Thursday, May 29, 2014

After watching all, a revisit to comments on "The World Wars" on the History Channel

On Monday, there was a positive post here on "The World Wars" on the History Channel after watching the first of three episodes.  After seeing all three there is a different perspective on this mini- historical series.

Given my interest in and knowledge of history, the short series was enjoyed, but not without qualification after getting the full picture.  As mentioned in the Monday comment the focus was on leaders, both tyrants and heroes.  Whether that singular focus has merit is a question for the ages, a few unique and powerful people versus the tectonic shifts of historical events.  That question will not be answered here.  The people focus made for interesting and accessible viewing.

This film was incredibly U.S. centric.  There were many instances of this.  One perfect example of was the taking of Sicily by the allies in 1943, finally getting a foothold in Europe.  Everything in "The World Wars" about this action was attributed to Patton and the U.S. troops.  In fact Montgomery and the British were fully involved as well.  They split paths, with Montgomery taking eastern path through Sicily and Patton through the middle and west.  These two humongous egos raced with their troops to see who could get to Palermo first.  The U.S. made it just ahead of the Brits, and were waiting in the town square with a brass band to welcome their fellow triumphant allies.

In the conference in Tehran in 1943 with Churchill, Roosevelt, and Stalin, Roosevelt, in the film, was seen as the main one talking and directing, with Churchill mute.  How unlikely is this?  Combine that with the fact that the most important meeting of the three leaders was in Yalta in February of 1945, and that was left out of the film.  That's the summit in which a sickly Roosevelt yielded to Stalin, and against Churchill, to cede all of Eastern Europe to Stalin's control when the inevitable conclusion of the war unfolded.  That set the table for the "liberation" of Poland by the Russian Army, Russia's long term bitter enemy, in which every woman between 8 and 80 in their path of "liberation" was raped, abused, and possibly killed, while small. town leaders were hung in town squares as soon as the Russians arrived.  What a slaughter Roosevelt blindly facilitated.  May Jan Karski someday be vindicated more completely.

This is much more than tedious nitpicking.  Some of the facts were seen through an agenda that, while not veering from actual facts exactly, distorted those facts by omission in numerous instances.  This was accessible and interesting history, but not reliably good history.  

Wednesday, May 28, 2014

Why not try another social media writing site

Writing is a form of relaxation here, without special sensitivity to the amount of talent that is brought to the table and done spontaneously at almost all times.  I signed up for this blogspot site nine years ago as soon as a friend told me about it.  The "Eyes Not Sold" name was created without any thought that it would live on, in fact need to live on.  No post categorizations were input, and then it eventually became too late to do so.  Without any forethought of consequence, ENS became a part of my life.

At about the same time LinkedIn was joined.  A brief resume type questionnaire was filled out of course, but there was no follow up on my part.  Occasionally there was a look at the site to see what showed up, but I  had no real interest.  Unless some perfect job came from out of nowhere, and it didn't, there was no follow up.  Despite all of that, it seems that my experience was not within the norm.  The stock after the IPO should have been bought.

Then the same friend more or less badgered me to sign up for Facebook.  At first there was no interest here at all.  For several years my "friend's" list totaled seven.  Then over time a few more "friends" approached and were added and a few were actually approached from here.  There was still little comfort with the site.  Then somehow high school classmates and hometown acquaintances became the core of Facebook here, and the "friends" list grew.  If someone wanted to be friended, a why not attitude developed.  The friend's list reached around 90 a couple of years ago and has remained static. Occasionally a comment comes from here, but mostly now I scan Facebook a couple of times a week and check a few likes, and infrequently add a comment.  It is not a major focus, and one ridiculously simple reason is that I no longer take any photos.  That's the core of Facebook it seems.  Everyone seems to have a wonderful life.  To suggest otherwise would be bad taste.  After all of that, relatively speaking there is a big investment here in Facebook stock, most bought after its initial collapse.

A year or so ago Twitter was signed up for, but that just didn't make sense.  Within days of signing up several people sent requests to join or follow them, I don't know which, but they were generally speaking people from my prior work life whose backs I had been pleased to see.  No interest here in going in that direction again.  The other thing about Twitter is that it seems to be a way for name brand people, with the help of their pr minions, to build followers, and for followers to get their kicks by identifying with the name brands.  And 140 characters, Twitter just didn't add up for this writer.  Still, while remaining completely skeptical, there were some shares of TWTR bought here after the recent collapse.  If there is any comfort to be found, more will be bought at this price.  Trash rules.

Now, and to the point of this meandering post, Medium has been joined.  Some writing was done there tonight, or maybe it should be called cribbing, as it was from a post here that was just marginally rewritten.  By writing something, I am trying to figure out how Medium works.  It looks time consuming, but it may be worthwhile.  More to come...

Are Tumblr and Instagram far behind.  Yes,  they probably are.  

Tuesday, May 27, 2014

"The World Wars" on the History Channel

"The World Wars" focuses on the first and second world wars, and the linkages between them.  It is a three part series that began last night and continues tonight and Wednesday.  For those with an interest in history, it is well worth watching.

When analyzing wars, the focus can be on the clash of cultures, the devotion to competing ideologies, the stages of civilization of competing forces, or on individual leaders, among no doubt many other approaches.  This series focuses most intently on leaders, famous and infamous.  In the first segment, the WWI experience of Churchill, Patton, MacArthur,  Hitler, Roosevelt, Lenin, Mussolini, and Stalin are most prominently focused on.  The Japanese experience at Versailles is covered briefly as well.  All of this is meant to show how WWI, the Versailles peace accord, and the experiences of future antagonists set the stage for WWII.

