Wednesday, October 29, 2008

Short Squeeze!

I haven't felt that good for long! When I first read the news I was kinda like getthef*ckouttahere... The Bloomberg news sez, Volkswagen overtaken Exxon as the world's highest market cap company. Duh?! WTF happened?!

It seems that Porsche SE, owner of about 40% of Volkswagen outstanding shares has been buying VW stock for sometime. However, since the September financial earthquakes and the associated tsunamis, the stock recently became a preferred shortseller target, damn the shorting bastards! The most shorted stock on the DAX, word has it. The chart on the left depicts this behavior clearly. Until three days ago...

Porsche had enough with that shit and went like: Herr Ober, we gonna own that stock for good. They announced their intent to buy themselves into a 70+% ownership stake and that they had secured agreements with some heavy stakeholders to do exactly that. By doing that though they squeezed the pool of available liquid stock, as many stock owners held stubbornly to their positions and thus, panicking shortsellers went out to pay anything possible to get out of their monumental losses! The stock jumped to levels unseen in its history and the history of the DAX.

That's the name of the game I'd give a year's salary to see happening again, to many more stocks this time... It's called short squeeze.

About the same time this was going on on the DAX, Goldman Sachs and Morgan Stanley stocks were plummeting in NY! Say what? Yes sir! Rumor has it that those leeches from New York City haven't learned their lesson yet. Probably, trying to recover loses they incurred in their toxic subprime hit assets, they've been shorting anything that moved. Société Générale of France was mentioned in the VW case as well. Official spokesmen of the three groups remained silent in all the tongues they speak. But the underground rumor mill of the 'smart money' knew a lot better; smart money are the professional and powerful investors who manage to keep one step ahead of the rest of us in the herd. If it proves that these three, MS, GS and SG are behind this, I hope the f*ckers lost zillions in the transaction. And it's about time some stupid government intervenes to stop them and all the others from destroying otherwise great companies that feed the millions of families of their honest workers in order to enrich themselves beyond obscenity! Gosh, I sound like Hugo Chavez right now, God forbid!

Sunday, October 26, 2008

I always liked that woman... but Pitt stole her away...

There's a hell lot to this woman than just a pretty face. Not all of them are Homer Simpson-like brainless broads like God forbid Britney and Paris.

Best news this Sunday!

Apple fights against the proposition to ban gay marriage in California. Makes my day! Joe the plumber and John the fixer will be so miserable at the hearing of the news... Think different, Apple Inc! Here's the detail from the LA Times article:

Apple said Friday it was donating $100,000 to fight the proposed ban on same-sex marriages in California, taking a rare political stand that may win some customers and irk others.

The computer and gadget* maker joined Google, Qualcomm and Pacific Gas & Electric Co. in declaring opposition to Proposition 8, which would define marriage as only between a man and a woman.

“We strongly believe that a person’s fundamental rights — including the right to marry — should not be affected by their sexual orientation,” an Apple statement said. Wading into a social issue with a six-figure donation is unusual and risky for a company that sells goods primarily to consumers, according to marketing and corporate governance experts.
James Klein, a designer and writer in Newport Beach, Calif., cheered the company’s stance. “It makes me feel so much better about the company I purchase from,” he said.

But Apple’s decision could drive away customers who disapprove of same-sex marriage, said Peter Sealey, adjunct professor of marketing at the Peter Drucker Graduate School of Management at the Claremont Graduate University in Claremont, Calif. Sealey** said he personally opposes Proposition 8 but thinks Apple’s decision was “wrong-headed.”
“It will hurt shareholders of Apple,” he said. “People will not buy a Mac because of this decision.”

*I like the gadget part... so, mobile phones are gadgets, eh? And music players? I wonder whether this reporter dude has been living under a rock in the last 30 years...
I don't know about you, folks, but I have the feeling that this big-shot PD School of Mgt professor is kinda full of neocon shit with statements like these. You can't even believe how this dude made it to a teaching chair in a California school at all! If you said Kansas City I might even understand it... Way to go man... John the fixer may even have a free post in his future cabinet for you if he ever makes it to the White House!

Variable and fix comp

Populist politicians and journalists. Both deserve to be chained together in the bottom of the ocean. The latest in a series of gaffes in this country is the headline news a few days ago about the Fortis management who, days before government intervention rescued the Bank from doomsday, approved bonus allocation to staff of their Wealth Management Division.

The innuendo and the tone of the message, read on the hourly news of the local national broadcast Radio One, was more than pointing to a cruel guilt and totally corrupt behavior of those Fortis functionaries involved. The Prime Minister Yves Leterme, self proclaimed moral leader of this miserable nation, stood up in fury to damn those involved for immoral behavior of the worst kind. Whereas millions of simple investors lost fortunes from the sudden and unbridled fall of the Fortis stock.

That's the theory of the men in power. Who, especially Leterme, all they care about is manipulate ignorant masses for their personal pop-polls and electorate benefit. Like that aging comedian who interrupted his campaign to run to Washington 'to fix the economy' three weeks ago. John the 'fixer'! Wow! We're all saved and well. Bye bye Great Depression 2.0!

The local news goes like: Fortis management approved bonuses to the staff of their Wealth Management Division days before Government Intervention. PM Leterme condemned heavily those responsible for immoral behavior.

How do you expect a common average IQ citizen to react to a message like this? Simply thinking: Corrupt sonsofbitches! Well done Leterme. Take those f*ckers bonuses away! Show the bastards who's da man!

Talking about pitiful reporters throwing oil to the fire! Always been like that. The jealous and ignorant have got the widest gob. Aware of their pitiful comp they don't like the hearing of some others 'making bonus'.

Let me tell you though how it works in modern companies, for more than 30 years that I've experienced them operating over both sides of the Atlantic, myself working out of pretty senior management positions.

Above all, most companies in today's competitive climate work in ways that are driven by short term performance. Growth in profits and revenues. They mainly act driven by trying to achieve profits and benefits for their shareholders. In terms of stock valuation and dividends. Shareholders being those 'heartless and selfish capitalists', large or small, who don't even thank you when you do well but they shout death and fire when you miss a quarter. And drop your company value in double digits afterhours after you announce lesser than consensus predictions and you forecast short of analyst expectations.

