Saturday, October 25, 2008

Tom Toles and the Economy



If you haven't followed by now, Tom Toles captures it like no other.

New Tenants in the Fish Tank

I recently was "evicted" from my home office, and as part of the deal, I had to paint the walls for the new tenant, baby Allison, pink....So the nursery is all painted, and the furniture is on the way...!

However, as part of getting the nursery painted, I had to move my desk, books, and aquarium down to the basement. The desk wasn't too bad, just a piece of glass and supports, but the aquarium was another story.

Well cut to the chase, I moved the tank down by myself "successfully", which is a relative word. The tank didn't break, but moving a fish tank in general is a whole process. I drained 90% of the water (55 gallons) because I had to, and moved the fish to a holding tank. Once the tank was in place downstairs, I had to recharge the tank. I had no choice but to discard more than half the water, which has dire consequences.

When recharging the tank, I knew there would be a risk of a bacterial bloom, since bacteria in the new water, which is different from the nitrosomas, would probably go crazy with the food source in the gravel. But after watching for a day and a half, nothing, and all levels looked good. So the fish went back in. Big mistake.

I went out to run some errands and came back to see most of the fish struggling to breath in the cloudy water. I managed to save 2 of the fish, but it was a sad day. So moral of the story is, if you have to move a tank, try and save at least 50% of the water. If you can't, then keep fish in holding tank longer until bloom occurs.

The happy part of this story is that I put in some new fish. Below is a picture of the Golden Ram I saved, thank god, and I bought him a mate who you can see in the far left background.. I also got 2 Blue rams, which are smaller in size, but these cichlids from South America are quite peaceful. I also got a Syndontis, which is really cool, but he hides during the day in the rock because he doesn't like the light. Finally, got some Juli corycats. One of them is picture below as they all camped out by the bloodworm larvae in the foreground...



Thursday, October 23, 2008

The Volatility Index, the S&P500, and the Bubbles

I've posted a chart that shows the S&P500 vs. the VIX, or volatility index. The VIX is an index that represents the activity of option buying on the Chicago Board of Trade. This index is often referred to in the press as the "Fear Index". Without getting into the particulars, the VIX represents the option buying. The index trades at a higher price when option buying picks up, which is a sign that traders are trying to hedge away the risk of owning an asset (in this case, stocks.)

The S&P500 index is on the left, the VIX price is on the right. The picture tells everything, but some things to point out:

  • The VIX and the S&P are negatvely correlated. When one goes up, the other goes down
  • During the last Tech bubble ('99 - '02) the VIX had support at $20, but often traded up during the Bubble as traders worried that the IT companies like Pets.com had no real earnings, or weren't worth more than GE...
  • The VIX peaked when the Tech bubble began to burst around end of 2001
  • The VIX then traded down heavily as the Fed eased rates and kept them low to stimulate the economy. All that really happened was 3 new asset Bubbles (Credit/Housing/Corporate Earnings)
  • The S&P peaked at ~1500 during both the Tech and recent bubble.
  • The VIX is currently at 70. In relative terms, this environment we're in is far from over, at least from a market sentiment point of view. Everytime you hear someone you someone say "the bottom has formed", keep you money in stable value for a bit longer. It's where I moved our money last July '07. Probably more luck than skill, but you know what they say.
This is the chart I've been staring at for the last 2 years. The 2 bubble peaks are undeniable. The VIX is just the market catching up with what was already apparent but no one wanted to acknowledge. Sometimes it takes you-know-what to stay on the sideline even though everyone else is drinking and dancing.

I think the bottom forms when the VIX starts to stabilize around 20-30, but just my opinion. I'm in capital preservation mode.

Wednesday, October 8, 2008

Nobel Prize in Chemistry for Green Fluorescent Protein

Green fluorescent protein was isolated from the green fluorescent jellyfish, Aequorea victoria. Seems like hardly a big deal, except that today the scientists who discovered this interesting jellyfish received the 2008 Nobel Prize in chemistry for their work. What's all the fuss?

When I was a grad student at WSU in 1996 for biochemistry, I was studying telomeres and solving the structure of the ACCCT DNA motif. I was asked to present my work at the 5th annual Protein Crystallography conference at the University of Oregon that year, and was pretty nervous. But when I got there, I realized that, much like today, I was nobody. The buzz was all around the presenter after me, who had solved the structure of green fluorescent protein. It was quite a scene, and I remember asking myself what all the commotion was about.

A Glowing Jellyfish, a Nobel Prize? First, the jellyfish was found to fluoresce green, and scientists were perplexed as to why. Think about it, we see something that doesn't make sense, and we investigate as to why the jellyfish glows green. Probably some evolutionary favorable trait that allows a deep water organism to illuminate its surroundings to find food, or scare its predators.

The Structure of GFP The structure is quite elegant. Proteins are made up of amino acids that are linked together via an amide bond (N-C). There are 20 amino acids, and they are linked sequentially in different and distinct combinations to produce a long peptide polymer. Each amino acid has a different side chain, which has a certain chemistry, if you will, to it that makes each amino acid distinct. GFP is made up of 238 amino acids. If you're still with me, here's where nature's beauty "unfolds" (no pun intended.)

The 238 amino acids are linked together to form the basis for GFP protein. This "sequence" is called the protein's primary structure. Guess what? There is a secondary structure, dictated by the chemistry of the protein's amino acids' amide bonds. Since proteins are hydrophilic, or water loving, the amino acids arrange themselves to hydrogen bond in the most energetically favorable state with water molecules. That is to say, hydrogen bonds are formed with water molecules to form what is called a "beta sheet". This beta sheet can be thought of as ribbons of amino acids that stablize themselves, via structure, in water, through hydrogen bonding.

