Just got an earful about Comex manipulators. Care to put a few holes through it?

Really? It's always a conspiracy when the market moves against you? I really have no explicit knowledge one way or the other about silver but people sure do like conspiracy theories– in government, in finance, etc. Plenty of this sort of "journalism" in the blogger financial press– it draws in the eyeballs.It always seems that people like to rationalize that it's someone else's fault where losing money is concerned since no one wants to face the shame of admitting a mistake. I have this theory that people like to use financial advisors so that they can blame someone else when their investments lose money: "That damn stockbroker sold me that loser, honey; it's not my fault".

Jeff Watson comments:

Having been on a margin committee (among many other exchange committees) before, my experience is that the margin will always be set in a way that will protect the exchange clearing house, the membership of the exchange, and to a lesser extent, the trade, end users, or what have you. Plus, the membership usually has an inkling that margin rates will be changed, no real surprises there.

Alston Mabry writes:

I love the author's analysis: in hindsight we shouldn't have gone long when we did. We should have gone long at the bottom and also a lot bigger.

And the conspiracy is:

1) Either using control over the exchange committee system to induce sudden hikes in performance bond requirements, or opportunistically using such hikes….

2) Using analysts to make extensive commentary to the mass media to the effect that the "silver bubble has burst" in the hope of inducing fear in the marketplace….

3) Using trading "bots" to transiently create thousands and, sometimes, tens of thousands of intra-day short positions….

4) Closing most intra-day positions into the mass of involuntary liquidations.

my favorite bit is "or opportunistically using such hikes".

Interesting profile, by the way:

Avery B. Goodman has been a licensed attorney for 26 years, and has concentrated in securities law related cases. He holds a B.A. in history from Emory University, and a Juris Doctorate from the University of California at Los Angeles Law School. He is a member of the roster of neutral arbitrators of the National Futures Association (NFA) and the Financial Industry Regulatory Authority (FINRA). He has also been an independent investor for many years. Snapshot Description: Independent / boutique research firm analyst. Trading frequency: Infrequent



 When holding the ball for the last shot (several examples in last night's playoff games), isn't it clear there is a tendency to wait too long?

I realize, especially when score is tied, you don't want other team to get the ball with sufficient time for it to set up a decent play and shot.

But taking that into account, the team holding the ball ("offense") should also factor in:

1) extra time needed to set up play and take final shot if offense players cannot get to planned positions, something goes awry, etc;

2) extra time needed if defending team interrupts or delays offense's final shot;

3) if offense misses but needs extra time for tip-in or for offensive rebound and second shot;

4) the possibility of the ball being lost or stolen while dribbling or passing around waiting for last shot;

5) the possibility that the offense is on its last legs, that the defense is the better or fresher team and will win in overtime, so there is a higher premium on the offense giving itself the highest chance to break the tie and win in regulation, rather than go to overtime.

More often than not, and especially last night, the team holding the ball winds up with a low-percentage shot (or even no shot). Taking all the above factors into account, shouldn't the coach and go-to guy of the offense start their final player a few seconds earlier?

James Goldcamp writes: 

The answer is, yes, especially with respect to #3 below. Also, another ploy is that when you know a team will hold for last shot at about 15 seconds left if I were on defense I would trap the ball handler and generally pressure knowing the player is afraid to shoot before 5 seconds or so and feel their coach's wrath; it's like a free option for the defense knowing you have a fixed strategy opponent.

The other thing that drives me nuts is with TV announcers where a team is down 2 points with the last possession saying "they don't need a three here", especially on the road. It's well known refs fail to call fouls at the end of a game ("put away the whistle"), so your player is likely to get fouled on a contested drive at the end resulting in a low percentage shot. Better to get a clear three off and win or lose it at that moment (again especially on the road where overtime will work against you); and if you shoot early enough three pointers are notoriously harder to rebound for the defense.

Just like in football, basketball experts and coaches are generally too conservative with strategy I think generally for the fear of looking stupid or reckless.

Pitt T. Maner III writes:

 Usually 7 seconds seems to be the amount of time chosen to start the last play. Given that you have about a 1 in 3 chance of winning with the final play in a tie ball game, and you want to eliminate all possibility of the opposing team getting another look if you miss your final shot, there is a bias to starting the final play late.

Could be considered an example of risk aversion. Better to not win and go into certain OT than to have a potential (if only slight chance of) loss when leaving 2 to 3 seconds on the clock.

