Thursday, May 31, 2012

Why Men Are Rarely Depressed


    Men Are Just Happier People -- What do you expect from such simple
creatures? Your last name stays put. The garage is all yours. 

Wedding plans take care of themselves. Chocolate is just another snack... You can be President. You can never be pregnant. 

You can wear a white T-shirt to a water park. You can wear NO shirt to a water park. Car mechanics tell you the truth. The world is your urinal. You never have to drive to another gas station restroom because this one is just too icky. 

You don't have to stop and think of which way to turn a nut on a bolt. Same work, more pay.

Wrinkles add character. Wedding dress $5000. Tux rental-$100. People never
stare at your chest when you're talking to them. New shoes don't cut,
blister, or mangle your feet. 

One mood all the time. Phone conversations are over in 30 seconds flat. You know stuff about tanks. A five-day vacation requires only one suitcase. You can open all your own jars. 

You get extra credit for the slightest act of thoughtfulness. If someone forgets to invite you, He or she can still be your friend. 

Your underwear is $8.95 for a three-pack. Three pairs of shoes are more than enough.. You almost never have strap problems in public. You are unable to see wrinkles in your clothes.

Everything on your face stays its original color. The same hairstyle lasts for years, even decades. You only have to shave your face and neck. You can play with toys all your life. One wallet and one pair of shoes -- one color for all seasons. 

You can wear shorts no matter how your legs look. You can 'do' your nails with a pocket knife. You have freedom of choice concerning growing a moustache. 

You can do Christmas shopping for 25 relatives and friends on December 24 in 25 minutes.

If Laura, Kate and Sarah go out for lunch, they will call each other Laura, Kate and Sarah. If Mike, Dave and John go out, they will affectionately refer to each other as Fat Boy, Walking Sperm and Wildman.
    EATING OUT When the bill arrives, Mike, Dave and John will each
throw in $20, even though it's only for $32.50. None of them will have
anything smaller and none will actually admit they want change back. When
the girls get their bill, out come the pocket calculators.
    MONEY A man will pay $2 for a $1 item he needs. A woman will pay $1
for a $2 item that she doesn't need but it's on sale. 
    BATHROOMS A man has six items in his bathroom: toothbrush and
toothpaste, shaving cream, razor, a bar of soap, and a towel. The average
number of items in the typical woman's bathroom is 337. A man would not be
able to identify more than 20 of these items. 
    ARGUMENTS A woman has the last word in any argument. Anything a man
says after that is the beginning of a new argument. 
    FUTURE A woman worries about the future until she gets a husband. A
man never worries about the future until he gets a wife. 
    MARRIAGE A woman marries a man expecting he will change, but he
doesn't. A man marries a woman expecting that she won't change, but she
    DRESSING UP A woman will dress up to go shopping, water the plants,
empty the trash, answer the phone, read a book, and get the mail. A man will
dress up for weddings and funerals. 
    NATURAL Men wake up as good-looking as they went to bed. Women
somehow deteriorate during the night. 
    OFFSPRING Ah, children. A woman knows all about her children. She
knows about dentist appointments and romances, best friends, favorite foods,
secret fears and hopes and dreams. A man is vaguely aware of some short
people living in the house. 
    THOUGHT FOR THE DAY A married man should forget his mistakes.
There's no use in two people remembering the same thing!  BUT WHEN HE FEELS THAT "DEPRESSION" IS ABOUT TO HIT HIM, HE GOES FOR

Girlfriends' Request List ...

Guys can laugh at this, or think quietly to themselves "yeah, maybe in the first 3 months ..."
But seriously, if you find one who complete you, these are a cinch ... if you are with someone who is not the love of your life, its a chore after a while ...
Ladies, if you find a guy who keeps finding it harder and harder to "share/give" these things to you, he's not the right person for you ...

Will The Bounce Hold?

This is what I said yesterday: “we might see a lower low intraday tomorrow but more likely than not, we will also see a bounce”. And we got just that. How far the bounce will go? We will know tomorrow how much fuel is left in the rocket and whether it will go to another planet far away. So no front running. Going against a trend and running with a countertrend rally is an expensive proposition, which I have learned painfully.

The interesting thing that happened in the market today, both VIX and SPX closed at red. VIX is showing a spinning top. I also see a kind of double top.

It kept changing throughout the day. In the morning it was solid green, 30 minutes before close it was a hanging man and at close a spinning top. This shows that there is fair amount of indecision in the market. Greed and fear are fighting for supremacy and if nothing bad comes out of Europe, most likely greed will win, short term. At least I am trying to keep my greed in check.

1300 level in SPX held for now and I sincerely hope and expect that it will now test the 50DMA which is around 1368. Today it looks doubtful whether it will reach there and that is result of the negative sentiment build up. But all that can change in 3 huge up trading days and folks will be talking of new bull run! Zuckers all.