Actually, only revenue counts... like an old boss of mine at CA, Sanjay Kumar, God bless'm, used to say: "if the revenue is in, the profit will take care of itself...".

Who's bringing in the revenues then? Simple answer: those responsible to bring it in! We call them salesmen. We know how much revenue we want to generate, we know from the past what an average salesman achieves and we divide the two. The result we increase by an empirical factor and we got suddenly the size of our sales-force. The troops to send out to fight competitors and bring in the spoils of war.

That's one thing. Now, how do we make sure we have our average Joe the salesman 'do his numbers'? We can check-upon them day in day out but this ain't the way. We can fire them too if they are lazy and ineffective but this should be the last resort; on top, how do we know the new recruits will be any better than those we fired? Sales is the scariest function for any company operating in free markets. After years of experimentation, most companies in almost all industries resonated to a sales-staff compensation scheme based on fixed and variable comp. Here's how it works.

Every salesperson, like any other employee, receives a fixed salary. He/she also receives some 'intangible' benefits which are in fact non-taxable tangible (company cars, tickets to work, meals, free coffee and parking, etc...). Salespeople then also receive what we call 'incentive compensation', or 'sales commission' based on achievement of individual targets, mostly sales bookings.

There's a myriad of formulas how to calculate a variable part based on someone's targets and for the same company rules typically change every single year, depending on top management's specific goals for the year. In some countries, relation between fix and variable is highly leveraged. In the UK for instance and in the software industry, don't be surprised if a salesman accepts a 40 fix - 60 variable for OTEs (on target earnings). In conservative countries though, like Switzerland, it's the other way around... 80 fix - 20 variable. Anyways...

Salesmen achieving more than 100% of their targets (overachieving, that is) get so-called 'accelerators'. For every dollar sold above target, they get an 'accelerated' (50% AND HIGHER) part of corresponding commission compared to what they got for on target or undertarget achievement. Most great salesmen get rich on accelerators! Sales is a risky job with more than generous comp if you do well. We had a kid in Computer Associates West Coast Sales, 27 yrs old or something, who did more than a million bucks a year in variable pay for a few years in a row. He would categorically refuse promotion to manager. Why should he? Managers don't make that kinda dough even in their wildest dreams. Does it say 'stupid' here?

What is a bonus then? Well normally, bonuses are discretionary. At Texas Instruments we used to distribute bonuses to employees when we beat profit targets at the company level. Top management would still protect the overall committed figure and distribute a fraction of the remainder to all the staff on a prorate basis and often based on individual performance formalized during annual employee assessments. In practice, if your boss liked you a lot, then you'd have a good cut in the profit bonus cake. That's a bonus! You don't count on it to live on, it's a nice windfall if it's there but make sure you can raise your family based on your fixed pay. Because bonuses ain't gonna be there all the time. No guarantees.

How about the Wealth Management Division folks getting 'bonus' at Fortis then.? I have not really verified the details but I am not buying that 'bonus' claim the news spoke about... and made Leterme start a new crusade against the Fortis management. These bank divisions work like any other commercial departments. Driven by sales (attracting investment capital in their funds, earning wealth management commissions, etc). I'm pretty sure that those folks in that department made their numbers in fiscal 2007 (a year ago) and based on their contractual labor agreement they are entitled to their variable comp, like anyone else is entitled to his/her fix salary. Where's the problem then?

Problem is, the pathetic reporter who spread the news spoke of 'Bonus' and not of a 'variable and target related comp'. Bonus feeds a much more powerful innuendo. It can make a Populist Prime Minister jump in as a modern day sibling of Godefroidt de Bouillon to punish the atheists!

And what does Joe the plumber, or Wendy the Waitress (or George the President) think about the incident? Guilty on all counts... burn those Fortis heretics into ashes...

How pathetic have we become...

Et ne nos inducas in tentationem

This is one of the most prophetic strophes of Our Lord's prayer that clearly explains why free markets without central regulation don't 'always' work. '...And lead us not to temptation'.

Best proof of the argument is the fact that normal businesses run under totalitarian regimes... like the Kremlin ran the Soviet Union in the Stalinist years. Hierarchically and with most of the power and authority concentrated at the levels of Board Chairmen and CEOs and from time to time in the hands of the (usually puppet) BODs.

Most insiders claim that business life is always 'at war', therefore absolute authority at the top is justified by the fact that also generals at war act under similar conditions of authority and do not usually subject their decisions and deeds to a democratic vote by lower ranks. They just decide and act! Eventually they enjoy the glory of victor or parish defeated and doomed. The Military are not and cannot be run like free democracies.

I was interviewing someone from a client's accounting department years ago (I forget who he was or even for which company I was doing the consulting assignment) when at a certain point he mentioned emphatically the strophe from St-Matthew's gospel. In so many occasions ever since I have been thinking of that moment with that dude proving true over and over.

The latest opportunity for proof of the argument comes from the recent debate whether the Libertarian Republicans in the US all of a sudden became Socialists and support Government intervention as far as to the Antichrist concept of Nationalization.

Problem is, when all is normal, with the fear index in the 20ies, fluctuations are minimal and companies are measured by their fundamentals, information is transparent (you wish) and the markets regulate and correct themselves without 'help' from the government*, even in times of 'irrational exuberance' (don't forget Mr. G.).

When war breaks out though and everyone is running for his/her life, all the assumptions about rational behavior of market players fall into the ocean. Then it becomes a stride of instincts. The flocks spread in all directions like when riot police squads charge upon assemblies of amateur demonstrators. 'Women and children first' becomes an instant myth. Everyone runs for his ass. Panic and chaos become the main rule. The 'butterfly effect' then becomes the dominant law of nature. And Big G. (not Ali, but Alan) gets flabbergasted and states 'I am shocked to find out how the world really works!'

