Wednesday, June 29, 2016

Today's Don't Laugh Challenge v.005

7 Things That Don't Belong in a Work Email

June 28, 2016
Time: 5 Things That Don’t Belong in a Work Email

Yes, yes. That's all fine and dandy but it's really missing the big picture here. And when I say big picture, I really mean:

July 1, 2013
JFK Airport security supervisor axed after accidentally sending XXX photo of his genitals in mass email blast

It went out to about 20 individuals, including subordinates, at least two FJC veeps and two PA supervisors, the sources said.

Yeah, I'm fairly sure that should be #1 on the list. So what's the 7th thing? Well, it's complicated.

Since the more trustworthy Cthulhu is not running for president this year and I therefore fully intend to vote for Hillary as the lesser of the two remaining evils, there's no way that I shall ever reveal the 7th thing, even if that thing involves sensitive government information stored on a private email server. No, sir. Keeping my mouth completely shut on that one!

In all seriousness, how did we get in this situation? How is it possible that I must choose between Hillary and The Donald? It's like having to choose between sandpaper and steel wool when it comes to toilet paper. Um, I'll take one sheet of sandpaper I guess. Dammit! It's #%^*ing double-sided! ;)

How Yahoo Finance Helped Me Make Zero Dollars in Profits Today

June 26, 2016
Illusion of Prosperity: The Sarcasm Report v.256

Q: If the goal is to buy stocks after the Brexit turmoil ends but before the stock market rebounds, then how might I accomplish this?
A: You need to be informed that the Brexit turmoil is over before other investors cause the stock market to rebound.

Q: As a retail investor, how could I do this?
A: Rapidly click on Yahoo Finance headlines until you see "Brexit Turmoil Has Ended" then rapidly click the buy button on your broker's website.

Q: How will Yahoo Finance most likely know that the Brexit turmoil has ended?
A: The stock market will have rebounded.

Q: So how will I be buying at the best time if I wait to see the news?
A: This time could be different.

June 29, 2016
Yahoo Finance: That's all, folks – the Brexit crisis is over

The crisis is over! Hurray! I've been rapidly clicking for days on these headlines! Time to rapidly click on the buy button to extract some easy profits!

That’s what the markets seem to be saying, anyway. On June 17, six days before Brits voted to leave the European Union, the S&P 500 index closed at 2,071.

2,071 is my target price. I'll sell when we hit it. Baby needs new shoes! Woohoo!

Stocks have since rallied again, with the S&P 500 settling –guess where — right around 2,071 six days after the vote.

Markets are closed? We're already back to 2,071? Dammit!

I really thought it could be different this time! I swear! Hahaha! :)

Legalized Gambling in Our "Casino Nation"

June 29, 2016
NHL is coming to Las Vegas because America is now a casino nation

In 1950, America was waking up to the problem of organized crime. U.S. Attorney General J. Howard McGrath convened a conference, primarily of big-city mayors, to discuss the root causes of the rackets (the word "mafia" had not yet entered the popular lexicon). Gambling, he said, was a fundamental nuisance in a country that was fundamentally opposed to the practice.

That was then, this is now.

Today, Attorney General Loretta E. Lynch would have to concede that the basic public policy of the United States is pro-gambling. All but six states run lotteries, taking in nearly $74 billion last year. Every National Football League team plays in a stadium in which gambling is as close as the nearest convenience store.

November 20, 2015
Man begs for money after risky bet implodes

Talk about a nightmare trade.

Joe Campbell had $37,000 in his online brokerage account when he went to bed on Wednesday night. By the time he woke up, not only had all that money vanished, but the amateur trader actually owed ETrade more than $100,000.

Gamble $37,000 on Wall Street. Lose $137,000. Owe $100,000. It's all perfectly legal.

June 20, 2016
Jupiter bar owner charged with running illegal gambling operation

An undercover agent won $15.

Illegal gambling! Alert the authorities!

When There Is Just One Bank Left, Will It Be Too Big to Fail?

Click to enlarge.

I only ask because if banks stay on the path they've been on for the past 7 years (or longer if you want to count the ongoing trend since 1988), there's only going to be one bank left in about 22 more years.

Mind blowing? Perhaps Bernie Sanders just needed a chart. Nah, Ross Perot already tried charts. Didn't work. Sigh.

Source Data:
St. Louis Fed: Banks

Tuesday, June 28, 2016

New Poll Says 71% of Americans Believe Economy Is Rigged

June 28, 2016
71% of Americans believe economy is 'rigged'

The poll asked a simple question: Which of the following comes closer to your opinion on the economic system in the U.S. People could select between three options:

1. The economic system is rigged in favor of certain groups 2. The economy system is fair to all Americans 3. Don't know

That is most certainly not a simple question. You've given me the option of saying it is rigged, that we live in a perfect utopia of fairness for everyone, or to claim ignorance. A simple question would be:

Do you believe the economy is rigged?

1. Yes
2. No

And even then it would be biased. Why am I asking about a rigged economy in the first place, unless somebody thinks it is?

Don't need a poll to know that life isn't always fair. I once saw several raccoons chase down a cat behind a neighbor's fence. Didn't see the end result but I could hear it. I will say this about the raccoons though. At least they didn't try to convince the cat that their subprime structured investment vehicles were of the highest quality! That's something I guess.

September 4, 2013
Survey says: Polls are biased

Pollsters took a stark look into the mirror Tuesday, seeking to explain how a new survey found that three quarters of Americans say most polls are "biased toward a particular point of view."

Can we actually trust a poll that says 75% can't trust polls? Perhaps another poll is needed to find out. I know just the person to do it.

Jimmy Kimmel's Lie Witness News

Will you be watching President Obama's planned 4th of July confederate flag burning with the last surviving members of the Tuskagee Airmen and the Wu-Tang Clan?

Hard to laugh, but harder not to! Hahaha!

Polls. And people wonder why Brexit was such a surprise?

Secondary Quote of the Day: "A Slow Moving Train"

Dammit! I wasted my quote of the day earlier today. It's gone. I'm now forced to rely on a backup.

June 28, 2016
CNBC: Don't get too happy about this stock rally

"It's going to be a slow moving train. It's calmed down for now — but it hasn't calmed down," said Ablin. "(The markets are) on heightened alert, but unfortunately it's moving at the pace of policy, not at the pace of the markets."

We don't hear many slow moving train analogies. Can someone clarify? I ask because it's calmed down for now, but yet it hasn't calmed down. Makes it hard to determine the actual speed of the train.

Does he mean that the train is actually moving slow? If so, that seems very safe. Rarely hear about slow moving train disasters.

Or does he mean slow motion video of a train? Those are almost always bad. They often involve a fast moving train meeting up with a slower moving vehicle attempting to cross the tracks in time.

We really need to know! Are the tracks safe? Can we cross them? And what's the deal with the heightened alert?

Don't worry. Nobody gets hurt in the video. It's apparently one of those slow moving trains I keep reading about. Whew!

Yeah, I know. I'm going to hell for teasing people like this, especially since I could no doubt be teased similarly. I have no defense. Simple things amuse me. And you know what they say, simple things amuse simple minds. So be it. I can live with that. Hahaha! :)

Who to Really Thank for Today's Stock Market Rally

I would never ask for myself, but I do think my fellow bearish bond anti-vigilantes deserve a round of applause. In the past week, the 30-year treasury yield has fallen from 2.50% to 2.27%. The yield held its ground today, in spite of the rising interest rate environment we find ourselves in, and in spite of the stock market rocketing higher. That's an amazing amount of spite and support for our fragile financial system. We're there for you. We've got your backs.

Not only will we continue to support future stock market valuations, but we also pledge to continue ruthlessly attacking the evil New York bank net interest margins on your behalf (as seen in the chart below), just as we ruthlessly attack the future returns of this country's many underfunded pension funds. It's all for you. Enjoy this era of permanent modern prosperity! Please don't let it go to waste!

Click to enlarge.

February 17, 2016
The Telegraph: Negative interest rates a 'dangerous experiment' for the world as monetary policy hits buffers

Commercial banks are at particular risk from negative rates, which have been described as a tax on the banking system.