That reminds me of Mr. Zuck. While he is having the fun, his FaceCrook shares had a rare reversal of fortune in the last 2 hours and ended the day in green. After IPO, the share had six red, two green and one eh! days. Talk about hype. And still it is at almost 90 time valuation of its current earnings and possibly 30 times expected earnings. Who all are buying this? What am I missing? It was a great example of greater fool theory beautifully executed by the company insiders who bailed out at the right time. The FB share will have free fall after its next quarterly earnings report and I am very sure it will be counted in penny stocks by 2014.

So where do we go from here? Nowhere actually. We wait patiently for the set up to be complete before we make our next move.  For the last week or so, the markets are churning in a range.

Unless it brakes the range and goes either way, there is nothing much to do. Thanks for reading Please re-tweet, forward, post it on your wall and share it anyway you can. My Twitter id is @BBFinanceblog and Stockcharts : Worldoffinance.  

Wednesday, May 30, 2012

Same Boring Stuff!

I know it is kind of boring to read the same thing. “Hold on”, “don’t do anything”, “this market is not for investors” so on and so forth. But what else can I say. If we got excited yesterday and jumped in, we would have been very sad today. Even if there is bounce on the way, a better entry is always welcome. So where in the grand scheme of things we are right now? It is just my guess and please do your due diligence, but if we compare the price action of last year, I think we are here:

The areas circled.

Here is an interesting tit bit from Bespoke

 Ya, ya I know I know. SPX is going to 1250 1st before any bounce or so they say. The funny thing is when everyone and their grandma agree on same thing, opposite happens. The sentiment is as bearish as it can get. We are almost getting to the point where we are getting bored and develop fatigue about news from Europe. There is no end of bad news from Europe and about Europe. But I tend to agree with Nassim Taleb. Forget Europe, it is USA which is a bigger problem.
Remember my post about the giant Ponzi scheme few days back?

Coming back to the markets here at Ponzistan, we might see a lower low intraday tomorrow but more likely than not, we will also see a bounce.  The FOMC is still three weeks away and it does not serve much purpose to tank the market too much now. The Chairman will not be able to take any action. Technically speaking, now is the right time for a bounce.  Can the market go lower from here? Sure it can. 200 DMA of SPX is at 1283 and would be a good support level. That is about 2% below from here. But the potential for upside is more at this point.  As and when the equities go up, commodities will also go up, including gold. However, I would still stay away from going long gold at this point of time.

I am not suggesting that you start buying tomorrow. All I am saying is: maybe we should not jump on the short side now and just stay in cash and see how things develop.  I know, again the same old suggestion. Boring.

Anyway, thanks for reading . Please forward / re-tweet / post it on your wall and invite others to join. (Twitter @ BBFinanceblog)(Stocktwits: Worldoffinance)

Department of "What Were They Thinking?"

I'm back.

Unknown University has a new initiative.  They want to encourage more "interdisciplinary" research.  So, they're trying to hire in groups centered around "big" topics.   So what do they call this approach?

"Cluster Hires"

It's too easy.   I'm not going there.  

Brainless Patriotism

Proton is the price we pay for brainless patriotism 
by Koon Yew Yin 
Image Detail
The founding of Proton National Bhd in 1983 was a big expensive mistake to begin with. Billions of ringgit from taxpayers have been lost in the process. 

The haemorrhage could not be stanched until only recently when Khazanah Nasional Berhad sold off its 43 percent stake in Proton to DRB-Hicom a few months ago. Malaysians have been wondering – is this finally an end to the unhappy saga of the government’s foray into the production of a so-called ‘national car’ or will the burden on taxpayers and car owners be continued in other new ways? 

A revisit of this white elephant project is necessary to generate a larger public discourse especially amongst taxpayers who should be more concerned as to where all the tax money they’ve been paying has gone to. 

One simplistic assumption which appears to have been made by the initiator of the national car project Dr Mahathir Mohamad is that an industry that is growing yearly should be profitable. It is not. In fact, industry data shows that the total profits of all the car companies over the last decades amount to only a modest return, and that only for the fittest in the industry. 
Image Detail
The British experience 
Consider the case of British Leyland, a vehicle-manufacturing company formed in the United Kingdom in 1968. It was partly nationalised in 1975 with the government creating a new holding company. The company incorporated much of the British- owned motor vehicle industry, and held 40% of the UK car market. 

Despite containing profitable marques such as Jaguar, Rover and Land Rover, as well as the best-selling Mini, British Leyland had a troubled history. In 1986 it was renamed as the Rover Group, later to become MG Rover Group, which went into administration in 2005. This ended mass car production by British-owned manufacturers. 

Today, many British car marques have transferred their ownership to foreign companies. For example MG and the Austin, Morris and Wolseley marques have all become part of China’s SAIC Motor Corporation Ltd. 
Image Detail
Mistake avoidable 
Why Dr Mahathir failed to learn anything from the disastrous British car industry experience is something that completely escapes many Malaysians. Surely any good leader would have gotten his officers to do due diligence. 

