances.

“Except for US Treasuries, what can you hold?” he asked. “Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.”

Mr Luo, whose English tends toward the colloquial, added: “We hate you guys. Once you start issuing $1 trillion-$2 trillion [$1,000bn-$2,000bn] . . .we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.”

You gotta love this guy! Obviously the out of control spending is impacting the dollar but in a positive loop buying USD denominated treasuries will prop up the USD. The good news is that they say they will continue buying treasuries. I have this theory that Ch…

Geithner's Financial Stability Plan (FSP)

Markets barfed at the announcement of the FSP (-5%) and the $2T number and finished with a funky 7888.88 on the DOW which made me think there was some chinese manipulation of the market since chances this number comes up is 1 in 100,000. My OCD is kicking in big time and I am obsessing on these numbers.

Anyway, I went out and read the coverage and the transcript of the fact sheet. In a nutshell, the plan is somewhat tough on banks and wall street didn't like that. Of course they didn't. Most investors cry wolf when they see pork in politics but would rather see a discreet appropriation of public funds to prop the bad banks, well there is little of the sort in the fact sheet except for the securitization bit.

1/ A stress test for banks
The fact sheet talks about a stress test for banks to see if they can sustain a further deterioration of the economy. A bit vague on the one hand. On the other "sustaining deterioration" is out of the question since the system is largel…

The God of Carnage/The Queen of Love and Beauty

I just missed Yazmina Reza’s play “Le Dieu du Carnage” (Un Dios Salvaje) in Madrid. The premise sounds hilarious.

From Wikipedia: the play is about two pairs of parents. The child of one couple hurt the other at school, so the parents meet up in order to discuss the matter in a civilized manner. However, as the evening goes on, the parents become increasingly childlike, resulting in the whole evening going into chaos.
From the Times Online (commenting on London performance): …All the characters are unheard. Nobody gives the other person time. It’s an accurate assessment of where we’re at. There’s a real urge...to hear the word “sorry”, but nobody is willing to say it out loud because of the litigious hand that hangs over everyone now… You take two children having a fight - who says sorry to whom, and whether they should or not - and you blow that up to their parents and beyond that to any political argument. We live in a therapy culture. Nobody is at fault. But if nobody’s at fault, th…

La Guerra de las Galaxias

I do take my children to more “cultural” activities, I really do, but last weekend, I needed a family outing, to which I could actually convince my husband to accompany me, that also takes into account the fact that I have two six year old boys. They are interested primarily in two things—fast vehicles, fighting and weapons.

Thus, we found ourselves at Star Wars the Exhibition in Madrid last Saturday. Unfortunately, all the places for Jedi school had already been filled up until later in the evening. Naturally, this invalidated all our bribes of the morning—“If you don’t stop fighting with your brother, pick up your clothes, brush your teeth, etc. You won’t be going to Jedi school. Only the worthy padawans make it to Jedi status, and so on...If you plan to attend this exhibit with your children, reserve ahead for Jedi school.

I honestly wasn’t expecting much, maybe some old props or vintage 1970s Star Wars dolls, but actually the exhibition was very well put together. What impressed me…

The Secret Life of Bourgeois Women

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We are having lunch with the Dueña at the Barril de Arguelles. We’ve come to that part of a lazy Spanish lunch, the kind that I don’t take very often, that starts at 2:20pm and ends at 5:30pm, the point where you’ve finished the coffee, and you aren’t quite ready to go. You’ve moved on to the fortified alcohol.

My husband is discussing the lifestyle change involved in moving from suburban America (Atlanta) to life in the more urban part of Madrid. “My wife is outside the apartment from morning until the afternoon. I don’t know what she does all day. I suspect she has a lover.”

The Dueña belongs to a Spanish generation that made the transition from the rigid post-Civil War era to the freewheeling post-Franco era, where, as my husband put it: “They had to close down the local titty bar in Puetro Pollensa because you could see the same thing for free on the beach.” Spanish cultural background aside, the Duena is familiar to me, if I am not to her. I grew up with women like her--well-bred …