Taking responsibility for one's self

Our activities and successes are based on our inner strength and wholeness. To grow, it is necessary for us to recognize and correct our own faults. Yet, it is difficult to do this since we hide our shortcomings not only from others but from ourselves. When we gain the ability to recognize and correct our own bad habits, we begin to make rapid strides toward greater happiness and success in all spheres of life. Only by learning to admit our own faults can we become more tolerant and loving to our fellow man and to his shortcomings.

attributed to Moses

How bad are the wildfires in California??

Organizers of the 2008 Western States Endurance Run, the Squaw Valley-to-Auburn cross-country race that has become one of the premier ultrarunning competitions in the U.S., announced Wednesday that next week's scheduled running was canceled due to the unprecedented number of California wildfires and deteriorating air quality. Organizers said two fires burning within two miles of the race course as well as air pollution levels in Auburn registering 10 times levels deemed highly polluted prompted the decision. "Although there will be no race for the first time in our 35-year history, we still wish to make this experience as meaningful as possible for our runners," the letter stated.

Western States 100 homepage

Mastercard bad boys . . .

In a huge settlement today, MasterCard will pay as much as $1.8 billion in quarterly payments over three years to settle the complaint that it blocked banks from issuing American Express cards. But MasterCard isn't the only bad boy . . Visa settled in November for $2.25 billion!

Lake Tahoe evaporates

1,400,000 tons of water evaporates everyday from Lake Tahoe, that's enough to satisfy 3,500,000 people.

Remember when ?????

It used to be said that so goes General Motors so goes the economy . . . . well, let's check here a little . . . back in October, 2007 GM was trading around $42/sh . . . . last check $13.79. OK, let's check on another big auto company, Ford . . . . last October it was trading at $9.75 . . . . drum roll, update . . . . closing today at $5.81.

Wow, that's some pain for the "buy and holders" of big auto.

Masdar City you ask????

How about this for an environmentally conscious social experiment, a mini-burg called Masdar City, a place with no cars, full solar power, advanced water-saving systems, complete energy independence, 100 percent walkability, zero carbon emissions, zero waste, full of so many radical enviro-friendly ideas it seems almost impossible, considering it's also being built on one of the least hospitable hunks of land anywhere. It's being built by the folks from Abu Dhabi, the richest city in the world (Average net worth of every one of Abu Dhabi's 420,000 citizens? Seventeen million dollars).

and the price tag you ask . . . $22 BILLION . . . that's a lot of zeros.

Whoah!

Happy Father's Day

To all my friends and relatives who are fathers . . . . . have a great day and thanks for raising the next generation.

More on jobs data from NY

The Floyd Norris at the NY Times notes that the 12-month change in private sector jobs is down 125,000 jobs from may 2007 to May 2008. Since 1953, this indicator has a perfect record, identifying 9 out of 9 recessions. When it flips negative (year over year), the economy is already in recession each and every time.

You can read about it here

Another interesting piece of data on jobs

Many people consider the temporary job market an important barometer of the economy . . . .

Neuroplasticity

Neuroplasticity is the ability of the brain to reorganize itself. Although in the last five years there have been some impressive demonstrations of brain reorganization that used to be thought impossible, the amount of reorganization that can occur in most adults is vastly less than can occur in children and adolescents.

Let's vote next week on the President

The Monterey Herald had a great op-ed piece yesterday which said "what more can we learn from the candidates in the next 5 months?" and I agree . . . . . let's have the election next week and save ourselves from 5 more months of campaigning and fund raising . . . . like the idea, send me an email.

32 years later

32 years ago (at precisely this time of day) Toni and I exchanged our vows overlooking the Pacific Ocean from a vacant lot on a cliff in Palos Verdes, California. We had our family with us with Judge Murphy presiding and the future Judge Tynan (Toni's brother) and Martha smiling on as Toni's mom Helen, Stephani (Toni's sister and maid of honor), Gay (my mom), Grandad CRT, Grandmother Betty, Aunt Sherry, my cousin Carla (pregnant with Nikki), my cousin Sandy and Rob, Rob (my best man and little brother) and Peggy, brother Andy and Lisa (pregnant with Kelly), sister Sarah, Toni's sister Kathy and Tom, Toni's sister Sharon and Peter and our two friends Dan and Susie witnessing the event.

During the last 32 years we've moved twice in Manhattan Beach then to Fair Oaks and now to San Luis Obispo. I created a business called Kincaid Hardwood Company and Toni taught elementary at Riverview Elementary. We traveled to Europe and around the United States seeing national parks and great golf courses and acclaimed art museums. We skied in the Rockies and the Sierras. We rafting in Idaho and Colorado. We've thrown Super Bowl parties, birthday parties, New Years Eve parties, fun parties. We've been to thousands of concerts and through it all we love each other more today than ever.

here's to my dear Toni . . . I love you. Let's keeping it rocking and a rolling.

Do you know what a QSPE is?

Banks have been using QSPEs to effectively boost their leverage and hence, their return on capital. Without the balance sheet constraints of the old days, banks were encouraged to create assets -- by making lots of loans they shouldn't have -- that could, in theory, be sold off later. It hasn't quite worked out that way.

