Tick Talk Live

What are the odds of a causal relationship between Obama’s foreign agenda with Iran and Iran’s economic prosperity? Check out the chart from the WFE Focus newsletter and then read Rozen.



Laura Rozen presents a comprehensive and compelling case for what is going on behind the political curtain regarding U.S. and Iranian relations. Here are a few quotes from her article that got my attention:

“I do think that it is important for us to be willing to talk to Iran, to express very clearly where our differences are, but where there are potential avenues for progress,” Obama told Al Arabiya television in the first interview he granted since becoming president earlier this week. “And we will over the next several months be laying out our general framework and approach. And as I said during my inauguration speech, if countries like Iran are willing to unclench their fist, they will find an extended hand from us.”

Along with reports that the State Department is drafting a letter to the Iranian leadership and U.S. Ambassador to the U.N. Susan Rice‘s comments this week that the United States will pursue direct diplomacy with Iran, the Obama administration is undertaking an intensive policy review toward Iran even as it gets its new team members into place.

“I am seeing actions that seem to be really quite different,” says Trita Parsi, president of the National Iranian American Council, a Washington group that promotes U.S. engagement with Iran. “Obama was not president for even 20 minutes when he said ‘mutual respect.’ That is an Iranian buzz word. No one in the Middle East uses that more than Iran.”

“By [Obama] speaking directly to the Iranian leadership and the Iranian people the way he has,” says Joseph Cirincione, president of the Ploughshares Fund, “and the way he may be answering Ahmadinejad’s letter, it presents his views unfiltered and it shows his respect for the Iranian nation. That’s very important.”

Isn’t this a lot like the chicken and the egg controversy? Which came first, the political bribe or money mongering politicians?

Song by Nelly seems fitting, esp. the line:
“oh why do i live this way?”
“(hey) (must be the money)”

Why do politicians live this way? Yep, must be the money.

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by Ren Richardson

(I promised Brian that my first entry here would be about the lessons my Scout Master taught me when comparison shopping for, uh, strumpets….but I thought I should enter the forum with more decorum.)

An economic climate like the current spurs a lot of people to draws parallels to other bearish times and, for even the moderately literate in financial history, there is little trouble in bringing them immediately to mind. Going backwards, we can point to 2001-02, 1998, 1987, 1981-82, 1974, 1929-37, 1907. Some of these episodes affected the financial markets far more than the economy (1998, 1987) while others had deep and long-lasting effects on both the broad economy and the markets. But what is interesting is that in over 100 years, we have had 5-8 significant disruptions to our economy, depending on your definition. If the current crisis develops into something comparable to the Great Depression, we will have had 2 very serious economic periods that could rightly be called ruinous. Not to diminish their severity but how many of us see 2 such instances in over a century of economic activity as an extraordinary triumph?

In this environment, what I believe is more worrisome is our expectation that financial crises can and ought to be eradicated. Whether attempted through free market channels or government intervention, the attempt to suppress the business cycle – or what we might more appropriately call inevitable effects of human economic activity – is the real failure. Just like in modern medicine’s infancy (and even today), often the cure we insist on taking makes our malady far worse than it would have been had we let our own immune system do its job. We stubbornly believe that the intervention of a cure must have beneficial properties because we intended it to be that way. We therefore don’t even bother to look empirically at our alternatives and let the evidence guide us. So when the first set of intervention fails, we intervene again and again to repair its consequences.

Thinking that we can manage financial crises out of existence is an expectation that has no empirical grounds. What country, what population, what economic system has ever seen continuous growth with no halts to its prosperity? I put that question as blithely as I can. Take it further: outside of our own, how many countries or eras have not experienced drastic and crippling economic climates with regular frequency? It is no stretch to say that the large majority of cultures we can survey in history have struggled economically and have found prosperous periods to be more the exception than the rule.

Ironically, it is the very affluence that our economy has generated over the last 200 years that has spun off these unrealistic expectations as an unfortunate side effect. The better and more efficient our economy has become at raising our living standards the more we expect what has been, from a long historical perspective, nothing short of stunning. We anticipate the rare and exceptional as a matter of course. We see the miraculous as an entitlement. Any member of the human race belonging to an era other than this most recent who witnessed the kind of prosperity to which we have become accustomed would be dumbfounded. And equally dumbfounded by our lack of perspective.

In the end, we can analyze the causes of this crisis until doomsday. Our differences lay not so much in our interpretations of the analysis as in our philosophical outlook. It is a difference between the Tragic Vision and the Utopian Vision, to borrow Thomas Sowell/Steven Pinker’s portrayal. 

The Utopian Vision looks at what went wrong; it asks what needs to be done to prevent such crises from ever happening again; it implicitly assumes that we can permanently correct our present situation if we take the aim seriously enough; and it fully believes that we can ensure a future without similar financial crises. The Tragic Vision (in the ancient Greek sense of Tragedy) looks at what went wrong balanced in the scales of what goes right; it assumes that correcting what is wrong often comes at the expense of what is going well; it asks how to temper what is wrong, not how to eradicate it; and it explicitly assumes that crises and disasters will always be a part of our future – because humanity and the human condition will always be a part of our future (my title, by the way, is adopted from a famous quote by Kant). To the Tragic Vision, victories come in small packages. But small wins that have real impacts on our future are preferable to grandiose plans that have no impact at best, and at worst can bring devastation in its own right. Just like the cure.

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I’ve seen so many Google Ads about “virtual trading billionaires” I could cry. That such ads propagate is proof that there is a sucker born every minute. Mean-spirited, but self-evident. Oh, and here is the latest hogwash: some netizen claims to be in high school and to have made 189% over the past 4.5 years (here comes the scam of the claim) with a “real account/ virtual account.” WTH? What the heck is a “real account/ virtual account?”  Sounds to me like this kid could be the only one in the world to own a REAL AIR GUITAR!

Here is my tribute to all virtual BillionAireGuitarists:

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Cows increase by 100% annually.

Horses increase by 100% annually.

Sheep increase by 200% annually.

Swine increase by 800% annually.

Rabbits increase by 4,800% annually.

Fowls (chickens [not turkeys]) increase by 12,000% annually (10 per clutch with hen incubation).

Fish (Cod [not shown here]) increase by 200,000,000% annually.

Humans can increase by 100% annually, so why on earth do they idealize a nest egg that doubles every SEVEN YEARS? It is called the Rule of 72 and it just isn’t natural!

I think this happens because society is so detached from natural returns that we settle for what financial experts t/sell us. Oh, and 95% of fund managers under-perform the broad market index EVERY YEAR. Wow. I’m wondering if there is any possible way for tens of millions of people to be any stupider. Those who believe the Rule of 72 to be an acceptable return on investment deserve to be slaves to the banks.

Then again, in the immortal words of Buddy Holly, maybe “It doesn’t matter any more.”

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It’s a cool piece of math, take wheat grain for example. Plant ten seeds, nine live to maturity and each produces about 30 more seeds EACH (9 + time,soil,water = 270). Let me put that into perspective for stock traders. You buy ten stocks. One fails. The other nine individually increase by 3,333%. Furthermore, consider the probability of success and the governing control you have if intervention is needed.

3. Non-homosapiensthat grow by eating the things planted in the ground and multiply according to their genetic propensities (fowls, domesticated cloven-hooved herds, rabbits, - oh, and a few honey bees).

4. Various personal skills and understandings that will help me develop the tools for the new micro-industrial revolution.

It is in experiencing risk consequences that one becomes acquainted with personal risk tolerance. As a result of experiencing a 78% loss in my currencies portfolio due to the fraudulent acts of REFCO (the largest broker on the CBOT in 2005), I created a rule for exiting the broad market. With my positions closed and check in hand, I knew I’d need a new medium for growth. The above asset classes are my “plan B.”

Meanwhile, should anyone notice an electronic marketplace that is governed by a perfectly transparent and democratic group of freepersons offering the above products, please let me know. I might buy a few chips and pull up a chair to that table.

5. God: it is my personal belief that the ability to prosper hinges on morality and that liquidity levels (too much and too little) will ruin the immoral. In the case of farmers, the liquidity refers to water. Floods, dearths, pesticides etc. flow from liquidity imbalances. In the case of speculative markets, the liquidity is trust. Right now the first tranche of distrust has been delivered to market. Remember, “In God We Trust” is the mantra of the honest man. As the honest are abused in dark markets, they will exhibit “light flight” (yep, just made that up) and outmigrate their funds. 

IMO, this is where the stupid money is going: this article reveals that high-end clients of Merril Lynch want gold bullion delivered to their homes. MORONS. Gold is the currency of war. If you can’t defend it with your personal army, it will be taken by force from you. Talk about painting a target on your back. Intellectual, voluntary peasants created by this second Great Depression will return to the land, wait out the wars, and establish peace shortly thereafter.

It takes two songs to sum up the above. The first is The Stand by The Alarm. The second is Forgotten Years by Midnight Oil. Enjoy!

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My crush on CondorOptions.com is hereby repined. I didn’t make their list of Top Finance Blogs of 2008. TickTalk didn’t get an honorable mention or even the Miss Congeniality Award. With jealousy and a critical eye I reviewed each blog on their list. [[All pretended indignation aside, I was astonished to find that NONE of their top blogs publish performance returns! -retraction. After digging a little deeper (because of Jared's statement in the comments below), I stand corrected.]] 

In general, it will never cease to amaze me how some of the “best investing blogs” get ANY recognition without proving that they have the “best returns.”  It’s like declaring that your buddies’ cars are the best without any of them even showing up for the qualifying lap. 

That being said, here are my five favorite investing blogs for 2008:

1. http://covestor.typepad.com/ (Check out the Nov. 25 article for 3rd-party verified, real $ returns)

2. http://www.slopeofhope.com/ (Tim Knight is witty, brilliant and posts his real $ trades in real time)

3. http://www.condoroptions.com/ (These cats have cocky/funny sizzle and even though I just slammed their top blog picks, I revere them because they post their trades)

4. http://tradingsmartbomb.blogspot.com/ (This guy has mean street cred and Wall Street Cred.)

5. http://www.learningmarkets.com/index.php/Options/Options-Education-Analysis-and-Reports/ (JJ offers drag-and-drop simple education to folks who will not be ashamed to post their trades).

Oh, and www.ticktalklive.com for setting the market to music with nearly every post (but annoys me by hushing me and telling me to ”listen to the words!”)

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