April Fools on Me

I had dinner with some clients of mine last night. A husband and wife, the three of us spent several hours going over things and having a nice dinner. Then I get the following email today, which admittedly made my heart skip a beat:

Dear Brett:

Thank you for your visit and for dinner last night. We buy next time...

that is, if there is a next time. I must be honest to say that we were both taken aback and shocked, to say the least, by your display of poor judgment, lack of common good taste and appalling lack of appreciation for one of our core and life-centering principles:...

By now, I'm thinking "oh no, what did I do/say/not do or say?"  How in the world could I possibly screw up so bad?  It continues...

A Ski Day

A significant storm dropped 3 feet of snow on the southern Rocky Mountains last week. Friday was the first full day since the snow stopped and if ski patrol had time to clear avalanche danger, the ridge would be open. Forecast to be clear, sunny  and warm, taking a ski day was certainly in the cards.

My day started with the best breakfast burrito one can find, from Abe's Cantina in the  tiny hamlet town of Arroyo Seco, NM, about 12 miles from Taos Ski Valley. Not long after I  found myself warming up on a few groomed runs in perfect conditions. Arriving at the  top of the highest lift, the view of the ridge opened up with it's bright white  cornice reflecting the morning sun. It was time.

It's January, so that means more of the January indicator myth

Every January, without fail, the financial press haul out their stock articles about the January indicator*, update a few numbers and voila! another article done for the month. The WSJ ran a piece about this "bellwether indicator". As expected, journalists got it wrong and only promoted the often quoted myth. If the WSJ can be lazy enough to post the same old tired article, I can take a few sentences to point out again why this particular bit of Wall St. lore is wrong.

My Favorite EconTalk podcasts

Russ Roberts, host of EconTalk, occasionally makes the point economics is referred to as the "dismal science". Those who refer to economics that way have never listened to Russ' podcast. Listening to EconTalk always leaves me feeling a little bit better about the world.

The media and politicians like to spin economics in a way that makes you scared and favorable to whatever solution they happen to offer. Russ in his podcast frequently examines these claims and exposes them either as false or highly misleading. For example, Russ many times points out it's a myth America doesn't make anything anymore, that its manufacturing base is being hollowed out. America is the world's largest manufacturer. America just becomes increasingly efficient over time. America can make more with less people. When your economy can make more with fewer resources (be it iron or human resources) that's actually a good thing for your economy.

Lake Woebegone part I

Lake Woebegone refers of course to Garrison Keillor's fictional location in Minnesota. Keillor has been in the news lately, apparently recovering from a stroke and providing a reasonable opportunity to highlight the Lake Woebegone Effect (henceforth "LWE"). In fictional Lake Woebegone, "all the women are strong, all the men are good-looking, and all the children are above average."

As January goes, so goes the year

That's an old, old Wall Street adage. So old, in fact, that I couldn't even track down its origins. What the maxim means is that the direction of January foretells the stock market's direction for the rest of the year (February through December) that is. Financial journalists love to pull this one out every year, particularly since a little quick math is impressive. In the 82 full years since and including 1926, this metric has worked 70% of the time. Considering markets are either up or down, 70% is much better than the coin flip odds would suggest. Or is it?

Tax-and-Spend Democrats, Small Government Republicans and other Myths

A few years ago, I attended an industry meeting at which TJ Rogers, CEO of Cypress, gave the keynote speech. Shortly after dessert was served, a color guard complete with blaring bagpipes followed a kilted TJ Rogers up to the podium. That night, TJ turned my beliefs about the fiscal policies of Democrats and Republicans upside down. I dedicate this posting not to TJ though, but to his former corporate controller, who claims he did the work.

Here are a few facts for your amazement and amusement.

The Daily Cramer

Sometimes TV really is worth watching. Case in point: Jon Stewart and the Daily Show. Regardless of what you think of The Daily Show, this week has been spectacular and may just crescendo tonight. Why? What's going on that it bears mention on a financial blog? Well, Stewart began this week by taking a comedic swipe at Jim Cramer and CNBC, which summarily got right out of hand.

Suicide Myths

There have been quite a few unfortunate, high profile suicides lately. Several were directly a result of the Madoff scandal- investors who lost everything or were disgraced by participation. Another just this week, German billionaire Adolf Merckle ,threw himself in front of a train.

Quotes on the Dismal Science

Here are some great quotes pertaining to economics and finance I have collected over the years.  Some are witty, some cynical and some are just painfully accurate observations. 

We'll be off for a few days (maybe, if we can stay away).  Enjoy the long weekend.

Market Lore

Working on a trading floor can be a lot of fun, not least because traders, marketers, researchers (economists, strategists, whatever) can have, shall we say, somewhat quirky personalities.  Even in today's politically correct HR-monitored environment, there is a constant flow of profanity-laced 'stream of consciousness-type' patter.  Cliches are legion, with many floor denizens relfexively repeating their favorite Simpsons or South Park quotes.  Or Animal House.  Or Risky Business, or Wall Street - I once walked past a filing cabinet on which some of short-term financing guys had placed the remains of a couple of boxes of Italian Pastry.  I said, to nobody in particular, "Leave the gun.  Take the Cannoli."  They laughed way too loudly, and told me I was about the 50th person to say that.  Here, in no particular order, are some of my favorites: