Breed's Blog

Parting Thoughts From Rosenberg - Ver 1.0

2009-05-12T18:25:00.002-05:00

Since this link might break, I've posted this in full. This market has me about as confused. In early march we were definitely oversold, now I think we have gone past what would be considered a fair value. Rosenberg outlines a lot of issues that we are facing fairly.

Monday, May 4, 2009

Parting Thoughts From Rosenberg - Ver 1.0

Posted by Tyler Durden at 6:56 PM

Some of David Rosenberg's last thoughts as he is putting the bubble wrap in his boxes. It is not surprising that his parting gift to his bank is a moderate shift to a slightly bullish outlook, likely designed to make life for his "Economic Strategist" replacement a little easier. However, reading between the lines allows for the real Rosie to shine through. And is, as always, a breath of fresh air in an environment where the MSM has become utterly useless.

We are in year 9 of an 18-year secular bear market

The S&P 500 peaked in real terms back in August 2000. Adjusted for the CPI, it is down 58% since that time. So, we would say that we are in year 9 of what is likely to be an 18-year secular bear market, because if you look at long waves in the past, they tend to last about 18 years with near perfection.

What happened during the last secular bear market

As an example, go back to the last secular bear market, and you will see that the S&P 500 peaked, again in real terms, in January 1966 and bottomed in July 1982, 18 years later. But there were plenty of mini-cycles in between. In fact, there were four recessions and three expansions during that entire 18-year period and unless you were a completely passive investor, you definitely wanted to be in the game during the three expansions because the S&P 500 rallied an average of 50% during those phases. Again, it is important to note that these were rallies you
could rent, not own, but they did last an average of 20 months. So, it’s not exactly as if they have an extremely short shelf life.

Playing a game of devil’s advocate

With all this in mind, we went through an exercise over the weekend and played a game of devil’s advocate. If Rosie had to face off against Rosie, what would we say if we were forced to take the other side of the debate, keeping in mind that in fact, we may be overly bearish at the present time. And believe it or not, we did manage to come up with some pretty compelling material.

Past the half-way point in the recession

First, our in-house model of predicting where we are in the cycle, for the first time, gave us a signal late last week that we are past the half-way point in the recession. Considering that the stock market bottoms 60% of the way through, this is an encouraging signpost.

We’ve worked through the effects of the Lehman collapse

Second, our propriety proxy for private sector interest rates has come down from 8.11% at the nearby peak to 7.18% now despite the backup in Treasury yields, to stand at their lowest since last September. The TED spread is back to where it was last September, as are most credit spreads. The VIX has finally broken to 35, back to where it was last September. 10-year TIPS breakeven levels, which were predicting deflation at the end of last year, are now forecasting 1.5% average inflation rates for the next decade. Again, we last saw this in September of last year. This is interesting because even though the economy and the markets were clearly in the doldrums back in September, the fact that so many market barometers are back to where they were then means that at the very least, we have worked through the ill-effects of the post-Lehman collapse.

Stock market has lagged relative to other asset classes

All an equity bull really has to do is point to the fact that the S&P 500 last September was trading around 1200. The only difference is back then we were looking at it from the perspective of being 20% off the highs whereas a move back to September levels, which, after all, would only mimic what many other market indicators have accomplished, would be viewed as an 80% surge off the lows not to mention another 35% potential upside from where we are today. Even the CRB raw industrials are now back to where they last October when the S&P 500 was hovering around the 950 level. So again, if we were equity bulls, and maybe we should be, we would simply point out that of all the asset classes that have bounced back to life, the stock market has actually been a laggard.

Three indictors that suggest cyclical bear market is over

Third, we found three indicators that have stood the test of time and strongly suggest that the cyclical bear market in equities and the economy have drawn to a close: the ISM, the Conference Board’s coincident-to-lagging indicator and the University of Michigan consumer sentiment survey. The ISM bottomed in December 2008 at 32.9 and is now 40.1. Going back to 1950, we found that recessions end within three months of the ISM hitting bottom, and never by more than six months. The coincident-to-lagging ratio just turned in successive lows of 89.6. The data go back to 1960 and we found that recessions ended within two months of this indicator, 100% of the time. And, the U of M consumer sentiment index bottomed at 55.3 last November. As we saw on Friday it had rebounded to 65.1 as of the end of April. The data show recessions end typically within six months of the bottom in this key leading indicator, and not once was the lag longer than eight months.

We could be on the precipice of a cyclical upturn

This is not to say that our secular views have changed. However, we could well be on the precipice of a cyclical upturn, and whether it is sustainable or not may have to be a story for another day. We don’t see as many green shoots as others do, but then again, we endured more than a year of jobless recoveries following the market lows of 1990 and 2002.

The most glaring example

The most glaring example of all is the fact that the S&P 500 bottomed in the summer of 1932 and yet by the end of the 1930s, seven years after ‘New Deal’ stimulus, the unemployment rate was still 15%, consumer prices were deflating at a 2% annual rate, and let’s face it, the Great Depression did not actually end until 1941. But for investors, the worst was over in the summer of 1932 in the immediate aftermath of the acute government intervention at the time. While
there were recurring setbacks along the way, including the severe bear market of 1937-48, the fundamental lows had already been turned in long before.

Investors have been able to price out financial tail risks

Fast forward to March 2009, and the same mantra was heard – ‘nationalization’, ‘depression’ and ‘deflation’. As was the case with FDR’s early days as President, what the last half of Obama’s first ‘100 days’ managed to accomplish was to eliminate these words from the investment lexicon. The degree of intervention from the Treasury and the Fed has been so intense that investors have been able to price out financial ‘tail risks’ that had dominated the market landscape through much of the first quarter.

The market is gravitating to a new mean

So, the way to look at the situation is that by removing the ‘tail risks’ of an outright systemic financial collapse, the market has gravitated to a new ‘mean’ (in the sense that at any given point in time, market prices reflect some expected distribution of possible outcomes – a very bad potential outcome has been taken out of the probability distribution, at least according to Mr. Market). This is why if the bulls have a solid argument, it is the prospect that the S&P 500 can indeed approach those pre-Lehman levels, which back in September, seemed rather bearish, but is only bullish today benchmarked against where we are.

Still not sold on the bull case for equities

Despite all these powerful arguments, we are still not totally sold on the bull case for equities. Valuation is not compelling, in our view. Sentiment has completely swung towards a bullish consensus (which is a contrary negative). Home prices and employment are still in freefall, the former undermining the balance sheet and the latter exerting a drag on the income statement and suggestions that a mild improvement in the negative growth rate is something to be excited about seems off base.

Difficult to ascertain who the marginal buyer will be

It seems hard to believe that after being burned by two bubbles seven years apart that the baby boomer is going to line up at the trough one more time. So, it’s difficult to ascertain who the marginal buyer is going to be. Disposal of durable goods assets to pay off a record household debt burden seems like a multi-year deflation story as far as we are concerned. Since the boomer household is income constrained and underweight fixed-income securities on its balance sheet, we believe that demand for high-quality bonds is going to strengthen in coming years. Government policy will remain highly pro-cyclical but there is no match for the contractionary effects from a shrinking US household balance sheet.

Deflation will win out over inflation

We are concerned that deflation will win out over inflation this time around. While the data cited above are indeed impressive in terms of their track record, since this is not a manufacturing inventory recession but rather a downturn deeply rooted in asset deflation and credit contraction, we may find out that the economic releases that were tried, tested and true in the other post-war cycles may not be appropriate today given the overpowering secular trends of consumer deleveraging and frugality.

Consumer Credit changes for Mar 2009

2009-05-09T10:34:00.007-05:00

The fed released data this week on outstanding consumer credit debt. The outstanding debt has been falling since the start of the credit crises in October of last year. In years pass falling consumer credit debt levels usual happen during the onset of a recession. The more severe recessions actual consumer credit contracts on a year to year basis. I've put together a couple of graphs of Year over Year changes in consumer credit.

The fed started tracking consumer credit debt in 1943. As you can see it has had a very steady and upward trend. You can see a larger version of the graphs by clicking on the images. The small wavers in the lines are changes in the growth rate of consumer debt. Since changes in total outstanding debt can either rise or fall on a month to month basis. I've smoothed out the trend by making a year to year comparison of debt levels.

Growth of total consumer debt varies from year to year. As you can see by this graph, debt growth averages between 5% and 15%. It is on only rare occurrences that actual outstanding credit contracts on a year to comparison. These contractions usually happen during the more severe recessions.

This last graph is from 1990 to present to show in detail the changes since the last time consumer credit contracted. In 1990 the consumer credit growth rate started falling. 18 months later total credit had started to contract. Reaching a total contraction of 2%. In April 2008 the credit growth rate started falling, this was shortly after the Bear Stearns collapse. April 2009 should be the first time total debt contracts on a Year to Year basis since '91.

Looking back there have only been a few points in time where total consumer debt outstanding has contracted. In each of these cases, the recession were worse and longer felt. The fall in the growth rate has accelerated since the Lehman collapse in the the fall. To date, this is one of the quickest time frames where total consumer debt goes from peak growth rate to contraction.

Customizing Oracle Evergreen Check Printing

2009-01-29T11:40:00.001-06:00

So, you decided that you must customize the Evergreen check printing process anyway. That's ok, I had to modify it, too.

So if you read this posting you know I said never ever change it. Well the business had to have certain changes, and most of these changes were needed. They do help speed up processing and cut down on costs.

Some things that you need to know about the evergreen print process. Evergreen uses the print driver file to store the escape character sequnces for formatting and placing various objects down to be printed. In the report design these are mostly found in little field boxes that make calls to the esc character code number (100,101,200,201 etc). This is a good listing of various escape seqences. HP ESC codes

The changes discussed here are the following:
1) print overflows from seperate tray
2) Addiong marks for envelope stuffers
3) sending second signature checks to a different output tray
4) modifying all overflows to go to overflow tray

First change, the ability to print your overflows from a seperate tray than your check. This way you are not printing all of the extra remittance pages on check stock. Not printing on check stock has two purposes. If you look at the code in the report there is logic when assiging the void and using the void section of the report. A seperate print driver code will need to be created that appears like the standard page except you make a call for printing to a different tray. For me all of the special print driver codes that I added were in the 400 range. You will also have to make changes to the orginal print code to print to the first tray for checks. Then the printer will need ot be configured to only use the designated tray for printing.
1) change exitisting print driver to print to specefic tray for check stock
2) add new driver that looks like 1 but prints to a different tray for overflow documents
3) change printer setup to only select paper designated tray only

Mailing large check runs is a tedious process and most companies utilize a envelope stuffer. These stuffers usually read marks on the paper to know when to start stuffing a new envelope. You will need to print driver codes for this. The first code tells where to start printing the mark. The second code returns the print curser back to where it was before printing the mark. This way you do not have to worry about all ofthe other print elements being moved or adjusted in ways that you are not expecting. In my case a double mark printing was used for a new document and a single mark notified the stuffer to continue stuffing.

Sending checks that require second signature to different output tray. Checks that required a second signature needed to be seperated, it was easier to just place it in the code to break it out for a different destination tray. This is also achieved by makeing changes to the print drivers.

We made an adjustment to include overflow checks as well. The stuffer wanted the checks to be the first document and not the last as the stndard program prints. The alternate tray leaves the checks face up instead of face down in the main output tray on top of the printer. This then placed the overflow in the correct way so that they too could be stuffed easily.

Citi buys new Private Jet

2009-01-26T19:30:00.002-06:00

With all that is going wrong with Citi these days, you would think that they would not go out and buy a Jet.

50Million of taxpayer money being spent on , not an American made jet, but a French made Jet. Only 9 of these are in the US. What do you think maintenance is going to like. $$$$

You would think with the sword of Damocles hanging over them aka Nationalization, they would not be doing this. Then again maybe they know the sword has already dropped and it is us the public that just does'nt know it.

Credit to GDP

2009-01-26T12:56:00.002-06:00

I've been reading a lot of stuff about the recent credit and liquidity freeze in the fall. A lot of speculation is being discussed on how this will impact the economy. It's a given that credit has been loose over the past few years and has helped fuel the real estate bubble, and has helped bring on the financial crises. What if Credit has been loose longer than we have thought, and only recently the barn door was left wide open?

I took some data from economagic to take a look at Credit to GDP as a percentage. A couple of interesting items come out. First, there are two definite growth rates. One prior to 1985 and the other post 1985. Post 1985 shows a growth rate 2-3 times the rate from 1952-1983.

With trend lines added you can see that we are currently above trend from the 1985 onward, but we are also way above the 1952-1984 trend line. The big question is, if credit is going to contract because of this crisis where will credit retract to. Something along the 1985 trendline, or the 1952-1984 trendline.

I guess we will find out in the next few quarters where Credit to GSP is heading. Then that will tell us what to expect on the impact of the loss of credit to the economy.

Lloyds is pants

2008-08-28T14:21:00.002-05:00

Found this article. At one level it is very humorous. But from a security point of view it is very horrendous. Some items the article didn't even touch.

First. Passwords were not encrypted. This means that every bank account password can be potentially exposed.

Second Bank personnel have easy access, can view and can make changes to the password.

Third, the 6 letter word for a password is ludicrus. It will only take minutes for a brutefoce attack to succeed.

Non-compete no more

2008-08-08T14:17:00.002-05:00

Found this Article today. I've had to sign a few non-competes over the years. They were all industry specific in nature so they have really never had an impact on my job mobility. I've always tried to make sure that the job skills I possess are applicable to most industries. There are fundamental processes needed in running a business successfully that transfer from job to job, industry to industry without any major changes.

It's just the principle of being fairly compensated for your job. If an employer really thought that the knowledge and the work you do is truly worth something, the employer should compensate you for this, right? The competitor across the street thinks you are and wants to pay you for it. At least in the state of California you can now take the job and money.

Almost every job I've ever left, the main issue was fair compensation. The job I didn't leave based on compensation, the IPO failed in 2000. I was left with the option of doing what I was doing or jump into the opportunity of doing support work on an Oracle ERP install at another company.

In the long run decisions like this one will reduce the friction of job transfer and will make the US more competitive.

Rails 2.1 and Timestamps

2008-07-28T09:46:00.002-05:00

Haven't posted many articles lately. Been busy with several work projects and other issues.

I've spent enough time with ruby that I can now look at tackling rails again. Since my first attempt at rails back in December were slow and did not gain traction. I thought a shift to getting to know the Ruby language would be better.

Version 2.1 of Rails has been released since I first looked at Rails. Apparently one of the new features that has been incorporated is time zones. One of my new rails projects uses date and timestamps. It was cool knowing everything is getting recorded in UTC. It cuts down on confusion of when a transaction was recorded. The only issue is displaying the users local time for it. I found this article that was very helpful in getting some quick results.

2008-03-24T12:54:00.001-05:00

Ruby: Stock Project - Database Design

Now that we have data files, we need to examine them and see what we will have for a database design.

Fields	NYSE	AMEX	NASDQ
Name	Yes	Yes	Yes
Symbol	Yes	Yes	Yes
Market Value	Yes	Yes	Yes
Description	Yes	Yes	Yes
Security Type	No	No	Yes
Shares Outstanding	No	No	Yes

Looking at the fields there are two tables we will need to have.
1. A table to hold the values for the different stock exchanges
2. A table to hold the values for the individual stocks

Name, Symbol, and description all exist in all 3 files. We'll use these plus add a stock_id field, and exchange_id to our stocks table.

Security type might be useful, but since it is only in the NASDQ we'll toss it for now. Market value is a basic calculation based on share and share price. It doesn't need to be stored, it is always changing and should not be on the mainly static information a the stocks table.

Shares outstanding is another dynamic amount that could change over time so it really doesn't belong in the stocks table. Since it is only in the NASDQ data file, we'll not include it here and see if we can gather this information someplace else. Shares outstanding will be needed when comparing trading volumes to total shares outstanding to get a volatility value on a stock.

With Decisions made it's now time to set up the Database.

Passive vs active investing

2008-03-21T15:09:00.003-05:00

I picked up this blog by Paul Kedrosky about a month ago. It's a nice mixture of tech and finance. It is more like a financial blog with a technology slanted point of view. Paul posts a lot of very interesting links to items that I would never have found.

One of the more recent posts is this research paper about active verses passive investing and the costs associated with them. Some of the comments missed the point of the article. It is not just about active and passive individual traders, but also the mutual funds both active and passive. From the sounds of the comments these are active traders who trade on a daily basis for their lively hood.

The point of the article is to point out why the small investor should not try to beat the market. The odds of the small individual trader, a trader who does not make a living by buying and selling stock, having enough information or resources to try and out perform the market is almost always doomed to under perform the market in the long term. The costs being spent to try and beat the market could actually cause the smaller investor to under perform the market.

So, instead of buying individual stocks, the small investor would be better off buying index funds, or ETF's. These have the lowest cost and give you near market returns.

Ruby: Stock Project – Source Data

2008-03-21T08:42:00.001-05:00

Ruby: Stock Project – Source Data

Now that we have installed ruby, postgres and have tested the connection between ruby and postgres, we need to find some data.

Google search for - stock list file

The search request brings back several hits. This link looked promising, plus free code. CodeProject: AJAX Stock Symbol Drop-down List. Free source code ...

The code is Java, but maybe if I need some ideas, I'll go back and skim over it.

Near the bottom of the page is a list of sites that the author used to get the free stock symbol files. The site I’m going to use is the NASDQ site. NASDQ is being very helpful they have provided their securities, plus AMEX and the NYSE. We won't have to go anyplace else to get our data.

The nasdq link for the data is http://www.nasdaq.com//asp/symbols.asp?exchange=Q&start=0. When looking at the other links the only thing that changes is exchange=? where the ? mark is exchange identifier. Downloading the file shows that it is a CSV file, and that it also contains quite a bit of information.

The data for these files was last updated on the 31st of December 2007. It's recent enough, especially in this slow market, Hopefully this file is updated about once a quarter, otherwise we may have to look for other sources, but for now this will work.

Now that we know what our initial data source data looks like we can now start to design the ruby scripts and the database table layouts.

For starters we are going to break this project into three areas.
1. Database
2. Ruby scripts (back end)
3. Rails / Other tools user front end

Retrieving your source data, and any other kind of updates, like stock prices and other financial data will be back end processes.

So lets get started on getting our data.

As noted earlier the url for retrieving the files changes very little, only the parameter of the exchange changes. Instead of writing 3 separate steps we can write 1 step that accepts parameters. I'm going to start out by creating a back end process file that will contain processes that are repeated continuously.

save this as "back_end_functions.rb"

----------- Start File -------------------

require 'net/http'

def get_source_stock(url,path_param,file_name)

Net::HTTP.start(url) { |http|
resp = http.get(path_param)
open(file_name, "wb") { |file|
file.write(resp.body)
}
}
end

-------------- End File ------------------------

This is the function that will retrieve the actual CSV files from the NASDQ web site and save them where you would like them saved based on the file name passed in the parameters.

With the function created we can now create our retrieval script. Your path will most likely need to changed or created. I like to keep data and scripts in different locations. This reduces the chance that you accidentally delete your script while trying to delete data files.

-------------- Stat File ------------------------

require "back_end_functions" # contains of fuctions

nasdq_url = "www.nasdaq.com" # defines the url to retrieve files from
url_path = "//asp/symbols.asp?exchange=Q&start=0" #path and parameters to requesst file
file_name = "nasdq.csv" #Name we want to assign the file
file_path = "/data/ruby/stock/data/" #path that the file will be written to
file = file_path+file_name #combined value of file and path to pass to function

p file
get_source_stock(nasdq_url,url_path,file)

# data to get AMEX file exchange = 1
url_path = "//asp/symbols.asp?exchange=1&start=0"
file_name = "amex.csv"
file = file_path+file_name

p file
get_source_stock(nasdq_url,url_path,file)

#Change data to get NYSE file exchange = N
url_path = "//asp/symbols.asp?exchange=N&start=0"
file_name = "nyse.csv"
file = file_path+file_name

p file
get_source_stock(nasdq_url,url_path,file)

-------------- End File ---------------------------

Execute the script above and you should end up with 3 csv files in your data directory. From what I can tell everything has to be done from the same drive. I know you can change drives, just haven't tried that. No reason to change so far in this project.