It's unfortunate that Economics theories have not yet advanced to equivalent levels that our science progressed in the knowledge of the nature that surrounds us. In physics for instance scientists are often more interested about what happens on the boundaries of 'normal' than what happens under 'normal'. If you translate that into the theory of Economics then you'll find that most of the free market models assume rationality in the decision making process of individual market players. They forget the fundamental premise that all those players are human and humans act emotionally and instinctively most of their adult lives. Leave some laws regulating social behavior unenforced and it's a jungle out there where the fittest and strongest survive. Problem is, you can't easily model 'emotional behavioral' within an economics theory in practical ways that work.

St-Matthew knew better. Even under the noblest conditions in the raising of an individual, under the best education to learn to live by the good and avoid evil, even under the Socratean claim that all of us are born 'good'... when or if we suddenly find ourselves under conditions where nobody watches us, or when we are properly covered by the applicable law, we'll go and grab more than necessary and deal for our own selfish good first and foremost than for anybody else's. I have seen this fact proven true over and over. Humans are made to be living within the boundaries of regulation. Especially, the most powerful among humans are the most dangerous. While most of us are herds of sheep, there will always be hyena's and wolfes and herd dogs chasing our ass and taking advantage.

So? Free markets? Yes, but...

The Greeks have an expression that rhymes even in English: Are you about to make a Turk a friend? Keep a large stick close to your hand...

If you know what I mean...

* Ronald Reagan sez... Two worst sentences you don't wanna hear in your life: We are from Government and We are here to help yeah!

Thursday, October 23, 2008

Ain't that sweet?

My deepest gratitude to Reuters Best Pictures of the Day for this phenomenal shot!

Catch the moment, that's what photography is all about... Composition and color are 'nice to have' but drama is even better! Look at the little girl's eyes, probably staring at 'da man', how preciously she holds her notebook with Obama's drawing, with a little 'love' heart next to his name... and see what I mean...

Change, we need! For these kids' sake. And stop p*ssin' me off with those McPalin patriotic wars against Terror BS.

His Royal Highness talks!

That's all we just needed now... he first caused the current global mess with keeping the cost of dollar borrowing at historic lows and then insisted on discouraging central regulation of high risk derivative securities for way too long, leading to the housing and credit implosion that even our grandmas talk about at their bingo games... now he' being smart to tell us that this is a tsunami and things will get worse before they get better... tell me something I don't know, dear Allan!

I used to worship him like a Semi-God but he eventually imploded into nothingness. I feel sorry I even bought his recent memoirs account. In audio and in book form. Turn Websters on the word 'moron' and you'll find my portrait.

I am only left with one Semi-God right now... El Jobso!

Get a life, dude!

I couldn't stop laughing reading the comments on this article... Apparently, this UBS analyst Maynard decided Apple needs a downgrade following their Q4 conference call last Tuesday. Duh? Anyway, read his remarks as he downgrades AAPL from buy to neutral. And he set his new target to 115 bucks, from 125.

I often made cranky comments on reporters and analysts being the scum of the earth but this Maynard dude defies every logic. I feel sorry he works for UBS as I am a good customer of theirs (non investment bank, of course). I am not surprised from his remarks though... it's a great contrarian strategy* to make people pay attention to you... it pays off even if you eventually look like an idiot... even more so, if you are lucky enough to be proven right, God forbid, you look like a genius and the flocks then really start paying attention.

Nevertheless, read the readers' comments below the article and have a good laugh. With the state of the markets again today, what else can you do?

* Riding against the wave... going against the masses... stick out by defying logic!

Obama leads McCain by 12 points...

These last couple weeks before the US Presidential elections (Nov 4th) polls are taken every single day, seems to me, and results are made known via news agencies and TV networks. Not only in the US, but worldwide even more so. In the latest Reuters report published today BO leads JM by 12 pct points. There's a well known Gallup guru called Zogby, who interprets the data like a Delphi oracle, and the rest of us, plain commoners, are paying religiously attention to what he has to say. Reason is, many have tried it, but only the Yanks are really good at it! Polling, I mean! They are able to predict outcomes within microns!

Anyways, the reason I'm posting this short blog here is the pictures of the two candidates the article author selected to display. Looks kinda like Obama's telling McCain: "12 point lead, my Friend(s)! No Cunt-ry for Ol' Men..."

I'll drink to that!

Wednesday, October 22, 2008

When is this gonna stop?

I can't believe the economy! We all knew we're in the middle of a 'recession'. Not that I feel any difference though. Highways are as crowded as ever, people seem to be working and even doing overtime everywhere I go, food is on the table, so, WTF? Fine. Recession been going on and on for months since almost a year. Companies started to report earnings for the September quarter and it doesn't look good. Fine. Tell me something I haven't heard. Few banks were about to file for Chapter 11 but only a handful did manage it effectively and the rest have been rescued by their governments who have thrown in trillions of dollars! Cool! Now, have you recently looked at the stock valuations of most of the NYSE healthy bluechips following the recent roller-coasters since this last September? Microsoft is less than it was ten years ago! C'm on! Microsoft for crying out loud! Toyota is less than half of what it was ten months ago! Google same story. GE even worse. Citigroup is only 12 bucks worth. I mean... when is this going to stop?

By any measure, everything seems terribly oversold! There are no buyers and there are only shortsellers, looking for a piece of negative news to push their target stocks even deeper! I don't understand. Oil heads for the mid 60's as we speak (at least this is a good piece of news). When the stock market was going down gold was going up. Not now though. Gold is almost 30% off its highs earlier in the year. Bonds are going down too. Only the dollar appreciates vis-a-vis the euro and that's great as well, other than US products (think Apple) are bound to get more expensive in the near future. In any case, the market movements defy every logic possible. It's like everything is imploding! Oh, yeah... I forgot. VIX is going up again!

Apple beats the sh*t out of 'Great Depression 2.0'

It's past midnight and Apple's conference call for reporting fiscal Q4 results, which I finally managed to attend for the first time via webcasting, just came to an end. My jaws hit the ground and stayed there for more than 30 minutes, especially after His Jobness, in a rare appearance (8 years ago last) at the analyst conference call, jumped in to comment on the company results. Eat your hearts out filthy shortsellers. I'm gonna laugh my way to the bank watching you covering your short positions tomorrow. A-holes! It's already happening in afterhours trading where the stock picked up more than 10 bucks on top of the day-close, before even the conference call was over. Wow! What a company. What fabustunning achievements! We should preserve His Jobness' genetic material and clone a few dozens like him to save the world. How about that?

