STaRT CoPiNG CHaRLie
by Zero Hedge - March 31st, 2011 11:47 pm
Courtesy of williambanzai7
Until last summer, I thought Charlie Munger was just a quirky old American business sage in the tradition of his hypocritical boss Uncle Warren. Then he made the infamous “suck it in an cope” quote and I decided he is just another quirky old crony American douche bag waiting for his comeuppance, just like Uncle Warren.
Well his comeuppance could very well be on its way, because Uncle Warren’s golden boy Davy Sokol is now saying that he only did the same thing that good ol’ Charlie did when they invested in the Chinese battery maker BYD. Looks like skivvy laundering time may be coming soon at the Injunction.
I am sure the good old boys at Berkshire Hathaway are going to get a big slapping around by the media/blogosphere. But I rather doubt anyone will wind up in Martha Stewart’s Big House even though these good old codgers are supposed to know much much more about the technical rules prohibiting executive front running and ahem, “insider trading.”
But never mind all of that. Today I was reminded what a douche bag good old Charlie really is by NYT’s Dealbook. In response to all the fuss about Sokol’s lapse of ethical judgement, Charlie apparently said:
“Few people understand how good he is, how really good he is…He is like a guy on a baseball team that could play six of the nine positions.”
Well I guess that means everything is a.o.k! That explains it all. If you can play 6 of the 9 positions, you can do no wrong. That could well be the mantra of American Ivy League Inc.
Bull Shit Charlie!
Here is what a real American sage had to say:
“There are some people who, if they don’t already know, you can’t tell ‘em.”
Yogi Berra
“Suck it in you old dope.”
WilliamBanzai7
Facebook
Twitter
LinkedIn 
del.icio.us
DiggFukushima Fallout Hits the US
by ilene - March 31st, 2011 11:35 pm
By MIKE WHITNEY
Originally published at CounterPunch
Three of the six nuclear reactors at Fukushima Daiichi nuclear plant have partially melted down and plutonium is seeping into the soil outside. Plutonium is less volatile than other radioactive elements like iodine or cesium, but it’s also more deadly. According to Business Week, "When plutonium decays, it emits what is known as an alpha particle, a relatively big particle that carries a lot of energy. When an alpha particle hits body tissue, it can damage the DNA of a cell and lead to a cancer-causing mutation." If plutonium leaches into groundwater or pristine aquifers, the threat to public health and the environment will be extreme.
This is an excerpt from an article in the Guardian:
"The radioactive core in a reactor at the crippled Fukushima nuclear power plant appears to have melted through the bottom of its containment vessel and on to a concrete floor, experts say, raising fears of a major release of radiation at the site. The warning follows an analysis by a leading US expert of radiation levels at the plant….
“Richard Lahey, who was head of safety research for boiling-water reactors at General Electric when the company installed the units at Fukushima, told the Guardian workers at the site appeared to have "lost the race" to save the reactor…" ("Japan may have lost race to save nuclear reactor", The Guardian)
It also appears that underground tunnels at the facility have been flooded with radioactive water that contains high-concentrations of caesium-137. A considerable amount of the water has made its way to the sea where samples show the levels of contamination steadily rising. This is from the Wall Street Journal:
"Levels of radiation in the ocean next to the Fukushima Daiichi nuclear power plant have surged to record highs, the government said Wednesday, as operators try to deal with large amounts of radioactive water—the unwanted byproduct of operations to cool the reactors.
“The Nuclear and Industrial Safety Agency said water taken Tuesday afternoon from the monitoring location for the troubled reactors Nos. 1 to 4 had 3,355 times the permitted concentration of iodine-131. That is the highest yet recorded at the sampling location, which is 330 meters south of the reactors’ discharge outlet." ("Seawater Radiation Level Soars Near Plant", Wall Street Journal)
All fishing has been banned in the vicinity as…
Thoughts On Future Monetary Policy, As Rumors Kocherlakota Leaked Tomorrow’s NFP Number Mount
by Zero Hedge - March 31st, 2011 11:12 pm
Courtesy of Tyler Durden
Tomorrow’s NFP number will be one of the most critical releases from the BLS: if on one hand the number is far greater than expected, it will effectively mean that QE3 will not begin immediately after the end of QE2, just like QE1 ended on March 31, 2010 only to see QE Lite implemented 4 months later. That the Fed is not willing to take a political gamble and send oil to $150 is conceivable, which is what would happen should Jon Hilsenrath start leaking QE3 rumors. On the other hand, the economy is once again turning lower as recent diffusion data (not to mention housing) has been indicating. Should the Fed implicitly tighten, by not loosening, the economic contraction will accelerate drastically, and capital markets will follow suit. And since as Hugh Hendry noted earlier, there is no China to pick up the slack, the stakes on the all in gamble in this bet that the virtuous cycle has picked up, will likely cost Bernanke his job if he ends up wrong and QE3 is needed anyway. Of course, as many believe, and as Bernanke himself has said, manipulating the market and stimulating inflation is and continues to be the Fed’s only objective. Obviously, the waterfall effects in either direction here are huge. Which is why if tomorrow’s NFP number is a beat and not just any beat but a massive one (read well over 250,000), it will be an attempt by the administration to cement the idea that the economy is now recovering. Anything at or below consensus will merely push the decision one month forward, however it will be too late to prepare the political landscape for QE3 in May, just two months ahead of the end of QE2. So tomorrow is likely D-Day on QE3 (or at least a direct continuation of POMO past the June 30 expiration date).
In this light, it is interesting to note what Morgan Stanley has to say of Narayana Kocherlakota’s interview from late in the afternoon, which stipulated a 75 bps hike in rates as normal, and which caused a minor sell off into the close. According to David Greenlaw there are rumors that Kocherlakota may have seen, and therefore leaked, tomorrow’s NFP number, which by implication would have to be very bullish, in order for the Minneapolis Fed chairman to have…
IceCap Asset Management – Kudlow’s Foot Meets His Mouth
by Zero Hedge - March 31st, 2011 10:44 pm
Courtesy of Tyler Durden
From IceCap Asset Management:
Of today’s major events, our biggest concern lies with the uncertainty in the Middle East & North Africa. Most Westerners, ourselves included, do not understand the complexities of these societies. What we do (and need to) understand is that the situation today is at its most strenuous in any of our lifetimes. This region produces over 35% of the World’s oil supply. Since current global production is about 88 millions of barrels/day, and current global consumption at close to 86 millions of barrels/day, the slightest disruption of production from anywhere, especially the Middle East, will have profound effects on this delicate equilibrium. In response to these unusual times, we are holding healthy allocations to gold bullion, crude oil and other commodities. We continue with our neutral allocation to stocks and will do so until our trend models signal otherwise.
Full report:
IceCap-Asset-Management-Limited-Global-Markets March 2011
Up, Up And Away (Part 2)
by Zero Hedge - March 31st, 2011 9:27 pm
Courtesy of Tyler Durden
…But before people begin panicking that the radioactive printer plant housed in the Marriner Eccles building has melted down and is now releasing radioactive money straight into the liquidity system, recall that $195 billion of this is simply from the unwind of the Supplementary Financing Program, which feeds into the Adjusted Reserves, which together with currency in circulation feeds into the Adjusted Monetary Base. Therefore, with the unwind of SFP completed, we expect this growth to taper off materially, although by the end of June the Adjusted Reserve balance alone will hit $1.7 trillion, implying another $200 billion or so in growth, although at a slightly slower pace.
The chart below once again (since we show it each week), shows the cumulative change in Excess Reserves and Fed Assets since the start of QE2. In an ideal world these two should offset each other (ideal in as much as banks don’t lend out Excess Reserves and simply keep the fungible monetary electrons as substitutes for Discount Window access), and other change means a migration in(+) or out(-) of currency in circulation (inflationary or deflationary). While until February excess reserves lagged securities held dramatically, this has since flipped, assisted in part by the SFP unwind, which pushes the scales in the excess reserve balance favor. In other words, there is another $150 billion or so before equilibrium is reached, all else equal. Keep a close eye on this cumulative (in)quality as it is the most direct indicator of marginal monetary pressure imbalance (Fed assets less net currency) in the system currently.
Or, in English, the cumulative differential plunge recently is hella inflationary (as the imminent subsequent reversion to the mean means money going out of reserves and into currency).
Migration Of The Black Swans
by ilene - March 31st, 2011 9:11 pm
Courtesy of Giordano Bruno, Neithercorp Press
The phrase “Black Swan” is really making the rounds these last few months. Uttering the term a year ago would have earned you a collection of confused looks and a general attitude of disinterest. Now, people behave as if they had learned about economic shockwave events and the global domino effect when they were in kindergarten. The problem is that when this kind of terminology hits the mainstream, in most cases it comes prepackaged with dumbed down and diluted definitions which promote an inadequate, cartoonish understanding of the circumstances.
To be sure, most Americans are well aware that the world’s political and economic foundations are about as stable as fresh pudding under a heat lamp. The problem is that they are now being conditioned by the mainstream media to view the idea of collapse as “cinematic”; a kind of live action fantasy in which we all get to play the part of the audience, watching safely from the dark in our cushy theater seats with a bag of overpriced popcorn, Dolby surround sound, and a hot date to keep us company during the boring parts. Three years ago, even mentioning the idea of a breakdown in society or a financial catastrophe beyond a minor recession earned you the label of “doom monger”; a rather inept and naïve attempt on the part of the MSM to silence any economic analysis that stepped outside the establishment Keynesian framework. Today, I turn around to look at a magazine stand at the airport and right in front of me is Newsweek openly declaring “Apocalypse Now”!
Is the mainstream finally catching up to the alternative media? No. The MSM is merely adopting pieces of our common language and twisting them to fit a more globalist friendly viewpoint. Because our readership is growing exponentially, and our traffic is skyrocketing while corporatized news sources are floundering, the MSM is losing its ability to obscure our fact based journalism with their over funded and highly sterilized adaptation of reality. So instead, they attempt to co-opt our particular vocabulary, and our news focus, while adding their own subtle spin and sensationalism. When people not familiar with the alternative media and the more in-depth information we provide talk about a “Black Swan event”, a depression, hyperinflation, etc., their concept of the implications of such disasters is far different than ours. They…
Measuring the Performance of the Ivy Portfolio
by Chart School - March 31st, 2011 8:35 pm
Courtesy of Doug Short
I’ve been posting a monthly moving average update for the five ETFs in featured in Mebane Faber and Eric Richardson’s Ivy Portfolio since the spring of 2009, when I featured my review of the book.
In addition to the monthly updates, I’ve also made a couple of generic studies of momentum investing with moving averages.
Investing strategies are not the primary focus of my website, and I don’t personally track the performance of the Ivy Portfolio other than to highlight the monthly signals. For ETF performance tracking and backtesting, I use ETFReplay.com, an excellent website for analyzing the performance of individual ETFs and ETF portfolios based on customized moving-average strategies. There are many free tools on ETFReplay.com. However performance backtesting of portfolios does require a paid subscription.
The image below illustrates my research on the Ivy Portfolio since 2007. If you click the image, you’ll open a HUGE version that also shows the monthly performance over the complete range as compared to SPY (SPDR S&P 500 Index). For cash, I’ve used SHY (Barclays Low Duration Treasury (2-yr).
Now, the portfolio in this illustration doesn’t *exactly* match the Ivy five. I picked 2007 as my starting point to show the performance from before the market peak in the Fall of that year. Thus I was forced to make one substitution for the Ivy ETFs — EFA (iShares MSCI EAFE Index Fund) in place of VEU (Vanguard FTSE All-World ex-US ETF), which was launched in early 2007 and didn’t produce a 10-month signal until December of that year. But the substitution presumably understates the all-Vanguard IVY portfolio: I make this assumption because VEU has outperformed EFA since the March 2009 market low (117.7% versus 97.2% as of March 31st).
For anyone interested in researching momentum investing with ETFs, the ETFReplay.com website is an outstanding resource, one that I’m pleased to include in my dshort.com Favorites.
Things That Make You Go Hmmm – On Silver Conspiracy Theories And Other Oddities
by Zero Hedge - March 31st, 2011 8:26 pm
Courtesy of Tyler Durden
From Grant Williams: “There are many commentators for whom I have the utmost respect, who completely discount any silver conspiracy theories. They cite the fact that it would be impossible for the manipulation to be conducted in the way that the conspiracy theorists allege or that there are corresponding longs for every short, but yet answers from either the regulators or those supposedly involved in the manipulation are conspicuous by their absence. Let’s face it – if this were a simple case of a misunderstanding it wouldn’t take much in the way of evidence to clear it up now, would it? Over the past several months, each time a futures contract has expired since the price break in silver began in earnest, the delivery situation has gotten progressively tighter until progressively closer to the wire and talk of a commercial signal failure has become progressively louder. The number of people opting to take warehouse receipts for delivery on first notice day has been climbing and stocks in the various warehouses have been declining to the point that it has been touch-and-go as to whether there would be enough physical silver on hand in the warehouses to satisfy demand for delivery. If, at some point in the (near?) future, time runs out and enough people stand for physical delivery, we will find out once and for all whether there is any truth to the manipulation/massive short position stories, and we will CERTAINLY discover how much physical metal there is available for delivery.”
Full report:
Guest Post: Legerdemath II: Anatomy Of A Banking Trick
by Zero Hedge - March 31st, 2011 8:03 pm
Courtesy of Tyler Durden
Submitted by Omer Rosen of Legedermath, who will gladly answer any reader questions related to the matter presented in the comment section.
Legerdemath II: Anatomy of a Banking Trick
In my previous article, “Legerdemath: Tricks of the Banking Trade,” I made brief mention of Treasury-rate locks:
Most brazenly, we taught clients phony math that involved settling Treasury-rate locks by referencing Treasury yields rather than prices.
A number of readers expressed a doubt that using a settlement method based on Treasury prices was appropriate. What follows is as good an explanation of Treasury-rate lock settlements as 2,000 words will allow. I have simplified some of the bond math and concepts and will end with an analogy that I hope will elucidate what the math did not. However, as this post hardly qualifies as an easy read, feel free to ask questions in the comments section. Confession: I fudged the word count a few sentences ago to increase the likelihood of you reading on.
Forget for a moment, everything you have heard or think you know about Treasury bonds. Taken in isolation, the purchase of a Treasury bond is nothing more than the purchase of a fixed set of future cash flows. If you find the term “cash flows” confusing, think instead of the following: buy a bond today, receive predetermined amounts of money on predetermined dates in the future.
In this column I will be referencing a 10-year Treasury bond paying a coupon of 5.00%, with a notional amount of $100. For convenience, I will christen this bond “Bondie.” Sans jargon, the fixed set of cash flows received when purchasing Bondie would be $2.50 every 6 months for 10 years and an additional $100 at the end of the 10th year.
There are two basic ways to describe the value of this fixed set of cash flows, either by price or by yield. Price answers a simple question: How much would it cost you to purchase this fixed set of cash flows? This price will change over time, in much the same way that the price of a stock changes over time. Yield expresses the return earned by purchasing these cash flows at a certain price.
If you had to pay $100 in order to receive the…
Reactionary Violence: Man Drives Car Into Fukushima Daini Nuclear Plant, Arrested, Wanted To Stand Out
by Zero Hedge - March 31st, 2011 7:13 pm
Courtesy of Tyler Durden
And so we move on to the long overdue reaction of pent up popular anger by the general public, which may have just hit its tipping point of being constantly lied to and put in harm’s way to protect the status quo.
- A 25-year-old man arrested for driving into Fukushima Daini nuclear plant, smashing the gate. Says he wanted to “stand out”: RTRS
Comparisons to a self-immolating fruit vendor in Tunisia need not apply.
PS Daini is the “other” nuclear power plant
More as we see it.
German
Spanish
French
Italian
Portuguese
Japanese
Korean
Russian
Chinese
Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(