Next step will be to look at all of the data files and start looking at how to design the database

Ruby: Stock Project – install ruby and postgres

2008-03-19T13:35:00.001-05:00

First part of the project, you will need to install ruby, postgreSQL, and the postgres ruby gem. Everything for this project is being developed under Windows. If you are using an operating system other than windows, you may have to make changes that are different from my documentation.

Download and install the latest version of Ruby from the Ruby Site here

Download and install the latest version of PostgresSQL here

When installing change the default port to 5230

Bring up a command prompt and install the ruby gem postgres

gem install postgres

This is optional, but you can download and install pgAdmin, pgAdmin is a database administration tool for Postgres.

SciTE is installed with Ruby, you will want to launch this and place the following code into it. Save the code to a file like test_db.rb. Then press f5 to execute the script. You’ll need to key in your password that you created while installing postgres.

require 'postgres'

conn = PGconn.connect("127.0.0.1", 5430, "", "", "postgres","postgres","[password]")

sql = "select * from pg_tablespace"

res_pid = conn.query(sql )

res_pid.each do |x|
p x
end

If everything has been done correctly you should get a result like this:

>ruby db_check.rb
["pg_default", "10", "", nil]
["pg_global", "10", "", nil]
>Exit code: 0

If not you’ll have to look at the error messages that generated instead to figure out what is wrong with the setup. Once complete you’ll be able to go to the next Step.

Ruby: Stock project – Build your own Stock Database

2008-03-17T15:55:00.005-05:00

With the state of economy taking up so much of the news, the stock market is taking center stage like I have never seen before. 1999 and 2000 were about how everything was going up and there was no end in site. Now 8 years later everything is going down and we don’t know where the bottom might be. It’s kind of funny to see how much has changed in only the past six months. We have gone from a pretty much status quo market to one of the most turbulent markets in over 30 years.

With all of the focus on the credit crisis, I’ve been watching a lot of CNBC in the evening. This is not for investing advice, just to see what the financial pundits are saying about the current financial events. So I’ve been watching a lot of Mad Money, Kudlow & Company, and Fast Money over the past few months.

The three shows are good shows to watch, just don’t act on the recommendations immediately. Listen, learn how to filter and learn how people make decisions. I could go into more detail about these shows, but that would be for a different post.

This brings me to the real reason for this post. In all of the shows, they, the hosts, are always referencing research. I researched this and found that this is this. They never go into the details of how they researched, the criteria used, etc. These TV hosts only show you the selections and not how they came to their selections.

A lot of free information services exist out on the Internet for stocks. There are lots of free development tools like Ruby and databases like PostgreSQL. This is going to be an exercise on how to build your own stock picking database.

What you will need for this project are the following:

Ruby
Ruby postgres gem
PostgreSQL data base
Internet Connection

If something is missing I’ll update this post with new information. I’ve installed several gems over the past couple of months. At this point I’m not going to install rails or use rails. I will use Rails, when I get to reporting and making things available to other people.

This will be the list of topics in the order they are created.

1. Install Ruby and Postgres

2. Source Data

Ever Wonder Why Mutual Funds Fees are so High?

2008-03-06T09:56:00.003-06:00

Found this link that relates to the WSJ Article about Peter Lynch, and Fidelity. I've never been a big fan of investment firms that hawk their own Mutual funds. See my posting about AG Edwards and why I selected them when they were independent.

Have you ever wondered why your fees are so high? Apparently at Fidelity it is due to Bribery. Do you think those bribes do not impact the bottom line of your mutual fund? Bribes given to the managers, just translate into Higher fees that are being charged to the Funds by the companies executing the trades for them. Here are some excerpts from the SEC filing.

I wish I could have spent 160k on a bachelor party weekend.

28.
During the Relevant Period, two Fidelity senior executives (DeSano and Grenier) and ten Fidelity equity traders (Beran, Bruderman, Burnieika, Burns, Donovan, Driscoll, Harris, Horan, Pascucci and Smith) in aggregate accepted approximately $1.6 million worth of travel, entertainment and gifts from brokerage firms that sought and obtained orders to buy or sell securities on behalf of Fidelity’s advisory clients.10 In addition, Lynch requested and received tickets to events from two equity traders, who obtained those tickets from brokers. Brokers took DeSano and/or certain traders, sometimes in groups, on more than thirty trips to such destinations as the Super Bowl, Las Vegas, Florida, the Caribbean, and Nantucket. These excursions sometimes included travel by private jet, lodging at fancy resorts, entry to exclusive golf courses, tickets to major sporting events, limousine service, expensive dinners, other amenities such as spa services, and, for certain traders, adult entertainment and illegal drugs. Bruderman even organized, and brokers paid for, his own extravagant, three-day bachelor party in Miami, part of which DeSano attended and which cost brokers approximately $160,000.

Or how about the "Fall Classic" Could you imagine getting to do this every year. I think there are some income tax evasions by these people as well.