Anyways, the market will be soon overwhelmed by detailed reports of praise about the mind boggling records Apple broke again this quarter. In the meantime, see for yourselves some of their achievements that I personally picked-up during the call.

Total number of iPhones sold in the September 2008 quarter (most of them 3G): 6.9 million
Total number of iPhones sold in all previous quarters since the launch of the iPhone: 6.1 million
Do the math: Total iPhones sold todate since launch: 13 Million. Initial target Jobs set : Ten Million by end of 2008. Holiday season hasn't even started yet and the dudes beat their aggressive target by 30%. Stick around... there's more. They overtook RIMM in terms or revenue generated in the quarter. Remember RIMM tanked a few days ago as they reported lesser margins because of the iPhone competition... Breath some and stay focused! Apple managed to be the third largest worldwide supplier of phones behind Nokia and Samsung! Can you believe that?! And there's more folks. iPhone already accounts for 39% of Apple's revenue. And they only started! Jezus, Maria, Josef!

Oh, BTW, they only recognized 802 M of iPhone revenue in the fourth quarter although their bookings number was 4.6B actually! How so? Well, they decided to apply GAAP deferred revenue models in their recognition of iPhone revenues based on future income from their sold iPhones that enters their books from a piece they get off the subscription pie baked by the operators. That is, of the lifetime long revenue from any given iPhone sold and linked to an operator subscription, Apple recognizes only a subset in any given period. This is just supercool and many companies moved to a subscritption model of revenue recognition as it seems to be hedging against lower future revenue streams in case recessionary times come knocking on their doors.

Interesting remark El Jobso gave responding to a question about the reason they are so successful on the iPhone. It is because they built product functionality based on their know-how of the software platform, as software became the real differentiator in smart phones. In other words, putting OSX on the iPhone was a competitor killer.

Stay tuned. Tomorrow (today actually) the 200 millionth iPhone app will be downloaded from their app store. 200 million apps in 102 days! 2M downloads a day, taking into account that it's been the summer too and many geeks, want it or not, do take some holidays to recharge their batteries...

Annual revenue 2008 was 32 billion and change! Margin for the quarter was 34%. EPS 1.26 bucks per diluted share. This compares to 1.11 of a Reuters consensus estimate... I betsa (Sarah, oh, Sarah!) in less than five years they will take over Microsoft for sure! And in six to seven probably IBM and HP! What a company! And yes, they got shitloads of cash: 25 Billion and counting... and no debt! What a treasury!

COO Cook, CFO Openheimer and His Jobness were all present at the call! Steve sounded healthier than ever before! His enthusiasm was contagious... I felt like opening a bottle of bubbly! Honest to Goad, I am so pissed with the tricks shortselling gamblers have been playing on the stock. This is the best fundamentals any company ever achieved, the best products any company could ever make (these folks are from the 22nd century, really) and they got the highest potential for massive growth of their market share in all their product lines, led by the best manager of all times! This company should surpass 500B valuation in my lifetime real easy, hands down!

Here's to you semi God Steve! We love you dearly!

PS... in the meantime afterhours trading continues in all tension... AAPL is 11 bucks and change in the green. By the time I wake up in the morning they'll be probably trading at 110 bucks. Yeah!

Monday, October 20, 2008

Games VIX plays.

The VIX, also known as the fear index, is a much respected variable that is closely monitored by seasoned investors especially in times of sudden volatility outbursts. The last few weeks VIX has been very naughty. It has probably received a Viagra OD and has risen to heights unseen in history since its inception. Historic records were continuously being broken, day after day, to the point that even the boldest and most audacious among investors had to admit 'I thought I'd never live the day to witness the VIX surpass 80 points!' That was just last Thursday.

Today was a calmer day but still VIX closed above 50 points (52.97 to be precise). Compare this to an average of 20 when things operate on 'normal' volatility...

May you live in interesting times, my son. 时势造英雄

Apple rules!

I have known most reporters to generally be cheap bastards who earn their dough with words and paragraphs they puke into published stories by mostly copy/pasting old junk in their meat-machines to produce all sorts of 'new' garbage. Mostly they 'are trying to' reflect the obvious general sentiment of the public and, as such, they are dearly pouring more hot oil to the fire every chance they come across.

I thought again about my such feelings at the reading of this article about Apple reporting it's results on Tuesday.

If you read the report yourselves, you'll find that the actual facts it mentions are nothing short of a stunning proof of success about his Jobness' company performance (who, BTW, is alive and well... a cat with nine lives)! Only the facts are Apple supportive though... Here's all of them:

'The company shipped roughly 2.5 million Macs in the June quarter, up 41 percent year-over-year, along with 11 million iPods, an increase of 12 percent.

Bernstein analyst Toni Sacconaghi upgraded the company to outperform on Monday. "Investors appear to be valuing Apple on an earnings multiple, rather than on cash flow, which fundamentally undervalues the company given the huge deferred revenue growth associated with the iPhone," he wrote.

Apple shares fell 3.5 percent to $98.34 on Nasdaq late Friday afternoon.

The company is expected to earn $1.11 a share in its fiscal fourth quarter, according to a poll of analysts by Reuters Estimates. Revenue is expected to come in at $8.04 billion, which would represent growth of nearly 30 percent.

Like many technology companies, Apple generates a lot of cash and has no debt. Last quarter, the company reported more than $20 billion in cash and short-term investments.

Apple's once high-flying share price has fallen around 50 percent since the start of the year.

Apple released its new, less expensive iPhone on July 11.'

That was it! Now, the remaining of the article is one and all SPECULATION! Pure wishful thinking that the pathetic reporter struggles to present as 'objective' as possible. Problem is, he's only rumoring without offering the possibility for verification. Here's an example. He says, in bold, as a matter of management summary:

Investors are cautious about Apple's ability to sell high-end products during a recession, but some say Apple stock is being undervalued.