QSPEs can have legitimate purposes -- but they also can obfuscate the true financial condition of a bank or broker. The purpose is not to simply hide losses off balance sheet, but to get those assets off balance sheet so leverage/Tier 1 capital ratios look better. Essentially you can be much more leveraged than you appear, so that ratios like ROA and ROE look stronger than they would if they weren’t employed.

Some financial gurus wonder if "The migration of exotics to the balance sheet may be inevitable." If he's correct, it bodes poorly a quick recovery for the financials. They have years worth of leveraged derivatives on their books, and writing them down won't be quick or painless.

9th inning? Hardly.

More on the financial crisis

To really understand how affected everyone is by the financial meltdown attributed to subprime mortgages (hear my cynism) you have to hear about what's going on in Europe . . . . how about this, from the Bloomberg wire . . . .

Bradford and Bingley, the U.K. lender struggling to raise cash in a rights offering, must honor a 2006 deal to buy about 2.1 billion pounds ($4.1 billion) of mortgages by the end of next year from GMC LLC.

Customer payments are more than three months late on 5 percent of loans already purchased from Detroit-based GMAC, trying to avert bankruptcy for its residential mortgage unit. That's more than double the average rate for mortgages held by the Bingley, England-based bank, it said yesterday in a statement.

the Science of Sound and Music

I've been reading "This is Your Brain on Music" by Daniel Levitin . . . . fascinating and very educational for anyone interested in What is Music? Where does it come from? Why do some sequences of sounds move us so, while others - such as dogs barking or cars screeching - make people uncomfortable? Levitin is a neuro-scientist.

Here's one interesting fact . . . "A Day in the Life" from the Beatles Sargeant Pepper LP has a 15 Hz for a few seconds at the end of the song, it's inaudible to most people over 40 years old but reportedly, Lennon wanted to make peoples dogs perk up.

Raising Margins on Oil Speculators

The New York Mercantile Exchange said on Tuesday it will increase margins for its crude oil and related futures contracts, beginning at the close of business on Wednesday.

Now this is the way to handle the situation . . . .

Happy BIrthday to Me

62 years ago I was born in Pasadena, California to loving parents . . . healthy and raring to go.

from todays calendar of quotations . . . . "A painter paints pictures on canvas. Musicians paint their pictures on silence." Leopold Stokowski

reveiw on George Soros's latest book

this review is by Paul Farrel from Marketwatch . . . . . . he begins by quoting Soros, . . . . "We are in the midst of the worst financial crisis since the 1930s," says Soros. "In some ways it resembles other crises that have occurred in the last 25 years, but there is a profound difference: the current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. The periodic crises were part of a larger boom-bust process; the current crisis is the culmination of a superboom that has lasted for more than 25 years."

The "new paradigm" can be found in his emphasis on the long-cycle "superboom" and "superbubble," that's the story of the "new paradigm." It started 25 years ago ... led to massive deregulation ... to blindly chasing free markets ... it unleashed excessive greed ... created the dot-com and credit meltdowns ... it is now driving the dangerous new "shadow banking system" fueled by $516 trillion in derivatives.

The system is broken, Soros warned Money magazine: "The days of rapid financial wealth creation are over. We're now in a period of wealth destruction. It is going to be very hard to preserve your wealth in these circumstances." Ouch! If you take no other lesson away for Soros' "New Paradigm," remember his warning: Protect your nest egg!

Still, he needs to write another book. The credit meltdown is not over, only pausing. What's the solution? He needs to help America and the world prepare better for the next "superbubble" meltdown, if not avoid it. Why? Because it's obvious Wall Street has not learned its lessons: The Fed bailed them out, set up a moral hazard condition. Now they're going back and to play in their new "shadow banking system."

U Utah Philips passed away

Utah Phillips, a seminal figure in American folk music who performed extensively and tirelessly for audiences on two continents for 38 years, died Friday of congestive heart failure in Nevada City, California a small town in the Sierra Nevada mountains where he lived for the last 21 years with his wife, Joanna Robinson, a freelance editor.

my website

check out a cool website www.craigkincaid.com

in the classroom with Jimmy

Teacher : OK, class, what's the difference between ignorance and apathy?

time goes by . . . . tick tick tick

tick tick

tick tick tick tick

finally from the back of the classroom . . .

Jimmy: Oh teach, I don't know and I don't care.

the latest on Societe Generale and their "rogue trader"

May 23 (Bloomberg) -- Jerome Kerviel was able to amass 50 billion euros ($78.7 billion) in unauthorized futures positions at Societe Generale SA because of ``fragmented'' internal controls, a report commissioned by the bank said today.

Kerviel's direct manager was ``weak,'' and the hierarchy failed to ``react in an appropriate manner to several alert signals,'' said the 71-page report from a special committee of the bank's board. Unwinding those positions cost a record 4.9 billion euros, the biggest trading loss in banking history.

His supervisors missed the level of his earnings, cash flows, brokerage expenses and overlooked warnings from Eurex AG, Europe's biggest futures exchange, the report said. Societe Generale's management has said the 31-year-old former trader lied, faked documents and e-mails, and hacked into the bank's computers to carry out and conceal trades. Kerviel is currently at the center of a criminal investigation into the affair.

I'm sorry but this is laughable beyond belief. SoGen is so inept in it's management that it now has to resort to damning supervisors after they damned the trader. They ought to be damning themselves and the whole top tier of the bank should be fired. I still believe they knew what was going on all the time and we very happy with the profits that Kerviel was generating before he blew up.

Airlines really know how to embrace their customers

Further, the new baggage fee (announced today by American Airlines) is likely to create havoc in airports and jet aisles as travelers try to beat the system by squeezing all their belongings into carried-on bags, further straining overhead bins' capacity. And it won't just be seasoned travelers but also newer ones, who might not know they can't bring aboard water bottles, razors or nail files, which will hold up the lines at security checks. ugh!

are analysts good at predicting anything?

here's the latest "analyst" forecast that totally missed the mark (9 am 5-21-08) . . . . Just hitting the wires, crude oil inventories for the week ended May 17 fell 5.32 million barrels, snapping four straight weeks of inventory builds. Analysts forecasted that stockpiles would increase by 300,000 barrels. Crude was trading nearly unchanged at $128.93 per barrel just prior to the release

that's a whopping BIG miss, don't you think?

Facts on Short Selling

My portfolio is up 9% this year and it's because I've played the market for a downturn since last November using ETF's like GLD, DXD, QID, SDS. now here's some interesting data points . . .

• The amount of trading dollars that are in dedicated short pools are tiny: About $5.4 billion That's one-seventh the size of Fidelity's Magellan Fund.

• The $5.4B dedicated short hedge funds are a sliver of the nearly $2 trillion of hedge-fund assets.

• Over the past two decades, 58% of the issues on the New York Stock Exchange have advanced, while 42% have declined -- every year.

Food's relationship to the overall CPI?

"In the U.S. counts food as only 8% of the CPI index. Whereas, it counts for about 10% in the United Kingdom, about 15% in the rest of Europe and more than 18% in Japan."

Now here's where things get really interesting. If you consider the proportion of U.S. household spending on food by income quintile, all but the top 20% of earners spend at least 20% of their paychecks on food.

Hence, what the weighting versus the reality are very different. This means that for 80% of the country's populace, the CPI weightings are dramatically understates what the average American is experiencing in terms of their inflation versus the official CPI measure.

Bush eclipses Nixon

In the how to become really unpopular race . . . . our current President, George Bush has set an all time record high . . . . uhhhh this is not a good high. No, Bush has eclipsed Richard Nixon with the highest disapproval rating ever at 71%. Nixon achieved his unpopularity record just prior to resignation after Watergate.

Kids on Bluegrass at Parkfield Bluegrass Festival

Parkfield Bluegrass Festival 2008 is over but we all had a great time putting it on and working with the kids to help them learn instruments, new songs and how to perform.

go to parkfieldbluegrass.com to learn more

Grantland Rice on Golf

"Golf is twenty percent mechanics and technique. The other eighty percent is philosophy, humor, tragedy, romance, melodrama, companionship, camaraderie, cussedness, and conversation."

How people listen to music

"I think there's been a huge shift in how people listen to music. They used to get as good a stereo as they could. Now they want an iPod. And the audiophiles have moved on to multimedia. But to get the content to people, you have to play by their rules."

"I cant tell you how many times someone comes in and plays me something he wants mastered and I'll say, 'Do you want to make it slamming loud or retain some of this great sound?' They'll say, 'We want to keep it really pristine.' Then the next day they'll call me and say, 'How come mine isn't as loud as so and so's?' "

"With the Beatles or Rolling Stones, they'd be a little sharp or flat, but no one would care — that was rock. Now if someone's out of tune or out of time, they treat it as a mistake and correct it."

How does MP3 work? MP3 reduces a CD audio file's size by as much as ninety percent, with an algorithm that eliminates sounds listeners are least likely to perceive — including extremes of high and low frequencies.

What is dynamic range compression? This studio effect reduces the difference between the loud and soft parts of a piece of music — recently, mastering engineers have used it to make sure every moment on a CD is as loud as possible.

Consumer Credit hits record

The Federal Reserves released data today : it's now $2.56 trillion, the Fed's report doesn't cover borrowing secured by real estate, such as home-equity loans.

Thomas Jefferson says

Impartiality is always partial.

Money Heaven and Bear Sterns and Enron

According to Yahoo Finance, there are 163.76 million outstanding shares of Bear Sterns. On May 7, 2007, Bear was trading at $158 or market cap of $25.874 billion . . . that's big. Wonder what Enron's market cap at it's zenith was ? we'll get back to that. Now, Bear Sterns is trading at $10.90 or a market cap of 1.785 billion or a loss of $24.089 . . . . gone to money heaven. Back to Enron, in Dec 2000 Enron's share price almost hit $85 (some sources say it's market cap was $65 billion). In 16 months it was gone . . . zero. I'm not sure if this is a fair comparison but it's still interesting, isn't it? and I haven't even brought up the subject of bond defaults, etc.

Vince Gill

Gill has sold more than 26 million albums. He has earned 18 CMA Awards, including Entertainer of the Year in 1993 and 1994. He is tied with George Strait for having won the most CMA Male Vocalist Awards (five), and is currently second only to Brooks and Dunn for accumulating the most CMA Awards in history. Gill is a member of the Grand Ole Opry, and has received 19 Grammy Awards to date, the most of any male Country artist. An avid golfer, he helped create the annual Vince Gill Pro-Celebrity Invitational Golf Tournament (“The Vinny”) in 1993 in order to help support junior golf programs throughout Tennessee. Besides being known for his talent as a performer, musician and songwriter, Gill is regarded as one of Country Music’s best known humanitarians, participating in hundreds of charitable events throughout his career.

Money Heaven

No matter which number you want to believe, 1 Trillion or something less, the amount of equity loss to financial institutions in the past 6 months is staggering and it's gone to money heaven . . . . whooosh GONE. Now, the refinancing that's taking place with sovereign wealth funds, private equity, and government bailouts is not new money. It's money that is being borrowed from Mr and Mrs America or some other central bank or money being redeployed from another asset class but the stark reality is that a huge amount of equity is gone and never coming back . . . . oh yeah, that probably includes real estate.

Citigroup calling re your HELOC

"We have determined that home values in your area, including your home value, have significantly declined. As a result of this decline, your home’s value no longer supports the current credit limit for your home equity line of credit. Therefore, we are reducing the credit limit for your home equity line of credit, effective March 18, 2008, to $10,000. Our reduction of your credit limit is authorized by your line of credit agreement, federal law and regulatory guidelines."

this is not something I made up, many people have received this notice . . .

Back from Nashville

Our first trip to Nashville was moderately eventful. We woke up Saturday morning to the Nashville Marathon and wound up at the Grand Ole Opry that night. Oh yeah, I finally made it to the stage at the Ryman . . . .

A new leader in the banking crisis

UBS AG, Switzerland's biggest bank signaled that it will cut its investment bank to a rump after lost bets in subprime mortgages landed the Swiss group with a $37 billion bill, making it the biggest casualty of the financial crisis.

The world's biggest banks and securities firms have announced $290 billion in asset writedowns and credit losses since the beginning of 2007, including reserves set aside for bad loans

now ring the bell . . . . who's next?

Lightning Strikes

Want to see some interesting data on lightning strikes ?? click here

William C Moore - 80 years of surfing

Bill Moore, the icon of Malibu passed away in December, 2007. He was surfing regularly at 88 but then a combination of ailments took their toll. I was privileged to be invited to join the surfout at Malibu Surfrider Beach organized by the Malibu Surfing Association on Saturday to honor Bill.

60% of Americans are renters and they're not happy with government bailouts

see what's going on here

NDFI . . . . ??? what's that?

NDFI is a acronym for "non deposit taking financial institution" and then there's this . . . .

Investment bank, hedge fund and broker balance sheets are about half the size of the commercial banks in the US and about one-quarter the size in Europe. Both assets and liabilities of NDFIs are dominated by repos, meaning that NDFIs lend and borrow based upon collateral of assets that are constantly marked to market. As asset prices fluctuate, leverage must constantly be adjusted.

Doug Kass on "bullishness"

Which gets me back to the media and a recommendation that I respectfully suggest to every host on CNBC, Bloomberg and Fox Business Network -- when interviewing a member of the bullish cabal, ask the following questions:

1. What is your investment mandate?

2. Do you have the flexibility to raise or reduce the cash component of your portfolio?

3. What was your cash position two years ago, what was your cash position a year ago and what is your cash position today? And why were your cash positions at those levels?

4. Have you ever been bearish?

5. How have the deteriorating economic conditions and worsening profit picture affected your market and economic views?

6. What change in conditions from current expectations would lead to a further change in your market views?

I might add, in bull markets, the obligation of the media is to ask the bears the same questions.

quality forecasting by GE

4/11/08 after announcing quarterly earnings declines, Chief Executive Officer Jeffery Immelt cut the annual forecast he had once told investors was ``in the bag'' for 2008 and repeated as recently as March 13 . . . so much for relying on the predictions of the geniuses . . . again.

another Warren Buffet quote

"you only learn who has been swimming naked when the tide goes out -- and what we are witnessing at some of our largest financial institutions is an ugly sight."

I love forescasters

from Bloomberg this afternoon on Freddie Mac (25.46) and Fannie Mae (29.00)

Lehman Brothers Holdings Inc.'s estimated that the stocks will soar to $45 or more, while their colleagues at Goldman Sachs Group Inc. forecast that the shares will tumble to $16 or less.

I'm not kidding or making this up . . . . you just can't make up this stuff.

Why not live in your house for free

Borrowers in California who fight foreclosure can stretch the process to 18 months, said the chapter president of the California Association of Mortgage Brokers and president of Cal-Pro Mortgage Inc. in Stockton.

That doesn't take into account the woman he knows who hasn't made a mortgage payment in eight months and hasn't heard from her lender.

``Now she's afraid to mail in a payment for fear it'll come to somebody's attention,'' he said.

Postdictive error

Using data after the fact to review decisions before the fact is a very critical mistake . . . . so when someone says that "we could have survived if . . . . " they are usually making this mistake. Today, this came out :

April 3 (Bloomberg) -- Bear Stearns Chief Executive Officer Alan Schwartz said the fifth-largest U.S. securities firm might have survived if the Federal Reserve had acted earlier to lend money directly to investment banks.