If they had done so, they would have found that the industry even with year-on-year rises in sales is not guaranteed to generate good returns to shareholders. Notwithstanding its long tradition of successful car manufacture and the country’s highly developed economy, the industry in the UK still failed to make profits. 

The reason for this situation is because one of the forces that limit profitability is the intensity of rivalry between car companies from around the world. This leads to oversupply and pressure on prices, further exacerbated by a high degree of freedom for new competitors to enter the industry.

Unless there is an enormous internal market such as China’s or the United States, and we can take advantage of the economy of scale, small producers such as Malaysia are forever doomed to a minor placing, or bankruptcy, in the marketplace. 
Image Detail
Played out by Mitsubishi 
As far as Proton is concerned, Mahathir’s mistake in ignoring the economic fundamentals of the industry was compounded by our lack of expertise or comparative advantage to produce cars. The anticipated technology transfer from Mitsubishi did not take place. 

This should have been anticipated. Why should Mitsubishi transfer their know-how to Malaysia when it can control the pace of transfer to maximize its profits? In fact, the top management of Proton should ask Mitsubishi to open their books to see how much profit they have made from Proton since it began operation. 

Mitsubishi knew that Proton could not do without them and they were quite happy to continue making money from Proton while the company here continued to bleed to death. 

Equally important was the poor quality of management. Just before the privatization exercise, Proton had accumulated RM4 billion during Tengku Mahaleel Ariff’s tenure as chief executive officer but its cash reserves had dropped to RM600 million during his successor Mohammed Azlan Hashim’s stewardship, according to Mahathir. 

To encourage people to buy Proton, the government increased the import duty for other cars and car parts. As a result, the consumers have suffered. For over 30 years we have had to pay higher prices for all cars including Proton. Even this has not been sufficient to save Proton which has been sold five times already. 

Another question to ask is why few car manufacturers, until recently, seem to get into bankruptcy? If so, then prices can rise relative to cost and shareholders can get a fair return. 

There are two main reasons. In some countries there is always the perennial optimism of managers and shareholders. In Malaysia, the reason is different. Here, our government has been changing rules and regulations to obstruct other cars from entering our market whilst providing special favours including an ever ready supply of financial assistance to keep Proton afloat. 

The end result is that some Malaysians have ended up with more expensive cars of other brands whilst most Malaysians have had little choice but to buy Proton – a poor substitute. 

This is the price we have to pay for brainless patriotism. 
Image Detail
Proton’s and our never-ending problems 
Ours is a sorry saga which is a classic case study on how not to set up a car industry. As with the national airline, I propose that a special course on our experience with Proton be offered in the Institute of Tun Dr Mahathir Mohamad’s Thoughts. 

What better way to honour the ex-premier than a post-graduate course on his pet project – the National Car – and inviting him to be a guest lecturer. I am sure he will have lots to share and many people to blame as to why the project has failed.

Earlier this year tycoon Syed Mokhtar Al-Bukhary was allowed to take full control of Proton. Since the sale, Proton’s problems have continued through its loss-making subsidiary, Lotus. In March, the conglomerate was forced to put in place a team of consultants to conduct an audit on the Lotus group of companies. 

The need for this review was pertinent in light of the financial obligation of Lotus in the form of a £270 million (RM1.3 billion) syndicated loan taken at the end of 2010, for which Proton had given its corporate guarantee. 

In March, Proton, in its third quarter results, noted that its subsidiary was in a technical breach of certain post-drawdown covenants on its long-term loan. For now, the loan amounting to RM1.01billion has been re-classified as a short-term loan as at Dec 31 until the receipt of approval for the extension of time. 

Although the new owner of Proton undoubtedly has deep pockets (he is the 7th richest man in Malaysia) and owns a business empire that covers ports, the postal service, power, defence and financial services, besides automobiles, we can expect him to recoup his losses by raising the prices further on Proton thus burdening our car buyers, and by charging higher prices for the other goods and services that he is involved with. 

In any way, the Malaysian consumer will continue to be suckered by the national car debacle.

Tuesday, May 29, 2012

How To Talk Like An Analyst or Sales Trader

Floating The Balloon.

There are many theories why SPX had an amazing 1.2% or 14.6 handle jump today. Some say it was because of the reumour that  ECB will re-capitalize the broke banks. Others are talking about some sort of secrete communication between the Fed and ECB. Many others are calling for a bottom and end of the correction. But have we not called for the counter trend rally for days now? It was only to be expected and I am rather disappointed with the speed or momentum of the bounce. Earlier I was expecting a bounce up-to 1400. Now I would be happy if we reach 1360. Already McClellan Oscillator is reaching close to 100.

I have written before, this will be a short squeeze rally, killing the bears and laying trap for bulls. But I have not yet decided to jump in. Because I think this bounce will not last long and we will resume selling soon. I do not think the correction is over.