Stay with me The sequence of the 238 amino acids is GFP's primary structure. The hydrogen bonding by these amino acids with water molecules is GFP's secondary structure. So most every protein has a tertiary structure. The beta sheet of GFP folds back upon itself to form what is called a "Beta Barrel" or " Beta Can." This formation is again driven by the interaction of the protein with "itself" and the water environment. Remember, all those amino acids have distinct side chains, and these side chains have distinct chemistries. So in the tertiary structure, the protein "folds" to form a structure to make sure all of the amino acid side chains that like water face outwardly and interact with water, and side chains that don't like water are shielded from the water. So for GFP, looking at the beta barrel cartoon, the water hatin' stuff is shielded because it's located between "ribbons" and thus, shielded from water. The water loving stuff is hanging off the ribbons and interacting with the water. (I'm overly simplifying things, but you get the point I hope.) As a final note, the ribbons could have folded up into any structure, but the beta barrel is the most energy efficient structure given GFP's primary structure (sequence of amino acids). Nature is elegant, we are anything but. (Great link with pictures on protein structure here.)

Back to the GFP's Structure and its Applications If you remember nothing else, just know that the GFP is a beta barrel with a chromophore protected in the center of the barrel. The chromophore in this case is formed via an interaction between Amino acid #65 (Serine 65), Tyrosine #66, and Glycine #67 that absorbs blue light and emits green, giving GFP its green glow. Neat, but again, what's all the commotion?

Well you can create different chromophores to GFP and have the protein emit different colors of light. Think red, blue, green, yellow, etc., any wavelength that is visible. So the big picture goes like this:

  1. You can create any "fluorescence" you want, given changing the chromophore by changing amino acids 65, 66 67 or some combo of the three...
  2. You can link green fluorescent protein to other molecules....
  3. Therefore you can link green fluorescent protein variant that emits color x,y,z, etc. to any molecule...
  4. Build an detector that looks for molecule via "colored" light, and now you can do some targeted science...
A simple example is DNA sequencers. DNA is made up of A,C,T,G base pairs. Tag each molecule with blue, green, red, or yellow, and then you can determine the sequence of any DNA molecule based upon the color pattern. Link GFP to a drug that targets cancer cells, and then inject drug into biopsy matter. If drug lights up in cancerous cells, but not normal cells, bingo. The drug might or might not work, but at least you know the drug is targeting the bad cells and not the good cells. The applications are limitless.

The Nobel Prize and Basic Research So maybe my talk on ACCCT wasn't earth shattering, but compared to Mr. Yang and the others after me, it made good sense why GFP's structure was a huge deal. BTW, the "discovery" by Mr. Yang at Rice University in 1996 probably generates that university tons in royalty streams from all the chemistry kits/tools that license the technology for use.

This is a classic example of why basic research is so critical, and maybe why pharma has lost its way. Seriously, a green glowing jellyfish might someday lead to a cure for cancer. Think about that, that's awesome, and certainly worth the Nobel Prize.

The Presidential Debate - "Who won..."

The question keeps being asked, "Who won? Who won?" I watched the debate, and I continue to be thoroughly underwhelmed by both candidates. If nothing else, rather than answer the silly question that all the news channels ask, think about this. Nothing was said. Absolutely nothing, and neither strikes me as presidential. Rather than ask who won, I think what has become painfully clear is who lost. It's us; we all lose.

Maybe we are on the precipice of becoming a third world country, if not there already. As the rest of the world's income rises relative to ours going forward, who knows? Maybe innovation will arise out of those countries we used to look down upon, and maybe, if we are lucky, we'll be the low cost labor pool for the world. We better figure some things out, and stop promising entitlement programs that are bankrupting this country. If the last 8 years blew so bad, fine, but I still don't think that a symbol of change equates to a leader of change. Especially from someone we have never heard of prior to now.

In recent times, maybe that's all a president really is, a promise of change if things are bad, and a promise of status quo if things are good. But ask yourself this, where are the WMDs? There's lots of good young people making the ultimate sacrifice so we can borrow beyond our means, and no one seems to remember Colin Powell's speech to the UN General Assembly. No matter what affiliation you profess to be, you have to ask whether we are really ever told anything. As I watch this slow moving train wreck unfold, I have the distinct feeling that the rest of the world is laughing at us. I don't have the answers, but the debate left me feeling very sad about the leadership vacuum that we are about to enter into.

Tuesday, October 7, 2008

Melamine and China's Contaminated Milk

Recently, the molecule "melamine" has been in the news. It seems that babies in China are becoming sick because of this chemical, and it has been suggested that the milk in China has been deliberately tainted with the chemical. So the obvious question is why? What is the incentive to put melamine in the milk?

The best theory I've read is that the producers are trying to water down the milk. Milk has protein in it, and if you water the milk down, you dilute the protein content, thus raising the risk that the milk doesn't pass QC. Protein is made up of a carbon-nitrogen backbone, and as you can see from the structure of melamine, it has a lot of nitrogen. So if you supplement watered-down milk with melamine, QC issues are potentially solved.

If true, it's a classic example of motives gone awry. Maybe there isn't enough milk, out there in China, and maybe they do have the best intentions, but the solution to the problem seems to have created a bigger problem in that its toxic. It's the law of unintended consequences at work, and it's pretty ugly when it involves babies.

Monday, October 6, 2008

Duane and Tracy's Wedding

This weekend, Duane and Tracy tied the knot. The Lent's were married at approximately 6:00 PM this past Saturday at Penn Oaks Country Club. It was a beautiful ceremony, and the bride and groom looked stunning, as they say.

