Michael Gracie

…where the buffalo roam…

…and fat trout eat black sculpins for play.

Where seldom is heard a discouraging word, and skies are free of tornados all day.

They are calling it a ‘floor’:

Pakistan set a floor for stock prices on the benchmark exchange, moving to halt a plunge that has wiped out $36.9 billion of market value since April.

Securities can trade within their daily limit of 5 percent “but not below the floor-price level” of yesterday’s close, the exchange said on its Web site, without giving details.

Stocks can no longer go down - it’s the “No Loss Sale Rule“, and not so cleverly disguised. Imagine the order imbalance that would occur in a real marketplace!

Amongst my inner circle I was voted “Least Likely to Attend the Democratic National Convention.” In fact, I didn’t receive an invitation to a single sanctioned event…bummer. And I’ve never been too big on gambling either, but I have been enticed into a few small-stakes poker games. And last night it just so happened to be a few delegates/friends twisting my arm to hand them a few of my hard-earned dollars.

No, Ben Affleck wasn’t in the room, and I am not going to bore you with a hand by hand description of the play either. But the convention still has two nights left, so I suspect there are still more games to play - as a contribution to the community I’m instead handing out some tips for success while playing poker with delegates, based on a night’s full of observation…

Contrary to popular belief about democracy and such, political conventions are all about partying. So make sure your opponents are the ones doing it. Tell them you are on the wagon, even if it’s just your nurturing the prior day’s hangover - make sure they drink plenty of political ale during play.

Next up: Delegates (particular the well-to-do kind) like action. I say don’t let them have it! Refuse no-limit games - in fact, suggest something like 2-4/5 limit. You may seem like the sissy up front, but this tack will pay dividends over the course of the evening. The want for higher stakes will push your politically-oriented opponents to chase pots. And chase they will, even when they have no hand to speak of.

Making the ‘deter action’ bit work also requires you play fairly tight. Sure, if you get dealt pocket aces over and over again you have little choice but to raise and re-raise like a mad person, but otherwise the best course is to fold…a lot. This has the additional benefit of enhancing the pot chasing phenomena too. You are, however, going to have to give up some pocket change while setting up for the bigger kills - coughing up a few blinds and a few uneasy calls will work wonders for your opponents self-perceived poker skills.

In Summary

1) Make sure your delegate friends get good and sauced;
2) Capitalize on their need for action by folding while they’re agitating;
3) Pound the big hands by steadfastly jacking up the pots;
4) Take your delegate friends’ money while their confidence is brimming.

The Convention officially ends on Thursday, and I’m sure most delegates (and the media and support) will be anxious to get home to their families for holiday weekend festivities. I’ll no doubt be fly fishing, and I’m happy to note that funding for my flies, leaders, lunches and fuel is secure.

It’s an oldie by ‘books in the internet age’ standards, but it’s still a goodie. Modern Streamers for Trophy Trout was written by Bob Linsenmann and Kelly Galloup with one goal in mind - figuring out and communicating what makes big trout tick so you can catch more of them.

The Meat

The main premise of ‘Trophy Trout’ is that the angling prizes are anything but friendly. In fact, based on the extensive biological and habitat research the authors (who just happen to expert fly fishers) performed, once trout get into the 20+ inch range they turn into angry, carnivorous predators that seek out steak dinners at night - and sometimes travel miles to do so. During the day, they stake out territory to rest in - territory they guard with ferocity.

Big trout don’t pay much attention to insects, Linsenman and Galloup say; it’s just not efficient to do so. The energy they might expend rising to a bug generally exceeds the amount of calories they would otherwise intake. Instead, they eat other fish, along with crawfish and other underwater invertabrates (and as some may remember, small mammals and baby birds if the opportunity presents itself). They need large amounts of protein to support their mass, and these big meals are what it takes.

