Sunday, December 27, 2015

Will the political talk settle down?

It would be a good thing if the divisive political talk, centered at first around Donald Trump but now spreading to other candidates, would settle down.  It is said "other candidates", as in the debates Bernie Sanders is somewhat restrained, but his campaign is massively anti-business, as in making money for shareholders has acquired an evil taint.  God knows, the system is not perfect but someone please find a better one in a country bigger than Sweden.

Trump's ongoing domination of the Republican dialogue is unfortunate, as this could have been a year of substantive debate between the two parties.  Now the Republicans have mostly gone to the edge, and those with the slightest bit of moderation, Rubio, Bush, and Paul, are being tormented by the extremist ring of the so-called "Party".  Cruz is by far the most dangerous person out there, from this, of course, completely unbiased point of view.  The damage he will do as a candidate, even if he loses, will be unprecedented for the U.S. political system.  He does not care at all what damage he causes.  He is a political nihilist.  Who could this remind one of?  In the distant past?  In what country?

Friday, December 25, 2015


This is a remarkably good film.  It is also a frustratingly sad one.  Amy Winehouse was a down to earth, unpretentious, hyper-talented, good humored, free spirit whose addictions were too much to overcome.

Her musical virtuosity is easily evident in the film, and her ability to sing jazz in a way only done by those two generations removed demonstrates a precocious nature that could not be expected.  Her jazz voice was an extraordinary throwback.  She came onto the scene at a time when little new talent was evolving, and her sound and style opened a new path for later aspiring female singers like Lady Gaga and Adele. She mixed in her share of soul and R&B as well, and writing her own lyrics she intuitively created unique hybrid music.

Her decline was certainly due to the devious nature of addiction and the pressure of fame and obsessive fans, but was transparently enabled by an entourage of friends, entrepreneurs, and family members who lived off of her talent.  The documentary makes it abundantly clear that leading that crowd of people exploiting her were her father and her manager. The repulsive real time rationalizations by both in this film can make one gag.

When she was starting out and basically only well known in the U.K., it certainly would have been nice to have stumbled upon her first album.  My parents, especially my mother, would have adored her voice.

Yes, it is Christmas

The rain has stopped for Christmas Day.  The weather is mild and the sky is, charitably speaking, an improved bluish gray. We stepped out for a short walk and it is a nice day compared to any earlier day this week.

As always, there is an attempt to make breakfast something special on this special day.  We started with fresh ripe pears from Oregon and then had Christmas eggs, as in lightly scrambled with finely chopped red and green peppers, and Christmas stollen, full of candied fruits, bits of nuts, and spices. As on most days, yours truly had one slice of bacon both to eat and to get the skillet ready for the eggs, and Cafe Du Monde coffee with hot milk and one pack of sugar.  The allowance of sugar is for special occasions only.

K is much improved from the impact of a fall last week and is eating as much as I do.  A few small gifts were given.  It's a quiet and peaceful day.

Wednesday, December 23, 2015

Is this Christmas?

Somehow drizzly to rainy, overcast 65 degree days, that seem to be moving into darkness at 4pm, do not feel like the Christmas holidays.  Tomorrow will be the same here, but Christmas day will, according to forecasts, be rain free and 65 degrees.  There is no desire here for a white Christmas, but a little cool fresh air would be welcome.

With parking lots jammed and shoppers still out in full force,  it's a day in the house.  Christmas cards still trickle in, almost all from people our age or older.  They are opened with great interest, and hopes for good news and photographs.  When former neighbors sent a card without their lifelong letter describing the year and all of the good news was not in the card, that could not be interpreted as positive.

Following the stock market today gave some bright news.  With low volumes, the meaning of this rise is impossible to interpret but better up than down.  Organizing some paperwork was the accomplishment of the day, always a good feeling to make a dent in that never ending chore.

Tomorrow we must go shopping and are considering an early start, a break in our routine.  Eat something, go, and get fully cleaned up later.  That's the idea, but actually doing that is by no means a certainty.  More later maybe...

Tuesday, December 22, 2015

Market rise reassuring before Christmas

Yesterday and today saw nice gains in the U.S. equity market that partially offset the big drop on Friday.  The gains were not stunning in any sector or any name today, but energy and commodities did have somewhat of a dead cat bounce.  With two market days before Christmas it would be unusual to see any major market move, unless there is major market news or a global event that gains attention that is not directly related to stock valuation, but has an indirect impact nevertheless.

There remains a cautious approach here, as credit markets always get attention if anything is changing, and they seem to be.  The high yield market is a relatively small portion of the fixed income market, but that's what they said about sub-prime mortgages in 2008.  At some point, one gets too old to bite their nails.  Some tax related selling is going on here, but it is not widespread because losses are not widespread.  Then there is always that dilemma.  If a stock that was bought for a reason has losses, is it time to add rather than run?   Decisions are being made.