As I get older, I hate to say that it is events like these that make me realize how fast time flies, and how difficult it often seems to get together with lifetime friends. But this weekend reminded me that no matter how much time flies, true friends are always true.

Duane asked me to speak at their wedding, and I was very honored. I shared two stories about why Duane's friendship has been important to me over the 10 years I've known him. See, I had caddied for Duane for both of his Player Ability Tests (P.A.T.s) and on the first shot of his first PAT at Upper Perk, he snubbed his tee shot. This would have been equivalent to you or I riding a bike our whole life, and then one day we get on the bike, peddle once, and fall over. Duane has always killed his driver, so it was shocking. I remember looking over to see if he was about to erupt. But I think we just smiled and then laughed, and I have always admired Duane for not taking himself to seriously. A good quality to have, an even better quality to have when married.

My second great story was Duane's second PAT, at Moccasin Run, the one he passed. I've caddied a lot of PATs, and in every round, there comes a moment that tests you. For Duane, it was #5, a driveable par 4 that is lined by the road down the left hand side. Duane tags his tee shot, and it heads dead left, and all we hear is a bang. The ball hit a telephone pole and we're not really sure if it stayed in. So we walk up to the ball and finally locate it, not really knowing if it's O.B. (Out of Bounds) but there it is in a nasty lie in the rough, in play. By now the ranger is watching our group, and everyone is waiting for Duane, and you can feel the tension. All Duane does is stick his approach to within 2 feet and drains it for bird. It was restaurant quality, seriously good stuff. But what it reminded me of was that I truly believe Duane looked at his tee shot like "thank god the pole was there to keep it in" rather than "this sucks." Golf, like life, is a state of mind. Lots of us say "don't quit", but that day I got to witness a friend actually do just that. I've always admired that quality about Duane, and as I said that night, "life will always throw you crap. But I've never worried about Duane. He can handle it."

So my final thoughts that I shared that night during the walk down memory lane was that after Duane passed his PAT, I thought I'd feel relief as his caddy. But in fact, what I remember feeling was true happiness for him, because I knew how hard he had worked to get to that point in his life. There's really nothing better than seeing the people you care about experience true joy and success. And that's exactly how I felt watching he and Tracy get married Saturday night.

Congrats again Duane and Tracy!!

The Three Amigos -- A lot of golf between these three

Erin and I, before the Scotch and Sodas (me of course...)

Apparently Dancing for no one ut my laughing wife...What a Fun Wedding!

Market Meltdown -- Dow in a Freefall

Fear has complete control of the market. You had heard it here first, but as I like to tell Erin, "nobody listens to me."

You know, the Phillies are playing the L.A. Dodgers for the Division Title. Since the Cubs didn't get through, you had to know that the universe would counteract this with a destabilizing force....Well, rather than a small planet exploding somewhere, it was the market.

Link to Prior Post Titled "Has the Market Reached the Bottom?"

Thursday, October 2, 2008

Probabilities for Baseball Playoffs


Here are the probabilities for each team to win their respective playoff series...I found it on a site called "coolstandings" which ESPN cited on their website...

Link to CoolStandings Website with Playoff Probabilities



Current "Smart" Overall Probabilities
Team Divisional Championship Grand Finale
Boston 74.8% 40.7% 23.0%
Philadelphia 73.2% 38.2% 18.5%
Tampa Bay 59.9% 29.7% 15.7%
LADodgers 63.2% 29.6% 12.8%
ChiCubs 36.8% 20.7% 11.1%
ChiSox 40.1% 17.3% 8.2%
LAAngels 25.2% 12.3% 5.7%
Milwaukee 26.8% 11.5% 4.9%

Joe Pa and Penn State Football

Let me preface this post by saying that I am not part of the PSU cult. But having met my wife at Happy Valley, I kind of get to enjoy the best of both worlds. I get to make fun of the people who bleed blue and white, and yet still root as a casual fan that got his business school degree from a school that has a legend for a football coach.

So I had to post a recent commercial of Joe Paterno that is running on the BigTen network. The posted version is the longer version, but the funny part is at the end when Joe Paterno gives his recruting pitch to a prospective recruit.

This time last year, folks were calling for Joe Pa to retire, and someday he will. But you gotta love his Lions ranked at #6. Never bet against a legend.

Tuesday, September 30, 2008

Current Bailout, and why it's bad...

Please read the link to John Hussman's post about the recent "failed" legislation that did not pass in the House. It's a simple as this, really...please read the link below.

The bailout will NOT prevent the recession. It's an election year, which prevents the general public from getting real information. If you want to rise above the masses and understand the bailout in its original form, click the links below. The package puts the taxpayers on the hook, and absolutely encourages future "irresponsible behavior". If you don't believe me, or Dr. Hussman, there's a link to lots of economists that signed a petition against the bailout.

The proposal will not solve anything. Taxpayers should not be on the hook to bail out debt holders in a company's capital structure. From a relative perspective, our generation has lived on credit, and now free markets are telling us we can't live like this going forward. If you can't afford a house, you shouldn't be allowed to buy one. It's that simple. Local banks took regional risk by originating loans that were bogus, and took this regional, localized risk and transformed it into a systemic risk. We are all now caught in the downdraft; price discovery of distressed assets is painful, disruptive but necessary. It's like an alcoholic going through detox.

Link to John Hussman's Post

Link to Economists Petition Against Bailout Presented in House

Saturday, September 27, 2008

M.A.D. and The Man who Prevented WW3

Here is a link to an article printed in Time magazine about a man that apparently had the "rocks" to stand up to group think and say "maybe we aren't being attacked by the U.S." If you are under the age of 30, you may not remember M.A.D. but this man made sure we never had to test the theory out.