So how do these discoveries affect the fly fisherman, particular if one is generally fishing by day? Well you aren’t targeting hungry fish per se - instead, what you are trying to do is literally piss them off! You are attempting to invoke the ‘fight response’ in a fish that is trying to rest before the dinner bell, and is hell bent on protecting it’s territory in the meantime. You toss a monster fly on the trophy’s head, and strip to emulate the flight response of a fish (or other creature) that just realized it’s in the wrong place at the wrong time. The monster gives chase, and you know what happens next.

The details on trout behavior really hit home, especially when you start thinking about how many small and medium size fish you always seem to catch on dries and nymphs (and in the usually spots). I’d love to give you a blow-by-blow on the techniques they describe, but you probably wouldn’t believe me anyway - you just have to read them for yourself. But what I will clue you in on is this…some of their methodologies will seem entirely unorthodox to the post-novice angler. The reason: big trout are often NOT where you’ve been taught to expect them to be during the day; the descriptions of how to target them reflect that. Another hint…big trout aren’t afraid of very much - by the time they reach ‘trophy’ size they are the veritable kings (and queens) of their castles - the authors’ attempts to taunt them during the many hours of diving research they did actually produced some aggressive responses…at the authors…from the trout!

Next Edition, Please

The book was published in 1999, and while I found it extraordinarily informative I do believe it’s ready for an update. First off, equipment has come a long way, meaning the rod action definitions may no longer apply. For example, medium action rods (which the authors suggested were suitable for streamer fishing) are now more apt to be designed for delicate dry fly action. I’m of the opinion that the medium-fast to fast action rods of today are the necessary item. My streamer rod is a Sage 690-3 SP, which was originally pushed as a medium-fast action with a tip suitable for intricate mending - it does a pretty good job picking up sinking lines (as long as they are small diameter) but I probably wouldn’t venture to cast streamers all day with anything less.

The authors’ definition of “trophy fish” (in the 20” range) is a little out-of-date as well. During my time out in the Western U.S. I’ve caught plenty of twenty-inch fish (even on the smallest nymphs), and I am certain I am not alone. Twenty-five plus is the new millennium trophy - the true pig everyone who reads this book should be shooting for. And I’ll add that is one more reason to be armed with a rod with the backbone to handle such beasts.

Conclusions

What Linsenman and Galloup are preaching is certainly worth practicing, and I believe that’s exactly what it takes to successfully employ their methodologies, practice. I consider myself a fairly strong caster, even in wind, and grew up stripping big flies - yet after three full day outings in some of Colorado’s prime ‘Gold Medal’ waters I still don’t have a beast to show for it using their techniques. That’s not to say I haven’t picked up a few fish with big streamers since, it’s just that most were taken towards dark. In other words, I’ve yet to invoke the territorial fight response in an angry brown during daylight hours. Nonetheless, everything the authors say makes practical sense, which means I’m nowhere close to giving up trying.

I am giving Modern Streamers for Trophy Trout 4.5 stars, with the caveat that it would surely get a perfect 5 in an up-to-date next edition.

You can pick it up here: Modern Streamers for Trophy Trout: New Techniques, Tactics, and Patterns

Happy hunting, trophy chasers!

Things I missed because I was doing fun stuff like running from tornados

• How to stop the next bubble? While the read is interesting, there are certainly plenty of conflicting arguments amongst the discussion participants (summary: they don’t really know the answer). It’s primarily a macroeconomic and regulatory chat - nobody seemed willing to touch on the subjects of herd mentality and the “keeping up with the Joneses” phenomena so prevalent in society - you are not going to stop those bubble creating factors without some embarrassing pain. (h/t The Big Picture)
• There’s no such thing as a free lunch, at least not if lunch is really dinner and you work at Google. Google has axed its famed free dinners, but they really weren’t free to begin with - everyone is on salary and was working extra hours as a result of the perk. Now employees have an excuse to leave early, and go work on their startup. (h/t Mashable)
• Drug and alcohol spa Cirque Lodge in Sundance Utah is using fly fishing as a rehab strategy. Catching trout in the Provo River would certainly keep patients’ minds off harmful substances, but as the Trout Underground noted isn’t it just swapping one addiction for another? I guess you’d have to be a participant to understand; in urban America, when one wants to describe something that is instantly addictive they say “It’s like crack” - in the Mountain West we say “It’s like casting dry flies on the Roaring Fork during the green drake hatch.”

