I’m so clever. Back in December I wrote here that Bernie Madoff’s results, far from being pulled from his hat, showed every sign of having been generated by a randomizing algorithm. My analysis suggested that – based on Benford’s Law fit – his results would have passed muster in terms of looking sufficiently random to be real.

Here is the original chart again:

I’m always uneasy about these “Let’s price Thing X in Commodity Y” exercises – if thing X was supposed to be priced in commodity Y, it would be priced in commodity Y – but this one is at least semi-useful. Here is the Dow index in gold since 1900:

There is a lot of chatter out there about Greg Zuckerman’s new book about John Paulson’s subprime trade. Titled The Greatest Trade Ever (Broadway Business 2009) the book chronicles how Paulson’s risky trade came together and how it paid out, controversies, warts, timing and all. I have a copy on the way and am looking forward to reading it, but here is an opening excerpt:

The tip was intriguing. It was the fall of 2007, financial markets were collapsing, and Wall Street firms were losing massive amounts of money, as if they trying to give back a decade’s worth of profits in a few brutal months. But as I aid at my desk at The Wall Street Journal, tallying the pain, a top hedge-fund manager called to rave about an investor named John Paulson who somehow was scoring huge profits. My contact, speaking with equal parts envy and respect, grabbed me with this: “Paulson’s not even a housing or mortgage guy … And until this trade, he was run-of-the-mill, nothing special.”

There is a new Grant Thornton report out arguing that the U.S. is suffering from an IPO drought caused by high-frequency trading and broken market microstructure (but not SarbOx). The alleged consequences? 22-million fewer jobs in the U.S. than would otherwise be the case.

Whoa. That's a provocative claim, but does it hold up?

Pace my Marketplace radio comment on the dollar's decline yesterday, this graph from Bloomberg of the recent stock market outperformance of U.S. exporters is noteworthy.

The indefatigably bearish SocGen strategist Albert Edwards made some entertainingly grumbling comments in Hong Kong today. Here’s a summary:

• Market will hit new lows in 2010 as we go back into recession
• Faith in growth stories is a “sick joke”
• Japan will fumble into bond sale trouble in 2010 as investor appetite dries up and yields climb

You have to give Edwards credit for having more staying power than most of his bearish brethren. Like Han Solo at the end of The Empire Strikes Back, Edwards is frozen in the bearish equivalent of carbonite – which is part of why we love him so.

Lots of people are staking out positions around (and mostly against) investor David Einhorn’s FT-reported anti-CDS musings in his latest investor letter. I agree with David in many ways – and his writing is as fun as usual – but I don’t accept all of David’s reasons (although I agree the ability to so directly influence the path to default can be problematic).

Two of my main CDS issues (which are fixable):

In a quick look around the world at market price/earnings multiples after the launch of the ChiNext wild-wild west exchange in China, the league tables have really changed. The impossible has happened, with the outrageously expensive Shanghai Composite newly looking (relatively) cheap. Gosh.

The latest Mintel data on credit card direct mail offers to consumers showing Q3 of this year against the preceding few years. The drop is ... precipitous, from 2.1 billion a quarter in 2006 to 391 million in the most recent quarter.

Vinod Khosla has his critics, including me now and then, but give him credit for often and unapologetically making risky, early-stage investments with a very high chance of failure.

Khosla has been dabbling in [clean tech] deals since he started his outfit in 2004. With his fresh capital, he is on the hunt for the most ambitious startups. "Our specialty is risk," says Khosla. "Forget [hitting] singles. Lay it out there and take a swing. You may not get a very high percentage of hits, but you get a high slugging percentage."

With the U.S. dollar is in full decline against all of its major trading partners, I thought it would be fun/interesting to see the currencies against which the U.S. dollar hasn’t declined this year.

There is a total of nine (!) currencies worldwide against which the U.S. dollar is up in 2009. Here is the list and YTD dollar performance:

A graph of the U.S. dollar against currencies of some of the U.S.’s largest trading partners since 1971. The bifurcation is the interesting thing.

In case you were ever doubtful that H1N1 flu fears wouldn't cause sanitizer sales to spike higher -- something I"ve written about here a number of times -- here is some data making the point fairly convincingly. According to Panjiva, hand sanitizer shipments to the U.S. have doubled year-over-year. Too bad Purell is such a teensy part of J&J (JNJ) sales.

click to enlarge

Just because a few people asked, here is a cash comparison over the last few years at Microsoft, Google and Apple. (Again, this is via Gridstone.)

Lots of chatter this morning about the increasing size of the Apple (AAPL) cash hoard, at least as measured by cash and marketable securities. Here is a graph of Apple's Smaug-esque hoard's growth over the last six years (via Gridstone):

One of my favorite bits of bloodthirsty Wall Street behavior is the feeding frenzy when a hedge fund goes down. The first thing everyone does is check the fund's known positions, figure out where the fund is in deepest -- the biggest positions in the least liquid stocks -- and then shorts the crap out of those stocks, expecting that said flailing hedge fund will have to sell.

With the preceding macabre thought in mind, here is a (for amusement only) table I put together over the weekend of Galleon's largest positions as measured by days to trade out of positions (as of 6/20/2009). I have updated the table to include in the final column the performance of these ten stocks on Monday of this week. As you can see, the top three stocks by days-to-trade all had a crummy day yesterday.

From a due diligence report on Galleon (excerpted in the FT), here are the three ways to make money with hedge funds. It's sort of amusing, in a bleakly comedic kind of way -- especially the first paragraph:

"You can take advantage of trading technology, but few do. You can be more intelligent than others, but few are.

Pascal's Wager (or Pascal's Gambit) is a suggestion posed by the French philosopher Blaise Pascal that even though the existence of God cannot be determined through reason, a person should wager as though God exists, because so living has everything to gain, and nothing to lose.
- Wikipedia

Must-read piece up at Technology Review on how expanded U.S. natural gas reserves change energy calculus. Some of that is direct, with there being far more natural gas potentially available than imagined even five years ago; some of it is indirect, with a possible natural gas supply expansion representing a sort of circuit breaker in the face of oscillating and/or climbing oil prices.

There are many challenges of course, not least of which is the absence of natural gas-powered cars on U.S. highways. A wholesale auto fleet transition to natural gas is not in our future, at least not a rapid one. Then again, even the threat of a partial transition is an important development in the tight world of oil supplies.

I'm a huge fan of not attending interesting-looking conferences, but encouraging other smart people to go and report back -- especially in abbreviated form. Here is Mike Panzer doing exactly that from The Economist magazine's inaugural Buttonwood event this week in New York:

Secretary Tim Geithner, United States Department of the Treasury: