Saturday, December 28, 2002

when evil is good

They kill the innocent in church services on Christmas Day. They kill the innocent in synagogues, in pizza parlors, at weddings, on public transportation, in office towers. They kill the innocent when war has not been declared.

They kill the innocent in his mother's womb.

Barbarism has come of age. And noone seems to be outraged.

alien baby boom

Are these the kind of people we want mass produced? People who think the human race was engineered by aliens? People who disregard the law; people who unwisely push the envelope on new technologies? People, who, perhaps, stretch the truth?

Of course these comments are about the recent claim by members of what is best described as a cult that they have cloned a human being. Even if this claim proves to be a stretch of the definitions, as it probably will, it begs so many questions that it can't be dismissed.

The begged question today is, do we really want to mass produce people like that? And, anyway, who decides? Would Tutsis want to see Hutus turned out en masse? Would Palestinians want to see Israelis mass produced? Would Muslims want to see Christians spawned by the gross? How many people really want to see Hillary Clinton mimeographed in 3-D? What if Osama bin Laden had made 10,000 clones of himself? What would the world be like 15 or 20 years after some self-styled god initiates life in his own image?

The real question is, who gets to decide who is fit to be cloned? And who confers what rights on a cloned life?

The correct answer is, of course, that no individual or committee is fit to make this decision. The problem now is, that someone must. And, really, when someone is deemed fit to decide who is qualified to have life initiated, it is not very far at all to having someone decide who is qualified to have life terminated. All for the good and enlightenment of the race at large, of course.

Unfortunately, Eugenics has come of age. We were warned that it would come to this, if we got comfortable with abortion, but who listened? Not enough people, apparently. And eugenics is the sort of thing that people who want to eliminate entire races think about and practice.

Lunatic fringe, we know you're out there.

Tuesday, December 24, 2002

good will

Is Christmas too "commercial?" The parking lots were full today. Today, and in prior days, busy people took time out from their busy schedules, and, using money they usually work pretty hard for (or will in the future), they thought of people besides themselves.

They studied things and shopped and dealt with crowds and fatigue and spent more than they know they should have, seeking just the right gifts; frivolous with time and money.

And frivolous with Good Will, if there can be such a thing. But I think there can be no such thing as frivolity with Good Will toward Men, which is, after all, the Christmas Spirit.

So, if the retail trade gets carried away, and even if it misses the beauty completely, The Invisible Hand is at work; people motivated by thoughts of Good will toward others are spending dear wages, granting gainful, maybe even rewarding employment, providing for the needs and comforts of life, and the means for a better future, experiencing joy, some even a riot of joy, in the simple act of giving. The giver will not lose his reward.

And so spreading Good Will becomes the Project this industrious people sets itself to in this season, and they carry it off with excellence and gusto, as usual.

"Glory to God in the highest, and on earth peace to men on whom His favor rests." Luke 2:14

And yes, His favor has on us rested. May it always be so. And may we always set ourselves to the spreading of Good Will. Perhaps the real driver of proseperity isn't our wits as much as it is our embracing of the Spirit of Good Will to Men.

Sunday, December 22, 2002

beyond the meltdown

The Argentine economy has collapsed. Again.

"You could die waiting for the IMF and the government to solve Argentina's problems," says Walter Blas, a Buenos Aires resident and coordinator of distribution of goods and services locally -- and privately.

But the people are making it work. Workers are keeping open plants that have been bankrupted, making and selling goods and keeping themselves employed. Food, clothing and medicine are being distributed -- needs are being met -- through charity and barter, through creativity, will, and cooperation.

In other words, the Invisible Hand is at work. It's a tough time. But in tough times, free people triumph. It's axiomatic.

When government and big business implement policies that are some combination of misguided, self-perpetuating, or fraudulent, and they thereby destroy an economy, confiscate the wealth of productive people, and mortgage the means of production and distribution of goods and services, there is still hope. Or perhaps it should be put another way: there is finally hope.