The sad part about this story, is the guy did the right thing, and all he did was go pay for it. Typical tragic flawed protagonist, seeking justice in an unjust world.

Have a read, it's a good reminder that doing the right thing isn't always easy. I'm glad he made the right decision, since it allowed me to meet the love of my life and allow our daughter to be born.

Link to Stanislav Petrov here

Thursday, September 18, 2008

The Ryder Cup 2008 is Here

The Ryder Cup is here...this year it's at Valhalla. Hopefully the American team can put up a fight, and I think Zinger's strategy is a good one. Let's face it, since the 1999 win at Brookline, it's been a European drubbing, so maybe hungry rookies can handle the pressure of a tournament that stresses team formats. The best is alternate shot, where you and your teammate have to hit alternate shots. It's a great format.

Let's go USA...and for heaven's sake, somebody shut Sergio down. 15 of 20 possible points in 4 Cups is insane.

Repost of Leverage Related Entries

Below is the link to the posts I've previously entered related to subprime and the credit bubbles. They are timely, and getting lots of hits these days.

Morgan Stanley looks like they will not make it by end of weekend.

Posts Related to Housing, Banking, and the Credit Bubbles

AIG is the latest headline in the news, here is a link that explains the part of AIG's business that really got them into this mess, which was Credit Default Swaps (CDS) that AIG wrote for securities related to the structured finance products (collateralized debt obligations, etc.) that Wall Street created and traded. It's written by a personal friend and he's wicked smart, but does a great job of assessing the true risk of this "insurance" on these products. It's insurance, plain and simple that AIG wrote, and the worst case scenario has played out. The expected value of the "losses" that AIG thought could never occur, as remote as they seemed at the time, have come true. Their model is broken.

Also, below I've posted some links to the smart money, that actually have been calling the markets up to this point. It's in your best interest to check out, but they are highly technical.

John Hussman

Safe Haven Capital Preservation

Nouriel Roubini -- Go to his RGE webpage

The Float

GMO

Epoch Investments

Wednesday, September 17, 2008

Team Pootie comes Roaring Back in Week 2

Team Pootie was down 116.5 to 57 going into Monday night's epic game between the Iggles and Dallas. I had D-Mac, Marion Barber and TO, and needed 59 points to win my game. I was 0-1 already, and this was not looking good, needing 20 points from each player.

Fred Taylor had screwed me again, Vikings D had let Peyton back into the game after a great 1st half of defense.

Team Pootie pulled it out. It was a confusing game to watch, but fun, since every possesion meant something to my fantasy football league game. D-Mac looks healthy again, and actually should have had two touchdowns ala Reggie Brown and DeSean Jackson. I hope Dawkins took care of that situation in the locker room this week. But if the exchange gets done between Westbrook and D-Mac, we send Tony, TO and Jerry friggin Jones home and we're the favorites.

Week 3 should be a close one. Playing the 0-2 guy in the division, so he's due, and I put Sheffler on the team and picked up Seattle D this week against the Rams.

Tuesday, September 16, 2008

Telomerase Enzyme and Aging

The enzyme I used to study in grad school is in the news...I blogged about it here. It's a good read, but as I recall, the enzyme is potentially multi-meric, so turning on the enzyme might take a multi-step approach.

Would you really want to live to 200?

Fed Might Cut Rates? -- Fed Funds Futures Now Price in Rate Cut

The two curves below show the implied Fed Funds rate from the futures market from June 18th and Sept. 15. Stunning. The rate is now at 2.00%, but with the pressure that financials have put on the system, most hope that they stay pat, but another 25 basis point cut is being priced in with about 32% chance today, and an 88% chance of 25 basis point cut in November. Rick Santelli on Friday actually noted that from the trading floor in Chicago, traders had already begun to price the change in sentiment in as he noticed a cut was now being implied...and the VIX volatility index ( the fear index) broke through 30 again after this weekend's events.
Unbelievable stuff. But when two Wall Street icons go down, it makes sense why sentiment has changed. Most knew Lehman was going to fall due to the amount of leverage they had and the amount of level 3 assets this leverage represented, but since Merrill effectively got taken out, the domino theory was now in play. Back in the Cold War, the USSR and US fought small "theater wars" in S.E. Asia, Afghanistan, etc. US foreign policy believed it was necessary to fight Russia because of what was then thought of as the Domino theory. The Fed is now playing the same part in the current financial crisis.

Net net, Bear Stearns was "supposed" to be the only one, and the Fed's actions, vis-a-vis JP Morgan, was supposed to be the end of the credit crisis. Guess again. Whether it's the space shuttle, or financial systems, when complicated, well organized and interconnected systems fail, they fail catastrophically.

Friday, September 12, 2008

Dogtown -- Redemption

National Geographic has a special on TV that documents the sanctuary that took in the pit bulls from Michael Vick. The sanctuary (and name of the show) is called Dogtown, and it provides an illustration of how these dogs were rehabilitated and resocialized. I watched it recently, and it is a truly heartwarming story about how animals are no different than humans in that they can rise above tremendous suffering. If I were rich, I'd probably be doing something like this. I blogged about Vick's dogs before here.

If you have a chance, check the show out. I promise it will warm your heart. Thank god these dogs found peace. Their rehabilitation makes the dogs seem more humane than some of the human sh*t out there.

Official Link to Show

Official Link to Sanctuary on Show

Lehman Brothers

My bet is that the Fed will announce something by 7:00 PM this coming Sunday night re: Lehman and another large bank (possibly 2 or 3) buying the assets of Lehman. Every crisis, the Fed announced their actions on a Sunday night. If not, trading on Lehman's stock will probably be halted Monday morning.

