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For those of you just visiting the site for the first time, sorry I killed it. To you, and to others who may be looking for an old article, here are some of my favorites from over the years. There’s much more, of course, if you care to browse through the archives month by month.

Cheers, and best wishes to you.

• When Talking Heads Say “Never”: The Impending Real Estate Crisis (16 Dec 2005)…The one that started it all- I was a real estate bear when real estate bears weren’t cool.

• Trading and the Personal Journey…The Market can be the greatest sensei you’ll meet in your lifetime, if you’re open to learning about yourself. Most of the time, most of us aren’t.

• Asian Currency Manipulation: How they keep their products cheap and our bond yields low…Why do I think this is important? Because at any point the governments of China and Japan could decide to reduce the rate at which they purchase our Treasuries or, God forbid, actually start selling those Treasuries rather than accumulating them.

• Kurt Vonnegut and Johnny Cougar

• The American Dream (Jan 2006)…[another one from the early days]… These material possessions may be as absurd as a 6500lb SUV for a single grandmother or cookie-cutter houses built wall-to-wall in the middle of a cow pasture (pardon, a gated cow pasture) for young couples…

• Repurchase Agreements: The Fed As Pawn Broker (12 Aug 2007)…Bubba Has A Liquidity Crisis, and Banks Are Bubbas Too

• Mother…She also, as all mothers do, played a major role in the construction of my “Wall”.

• My “Fed Fade Trade” Deconstructed (31 Oct 2007)…this trade works maybe 60 percent of the time. Perhaps 5 or 6 “Fed days” each year. But when it does (like today, and big-time in June), it’s possible to make a serious gain in only a few minutes if traded correctly.

• The Unlived Life (02 Dec 2007)…

• Christmas Shopping Without Debt Enslavement: The New Layaway (29 Sep 2007)…someone, somewhere has gradually convinced us all that it’s perfectly fine for individuals and governments alike to spend money they don’t have. Illegitimate Spawn of The New Deal, perhaps.

• People Are Strange…They say your true character is who you are when no one is watching. As it turns out, your true character also shows when you give money anonymously.

• Refinancing Subprime Loans to Prevent Debt-Deflation (06 Sep 2007)…one of my core beliefs is that true adulthood and maturity are the result of learning to accept and deal with the consequences of our own decisions. More importantly, it’s learning to consider the consequences before we commit to a decision, not just whether “I want it.”

• Out Of Office Itinerary: I’ll Be Between the Notes (3 June 2007)
  (One of my favorite vacation notices)

• Subprime With Good Credit, It’s Still Just Good Old-Fashioned Greed (04 Dec 2007)

• Let’s All Move To Jeff’s Neighborhood (28 Aug 2007)…As a matter of fact, I’d argue that those same credentials often insulate people from reality, leading the “experts” to ignore even flagrant evidence if it contradicts them. Thus catastrophe sometimes results as these people begin to think of themselves as infallible.

• Speaking of Deflation… (19 Aug 2007)…

• Some Macro Thoughts on Deflation and Recession (16 Aug 2007)
  (this is the one where I called the 8/16 reversal, and also said it was NOT the long-term bottom)…So Was This The Bottom? I don’t think so. The macroeconomic factors haven’t resolved in the least. In fact, I’ve continually made fun of the talking heads’ using euphemistic language like “housing slowdown,” “slump” and the ubiquitous “soft landing” … we’re not even close to the last shoe dropping on the housing bubble

• Other People’s Money (OPiuM) (01 Oct 2006)…The temptation is to try to rush the process by funding our account with borrowed money. We’d be much better served to take the time to get our personal lives in order first.

• “Tame” PPI not such good news (Sep 2006)…We are due a recession- overdue if you count the one the flood of new money a few years ago postponed. I think the inverted yield curve is telegraphing that fact. But remember, we need something to recede FROM.

• Inflation, Deflation, Real Estate, The Dollar and Their Effect On Equities (15 Mar 2007)…That is not where we are right now. We have an economy frothing with money, but no growth to speak of (compared to what should be expected). What we have is an economy that’s trying to stall in spite of all the excess money. What happened to all that money, and where’s the inflation? That money caused a vast inflation in home prices, in case you didn’t notice.

• The Fed Should Not Be The Hedge Funds’ Insurance Agency (4 Aug 2007)…I laugh when I hear silliness like, “Do you think the housing slowdown is over?”… it’s not a slowdown, it’s a drastic reversion to the mean, and at best, we’re at the “end of the beginning,” with the fun part yet to come.

• Moving Averages: Let’s Talk TA…when it comes to Technical Analysis, moving averages are the most-frequently used indicators around. This also makes them some of the most misused indicators around.

• Turbotax Warning for Ameritrade Users, or How I Discovered I Was Rich…That’s right. After TT eliminated most of my deductions (hey, that 2% threshold is pretty high for a millionaire), it announced that I owe $1,312,256 in Federal Taxes. And here I was fretting over balancing my checkbook.

• What Would You Do If… (26 Sep 2007)…I don’t think I’d like the person I’d become if I had that much money right now.

• Jon Stewart and Alan Greenspan: Best Interview Ever (19 Sep 2007)…The coup de gras is when Greenspan admits that even with all the complex mathematical models, neither he nor anyone else is any better at forecasting now than they were 50 years ago!

• Are You A Compulsive Trader? (19 Dec 2006)…

• But I Don’t WANT To Be Like You (02 Nov 2006)…”one day when you grow up you too can start trading stocks and can be JUST LIKE ME.” Really? Just like you? You mean, with my head up my own ass and all?

• GMTA, And They’re Trying To Tell Us Something (11 Oct 2007)…

If deflation caused by the credit market collapse overtakes the easing Fed and the falling dollar (leading us into a painful recession), we’ll hear about it from CNBC and FoxNews about nine months too late. Is there any way for the astute individual (who knows what shows up in the “news” is always past-tense) to spot the breakdown as it’s happening?

There is- watch the commodities, they react first.

Keep an eye on the charts of Oil and Gold for a top, see the dollar find a bottom against… everything, and when you’re comfortable we’ve rolled over into the spiral, plan your trades accordingly. What worked brilliantly the last year or so may suddenly stop working, and you’ll find your trades hitting stops instead of profit targets.

That will mean it’s time to get out the old playbook and mix things up, because we’ll be on the field with an entirely different opponent.

Related Links

• Refinancing Subprime Loans to Prevent Debt-Deflation
• Dollar Stronger against the Euro?
• The Fed Should Not Be The Hedge Funds’ Insurance Agency
• Speaking of Deflation…

I just heard Garrison Keillor reading a poem on Writer’s Almanac, after the news and before the music on NPR. It made my day. Thought you might enjoy it as well. It’s a poem called “When I Am Old” by Ray Nargis from Almost Tomorrow. The link I’ve inserted is the NPR affiliate link to Amazon, so they get the two cents if you buy it.

Here are some excerpts:

When I am old I’ll drink whiskey in the morning
And coffee at night
And laugh and spit and swear wherever I want.
When I am old I’ll help Girl Scouts across the street
Even if they don’t want to go
And I won’t have a car
And I won’t have a bike
And I’ll walk everywhere.
…
When I am old I’ll tell people exactly what I think of them
And surprisingly, most of the time it really will be good stuff.
When I am old I won’t have a TV
And I won’t have a radio
And I won’t have a computer or a clock or a phone in the house.
I won’t read books and I won’t read magazines
And I won’t read newspapers and maybe, finally
I’ll learn something just watching the birds and the weather.

Just finished listening to the NPR article on the album Allison Krauss and Robert Plant have done together called Raising Sand. If you’re a fan of either (or both) of them, be sure and listen to the audio of the interview (it should be available by noon today). I especially like Plant’s explanation of why he doesn’t care for the term “duets”.

Krauss has what some have described as “the purest voice God ever gave a human,” which much of her work with Union Station seems to validate, and Plant, well as you can see from the pics in the article, he looks like death warmed over, but he’s a brilliant musician and music historian, and probably more intelligent and articulate than most any other rock star alive (listen to some of his past interviews if you get the chance, it’s like William F. Buckley with a sense of humor, and talent). That he, Jimmy Page, JPJ and Bonzo ever got together is one of greatest blessings in our musical history.

These two are supposedly already making plans for a 2008 tour. I’d certainly pay a premium to see that. Let’s cross our fingers.

What, you didn’t have the internet? What, you didn’t have an mp3 player? What, you didn’t have a telephone? NO! You were not making a value-based purchase of a necessary commodity.

You were absolutely, as the late great Alan Watts said, playing the game of “I have conformed sooner than you.”

And you won. Bully for you. You got your money’s worth. Now shut up and watch Pirates on that itty-bitty screen and pretend you like it.

I was an old man at twenty-four as I held my mother’s hand and helplessly watched her die. My father was long dead, all my grandparents were dead. She was the last one.

My first Baby Girl was born less than a year later. That Baby Girl is now only a few short months from turning fifteen. When I make the trip to my mother’s grave each year on the anniversary of her death, I still tell her how proud she’d be of all her granddaughters, and how we all missed out by not having her around to spoil them.

She also, as all mothers do, played a major role in the construction of my Wall.

This morning at work I found myself in a peculiar mood (I’m prone to them), and heard myself singing Mother by Pink Floyd under my breath. It stayed on my mind for hours, and I’d randomly ask someone if I should trust the government, if it was all just a waste of time, if they thought they’d try to break my balls, or whatever. It occurred to me to blog the lyrics of Mother, just because I can. But I decided against it. No good reason.

Then tonight I had dinner with a wonderful young lady (home-cooked, no less). As I left her apartment complex, I flipped on the radio. It was on the “modern rock” station (which plays Head-Banging music and for which Nookie is a mellow oldie), and what did I hear? An acoustic guitar playing a “G” chord, and Roger Waters’ voice singing, “Mother do you think they’ll drop the bomb?”