29.
One brokerage firm seeking and obtaining Fidelity’s business, Jefferies & Co., Inc. (“Jefferies”), gave one of its brokers, Kevin W. Quinn, a travel and entertainment budget of $1.5 million per year. From that budget, Quinn entertained DeSano and several Fidelity traders, primarily by taking them on weekend excursions by private jet.11 For example, Quinn organized an annual trip he called the “Fall Classic,” which included private jet travel, exclusive golf outings, lodging at expensive resorts, and other activities. During the November 2002 Fall Classic, for example, Quinn took DeSano, Bruderman and Harris by private jet to Las Vegas. Quinn provided accommodations at the Bellagio Hotel, several thousand dollars worth of golf merchandise, a private band, meals, golf, and entertainment at a nearby strip club. The group continued by private jet to Cabo San Lucas, Mexico, where Quinn provided accommodations in villas at the Esperanza Hotel, meals, more golf, and other entertainment. Jefferies paid approximately $200,000 for the expenses incurred on this trip.

The list goes on and on. They even had their Drugs bought for them. So now if you are a holder of a Fidelity fund, your 401k has helped finance someone else's drug habit. I don't care if they bought drugs with their own salary, but these are bribes that are just charged back in the form of higher fees. This means that you the investor are being stuck with the bills. Go Here to see the full filing. It is not your normal day to day filing by the government.

AG Edwards philosophy going going ...... gone

2008-02-26T12:44:00.002-06:00

Wachovia bought A.G. Edwards almost a year ago. I think the effects of the acquisition are starting to be felt. When the acquisition was announced, I had my own personal reservations. One of the main reasons that I selected A.G. Edwards was that they were independent and did not manage their own mutual funds. I consider managing mutual funds and giving financial advice to be one of the greatest conflicts of interest that exist in the financial advising industry. Which mutual fund products will be the first recommended by any of the brokers? The mutual funds that their company manages will be offered first, of course. Here is a link that summarizes up the philosophy that AG Edwards had. It’s an excerpt from a the book: The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value Google only displays the image of the pages, but these pages on AG Edwards summarize my beliefs on what a financial advisor should do as well.

So in less than a year my broker has left. That in itself is no big deal. He was OK but I wouldn’t move my money because he left. 3 months after my broker has left I finally get a phone call from the “new” guy handling my account. Why? Not to touch base with me to get to know me, my goals, etc… No, because one of the stocks I own was getting bought out in an all cash deal, and they wanted to know if I intended to tender my shares. “Duh” I think this is a computer alert, and I’m being contacted by an employee to take action. No mention that since this was his first time to talk to me, would I like to schedule time to go over account, goals, etc…. nothing. I’ve had the chance to talk to him several times now, due to mistakes, mis-handlings of the account. They didn’t tender the shares; they (AG Edwards) changed the address from my current address to a former address. With every phone call not one single mention of going over the Account, or any other pleasantries. So, what do I do? I get the feeling that this new guy just got his series 7, doesn’t have an investment philosophy, and will most likely start pawning Wachovia funds to me. I think it is time to take my money someplace else, because AG Edwards is close to not existing anymore, at least the AG Edwards that drew me to use them.

It's like reading 1984

2008-02-21T13:30:00.003-06:00

If you ever wondered what inspired George Orwell to write 1984, just look to England's Parliament, and court system. This Article is how the former Lord Chancellor want to make retroactive changes to the Web.

I think it would be easier to make changes to the law instead. Once information is public it is public. If you are so concerned about contaminating the jury pool, have a better selection process, and once selected, sequester them.

Patents like this should not be allowed

2008-02-21T11:41:00.003-06:00

It's because of companies like this that these kind of patents should not be allowed. To me this is the equivalent of patenting skipping a special form of walking.

This world is filled with people who have great ideas that never get fulfilled by the person who thought them. If you don't share the idea, and never implement that idea, you should NOT be able to get any kind of monetary benefits from some one else who also thought up the idea independently and actually implemented the idea and made money.

Ruby: How to Parse an HTML page and retrieve embedded table information

2008-02-20T10:35:00.003-06:00

I couldn’t find readily available an HTML::TABLE parser for ruby like I had for Perl. So I thought I’d just try and make basic one for a page that I like to grab information from. I really couldn’t find any good examples posted. So here is a sample method for extracting information from a table on an HTML page.

First I usually start with a very simple get the data and print the data out. The main purpose is to verify that you actually retrieving the data.

require 'net/http'

url = 'http://your.url.here/

url_data = Net::HTTP.get_response(URI.parse(url)).body

p url_data

Second you can look at the output data to see how the table labels are made.

Next I add the next piece to split the sheet data along the different embedded tables. This will become a loop process to access the different tables. Right now I just want to print out all of the tables.

data = url_data.split(/

data.each do |x|

p x

end

The first table split lines is 24 tables down. In this case I’m finding an embedded table within the original table or Table 24 for this page and it has a different tag format a "forward slash"table. The page I’m looking at is very table extensive in its layout. I reset a counter before going into the do each on the split of the table lines. Once I hit the table that I want to drill down further into I start another loop. At this stage I’m printing out the entire row of the table that is being displayed.

y=0

data.each do |x|

y = y+1

if y == 24

data_table = x.split(/<\/table>/)

z = 0

data_table.each do |t2|

if z == 0

data_row = t2.split(/tr/)

data_row.each do |row|

p row

end

The next step would be to isolate the individual elements in the row that you want to extract. In my case my elements are laid out in a single column. Column 1 is padded space, column 2 are labels and column 3 are the data values. So to display only the column 3 values I would loop through like this.

data.each do |x|

y = y+1

if y == 24

data_table = x.split(/<\/table>/)

z = 0

data_table.each do |t2|

if z == 0

data_row = t2.split(/tr/)

data_row.each do |row|

data_column = row.split(/

c = 0

data_column.each do |column|

c= c +1

if c == 3

p column

end

After this point it’s clean up of the extra HTML formatting tags. Save the values to a local variable and work with the data.

2008-02-14T21:25:00.001-06:00

I cut and pasted Scott Jennings Article last night thinking that I might repost it here just to preserve a drama that I found quite funny and interesting. It seems several others have had the same idea as well. Nerfbat and Ironrealms have done repostings as well.

Deep down inside almost every WoW player or other MMO player would really like to play their favorite game for free. So, if you could sell a few items for real world cash to cover your monthly gaming expenses. Why not. The people in the Article have gone way beyond this, they are just exploiting the game economy in a way most likely unintended by the developers. If the game developers had intended this to happen they would have also developed a market place for these goods to be trade and sold.

Any way it is quite fun to see a rock fight being done in a house of glass. Lots of broken windows.

___________________________________________________________________

Scott Jennings says:

MMOcitizen.com, a website operated by the law firm currently bringing a class action lawsuit against IGE, obtained and published a copy of a complaint in another lawsuit involving IGE: this one brought against former CEO Brock Pierce last year by co-founder Alan Debonneville.

For almost 5 years, Debonneville has dedicated his entire life to the creation, development, and success of IGE US, LLC (”IGE”). IGE’s meteoric rise from an under funded startup to the market leader culminated in a Goldman-Sachs investment of $60,000,000, which set the value of IGE at the time of $220,000,000. While Pierce, a flamboyant former child actor, has always been the public face of IGE, Debonneville has been the tireless working founder, responsible for the expansion and operation of the company.

The filing goes into great detail about IGE’s rise and fall from Debonneville’s point of view, with, just in case you weren’t already glued to your PDF files, added dirt from the dot-com-money-and-man-boy-love days of DEN.

After living and working in Spain for a few months, Debonneville observed that Rector and Pierce had a very close relationship, one that did not seem normal between a 40-year old man and a 20-year old young man…

…Apparently, there were a multitude of charges related to the prior operation of a company specifying that Pierce, Rector, and Shackley had stolen money from the company and wasted corporate assets for things like the purchase of illicit drugs, living a lavish lifestyle, and criminal allegations of transporting a minor across state lines for sexual purposes. Upon learning this information, Debonneville questioned Pierce regarding the allegations, and Pierce stated that the claims were false and contrived as a setup by some competitors and former employees…

Wild enough? It gets… something. Worse? Better? Uwe Boll?

Debonneville was told by Pierce that the “Spanish FBI” came to their house with a “SWAT” team in helicopters, kicked in their door, shot their dog, and threw all of them in jail.

The complaint eventually leaves the Mallorca Vice portion of history and gives a breezy history of much of what we knew already - IGE’s quick rise and huge cash infusions, and the use of that in a quest to purchase respectability through hiring executives and purchasing websites. Eventually, it all falls apart around the time of the Goldman Sachs investment as the principals began to fall out over arguing over how to divide up the huge amount of stock, which is dealt in the document (from Debonneville’s viewpoint, of course) in point-by-point detail.

Debonneville was starting to discover that Pierce had not only lied to Debonneville about the Yantis Stock Repurchase, but also that Pierce had benefited personally to the detriment of Debonneville from the Salyer and Maslow sale of stock. Of course, Debonneville was shocked to learn that Pierce had sold any of Pierce’s stock in IGE…

…On July 14, 2006, in an apparent attempt to convince Debonneville that his interest in IGE was becoming worth less and less money, Debonneville was sent an article regarding a crackdown on the sale and purchase of game items for cash in Korea. The implication was that IGE’s recent acquisition of Itemmania, a Korean online house, was going to be a failure. In hindsight, it appears that this was just another one of Pierce’s attempts to manipulate Debonneville into selling his stock to Pierce for a less than fair value, certainly for less than Pierce realized on the sale to Maverick. Today, it is likely that this may in fact be IGE’s most valuable remaining asset…

And just in case you started nodding off with tales of stock screwballery… enter everyone’s friend in space, Jonathan Yantis.

Yantis also advised Debonneville that if a deal was not reached with IGE, Yantis had already put a network in place to compete with and destroy IGE. Yantis stated that through the hiring of certain individuals who he had a long time business relationship with, Yantis would sell currency that had been exploited or duped.

Exploiting or duping is a process whereby an outsider hacks the game program into creating currency for the individual or duplicating an item and then selling it over and over which also results the creation of currency. These actions allow for the exploiter/duper to create an endless supply of currency without any real cost to that currenct. This is something Yantis has done in the past and made large profits from. The exploiter/duper would typically receive a commission for any currency sold of about 40% of the sales price. Due to the currency being exploited, Yantis was and would be able to sell currency at a price significantly below market, since the cost of the currency sold was non existent. This also allowed for an infinite supply to be created in what could take as little time as a few minutes.

