How to forecast S&P earnings ..

without looking at any S&P numbers including price.

Will continue after my dinner out toninght.

Open letter to my financial brethren:

We NEVER surrender.

Ignore the bashers calling for more oversight. You want more stinky auditor breath blowing on your face?

Ignore the bullshit claims about cramdown will do this and that. You LEND people money and you want to get paid INTEREST. NOT STOCKS. What you want is to get a bunch of f*wads in DC to give money to the STOCKHOLDERS so they can pay YOU your interest and the interest of. Kapish?

My financial brethrens, no law, god or man's are above you. You set the law and teach the sheep where to eat, sleep and s&^t.

You want to bet all red. ALL. That means a HUGE bailout, stimulus or whatever you want to call it and you want to plunk it in everything with leverage, that means banks.

The way of the warrior is to charge. If drug helps calm the nerve then get some. Charge and attack with utmost brutality.

If it turns out that you are surrounded later you can always commit suicide. ;)

You want to go out with a bang, not a whimper, ever. I will be watching proudly as you wave the flag going down, my sons.

Nice winter sky

Too bad you wouldnt be able to see this one:

http://cosmology.berkeley.edu/Education/BHfaq.html

What would happen to me if I fell into a black hole?

How long does the whole process take? Well, of course, it depends on how far away you start from. Let's say you start at rest from a point whose distance from the singularity is ten times the black hole's radius. Then for a million-solar-mass black hole, it takes you about 8 minutes to reach the horizon. Once you've gotten that far, it takes you only another seven seconds to hit the singularity. By the way, this time scales with the size of the black hole, so if you'd jumped into a smaller black hole, your time of death would be that much sooner.

Once you've crossed the horizon, in your remaining seven seconds, you might panic and start to fire your rockets in a desperate attempt to avoid the singularity. Unfortunately, it's hopeless, since the singularity lies in your future, and there's no way to avoid your future. In fact, the harder you fire your rockets, the sooner you hit the singularity. It's best just to sit back and enjoy the ride.

Da li'l end

Quantitative easing from Marketplace on Vimeo.

Some G-rated preview of other motion pictures while we are writing the "Da" article (targeted for XXX-rating) carefully so as to not miss any emergency exit.

Seasons Greetings:

To all investors happy holiday. May you use the calm before the storm before my final "serious" publication for this year (or perhaps for good) : "Da End Game", which is pretty much this:

2009 is not going to be a year of surprise. I can tell you all of it right here, right now.

1. There's a lot of liquidity (read: free money) out there. In the fixed income parlance you either go long duration or long credit.

1a. If you want to go long credit there is no place to invest.
1b. If you want to go long duration, well... check your 10-yr rates.

Conclusion: banks will in early January rush to buy all the short term credit paper they are going to get, and probably some more treasury and that will give a signal as if credit is thawing when the case was just people drowning in liquidity.

2. In case you are thinking of carry trade, please note that you would need to have the growth in both income and productivity RIGHT here in the US. I know, you say China this and China that will grow but not gonna be enough by any stretch of imagination. (Hint: check the GDP sizes).

3. Low mortgage rates from Dec - Feb have helped TRAPPED the housing market further. How?

3a. Most who took the rates were refinancers - these made the case further given that about $5-10k equity was stripped in exchange for lower rates that the probability of moving is even lower after than before refinancing.

3b. The guys who didn't refinance have lost both the opportunity to do so (as the market marches back up) and proved they couldn't do so in the first place when they had the chance. In the parlance: they are burnt out 100%.

3c. The unlucky few picking up houses would find out that indeed affordability is a function of mortgage interest rate, and that does not mean very good for them after artificial treasury prices were lifted.

4. Remind yourself everyday that everybody else in the world will cut rates to zero. There is no currency for which you can hope to make money beyond speculative spurts.

5. Two large banks, currently viewed as a bullwark of the remaining financial industry, will collapse H2 2009 or H1 2010. Cause of death: drowning.

The best Madoff discussion today:

Gotta put my thinking cap on:

Gettelfinger: An american hero.

Kudos to Gettelfinger for single handedly ending the FUTURE unstable consumption binges of america. You are truly an american hero on par with General MacArthur and Jesus, sir.

The crusader waving goodbye to the bulls Nazis:

Bye!

What is the Holy Grail?

Not this:









Nor this:





















But maybe it's a medieval copy of "Jekyll Island"?