AIG seems to be taking a hit on the issue of their credit default swaps, or CDS, business. But really at the heart of this matter is the FASB rule that states that level 3 assets must be marked to market. In the current environment, marking to market results in marking level 3 assets to virtually zero. If someone is going to step in and buy all of Lehman's Alt-A, level 3 assets, someone has to assure that their assets are worth more than zero. The current accounting rules do not allow for this, so it's a vicious cycle that ultimately looks like the Fed will again need to step in.

Log Me In -- Remote Access to Home Computer from Anywhere


This is a great, free service that you can use to access your home computer from anywhere. The service is called Log Me In (www.logmein.com) and it's tremendous. Justin told me about while in Seattle, and I now use it to check on our dog since I have a webcam hooked up to a computer at home. It's just cause I miss her during the day, and like to check in and make sure she's ok.

The simple idea is much like Window's NetMeeting, where you give control to a remote user who then can troubleshoot your computer, etc. If you want to use the free service, you go to the site from a computer at home you want to access, and create an account with Log Me In. Then you enroll the computer, and you're done. Test it out by going to another computer and you can log in much like you would when you access the computer as if you were sitting right there. Be aware though, not all corporate firewalls let you do this, but I've tested from hotels, etc. and it works. Make sure you click on the "free service," as they do auto-enroll you in fee service after 30 days. But once you sign up, just change the subscription/service level from the dashboard and you will never be charged. I've never been. I used to use Orb, which is also good, but this is much more multi-functional, in case I need to access files from home, etc.

Here's a screenshot of Katie cakes looking over our couch. We've learned that her routine is to sleep on our couch most of the day, but she begins each day flipping over our rug and throwing a pillow onto the floor. It's kind of funny to watch. (Click to enlarge)


"Our Site" -- Click and Viewing Behavior

Here is a chart that shows the number of visitors that hit the site since February this year. The reason I chose Feb is because statcounter started tracking the site as a new project in Feb '08 since I had hit my limit of 500 as a free service (www.statcounter.com)

June's traffic really picked up because I realized how to drive traffic to the website. However, I think that the blue area is the most meaningful. Over time, I have been able to drive new, unique visitors, which is everything. If you want to know the secret, email me, as it's still a work in progress, and still too early to tell. But if you are thinking about monetizing your website, it's an idea worth thinking about.

If you drill into this data above, you will see some patterns of behavior by the people who click on the site. What the data shows is that the traffic is non-existent on weekends, then builds slowly from Monday to Wednesday, then tapers again.



Two things come to mind:

1. Either people are bored as the week starts and find the site and return...

2. I blog in bursts, specifically during weekends, and post all new stuff on Sunday night. This drives traffic.

I know the motives of my behavior well, and Sunday night is when all of my pent up creativity from things I think about get "written". What I'd like to do is drive traffic with less "seasonality" if you will, so that demand is more constant. But before you can address and change a market, you have to be able to understand the behavior of it's participants. I'm the supplier, I want to understand my corresponding demanders.

It'll be interesting to see if folks start to subscribe to the Feed Burner update service or if the StumbleUpon button drives traffic higher...we'll see.

Lehman In Trouble

Here is the 1-year chart for Lehman (LEH)

Here is the 1-year chart for Lehman vs. Washington Mutual (WM) and Merrill (MER).


I blogged about this earlier.
Looks like it's a race against time. Lehman is the overlevered borrower whose house price is falling through the floor. It's the negative equity story, and unless they find a buyer for this distressed "asset", it doesn't look good. Maybe the gov't will bail these folks out too. I know some really good people over at Lehman, so this one has been tough to watch play out. It sucks that their management has mortally wounded the company. Agency issues and greed.

Tuesday, September 9, 2008

StumbleUpon -- A Marketing Pitch

One of the best ideas...highly recommended

www.stumbleupon.com

Tough Week for Team Pootie

It was a tough week for Team Pootie. Put up 103 and lost to the high points winner of the week. D-Mac threw 3 touchdowns for the team, and Marion Barber and TO got us 40 points. Dogs of the week, Vikings Defense almost laid an egg, Aaron Rodgers, bite me.

Being a fantasy football manager is a lot like being a portfolio/asset manager. It's a long season, so I'm managing for the long run, but week to week is tough. You can think of each "position" (QB, RB, WR, etc.) as an asset class, and I'm looking for uncorrelated assets that have high returns and low volatility to generate consistent, high points through diversification across the entire portfolio. Specifically, in the short run, I'm looking to "diversify" my risk concentrated with the Dallas Cowboys, and I'd like to gain more exposure to a better Defense. Simply put, Pootie Tang needs to man up and get some players.

Sunday, September 7, 2008

Hadron Collidor Turned on This Wednesday

The collider goes live this Wednesday, the 10th....If you google "Hadron Collider", you will get a ton of sites that walk through different aspects of the collider. However, my favorite is the article that claims that scientists that have been working on this project are getting death threats. If you scroll down, there is a comment by one of the readers to the article that states,

"The only substance behind these threats is that some religious nut went full retard, never go full retard."

Full retard, well put. I tried to blog about this before....here.

Here are some other great sites, including CERN's Operational Site, below:

CERN's Site

Interactive Guide on Hadron Collider

Educational Site for the Religious Freaks on Particle Physics

Link to Brian Greene's book The Elegant Universe


PBS Special on Brian Greene's Book

Friday, September 5, 2008

Our Trip to Seattle

video

Our Trip to Seattle Erin and I just got back from a mini vacation in Seattle. We went out to visit the Leigh’s, our friends from b-school who work at Amazon, who just had their first, baby Frances Laura. It was a great time, and we spent time doing all the usual touristy stuff. Saturday, we arrived at Sea-Tac and went to Qwest Field to watch Washington State play Oklahoma State. Justin went to undergrad at Wazzu, and I did my “Master’s” work there, and according to the math, we were both there at the same time for one year. Qwest Field is a neat stadium, and it’s pretty loud…Saturday night we had drinks and pizza in Columbia Hill. Justin and I got to play some golf at Trilogy, and I am sad to report that playing on tired legs, I could not bring my dollars back to their rightful home. But a $2 Nassau is a $2 Nassau, and Justin netted me to death throughout the round.