Since we can never know, it's totally ridiculous that a major media outlet would even give this type of thinking credibility by printing it. This is like me saying, I might not have been hurt walking down the street if the ball hadn't rolled in front of me . . . duh.

Eiffel Tower opened 100 years ago today

100 years ago today, the Eiffel Tower opened. I was there 3 weeks ago and took this photo

UBS writing down another $18 billion

it's amazing how difficult this is becoming - from the Financial Times . . .

UBS is poised to reveal further writedowns of up to $18bn and seek a capital increase of about $13.1bn just weeks after shareholders approved a similar-sized injection from outside investors.

Times they are a changin'

Whole new ballgame: After years of free invites to the Giants' Opening Day, San Francisco supervisors got a decidedly less enticing offer to this season's home opener April 7 against the San Diego Padres.
"I am pleased to extend you the opportunity to purchase two tickets to Opening Day," team Senior Vice President and General Counsel Jack Bair wrote to each of the 11 supervisors.
"As you may know, it has been our custom for many years to invite our public sector guests to the game and to our pregame party on a complimentary basis, as we do our sponsors and key vendors," Bair wrote.
He reminded the supervisors, however, that all that changed last year when the board adopted an ordinance prohibiting officials from accepting gifts from anyone doing business with the city.
"As a result, we are required by law to charge you for the value of the tickets and benefits received," Bair wrote, including "the approximate pro-rata cost of the food and refreshments offered at our pregame party."
From what we hear, all but two of board's 11 members have taken the Giants up on their offer, with most opting either for a pair of lower box tickets ($49 each) or club level seats ($82 each).

thanks to (SF Chronicle) Phillip Matier and Andrew Ross

Here's an Idea - Reform retirement-savings

It's time to convert retirement savings from an IRA to a Roth IRA model. Collect the estimated $5.8 trillion of deferred taxes now and apply this to resolving the Social Security and Medicare shortfalls.

If we wait, expect as much as half of that money to disappear. The Treasury and Congress can simplify rollovers from mediocre investment choices to brokerage accounts, and simplify conversions to Roth IRAs. This way, the government could collect trillions in deferred taxes before the money is lost to a bear market.

The rollover and conversion choices should be voluntary, and premature withdrawals should be discouraged. Investors would be wise to remember that the reason they lost money in the last bear market was the rigid buy-and-hold investment strategies forced on them by traditional advice.

Congress could provide incentives to simplify the process by spreading the taxes over a three to five-year period, capping the income-tax rate for Roth IRA conversions, and removing the current income and age tests to qualify. Savers should look before they leap, of course, but they should be allowed to "leap."

British Airlines still has big problems

British Airways, based in London, has canceled more than 200 flights since the terminal opened March 27, after computer log-on failures for baggage handlers and delays at staff car parks sparked turmoil at the airport, Europe's busiest.

British Airways already is Europe's worst airline for lost luggage and the second-worst for delayed bags, according to the Air Transport Users Council. The flights canceled today were domestic or European. All long-haul services were scheduled to operate as normal, the airline said.

Remembering William F Buckley, Jr

It's been a little while now since Buckley passed away and I've been absorbing some of the media reviewing his life, wit, philosophy. Charlie Rose had a wonderful hour long program reviewing the 17 times that Buckley appeared on his show the night he passed away; if you can find it, watch it.

I've never read one of Buckley's books but I have subscribed to National Review and I rarely missed Firing Line. Buckley was funny, confronting, fascinating, consistent to the end and so smart. I really liked his used of the English language.

Then I found something on youtube that seemed to really align Buckley with me in which he said on Meet the Press in 1965, "I'd rather be governed by the first 2,000 people in the Boston telephone directory than the 2,000 people on the faculty of Harvard University."

Thank you Bill Buckley for living the great life.

Lending Crisis?

``There's really only a handful of banks that are offering cash,'' said a money-market trader at a unit of Landesbank Baden-Wuerttemberg, Germany's biggest state-owned bank. ``Everyone is just waiting for the next bank to go down. There is no trust in the market. They're very afraid.''

Joe Lewis (no not the boxer)

talk about bad trading . . . . .

Lewis paid an average of $103.89 apiece for his 12.14 million Bear Stearns shares, according to yesterday's filing. He started accumulating most of his shares last July and has lost about $1.19 billion on the investment, or almost half his wealth, which Forbes magazine estimated at $2.5 billion in its 2007 survey.

Back from Euorpe

I usually manage to go to Europe when something important happens in the financial markets and this time I did it again with a little political intrigue to boot. I returned home last night so here's my first installment on what happened . . . . in case you missed any of it.

Not a day after I arrived in Paris to spend two nights with my niece and her boyfriend (Greg), did Eliott Spitzer get embarrassed and resigned as NY Governor. This was quite a timely event in that Greg had worked on Spitzer's campaign and been an aide to the incoming David Paterson.

What was to come over the next 10 days was the financial meltdown of Bear Stearns, Carlisle Capital and Wall Street.

another story tomorrow.