Sub-zero rates reduce the profit made on interest, while increasing the cost of capital for borrowers. Japan's banking sector has seen its net interest margin (NIM) fall to 25-year lows as a result of the Bank of Japan's unprecedented monetary stimulus, according to data from Morgan Stanley.

Sometimes, in order to save a thing too big to fail, one must first nearly destroy a thing too big to fail.

Source Data:
St. Louis Fed: Net Interest Margin for Banks in New York

Costco vs. Sam's Club (South Seattle Edition)

June 28, 2016
Sam's Club is firing shots at Costco after the credit card swap disaster

On Saturday, Sam's Club announced that, until July 4, Costco Membership Cards could serve as free Sam's Club Cards — noting that Sam's Club accepts all major credit cards, unlike Costco. Typically, only members can shop at Sam's Club, with an annual membership costing at least $45 a year.

Simce we have memberships at both chains, I thought I'd offer a few personal comments about the Costco credit card debacle.

I think Sam's Club is the one desperately in trouble, at least in my area. Here's why.

1. The Sam's Club parking lot is never full. Their store is never full. Their checkout lanes are never full. As a customer, this is clearly a desirable situation. To an investor, not so much though.

2. The Costco parking lot is always packed. Their store is always packed. Their checkout lanes are always packed. As a customer, this is clearly not a desirable situation. To an investor, it is ideal.

3. Since Costco is always packed and Sam's Club never is, Costco can afford to offer us better deals. I think they do. When I see something priced at Costco, I don't try to second guess if it is a good deal. I generally know it is.

4. When I see something priced at Sam's Club, I do second guess it. Why? There is a particular bag of chips that Walmart also sold. It wasn't exactly the same size bag. Sam's Club's bag was slightly bigger. It has always bothered me that the cost per ounce was higher at Sam's Club, a place where I pay a membership fee. I therefore never trust a Sam's Club price to be fair, nor will I ever.

5. We spend more money at Costco than we do at Sam's Club even though Sam's Club is closer to us. That is not a good sign for Sam's Club over the long-term. It's the more pleasant store to shop in, because it isn't packed. You'd therefore think we'd buy more there. We shop there more often, for the convenience, but we actually buy less. Why? I can give you one reason. Since Sam's Club has fewer customers buying their bulk goods, I suspect their products don't turn over as fast. This leads to expiration date problems from time to time. If you are buying bulk goods, you need to see excellent expiration dates. We sometimes don't at Sam's Club.

6. I have never owned an American Express card and never will, perhaps somewhat out of stubbornness. I prefer a thin wallet. I use one and only one credit card. It's a Visa. I am so pleased that I will never need to take my checkbook to Costco again. Such a pain it has been. Yeah, first world problem. I know! More times than not, a supervisor needed to verify my check. So there I would wait, like a suspected terrorist needing a background check. The nightmare is finally over! Hurray! Thanks Costco!

7. Sam's Club took my Visa. Now Costco does too. Not good for Sam's Club. If I could choose only one store, it would be Costco. Sam's Club would get dropped in a heartbeat.

8. So why do we shop at Sam's Club? They had fantastic prices on some generic medicines, both for us and our pets. The key word being had. Makes me wonder if some weren't just incompetently mispriced. There are things they sell that Costco doesn't. We're particularly fond of Hershey's dark chocolate, for example. Since the store is mostly free of other customers and closer to our house, many of the refrigerated perishables are often bought there. The milk is especially good. Instead of buying a two gallon pack at Costco, we can buy a gallon of skim and a gallon of 2% at Sam's. And for whatever reason, I prefer the taste of Darigold. They used to sell bulk Cracker Jack. I love that stuff. Don't now though. Do we still buy enough there to justify the membership fee? I ask myself that every month. It's a close call, at best. Would not take much for us to drop the membership. Let's just put it that way. That's especially true since one of our dogs no longer gets her medication there. We'll see what happens at renewal time. They should not be optimistic.

9. We don't get too attached to our local Sam's Club, mainly because we wonder how long it will be there. They are losing the race with the nearby Costco, by a wide margin, and what could possibly change that? Costco's credit card debacle? Don't make me laugh. At least for me, I welcome the change. Big time. Does it seriously annoy many customers who are forced to make a change? I'm sure it does. Will anyone care five years from now? I could be wrong, but I doubt it. I really don't think my local Sam's Club knows how to cater to the needs of fast-moving disgruntled American Express card holders. It's a very laid back environment. Time moves slower in a Sam's Club. Everything is so leisurely. We'll see!

The Dumbest Financial Mistake That Jim Cramer Can Ever Remember Seeing

June 27, 2016
Cramer Remix: Brexit is the dumbest financial mistake I’ve ever seen

Please allow me to refresh his memory.

March 12, 2009
The Worst Moments Of Jim Cramer's Career

6. "The Winners of the New World".

On February 29th, 2000, Jim Cramer gave his "top 10 stocks" that are "going to make it in the New World".

This turned out to be a phenomenally bad list that would have incinerated the portfolio of any investor who was following along and buying. The ten stocks were:



Avoid everything but tech in 2000, he said. It is by process of elimination that he picked his top 10, he said.

Apologies to those who followed his advice, and then keep reliving those painful memories here. Shame on me. It seems that I've got winners of the new world permanently etched on my brain. Never seems to get old. At some point I just need to drop it though, and instead concentrate on the other nine worst moments of his career.

Bad Mark. Bad! Bad! ;)

Proof That We're Actually Living in a Very Humorous Computer Simulation

June 27, 2016
Diet Pepsi to reintroduce aspartame option

The new offering, sweetened with aspartame and Ace-K, will be called Diet Pepsi Classic Sweetener Blend and will be offered in 12-packs, 2-liter bottles and 20-ounce bottles.

Diet Pepsi Classic Sweetener Blend? Seriously? I remember a time, in the not-so-distant past, when I could simply say, "Pepsi, please."

Oh, how our computer programming gods must enjoy toying with us! Hahaha! :)

See Also:
10 Reasons Life May Be A Computer Simulation

Quote of the Day: "The Real Elephant in the Room"

June 26, 2016
The $100 Trillion Bond Market’s Got Bigger Concerns Than Brexit

“The real elephant in the room is not the U.K. vote or a Trump presidency. The real elephant in the room is we’ll have low and negative rates for a very long period of time.” - Steven Major, HSBC Holdings Plc’s Head of Fixed-Income Research

For what it is worth (not much), believer in the real interest rate elephant since 2000, and the nominal interest rate elephant since 2010. I'm basing this solely on the money I have personally invested, which generally implies true belief and not just idle chitchat.

Monday, June 27, 2016

Confessions of a Patient and Frugal Video Game Addict (Part 2)

In part one, you may recall that I said:

The funny part is that even as a patient and frugal gamer, I could feel the temptation. I'm starting to burnout on the game a bit. If I paid the $20, I could back away from the game. That's when it hit me. The worst possible time to spend $20 on a game is when you are starting to burnout! What an epiphany! Hahaha!

Full burnout achieved! Best $20 I never spent! That sure didn't take long! Hahaha!

Although I have 2,869 gold in reserve (enough gold to make many players salivate), and could easily coast for more than a month on it alone, I am quitting the game forever today. Game uninstalled. Poof.

The new update is out and there wasn't even a moment's rest. Four more expensive high end cars were added to drain our gold. Further, the weekly time trials were reset. This means that we have to compete in four separate time trials this week instead of just the normal one. This doesn't mean much to those who haven't played the game, of course, so let me just say that it is four times the work for the same reward. Further, I'll be traveling this coming week for 4th of July festivities. Can't think of a better time to quit. And then there's hiking season. It's here! It will be much better for my health than a mobile video game, and I won't be complaining one bit.

This is not a rant though. I enjoyed the game immensely. It's just a perfectly normal progression from great fun to burnout. That said, there is an amusing rant that I would like to share.