Adieu.

Filled up the truck and drove to South Park. Stripped streamers all morning while everyone else nymphed. And everyone got into fish but me, unless you consider a sucker on a brown woolie bugger a fish (which I don’t).

We had a fine picnic lunch and then headed back out. Nary an hour had passed when the skies grew dark - then I saw lightning and called everyone back to the vehicle for a little sit and wait. I was minutes from taking a snooze when I looked in the side mirror and saw a funnel cloud forming behind us. Needless to say we immediately hauled butt out of there.

After putting a extra mile or so between us and the storm, I beckoned for the camera from my vest, and caught these:

We went up to the mercantile store in Hartsel and chatted with the nice lady at the counter. She was working the radio when we heard the call for emergency assistance. At least a dozen sets of flashing lights roared down SR 24 over the next fifteen minutes. We waited a bit to see if there was any need for volunteer assistance (which didn’t happen), and then we high-tailed it home through some more nasty weather.

Now safe and sound, and I’ve since heard on the news that there were a few tumbled vehicles around Eleven Mile Reservoir but (very thankfully) no serious injuries. And that news was the best part of the day.

SIDE NOTE: Ok, so I got outfished and we had plenty of laughs about it too. And, tornado or no tornado, the worst day on the river is still better than the best day sipping lattes in some cafe in the city. Nonetheless, hearing that nobody was badly hurt was welcome relief.

Circulating via email, but good enough to share…

At VANDERBILT: It takes two; one to change the bulb and one more to explain how they did it every bit as good as the bulbs changed at Harvard.

At GEORGIA: It takes three; one to change the bulb and two to stabilize the rolling beer keg the bulb changer is using for a ladder — instead of standing it upright.

At FLORIDA: It takes four; one to screw in the bulb and three to figure out how to get stoned off the old one.

At ALABAMA: It takes five; one to change it, three to reminisce about how The Bear would have done it, and one to throw the old bulb at an NCAA investigator.

At OLE MISS: It takes six; one to change it, two to mix the drinks and three to find the perfect J. Crew outfit to wear for the occasion.

At LSU: It takes seven; and each one gets credit for five semester hours.

At KENTUCKY: It takes eight; one to screw it in and seven to discuss how much brighter it seems to shine during basketball season.

At TENNESSEE: It takes ten; two to figure out how to screw it in, two to buy an orange lampshade, and six to phone a radio call-in show and talk about how much they hate Alabama.

At MISSISSIPPI STATE: It takes fifteen; one to screw in the bulb, two to buy the Skoal, and twelve to yell ‘ GO TO HELL, OLE MISS!’

At AUBURN: It takes one hundred; one to change it, forty-nine to talk about how they did it better than at Bama and Georgia, and fifty to get drunk and roll Toomer’s Corner when finished.

At SOUTH CAROLINA: It takes 80,000; one to screw it in and 79,999 to discuss how this finally will be the year that they have a decent football team.

At ARKANSAS: None; there is no electricity in Arkansas.

Short and sweet

I attended the premier of I.O.U.S.A. last night. Included in the opening was a live simulcast discussion with Warren Buffett (Berkshire Hathaway), Peter Peterson (Blackstone Group), David Walker (former head of the GAO), William Niskanen (Cato), and William Novelli (AARP).

The Movie

The movie’s subject…the national debt, and the format was designed to explain to the average American (i.e. the ones that either don’t pay attention to national affairs and/or don’t grasp complex economic concepts) what the growing liability means for future generations. I’m certain that before days end, a few on the payroll of the legacy media are going to trot out their thumbs, which will invariably be pointed downward. Of course it’s not their job to inform you - they get paid keep you thinking everything is fine, that social security will cover your retirement, and that you should keep buying those Chinese-manufactured widescreen TVs so often advertised in their publications. Saving is for the birds - real people consume!