Despite the general bullishness in the market, the horror story was reserved for Facebook, now below $ 29. Is it possible to cancel an IPO and demand a complete refund? Commodities are not showing much enthusiasm matching the equity. Copper is still around $3.47. Crude have not been able to break $ 91 and dear o dear Gold lost intraday and sitting at $ 1555. Euro broke through $ 1.25 and is at the lowest for the year. Spanish yields are reaching the stage where Greece was two years back. And ECB is yet to come up with money. To top it all, Egan Jones downgraded Spain. Why the euphoria then? Because that is all written, so! No treasuries sell scheduled this week, so no need to create panic. Clear the short term oversold conditions and is ready for fresh plunge. It is that simple. In the process if some momentum chasing lemmings join the buy express, all the better.

It is all good if you are a day trader. But God save you in this market if you are an investor and you listen to all the talking heads and decide now is the time to buy or you will miss the bus like last Jan-March. I think and I may well be wrong, that right now, “Cash is King” and I am waiting on the sideline to see how far the bounce goes.  We have penned the coming course of action many times over and so far it is following the script with minor variations. So save us from temptation God!

Thank you for reading . Please forward / re-tweet / post it on your wall and invite others to join. (Twitter @ BBFinanceblog)(Stocktwits: Worldoffinance)

Can-One Vindicated

I usually do not refer back to my previous postings even when its "right". Just look at the financials of their latest quarterly. Naturally, the contribution from Kian Joo served as a huge fillip to their bottom line. No matter how you cut it, its still 59 sen EPS per quarter. So technically, ONE TIME P.E.R.??? Of course you have too look at the liabilities jump from having to purchase, just over RM300m. Gawd, they made RM90m in one quarter, they probably can cover the entire liability in a year.

Even if you take out Kian Joo, Can-One's own operations did spectacularly well too. They posted RM12m profit, last year same quarter was RM4.5m. Are we convinced?


2Profit/(loss) before tax
3Profit/(loss) for the period
4Profit/(loss) attributable to ordinary equity holders of the parent
5Basic earnings/(loss) per share (Subunit)
6Proposed/Declared dividend per share (Subunit)

7Net assets per share attributable to ordinary equity holders of the parent ($$)

Remarks :
The Directors do not recommend the payment of any interim dividend for the First Quarter ended 31 March 2012.

Funny Ad

Apparently, this commercial is very funny in Hokkien.

Living The Life We Want (Revisited)

A special person shared with me last week about attending a talk by a 'wise person', and that it is important to "learn how to let go". To let go of our bad memories, failures, unproductive ways, etc... To which I replied that "we always hold onto people who don't love us or people who hate us or people who make us mad or people who take us for granted ... we also care too little for the people who love us unconditionally, the people who adore us, the ones who still stick around in spite of all your shortcomings". Such wasted priorities. Live the life we want, don't resign to fate, don't waste it waiting for those who never intend to turn up, don't waste it on bad memories of those who wronged us, don't dwell on regrets and failures ...

I think this might be an advertising thing, but magnificently crafted and very meaningful, and probably based on some 6 old foggies' true life story. Love the Chage Aska song in the background, On Your Mark.

Sunday, May 27, 2012

Its Monday .......

My Choice For The Next PM of My Country

Weekend Rambling.

Everything so far suggests that we will see a re-run of last summer.  Like last year, Europe is at the front and centre of everything. Last summer QE2 was getting over. This summer Operation Twist is at its end stage. What is new this year VS. last year is US Presidential election. More the reason for free money. I keep looking at last year’s price action and I get a feeling that the Algos are following the same program with minor variations. Even in 2011, they were following the program of 2010. In effect it is the same program for last 3 years. Take a look at the weekly chart of SPX.

Why would it be any different this year?

The bounce so far has been weak. But that can change quickly. All it needs for the Fed to open its swap lines to ECB. I would have liked if NYMO was at lower level but it is already approaching zero. It is easier to stage a bounce from oversold level.

The counter trend bounce therefore may not be very strong.  Again, if we look at the daily chart of SPX, the Fibonacci retrace levels indicate many different levels of bounce but the one I am looking at is the 61.8% or 1368. That also happens to be the 40 DMA. If it goes past that level, the next one is 50DMA of 1374.

Let us see how it plays out this week.

The settlement for last week’s huge treasury sale will be this week. This may put some pressure on price action on Tuesday. But with no major treasury sales due for the rest of the month, there is less need to create panic and drive the rates down. That may be another factor whereby the master manipulators let the treasury yield rise a little bit and allow the stock market to go up with it.  Already the futures have opened higher but the markets are closed on Monday in USA so it does not really matter what happens between now and tomorrow.

