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 . . .