Yantis indicated that this was also how he could turn the trading arm of IGE around and make it profitable, almost instantly. Pierce was aware of Yantis’ intent to use these exploits. In fact, Pierce counted on them as part of the rationale behind why Yantis should be brought back to work for IGE.

A clearer explanation of the toxic effects of RMT on online gaming has yet to be written. (I know. I tried.)

I’m sure that as this hits the commentariat there will be more to be said. Oh, there will be more.

Ruby Project

2008-02-14T16:21:00.003-06:00

The past few weeks I've been working with ruby creating a few small short projects. I've been impressed with what I've been able to do with little effort. Almost everything I've tried has taken little time, and has been fairly easy to debug and get working well enough for me to use.

This is a short list of what I've been doing over the past few weeks.
Image file replacement program with GUI interface
XML feeds from a web site to populate a database with values
Retrieve a list of paid checks from Oracle ERP and place them into an excel spreadsheet
Send an e-mail with attachments (file mentioned above)

most of these were work related, some were just to test, while others turned into great time savings.

I'll post some details on some of the programs that I've written. The only dissappointment I have with ruby at the moment is the lack creating a compiled program. I want to distribute one program so that I don't have to actually run it anymore. Oh well.

Interactive Visual of the Stock Market

2008-02-14T09:38:00.002-06:00

I found this link today, an interactive breakdown of the stock market. It breaks down the stock market by the major sectors, and then gives each company a different size square according to their market share within that sector. There are several options to see performance based on certain points in time. Look at the financial sector for the past 26 weeks almost all red.

http://www.smartmoney.com/marketmap/

W. Virginia, other states too

2008-02-07T21:24:00.000-06:00

I saw this article today and wasn't really surprised by it. I haven't had to business with the state of W. Virginia, but I have had to deal with states like Mississippi, and Alabama. These states are consistently ranked at the bottom of almost every category. I think the only category where they rank high is on how hard they are to deal with.

Single Source of Truth

2008-02-07T14:28:00.000-06:00

One of the more common issues for businesses today is reporting on business activity. Reporting issues and the reasons for these issues are endless. If you are in business, you most likely have reporting issues.

Why do companies need reporting? To help the people in charge of running the company, run the company as efficiently and as effectively has possible. Every decision that is made has an effect on the bottom line. Decisions have a better chance of having a positive affect to the bottom line when the business has more accurate information about its activity.

Growth through acquisitions creates a lot of challenges. When one company acquires another, a lot of duplication is introduced. Not all duplication can be eliminated immediately, and some duplication may exist for years beyond the original acquisition date. This holds true especially with the IT solutions that handle, track, record, and report business activity.

Most of the IT solutions for each of the acquired companies are most likely different from the other companies’ solutions. These differences will range from systems that record business activity, to the nomenclature that each of the individual business use to describe their business activity.

Because of the differences between the acquired companies, multiple challenges exist when trying to report overall business activity.

Accurate reporting is essential for a company to be and remain successful. It is through reporting that informed decisions can be made.

The answer for this need for accurate reporting is something I call: The Single Source of Truth.

Security?

2008-02-07T09:45:00.000-06:00

Found this article. Kinda sums up the whole meaning of what Apple and other companies really mean when they are talking security. Security is nor to protect you the user, it is to protect them the company whose software / product you are using.

Primenet is 10 years old

2008-01-31T10:29:00.000-06:00

It was 10 years ago today that I installed the new prime95 program that would connect to primenet to retrieve mersenne prime numbers for testing. I had been participating for over 2 years before primenet was created. Before primenet was created you sent an e-mail to George Woltman. George kept track of all of the prime numbers and would send you 3-4 primes that you would run. You would then e-mail the results in your results file from him to process back into his database where he tracked all of the results.

Prime net replaced all of this manual effort and allowed George to focus on maintaining and improving his FFT code. Prime95 is a program that takes advantage of CPU’s architecture, and pushes it to it’s limits. It is also one of the friendliest programs to install on your computer. This program plays nice with all of programs I have ever run in my 10+ years running it. I’ve never seen it interfere with other programs. It has also detected many CPU and RAM failures before they became failures that ended in catastrophe. This is a testament to George’s concise meticulous error trapping programming ways and truly only wanting to use free CPU cycles and nothing else. I’ve run other distributed programs and several of them tend to want to hog the CPU and not let go immediately.

Here are some helpful links to learn about Mersenne primes, and how you can contribute to discovering them.

http://www.mersenne.org/

http://www.mersenne.org/primenet/status.shtml

http://mersennewiki.org/index.php/Main_Page

Some quick stats for marking the 10 years:

As of today I’ve tested 293 Exponents

Totaling 656 Pentium 90 CPU years to the project + a couple of years prior to primenet.

Over the past 10 years it has taken me an average of 3-6 weeks to complete a test of a single prime depending upon the age of my computer.

A prime in the 39-40 million range takes about 10-11 Pentium 90 years. So in the space of 3-6 weeks today, I can do the work that it would take my P90 10-11 years to do. Amazing