The Fed knows that it has painted itself in a corner but it is reluctant to accept that. Everyone in the corridors of power knows what the challenges facing USA are. There is a Seven Trillion Dollar asteroid     ( yes, trillion with a capital T) coming in the way of USA in 2013. That will knock off 4% of the GDP and will put USA in recession. The first causality will be the Banks  and they need all the free money that are available.  If you do not remember what Bernanke said in last April regarding the looming danger, here it is to refresh your memory:

"It's very important to say that, if no action were to be taken by the fiscal authorities, the size of the fiscal cliff is such that I think there is absolutely no chance that the Fed could or would have any ability to offset, whatsoever, that effect on the economy," "I am concerned that if all the tax increases and spending cuts that are associated with current law would take place, absent congressional actions, that would be a significant risk to the recovery."

In any event, the “recovery” that the Fed chairman talks about is the recovery of the TBTF banks that he represents and not the recovery of the main st.  But that is the fact of life and all your representatives are also the representatives of the big businesses. So now the effort is on to find a solution to the coming disaster.

Given all that why do you think SPX will go up at all, let alone going to 1500 if there is no easy money from Bernanke? Just because Obama wants to get re-elected does not mean anything to the real money bags! To go there, we need fuel which is QE. If any opposing congressman wants to protest against the Fed giving free money to the banks before election, the best way to shut him is to give him a call from his broker or banker that the world is coming to an end and his shares are now valued much less.  (Except Ron Paul may be) Problem with the giant Ponzi scheme that the Fed and congress are playing is like riding a tiger. They cannot get down without getting killed.

We look at Fibonacci level, over sold or over bought or some other crap to find out what the stock market will do next but the real answer for the stock market going up or down can be found somewhere else.  For the retail investors, who have lost money every time s/he has tried to beat the system with various system, I can only say that be very afraid. Preserve what you have and do not fall prey to the schemes like the FB IPO or some other get rich quick scheme.  This rally is to be sold into. Raise cash and be patient.  We have not seen anything yet but remember timing is everything. The 1st rule of investing is “Preserve Capital”. And be clear to yourself, are you investing or gambling.

Hope you are enjoying the “Memorial Day” long weekend. While you are having fun, it will be nice if you remember that they have killed 1000s of young men and women in the name of honour and glory in needless war which did not protect American or made it any safer. We are not even thinking of many thousand innocent civilians who got killed, maimed, ruined as incidental casualties of war. And yet the real source of the problem, the states from where it all emanates like Pakistan or Saudi Arabia, are our friends!

Thank you for reading . Please forward / re-tweet / post it on your wall and invite others to join. (Twitter @ BBFinanceblog)(Stocktwits: Worldoffinance)

Saturday, May 26, 2012

1200 OR 1400 ?

Last Monday, may 21st SPX closed at 1316, on May 25th it closed at 1318. It is as if the last few days did not exist at all. All intraday highs and lows for nothing. For two consecutive days I have written that although I expect a “Memorial day rally”, I am not sure how far it will go and it is just a counter trend rally if it happens. For three days in a row, they have goosed the market at the close, to make it close in green by a whisker. And McClellan Oscillator is doing something funny. It is slowly creeping out of the oversold position and reaching the Zero level. All for 20 SPX points?  But then why bother about one week, SPX has not gone anywhere for the years as a whole. If you think this week was a waste, then last one year was waste as well. Only the brokers made money out of us. And of course TBTF banks.

Coming back to the market, it remains oversold and the promised rally is yet to materialize. On the other hand sentiments are overtly bearish and yet we have not seen the capitulation. The immediate downside appears limited to 1280 and the upside potential is somewhere between 1360-1380. ( Very short Term for next few trading days) The seasonality favours the bull in the very short term but the bears are in control of the intermediate term, till Bernanke shows up.

I  think we will see violent and volatile price movement for the next few weeks till the FOMC meeting and much panic will be created here in USA and in Europe that will help the Fed to open its purse string. It is only too willing to help but needs some clock and dagger to perform and appear non-partisan.

The investors should avoid the market till the FOMC is over and we know what is in store. Cycles are down for major part of June and even if it manages to rally to 1380, it will be a counter trend rally and risky to participate.

The markets are closed on Monday, May 28th in USA but open in Europe. It will be interesting to see how the markets open here on Tuesday. If Europe manages not to blow itself up on Monday, next week has promise to have some action. In the mean time enjoy your long weekend.

Thank you for reading . Please forward / re-tweet / post it on your Facebroke wall and invite others to join. (Twitter @ BBFinanceblog)(Stocktwits: Worldoffinance)

The Debasement Of Major Currencies

Since the global economy largely went off the Bretton Woods system where gold deposits was secured by issuance of currency, we have not encountered such a drastic debasement of major currencies. Basically when a country prints their own currency without "significant backing or financial reserves", you are assuming the rest of the world are idiots. If Malaysia tries to do that, nobody will accept the ringgit at 3.0 vs the USD, it becomes monopoly money.

However, the USD is a reserve currency, closely followed by the Euro and the British pound. Its OK to print as long as the central bank also "withdraws" the money from circulation later on. Do you see that happening over the next 5 years?

Supposed when you print (irresponsibly), the worth of that currency adjusts itself in the markets, but we all know that has not been the case. 