The Vibe As tourists, I would offer that downtown Seattle has an interesting vibe, and could not be more different from NYC, or dirty jersey, for that matter. It’s hard to describe, but for lack of a better term, the vibe is a nice mix of “alternative, polite, and slower pace.” While we didn’t do the high profile stuff, like the Space Needle, or the Museum of Flight, we did go to the aquarium and spent some time at Pike’s Place, which is incredibly cool and embodies better the vibe of Seattle. I have posted some pictures below, and a link to my Webshots that shows more here…

Pike's Place Market Several things were super cool; we went to the original Starbucks”, walked around all the Farmer’s markets, and finally stopped to watch the famous Pike’s Place Fish Company, where the business owners throw large fish across to each other. My mom told me that there are corporate, team-building programs based upon this store and these workers. The rationale is that these workers have created a fun, unique and productive workplace in a job that most would find boring and gross. The proof is in the crowds that were lined up around these workers, waiting for someone to order a fish. I posted the video I took on my camera of these guys working...it's up above.




Baby Frances Laura Hanging out with the Leighs was fun, and seeing Seattle and the surrounding areas was fun. Our hosts could not have been more gracious, and it was weird to see folks we had spent so much time with in b-school on their home turf (I think I mentioned the word “anachronism” on hole #5 to JL)…We got to see baby Frances; she’s adorable and pretty responsive at 2 months. Mom and dad are running 5Ks and half marathons 2 months after the birth, which is inspirational if nothing else…All I know is that I’m pretty sure I got her to smile, and all it took was some funny noises. What a cutie, maybe next time we’ll introduce her to Allison.

An Interesting Side Note Finally, it bears mentioning that we stayed downtown at the Hyatt right near Pike’s Place. When we arrived on Saturday after the game to check in, there were throngs of people across the street at the Convention Center, and all looked “familiar” in a subconscious way. Our hotel was also overrun with many of these people, who were wearing various t-shirts; one of the patrons had on a black t-shirt with 3 Pac-man ghosts, another was wearing a t-shirt with Zelda on it. So, to the dismay of my wife, I asked the 20-35 year old male who we rode the elevator up with, “what’s going on across the street?” Turns out, there was a electronic gamer conference going on, and most were staying in our hotel.

Well, I admit, I’ve played my share of video games. Most recently, one of my more shameful gamer moments was getting sucked into the hype of Halo 2 in 2005. I was in State College, PA at the time and had reserved my advanced copy, which I could pick up at 12:00AM on the day of the product launch. So I drove to Nittany Mall at 12AM in the morning, thinking I’d just run in and run back out with my game. Well, upon arriving, I waited in a long line in the mall for 2 ½ hours with some of the greatest representation that central Pennsylvania has to offer (Central PA is tremendous, but perhaps this is not my moment to throw stones at glass houses…) When I got back to my apartment, I played the game till 7:00AM, and then went to my Investments class that same morning. Having taken no shower and not brushed my teeth, my classmate Hristo looked at me and asked “late night at CafĂ© 210?” and I explained “nope, I waited in line last night for Halo 2 and played the game up till about an hour ago.” Hristo replied, “dude, when else can you take a break from the real world and do something like that?” Well said Hristo, and absolutely true.

The point of my story is that I needed to illustrate my “motive” for snapping the picture below. If you’ve ever watched the show G4 on cable, then you know who the dude is in the picture below. If you don’t, well then, maybe you’ve never played video games or waited in line for Halo.

Adam and Me, outside the hotel in Seattle, super cool about a dumb fan...

Video of Adam on PAX2008 Show in Seattle


Seattle is a beautiful, great town, I highly recommend anyone check it out. Thanks again to the Leighs!!!

Image hosted by Webshots.com
by jkweil

Thursday, September 4, 2008

Flying on a Plane and the Theory of Relativity
























Being a commuter, I spend a lot of time on buses and trains, and while traveling back and forth from Seattle recently, I realized that the captive time makes my mind race. Well at one point, I had to go to the bathroom, and while standing in line, I got to thinking about the theory of relativity.

Most people know who “discovered” the theory of relativity. But few can explain it. I'm quite sure I would have asked Einstein "what does that mean" when he made the absolute statements about relativity, and I'm sure he would have answered and explained with examples and details. As a digression, Erin will tell you that the statement I make most when I give someone the opportunity to explain absolute statements* is “what does that mean?” or “please give me an example.” It’s a simple statement that you can follow up anyone’s prior statement, and it’s most useful when someone flat out says something you either don’t agree with, want to challenge the validity or conviction of their belief, or just probe to make sure they even know what they are talking about. You’d be surprised how many people try to tell you how you should think. It’s on you to challenge them and ask them “ok, I hear you, but what does that mean??” I find the statement indispensable, and there are lots of other folks eligible for this question. Erin and I always laugh at some of the responses we hear when we ask that simple question.

So what does the theory of relativity mean? Well, relativity was born out of Einstein’s constant struggle to reconcile the speed of light and the measurement of time. I remember the first time I ever read about the theory in Physics in undergrad, and two things stick out: If nothing else, the theory of relativity is profound and should make your head spin, and you realize how far ahead of his time Einstein was as an intellectual. Think of relativity this way, as I am sitting next to Erin on the plane, she and I are not moving relative to one another. However, we are in a plane that is moving at a cruising speed of 450 mph at 30,000 feet. Again, my speed relative to the plane is zero, I am sitting still. But, relative to the ground, I am moving 450 m.p.h. That’s awesome, and guess what?? If I froze the plane in the air, then relative to the plane, the ground is moving 450 miles per hour. Think about that.