A free people with a fighting spirit and work ethic. Never, ever underestimate the good they will accomplish.

Saturday, December 07, 2002


Picture this scene with me.

It’s an art auction. The auctioneer is at the podium. He describes a Monet. “We will start the bidding,” he declares, at $25,000. Do I have $26?”

“I’ll bid 25 thousand and 10 dollahs” shouts someone from the back.
“Twenty five thousand and twenty dollars!” comes another call.
“Twenty five thousand and 30!” still another.
“40!” wails the first bidder.
Fifty!” hollers another.
Finally, an aggressive buyer steps up. “26 thousand dollars,” he bids.
“Twenty six thousand and 10 dollars” counters another.

Is this getting frustrating to read?

Now you know what it’s like to trade in decimals.

If the efficiency of an auction market is partly determined by the minimization of frivolous bids, then decimals hinder efficiency. Decimals are an invitation to market obstruction.

Is this a true auction market? It might better be described as a market within a market. What the boiler room guys used to call 'insides.' Pennies are used to nullify bona fide bids and offers, buying time for the specialists and his partners in crime, the floor traders, to trade ahead of you with a complete knowledge of the market at that moment.

As one trader said, "I didn't know pennies would be so expensive." Lately it seems like an auction in name only.

Thursday, November 28, 2002

"America Rocks"

The only appropriate response, in my book, to the opinion piece by Ted Nugent which ran in Wednesday's (11/27/02) Wall Street Journal, is a wholehearted, top-of-the-lungs shout of AMEN, preferably from the highest accessible point.

The yearly Journal editorials, "The Desolate Wilderness" and "And the Fair Land" are marvelous, as usual.

A blessed Thanksgiving to you all.

There is a transcription of "America Rocks" on The Nuge Board. (scroll down a bit). I recommend you purchase the Wall Street Journal however, because a) the material is theirs and b) it's another proper response to such moving and relevant statements.

Saturday, November 23, 2002


Things are rarely what they seem to be. The media, an institution which one would rightly expect serves the role of shining light on matters, often does. But it seldom stops there. Usually it shines enough light to call attention to something and then proceeds to distort the thing with innuendoes, cliches and outright slander until the truth is pushed away into some far off corner, barely recognizable. The media touts itself as an essential discoverer of the truth; in practice, however, it is a master torturer of the truth. It seems that, should any truth survive unblemished, it has overcome very great odds to do so.

It is ironic, too, the way a specialist handles his stock. He is a master at making it look like it is going to go up in price, when it is about to go down. Charged with the significant task of maintaining a fair and orderly market, his game is really distorting price action in order to deceive other market participants. It is amazing how a stock can continue to advance in price throughout a day, by the process of tricking buyers into selling at a loss all day long.

Irony can be refreshing, as well. For example, I thought I detected irony in the story that Rudolph Giuliani is now a partner in a venture created to purchase Worldcom debt. It can be argued that Mr. Giuliani was 'launched' from relative obscurity as a prosecutor in Manhattan to the world stage as Mayor of New York City at least in part by his very high profile investigation into the trading practices of Michael Milken and Drexel Burnham Lambert in the late 1980's. The investigation resulted in, among other things, the folding of Drexel, the imprisonment of Milken and his forfeiture of $1 billion in penalties (one can't be faulted for wondering what use those funds were put to).

Milken was known in the press as "The Junk Bond King," because of his skill and dominant presence in the junk bond market. In fact, he can be said to have made junk bonds 'respectable' -- at least for a season -- using them in a novel way as a device to raise capital. But during the Prosecutor Giuliani's investigation and legal wranglings that surrounded it, the employment of high yield debt was painted as immoral, and its operatives, 'predators.' Bringing such ne'er do wells to justice was quite the fervent cause among many in that day. (Spitzer watchers take note: there is nothing new under the sun).

If ever there were a junk bond, the Worldcom debt would have to qualify. And now, Mr. Giuliani, former conquerer of junk bond kings, is a buyer. And if that isn't irony, I don't know what is.