First, if a country prints more currency to manage their affairs, this results in higher inflation. This is what most developed countries are doing today. Secondly, and most importantly, the value of the country's currency becomes less valuable due to inflation (currency debasement) since over time inflation is a killer of currency value. Finally, the cost of borrowing will eventually rise. This becomes tricky because when the cost of borrowing rises it becomes much more difficult to repay the borrowing. A vicious cycle can develop. We are seeing that today with Greece.

However, we see little inflation as we are all in a liquidity trap. Banks and other institutions just hoard the money. If the samae amount of money goes to work in the system, you have a strong multiplier effect, which meant that more funds will chase for the same goods and services, thus driving up prices of everything, stock prices and real estate included. Again, none of that has happened in those country.

However when things really "stabilise" in Europe and the US, we will see the above chain reaction. Technically, when that happens the central banks should "withdraw" some of the printed money from the system. However, they are unlikely to do that till much much later, and even that, rest assured it will be a minor fraction of the amount they actually pumped. Look at the "amount of currency debasement" by the central banks. It has gotten to a point of no return.

So, who loses out, the rest who did not print their currencies irresponsibly. The more we invest in USD, Euro, the more we are showing our backside and telling them to please screw us.

Everything being equal, if they die, its no good for the rest of the world's economies. Is that part of the insurance we pay? So, when you buy that New York or Florida apartment, when you buy the high yielding foreign currency bond, think again. The rest of the world MUST PUNISH these "bad behaviour".

So, we have to strike a balance. If you are very rich, try to shy away from assets denominated in these currencies. As I think they will not do the prudent moves over the longer term. Its best to consider other asset classes that will be able to withstand the cycle of currency debasement, which has reached gigantic proportions.


Arable land with a dependable climate

Oil-refining capacity

Electricity generating capacity

Water-treatment capacity

Drinking water, bottled or piped

Coastal access, harbours and ports


Real estate in long-standing, distinctive locations

Antiques, fine art, stamps and coins

Commodities without futures and options markets

Or, if you are just another middle class person like me, if you have excess cash, put in HKD and SGD. The latter is financially one of the strongest currency. The former is very ripe to unpeg from the USD, which should bring forth at least a 20% revaluation. No way can the HK economy continue to be pegged to the USD. I suspect they will revert to a combination peg of the yuan, yen, euro and usd .... sometime. When will that happen? When the USD falls into a hole (i.e. dropping more than 30% in a year in value).

Thursday, May 24, 2012

Russian Roulette.

Today’s post will be ultra-short as I am going out for a late evening meeting and will not be able to do much later.

In the morning I sent out four tweets. You can see them next to the blog. Around 11.45 AM Eastern, I closed the long positions initiated yesterday and a minute later informed everyone that I am getting out. I am clueless in this market and I do not want to be cute or smart. Just take a look at the price action for the last four days.

I still think we will get the “memorial day bounce” but we might not go very far and may even get a better entry point as well if at all we decide to play the bounce.  It’s a meat grinder of a market and if we are not careful, our hands and fingers will get smashed. The primary objective in this type of market is to preserve capital. You can smell the stinking rat here.

So let us see what happens tomorrow.  Friday before Memorial Day tends to be light and lackluster. If the level holds tomorrow before close, then I might take another stab at it. But this is not investing. This is playing Russian roulette. Do we really want to play this game with a loaded gun? Let me repeat what I wrote yesterday : “ If you are an Investor, it is better to avoid the market now.  A better opportunity will come by 3rd week of June. “

Thank you for reading . Please forward / re-tweet / post it on your Fadebook wall and invite others to join the growing gang. (Twitter @ BBFinanceblog)(Stocktwits: Worldoffinance)

Tributes By Elton John and Barry Gibb

Barry Gibb has paid tribute to his brother and Bee Gees bandmate Robin by releasing a touching farewell video.
The remembrance clip, set to the Bee Gees ballad Heart Like Mine, features never-before-seen home video footage of the Gibb brothers as kids, as well as career highlights and live performances.

The montage, which Barry posted on his YouTube page, is titled Bodding - Robin’s nickname. The singer lost his battle with cancer at the age of 62 on Sunday and Barry, the sole surviving member of the trio, has yet to make a public comment on his sibling’s death.

Robin’s twin Maurice died in 2003 of complications linked to a twisted intestine.

Read more:

Wednesday, May 23, 2012


WOW! That was some intraday reversal.  Are we still playing the old tape?

It may not be exactly similar but the theme is very familiar.

This market is insanely dangerous both for bulls and bears. It’s like walking in a minefield at the middle of night blindfold. That is why I keep repeating “don’t do anything, just wait.” I was looking for a bounce but I waited till the last half an hour to decide whether to go long. I think we have had a test of the earlier low and reversal there from.  A close below last Friday’s low will take SPX to 1380 level. Please remember, this is not “Risk On”. This is ‘Risk-Off, Off”. There is a difference.