I've spent most of my adult life wondering about reporters stating things like that, about their sources of information. Who are these 'investors' in the first place. There are almost 900 million outstanding shares of Apple Inc (a fact). Only less than 7% of these shares are traded daily on average (a fact). So, who are the freaktard investors who 'are worried'. And how was that monkey reporter able to poll them and understand how they feel? Lemme tell you somethin': I challenge you to replace the words 'investors' as the verb subject with 'I, the moron reporter', or 'My sneaky and corrupt shortselling trader friend, managing a few billion of funds, promised to pay me (and few more of my sort) a good dough if we spread some negativity about AAPL right now'.

Common sense dictates that Apple products cannot be easily compared to any other company's in any market. Not their desktop computers, not their phones and not their MP3 players. Apple's products are fashion icons that are normally purchased by a very small percentage of the world population, albeit sought with passion by many more out there. Those who can afford them usually enjoy earning above average incomes and they are not quite going to feel the upcoming  'depression' unless a rain of meteorites destroys the northern hemisphere. Apple's market share in personal computers is relatively small, such as an even 50% growth wouldn't mean anything significant whatsoever. There are more than a billion computers in use today, so a few extra million boxes sold by Apple isn't going to change the world! Same for smart-phones. Conclusion: Given the size of the market compared to Apple's growing output has led the company to fundamentals that are and will remain stunning for the foreseeable future without the shadow of a doubt. So, where are the investor concerns?

But the writer goes on with more BS like this:

Another question mark is the new iPhone which was launched in July. While almost everyone expects the device to rack up strong sales, will it be enough to drive growth, especially if Mac computer sales suffer?

Now, what kind of question is this? Where's the evidence that this could happen? Pure speculation and rumor spreading to scare the living shit out of potential buyers of AAPL stock so the sneaky shortsellers will find the opportunity to make a filthy and easy buck (more than one really...). And this goes on with another statement:

"The concern about the stock is that because of the macro-environment people aren't going to be buying Macs, people aren't going to buy iPhones, because they're expensive," said Andy Hargreaves of Pacific Crest Securities.

Of course, let's add some moronic statement by a loser analyst (thinks the reporter) who, having recently looked at the stock after the facts as usually, decided to throw a double digit IQ statement like people aren't going to buy iPhones... Lemme tell you something, moron! People aren't going to buy because they aren't able to find any available. The moment buyers arrive at the shop the little marvels have already been SOLD OUT! How about that, a-hole?

I could go like this on and on... Unfortunately, there are too many of them useless reporters writing filth like this. When Apple goes up and economy is good they all become suddenly huge Apple lovers (or of any other company they've been reporting on). When Apple dives, they throw in shitloads of negativity, likewise. And in the meantime they earn a 'well deserved' buck.

There's only one reason that this phenomenon is possible at all. This is the insecurity of the flocks constituting the public, and their adoration of bad news, gossip and unverified fiction... as long as it sounds dramatic. The public is starving for stories like those that moron reporters are producing in their mills. As long as the public feels like that, these stories are becoming self-fulfilling prophecies and healthy companies suffer the repercussions. Some of them may even go down for good, like we saw happening to some reputable financial industry players recently. The rumor mill killed the good!

How about this as a partial remedy to the 'Depression' problems we are facing right now: Shut down all media for 90 days and only show 'The Sound of Music' on TV. I betsa (Sarah, oh Sarah!) it's gonna work out for the best...

Monday, October 13, 2008

It's the economy, smartass!

Here's a column the brand new 2008 Economics Nobel Prize winner wrote on NYT not so long ago:

"... It’s 3 a.m., a few months into 2009, and the phone in the White House rings. Several big hedge funds are about to fail, says the voice on the line, and there’s likely to be chaos when the market opens. Whom do you trust to take that call?

I’m not being melodramatic. The bailout plan released yesterday is a lot better than the proposal Henry Paulson first put out — sufficiently so to be worth passing. But it’s not what you’d actually call a good plan, and it won’t end the crisis. The odds are that the next president will have to deal with some major financial emergencies.

So what do we know about the readiness of the two men most likely to end up taking that call? Well, Barack Obama seems well informed and sensible about matters economic and financial. John McCain, on the other hand, scares me..."

Continue reading...

Financial 'Innovation'

In Paul Krugman's blog this morning you could read that something 'funny' had just happened to him. A 'natural' stand-up comedian (very much like Bill Maher), Paul Krugman, is an Economics Professor at Princeton, 55 years old (only thing I have in common with the bloke, sad to admit), and since this morning he became the laureate of the 2008 Nobel Prize for Economics! Ain't this something?

If you are patient enough to run the above clip to the end you'll learn more about the present financial crisis that you had ever wished. One thing for sure you keep on forgetting as you're watching the clip is when this was actually shot. Krugman gave that short lecture about the economy something like a year ago (ok, wee bit less than that... December 14th, 2007). As he goes on talking you need to keep correcting your thoughts and be thinking: 'No, its not yesterday he did that, it's a year ago'. Amazing. So, there's nothing new about this mess. It's been out in the open at least since August last year. The other thing you learn is that it's not the first time this happened in the last 20 years. In a similar case with a pretty serious impact on deposit owners, the Fed bailed them out by spending more than 150B dollars of taxpayer money. No need for a Congress approval on that bailout though as straight deposits were normally guaranteed by the Government. This time, the mess was caused by the 'get-rich-real-quick' pastimes of the fast and the furious Wall St. boys & gals, with products of Financial (Engineering) Innovation whereby mortgage loans that shouldn't be (subprime) were arranged in 'baskets' with a variety of other financial 'securities' with no transparency whatsoever changing hands multiple times and ending often in the pockets of many atypical 'financial' institutions, leading them into the abyss of bottomless exposure. The rest we know...

Congrats Mr. Krugman! Is it a coincidence that the man is a lifelong liberal too?

Sunday, October 12, 2008

Obama leads the polls...

Sounds like music to my ears. Especially the statistically significant bit! Now if the poor bastard was born 100% blank we'd all sing our way to the bank! This is the thing I am sh*tscared about those sixpack Joes, like McCunt likes to call them, especially those of my generation or older. Among the young who will have to suffer the most if another Bush sequel emerges, Obama has a 20 point lead! It's the older demographic groups who are typically afraid of his dark skin. As most have been raised in a climate where blacks were mostly the stupid, ugly, and good for nothin', it will take quite a bit of extra cycles for older 'whites' to accept a colored guy for President. Especially those senile stinkin' rich Florida pensioners... It is a well known phenomenon, the 'Bradley effect'. I am very much afraid that history might repeat itself. Especially having experienced eight years of an appalling regime by G.W. Bush and his vicious hawks.