Estimated tax is being calculated now, and that always leads to a completely knee jerk thought, that thought being a wish that there was a viable Republican to vote for, or wish for.  That seems unlikely, especially with Congress now being in that party's control.  There is something to be said for a balance of power, especially if that is the best that can be accomplished.

Thursday, December 17, 2015

This stock market has no idea where to go

We are in a random period.  There seems to be no analytical pricing of equities.  There are simply mood changes as money managers look to see how they are presented at year end.

This is no time to do anything but lighten up.  There are always opportunities, and there is no ignoring a few of them here.  That said, old holdings with big gains can take some beneficial reductions, and tax consequences should be ignored.

Liquidity is becoming an issue for some and that, as was clearly shown in 2008, can possibly mean for all.

Wednesday, December 16, 2015

Republican debate recap

Last night's Republican debate had several outtakes:

---Donald Trump received the best of the television coverage when he alone was interviewed by reporter Chris Cuomo just after the debate ended, four minutes of Trump time.  He came across as crass but rational in his own way.  There were no other immediate interviews following Trump.

---Jeb Bush did his best to play a major role in the debate, stepping up his role in standing up to Trump.  It was his best debate showing by far, but he remains a less than compelling personality.  He cannot shake the entitled and almost lazy persona that his family background presents.

---Fiorina, Christie, and Kasich came across mainly as nuisances to an otherwise active debate.  Their ego run campaigns seem to be meaningless.

---Rand Paul, from out of nowhere, somehow played a much more meaningful role in the proceedings, gaining more air time than expected.  He is a fringe candidate, but not completely out of it.  Well, maybe he is, but not from this contest.

---The Cruz//Rubio interaction was as expected, with both candidates seeming anything but exceptional.  There was nothing decided last night, other than the fact that these guys have no immediate claim on the nomination.  They are not nearly as charming as some think they are.

Tuesday, December 15, 2015

Entertainment tonight --- Republican debate

At 8:30pm Eastern time another Republican presidential debate will be on air.  Now it's Cruz time, a supposed upstart who is a major challenge to the Donald Trump phenomenon.  Ted Cruz has been biding his time, doing his work in various important states, and planning for the chance that now approaches.  He is the far right conservative who speaks so well, and has few limits to his "facts".

At this point there seems to be no viable Republican candidate who  could remotely be called moderate.  Jeb Bush was supposed to be that candidate, but he has failed to excite anyone even as he moves his positions further to a right wing fringe.

Trump will get the ratings and Cruz may be the beneficiary.  Who can avoid watching this?

Sunday, December 13, 2015

Christmas people

There are certain people who enjoy the Christmas season immensely.  One of my grandmother's, my father's mother, was a Christmas person.  She lived for the season and as she aged she spent hours and hours happily making scrapbooks of Christmas cards and memorabilia, almost being a one person production shop for her family, friends, and, with special care, any child.  Christmas dinners, in those days in Bedford, Virginia, had turkeys fresh from nearby Blue Ridge mountain area farms, courtesy of my grandfather the hunter, all bread home baked, and she was in her element as a remarkable country cook for whom recipes were irrelevant.  "Santy Claus" was coming, as she frequently said.

K was a Christmas person too.  She was the absolute leader in her family of the secular Christmas ritual. All cards received, and there were many in those days, were taped around the openings of doors in her late childhood home when we first knew each other.  Poinsettias were on the two major window sills and in the lower level den near the door to the patio.  A large tree was carefully decorated in the living room with the vaulted ceiling.  All was K's doing, and nothing was garish or too much.

My in-laws were the social center of a number of families that arrived in New York under similar circumstances in the late 1940's.  They all converged on the house at Christmas every year, 25 to 30 people.  K's role was dessert.  She would spend two or three days before Christmas dinner making chocolate chip cookies, oatmeal raisin cookies, cooking various cakes, making pecan bars, brownies, and on the day before pies, apple, pecan, and even a few times used my mother's recipe for lemon chess.  It was a full time undertaking that K loved, and that at times almost overwhelmed our Christmas.  What can you expect of a Christmas person. Among that group of my in-laws close friends, her Christmas dessert spread seemed to be talked about all year long.  Each year when they left, portions of K's bounty were all packed up with them to take home.

Certainly Christmas was in my background as well.  Christmas Eve and Christmas Day were major events in childhood.  The morning when I awoke to Walter Hagen woods, golf clubs, at age 12 was the most memorable surprise.  With K and the children, setting up the tree while playing Christmas music and putting up all of the ornaments was something that was close to pure joy, but K did the lights first because that was a task a bit too tedious for yours truly.  Outdoor lighting was tried at times when the children were young, but it was not too successful.  I had to face the facts.  I like Christmas and I like choosing gifts for friends and family.  I liked the tree when it was a group effort. Clearly though, it cannot be said that I am one of that rare breed that have been referred to here as Christmas people, not even close.

K misses it dearly.

Saturday, December 12, 2015

A Tiptree morning

A highlight of every morning in the last year is our Tiptree jam or marmalade with toast or an English muffin.  We look forward to it.

Tiptree is made by Wilkin & Sons LTD in, appropriately enough, Tiptree, England.  In small print on each jar it says "By appointment to Her Majesty the Queen jam and marmalade manufacturers."  We are far from being anglophiles here, so this could be called an exception well worth making.  

Wilkin & Son began their business in 1885, and the town of Tiptree has a population of around 9,000, so it's a village that is well known because of its one unique business.  We favor the medium cut marmalade, the morello cherry jam, the raspberry seedless, Little Scarlet, a strawberry jam made with a type of tiny fruit, and the black cherry when available.  Combined with either bacon and eggs or a bowl of more healthy cereal, the Tiptree spreads are a treat.  Looking up Tiptree just now, their special Christmas preserve was just ordered on Amazon.  That will be a new one here.

Admittedly it is much more expensive than your average jar of Smuckers at the grocery store, but here it feels worth every penny.  Small pleasures patched together during a day are important.  It's one more reason to get up.

One should note that this is not a paid advertisement, although maybe it should be.

Friday, December 11, 2015

A bad day for the markets all around

This Friday, today, was not a good one for financial assets.  Oil prices continued to collapse and other commodities were under pressure.  At some point this could become more than just one off information based on supply and demand, and instead a clear signal that commodities markets see global investment growth, particularly in China, as evaporating.

The high yield bond market took a stinger with Third Avenue Management's shut down of a fund rather than continue with honoring requests to redeem.  The fund was apparently an extremely high risk patchwork of securities that were at the lowest ratings or unrated.  Nevertheless, Third Avenue is a well known name and for them to take such an action was a jolt to fixed income markets.

U.S. banks were weak all week.  That is a puzzle here, unless the activity in the commodity and bond markets has some thinking that the Fed will be too timid to have a rate hike next week, and premiums built into the banks based on expecting an actual yield curve to emerge were being taken away.

From Google to Facebook to Apple and others, even major tech names have been leaking for the last three days.  Is this seasonal trading related to tax timing?  What pressure are they under at this point. It is unclear.

We enter the weekend with questions and concerns.  Maybe a weekend is just what we need to get a grip and carry on through for the rest of 2015 with some clarity and strength.  Maybe a weekend is what I need.

Thursday, December 10, 2015

Some things never change

Today there was white bean soup on the menu at our local deli, the one in town that all long time residents patronize.  Never had it, but it sounded ok, sounded healthy, and it was steaming hot, full of the beans, in a reddish soup.  Looking at it as I opened the lid, there were these small exact squares of something on top.  I had a guess and after stirring knew it was ham.  Then I took a bite. It was hearty, no doubt, but there was something else going on.  I had to think about it, but got it in a minute.  There were small pieces of cut up hot dog in the soup.  Had I just been transported back to the 1950's into Mrs. Bateman's cafeteria at Forest Hills Elementary?

"The Deli", sort of as in "The U" in college football, has not changed its menu in the almost 30 years that we have been here, not at all.  They have not changed any recipes either and favorites here like Penn Dutch potato salad, their cole slaw and macaroni salad, and their large shrimp salad with celery and a lemon juice based light mayonnaise dressing, are always the same, and it's all made in a small kitchen at the back of the store.  Coming from the parking lot, customers squeeze by the kitchen on the way in.  It is likely that nothing has changed since it opened, whenever that was, but by the taste of the bean soup it was in the 1950's.

Apart from having the look of a standard deli, there are fresh kaiser rolls every day, poppy seed being the best, exceptional store cooked rare roast beef which lead to two fisted New York style sandwiches, and most things one would want other than anything approaching a non-mayonnaise based salad.

The Deli has a German heritage.  When we first moved here an older man named Helmut was omnipresent. Since it all stays the same, there is Wiener Schnitzel with Gravy on Monday and Thursday, Bratwurst with Sauerkraut on Tuesday, Knockwurst and Kraut on Friday. Being a town with a significant Catholic population, Friday also has fried flounder fillets and homemade crab cakes.  It should be mentioned that Monday also has Potato-Bacon soup, but being after a weekend I have never felt up to that.  There are many other standards that may seem unlikely, like a French Fricadellen(look it up) on Wednesdays and a tad bit greasy Chicken Cordon Bleu on Thursdays which is highly popular with the high school students four blocks away, at least it once was.

As befits, there are four types of potato salad, the Penn Dutch which is egg, ham, and celery based, a mayo based American, a mustard based American, and of course German potato salad, a bit vinegary for my taste as it seems like the real thing.