The model portfolio has been updated with the picks but they have a very tight stop. And as promised, I tweeted my intention well in advance. This bounce is going to be a technical bounce and counter trend rally. So don’t expect too much for too long. However, it is going to be a massive short squeeze.

Germany sold $6 Bn. 2 year bonds at 0 %. Yes you are reading it correctly. But that’s all a galaxy far away. In the immediate neighborhood, the Fed has to sell $ 35 Bn. 2 year notes yesterday and another $ 35 Bn. 5 year notes today. No wonder they had to create little panic to get good rates.  The TNX (10 year treasury yield index) was at historical low.

The recovery for the day was without any volume. But isn’t that the case always?  As I said in the beginning, it is just a technical rally from oversold position.  Seasonality is also a factor.  From now till the first two days of June, it is a bullish period. When bullish seasonality combines with oversold market, we do expect a rally, even if it is a counter-trend one. It is called “Memorial Day Rebound”. The following table is from “ Stock Traders’ Almanac”.

Tomorrow is expected to be bullish. Let us see where and how far it pushed. It is always good to remember that the market is the boss and it inflicts maximum pain on maximum number of people. So be nimble and trade safe. If you are an Investor, it is better to avoid the market now.  A better opportunity will come by 3rdweek of June.

Thank you for reading . Please forward / re-tweet / post it on your Fadebook wall and invite others to join the growing gang. (Twitter @ BBFinanceblog)(Stocktwits: Worldoffinance)

Kagemu - Absolutely Brilliant!

Call it modern art, modern dance, creative graphics ... you cannot deny the creative geniuses behind this two performers. Black Sun is a meticulously choreographed projection of motiongraphics onto dance,combining traditional and modern elements of Japanese culture and martial arts.  Artist Nobuyuki Hanabusa and dancer Katsumi Sakakura, together known as Kagemu, have since been widely imitated by others....

Tuesday, May 22, 2012

The Smug Little S**T Hosed The Muppets!

You read it right. Now the shocker and it is from Reuters;; Reuters' Alistair Barr is reporting that Facebook's lead underwriters, Morgan Stanley (MS), JP Morgan (JPM), and Goldman Sachs (GS) all cut their earnings forecasts for the company in the middle of the IPO roadshow. They told it to the institutional investors but nothing to the retail. No wonder Goldman calls the retail investors as “Muppets” in their internal emails!

If we did not live in a banana republic, the lead underwriters and owners of FB would have been hauled for criminal conspiracy to defraud the investors. But that is not going to happen. The rot in the system is too pervasive. But even the muppets are to be blamed for their greed. One would have thought that by now the retail investors have learned their lesson as how the St. games the system, but no, not a chance in hell.  From NY Post:
After a 30-minute delay, individual New York investors gobbled up stock online and at discount brokerage houses.
Queens chauffeur Thomas Gardner, whose home was just foreclosed on, could only afford $89 for two shares, which he hoped would eventually send his 9/11-born son to St. John’s University.
“This is a good start,” Thomas said, beaming as he came out of a Midtown Charles Schwab office. “Everybody is hoping for something, so I’m jumping on this wagon. I have a good feeling.”
Michael Scott, an Upper West Side architect, bought his shares on his iPhone.
“I like the chase,” said Scott, who bought Google stock at $100 a share in 2004 and still holds the $618 stock.
Retired nurse Teresa Ryan, who lives in Tudor City, bought 4,920 shares at $40.50, noting she made a killing on Apple stock.
“I’m very psychic when it comes to stocks, I really am,” said Ryan. “I have no retirement, I have no pension, so I try to make money on the market.”


I am disappointed that there are no puts available on FB or I would have bought a boat load of puts on FB. If you consider the EPS of Apple or Google, FB should be trading at $ 2, max. $3. No more.

Coming back to market, the early morning euphoria was absent by the day’s end. We may see further dip tomorrow at least in the morning and that is why doing nothing now is a good idea. Let me repeat what I wrote yesterday: “Tomorrow might be a red day and a better entry point. There is no hurry. This is not the last train leaving station.” Logically and technically speaking, there has to be a test of selling pressure and how aggressively the dip gets bought before we can determine the strength of any up-swing. Pardon me if I have confused  you butif and when I go long, I will inform you by twitter. More the reason you should join me in twitter (@BBFinanceblog). As you know, I do not spam with unnecessary tweets and say something only when it is worthwhile. Most of the time, it is just noise out there and not worth bothering.
The late day sell-off was triggered by the rumour of  Grekxit. This time the rumours are working the other way, to create panic. You can actually see through the game. Greece will exit Euro but not now, may be in another six to eight months time. Despite all the bravado, Europe is not yet ready to face the mess. And don’t forget the almighty “O” wants to get re-elected and will do everything in his power, including arm-twisting the European leaders to at least temporarily pull a rug over the problems and print more money.