Here’s where it gets crazy. If you hold speed constant, the farther away from the ground you get, time begins to slow down. There is nothing that you and I know of that moves fast enough to make this difference noticeable. But if you could move at or near the speed of light, time starts to standstill. It’s a hard thing to conceptualize, but it’s the fundamental basis for time travel, and was instrumental in reconciling the 4th dimension, which is space-time. If you think this is from a science fiction movie, guess again. Global Positioning Satellite units that you can buy for your car sometimes make the marketing claim that they correct for this time lag given that the satellites are moving much faster relative to your position so that you don't have errors in your position magnified...Einstein was ridiculous…think about it. There were no computers back then, just great minds.

*For example, if someone makes an absolute statement like "I think my coworker talks about me?" you should ask simply "What does that mean?" If you can make the person give you an example, or further clarify, 9 times out of 10, if the statement is true, the person can explain what they meant and there is usually a good basis for their belief. If they can't explain their statement or back up with evidence, well, then you know the person just says things with little evidence to back up their beliefs.

RNC -- Will McCain Get a Bounce?? -- UPDATED

McCain is set to accept his party's nomination tonight. InTrade shows as of 8:00PM that the futures market for the presidential election pegs OB's chances at 59.8%, and McCain's at 39.6%. We will see...

UPDATED
Looks like the Palin bounce is in full effect. This is a tremendous election year, like watching two midgets argue over who is taller. The public will choose between which choice is less worse. Whoever wins, either candidate is screwed and the agency issue will rear its ugly head once fame and power are achieved by leadership midget 1 or 2. The question we all find ourselves asking at the end of the day is which candidate potentially screws us less? Think about it.




Check this tomorrow to see if the bounce moves McCain higher than 40%...

Friday, August 29, 2008

My Day Inside the Ropes with KJ Choi ...

Last Wednesday, I was fortunate enough to have the opportunity to play golf in the Barclays Invitational Pro-Am. It was the most amazing experience I've ever had. Please indulge me as I relive the experience...

When I received the invitation, I sent Barclays (BGI) my handicap. BGI sent me my info packet that listed directions to the parking lot. My tee time was 7:30AM. At the time, I had no idea who I'd be playing with, but the night before, I checked the tournament website to get a feel for the course. The link is here, and after looking through, I was pretty nervous.

Time to Head Out So I get up at 4:30AM, shower, and load the car up with my sticks and my shoes. I am on the road by 5:45AM and reach Ridgewood by 6:45AM. The attendant in the lot takes my bag and I ride in to the course on a shuttle with the other "lucky amateur bastards". We get to the course, and I have to register. The nice woman gives me two things, a pass for all access that marks me as a contestant, and a sheet that shows who I am playing with and what tee I am starting on. I get to play golf with "The Chairman" -- K.J. Choi. K.J. is the 15th ranked player in the world. Links to K.J. are here, here and here.

Pass for tournament with KJ's Autograph (click to enlarge)






















Sheet with Pro Pairings and Starting Tee
(click to enlarge)























Texting
my Buddy Jimmy
I sit at the locker they give me in the clubhouse, and I can barely keep my head on straight. The only thing I could think to do is text my buddy Jimmy two simple letters "KJ". I put the cell phone away and head out to look for my bag and the range. Once I find them, I grab a wedge, a 7 iron and my driver and head down to the range. The first person I see hitting balls? Freddy Couples. Next to him? Sergio. It's basically insane. I go to the tent to get my bag of balls, and they have every ball you could want to hit. I grab the bags marked Titleist because I don't hit "Bridgestones", and hit a few, then head back to the cart when they announce the time as 7:25 AM. Oh, on my way back, Phil Mickleson is being interviewed in a chair by the range. That was cool.

So our team heads down to the 17th tee box, still no sign of K.J. though. We're standing on the tee with Stuart Appleby's group, and he's ribbing us about K.J. being late. There's about 14 people standing around including all of our caddies. Honestly, I'm so nervous, I don't really remember what he said. But they tee off and K.J. and his caddie show up and Appleby points to his watch..K.J. just starts laughing.

The Chairman Arrives K.J. is extremely nice and introduces himself. His caddie, Andy, is a Scotsman and he's a freakin' riot. For example, he hands us "pin sheets" and states "in case your firing right at them." We stand on the 17th, and it's time to go. The 17th is a dogleg left, so K.J. tee's off from the pro tees. He nuts the ball with effortless power, which is truly what you realize with these guys. The ball turns around the corner and disappears. I say "good ball KJ" and walk up 20 yards to our tees, the fourth set.

First Tee Jitters I'll save you the suspense... I had hit 5 good drivers on the range, so I felt comfortable on the tee, all things considered. I remember picking out my spot in the distance, lining up, and then trying to stay relaxed and slow. I remember seeing the ball, hearing the ball, and KJ and the group saying, "great ball." We teed off into the sunrise, so I never saw it. We go up, and I outdrove KJ given that I was up 20 yards, and really tried to keep it together because I didn't want to be that dude that tried to show up the pro. But I did outdrive him, and it meant nothing other than my teammates took notice and so did the kid and his dad standing outside the ropes watching our group. You can't imagine how awesome it is to pipe a drive, pick up your tee, and there are people clapping and a pro saying "great ball". Oh, KJ made birdie on 17, I made bogey. Hitting a big drive is like getting a girl's number. You still have to make the call, so all that matters is the shot you hit from there.