Despite how much I want the Democrats to win this time (I admit it, nobody's perfect... I wished the Republicans to win in 2000 because of that cow Janet Reno going after my dearest Microsoft those days), I'll keep my fingers crossed until we see the final outcome. And if it comes our way, I promise, I'm gonna get puke drunk first time ever in my pitiful life... can you believe that?

Economy 1-0-1

I picked this '4 dummies' book at Barnes & Noble's on Fifth Avenue last month, during a short tourist escapade to Big Apple. I am not that 'big' about book reading (although I am a bit of a book collector, more than 800 owned without a single 'fiction' accounted for; fiction? - maybe a couple of dozens there... that's it).

'4 dummies' books are not that bad. On the contrary... some are great! Especially this one.

Let me give you a great example. It's copied from the 'Understanding the US Economy' chapter.

It goes like this:

Market experts and those well-versed in economic theory, along with politicians and pundits, like to muddle things up when it comes to interpreting data and formulating working summaries of economic activity. That's how they keep their jobs... by confusing the public when it comes to what's really happening with the economy.

But understanding how the economy works and making it fit your trading approach doesn't have to be that complicated. Simply stated, the United States economy, the largest in the world, is dependent upon a series of delicately intertwined relationships, so keep these factors in mind:

  • Consumers drive the US economy.
  • Consumers need jobs to be able to buy things and keep the economy going.
  • The ebb and flow between the degree of joblessness and full employment, how easy or difficult it is to get credit, and how much the supply of goods and services is in demand drive economic activity up or down.

Couldn't be any simpler than that, could it? BTW, the character bolding is mine.

A Republican talking to the McPalin's...

This post by Frank Schaeffer, a lifelong Republican as he publicly admits himself, first ran in the Baltimore Sun as an op-ed on Oct 10, 2008. Schaeffer is the author of Crazy for God: How I Grew Up as One of the Elect, Helped Found the Religious Right, and Lived to Take All (or Almost All) of It Back.

"...Senator John McCain: If your campaign does not stop equating Sen. Barack Obama with terrorism, questioning his patriotism and portraying Mr. Obama as "not one of us," I accuse you of deliberately feeding the most unhinged elements of our society the red meat of hate, and therefore of potentially instigating violence. At a Sarah Palin rally, someone called out, "Kill him!" At one of your rallies, someone called out, "Terrorist!" Neither was answered or denounced by you or your running mate, as the crowd laughed and cheered. At your campaign event Wednesday in Bethlehem, Pa., the crowd was seething with hatred for the Democratic nominee - an attitude encouraged in speeches there by you, your running mate, your wife and the local Republican chairman. Shame! John McCain: In 2000, as a lifelong Republican, I worked to get you elected instead of George W. Bush. In return, you wrote an endorsement of one of my books about military service. You seemed to be a man who put principle ahead of mere political gain. You have changed. You have a choice: Go down in history as a decent senator and an honorable military man with many successes, or go down in history as the latest abettor of right-wing extremist hate. John McCain, you are no fool, and you understand the depths of hatred that surround the issue of race in this country. You also know that, post-9/11, to call someone a friend of a terrorist is a very serious matter. You also know we are a bitterly divided country on many other issues. You know that, sadly, in America, violence is always just a moment away. You know that there are plenty of crazy people out there. John McCain, you're walking a perilous line. If you do not stand up for all that is good in America and declare that Senator Obama is a patriot, fit for office, and denounce your hate-filled supporters when they scream out "Terrorist" or "Kill him," history will hold you responsible for all that follows. John McCain and Sarah Palin, you are playing with fire, and you know it. You are unleashing the monster of American hatred and prejudice, to the peril of all of us. You are doing this in wartime. You are doing this as our economy collapses. You are doing this in a country with a history of assassinations. Change the atmosphere of your campaign. Talk about the issues at hand. Make your case. But stop stirring up the lunatic fringe of haters, or risk suffering the judgment of history and the loathing of the American people - forever. We will hold you responsible. "

Thursday, October 9, 2008

OMG! What a day!

You can say that again... The problem about the current state of the stock markets is that even the experts are lost when asked what causes the out of control breaking of any conceivable support anywhere, or what drives ALL the major indices south to abyssal depths unseen in the history of mankind. Yep, you read right, not just a few individual stocks but all of them buggers all at the same time! My favorite hyper energetic CNBC anchor Maria Bartiromo was really mad at one particular point during today's session, while reporting from the NYSE floor. This is a market of just sellers, no buyers she cried in despair, barely short of shouting WTF! The fearful flocks hang onto their cash whereas the fast and the furious drive blue chips via persistant short-selling to levels not seen before, even in the crash of 29. Take GM as an example. It has been trading today at the levels of 1951-2 (before I was even born!) when a car used to cost 3000 dollars max and gaz was 20 cents a gallon! What can I say!?!

When is this gonna end? Eventually, for sure... probably after some more government intervention worldwide and after reaching a position where things seize to appear any more attractive to shortsellers. That's any time soon but I wouldn't hold my breath, if I were you. I was glad to see today that my favorite AAPL has been holding rather well for most of the session; eventually losing far less in % points than the Nasdaq itself when the market crashed half hour before the close. That was thanks to Apple's invitation of the Press to an event to show-off new Macbook designs soon to be launched, on time for the holiday season. I wouldn't be surprised to have seen them flirting with the mid seventies otherwise, without this little push by mom Apple Inc.

Today's been quite an interesting market crash day... (jeez, I even started to get used to weekly crashes nowadays...). Typically, we see gold bullions gallop sharply north in days like today as most investors run for it as a safe haven. No today though! Everything went south, gold, oil, stocks! AMAZING! I believe that the current situation is especially troubling to most traditional economics theorists, especially those defending the concept of self-regulating free markets (my ass!). What next? You know, most of our theories hold when things are quasi at rest... the moment turbulence starts, chaos dominates and math models break down, everybody's about to run for their lives and theories go down the toilet. Nevertheless, the audacious emerge with shedloads of dough in the pockets. Fortune favors the bold!