Real Racing 3 Wikia: No Compromise

GODDAMN IT WHAT THE HELL IS WRONG WITH YOU FIREMONKEYS????? Not even 1 Day to rest after the Le Mans event???? Are you kidding me?!?!?! I wanted to progress a bit in the career for pete's sake NOOOPPPE not happening. Oh look! 670 GC in my bank and GUESS WHAT? BAM! Ferrari FXXK. BAM! Lotus Exige S 360! BAM! Lotus 3-Eleven! BAM! Lotus Type 125. 4 cars, another 1000 Gold to be spent in the span of 1 month. Enjoy, lads! Hint: Firemonkeys are already feverishly working on the next half dozen GOLD COINS cars that will release right after these events finish.

- 4 hours ago by A Wikia contributor

I think I know who this is. It's Cartman from South Park! Hahaha!!

People like free stuff. No doubt about it. Not sure free stuff that makes one swear is worth it though, but hey, maybe that's just me!

As a side note, I'm never getting roped into a game that demands my continual attention again. You can take that to the bank. It eventually starts to feel like an obligation. Go figure.

I have other games ready to play. Looking forward to playing more Crash Dive (WW2 sub simulator) and Starbase Orion (space exploration and conquest), both of which can be played at a leisurely pace, with absolutely no time pressure. Life is good. :)

One last bit of advice for those who are just now starting to play Real Racing 3:

Do yourself a huge favor. Do not attempt to complete it. Do not feel compelled to compete in the weekly time trials. Do not complete every special event. Do not collect every car. Simply enjoy it as the good free racing game that it is. Otherwise, it will consume your free time and/or money with reckless abandon. I say this as a video game addict. It's hard enough for people who have played for years to keep up. You have little chance, and even if you do ultimately succeed before you burnout, this free game will extract a serious toll.

This Investment Is Guaranteed to Test a Long-Term Saver's Patience

The 20-year treasury constant maturity rate hit 1.83% today. That's the lowest rate I have ever seen, and I'm 51 years old.

You'd think I'd be crazy for telling a long-term saver that it is a relative bargain. You'd be right. Not only would I be crazy, but I'd be Game of Thrones Ned Stark raving mad. I'd have lost my head!

The relative bargain for patient long-term savers is the EE savings bond. If you buy it today, it is guaranteed to double in 20 years. That works out to 3.53% per year. That's a full 1.7% more than a 20-year treasury also purchased from the US government.

In order to get the 3.53%, you must hold the full 20 years. That's going to require serious patience. The patience doesn't end there though. For new investors, that yield is guaranteed through October. There's no hurry. Bonus points will not be awarded for locking it in early. You can therefore patiently wait until October to make the decision to buy. I strongly suggest waiting.

I know what you must be thinking. A lot can happen in 20 years. Rates may rise, especially if inflation gets out of control. Could ruin you. Could ruin me. That's absolutely true. What's also true is that rates could continue to fall though, just like they've been doing for nearly four decades. Very few financial "experts" ever warn about that outcome though. Why is that? You'd think Japan and ZIRP would give at least some of them reason for pause and/or self-doubt.

There are no sure thing investments. I can say the following five things with absolute certainty though.

1. You will be earning the exact same 3.53% rate that I'm earning on the EE savings bonds that I first started buying in 2010 (just 14 years to go on those). I intend to buy this year again, in October. Until then, I patiently wait.

2. I cannot profit off your decision by so much as a penny, no matter what you do. Buy them or not, makes no difference to me. There is no market price for savings bonds. I am not rewarded if people flood into them. I get what I get. Further, I cannot profit off of your transaction. Nobody can. You buy directly from the government. There are no middlemen looking to take a cut. I find that refreshing in this era of greed.

3. My only motivation is to inform. Some may not be aware of this alternative. The banks certainly aren't going to tell you if you are looking to buy a long-term CD. They certainly never told me when I first started buying I-Bonds in 2000!

4. All bets are off on November 1st. Although those buying EE savings bonds before then are guaranteed the rate if held 20 years, there's no telling what the terms will be for those investing later. If rates do keep falling, the risk of the terms changing unfavorably continue to rise. I'm amazed that the terms haven't already changed.

5. If EE savings bonds end up being a truly horrible investment over the next 20 years, which they very well could be, know you will not be alone. I will be right there with you, licking my wounds too. The one "saving" grace will be that at least we didn't buy the 20-year treasury and hold to maturity, or buy stocks counting on permanently low rates to support their high leverage. Could potentially be worse, lol. Sigh.

This is not investment advice.

Sitting in a sizable inflation protected treasury bond ladder, a rather substantial inflation protected I-Bond ladder, a very modest amount of potentially riskier and potentially more rewarding EE savings bonds, and cash (for short-term needs, emergency funding, and for potential future investment opportunities), all for the long-term. Not a single regret about any of it. I retired in 1999. After fully recovering from the dotcom bubble, this baby boomer lost the desire to swing for the fences in 2004, near the peak of the housing bubble. Not ever swinging again. Don't need to. Been there, done that. Done.

If you absolutely need to swing for the fences, then go for it I guess. Just make sure you aren't confusing want and need. You need to swing if your personal loan shark will kill you if you can't give him back the 50 grand you previously blew on sure thing day trading investments. You want to swing if your 2015 convertible has tragically lost that new car smell that once made it such a pleasure to drive at the same time your butler is looking for a raise. Just sayin'. ;)

Confessions of a Patient and Frugal Video Game Addict

June 24, 2016

This week, the China-based company Tencent Holdings paid 8.6 billion dollars for a controlling stake in Supercell, and therefore a stake in our need for instant gratification. Tencent is the biggest Internet company in China, with a market value of more than two hundred billion dollars. It controls one of China’s biggest Web portals, the messaging app WeChat, with seven hundred million active users, and League of Legends, an online multiplayer game that reportedly had 1.6 billion dollars in sales in 2015.

Good grief. Our founding fathers are rolling over in their "service economy" graves right now. I hope you realize that.

One writer described racking up nine thousand dollars in expenses in Game of War: Fire Age, a mobile game that featured Kate Upton in an ad that ran during the 2015 Super Bowl. Many people—“healthy people,” Baron clarified—choose to spend that money because the feelings they get from the game are worth it to them. “They’re willing to spend five bucks to save themselves three days’ worth of time, because they value what they want to value.”

$9,000 for instant gratification? Are we insane? This type of gamer is basically paying for me, so I don't need to.

Take Real Racing 3. I'm addicted. I've spent a grand total of $5.46 (on a starter pack which removed some in-game advertising). I've played 2,813 hours so far and reached level 633. I've accumulated 41,701 gold (most of it spent). I consistently rank in the top 5% in the weekly time trials. I currently own all 151 cars and show 100% completed (until the next update). That's right, I've been seriously addicted. It's been fun though. No complaints.

A few days ago they offered to sell me 1,019 gold for $19.99. That's an 80% discount to their normal price of $99.99. At my level, it would take roughly 70 hours of game play to earn that much extra gold.

On the one hand, paying $20 to save me from playing 70 extra hours would seem like a very good deal.

On the other hand, why on earth would I pay NOT to play the game? I either like the game, or I don't. If I no longer enjoy the game, then there is a much cheaper alternative. It costs me absolutely nothing to quit!

It's insane to think that I would pay $20 to free me from having to play the game. Where would it end? Could they tempt me to pay another $20 not to play again? Perhaps. It's insane!

The funny part is that even as a patient and frugal gamer, I could feel the temptation. I'm starting to burnout on the game a bit. If I paid the $20, I could back away from the game. That's when it hit me. The worst possible time to spend $20 on a game is when you are starting to burnout! What an epiphany! Hahaha!

Electronic Arts can pry the $20 from my cold dead fingers. They'll have to wait in line though. Over the years, there are so many things building up. Take my savings bonds and long-term inflation protected treasuries, for example. Years ago I said they could pry them from my cold dead fingers too, as I intended to hold to maturity. With interest rates as low as they are today, I'm clutching them tighter than ever. Go figure.

We live in a very impatient and fast-moving world. You want to know what concerns me most though? How many more impatient itchy trigger fingers are hovering over the global economy's stock market sell buttons? The wealth effect could very easily continue to unravel. What goes up quickly and seemingly effortlessly can also come down quickly and seemingly effortlessly. Can't really have one without the other. Neither quick moves up nor quick moves down imply strong and resilient stability. Sigh.

Sunday, June 26, 2016

The Sarcasm Report v.256

Welcome to the 2^8th sarcasm report! Momentous day! So let's get right to it.

June 24, 2016
Yahoo Finance: After the Brexit turmoil, expect a stock-market rebound


Q: When can we expect the stock market rebound?
A: Just after the Brexit turmoil ends.

Q: When can we expect the Brexit turmoil to end?
A: Just before the stock market rebounds.

Q: When would the best time to buy stocks be?
A: Just before the stock market rebounds.

Q: Would it therefore be best to buy just after the Brexit turmoil ends?
A: Yes.

Q: Is there a way we can know exactly when to buy?
A: Yes. You will want to buy just before the stock market rebounds.

Q: Exactly how will we know?
A: The Brexit turmoil will have just ended.

Q: What's the best way to know that the Brexit turmoil has not ended?
A: The stock market is not rebounding.

Q: What if the Brexit turmoil takes a long time to end?
A: Then the stock market rebound may take a long time to start.

Q: If the goal is to buy stocks after the Brexit turmoil ends but before the stock market rebounds, then how might I accomplish this?
A: You need to be informed that the Brexit turmoil is over before other investors cause the stock market to rebound.

Q: As a retail investor, how could I do this?
A: Rapidly click on Yahoo Finance headlines until you see "Brexit Turmoil Has Ended" then rapidly click the buy button on your broker's website.

Q: How will Yahoo Finance most likely know that the Brexit turmoil has ended?
A: The stock market will have rebounded.

Q: So how will I be buying at the best time if I wait to see the news?
A: This time could be different.

Q: There were previous times?
A: Yes. There was a Great Depression, an oil crisis in the 1970s, a dotcom bust recently, and a housing bust even more recently, to name just a few.

Q: Were there always stock market rebounds after the turmoil?
A: Yes, without exception.

Q: What if there is always turmoil in the future?
A: Don't ask too many silly questions. The economy is always strong and resilient.

Q: Strong and resilient enough for "normalized" interest rates?
A: You ^*# #%*% naysaying little #%^*ing #%*%!

Q: Why the potty mouth?
A: Sorry, I just noticed that the stock market futures are in the red.

Q: Does that mean the Brexit turmoil isn't over yet?
A: Yes.

Q: Is turmoil another way of saying that the stock market is declining?
A: Yes. Nobody ever says that the markets have turmoiled to new highs.

Q: So once the stock market stops declining we can expect a stock market rebound?
A: Yes. Once the turmoil is over it will be the end of the turmoil.

Friday, June 24, 2016

Nearly Lost in the Brexit Shuffle: Our Durable Goods Falling Knife

Click to enlarge.

Get out the party hats. Sigh.

Source Data:
St. Louis Fed: Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft

Citigroup's Protective Cocoon

June 24, 2016
Citigroup CEO reassures staff on Brexit: 'Citi is well positioned'

Last year, we created a group of senior leaders from across our businesses and functions to ensure we were prepared for this possible outcome.

It is everything you've dreamed of. It is nothing you expect. It is the mystery of an awesome secret. It is the miracle of everlasting life. Beyond the innocence of youth and the wisdom of age, lies the wonder of Cocoon.

Well positioned? Citigroup ended the day down a whopping 9.4%.

Kiplinger and Time vs. Lloyd and Harry

June 20, 2016
Kiplinger: 3 Most Dangerous Myths of Retirement Planning

The asset-allocation rule is outdated. It suggests that you decrease the stock allocation of your portfolio and increase your share of so-called safe investments (such as bonds or certificates of deposit) as you age. The rationale was two-fold: 1) As you age, you have less time to grow your money or to recover from a loss, and 2) the "safer" investments are safe, yet provide better returns than inflation.

However, times have changed since the rule first came into style. These days, people are living much longer, and bonds and CDs are not as rewarding as they once were. Following this rule for your retirement plan in current times could put you in the danger zone of outliving your portfolio. Not an ideal plan obviously!

We know that bonds and CDs will not be as rewarding as they once were. It therefore seems very dangerous to assume that stocks will be as rewarding as they once were.

4 days later:

June 24, 2016
Time: 3 Tips for Retirement Investors in a Post-Brexit World

2. Review your asset allocation. This is not the time to start tweaking your portfolio. But you do want to make sure that you asset mix fits your goals and risk tolerance. If you are finding it difficult to sit through this kind of market volatility, you may want to ratchet down your stake in stocks. But don’t sell during the crisis—instead direct future contributions to bonds and cash. (And if you’re nearing retirement, you should already be doing this.)

Kiplinger steers retirees into stocks right before stocks crash. Time steers retirees into bonds right after stocks crash.

As a team, they're making Dumb and Dumber look like an Oscar-worthy drama this week. ;)

Thursday, June 23, 2016

Brexit: Soros vs. Cramer

June 20, 2016
The Brexit crash will make all of you poorer – be warned

Too many believe that a vote to leave the EU will have no effect on their personal financial position. This is wishful thinking. It would have at least one very clear and immediate effect that will touch every household: the value of the pound would decline precipitously. It would also have an immediate and dramatic impact on financial markets, investment, prices and jobs.

June 22, 2016
Cramer: Brexit fears are totally overblown

Even if the United Kingdom votes to leave the European Union, Jim Cramer simply refuses to believe that it will be a momentous or terrifying event.

Even all the way across the great pond, American S&P 500 futures are currently down 5%. Score one for George Soros.

What I Love Most about XFINITY Home Automation

The thing I love most is that we've only hooked one of our lights up to it.

That means we can currently use all of our other lights since every attempt to turn on that one light remotely has ended in an error today. Hurray! :)

We've had very limited home automation service as part of a package deal for a little less than a year. Most days are pretty good, if you don't mind waiting for an app to very slowly load on a smart phone, but some days are a complete joke. This is one of those complete joke days.

Perhaps I should call Comcast and schedule an appointment to turn our light on. Nah, think I'll just wait it out, as usual.

It's like that joke about the weather. Everybody talks about the Comcast, but nobody does anything about it.

I can't imagine using this service for home security. Might just as well put a sign in the yard.

Dark house? Home automation and security most likely down again. Please don't break the windows. Spare key is in potted plant by front door. Take your time. Two hour appointment window probably not even booked yet.

Parabolic Trend Failure of the Day: Arizona Building Construction Employment

Click to enlarge.

It's a dry heat, in the desert. Nobody could have possibly seen it coming.

Source Data:
St. Louis Fed: All Employees: Construction: Construction of Buildings in Arizona

Barista: The Perfect Career of the Future

June 22, 2016
USA Today: Robot installation hits high but growth slows

"Jobs in the factory will change. Workers will be freed from repetitive routine tasks," IFR President Joe Gemma said in a presentation he planned to give Wednesday in Munich. "Workers will focus on jobs that require judgment, common sense, creativity, problem-solving skills and dexterity."

1. Judgment

Bulletproof Coffee: Barista/Coffee Hacker

Demonstrates good judgment and decision making skills

2. Common Sense

Cafe Seeking PT Barista

You must possess common sense!

3. Creativity

Express your creativity. Be your own Barista

The artistic patterns in your latte formed by the different layers of milk foam, coffee and milk aren’t just to show off the Barista’s creativity. The design in the milk demonstrates that the consistency of the foam is good.

4. Problem-Solving Skills

5 Things You Learn from Shadowing a Barista That AREN’T About Coffee

Being a barista can often feel like an exercise in problem solving.

5. Dexterity


Must be able to measure accurately and have sufficient dexterity to handle food and equipment efficiently and safely

Barista! Doesn't require a college degree unless some other applicant has one! Can't be automated!

January 7, 2016
Robot barista makes custom coffee

This robotic arm connects to a printer to put your name on a cup of coffee, then sends the cup to a machine to make a custom brew.