My Random Thouhgts I won't go through every hole, because those who know me know I remember everything due to my photographic memory and really could. But here are some of my random thoughts about the experience:

  • KJ Choi could not have been cooler. He really kept us relaxed, it was hard to believe he was the same intense guy you see winning on TV at tournaments.
  • I've always imagined what it's like being inside the ropes. And you know what? It's exactly how I pictured it. Being inside the ropes beats standing outside the ropes any day.
  • I hit 10 fairways that day, and it was a blast having people watch you tee off.
  • TV doesn't do any justice to what these guys do. Their swings are beautiful, and the shots they hit from the places they do are unbelievable. And putting on PGA greens are heaven.
  • I made 2 pars for birdies in our team's effort.
  • KJ and his caddie were working on strategy the whole round, talking about what clubs to hit on each hole, and looking at the greens since this was the first time many had played at Ridgewood CC.
  • KJ signed about 50 autographs during our 5 hour round. The most inspiring moment was when KJ signed the hat for a girl who walked with two crutches because of a birth disorder. KJ really took time to show he was appreciative that she wanted his autograph. Watching her reaction after he signed her hat and headed toward his ball made me realize how much of an impact we all have on others, no matter what our status in life.
  • Funniest moment of round (for me personally): Walking from 13 green to 14 tee box, KJ was back behind us and signing more autographs. As I come up over the hill towards the tee box, some little kid looks at me and says "KJ, can you sign my hat?" His dad quickly looks at me and says "That's not KJ." It was pretty funny. I quickly realized that while I was inside the ropes, this kid's father reminded me my presence there was temporary.
  • On my 3rd hole (#1), I rolled my ball in for par, and stood off to the side and waited for the others to putt out. My eyes got watery because I realized how far I had come in my life to reach that point inside the ropes, and it has a very humbling moment. Thanks Jim, Duane and Willy for giving me the skills to hang with KJ and play one shot at a time.
  • Saying "good putt" and "nice drive" to KJ and having him look back and say "thanks" never got old the whole round. Thinking about KJ saying "good drive" after I hit my drives off the tee still gives me chills. I can still hear he and Andy.
I could go on and on, but I was on a high for three days. Below is the picture of our team and a signed "flag" by KJ. His agent and he also sent a card that I received this week saying thank you again, it was just classy. When the round was over, I took off my visor, shook his hand and thanked him again for making the day so much fun. I won't ever forget the experience. KJ was a true gentlemen.

Plaque of Our Team (-10 under, tied for 4th)























The Epilogue BGI invited me to play two days later at Liberty National. Liberty National is where the Barclays will be held next year, and the thought right now is that the Barclays will rotate between Ridgewood, Liberty National, and Westchester Country Club. Apparently, Bob Diamond, the president of Barclays, is a member there. Here is a link to Liberty National..here and here.

Liberty National I got to Liberty and met up with my contact and met Bob Diamond in the locker room. Bob was playing in the group ahead of us, and Tim Finchem, the PGA Commissioner was also in his group. (In the picture I took below, you can see Commisioner Finchem in the grey slacks with the black shirt...) There are just some beautiful views of the Manhattan skyline from the course. Liberty that day played much tougher than Ridgewood, no disrespect. There's fescue all around to look at off the tee, and when the wind gets going, it can wear you down. The greens are really crazy too. Should be a great venue next year...!

View from the 16th Tee Box...lots to look at

Finally, a word about the Barclays Tournament
Erin and I went to the Barclays on Saturday. We hung out at the hospitality pavilion, and I introduced Erin to Bob Diamond while there. We followed KJ from the 16th hole on in since he teed off at 9:40 AM. He was -3 under for the day and making a move, and had birdie chances on 16 and 17. I said hi to Andy and we followed their group in. Afterwards, we headed down to the driving range to watch KJ work out. I spoke with his friend who recognized me from Wednesday and introduced Erin to Andy as well. We hung out along the 17th fairway since that was where I started our Pro-Am round and watched VJ, Lumpy, Nick Watney, Sergio, and Phil hit their approaches into 17 green. It was simply awesome being inside the ropes. Kudos to Barclays, what a fantastic week. KJ, if you are reading this, you have a fan for life, ask Erin. She was laughing watching me run around the course following my pro.

Thanks for letting me share this experience. I know it was a long post, but for a once in a lifetime experience, I could've written a book.

KJ's Swing on CBS's Swingvision Slow-Motion Camera

Thursday, August 28, 2008

Morton Wins Against the Marlins

Charlie went 6 innings against the Marlins and got the win. The young rookie threw 125 pitches scattering 4 hits and giving up just 2 earned runs. It was a good win, great outing CM.

Wednesday, August 27, 2008

Presidential Predictions on Univ. of Iowa Futures Market

Courtesy of Iowa's Futures Market Website -- See Link










Here's another futures market where market participants can try and predict the outcome of the Presidential Election this fall. Red line is for the elephants, blue line is for the "donkeys". The time horizon is from 2006 to present (Aug. 2008)

It seems that lately, the red line is trending higher, and the blue line is trending lower, consistent with the futures prediction on Intrade's market (www.intrade.com)

Link to Presidential Market at University of Iowa

Tuesday, August 26, 2008

Biochemical Pathways...

Here is a link to a clickable, interactive chart that shows all of the body's biochemical processes or metabolic processes. The charts give you an appreciation of what medical science is trying to accomplish when targeting such diseases as Alzheimer's, cancer, etc. The chart shows that nature is both elegant and complex, and our search to find the cures for things that go wrong in nature is a humble, yet noble one.

Link to Metabolic Processes Chart