Buffett and Dexter Shoes

even the great ones make mistakes . . . .

In 1993, Berkshire paid $433 million for the Maine-based company. Rather than use cash, Buffett used Berkshire Class A stock to fund the purchase. That Berkshire stock is worth eight times more now, giving the Omaha, Nebraska-based insurance and investment company a $216 billion market value.

Dexter didn't make it that long. It ended shoe production in the United States and Puerto Rico in 2001, and Berkshire folded what was left into its H.H. Brown Shoe Group unit.

"What I had assessed as durable competitive advantage vanished within a few years," Buffett wrote on Friday. "By using Berkshire stock, I compounded this error hugely. That move made the cost to Berkshire shareholders not $400 million, but rather $3.5 billion. In essence, I gave away 1.6 percent of a wonderful business -- one now valued at $220 billion -- to buy a worthless business."

"To date, Dexter is the worst deal that I've made," Buffett went on. "But I'll make more mistakes in the future - you can bet on that. A line from Bobby Bare's country song explains what too often happens with acquisitions: 'I've never gone to bed with an ugly woman, but I've sure woke up with a few.'"

Warren Buffett

"He lies like a finance minister on the eve of devaluation."

-- Warren Buffett

Talk about hedge fund volatility

Peloton Partners LLP, the London- based hedge-fund firm run by former Goldman Sachs Group Inc. partners, is liquidating its ABS Fund after ``severe'' losses on mortgage-backed debt and demands from banks to repay loans.

Peloton, founded by Ron Beller and Geoff Grant in 2005, is seeking buyers for the $1.8 billion fund's assets, according to a letter sent today to investors. Firms including Citadel Investment Group LLC and GLG Partners Inc. have made bids, two people familiar with the situation said.

The fund's demise after an 87 percent gain last year highlights the severity of the U.S. subprime-mortgage collapse, which has spread to AAA-rated securities and triggered bank margin calls. Boston-based Sowood Capital Management LP shut down last year after losing $1.5 billion. Two funds managed by New York-based Bear Stearns Cos. filed for bankruptcy.

Falling Slowly wins Oscar

We saw "Once" as soon as it was released and as we came out of the theatre I said to Toni that we may have seen the Oscar song winner in that movie. I really like the song. It's a curiously composed piece.

I didn't know anything about the exclusion of the song from eligibility or other issues facing other films music, like Eddie Vedder's music from "Into the Wild" or the music from "There Will Be Blood". read more at this link . . . very interesting

quote by Francis Bacon

It is a sad fate that a man is too well known to everybody else and still unknown to himself.

Collapse of the Auction Rate Bond Market

While this is still a developing story, check out the extent to which the market has collapsed . . . .

From 1984 through 2006, only 13 auctions failed, typically because of changes in the credit of the borrower, according to Moody's Investors Service. There were 31 failures in the second half of 2007, and 32 during a two-week period beginning in January.

The average rate for seven-day municipal auction bonds rose to a record 6.59 percent on Feb. 13 from 4.03 percent the previous week, according to indexes compiled by the Securities Industry and Financial Markets Association.

Sand into Oil

from Bloomberg Markets, I found this . . . . 

. . . .  at Fort McMurray's pit mines, it takes 2 tons of sand, 250 gallons (947 liters) of water and 1,400 cubic feet (39.6 cubic meters) of natural gas to produce one barrel of synthetic crude, says Peter Wells, director of research firm Neftex Petroleum Consultants Ltd. in Abingdon, England. That's enough water for a day's use for a U.S. family of four and enough natural gas for 5.6 days. The gas is burned to power a process that extracts a tarry substance called bitumen from the sand and then refines it into synthetic crude.

In turn, each barrel generates as much as 110 kilograms (240 pounds) of carbon dioxide equivalents, the same as refining three barrels of traditional light crude.

"When you're schlepping around two tons of sand for a barrel of crude, it shows that conventional oil is already well into depletion," says Jeffrey Rubin, chief economist at CIBC World Markets Inc. in Toronto. "Price will ultimately ration demand. People won't be able to afford to drive."

Two new songs on my website

Go to www.craigkincaid.com and click on the Kincaid Music link, then click on either C P R R or Sarah Hear My Plea on the top bar to listen to the latest songs I've written.
C P R R was inspired by Stephen Ambrose's book "Nothing Like It So Far" about the building of the Transcontinental Railroad. Sarah Hear My Plea is a song about the things I won't, can't, never do in this crazy world.

Warren Buffet on the subprime mess

"It's sort of a little poetic justice, in that the people that brewed this toxic Kool-Aid found themselves drinking a lot of it in the end."

Sleeping

According to a report published by the journal SLEEP last year, U. S. adults sleep, on average, 6.5 hours each night.

So that's the reason I'm so tired when I wake up.

Keeping up with the Indexes

Bank of America (BAC) and Chevron (CVX) are being added to the DJIA, replacing Altria (MO) and Honeywell (HON). A Dow Jones official on CNBC said that Altria spurred the change due to its plan to spin off its Phillip Morris brand. He said this is the first change to the average since 2004.

One of the primary reasons that it's so difficult for mutual fund managers or anyone whose benchmark is the Dow Jones Industrial Average to match or outperform it is that it's always changing.