What? Dammit. Never mind. Still looking for that perfect robot-proof career that requires judgment, common sense, creativity, problem-solving skills, and dexterity. I really thought I had it this time.

Wednesday, June 22, 2016

Today's "Punishing Blow" to Tesla's and SolarCity's Shorts

June 22, 2016
CNBC: Chanos: ‘Brazen' SolarCity deal is ‘corporate governance at its worst’

"And if you don't want to believe me, consider this: The combined market drop in the value of both companies is more than the equity value of the deal itself — which means that Tesla shareholders think SolarCity shares are essentially worthless," Chanos said.

The combined market cap of the two companies fell. Generally speaking, that's pretty good news for those shorting both companies.

Some people have characterized Tesla's bid as a punishing blow to those shorting both Musk firms.

SolarCity ended the day up 3.3% but Tesla fell a whopping 10.4%. I haven't seen a "punishing blow" this intense since the cardinal poked her with the soft cushions.

This is not investment advice. I have no positions in either company.

A Long-Term Perspective of the 10-Year Treasury Yield

Click to enlarge.

Sometimes it's the journey that teaches you a lot about your destination. - Drake

It continues to get harder and harder to make money off of money. That's been my theory for more than a decade, and for what it is worth, I'm sticking to it. Sigh.

Source Data:
St. Louis Fed: 10-Year Treasury Constant Maturity Rate

Tuesday, June 21, 2016

It's National Selfie Day!

Other than our overeager dog attempting to ruin the shot, I think I nailed it!

Yes! That's me, in the green shirt! Hahaha! :)

Success: Don't Miss Out on Life's Greatest Thing

June 21, 2016
CNBC: Millionaire investor: This is when you know you've made it

"Hey, if you've got two cars, monetarily wise, you're successful," said McConaughey, co-chairman of the West Texas Investors Club, the investment group he started with his friend and business partner Wayne "Butch" Gilliam.

McConaughey, who built a lead pipe empire worth millions, described getting a second car as "the greatest thing that ever happened" to him.

July 23, 2015
Sutherlin Nissan of Orlando - Purchased Two Cars With Bogo Deal At New Car Dealership

Hello, my wife and I went to Sutherlin Nissan to purchase 2 cars at same time because we heard the advertisement on the radio from Sutherlin Nissan offering a bogo deal.We went up to Sutherlin Nissan on 1/31/15 and spoke with a salesman who's name is Aaron J.D.Amico, and we sat down and Aaron told us in order to take advantage of the bogo deal, we had to purchase the more expensive Altima as first choice, and then the second car would be the cheaper car.

We chose the Altima and the second car we chose was a 2014 Nissan Sentra. We had a 2014 Nissan Versa to trade in also, but we had negative equity in this car. Aaron gave us $12,000 for our Versa, and we owed $15,016.00 on the Versa. So we had a negative equity of $3016.00.

We haggled over keeping the price hopefully under $400.00 a month, but at the end we agreed at a monthly price of $550.00 a month which was what the figures came up with. We went into the finance officer's office, and his name is Sammy, and Sammy was having alot of trouble with his printer and could not print out the finance documents, so we ended up waiting in his office for over one hour before he could begin printing out the documents and contracts. When the documents were finally printed out needless to say Sammy was rushing us to just look quickly and sign to finish up everything after so much wasted time and trouble with his printers. So we looked over the documents quickly and signed everything, they took our Versa and Brought out two new cars, the 2015 Altima and the 2014 Sentra.

Sammy explained to us that the Sentra would be free for two years of lease, and Sutherlin would cut us a check to cover two years of lease which was $299.00 a month for 24 months totalling $7176.00. Sammy said we are loosing alot of money on these Bogo deals, but they need to keep their customers happy. Sutherlin did cut us the check and we just transferred all the funds to Nissan Finance to cover us for 2 years of lease payments. But a week later I look at our contracts and finance and I recognize that Sutherlin Nissan charged us an initial price for the Altima of $29,688.00 or almost $30,000.00.

I check online and find out that the Altima we purchased with same options cost no more than $23,500.00 to $24,000.00. I immediately go back up to Sutherlin to let them know this and ask if they can adjust our monthly payments and purchase price down to the true value of the vehicle, and they continue to say we got a good deal because we got the second car free for 2 years. A couple of days later I go back up to Sutherlin Nissan and talk to another Finance Manager because Sammy is not in and is off that day. I tell this other Finance Manager the same story that we were charged way too much for the Altima, and this Finance Manager tells me that how do you expect us to pay for your two years of free lease in the Sentra unless we offset that loss with raising the initial price of the Altima.

I tell this Finance manager that no one there when we first came to purchase these cars with the bogo deal told us that these two cars are a package deal and the initial first car choice's price would be raised accordingly to offset the 2 years free lease of the second vehicle. If they had told us this we would of never purchased these 2 vehicles because that would mean this is not a true bogo deal and that we are still just paying full price for two cars. And we were charged twice as much on our interest rate than we were paying for our trade-in car or the Versa which was something else we did not understand since our credit rating had not changed in the least when we financed our Versa. I went to our bank who financed our Versa at the low interest rate and told them we had a new car and that it was a 2015 Altima.

I gave them at the bank the contract for the Altima purchase, and they flatly came out and told me they cannot refinance this Altima because we paid way too much for this vehicle, and that the Altima is only valued at $23,500.00 and maybe $24,000.00 with all the options we have in it. Our bank could not help us refinance this car.We have been agonizing over being ripped off by this Dealership for many months now, and have made almost seven monthly payments on it already that was so hard to do. We cannot enjoy this car at all because we know we paid way too much for it.My wife and I have been constantly arguing over what we paid for this car, and we cannot find any help in this matter.

We pray you can help us out of this situation Mr.Newlin

Monday, June 20, 2016

Parabolic Trend Failure of the Day: Nevada's Real GDP

Click to enlarge.

December 14, 2015
2016 economy future looks bright for Nevada

Local experts met Monday to talk about the economic outlook for 2016, and it looks like experts are feeling optimistic about the future of Nevada's economy.

Parabolic growth trend failing spectacularly, gambling in a dust bowl, ongoing water shortages, reaching the later stages of a cyclical recovery with not much to show for it, stock market offering more than a year of nothing burger, 10-year TIPS yielding just 0.22%, and a global economy teetering on the edge?

Who wouldn't be optimistic? Time to hit the roulette tables! This baby needs new shoes!

Real Median Household Income in Nevada

Click to enlarge.

Oh, Mark. Don't be such a party pooper!

Source Data:
St. Louis Fed: Real Total Gross Domestic Product for Nevada
St. Louis Fed: Real Median Household Income in Nevada

Sunday, June 19, 2016

Quote of the Day

June 17, 2016
Bloomberg: Why Can’t You Get Your $300,000 Supercar With a Stick Shift?

In terms of eliciting the most extreme performance, human beings just can’t compete with the precision of a computer.

Then they came for the stick shifts
And I did not speak out
Because I was not a stick shift

Four Simple Solutions to Make Housing More Affordable

June 16, 2016
MarketWatch: Why there’s a new kind of housing crisis

The “crisis” is no longer defined by the layers of distress left behind after the subprime bubble burst, but about access to stable, affordable housing.

Simple government solutions exist.

1. Always lower interest rates faster than housing prices rise. That way mortgage payments will eventually fall to zero, and maybe even turn negative like the 30-year Swiss bond just did.

2. Always raise interest rates faster than housing prices fall. Push those prices low enough and people won't need a mortgage.

3. Always lower wages slower than housing prices fall. This one's tricky. It may feel like a deflationary depression. Been there, done that. Again.

4. Always raise wages faster than housing prices rise. This one's also tricky. It's tough to stop the bidding wars once workers have good money coming in. Then again, maybe much of the bidding will be confined to canned goods, toilet paper, ammunition, oil, and precious metals instead. In the name of housing affordability, one can always hope!

