Michael Gracie

No need to ask why

Via Bloomberg (emphasis mine):

Almost a year after the Federal Reserve began to cut its target rate for overnight loans between banks to 2 percent from 5.25 percent, borrowing costs for states, cities, hospitals and municipal authorities are going in the opposite direction.

The $2.66 trillion municipal debt market is reeling from a series of jolts springing from a decline in the creditworthiness of insurers that once backed half of all securities sold at the same time the economy teeters on the edge of a recession, eroding tax revenue.

When it’s being noted that borrowing costs are going up because of the insurers’ creditworthiness, you can be fairly certain that the fortitude of the actual borrowers is already in the tank.

Need examples?

• The Illinois governor proposes putting speed cameras on interstates to pay for Chicago police reinforcements;
• Detroit’s mayor is put in jail after trying to sell a tunnel to the Canadians;

and

• New York’s governor is begging in…Washington.

Only Arnold Schwarzenegger seems to have a clue - cut pay and lay off workers, and veto every spending bill that crosses the desk, until a realistic budget is finalized. Of course, he’ll have to get past the whining state workers’ union and ancient payroll system technology (in the heart of the information technology center of the universe no less) for his hard-nosed tactics to work.

Nevertheless, there’ll be no borrowing without usury for state and local governments. Considering that the institutions having been riding the gravy train, on the backs of bond ratings propped up by bogus “insurance”, that’s probably the way it should have been all along.

Business Week notes:

The prices for Facebook shares in these transactions are far below the $15 billion level. [Laurence] Albukerk, the founder and managing director of EB Exchange Funds, says two current directors and one former executive recently contacted him about selling some of their stock for a $5 billion valuation. He also says two investment firms have bought large chunks of Facebook stock at a valuation of about $3.75 billion.

$3.75 billion. Not too far off the “imperfect mashup” estimate.

UPDATE: Fred Wilson sheds light on the discount. In his eyes, it’s just compensation for a lack of liquidity…

As exits via IPO and M&A become more and more difficult, I sure hope the secondary market will step in to fill the gap.

…and it seems, a sign of the times.

I suspect we’ll soon see some type of organized, internet-based exchange(s) pop-up and try to fill the gap, although I also suspect that most attempts at intermediation in a market reliant on close personal relationships and confidentiality will also fail. But, there is probably some business out there for all the deals that aren’t Facebook-level in profile.

For the highly productive worker, obviously concentrating on the latter…

Now I’ll say it again…get back to work.

PS: If you get busted reading this, just tell your boss corporate fly fishing still sucks!

Forbes: Digital goods–and pets–are coming to Apple’s blockbuster device.

As a solution for the rumored pathetic MobileMe service Apple should buy Facebook and enable users’ ability to wipe poop on each others iPhone screens.

Instant enterprise ready, baby!

UPDATE: There’s a heck a goodwill write-off waiting there too.

UPDATE 2: Even better - sell the poop for $1,000.

Howard Marks of Oaktree Capital says it “Doesn’t Make Sense” (.pdf), opening with:

In fact, I marvel at how many things take place in the worlds of business, investments and politics that stem from irrationality…

Mr. Marks ventures on to numerous issues related to the current financial malaise - here are the highlights:

• The “wisdom of the crowds” only works for so long, and compulsive-short term thinking simply exacerbates inevitable corrections
• The ratings system was flawed from the get-go - there was no way this wasn’t eventually going to happen
• Blaming speculators is the weapon of mass distraction for the politicians and their media cohorts
• Setting the expectation that losses will soon disappear is easy to do when there is no one left that remembers any differently

And one of Mr. Marks’s favorite tidbits…

Being too far ahead of your time is indistinguishable from being wrong.

Certainly rings home here, but I’ll add that chance favors the prepared. Further, the chance of turning “wrong” back into “right” is magnified the further the downside deviates from the mean.

For those that fear reality-based thinking (which I believe is the standing majority), move on. For the rest, read the whole thing.

If you can’t cast a fly and/or can’t tie it to the line, you are going to have a hard time fly fishing. It’s that simple.

Fortunately, learning how to do both of these veddy, veddy important angling tasks is just about as easy.

A book I originally thought would help with lazy guide syndrome (i.e. guides refusing to pole close enough to the bones so I could just net them) turned out to be a pretty darn good book on generally casting and practice technique. Longer Fly Casting has plenty of pics to follow - it lingered in my library for a while, and has since been passed on. And since that time it’s been updated too!