The most important aspect of this long narrow space is that "everyone goes there" and it's easy to bump into people that one knows, once knew, or had some passing connection with.  The locksmith who is incompetent goes there, the painter who can't paint does as well, while the competent electrician frequently shows up.  Attorneys stand in line with every home repair guy in the area.  It's a community place that could not be duplicated anywhere else as its eccentricities are too unique and that's fine.  Don't change.

Oh, there is rice pudding, bread pudding, and German butter cake every day, as well as, believe it or not, a darn good fresh fruit salad with melon, grapes, pineapple, strawberry, and apple.  Lipitor must be acquired elsewhere.

Wednesday, December 09, 2015

The President's Oval Office address, and his personal approach to terrorism

Sunday night's address from the Oval Office was measured, rational, and expressed a steadfast commitment to confronting ISIS and terrorism generally.  What it did not do was say anything new.

The biggest flaw in the speech was his turn to his standard comments on gun control early on.  Yes, we support severe restrictions on gun sales here including no assault weapons, as well as thorough background checks, and the elimination of all of the virtually unregulated gun shows.  The problem is that many American people do not.  In fact, many members of the President's own party do not, including by virtue of years of his voting record, Bernie Sanders.  The President may as well have just turned the volume down on the rest of what he had to say for many of the listeners, and one would presume that he would have wanted them to listen.

President Obama seems to have a super sized view of himself.  Just being President does not mean that people will feel buoyed every time he speaks.  A good example of that is his insistence on using the term ISIL when almost no one else in the world or in this country does, except obviously everyone in his administration by executive fiat.  That has been an unnecessary rub here for a long time.  It was pointed out in a simple letter to the editor a few days ago in the NYT by a Philip Berkowitz of New York, who wrote, "What strand of professorial precision(or political correctness) requires this?"  It is unclear that anyone can explain it as anything other than a nit pick exercise of presidential power. What's the point?

During this troubled period in the Middle East, President Obama had his "red line" fiasco that put a huge dent in his credibility in that region, and his complete intransigence, until just six months ago, about giving all aid to Iraq for fighting ISIS to the corrupt central government.  Yes, it is still obviously corrupt and highly partisan.  The Sunni tribes and the Kurds know that well.  It is not yet clear whether Obama gets it even now.

One other thing to note.  Whether in sports, or business, or politics, or government, saying the word strategy is mostly vacuous.  Saying that word implies nothing specific.  It says to the listener that "we have a plan but we not going to tell you about it", or "we have no idea what we are doing and are still trying to figure something out", or "you are not smart enough to understand what we are doing."  We did not count how many times Obama used "strategy" in his speech, but it was more than a few times.

It goes without saying, we hope, that President Obama is a huge breath of fresh air compared to the racist megalomaniac Donald Trump and to most of the Republican presidential field.  Yes, some are lame, but some could be dangerous as Trump stirs the pot for them and they can choose to sample it when they choose. Yet, we still need to hold Obama accountable, to be sure that the embarrassment to the U.S., Trump, does not lead Obama to think that, in comparison, everything he has done is on track.

Monday, December 07, 2015

Irresponsible advice from Charles Schwab

Today, "On Investing", the Charles Schwab regular magazine for clients arrived.  The cover announces the major story, "Investing Without Borders".  While the title is a somewhat repulsive take on a major humanitarian agency's name, the article is even worse.

Schwab's client base is primarily retail investors.  In this article, Jeffrey Kleintrop, Schwab's so-called Chief Global Investment Strategist, suggests that, "In general, allocating between 25% and 50% of your stock holdings(or more, depending on your risk and return objectives) to international equities could give your portfolio a more global perspective.  This may sound high, but..."

"High"?  It's in fact absurd given the exposure that many U.S. multinationals and even mid-caps already have to global business, U.S. firms that are regulated in the U.S. and audited in the U.S. under strict guidelines.  U.S. firms are also in a highly liquid market with currency hedging being of little consideration(currency exposure is not even mentioned in the article which could be viewed as unethical).

Kleintrop supports this statement by mentioning that the worst 10 year period for stocks over the past 45 years was February 1999 to February 2009, and the U.S. index fell almost twice as much  the world index on an annualized basis.  Hmm, in the U.S. the tech bubble was reaching its zenith at the beginning of that time frame and at the end the U.S. equity market had reached its nadir in the extended real estate recession.

Disingenuous is too mild a word to describe what is written in this article, irresponsible is obvious, but borderline fraudulent may be better.  Does Schwab think that they are clever in pushing this approach to retail investors in order to tie investors to their Schwab advisors, who they will likely need to deal with frequently should they follow such advice?  Does it just want the churn, or are annuity like hedging costs the attraction.

Whatever the reason or reasons, this article is terrible advice for most retail investors.  Few professionals would even make such an allocation!