So we wait for more price action to get a better idea about the immediate direction of the market. Thank you for reading

The Bee Gees or The Beatles

It is common to hear The Beatles as the best group ever in terms of musicality, composition and longevity. So what about The Bee Gees? Now that 3 out of the 4 brothers have left us, maybe its time to reassess the true worth and rightful standing of The Bee Gees.

Why The Beatles is so famous? Their music was mind changing, innovative, and brought a whole new meaning to rock and roll. Their members' lives were esoteric and hogged the media. They proclaimed for world peace, engaged in Eastern philosophies, they were cool to the max ... they were anti establishment. They rooted for the hippies, the disenfranchised, the disenchanted ... They were more than musicians, they were more than performers. The media loved them. They Brits were proud. The Americans wanted to call them their own. The whole world wanted to love them because they were "cool".

The Bee Gees were enormously successful in the early years, on par with The Beatles. Maybe because they did not do as much drugs as The Beatles? They were not as cool, they were regarded as "middle of the road" stuff. Good stuff but not lasting, so they say. The Bee Gees did not have a "home". The Australians did not really "own" The Bee Gees, the band members did not really identified themselves as Australians. The British did not really adopt them as their own. Their success in the US was always muted at best. Nobody wanted to "own" them as their own.

The Bee Gees' longevity in the business was more than double that of The Beatles. we all know how difficult it is to have a musical career lasting more than 10 years, particularly if you are in the singer-songwriter group. If you were a really good crooner, you can last ages, like Sinatra, Buble, Striesand, etc...

While The Beatles basically stopped in the 70s, albeit The Wings were excellent and George Harrison had some sparkle, plus John Lennon created some fine transformational stuff. The Bee Gees reinvented themselves in the late 70s and were quite instrumental in being a major player in the disco era. Now, the disco era was frowned by most music critics as being a fun but shallow part of musical history, but hey, disco was a critical part of musical history whether you like it or not. Even now, people keep going back to the fun times of 70s and 80s music in radio stations and just look at the reissued CDs that are selling nowadays, its the 70s and 80s music.

Many critics used the disco era music to further downgrade The Bee Gees' achievements. Having said that i think their Spirits Having Flow album was easily the landmark album in the early 80s.

The Beatles albums remain iconic and stood the test of time, The White album, Abbey Road, Sgt Peppers, etc... nobody really bothered with The Bee Gees. One thing which The Bee Gees may have lost out was their lyrics, which The Beatles were more subtle and have higher ambitions in conveying their messages. But having said that, much of The Beatles early stuff were also shallow type of lyrics.

I have compiled The Beatles' great songs that marked their career, most were hits but I have included others which have been significant as well:

A Hard Day's Night
A Taste of Honey
Across The Universe
All My Loving
All You Need Is Love
And I Love Her
Back In The USSR
Can't  Buy Me Love
Come Together
Day Tripper 
Do You Want To Know A Secret
Drive My Car
 Eight Days A Week
Eleanor Rigby
Get Back
Good Day Sunshine
Hello Goodbye
Helter Skelter
Here, There, Everywhere
Hey Jude
Hippy Hippy Shake
I Am The Walrus
I Feel Fine
I Saw Her Standing There
I Should Have Known Better
If I Fell
I Will
I'll Follow The Sun
In My Life
Let It Be
Love Me Do
Lucy In The Sky With Diamonds
No Reply
Nowhere Man
Obladi Oblada
Paperback Writer
Please Please Me
Please Mr Postman
P.S. I Love You
Shake Rattle and Roll
Rock and Roll Music
Sgt Peppers Lonely Hearts Club Band
She Loves You
She's Leaving Home
Strawberry Fields
The Fool On The Hill
The Long and Winding Road
Ticket To Ride
Twist and Shout
We Can Work It Out
When I'm 64
While My Guitar Gently Weeps
With A Little Help From My Friends
Yellow Submarine
You've Really Got A Hold On Me
You're Gonna Lose That Girl
You've Got To Hide Your Love Away

65, thats 65 fucking awesome songs. What about The Bee Gees?

Chain Reaction
Come On Over
Don't Forget To Remember
Fanny Be Tender With My Love
First of May
For Whom The Bell Tolls
How Do You Mend A Broken Heart
How Deep Is Your Love
I Started A Joke
I've Gotta Get A Message To You
If I Can't Have You
In The Morning
Islands In The Stream
Jive Talking
Lonely Day
Love So Right
Love You Inside Out
Melody Fair
More Than a Woman
My World
Mr. Natural
New York Mining Disaster
Nights On Broadway
Night Fever
Our Love (Don't Throw It All Away)
Rest Your Love On Me
Run To Me
Spicks and Specks
Spirits Having Flown
Staying Alive
This Is Where I Came In
To Love Somebody
Too Much Heaven
Warm Ride
Woman In Love
You Should Be Dancing
You Win Again

That's 47 great songs. Not bad at all. Fair to say, The Beatles output were more vociferous and had more quality but The Bee Gees are not far behind. Nowadays, its not cool to like The Bee Gees. That should never be the case.