Surely, with the government's help of raising and lowering interest rates and wages randomly, some combination is eventually bound to create stable, affordable housing. Or not. Government

If you think the problems we create are bad, just wait until you see our solutions.

The Banking System: Don't Be a Hero

June 19, 2016
USA Today: What to do if you’re in a bank robbery


1. Stay calm as you sell all of your banking stocks at the early stages of the financial crisis. Always better to calmly sell early, than sell late in a blind panic.
2. Observe the bank CEOs, if you can. In times of trouble, they can be elusive. Do not lose hope. For those who are patient, simply wait for them to testify before Congress. Watch them squirm for taxpayer bailouts.
3. Don't be a hero. Don't deposit more money in the weaker institutions until the crisis has passed. You'll know when the crisis has passed. Interest rates will be normalized to what they were just before the legendary dotcom crash, because nothing is more normal than that.
4. Cooperate. As they say, don't fight the Fed, unless fighting the Fed involves buying long-term treasuries before the Fed does. If that's the case, fight the Fed with every fiber of your being. Don't let the Fed win! Gobble them up faster than they can! And should you ever "need" to sell instead of simply holding to maturity as I intend, then be prepared to potentially fight the Fed again. Sell before they do or you might regret it, unless, of course, the Fed intends to hold to maturity too, like they've been doing.
5. Don't compare notes with other witnesses. The last thing this country needs is a bunch of naysayers continually pointing out the weak financials. Whatever you do, don't start an Illusion of Prosperity blog. Oops.
6. Continue to bank confidently. 25-sigma events are relatively rare. The odds of two of them happening in one lifetime are probably less than 50%, unless something unexpected happens. You know, like the sudden appearance of a flock of black swans flapping to the beat of the Candy Mountain song.

Saturday, June 18, 2016

First World Problem of the Day

June 17, 2016
Why Spending Tends to Increase in Retirement

Filling Up Time Costs Money

“Once you enter retirement, your weekend is now seven days a week instead of two, which gives you triple the amount of free time to make spending decisions,” said CFP Chris Teofilak of the Index Fund Wealth Group.

Nobody warns us about having to make so many more spending decisions. It's exhausting!

Finding hobbies, attending events and traveling all cost money — more than retirees may have budgeted for.

Finding hobbies is my single largest retirement expense. No doubt about it.

My Typical Retirement Morning

7:00am: Butler wakes me. I slip him an extra $5 for the effort.
7:05am: Full day ahead so take a quick shower.
7:10am: Head down to the dining room for breakfast.
7:15am: Thank my chef. Hand him two tickets to today's baseball game.
7:20am: Order something fun at
7:30am: Tell the chauffeur to bring the car around.
7:40am: Meet my personal hobby consultant. Browse list of potential new hobbies.
7:41am: Ask him how he likes his new yacht, secretly hoping that he'll offer to take me around the lake, since the fees he charges paid for it. No luck. There's always tomorrow though.
7:45am: Getting a bit hungry. Time for second breakfast. Decide to slum it at McDonalds with my chauffeur. I notice that he has quite an appetite on days when I offer to pay.
8:00am: Need some coffee. Off to Starbucks.
8:10am: Boredom's setting in. Desperately need to buy something. Closest store is Home Depot. Buy some valve thingy from the plumbing aisle. Not sure what it does. Has an interesting shape though.
8:20am: Arrive back at home. Butler offers to take my valve thingy and store it in the valve thingy room. He's always looking out for me. Give him another $5.
8:30am: Call my broker. Tell him I want to sell something that's not going up and buy something that will. He says that won't be a problem. Great guy. Make mental note to buy him something special this Christmas.
8:40am: Watch 10 minutes of a live wrestling event on the TV. I really thought the big one would win but apparently should have gone with the guy in the better costume. Live and learn.
8:50am: Call my bookie to see how much that's going to cost me.
9:00am: Head out to the backyard to watch the Amazon drone land. I know I bought something fun. Wonder what it is!
9:05am: Oops! It's the same valve thingy I just bought at Home Depot. Don't I feel silly!
9:10am: Slip the butler another $5 and hand him the valve thingy. He tells me the valve thingy room is 95% full.
9:15am: Call my personal general contractor on speed dial. Wants to know if I want to continue expanding my mansion towards the protected wetlands. That's a no-brainer. Certainly not going to expand it towards the pool!
9:30am: Call my personal politician about acquiring the necessary permits. He asks me the same question he always does. Of course I will contribute to his campaign. He knows how to get things done!
9:45am: Brunch! Making so many spending decisions builds up the appetite. But where? Hmm.
10:00am: Deciding to circle the city in my private jet while eating fresh fruit and cottage cheese is the best decision I've made today. It wasn't a hard decision though. I've been making the same decision every day since I retired.

It's not easy spending money to fill time, but somehow I make do.

In all seriousness, if you are looking for ways to fill your free time with money then I feel very, very sorry for you. Free time should be savored for the precious commodity that it is, not filled. It's not some sort of evil sinkhole that causes nothing but pain and despair!

I am never looking to fill my free time. I cannot relate to the concept. Time flies when you're having fun! There are an infinite number of fun things to do. Saying that they all cost money means that before money was created, nobody had any fun. Yeah, right. And I've got some oceanfront property in Kansas I'd like to sell you!

We've Hit Poo Poo Point Again

Click to enlarge.

I rest my case.

Dammit. I burned free time posting this. You burned free time reading it. We're certifiable! I hope you realize that!! Maybe I can still salvage something from the wreckage though.

Hahaha! :) < ---- Fun! Whew!!

Friday, June 17, 2016

The World Needs Federal Reserve Trading Cards

June 17, 2016
Yahoo Finance: It's time for the Federal Reserve to fire James Bullard

How does one with such a poor track record stay employed?

The answer is simple. It gives us all something to talk about. Keeps the conversation flowing. Gets our minds off the upcoming presidential election. Unites the country at a time when we are most polarized! James Bullard must not be fired! He's doing the country a great service!

Look at all the support I've given him over the years. Is it not enough?

May 30, 2016
Fed's Bullard: Global Markets Well-Prepared for Summer Rate Hike

Potty trained, I said. Potty trained!

April 15, 2015
Fed Up

Bullard also expressed his continued frustration that financial markets are not pricing in the same level of interest rates as the Fed’s own projections. Fed fund futures suggest the first increase in rates will come in December.

Does it really matter if the markets were exactly right and Bullard was exactly wrong? Not in the least! Got us talking! Communicating! Being more transparent!

January 16, 2015
James Bullard's Linear Trend Failure of the Day (Musical Tribute)

That one inspired me to actually make a chart. People love charts! Good job!

November 16, 2014
Bubble Blowing Careers for Dummies (Musical Tribute)

Don't let the title fool you. It's all about Bullard!

October 9, 2014
My Nomination for Hubris Quote of the Year

I have a great bet for you. I have no idea who I nominated. It's been a long time and my memory just isn't what it used to be. That said, I'll bet you $100 that, out of 7 billion people on this planet, it was James Bullard. 7 billion to 1. The odds are incredibly stacked in your favor. You'd be a fool not to take the bet. I'm practically giving my money away!

So what does all this mean? Isn't it obvious?

We need Federal Reserve collectible trading cards! I'd definitely trade one Yellen for two Bullards! Those Bullards would only go up in value as time goes on! We can't ever seem to stop talking about him. Collectible paper assets that only go up in price? Never deflate? A monetary policy dream come true! Get you some!!

Bad Mark. Bad! Bad! Hahaha! :)

The Sarcasm Report v.255

June 17, 2016
Yahoo Finance: America's hidden epidemic: food addiction

We hide it so well!

That's it. I'm ending my food addiction.

I went cold turkey today, with mayonnaise, three sliced olives, a slice of Swiss cheese, and two slices of whole wheat bread. Seriously. Ending an addiction has never been so easy!

What can I say? I'm addicted to the craziest things. Food, water, oxygen, and video games! Ridiculous!

In all seriousness, I don't think we can end our food addiction. We actually do NEED food. It's not like gambling, debt, cigarettes, or cocaine. I think we can all agree that many of us, myself included, would be doing better if we ate less though.