That thesis is accepted common wisdom but the way it is approached here, at a personal level, is compelling.  While the broad brush of these events is well known here for the most part, individual details were at times new.  The impact of the ongoing battles between Mexico and the U.S. on the ability of the U.S. to focus seriously on Europe at first, and then on the U.S. decision to join the fight was not front of mind knowledge here.

It is apparent at first glance that this series will be a boon to high school history teachers for years to come.  There are regularly shown maps detailing the progress of the fighting and the countries of the combatants.  Geography is not second nature to young people these days for reasons that we could all guess at, right or wrong.  A story line that is based on individuals rather than bigger picture historical trends is much more watchable and attention grabbing for many.  While looking at that bigger picture still has great value, "The World Wars" approach was entertaining, informative, and meaningful as well.

We look forward to two more nights.

Sunday, May 25, 2014

Classy move by President Obama

President Obama's trip to Afghanistan today to meet with the troops was the right thing to do at the right time.  Showing support for their mission and tenacity is only fair.  They have the difficult task of winding down a commitment while protecting Afghanistan's stability and themselves.  Of course some politicians in the U.S. will no doubt accuse him of doing this solely for political purposes, but they say that about any action he takes.  What they say is not important.

Obama did not surround himself with generals when he spoke to the troops.  He did not use this trip as an opportunity to cajole Karzai or Abdullah, or to have major discussions about strategy with our leadership there.  Of course he no doubt received some first hand briefings of value, but it is clear that his primary purpose was to meet with our soldiers on the ground.

It's hard to think of anything more appropriate for him to do on part of Memorial Day weekend. 



All of a sudden it's summer.  Not the official season of course, but the weather is perfect today.  It's the kind of late spring weather that most people wish would be the coming summer weather.  Clear blue skies, sunny, 78 degrees, little humidity, and a slight cool breeze make for a fine day.  The temperature will go down to 58 tonight leading to refreshing Memorial Day morning for the annual parade in our small town, and then it will rise to 83 during the day for the beach people, as, stretching east, Coney Island, Long Beach, Jones Beach, and Robert Moses State Park will be packed.

All windows down, driving around today doing errands was pleasant.  Buying some begonias for the front yard planting space in front of the hedges was the first "chore" to get done.  Impatiens apparently have some blight and will not be back for several years.  Yeah, I know that it's a little late for optimal planting time, but many others were out doing the same thing.  I will not be alone having fully bloomed plants in mid-July.  Then on to North Shore Farms for some salad stuff and Ben and Jerry's Vanilla ice cream, a staple here that is no longer available at Whole Foods.

Walking around in light jeans and my spiffy "Daily Yonder" t-shirt, everything seems casually perfect even if the agility here is no longer quite what it once was.  This kind of weather always made me yearn for an ocean breeze, a walk on the beach, and sitting on a boardwalk deck eating a hot dog with too much mustard and sauerkraut and fries with ketchup, food that would only taste good at that particular place and at that moment in time.  After foregoing the beach for various reasons in recent years, last year I struck out on my own and drove to the best beach in the area at Robert Moses.  It was hot and the walk to the best spot was longer than remembered.  I spread my towel out, got out a book, and tried to settle in.  I stood up and stretched in hopefully a way that was not obtrusive and would be relaxing, and then laid back down on my stomach, book propped up in front of me.  Then it hit me.  What am I doing lying in the dirt sowing the seeds for another basel cell carcinoma, or at least yet another of multiple biopsies over the years.  I packed up and took a sweaty walk to the concession stand, but they had no hot dog buns and their french frying apparatus was broken.  I did not want a bunless dog.  My beach joy was broken too.

This year there will be, I know, a few weekday walks on the beach and on the boardwalk in t-shirts and jeans or shorts, but the old exuberance for diving into the water and reading in the sun seems to have passed.  Maybe, maybe not, for the dive into the ocean.

Welcome warm weather, at least for now.  

Friday, May 23, 2014

Gridlock city

Manhattan and the major arteries into the city have become more intensely crowded than ever in recent years.  Taking the Long Island Railroad, using subways, and cabs at times, the impact here had not been great and the experience had mostly been missed.  Not so recently.

Out of necessity, several times in the last month I have taken a car service into Manhattan for doctor's appointments.  The drive into Manhattan was helped by the midday timing but once into Manhattan it was bumper to bumper almost everywhere.  Even driving in areas like uptown 3rd Avenue were packed.  That was not remotely the case even five years ago.  The drivers blamed bike lanes for both taking over space and leading to trucks needing to park in formerly drivable space in order make deliveries.  They also note that pedestrian malls like the one in Times Square and around parts of Herald Square have eliminated major parts of 7th Avenue and at the edges of 6th Avenue.  Apart from the driver's thoughts, my best guess is that the problem is just simply more cars.

Yesterday was a live first hand experience with what is going in this traffic.  We drove into Manhattan to visit K's ailing parents.  Despite their lack of much awareness, the event was my father-in-law's birthday, and K's sister from upstate was with us.  This required us to bring food and desserts, thus the need for a car.  I drove.

We left our suburban home that is only four miles from the Queens, New York City border, so obviously this is a close in suburb.  It was 11:30am as we backed out of the driveway.  The usual area traffic was there but we made it to the Long Island Expressway easily and then merged into fast moving but thick traffic.  Within a few miles we were in slow moving thick traffic.  A few more miles and we were in bumper to bumper creeping traffic.  We made it to the Brooklyn Queens Expressway in this fashion, circled around the entrance ramp and squeezed our way into bumper to bumper stalled traffic.  For a while it did not move at all and then ever so slowly the crawl began, with the only occasional entertainment being New Yorkers getting out of their cars and into the roadway to scream at each other or at truck drivers.