Personally, I thought the producers did a fine job with the documentary. Yes, it was slightly boring at times, but this is macroeconomics - I’m sure a lot of folks would rather watch a documentary for the search and subsequent discovery of Atlantis built entirely of gold, but Nick Cage already has a lock on that subject. The creators broke the base down into four subtopics, fiscal deficits, trade deficits, personal savings and consumption, and elected officials, and then reviewed each’s contribution to the present crisis with an even supply of nifty full motion graphics and narration. I may have yawned a few times because I’ve already heard the story, but I don’t think many people have (and therefore won’t). My only real problems with the product - they could have slowed down the graphic effects (and maybe personalized them a bit with direct human interaction/presentation), the “man on the street” interviews too predictably uncovered the public’s naivete, and I’m tired of hearing politicians whine about the issue as though they are concerned (which was peppered throughout the film - the choicest were Sen. Kent Conrad a.k.a. Mr. Cheap Mortgage and Former Treasury Secretary Robert Rubin a.k.a. Mr. I Didn’t Get Fired). I’d say the film was on-par with An Inconvenient Truth, only much less convenient and lined with significantly more truth.

The Discussion

The townhall discussion, hosted by Becky Quick of CNBC’s Squawkbox with the above mentioned participants, was the real highlight of the show - hopefully the producers will include a taped version of the segment with both future screenings and the DVD. I have to say I was most impressed with David Walker - the guy may sound alarmist to some, but I think he’s just plain tough. He, like several others, talked straight, and he in particular pulled no punches with the audience or the other panelists. Least impressive, Warren Buffett. At one point he discussed the shift from manufacturing to the “brain power” economy, with choice references to Microsoft, Google and eBay, despite the fact he’s oft quoted for his lack of understanding of internet business, and failed to make mention of the US education system’s ongoing failure to prepare young American’s for this change. However I do give him credit for emphasizing the disparate income tax rates effecting the investing class versus the working class, although I did smell what might have been a hint of partisanship there that might be a pre-cursor to tax hikes (and I’ll note that a hike in the capital gains rate might not make much difference to a guy worth tens of billions of dollars who is admittedly now looking beyond our borders for new investments, but to someone with say a million or two in investable assets it would be a very very big deal).

As for the other guys: Peter Peterson showed he’s a statesman, William Niskanen appeared both grounded in pure logic and seeking workable solutions, and William Novelli generally exercised caution with his words (particularly when social security privatization was mentioned).

Conclusion

Anyone who doesn’t understand what the national debt is, what contingent obligations such as unfunded entitlements (i.e. off balance sheet liabilities) are, and/or how their 52-inch widescreen and matching credit card bill are going to effect their childrens’ children, they should go see this movie (or buy it). If you are already part of the “get it” crowd, you may find the panelist discussion interesting, so make sure it’s included (and keep stuffing those gold ingots under the mattress).

If you’ve already planned your weekend, keep reading. Otherwise, you have more important things to do.

• Why the rumors about the Mormon Church buying Facebook made sense - it’s about genealogy business. Personally, I think the Mormon Church is run by very smart folks, and very smart folks don’t buy businesses that don’t justify their valuations via profits.
• In defense of short selling. It only needs defending because the powers that be want to ensure folks the “buy and hold” strategy they were “sold” doesn’t come back to bite.
• A state record channel catfish was caught on a Barbie Rod! I wonder when Mattel will start dumping last year’s model on eBay.
• The CFTC found that a select few speculators were dominating the oil trading market, but they also noted that those few didn’t really manipulate prices. I’ll bet that if oil was trading a $200 a barrel right now, some of their “findings” might have been a little different.
• Banks are still lining up at the pig trough discount window, and their wealthy clients are feeling the pain as private-equity capital calls come in. Didn’t those clients know the banks lent out all that money they were supposed to be safeguarding?

That in turn brings up the question…

• How safe is your brokerage account (yes, brokerages use securities as collateral on loans too)? Guess that depends on your brokerage…

Source: Weiss Research, Inc.

Adieu.