Eat fewer calories. Burn more calories.

This isn't exactly rocket science. My optimal diet book still needs more work though. There are 20% more words than needed.

Calories? Eat fewer. Burn more.

Much better! Needs a title. Hey, why don't I just move the contents to the title? That way the book won't need any pages! Think of the money that will be saved on printing costs! Genius!

Uh, oh. Did I type this in public? Don't you dare steal all five words of my optimal diet book! It could be worth millions! Hahaha! :)

The College Degree Prisoner's Dilemma

Of those aged 25 to 34 in the civilian labor force, how many have bachelor's degrees or higher?

Click to enlarge.

This is yet another parabola doomed to fail, for it will not be possible to exceed 100%.

Prisoner's Dilemma

The prisoner's dilemma is a standard example of a game analyzed in game theory that shows why two completely "rational" individuals might not cooperate, even if it appears that it is in their best interests to do so.

Let's say two high school seniors named John and Jane both really want a particular job in their small farming community. The job does not require a college education, but higher education would still be preferable. They are the only two people who will apply for it. The previous person who has that job will be retiring in 4 years. What should they do?

If John goes to college, then Jane must also go to college in order to compete. If Jane goes to college, then John must also go to college in order to compete. It would be in both of their best interests if they cooperated and neither went to college. Going to college pushes both of them into debt and if they both go, neither will have the advantage over the other.

I think that's where we are at in this country. That's why we're seeing the parabola in the chart. Unfortunately, jobs requiring college degrees are not growing as a parabola. Not even close. In my opinion, the number of heavily indebted overqualified workers in jobs that really shouldn't require a college degree will continue at an ever alarming rate. Sigh.

I don't see what can reverse the trend until it finally reaches the ultimate breaking point. College is becoming the new high school, only with extra debt and with four more wasted years. That's not true for everyone obviously, but for many workers it is. The advantage of going to college is being lost for those who will ultimately end up in jobs that don't require it.

Unfortunately, I don't see an alternative. Even if you end up in a job that doesn't require a college degree, you may still need the degree just to get it. All things being equal, most employers would choose the more educated worker. I'm therefore not offering "do not go to college" advice. I'm simply trying to point out the reality of what is happening. When it comes to college education for the masses, especially those who ultimately end up in low paying jobs even with a college degree, the glass is half full, and leaking.

Source Data:
St. Louis Fed: Custom Chart

Thursday, June 16, 2016

Complete Faith in Our Corporate Prophets and Their Shrines

The following chart shows sales and office occupation employment. 33+ million workers can't be wrong. The economy is doing fantastic.

Click to enlarge.

I know what you must be thinking. Although the parabolic trend from 1984 through 2007 failed to the downside miserably, and we're still way below trend, we desperately need to build more office space for all of our future sales and office occupation employees in an increasingly modern, digital, outsourced, and automated world. Yes! Over the long-term, we'll need a lot more office space! No doubt about it. Just need to keep the faith!

The next chart shows total private office construction spending.

Click to enlarge.

Woohoo! Forget those last two times when office construction spending fell off a cliff, this time is totally sustainable! Just look at total private office construction spending go! Once more unto the breach, dear friends, once more! And then once more after that just to be safe!

But really, how much faith is there? Wouldn't it be nice to know? Let's find out. The following chart shows total private office construction spending divided by total private religious construction spending.

Click to enlarge.

Hallelujah! That's a biblical amount of faith! Preys be to our new gods! Corporate shrines for everyone!

Too much sarcasm? Hell no! Too much optimism! That's what I'm always suffering from, but somehow I manage to miraculously endure.

This is not investment advice, especially for those wishing to start a new corporate cult doing new corporate things in entirely new and exciting corporate ways. Oops, I mean corporate culture. Freudian slip.

In other news, I've updated the last post to show the 8,000 doctoral degree workers paid at or below the federal minimum wage. So we've got that going for us too, which is nice. Sigh.

Source Data:
St. Louis Fed: Employment Level: Sales and Office Occupations
St. Louis Fed: Total Private Construction Spending: Office
St. Louis Fed: Custom Chart

Wednesday, June 15, 2016

Statistics Challenge: How Many in 2015? (Updated)

Click to enlarge.

If it helps, here are some facts to get you started on your prediction(s) for the future.

1. There are seven data points at 1, four at 2, and two at 3.
2. The median is 1.
3. The average is 1.615.
4. The standard deviation is 0.768.

As a bonus challenge, if you can figure out exactly what this data represents by any means at your disposal, I will be seriously impressed.

Feel free to keep your guesses to yourself, but if you are curious about the answer, I will be updating this post in 24 hours or so to fill in the missing information.


Click to enlarge.

I bet if we would have asked each member of the Federal Open Market Committee how many doctoral degree workers would be paid at or below the federal minimum wage in 2015, they would have each said about 1,600. You know, because labor conditions are generally improving, blah, blah, blah. And since all may have agreed, one might even start to believe their predictions as a group would hold even more weight.

Nobody would have said 8,000. It is 8.3 standard deviations from the 2002 to 2014 average. It's an 8-sigma event! Virtually impossible!

And yet, it wasn't virtually impossible. It's just bad statistics. It's not a normal distribution. 12 years of data wasn't enough to accurately predict the future. No amount of data is. There are no black swans here. @#$% happens. That's especially true in this economy.

Moral of the Story

Past performance is not necessarily indicative of future returns. It's an important concept. There are no sure things. I don't waste my time parsing every last word the Fed says looking for ultimate wisdom. Although some wisdom may be found in the rear view mirror, most of it is found looking out the front window.

When the Fed says labor markets are improving, what they really mean is that the past shows labor markets were improving. Of course, presenting the truth that way doesn't inspire nearly as much confidence.

The captain of an airplane never announces, "You may be relieved to know that this flight has gone as well as can reasonably be expected since taking off at the airport. It's a large plane and it therefore handles sluggishly. Our ability to evade incoming surface-to-air missiles was therefore poor, and continues to be. That said, although you may already be aware of this, I'm very pleased to announce that we haven't crashed. That's very good news for all of us. There is more good news though. Any number of serious things that could have gone wrong so far, haven't. The number of mid-air collisions has been within the acceptable range of zero to one, favoring the lower end. Although there is no telling what the future might bring, each passing minute incrementally improves our odds of actually making it to our destination in one piece. That brings us to the landing. Please buckle your seat belts. The landing is the most dangerous aspect of air travel, but I'm anticipating a good one, which many define to be any landing that we can all walk away from, not just those of us who were lucky enough to make it to the plane's exits in time. Thank you for flying Honest Airlines. We'll be coming into contact with the ground soon and many of you may meet up with your loved ones, be it on earth in the baggage claim area, or in heaven should the tarmac become our final resting place. Have a great day! Please enjoy the rest of your flight! Oh, great. A fog bank? Seriously? Reminds me of the time my house was in foreclosure and I lost my will to live. Seems like only yesterday, probably because it was. Oops. Is my microphone still on?"

Bad Mark. Very bad! Very bad! Hahaha! :)

Speaking of very bad, I just want to say one more thing about the chart. 2015 was clearly not a good year for everyone. WTF! :(

Source Data:
St. Louis Fed: Wage and Salary Workers Paid At or Below Prevailing Federal Minimum Wage: 16 Years and Over: Doctoral Degree

Parabolic Trend of the Day: Charge-Off Rate on Commercial and Industrial Loans

Click to enlarge.

It would be completely unprecedented for this parabola to continue until something breaks! Nothing like this has ever happened before! A 25-sigma event!

Click to enlarge.

Is this the same chart? No? Sure looks the same. Starts in 2002? What? Doesn't change my optimistic outlook in the slightest though.

It was completely unprecedented for that parabola to continue until something broke! Nothing like that ever happened before! A 25-sigma event!

This is not a prediction of the future. If forced at gunpoint to make a prediction, you can probably guess which way I'd lean though. Sigh.