By 12:15pm we were near the entrance to the Williamsburg Bridge(this is approximately 15 miles from our house) and worked our way into the appropriate lane, and then it was bumper to bumper to Delancy Street.  Relatively speaking, we made it to Bowery and then down to the apartment tower on Worth Street without major issues, although needless to say it stayed crowded.  At 12:35 we were there, extremely ready for a pit stop and a little frazzled.

If this has been tedious to read, then I got the point across.

We began the return to our north shore Long Island home a little later than was hoped for, at 3:45pm.  The late afternoon traffic was underway.  K's sister was manning the traffic warnings and GPS suggestions on her Iphone, and we headed up Bowery.  As we moved toward Delancy the traffic became intense, as aggressive drivers nosed into every crevice of space.  Then came news from the Iphone that the Williamsburg Bridge was completely stalled with traffic, no movement there or on the BQE.  I made the executive decision to head uptown to the Midtown Tunnel at 34th Street.  The entire way up Bowery and eventually up Third Avenue was moving one block at a time.  In order to survive I became an aggressive driver as well, as there was no choice.  Doing that was also much more entertaining than sitting as a passenger.  Somewhere around Bowery and Houston, I maneuvered a pass of the double linked bus that we were stuck behind in the right lane.  It was fast and possibly stupid, but it worked.  Finally we made it to the midtown tunnel access road that K spotted.  It was already after 5pm.

We made it through the toll booth area with surprising ease, and then began our ride on what looked like a free flowing I-495.  The free flow stopped after about a mile, and again we were in bumper to bumper traffic.  It finally began to move more rapidly and dangerously as we approached Nassau County, and then we edged our way right to exit, a responsive engine required.

When we finally hit the driveway again it was 6:05pm.  That's 2 hours and 20 minutes from when where our 22 mile drive began.  Getting out of the car I felt almost too crippled to make an emergency bathroom visit.  K's sister said, "why do you live here?"  I really didn't have an answer. 

Thursday, May 22, 2014

"Not involved"

A New York Times article today starts with, "President Obama was not involved in the decision to indict five members of the People's Liberation Army, an administration official said."  The article then implies strongly, as if it would be odd to think otherwise, that the Justice Department has been building its case for several years and it is their territory.  A Justice Department official, was quoted relying on a condition of anonymity, "Our message wasn't getting through".

First question is when is the Justice Department in the position to independently make important foreign policy decisions.  Second question is when does an important issue rise above the level of trivial so that Obama can focus on it.  Third question is was the administration official lying?

The charges of corporate espionage against Chinese operatives may be right, almost no doubt it is, but there must have been a better way to handle this.  After all of Edward Snowden's revelations, the administration's charges were low lying fruit for every propagandist around the world, and even some truth tellers.  On top of that, how can the U.S. set the precedent for indicting other country's individual citizens for crimes, and not deal with the bigger picture of government policy as well.  Sanctions, tariffs, patent resolutions and charges, well I guess that was not the chosen direction so, they maybe said, we'll just pick out five individuals for a showcase media trial, in absentia, in the U.S.  This was a naive idea to start with.  If the idea did actually come from Obama it shows that once again he puts his emotion and political positioning ahead of a real thought process, and if it did not come from Obama that's worse.  Our fears are confirmed, and he has become a disengaged self absorbed President.

There's more to come on this, one could expect.

Wednesday, May 21, 2014

Where to invest in breakfast

The thought occurred here that the baby boomer aging trend may be good for breakfast.  What percent of boomers now wake up early with little chance of falling back to sleep?  Do they have spouses, former co-workers, friends, and acquaintances who have the same pattern.  Where does one go for a cup of coffee and a place to wish a few folks good morning?  Where does one get, relatively speaking, the most affordable good meal of the day?  It's all at your local diner or in many cases at those chains of restaurants that focus on the morning meal.

That English muffin toasted with butter and jam, the plate of eggs, with toast, with hash browns, with grits, with bacon, with link sausages, with a slices of tomato, with whatever, it's a potential for a heartstopper breakfast that some would say is worth the risk.  What about oatmeal with brown sugar and raisins and some grapefruit, or some cream of wheat with a bowl of cantalope, maybe that's the healthy ticket.  Or one could go the fill me up route too with pancakes, waffles, syrup, or whipped cream, add strawberries and blueberries to pretend it's healthy, anything goes.

This should be a growth business if demographics and social inclinations mean anything.  While this often can be a good entrepreneurial local business, the large chains dominate the highways, interstates, and suburban areas.  For those chains that are private companies, there is little way to invest in whatever opportunities they are seeing.  Companies like Waffle House, Biscuitville, and Huddle House seem happy to be on their own so business must be all right.  For national chains that are publicly traded, the business does not look that easy for some.

The firms looked at here are Bob Evans(BOBE), Denny's(DENN), Cracker Barrel(CBRL), and Dineequity(DIN).

Bob Evans looks like either a train wreck happening or a huge opportunity if a few important things fall in place, by force or by luck. Shorts cover 12% of the share base. The company is not making money of late and it appears to desperately need a new committed bank line, as virtually all of its debt has moved to short term.  It does have $486 million of shareholders equity on a $1.1 billion balance sheet, not bad, but that balance sheet has $512 million of current liabilities.  On top of the obvious financial issues, the CFO recently resigned and one of its top institutional shareholders is challenging three new board members as inappropriate, citing years of poor corporate governance.  The company has a chance, but seems to need a severe management arm twist to see the light.  This is a play for investors with a high risk tolerance, meaning if things do by chance work out, there should be a high return.  Dividend yield is 2.6%.  Shareholder base is relatively weak apart from L.A. based NWQ, where Jon Bosse, a thorough value based investor who was once well known here, is co-president and Chief Investment Officer. That unique aspect to the shareholder based is accurate unless one knows good things about BOBE's largest shareholder, River Road Asset Management of Louisville, KY.  I have no information, but once did like the take-out from the Kingfish Restaurant nearby.