I'll Be Home for Christmas - royalties

J. Kimball Gannon, who wrote the memorable song, left 30% of all his royalties to the Canton , New York St Lawrence University in his will. The payments started in 2000, following the death of Gannon's widow. Since then, St Lawrence has earned nearly $175,000!

Flyer's Rights

You've heard of the nightmares that travelers are experiencing through airports, stuck on airplanes, being late . . . . . want to do something about it? This is something the government ought to be doing and candidates should be talking about.

go the Flyer's Rights website and get involved click here

Super Bowl bets reviewed

Here are the results of the annual Phil vs Craig Super Bowl betting competition. There were 61 bets (stuff like longest TD, first team to score, most punt returns by team, time of possession, first turnover type, team to score 1st TD, team winning each quarter, the half and game, etc). It was tough going when we were selecting our positions but in the end there were 3 bets with no outcome ( there were no blocked punts, neither team won the 3rd quarter, each team punted 4 times) . . . . . . drum roll puleez . . . . . I won with 30 correct picks to Phil's 28. He's sending me the most coveted "loser's check" for 50 cents (yeah, we only bet 25 cents on each possible outcome). I'm now trying to figure what to do with it . . . . maybe pay down the mortgage . . . . naw, I'm gonna put it towards a new #16 blue winged olive fly.

You Tube and copyright infringement

there is no copyright infringement on You Tube's part . . . .

A site like YouTube is actually protected by law (the Digital Millenium Copyright Act, or DMCA) from being sued. The reason is that YouTube does not actually post content. It is simply a service that allows users to post content. Under the DMCA, they have "Safe Harbor" protections as a service provider. You may recall that Viacom sued YouTube, but there is a good chance that they would have lost. YouTube chose to settle for two very good reasons. One, it would have cost them a lot to defend. Two, they would rather the courts not test the DMCA when somebody with the money and clout of Viacom is sitting at the other table. Most of us do not have that kind of money. Of course, there are things they must do in order to maintain that Safe Harbor status. If the site where you find the infringing material is one where the operators of the site post the content then they have no protection under the law.

Predicition isn't easy . . . and you're told it is

This morning it was announced that job creation in the US dropped by 17,000 last month . . . .

None of the 80 economists surveyed by Bloomberg had predicted the decline in payrolls, which was the first since August 2003. The median forecast in the survey projected payrolls would rise by 70,000, compared with an initially reported gain of 18,000 in December. Forecasts of an increase ranged from 5,000 to 160,000.

the Calendar Grand Slam requires luck

When asked if he thought the calendar Grand Slam was possible, Tiger Woods said, "It's about playing well at the right times, it's about getting lucky, actually.  You have to have everything go your way."

Another rogue trader ?

Here's another trading company blaming the trader . . . . trust me, the company knew what he was doing.

1-24-08 Societe Generale SA said unauthorized bets on stock index futures by an unidentified employee caused a 4.9 billion-euro ($7.2 billion) trading loss, the largest in banking history.

France's second-largest bank by market value plans to raise 5.5 billion euros from investors after the trading loss and subprime-related writedowns depleted capital, the Paris-based company said today. The Bank of France, the country's banking regulator, said it's investigating the situation.

Martin Luther King, Jr.

The surest way to be happy is to seek happiness for others.

Martin Luther King, Jr.

to err

I've said it before, and I'll repeat it again: To err is human, but it requires an MBA to create total clusterfuck . . .

The Facts ???

When it comes to "reporting" the "facts" I'm a skeptic of 99% of the media's attempt to do so and I really like this . . .

As Rob Corddry once asked, "How does one report the facts in an unbiased way when the facts themselves are biased?"

Countrywide Credit incentives for executives

get this . . . . I can't stop laughing this is so egregious

Countrywide's compensation committee has approved retention awards of cash and cash-settled restricted stock units for David Sambol, president and chief operating officer; Eric Sieracki, executive managing director and chief financial officer; Ranjit Kripalani, executive managing director, Capital Markets; and, Carlos M. Garcia, executive managing director, Banking and Insurance, according to the filing with the Securities and Exchange Commission.

The bonus portion of the incentive packages range between $2.5 million for Kripalani and $1.45 million for Garcia. The executives must remain with the company through at least March 15, when the bonuses are to be paid, according to the filing.

these people ought to be hung up not "incentivized". what could B of A learn from this bunch of losers?

AT&T in trouble ???

AT&T is disconnecting more home-phone and high-speed Internet customers for failing to pay their bills.

Wyatt Earp is buried in

Colma, CA is near Daly City

Edmund Hillary

Here's to one of the greatest adventurers of the ages.  I've been fascinated by Everest for 40 years recently watched the special on TV about climbing Everest and the most interesting part of the climb is the Hillary step.  It's hard to imagine how incredibly difficult it was for Hillary and Tenzing Norgay to climb Everest when they did and then come down . . . . here's toast to Sir Edmund Hillary who has done so much for the Tibetan and Nepalese people.

Eric Clapton

I just finished reading EC's autobiography and it's a fun read. From the Yardbirds to the recovery from alcoholism and happiness with 4 daughters by his current, you'll enjoy it.