The other “must have” for getting the fly in the water is Practical Fishing Knots. I’ve mentioned this one before, and it too was given to someone after I finished up with it. It’s a great guide that will leave you with a stable of go-to knots. Sadly, it’s been a while since I chased big game, and if I’m ever asked to tie a bimini twist I’ll probably have to buy it again!

Experienced fly fishing folk won’t be surprised that both recommendations are written (or co-written) by the infamous Lefty Kreh. That wasn’t the intention, but I’ve heard Mr. Kreh is one fine photographer too. Maybe he’ll put out a how-to book on that as well.

I could certainly use the help.

Tidbits are small, until they grow up

• Roubini on bank losses: “If people were not spending their rebate checks in June, what will happen when there are no more checks?” Yep…retail is next.
• Trout are unwelcome in South Africa. Check for whirling disease, and then send ‘em on over?
• You mean subprime lending wasn’t the only problem? No, “Subprime was the tip of the iceberg.”
• Caricatures having sex in purportedly sexless virtual world. Nature finds a way?
• Apple will soon release yet another phone without a keyboard. Or a keypad.

and

• Big social networks are failing in Japan. Maybe it’s just because everyone is already too close together.

By ignoring all the disclaimers

It could be truth, or just plain voodoo, but understanding the times that the sun and moon rises can help you figure out when’s the best time to fish. I’ve never quite understood it myself (at least as it relates to non-tidal waters) but certainly fishing seems best when the moon is new (like today). It’s dark at night, freshwater fish generally feed by sight, so it makes sense the fish would feed more during the day. The opposite goes for full moons.

Alas, I’m too lazy to figure it all out on my own (or pick up a paper), so I bought a Garmin eTrex Vista HCx to do it for me. No, I don’t get lost (and I don’t ask for directions either ). I bought this puppy way back when because a) it’s easy to patch into the Mac, and b) it comes embedded with a handy little fishing predictor.

Today is supposed to be an excellent day…

…with the best times between 12:03pm and 2:03pm, at least on the Dream Stream. Nifty. And I never actually marked that waypoint in order to get those best times either. Instead, I cranked up Google Earth, found the spots I frequent using the satellite imagery (with roads showing), and set a bunch of pinpoints. Then I uploaded those points into the Garmin using GPS Babel+. Note: Google Earth and GPS Babel+ are free (although you can donate to support development of the GPS Babel project).

Now…not everyone is going to bother jumping through these kind of technological hoops just to catch more fish, but all is not lost. Here are some links to help you determine moonphase and sunrise/sunset etc…

• Moon phases, compliments of www.calculatorcat.com (and there’s software you can buy there too)

and

• Complete Sun and Moon Data for One Day, compliments of the U.S. Naval Observatory

Finally…

There’s an old saying that goes “The worst day of fishing is still better than the best day at work.” Don’t get me wrong - I think work is fun - still, this adage is the only part of this post I can assure you is correct.

So get back to work!

Forget waiting for “fail to deliver” notices on the short selling of financial issues - some firms are refusing the shorts altogether. It’s a classic case of “you pat my back and I’ll pat yours.”

It’s high time the SEC implements the “No-Loss Sale Rule” instead…

(h/t Big Picture)

Save a trader from a coronary today!

Does technology create disaster? No, but why don’t climate statisticians have heartburn?

Paul Kedrosky crunches the numbers and finds that there were less than 3,000 seismographs deployed in 1932, and more than 23,000 in 2007. His conclusion:

Combine the preceding with the fact that the number of seismographs worldwide grew from under 350 to over 4,000 during the same period — an 11-fold increase — and you have all the proof any sober-minded person could need: Seismographs cause earthquakes.

Of course, there’s some humor in that. Unfortunately, it’s not quite as funny when it comes to surface stations and temperature warming.

I recently read a study on western rivers and trout (.pdf) stating in no uncertain terms that regional temperatures over the last decade were significantly higher that 20th century averages. I love western rivers and I love trout - plainly and simply, if they didn’t exist I probably wouldn’t live where I live. But I’ve just got to ask…

How does the number of surface temperature stations deployed by or on behalf of the United States Historical Climatology Network over the same period effect that data? And, how does the apparently woeful condition and sometimes absurd positioning of those stations play into the mix? According to an independent, volunteer organized survey of those stations (which, by the way, has covered roughly 44% of all existing stations so far), the data could be “toast”.

LIke I said - not a laughing matter.