Denny's has an amazing balance sheet and not in a good way.  It has $6 million in shareholder's equity on its $288 million balance sheet.  Fortunately $166 million of that balance sheet is long term debt. There have been revenue declines over the past five years but the last five quarters have been flat.  The company turns a modest, as in really small, profit each year.  Securities analysts are almost uniformly bearish but, a shock, the top ten shareholders include Fidelity, T Rowe Price, Wells Fargo, and Brown Advisory.  There must be something that is not known here, some intangible like promising management?  I don't have the foggiest because on the surface things look bleak.  There is no dividend and but short interest is just 2.9%.  If you like the food and morning atmosphere, then take a walk on the wild side and buy a few shares of this stock.

Cracker Barrel trades at around $97, well below its $118 high for the last 52 weeks.  The dividend yield is a rewarding 4.2%.  Short interest is at 4.7%.  Revenue has grown modestly but steadily over the past five years, each of which has been reasonably profitable.  P/E ratios do not seem to be inflated, especially relative to industry peers.  Everything looks like an anomaly for this industry, meaning it looks good.  The wild card here is that 20% if its shares are owned by Biglari Capital or Biglari Holdings.  These are the successful investment vehicles of the aggressive Sandar Biglari.  This is my first introduction to Biglari, and have no way to predict how this will affect future performance of CBRL.  At the moment it is definitely putting pressure on management but whether in a constructive manner is not known.  Still, given the long term thesis here about the breakfast business having a demographic growth aspect to it, this is an interesting stock. Summer car travel season is just beginning.  Cracker Barrel's tourist chachka business will thrive.  Surprisingly, a toe was stuck in the water here as this casual research was being done.

Dineequity was included here because it is the holding company that owns International House of Pancakes or IHOP.  Its other major holding is Applebee's, which is even larger than IHOP.  Making an investment primarily based on breakfast here is not possible, and information on the IHOP financials as a subsidiary are not available here.  So why is it written about.  Solely because it has IHOP, which is too ubiquitous to ignore.  Dine Equity as a whole does not look like a stock to buy at the moment, but it is does not appear to be overly stressed.

Time to hit the hay, and for breakfast tomorrow it will be...home or Louie's, the local town diner.


Tuesday, May 20, 2014

Market edginess continues, with no help from retail or Holder

The U.S. stock market continued to be volatile, with another jump on the slide down today.  Comfort is not what equities are about these days, but let's be honest.  There were a lot of gains across the board for the most part in 2013, and 2014 is turning out to be just above flat so far.  Certain discreet sectors, as in sectors beneath bigger labels, and of course certain stocks have done well, but sitting back and watching one's chips pile up has not been in the cards.

Retail led intraday headlines as being the culprit, with some value clothing chain stores disappointing and Staples having a material miss.  It's not clear that these results are a big deal as it is not news that there is little to drive new traffic in places like Marshall's and TJX,  and Staples has been a firm that somehow can't escape chronically poor management.  The bigger news in retail was two divergent stories.  Home Depot did well as the traditional spring sales pick up has not disappeared while Dick's Sporting Goods performed far below expectations.  That company looks to have been expanding too fast, too early to tell though.

Behind the scenes the bigger issue from this perspective is the Credit Suisse judgement, and the associated criminal charge.  While regulators have apparently agreed to forego the more punitive aspects that this charge could have led to, this sets a precedent that the Obama and Holder duo want to see.  The stock price of Credit Suisse was not materially affected by this today, but that is not the issue.  Some in Congress and in the administration seem to enjoy this a bit too much.  Certainly the prosecutors do, not the least of which is Holder.  Credit Suisse should be held accountable, but there is suspicion here about what the longer term agenda really is.

One could easily believe that some in the financial markets feel the same trepidation.    

Monday, May 19, 2014

Censorship, from the perspective of Eyes Not Sold

Lying in bed last night resting and comfortably, but with sleep not coming, not unusual at times, eyes closed my mind wandered into thinking about the extent to which this inconsistent blog is subject to censorship.  Its been a curiosity here for some time, but this morning I looked at some stats related to Russia.  Blogspot began providing greater functionality three to four years ago to allow locational tracking of pageviews, among other things.

Since that onset of greater functionality, Russia in the aggregate had represented 20% of all non-U.S. pageviews and was the largest foreign country viewer.  Fyi, non-U.S. pageviews overall  represented 16% of total pageviews.  Over the last nine months there had been a significant lessening of Russian looks at ENS and it is, one could think, no coincidence.  In fact, this past month Russian pageviews were 6, an immaterial amount, and last week 2.  Russia may be clamping down on all U.S. blogs, or they could actually be looking at content.  If the latter is the case, the commentary on Pussy Riot here as well as some critical as well mocking remarks about Putin from time to time would have not been well received.

China was the second big interest.  The problem is that it is unclear whether China in the blogspot definition includes Hong Kong.  Based on the stats, it probably does.  I checked Baidu, the major search engine in mainland China, for listings of John Borden, which brings up ENS rather quickly on most U.S. search engines.  On Baidu it brought up a State Farm agent in Dover, Delaware, multiple mentions of a John Borden who wrote a book called "American Money" in the late 1800's that appears to be some treatise on the currency, a John Borden who wrote some commentary or a book on the romantically challenged male who stays in his marriage, and dozens of mentions of Lizzie Borden, or Lizzy Borden.  No ENS.

