CPST1

Unemployment Data: Nothing to Cheer About

n the early 80's where I worked the room was filled with as many as 60 personnel all sorting through stock trade invoices, to then mail to the respective customer and their broker. Commissions were at least $110. Teltron was the system used for Information Management of customer account records and allowed for us to read the news sticker, or send short handed email messages.

One day an inner office memo was issued simply stating how the entire department was going to be replaced by a computer. At that time the Dow struggled to reach 1000. Unemployment (10% OR HIGHER)

I was proud to change jobs and in the process increase my pay by 30%. As I adjusted to the new environment I found that given the age of the institution that some areas of the office were still in, or as original as the day the office first opened. There at a wooden switch board was likely one of the oldest workers manning the switch board with dedicated line(s) to the exchange floor in order to execute trades at near light speed.

Years later, and with an additional background in computer modeling (Fischer Black/Myron Sholes - The Rational Price of an Option) I pursued a new interest as it pertained to an IBM fellows work regarding a developing technology in which the premise was to use computers as a method to program other computers. That study was refereed to as Machines That Learn.

Before delving into a years learning experience playing backgammon with “mloner” a machine that learned, I kept a ear close to the development of the options models used to compute the rational price of an option. Years before "Black Monday"

We had developed on our own, the model based on the first paper written and submitted to the CBOE at Kiewit Computation Center at Dartmouth College, in Hanover, NH. In order to input data I had to use the services of Computational Data Services in Waltham, MA to capture stock prices and then transfer those prices to punch cards that we could load into the database in order to test the pricing of options as a function of price movement. We determined that the only way to determine variance was to solve for it. In short, it left us believing the strategy, yet short the confidence to follow through with investment. After discussing the work with a floor trader at the CBOE he made comment that they all used the model and that enough capital was required to keep the trades up to the pace of the models output each day. Around $20k.

On the other front of trading was a system billed as the largest super computer system this side of the Mississippi. It was designed to follow every trade and calculate every position held.

In total the experiences left me overwhelmed. The first computer system replaced an entire office floor of workers. The second system was dwarfed by an even larger system.

After which in time I would play backgammon with mloner a neural net system that as it learned my errors could present problems I would fail to solve. Whereby the more one plays a neural net computer the more it learns its opponent. Most would expect the machine is programmed to play the most effective strategy in order to win the most points. Which it always accomplishes. But, mloner would fix the dice rolls and leave you standing in your shoes everytime wondering, suffering at the heat of your own inconsistencies of learning to play Backgammon the way it was really meant to be played.

Todays market, the bailout, bankruptcy, too big to fail, is reminiscent of the old times so often forgotten.

Reference with links:
seekingalpha.com/insta...

Bond Expert, Friday Outlook: Ready to Sell Something?

Excuse me again; I’m still adjusting to walking on the ceiling.

Sell or buy into a buyout?

There is a measure of monetary convergence (delinquencies stabilized) where the cost of funding the bailout is used to revive illiquid assets. Although, what if any potential is there for the common stock holder? 10% preferred stock seems to be he apparent bear minimum.

Investor Firm to Tap GM's Fresh Billions to Buy Delphi
online.wsj.com/article...

Two Hedge Funds Close Shop

Here's a report and the risk the Air France flight was up against last week as they crossed the Atlantic through the "intertropical convergence zone (ITCZ)" or, where storm activity is at its highest.

www.weathergraphics.co.../

Hedge funds should know when to get out (liquidate) and cross lines, when they have so much on the line and yet have so much beyond what they set out to accomplish.

Turning back is always a smart move in aviation. Some storms just can't be crossed.

Seeking Alpha Partners with InfoNgen to Empower Its Contributors

Personally I could use this program to test my assumption of what Cramer is going to talk about next.

Bond Expert: Tuesday Outlook

Mr. Jansen, really one could consider a Hummer.

Here's why, how and who:

Governor Arnold Schwarzenegger to Showcase Raser's Electric Hummer H3 in a Demonstration Drive at the California State Capitol

New Plug-in Electric Vehicle Technology Could Allow America’s Top Selling Vehicles to Run Primarily on Electricity, Dramatically Reducing Emissions and Gas Consumption

For Sale: Open source self-powered (well to wheels) vehicle
www.rasertech.com/

As the Dollar Continues to Collapse, Where Will You Put Your Money?

The assumption regarding the dollar is that nothing will change?

That the stimulus packs are nothing more than debt that will never be paid when each day new steps are taken to enter a new age of prosperity.

Today's investment strategies are incrementally different than the value of currency.

In today's climate we have a newly rewound watch in a wireless society allowing global market change through the transference of more efficient means to accomplish similar tasks.

I make measure to any currencies value given to the level of technological breakthroughs and not as a competing value to agricultural resource. In that manner technology as the automation of energy markets or that a lesser footprint is made conserves the means of an agriculturally rich nation.

After all, it's the nations without water creating the most instability.

Microsoft CEO Steve Ballmer Introduces Bing!

Bing is a search engine that finds and organizes the answers you need so you can make faster, more informed decisions.

www.bing.com

Why 'Bing'? Why Not 'Sift'?

It's "BING!" as when the lights turns on, or one might exclaim when they found what they're looking for. BING! I've got it! Like, Seinfeld and Gates…

But, I would have expected something more next generation, like a search system that integrates with an operating system that is tied to a mainframe from which your data (search/knowledge parameters) can be compiled and updated as the system could infer where and what your interest are and therefore enable a more unique web experience.
As in, BING! Just what I’ve always wanted….

More often than not there is in a manner of speaking, two sides to the same story. That of the newspaper and that of the source, or that you’ve taken the time to read a story and enacted a search from which further interaction is made to gain knowledge. It is that basis of search (for knowledge) that a next generation search engine could function as.

As in, BING! I told you so?

New Oil Shock 'Inevitable' - McKinsey

Seeing GM and Chrysler file bankruptcy is "shock" enough from the first "oil shock." Now however, equate what GM and Chrysler are going through to an average consumer household with limited if any ability to hedge investment or to strategize anymore than to burn wood for heat...

Households as well as industry are refining their ways to utilize energy consumption and yet McKinsey warns in the short term, "... to improve the balance between energy supply and demand, the current slackness in energy markets will last no longer than it takes for the global economy to recover."

By energy markets McKinsey implies strictly the traditional method of refined oil usage. From which the chart shows the likely GDP expectation based on traditional demand even as "next generation energy platforms" are deployed. When enough new "energy markets" start up then perhaps the traditional market will be inverted if a successful next generation energy market emerges in time.

Otherwise, I'd suggest a cord of wood is worth 1/4 oz of gold in good times.

What Is Even More Enticing than Gold? Silver

In the 70's and 80's there were extraneous factors that contributed to the rise in the price of silver. Mostly an attempt to corner the market as written in the book, "The Silver Bears"

Today, if there was a massive sell off of gold then what asset, or resource could be considered as valuable?

If a comparison is drawn to the price of gold to that of the demand for oil, then one might consider the aspect of exchanging the sale of oil for the purchase of gold. Considering oil cost $2.50 a barrel to produce it seems reasonable to buy gold from the sale of oil and purchase currency only when and where it is needed.

Twitter Surges Past Digg, LinkedIn and NYTimes.com with 32 Million Global Visitors

Example of where Twitter might go:

.............For example, this home phone can, for the first time, also send text and picture messages to cellphones. Right from the kitchen counter, you can text your kids in real time. Required refinement: You can exchange these messages only with Verizon cellphones. The company says it’s working on the technical barriers to other carriers’ phones.

Speaking of kitchens, that $35 a month also includes unlimited TV, courtesy of Verizon’s Vcast service. The shows — a lot of cable shows, for example — look and sound fine on the 7-inch touch screen. Required refinement: There’s pause, but no rewind or fast-forward. That’s tough if you’re following along with a cooking show.

Twitter Surges Past Digg, LinkedIn and NYTimes.com with 32 Million Global Visitors

Twitter plays on a basic role of computing and that is as an Information Management System for its users to use as an open information service. Therefore, it is dynamic in nature and it is likely that the dynamic of keeping the information stream current that drives the measured growth as seen in the chart above. It could be as interesting to correlate the growth of mobile device capability/capacity to measure the broadening trend of where and how information (text, voice, video/live, photo) is sent and received. If so, then as Twitter continues to develop perhaps they will generate new revenue streams from subscription services that use the networks that connect the devices to further blend the IMS with users own Data Management System. It is an interesting development and one where new users are also discovering a new use for www application.

Expect Oil's 'Crack Spread' to Widen

Crack spread analysis calls for new equations on an old twist. Some alternative fuels like that of ethanol have lost its yield to the spread guidance as the refineries that have been built have declared bankruptcy (Verasun) even though government regulation demands that reformulated gasoline be used.

Therefore, the spread could more aptly be measured to that of alternative fuel conversion. Where the conversion to alternative energy means (e.g. wind, solar, geo-thermal...energy storage (GE)) is creating demand for traditional means of energy in order to build the new alternative fuel dependent system.

It is the gainful yield from which the spread should be measured that an alternative energy can in fact replace legacy (GM) oil dedicated systems.

A Balanced View of Oil Prices, The Economy and Speculation

Timeout!

Chairman Ben S. Bernanke
At the Federal Reserve Bank of Kansas City's Economic Symposium, Jackson Hole, Wyoming
August 31, 2007
Housing, Housing Finance, and Monetary Policy

www.federalreserve.gov...


On Apr 06 04:13 AM Fighting Yoda wrote:

> It was all speculation, fund inflows are the surest easiest measure.
> The speculation died only because of the burst of the credit bubble
> – no more easy money available to speculate.
>
> This commodity/oil bubble was caused/exacerbated by money easing
> from Bernanke in August ’07. Remember despite all the turmoil – the
> markets went even higher till Oct ’07, and commodities peaked only
> on July ’08. The fool Bernanke does not understand the implications
> of unintended consequences. If not for the commodity bubble we will
> not have such a major recession. Now we will continue with a even
> worse recession because – we continue to follow the policy of easy
> cheap money. This will have much larger and worse consequence in
> a couple of years.
>
> Meanwhile we are headed into deflation – don’t buy into the commodities.
>

Oil As Money and the Decline of Energy Earnings

It's outrageous to speculate that the price of oil is staple to the value of currency. If currency best represents productivity in respect to a means of exchange then higher oil prices also equate to higher gold prices. If anything there is a tradeoff of having productivity and a cash rich society, where the price of oil and gold become so high that fewer and fewer have the cash to trade freely.

$150 oil was a wake-up call and things are changing. More has transpired since oil peaked and the result is likely worse than the peak price of oil or gold. That fewer people have the means to sustain themselves independtly, and that in turn will create a demand for a greater scale of economy.