Watch this space... undoubtedly, much more to come. By the way, volatility index VIX jumped above 60 points (VIX in its 50s is abnormally huge, 60 is once in a lifetime sort of thing!)

I suggested to my spouse to be lighting candles in her church for things to start changin'. Ask your spouses and friends to do the same, folks. What else ? Sad to admit, this millenium sofar, along with that White House Texan cowboy who started this mess 8 yrs ago, has been nothing else than a continuous disaster after disaster for almost everyone on the planet, security-wise and financially! And... to think that way too many redneck voters are getting ready to go vote for a McCunt sequel to this? OMG!!! We are doomed!

Saturday, October 4, 2008

Of wooden arrows, bio-fuels, knitting grandmas and bicycle commuters...

Kill Bill 2 never materialized. We are so happy! Not? Anyways, I'm damn sure that all of the 263 House Reps who voted 'Yea' feel pretty cool right now about their monumental 'achievement'. Except for their Jewish New Year day off, they had to work 'real hard' this last week. To critically delay approval of the bailout package, that might be too little too late after all. And thinking that they served their country well and its taxpayers even better. What a load of crap!

My good friend John warned me from the very beginning. That's a very bad Bill, he said. What the heck are you talking about, I said. It's a terrible Bill. I would have never voted for it, he insisted. Getdahelouttahier, I thought. Listen, he said, these dipsticks added so much triviality provisions into this Bill that makes you puke. What do you mean, I asked. Well, he said, look at page 301 of the document... they are even talking about tax exemptions concerning children toy wooden arrows! Couldn't hold LMAO until I saw it with my own eyes. See for yourselves (click the screen capture below for detail).

Cool! And if you get deeper into the document you find provisions about people using bicycles for commuting, wool knitting, and shedloads of crap like this. I was suddenly tempted to do a PDF search on Viagra... who knows, you might get tax relief for using it on a regular basis. I finally stopped going thru the text of the Bill in disgust about the monumental BS in which the original focused three page Paulson proposal was turned into by a bunch of dickhead 'lawmakers' assisted by scores of useless Civil Servants (justifying their jobs) and of dozens of leech lawyers who never managed anything positive in their entire petty lives. What a clusterf*ck!

A week and and half ago US Secretary of the Treasury Dept. Hank Paulson came up with a much focussed proposal to bail out Wall Street companies that risked defaulting and taking the entire financial structure of the 'system' down the drain with them. Some companies already fell victim of the crisis and kicked the bucket. Others are still on the brink of collapse. Something focused, strong, quick was needed to be injected into the system to be effective at all. Like you are rushed to ER with a massive heart attack. They are not going to start cutting your nails or shaving your mustache for crying out loud! They need to cure the harm exactly where it takes place and where it can be the most effective to treat it.

What did the Congress Lawmakers involved in the approval of this Bill do instead? They added fine detail. Controls. Regulations. More detail. Exceptions. More detail. Rules about recovering administrative expenses. Authorizations. Dates. Validity regulations. Tables of contents, sections, titles, divisions. I am sure the damn thing passes an ISO certification check hands down! And... they added sweeteners... (like, combing her pubic hair, when the patient stopped breathing). Jon Stewart in the Daily show commented that evening : They' been complaining about the size of the 700 Billion bailout and they just added another 150 Billion of 'tax relief' onto it!

Look at some stats. The original proposal was 3 pages long. The entire essence of that document can still be found spread over a short segment of the final version of the Bill, starting at the lower 30ies page numbers for about 10 more pages. Before that, of course, all the provisions about restricting the horny executive comps! Very important! This document is not about TARP at all. It's about beating the Wall Street mavericks, right?

Anyways, on page 99 of the Bill the text continues with Tax Provisions that go on for another 350 pages! Anything you can think of you can find here. Up to bicycles, wooden shaft arrows, oil drilling, grandma wool knitting, bio-fuels, apple-pies and motherhood... I thought the bill was about injecting confidence into the Financial system, ain't it?

Paulson is a maverick manager. He's grown to the ranks of Goldman Sachs and he knows Finance like the inside of his jeans pockets. He wants this to happen quickly and effectively. He's only left with three months in Office and bets his entire legacy on this Bill. He's got no time to waste. He'll give his life to make this happen. If he succeeds we should canonize him!

Sad though to think about the 'lawmakers'. Driven by their personal electoral ambitions they turned into worst type populists and as they try to appeal to a misinformed and frustrated electorate they have added all this BS detail to the Bill. Like they've been waiting for this opportunity all their sterile lives in order to squeeze and sneak-into it the petty horseshit that they promised to one or another half-brain constituent. And they inflated the text to a level that would make every dead mandarin in Chinese History blush with shame.

And I thought that our lawmakers in the Brussels centered European Institutions were the World Champions on this. Dream on...

Thursday, October 2, 2008

50 years of NASA

With all the turmoil in the financial markets, I almost forgot about one of the noblest achievements mankind ever reached, that is, the exploration of the infinite space that surrounds our planet. I am referring to the foundation of NASA 50 years ago as of yesterday that has been definitely the most important event in the history of exploration of the universe. Visit the NASA homepage for a comprehensive browsing of their achievements in their first 50 years of existence. Mind boggling! If you just stood still upon some of their achievements. They put a man in orbit 4 years after works started in October 1958. They then put a man (two actually) on the moon 7 years later. Try to match that performance.

Looking at some of these pictures and clips on NASA's 50 year timeline gives me a nostalgic feeling as they bring back memories when I was watching those early achievements during my first 18 years. I was nine when John Glenn orbited the earth and I remember this all too well. Sixteen when Armstrong and Aldrin walked on the moon. Most of the NASA spectacular results in those early days appealed so much, almost romantically, to so many of my generation that we ended up falling in love with physics and math at school and dreamed to eventually pick-up careers in Engineering and Science. My moment of Zen happened in 1999 when I met and even had my picture taken with both of them, two of the Apollo 13 heroes. Later generations were more into computers and making money in's and here we are today, preparing for the Deep D Version 2. God forbid!