As to the pageviews here, China represents almost 5% of  non-U.S. pageviews since the tracking began,  and has continued to have some reasonable flow, which suggests that Hong Kong is part of the puzzle.   Mainland is presumably protected from these subversive thoughts.

Of course, this seemed interesting here, as a small piece of evidence of censorship in action.

Sunday, May 18, 2014

That never ending 20/20 hindsight

Academics and market pundits continue to take a look back and explain how everything was done wrong.  What is referred to here?  Of course it's the mortgage market collapse that precipitated a financial liquidity crisis and led to the great recession.  This flow of second guessing seems to be never ending.

The NYT reports today that two top academics, one from the University of Chicago and one from Princeton, published yet another book , "House of Debt", analyzing the crisis and explaining how it could have been foreseen earlier and could have been handled better.  In their photos they look proud.  Enough already, it has been 7 years since this problem began to become visible and already more than five years since the full collapse happened.  Couldn't they have shared their wisdom a little sooner.  Sorry, I forgot, they are tenured academics, not in the fray and not interested in getting their hands dirty.

In all of this non-stop chain of commentaries on the crisis there are a number of major issues missing.  First, a real crisis is something that happens in real time, as in real stupid fast time.  My time in the cross hairs of banking spanned the 1990-1991 real estate, energy, and sovereign debt fueled recession, the '97 Asian foreign exchange crisis, the '98 Long Term Capital Management collapse that inspired a global credit liquidity crisis, and the collapse of the technology equity boom, and my view is that the most dangerous of those the events by far was LTCM.  Fielding unanswerable questions in my office that October 1998, and watching top executives traipse down to the New York Fed every morning and not come back until, at best, late evening, was unsettling.  Global credit markets were moving toward complete gridlock, and in fact already in a day by day seize up.  There was no guarantee that this would work out, none whatsoever.  Finally almost all of the major banks came to a compromise agreement, not cheap, on how to backstop the situation.  There was one major holdout, Bear Stearns.  Was Jimmy Cayne smoking pot and playing bridge?  Oh well, one could guess they eventually got their comeuppance. 

The best decisions are not always made in this type of environment which would certainly include some aspects of 2008, but if those decisions kept the markets flowing one more day, week, month, year, for that time frame they worked.  That's one aspect that these 20/20 hindsight books have no concept of it seems here.

A second barometer of how this market collapse was simply not anticipated could be seen in tracking the investments of major institutional investors and mutual funds.  Much hedge fund data is not available.  What one will see is that many astute investment managers and highly rated investment firms with strong track records stayed invested fully for too long and not intentionally.  There are many reasons for that but a major one was that even most smart investors had no idea until it was too late that $60 billion of credit default swaps were written against $2 billion of securitized sub-prime mortgages.  That issue was written about here ad nauseum here in 2008 and 2009 so will say no more.  The problem of lack of transparency in and availability of this type of derivative still exists believe it or not.  How many academics had any idea of this problem at the time.  None one could guess, but that 20/20 thing is sure nice.

Eyes Not Sold first wrote about a pending mortgage default problem on 2/07/06 and again on 8/24/07, and many more times after.  Of course those posts were suggesting that it would or could lead to a mild recession.  Things got far worse.  There are many more reasons for this beyond the two points discussed above, but they seemed to work well for my purpose here.


Friday, May 16, 2014

A comment today on a book and a film

---Courtesy of Netflix, "The Intouchables" was seen here tonight.  This 2011 French film, a combination of humor and drama, was a huge hit in France and Germany, but less so in the rest of the world.  We enjoyed it, just relaxed and suspended critical abilities.  Based on a true story, one of an extremely wealthy quadriplegic and his free spirit French African caretaker, the film has the design of a soft tearjerker, but the many laughs plus the foibles of the wealthy man's entourage and the caretaker's background and family can push that thought out of mind.  It is, after all, a true story.

---It appears that at some point I will need to read "Stress Test", Timothy Geithner's reflections on the financial crisis, or on financial crises in general.  On CNBC and on Bloomberg radio it has been difficult over the last few days to find any pundit who is not trashing the book.  In their opinions Geithner is making himself look good at the expense of others and failing to understand many aspects of the 2008-2009 time period, and beyond that in his tenure as Secretary of the Treasury.  On the contrary, the book's cover blurbs are from Warren Buffet, Doris Kearns Goodwin, and Walter Isaacson, all heavy weights, and they could not be more positive.  With advance copies, it is likely that they actually read the book, while it is unlikely that even half, at most, of the media snipers read anything more than a few chapters.  They already had their opinions of Geithner and were just looking to find a few sentences for reinforcement.  And that's why I eventually need to read the book, or at least a few chapters.

Thursday, May 15, 2014

Nowhere to run

The equity market was brutal today.  Across the screens and among the accounts that are followed here, red was the color of the day.  Even bond funds which pundits were highlighting had miniscule gains it seemed.  One could guess that they were pleased to see something on their computer that was green to talk about.

It was great news to see that in the last two hours of the trading day about one quarter of the day's losses were erased.  That's how bad it was, relief there was no panicked close even as losses are still eye-catching.  Oh well, if stocks just go straight up, they generally go straight down at some point.  It would be better if any downturn would be more gentle, but, as was said here a week of so ago, even on good days the market is on edge now.

On a market day like this, I try to hide.  I find errands to do, books to read, a trip to the library,  ice cream to eat, e-mails to write, guacomole and chips, anything to not deal with a situation over which I have no control.  How to trade a market like this is a mystery to me.  It would be too easy to make a stupid decision.  Tomorrow could be interesting, but I hope not too interesting. 

Sunday, May 11, 2014

Mother's Day, 2014

Certainly it could be said that eight years later, it might be strange that I would be driving around listening to James Booker, William Bell, Meschiya Lake, and "Exile on Main Street"(Sweet Virginia, that has nothing to do with Virginia), and thinking about her.  Probably not of course.  She loved this music as much as I do.  Now I am reading "Sycamore Row" by John Grisham, and his books were ones that she always read.  For me, they are default books, he can tell a tale well, but I am in between the literate and the just completely horrible war stories of non-ficiton that are well written by Dexter Filkins and Mark Mazzeti..

She was attracted completely to Grisham, as she was a legal secretary.  She was in fact much more than that.  The firm, started as Meade Tate and Meade in Danville VA, specialized in both sides of health related cases,  and she became a specialist in writing the attorney's briefs, some of those attorneys not too swift.

She "retired" when she was around 75 when she was tired of the jibber japper of other secretaries.  She was the quiet and serious type.  She continued to work on briefs and be paid by the attorneys, somewhat generously, until she was about 80.  Then the familial dementia began to slowly step in.

She was the person who believed in me.

Happy Mother's Day, born 2/24/20, died 2/26/06.  Still with me.


Saturday, May 10, 2014

Small caps retreat

The favorite here over the last five years has been small cap stocks, the indexes and the unique choices both included here.  Now there is finally some withdrawal, not that it is wanted.  The Russell 2000, a small cap index, is down 7.4% from its peak a few weeks ago while the Russell 1000, mostly large caps, is down comparably just 1.3%.

The bet here is still on the small caps, but wary of small cap techs and biotechs.  There has been too much hype and hubris in that sector, but home runs will still be hit and keep investors engaged.  Long shots will be propped up.  Long shots will lose money.  One win could erase all losses for hedge funders, so they stay in the game, as do the writer.

Small caps apart from tech and biotech have continuing promise.  Any diversified portfolio needs a healthy dose of a total market or extended market index when looking at the long term.  Hopefully I am not wrong.

Friday, May 09, 2014

Mojo Nixon's mother

Driving around Long Island yesterday, we were listening to the Sirius XM radio show Outlaw Country hosted by Danville, Va native Mojo Nixon.  On this program it is customary for there to be sound bites from both well known and obscure country and western musicians, usually promoting Outlaw Country as well as making crude and profane remarks about Mojo, in Outlaw Country's style of humor.  Half listening at first as we headed to LL Dent, I tuned in as a female voice began talking about Mojo.  She said he was born Neil Kirby McMillan, grew up in a supportive and stable family which always attended Mount Vernon United Methodist Church, made a few more remarks saying that she didn't really know this Mojo Nixon, and concluded by saying, "I don't know what happened".

Early on I realized that it was a recording of Mojo's mother.  She was a good friend of my mother at church and in various women's groups around town.  She had a since of humor as did Mojo's father who died way too soon.  If my mother was still with us, I would have loved to have shared this with her.  She would have laughed.

Thursday, May 08, 2014

Dinner at LL Dent

Tonight we had dinner at LL Dent, a new discovery for all.  LL Dent describes itself as "American cuisine with a Southern flair."  It is run by a black family from a small town near Augusta, Georgia so some might call it a soul food restaurant.  It is located in a strip mall about ten miles from us, a drive through suburbia to Old Country Road.  It could be called Old Mall Road, as there is no visible country in sight.  There is a certain symmetry to this two mile area as it is all restaurants and shopping, with no car dealerships or gas stations.  LL Dent is sandwiched by a Red Lobster and a Five Guys.

It's a nice and comfortable place.  After being seated the owner, Lillian Dent, came to our table to welcome us and chat for a few minutes.  What attracted my attention at first was the music, gospel music, that came from the restaurant's sound system, not too loud but not too soft.  "I want to see my Jesus someday", a beautiful sound sung by who knows who.  Not me.  It reminded me of the Gospel
Tent at Jazzfest.

Cornbread came as we looked at the menu.  I had forgotten the taste of really good cornbread.  K said she could have it for dessert.  She ordered a tossed salad and pan-seared salmon with "the best grits this side of the Mason-Dixon line".  It was topped with kielbasa sausage, spinach, onions, and red peppers.  I ordered deep fried cornmeal encrusted catfish with hush puppies and sides of collard greens with smoked turkey, hoppin' John, and cole slaw.  We finished with homemade pineapple coconut cake, that's fresh pineapple.

This food was good.  K's salad came with some kind of creamy peppery dressing that was stupendous.  It was made by Lillian's daugher.  K's grits were out of this world, and the garnish described was perfect.  I had two hush puppies on my plate and she ate one and a half of them.  My catfish was completely without any grease and exceptionally fresh tasting, with a tartar sauce that was special.  I like tartar sauce.  The cole slaw was recognizable to any southerner, not the sour stuff that is served so often up here.  The slice of cake to share came and was the size of Mike Tyson's fist, a healthy portion the waiter noted.  We could eat about a third of it and the rest came home with us as well as at least half of K's entree.

The restaurant has really interesting old and new family pictures along the counter and in the hallway toward the bathroom.  The bathroom itself had two framed sayings.  One was something about the central focus of FAMILY, and the other said "I can deal with anything if I have the right shoes."

We'll be walking in again soon.



Wednesday, May 07, 2014

Equity markets today climb back after dismal start

The Dow and S&P rose meaningfully today after an early morning falls, while the Nasdaq pared losses significantly, but still cast a pall over the U.S. market.  Facebook, Twitter, Groupon, and Yahoo continued yesterday's loss setting ways, while many smaller cap internet and cloud related stocks showed weakness.  The most startling collapse of the day was not in a technology related company, but in healthy food.  Whole Foods Markets fell 19% after saying that heightened competition would be eating into their revenues and operating results.  The markets are on a valuation edge.