Footnote: Granted, Worldcom debt is high yield because, well, the market has weighed in on the prospects of repayment and the company has been found wanting. This differs from high yield offered by bonds that are issued in order to finance a speculative corporate takeover.

Mr. Giuliani was later to enthusiastically endorse a Presidential Pardon of Michael Milken. Read more of this wonderful irony here. Now that he's back in the private sector, he's thinking like it.

Sunday, November 17, 2002

1 + 1 > 2

Absent any cohesive or compelling observations of my own, I've decided to provide the reader with a bit of the emminently cohesive and compelling James Grant. If you haven't read anything by Mr. Grant, do so immediately. You can start here.

The December, 7, 2001 issue of Grant's Interest Rate Observer considers the comments of William B. Harrison, Jr., CEO of JP Morgan Chase, offered in the company's 2000 Annual Report. Predicting rates of return that would be more appropriate to an aggressive trading operation (20%-25%) than to a prudent guardian of wealth (5%), Mr. Harrison gushes, "We now have the capacity to fulfill our clients' needs with any financial transaction, anytime, anywhere in the world. One plus one will significantly exceed two in the equation." As indeed it would probably have to in order for the predicted rate of return to be realized.

A little gushing on the part of a CEO who is proud of his company's achievements can be seen as healthy, if it is sincere and if we can tolerate hubris. With regard to mathematical accuracy, one might allow that the CEO has taken poetic license in addressing the effect of economies of scale, monopolistic advantage, or some other financial lever. That would be the best case. It would be worse if people in very high places, like our CEO, with the stewardship of large reserves of the world's wealth, want you to believe that they have found the philosopher's stone. And worst of all would be that they themselves genuinely believe that they have found it.

Mr. Grant seems to suspect the worst of the worst when he opines, "When a banker proposes that one plus one equals something bigger than two, we may infer something. What we may infer is that he or she is about to drive the family Cadillac into the country-club swimming pool."

He also patiently points out what seems to have been forgotten by those who should be the last to forget: "To achieve a rate of return even modestly in excess of the risk-free rate, a bank must bear some risk." To achieve multiples of the risk-free rate, it follows that risk must be multiplied.

Makes one wonder who it is that runs the asylum, and how long the effects of that helium they've been collectively sharing will last.

Sunday, November 03, 2002

decimals have no soul

"Todd, buy me a thousand BJS at market!" I shouted across the room to our order entry operator extraordinaire and all-around good guy (these words don't begin to do Todd justice). A few seconds later, he would intone, "You bought a thousand BJS at sixty-five and seven sixteenths."

"Hey, what's the market on Weyerhauser?" someone would holler. "Fifty three at an eighth!" came the answer.

This is about romance, partly. Imperial measurements -- fractions -- are what I grew up with. My father would measure the area which would receive the copper gutter he was creating (for the home of, say, the Chairman of Gillette, the CEO of Tweeter, etc, or the former Ambassador to France.). He'd say something to himself like "Fourteen and a strong half," pronounced "hahf," in the Yankee way. He knew exactly how big "a strong hahf" needed to be.

But the romance ended. Someone, somewhere, decided that America had to toss in its lot with the Europeans (besides the British), who had decreed that all things must be decimal. Cold, precise, decimal. No margin for error. No room for interpretation. All things must be exact. Few things are, or course, though they try to make it so.

But it's more than romance. Fractions worked just fine.

One good thing about fractions is that they made communicating the decimal portion -- the fraction -- simplicity itself. When you said 'an eighth,' everyone knew that you were talking about the amount on the right side of the decimal. It was efficient. When you say 'twelve-point-five,' you're forced to ammend your message with 'cents' or some other tangential qualifier to indicate that you're not talking about whole dollars.

Now when you talk to an order entry person he says things like, "You bought a thousand at sixty-five SPOT forty three." Funny, I can't picture my father saying, "fourteen and a strong 5 centimeters." It's just too wordy.