Transcontinental Railroad

in 1868, every sawmill in the Sierra was cutting timber for the building of the famous showsheds for the Central Pacific RR.  65,000,000 BF of timber were used to build the snowsheds over the summit near Truckee, California.  900 tons of bolts and spikes were also used.

words of advice

you can plan plans, but you can't plan results

Bear Stearns problem

Watching the financials implode is an interesting experience since I own none of them but how about this . . . .

Paul Novelly, a director, sells 50,000 shares of Bear Stearns! At the lowest price since mid 2005 (about half of what it was a year ago), what does this say about the future of the company?

Who Do You Trust?

from a good website to monitor . . . http://bigpicture.typepad.com/

I quote Barry . . . "I am naturally skeptical. I see too much bullshit everywhere. Hence, I believe Trust is something that must be earned, not given away. Not demanded, not assumed, but actually earned. Especially if you are a startup company, with enormous access to lots and lots of very personal data. These firms should have to earn your confidence. They have gotten carte blanche so far, but I suspect the era of blind faith is coming to an end.

Ask yourself these questions: Who do I trust? Who can I rely on, confide in, bank on, have faith in? Who do you read? Who do you let get inside your head? Who do you believe? Who are you sure about? What companies do you entrust with your personal files and passwords? Your social security number, bank account data, personal financial info, data? Who do you trust?"

I am also a huge skeptic of everything which causes some friction among my friends as they see me as being "negative" NOT. They're not the same thing. I just don't trust anything I didn't see myself, experience myself or hear myself. I read and listen to lots of stuff and research it before I act on it but rarely do I blindly accept it as truth . . . . unless of course it's skeptical. :-) CK

Napolean's desire for luck

Napoleon, asked what qualities he looked for in his generals, replied, "Luck. Give me generals who are lucky."

Municipality losses from CDOs etc

get this . . . .

The investment by the Springfield, Mass Finance Control Board, the municipal body that manages the city's finances, is valued at $1.2 million, down from $14 million a year earlier, according to Secretary of State William Galvin. The finance board has hired Boston-based law firm Goulston & Storrs to investigate the investment, Springfield officials said in a statement. Massachusetts Attorney General Martha Coakley has also started a probe into the matter, which was reported earlier today by the Boston Globe. The Springfield finance board said it ``believes that Merrill Lynch can and should be held fully accountable for any potential losses.''
The chairman of the Springfield finance board is Chris Gabrieli, who ran unsuccessfully for Massachusetts governor in 2006. Gabrieli, a venture capitalist, was defeated by Deval Patrick.

big surprise . . . . that everyone is trying to duck responsibility.

Buddha says

Remember Buddha's advice: "Believe nothing, no matter where you read it or who has said it, not even if I have said it, unless it agrees with your own reason and your own common sense."

Happy New Year to everyone

the landscaping is complete and we're enjoying the scene

Talk about getting it wrong . . .

"Just days into his second turn as CEO of Sallie Mae, Albert L. Lord couldn't find the right words to soothe Wall Street. Lord, who assumed the chief executive's seat on Friday and said he plans to stay in the position for at least two years, called his recent sale of about 1.2 million shares of company stock to meet margin calls "embarrassing and troublesome to me personally" but not a reflection of diminished confidence in the company's long-term future." AP report

Chuck Stearns

Chuck is the only skier in history to maintain a position at the top of both tournament skiing and ski racing at the same time. Perhaps his most remarkable achievement in ski racing was winning the Grand National Catalina Ski Race 10 times. The last time was his competition swan song in 1979 when at age 40 he finished the 52-mile open-ocean course in the record time of one hour and two seconds.

Remembering Dan Fogelberg

One of my favorite songwriters has passed away . . . . it was "Part of the Plan" and his "Run for the Roses" is over. A moment to remember the songwriter whose father was "The Leader of the Band".

Dan Fogelberg

taxing services in California????

One way to raise revenue would be to apply sales tax to services, such as those provided by attorneys, accountants, consultants, architects and auto repair shops, Levy said.

"This has been widely discussed around the country for 10 to 20 years. We are a service economy, and we have this sales tax (on goods) that's doomed to grow slower than the economy," he said.

According to his research, California's services industry is worth about $700 billion a year, the biggest chunk representing health care.

That alone could raise about $10 billion in additional revenue to the state and local governments, Levy said.

Shocking Housing Revelation

"We now find out in hindsight it played an important role and a very dangerous role," he said. "For the first time that I can remember, you saw investors coming into the housing markets and trying to play it into almost like a day stock."

Jerry Howard, chief executive of the National Association of Home Builders, told CNNMoney.com today

Ever check out the true production figures for oil producers, exporters, consumers and importers?

Big Wave Photo from the Central Coast

I took this photo of the big surf on Tues Dec 4 looking towards Point Sal. The "cloud break" is almost 1/2 mile off shore.

SC UCLA photo

an abstract photo for sure but cool.

$50 to park at the Shrine

Call me crazy but I wasn't the only one. Parking at the Shrine Auditorium parking structure was $50 on Saturday for the SC-UCLA football game. 6 stories and at least 100 cars per story and the place was full!