Other factors today had some influence.  From a positive perspective,  Fed chairman Janet Yellen's comments on Capital Hill  were relatively muted and boring, but she gave every indication of continuing to support the economy as long as employment levels and GDP growth fell below their targets.  She does expect improved growth in this quarter, although she expressed concern about a lagging housing market.  Yellen speaks again tomorrow.  EPS has beat estimates of securities analysts in 75% of those companies reporting this earnings season.

Putin said that Russian troops had pulled back from the border of Ukraine, although they still remain in the immediate vicinity.  He requested that two eastern provinces hold off on elections to vote on seceding from Ukraine.  This is what no doubt led to a decline in gold prices, offsetting yesterday's rise.  Putin's expected gambit to oppose Ukraine's May 25 elections for a new government, given the unrest in the east and in Odessa, did not happen.  In fact, he endorsed the election if protections were put in place for all citizens in a new constitution.  Whether everything will be to Putin's liking is unclear, but the U.S. and Kiev certainly want to go ahead.  The question is whether Putin's subversion and support of dissidents in the east will accomplish what he has hoped for.  With Putin's supposed pullback from the border, which Ukraine officials say they have not yet seen, Ukraine and Russian stocks rose, which hopefully is not lost on Putin and his oligarchs.

One other weight on the market may be Warren Buffett's remarks at his festive annual shareholder's meeting.  While not public, reports are that Buffett feels completely comfortable with Berkshire Hathaway's results, which have not met his almost traditional market beating returns for four of the last five years.  Is this complacency or wise risk taking.  It certainly could signal lower returns ahead for the overall market, even as they are expected to continue to be modestly positive.  This view was expressed by Yale economist Robert Schiller in a Bloomberg interview earlier in the week.  Essentially, Schiller said to significantly lower one's expectations, but that an investor still must be in the equity market.

Tomorrow will be watched closely by those day to day traders, especially those focused on the momentum and growth stocks that have been leaking badly.  

Tuesday, May 06, 2014

Internet advertising, a Facebook and Biotherm Homme example

This will take some explanation and require some patience, but it is something that is not fully understood here and maybe should be.

Biotherm Homme is a French maker of a shaving foam that has been used here for many years.  Mousse de Rasage Peau Sensible is the descriptive name.  I first picked some up in 1981 at a duty free shop in Paris.  It led to the best face scraping that had ever been experienced here.  At that time it cost not much more than Gillette, given the duty free and the exchange rate.  Over the years, in many trips to Paris on business and some for pleasure, several containers would be bought each time passing through the Charles DeGaulle.  If I ran short, a few Manhattan department stores stocked it, although the price was higher. In addition, there eventually became a mail order internet option based in Montreal that worked reasonably well.

The mail order option became the only option in the last ten years as I have only been to Paris once in that time frame and Biotherm Homme stopped selling its products in the U.S.  I said "reasonably well" related to this internet site as it seemed to be operated by one or two people as representatives of the company.  The web site was balky and temperamental, and the support was limited.

Almost down to the end of my supply, at the beginning of last week I wanted to order more of this indulgence.  That meant going to the internet.  Following the instructions exactly, twice, it would not accept the order.  I called the suggested phone number and with my limited French understood the recording saying that they were not open that day due to an unusual circumstance.  My reaction was to think it was just more of the same. I would wait and try again in a few days.

Two days later I opened my Facebook account, one that is used a couple of times a week, more as an observer than as a participant.  With people that are really "friends" I check a few likes, and then move on.  What happened that day was that the third item down on my home page was an advertisement from Biotherm Homme.  This had to be tailored for me.  This is not a widely known company in the U.S.  And there it was, and I am one of many John Borden's.  I do see the much more prolific advertising on Facebook these days but don't relate to it, until now.  Clicking on the ad and reaching the same website again, I ordered.  It worked.

How did this happen?  It makes one think, but think what.


Monday, May 05, 2014

"The Silence of the Wave", another novel from Gianrico Carofiglia

Rarely are books by one author commented on with such a short lag time here.  On March 21 there was a post here on another Gianrico Carofiglia novel, that one part of his Guido Guerrieri crime series.  "The Silence of the Wave" breaks that mold for the most part and benefits from the change.  The book was found in the most unlikely place here.  That is the local library which does not have an especially broad reach.  The book was written in 2011 but the translation was completed in 2013.  As recently as two months ago it was not listed on Amazon, so publishing and distribution seems to have occurred in 2014.

While the protagonist of the book is a carabiniera, or detective, in Rome,  on disability leave and with some stories to tell, that is the main link to Carofiglia's prior tales.  It is a story of a nascent and unexpected relationship, a child's dream life that links to his real life, and two individuals seeking psychiatric help to move past almost disabling traumatic experiences.  The two inadvertently meet as their appointments are contiguous, and slowly a relationship develops.

A poster in the psychiatrist's office is a photo of Louis Armstrong, with the words across it saying, "If you have to ask what jazz is, you'll never know."  That sets a tone that defies exact knowledge and the ability to force understanding, of many things.   A chapter early on begins with the sentence, "Sometimes remembering and thinking are not beneficial activities."  That's  the same theme it seems.  Later in the book as the story develops a sentence pops out of one sequence, "When a coincidence is repeated, it constitutes a first clue and then evidence."  Just maybe something is knowable.

Other sentences from the book that resonated here when put in the context of the story were, from the psychiatrist, "People come here to learn to live with their own madness.  Even though nobody is aware of it."  From the protagonist, "I started to feel afraid of death just when I stopped caring about my life."  Again his thoughts, "At what point had he disappeared to give way to someone else."  And from his mother in the past, "The older you get the faster time seems to go.  That's what makes you afraid."  On the surface each of these quotes may not sound like much, but in this modest book they work.