That’s about as unlikely as it gets, and all the excuse I need. So here y’are:

Mother do you think they’ll drop the bomb?
Mother do you think they’ll like this song?
Mother do you think they’ll try to break my balls?
Oooooaah, Mother should I build a wall?

Mother should I run for President?
Mother should I trust the government?
Mother will they put me in the firing line?
Oooooaah, Is it just a waste of time?

Hush, my baby, baby, don’t you cry.
Momma’s gonna make all of your nightmares come true.
Momma’s gonna put all of her fears into you.
Momma’s gonna keep you right here under her wing.
She won’t let you fly, but she might let you sing.
Momma’s gonna keep Baby cozy and warm.
Oooo Babe.
Oooo Babe.
Ooo Babe, of course Momma’s gonna help build The Wall.

Mother, do you think she’s good enough,
For me?
Mother, do you think she’s dangerous,
To me?
Mother will she tear your little boy apart?
Oooooaah, Mother will she break my heart?

Hush, my baby, baby, don’t you cry.
Momma’s gonna check out all your girlfriends for you.
Momma won’t let anyone dirty get through.
Momma’s gonna wait up until you get in.
Momma will always find out where you’ve been.
Momma’s gonna keep Baby healthy and clean.
Oooo Babe.
Oooo Babe.
Ooo Babe, you’ll always be Baby to me.

Mother, did it need to be so high?

   (from The Wall, music & lyrics by Roger Waters)

The SPY trade was stopped out in one day at 150.24. Also I discovered another error in the spreadsheet I wrote for this project- it didn’t affect the entry and exit targets significantly, but it’s a good reminder to always be diligent in double-checking when you copy/paste new data into a sheet- particularly with cells containing indirect references (which don’t automatically adjust when the cells shift down and over).

I’m planning on calculating the profit/loss for this project based on different position-sizing strategies: fixed-dollar amount, fixed share number, and the one I personally use, risk-based position size (i.e. “R“).

Also, don’t think I don’t realize that I’m starting this tracking right when the market appears to be rolling over, and that I may spend the first “x” trades getting whipsawed. That’s OK. What I’m working on here is paying less attention to what my gut tells me, and only using my discretion within the limits of the trading plan (vs. saying “to hell with the plan, I’m going all in short!”).

Nothing teaches like real life.

Summary:

• Number of trades so far: 1

• Position: Cash (last trade stopped for a loss)

• Plan: Long above 151.60 or below 146.50, with an initial stop of approx. $2 on either one.

Been out of touch lately, here’s a quick catch-up.

The Vacation

It rocked. Riding those mountain roads was awesome, as always.

The Market

Very tenuous. I’m not shorting here, however. I’m on the cusp of going fully to cash.

I’ve made the life-changing decision that my swing trades will be either going from cash to long, or from long to cash as long as the market remains in an uptrend, which it still is at this point. No more swing shorts in an uptrend. Daytrades are another matter- I’ll go short or long based on the particular day’s action, of course.

This life-changing decision is also the conscious decision to miss out on the big swoop when the market switches from uptrend to downtrend, and the chest-thumping of “I caught the top” when that happens. My swing money will simply be in cash, and will switch to the converse strategy of short- or- cash in the new downtrend.

No charts tonight, but pull yourself one up and look at the divergence between the price bars and the RSI(14) over the last few weeks. Spooky.

I’m off to have a few cold ones and listen to some blues. And speaking of blues…

I’m Being Sued

This knock at the door changed my life, and is part of what’s put much of my writing on hold. Last year, I put a couple of clearcoat scratches on a car that pulled up behind me and waited to be hit. Under 1mph. The cop had to ask me where my car touched theirs, ’cause he didn’t see it. They were busy on their cell phones, calling the lawyer from the TV commercial.

It now seems that those scratches (neither of these “ladies” was even the car owner, BTW) in the clearcoat were enough to cause two pages of injuries to these parasites, according to their parasite lawyer.

I’m having to rethink my entire outlook on life. I’ve been ultra-responsible and honest (yeah, farm boy- I still change tires for little old ladies, too), and there’s the potential for 40 years of that to mean squat. This could affect my daughters’ college, etc, etc.

Plus I may be having to choose between buying some QQQQ or buying some hamburger meat.

We’ll see.

Dropping Like Flies

I have not, despite being tempted several times, stopped blogging. Seeing Estochastica, Victoria, and X retiring their blogs has caused me to rethink continuing mine, as I’m sure it has many of you. This can be pretty thankless, and you’ve gotta do it just for the love of it. Then when your passion for it fades or life gets in the way, you stop. That’s the way I prefer it.

(There’s another way, where you pump and dump and promise fabulous riches to the lemmings who flock from site to site looking for the easy answer. Then when the crowd fades and the ad revenue drops, you move on… unless you’re really “good,” in which case you sell your pumped-up project to the geniuses at some corporation during its peak. Brilliant? Or just clever (wink, wink, snicker, snicker)? Whatever.)

We’ll miss the great folks from those labor-of-love blogs for the education and valuable content they provided, and our RSS readers won’t be the same without their feeds.

Gotta run. Blues waiting. Later ya’ll.