Source Data:
St. Louis Fed: Charge-Off Rate on Commercial and Industrial Loans, All Commercial Banks

Exponential Trend Failure of the Day: U.S. Industrial Chemical Production

Click to enlarge.

The U.S. chemical industry, a more than $800 billion enterprise, is heavily linked to the overall condition of the nation’s economy. It has been consistently leading the U.S. economy’s business cycle due to its early position in the supply chain. - Zacks Investment Research, May 20, 2016

June 15, 2016
The Business Insider: US industrial output fell in May; auto production plummets

The Federal Reserve said Wednesday that industrial output - which includes factories, mines and utilities - dropped 0.4 percent from April. The decline reversed the 0.6 percent gain seen between April and March, an improvement that provided some evidence that the industrial economy was turning around after a period of extremely weak performance.

Source Data:
St. Louis Fed: Industrial Production: Nondurable Manufacturing: Chemical

The Fed's Altitude Problem

June 15, 2016
Insight - Fed faces battle to escape world's low interest rate grip

That is a far cry from the 3.5 to 4 percent that the Fed's policy rate has averaged since the 1990s, and means the central bank will treat each move with particular caution, current and former Fed officials say.

The Fed's been here since 1913. In 1954, 25 years after the Great Depression began, the Fed's policy rate was a mere 1%. It took another 27 years to peak at 22% in 1981. Barring the cyclical ups and downs, it's been falling ever since.

So what makes the 3.5 to 4 percent since the 1990s so special? How did it somehow become the benchmark for what is normal?

Control Tower: We show your altitude at 120 feet. Can you confirm?
Captain Yellen: Our instruments show 120 feet.
Control Tower: Increase altitude to 4,000 feet.
Captain Yellen: What it was 90 minutes into the flight?
Control Tower: Yes, 4,000 feet.
Captain Yellen: We have increased altitude to 370 feet.
Control Tower: Please increase altitude to 4,000 feet.
Captain Yellen: In order to reach 370 feet, we had to reduce airspeed.
Control Tower: Maintain airspeed!
Captain Yellen: We had no choice. One of our other gauges is dangerously low.
Control Tower: Which gauge?
Captain Yellen: Fuel. Shows empty.
Control Tower: When did this happen?
Captain Yellen: 81 minutes into the flight.
Control Tower: What was your altitude at that time?
Captain Yellen: 21,000 feet. We've been gliding ever since.
Control Tower: Why didn't you tell us then?
Captain Yellen: We didn't want you to panic.
Control Tower: At least you still have use of the control stick. That's something I guess.
Captain Yellen: It's a bit loose and accommodative.
Control Tower: WHAT? HOW LOOSE?
Captain Yellen: Let's just say that the flight attendants are currently asking the passengers if they can spare any duct tape or crazy glue.

Today's Don't Laugh Challenge v.004

It's the simple joys.

Hahaha! :)

How am I going to come up with a 5th challenge? Anyone who survived this one is immune!

Tuesday, June 14, 2016

Great News for Department Store Investors

Click to enlarge.

Although sales continue to decline at a relatively rapid pace and are therefore not even remotely keeping up with population growth or inflation, at least they are finally above the broken parabolic trend!

If past history great news was all there was to the game, the richest people would be librarians spin doctors.

Source Data:
St. Louis Fed: Retail Trade: Department Stores

Today's Don't Laugh Challenge v.003

There may very well be a special place in hell reserved for me for laughing during this video, but if you laughed too, see you there! Hahaha! :)

The Strong and Resilient U.S. Consumer

June 14, 2016
U.S. retail sales point to strong domestic demand

Economists said based on May's broad increase in retail sales, consumer spending in the second quarter was growing between a 3 percent and 4 percent annualized rate.

Hurray! Consumers still want to buy stuff!! Woohoo!!! :)

June 14, 2016
WSJ: Why Synchrony Financial Spooked the Credit-Card Industry

Consumers seem to have generally suffered a decline in their ability to pay debts, they said, possibly because they have taken on more auto and student loans.

Hurray. Consumers still want to buy stuff. Woohoo. :(

The Biggest Mistake This Investor Made Today

June 14, 2016
Most U.S. investors are making this big mistake

One of the biggest mistakes an investor can make is overweighting a single asset, but that’s what most U.S. investors are doing right now, according to analysts.

Not sure that is a big mistake. Overweighting a single asset class allowed me to retire early.

Meb Faber, co-founder and chief investment officer at Cambria Investment Management, said that a majority of U.S. investors are too concentrated in domestic equities.

Although I don't own stocks any longer, I do know that stocks only go up. Everyone knows it. It's common knowledge, again. Don't let my sarcastic tone fool you. I have the utmost confidence in future returns from here, as long as I'm not required to back my words with my own money. Hey, is there a way I could back my words with other people's money?

“Managed futures funds are great to protect portfolios at times of stress, but they also tend to perform poorly in sideways markets. Managed futures funds that charge reasonable fees—between 1%-1.5% would be a good option to smooth out wild rides in the portfolio,” Faber said.

I might be making a big mistake here, but cash protects my portfolio in times of stress, and also tends to perform poorly in sideways markets. Perhaps I just need to find a manager who will manage my cash while charging me small fees? Or should I just continue to park it in an online savings account that pays at least some interest?

I bring it up because it will be a cold day in hell before I invest in a managed futures fund. If I wanted to pay someone else to gamble on zero-sum games with my money, games in which for every winner there must be a loser, then I'd be living in Las Vegas and using past performance to find the luckiest roulette table players. But hey, maybe that's just me.

So what actually was my biggest mistake today?

I read the comments of this article. Not only is GDFGDF DFDSGSDGFD nearly as prolific as I am, he/she has also mastered the use of UPPERCASE. Let me offer one small excerpt from just one of the many comments (out of 15).


If you have made it this far into this post and are still reading, then I offer you a sincere apology. We will never get this time back, and as they say, time is money. It has been our biggest mistake today. ;)

Economics and the Completely Impossible

June 14, 2016
Bloomberg: How I Helped Inflate the Housing Bubble

But we turned out to be wrong about Twin Cities housing prices. As part of our move to Rochester, where I now work as a professor of economics, we recently sold that house. Including money spent on renovations over the years, our capital loss came to about 45 percent of the 2005 purchase price. Back when we bought the place, I would have said that such a loss was completely impossible.

Since it is completely impossible for an economist who lost 45% on real estate purchased at the peak of the housing bubble in 2005 to become the current president of the Minneapolis Fed, we all should have complete and utter confidence in the Fed.

What? He is the president? Stop it! Get out!

Since it is completely impossible to tune a piano, nobody will ever enjoy piano music.

What? That's completely impossible! There's no way her fingers can be moving that fast!

Parabolic Trend Failure of the Day: Manufacturing Productivity

Click to enlarge.

Parabolic trend failures, for those times when exponential trend failures just won't do.

Feelin' good about the future though. Real good. Sigh.

Source Data:
St. Louis Fed: Manufacturing Sector: Real Output Per Hour of All Persons

Something I Read Last Tuesday Morning

June 7, 2016
CNBC: Something I saw Tuesday morning makes me think stocks are going higher: Trader

But what really had Gordon convinced Tuesday morning that the rally was about to heat up was when the large-cap S&P 500 breached its respective April high. The next confirmation for Gordon will be when the Nasdaq breaks above its 2016 high, which it is just points away from.

I'm really kicking myself for not pointing this exciting trading opportunity out to you last week. Hope my inexcusable negligence hasn't cost you too much easy money. ;)

Monday, June 13, 2016

Permanently High Plateau?

The following chart shows the 4-quarter moving average of household net worth divided by GDP.

Click to enlarge.

Is it just me, or do risk assets seem especially risky these days?

Source Data:
St. Louis Fed: Custom Chart

The Department Store to Nonstore Retailer Employment Ratio

The following chart shows the number of employees at department stores divided by the number of employees at nonstore retailers.

Click to enlarge.

For those who believe this time isn't different:

This time it's different.

Yeah, yeah. I just used the four most dangerous words of investing. I hear you. Still thinking them though.

Source Data:
St. Louis Fed: Custom Chart