As detailed somewhat in the March 21 post, Carofiglio's crime novels are more investigation and thought than ones of action or violence.  They are built on character development and not on formulaic plots.  "The Silence of the Wave", referring to surfing and the main character's childhood experiences in California, is a breakthrough book to some extent.  It is a book that doesn't try to do too much but definitely does enough.  It was an enjoyable break from a bout of non-fiction that I am going through.  While there are a couple of, just two, cliched literary references, overall "The Silence of the Wave" was thought provoking, observant, and entertaining.  What more can one ask from a crime writer in transition.


Sunday, May 04, 2014

"Back in the USSR"

Could Vladimir Putin be humming this song as he goes about his business?

"Well the Ukraine girls really knock me out,
They leave the West behind,
And Moscow girls make me sing and shout,
That Georgia's always on my mind."

He certainly embraced Georgia a few years ago and now he's definitely looking to leave the West behind in Ukraine.  He owns Moscow.  What a change that humming would be in the unlikely event that he has a musical bent.  Early in his autocratic reign, in May 2003, Paul McCartney had a concert in Red Square and was able to sing his song right there for the first time.  The crowd went wild.  Can you imagine the seething Putin hearing about it, probably from Medvedev who is a devoted and knowledgeable popular music fan and no doubt took the opportunity to be there if he was allowed.

As is well known,Ukraine is moving toward a tentative form of civil war in some Eastern regions. The Odessa turmoil was a shock to some degree as it is in the southern part of Ukraine toward the middle of the country.  It is a vital port and industrial area, but the majority of the population is  pro-Ukraine and not pro-Russian.  That may be said to a lesser extent for the Eastern areas as well, but the pro-Russian militias there have been well organized and well supplied and many of the leaders are trained veterans of the Russian and Ukraine armies.

Unfortunately events are playing out in Ukraine just as forecast here in blogs beginning in February.  The dreaded last piece of the puzzle is for Putin's forces to actually take the step of invading openly, no longer playing just the subversive role.  The world awaits Putin's next step, and will watch the response of the U.S. and Europe, and the divisions between the two that may become visible.

We will watch as well.

Saturday, May 03, 2014

In surveillance discussion, Obama deflects issue to corporates

This is eerily similar to Obama's approach to the responsibility for the excesses that led to the great recession.  While few informed people would argue that there were not multiple players that played a role in sowing the seeds for the mortgage crisis, credit crisis, and the follow-ons that led to the 2008 and 2009 recession, Obama, in his mind, deftly switched all of the blame to the major bankers.  Ignoring the blind and complicit regulators, Congress, and the widely disbursed brokerage industry, Obama and Holder made it simple, and all government authorities and elected officials ducked for cover.

As detailed to some extent in the NYT article today entitled "In Surveillance Debate, White House Turns Its Focus to Silicon Valley", the Obama administration is formulating plans to exert government power to reign in what it views as invasive practices by corporations and move the focus away from its own incredible lack of leadership on and control of NSA activities, or even its direction of those activities.  Google, Yahoo, Facebook, and others should be on alert, as one can be sure they are.  The Obama administration, and its captive Holder Justice Department, does not have a prescriptive approach to issues.  They have a control seeking and punitive approach.  Particularly in an industry like technology, which has compensation  policies that are even more lucrative for top leaders than those in banking, Obama's high horse resentment could be on full display.

The issue of the data collection and associated analysis by many internet firms is certainly one that deserves attention and ongoing scrutiny.  There is the clear potential for abuses or overreach, but it is not clear that what goes on today in these firms is even remotely in the realm of the NSA's actions.  Overreaction by the government, driven by Obama's desire to deflect attention on to the corporates, could have a stifling effect on what could be viewed as this country's strongest and most innovative global business position.  Platoons of ill informed and narrowly focused government workers invading the major internet firms with requests for information and subpoenas for e-mails and who knows what could lead directly to the door of the Democrat's largest and favorite donors, the trial bar.  This is not trivial.

One can only hope that this does not turn into some kind of vendetta, and that the internet titans have the ability to placate Obama's minions and minimize any disruption.

Friday, May 02, 2014

Strong employment report

On the surface today's employment report was stunningly strong.  The unemployment rate dropped from 6.7% to 6.3% and 288,000 new jobs were created, more than any analyst's estimate.  Various  interpretations may find some reasons to not exactly stand up and cheer these numbers, but we'll take them readily, without too much skepticism.

A major reason that the unemployment rate fell so precipitously was that 800,000 people dropped out of the labor force.  With unemployment benefits no longer available, some potential workers didn't  need to maintain the facade of looking for work that was not coming their way.  Additionally the social security eligible boomers are growing by the day and for those with other resources, that could be enough to dissuade job searchers.  As to the components of new jobs, retail and construction apparently led the way.  Retail generally translates into low paid work but construction can be well paying, depending on the geographic area and especially on the skills of those hired. Overall wage growth was flat. Should it be wages were flat, as "growth" doesn't work here.

Despite those caveats, the reported numbers were indubitably strong, and that will have the effect of reinforcing the Fed's inclination to continue its so-called taper, reducing their liquidity building asset buying.  Additionally interest rates could be nudged up in the not too distant future.  From this perspective this is all good, but short term market traders will no doubt not see this as marginally shaking the status quo, and giving equities a little higher hurdle.

The market's initial enthusiastic response to the employment numbers has been restrained by this balancing act between good news and the near term impact of the good news on Fed policy.  The most influential overhang on the market this afternoon is the developing situation in Ukraine.  Here at 2pm, the market has a long way to go before the day's close.  More later perhaps.