Anyways, the Senate didn't 'Kill Bill' this time, good for them and all of us, and it's now about waiting the egotripping retards of the House, so full of themselves, to cast their vote hopefully tomorrow. As the weight of a worldwide public opinion rests on their shoulders, 'Nay' voters feel just great... the word even has it that some über-moronic among them who voted 'Yea' the first time are 'reconsidering' their intents... Talking of monumental a-holes... take a look at each one of them in Wikipedia and start spitting your monitor screen. Who TF they think they are? I guess the US should change its rules of admission to Congress and impose a compulsory, albeit elementary, IQ tests to candidates for a seat in the Lower House. It might have saved us all this week's pain and misery after all...

Wednesday, October 1, 2008

Astrology vs. trading with Technicals

As I was reading the latest alerts posted by an online financial info provider I just couldn't stop thinking that some technical info predictions sound very much like astrology talk. Difference is that typically behind analysts' technical statements, based on charts, there is some proven 'theoretical' or 'empirical' rationale, which is not always the case with 'mediums' predicting the future based a subject's natal charts and future ephemerids. Let's play a game though, to see what I mean. The text below comes from today's alerts on AAPL by Beacon Equity research.

"In today's daily chart, AAPL's Bollinger Bands indicate greater than normal volatility as reflected by an increase in distance between the upper and lower bands. Trading within its Bollinger Bands, the stock reflects neither an overbought nor oversold condition relative to its recent price trend. MACD reflects a strong bearish signal, with the indicator below the 9-day moving average signal line, and also below the critical 0 level, indicating that moving averages are trending lower. With share price currently below the stock's 13-day moving average signal line, the bearish signal is more pronounced with decreasing moving averages."

I'll write this now by replacing some technical terms (bold) with Astrology concepts (bold too). See for yourselves... (BTW, I am no astrology expert, so the concepts I use will definitely be pure nonsense... whatever... it's all about proving a point).

"In today's daily chart, AAPL's Third House indicates greater than normal volatility as reflected by an increase in distance between Mercury and Venus. Trading within its Fifth House, the stock reflects neither an overbought nor oversold condition relative to its recent price trend. Pluto's vicinity to Zupiter reflects a strong bearish signal, with both planets below AAPL's ascendant zodiac, and also below the critical Moon position, indicating that both planets are trending lower. With share price currently below the stock's 13-day distance from full Moon, the bearish signal is more pronounced with decreasing position of Venus vis-a-vis Saturn."

See what I mean? No wonder some traders actually use astrology to guide their trades... like Nancy Reagan following her psychic's advice to guide Ronny is his strategic decisions...

Helter skelter... I admit, but, it sounds like fun... innit?

Largei must have had a fit yesterday...

Take a look at GOOG after the close yesterday night. 322.99 bucks a share! And I thought Greenberg was losing billions! How about Google's Largei twins then?

Breath! Not so bad! It happens! Not?

Read the story:

The last-minute pounding Wall Street gave Google's shares was caused by "erroneous orders" that Nasdaq says it is canceling.

Minutes before the closing bell Tuesday, a flurry of trades sent the Web search leader's stock plummeting 10 percent to close at $341.43.

Nasdaq said in a statement that erroneous orders routed to Nasdaq from another market center were responsible for the high volume of trades.

The exchange raised Google's closing price to $400.52 -- a 5 percent gain for the day -- and canceled all trades below that amount and above $425.29 between 3:57 p.m. and 4:02 p.m. EDT.

Can you just believe this? And, if you're holding no GOOG stock, are you having a laugh?

A new life

The boy was just over 24 hours old when half of the US Congress (the House) was about to start voting on the bailout. Bloody Monday, 9/29, was progressing painfully with the Dow and NAS diving south in abyssal depths never seen before.

The boy wouldn't care less. He was just fed and asleep. Sleep makes babies grow. And smell good! Newborns have a wonderful scent. New cells, I always said. New healthy cells rushing to grow in the billions. Brings to mind Bono in 'Miracle drug':

Freedom has a scent, like the top of a newborn baby's head...

The rest of us stayed fixed on TV screens as news were broadcasted by all Financial and News channels available, Bloomberg, CNBC, CNN. Is it gonna be a Yea or a Nay? Going well... Early votes are pouring in... Good! Yea seems to be winning... Slamdunk is gonna be... Thank you Lord... Wait... Nays are trailing close... OMG they just overtook the Yea's... I can't f*ckin' believe this! Open up Websters on 'moron' and you find a groupshot of 228 shameless and double digit IQ members of the House.

Many years from now, my good friend Nikolaos, dad of the newly born, is gonna be telling the kid stories about the day after his birthday! A historic day of huge proportions. The day that human greed, ego, stupidity and self destruction foresaw the living Globe with another Great Depression! Similar reasons brought down Enron few years ago. Similar to Enron leaders, in Wall Street this time, are to blame for this one. What did the government do to get us out of that Enron mess? SOX's the name. Did that do any good? Don't know yet... hasn't protected us from the subprime mess and its avalanches, it seems...

Is this mess ever gonna end? Sure thing... When then? Who knows? With a Congress and a state of Affairs in the US, like we are experiencing them these days, maybe it'll take many more cycles and sacrifice by every living soul before few hardcore dickheads in the US get it... Let's hope for the best. Right now US matters seem in disarray. Far worse than the days after 9/11. Neither the Administration, nor the new Presidential Candidates and much less the Fed Chairman and the Treasury Secretary are being listened to. Sheer Anarchy! Calculated Congressmen prefer to listen to constituents cries instead of to reason. Like the man on the streets has got a snowball's chance in hell to define what's the right thing to do. Like Joe on Main street knows any sh*t at all about the economy. C'm on, freaktards. Are you in a coma or somethin'?

Baby Nikos Jr wouldn't care less about all this; by the time he'll be making money of his own, Sep 29, 2008, and George W. Bush will be nightmare memories of the past he can only watch on History channel. Lucky him!

Welcome to life Jr!