Another trader has his own take on the romance angle. "If your wife asks how you did when you get home, and you say 'I made three-eighths,' it sounds like you made something. If you answer, 'I made thirty-seven and a half cents,' she thinks, 'Gee, I found that much in the couch cushions.'"

Markets have, heretofore, found a way to adapt to vain and frivolous rules imposed upon the business by the power players, because markets are made up of people. Regular, imperfect, motivated and live people.

Perfection is beyond the reach of man's hand, however finely he subdivides his observations. To err is human. To adapt is human. But decimals have no soul.

Saturday, October 26, 2002

beyond your dreams

"Stretch yourself," advises Dick Helm, the Assistant Coach of the Toronto Raptors. Mr. Helm has been a coach of some kind or another for 40 years. Interviewed today by Chuck Swersky on Sports Spectrum Radio, Mr. Helm offered some insights I'd like to paraphrase here.

"You never arrive," he said, speaking of being ready to learn something new each and every day. This would suggest that there is value to remaining teachable, in one's pursuit of peak performance, if one is to really be alive.

He said he tries to encourage players to stretch themselves. "You can go beyond anything you dreamed," if you will, he said.

emphasis added.

tortuous paths

Wisdom teaches her children
and gives help to those who seek her.

Whoever loves her loves life,
and those who seek her from early morning are filled with joy.

Whoever holds her fast inherits glory,
and the Lord blesses the place she enters.

Those who serve her minister to the Holy One;
the Lord loves those who love her.

Those who obey her will judge the nations,
and all who listen to her will live secure.

If they remain faithful, they will inherit her;
their descendants will also obtain her.

For at first she will walk with them on tortuous paths;
she will bring fear and dread upon them,

and will torment them by her discipline until she trusts them,
and she will test them with her ordinances.

Then she will come straight back to them again and gladden them,
and will reveal her secrets to them.

If they go astray she will forsake them,
and hand them over to their ruin.

Sirach 4:11-19
emphasis added.

Bet the farm on this one.

"word is bond"

Whether or not it is poetic blood lust begs the question of how to define poetry. When something defies categorization, meaning, and other tests of good logic, it must be art, right?

Welcome to the Enlightenment. Welcome to the fruit of evolution. Welcome to the pinnacle of human invention cascading toward the nadir of human dignity.

Its technical term might be Nihilistic, Deconstructionist, Anarchistic, Post-Christian, 21st Century Poetic Blood Lust. It seems to have been partly inspired by one Busta Rhymes, having drawn a theme of sorts from his, ummm, poetry.

So let's call it Gangsta Blood Lust.

Garbage in, garbage out.

Saturday, October 19, 2002

if you're hungry

Today I had the privilege of talking with a 91 year old gentleman. I asked him about life during The Depression.

"We used to eat grass clippings," Al told me, without a trace of humor. When he saw my jaw drop and my eyes widen, he added, "you'd be surprised how good it tastes with a little salt;" and then, emphatically, "if you're hungry!"

"Do you see another depression," I asked?

"No," he shook his head. "Things are different now. There was no government insurance then."

God help us.

rightful owners

15 years ago today stock markets had a reality check. From my desk, after a year of watching it go up, up, up, a year of wondering how it could be this easy, I watched the laws of nature judge the markets.

During that year, I had been suspicious. Were these arrogant young brokers, like me, going to continue to wax richer?

On Monday, October 19, 1987, markets captured my attention like never before, and have held it since. The tilt in my sense of balance created by the relentless bull market was satisfied. There is a Wall Street proverb that says, "Money always returns to its rightful owners."

A comforting thought, indeed.

poetic blood lust

9 kills, 11 shots. 9,11. 911.

A shell casing in a panel truck near the airport. Are they gone? Mission accomplished?

This is beyond terrorism. This is poetic blood lust.

People at work in a high rise. People cutting grass. People pumping gas. People shopping at Home Depot on the weekend.

Every day people. You and me.

The death poets are sending a message. It's psychological warfare at its most sophisticated -- brutally simple.