Even the best players in the clutch are below 50%. The conservative NBA coaching decision is often to go with your best shooter on an isolation one-on-one and to start the move to the basket at 5 to 7 seconds. It avoids a lot of post-game fan negativity which has to be a consideration. You would think (game theory wise) that a mixed last shot strategy of alternating players and plays would produce a higher win percentage but what coach wants to try that in the playoffs! Better to go with 5 seconds and your known Jordan, Horry, Kobe, LeBron being double covered than go with an alternate strategy.

Here is a list of the best "clutch" players.

Even NBA players "choke" (on occasion), so that if the final play starts too early there is probably a greater risk of potential turnover or poor clock management if several passes are made. There is a "dear in the headlight" phenomena when there is too much time to think about taking a shot–too many options and players not used to handling the ball in pressure can cause a freeze up. The defensive team may also make a decision to foul your worst free throw shooter. (although choking effects seem diminished in last 15 seconds according to following research)

It would be interesting to know what the risk of losing an NBA game is with only 1, 2, 3 ,4 , 5 seconds, etc. left on the clock.

Around 7 seconds appears to be the threshold time to running an effective play when taking the ball in from end to end.

This is a great article on the NBA choke effect:

We analyze the effects of pressure on performance using National Basketball Association (NBA) free throw data from the 2002-03 through 2009-10 seasons. We find strong evidence that players choke under pressure—they shoot 5-10% worse than normal in the final seconds of very close games. Choking is more likely for players who are worse overall free throw shooters, and on the second shot of a pair after the first shot is missed. In general, performance declines as pressure increases (as game time remaining decreases, and as the score margin decreases, whether the shooter's team is winning or losing). However, we find no evidence of choking when games are tied in the final 15 seconds. We also fail to find evidence of performance under pressure being affected by home status, attendance, and whether or not the game is in the playoffs.



 Why was there a Negro League in baseball, yet Pro Football never made such a distinction. They were a part of professional football from the early formative years of the league.

Anyone know the reason or can offer an explanation?

Stefan Jovanovich corrects: 

Not true. Black-skinned people were not allowed to play in professional football until after WW II. The pre-War heroes of professional football - Red Grange, Bronco Nagurski, Don Hutson, Sammy Baugh– were all "white" (sic). Jim Thorpe was given a pass only because of the odd status given Indians. The irony of all this is that the first professional sport - baseball– began as an "integrated" (sic) one; the "color barrier" was erected legislatively, first at the state level in the South and then nationally as part of Wilsonian "progress". As late as the 1880s black players were part of professional teams in the North. The ultimate proof of how much "racism" (sic) is a product of the higher mind that brought us universal education is that hockey in Canada remained without a color barrier until nearly 1890s. It was only with the rise of the Cecil Rhodes approach to trade that the descendants of the runaway slaves in the Maritimes were banned from being on the same ice with properly pale players.

Ralph Vince replies: 


My Grandad (who played against Thorpe) played with a number of Negro players in the early 1920s– I had lengthy discussions with him and his recollection was not only firsthand– there is a Negro player who was on his team who is in the Pro Football hall of Fame.



 I visited the New York Transit Museum, and I am trying to think of what I should have learned there that has applicability to markets.

1. I start with that much of the development of life goes from above ground to under ground, and what you don't see has enormous effects much greater than those above.

2. There's the fact that people don't like to go with fixed routes when they can travel in privacy directly by their own volition. And underground use was 8 million a day in 1930, but only 3.5 million today despite all the subsidies.

3. The private sector always does a better job than the public, especially when there's competition. In 1939, the city and state bought out the 2 private companies, the IRT and the BMT, that had been competing and innovating against each other.

4. There's the 60 year delay so far in rebuilding a line on the east side that is typical of public activities, even though it was promised when the elevated were taken down in that area.

5. Real estate prices and population always follow the subway routes, so it's always good to invest in where the subways will take you. In 1900 5 times as many people lived in the lower east side as the upper east side, but it was reversed when they built the IRT's that carrfied people up north. There is talk about ultimately getting the 3rd avenue line going again.

What other things do you see?



Rough winds do shake the darling buds of May

And summers lease hath all too short a date;


 Given the dramatic move in crude this May and the dramatic day in stocks almost exactly one year earlier, I decided to see if the Bard offered any predictive forecasts, May being "windy" and summer being "short".

Not much to offer for trading but the Sonnet if recited at the right time is guaranteed to foster a Spring romance.

2006 to 2011

Not much to offer for trading but the Sonnet if recited at the right time is guaranteed to foster a Spring romance.

SP500 Day Range >50 points

Month  N

1    3
2    1
3    1
4    0
5    1
6    0
7    0
8    1
9    4
10   17
11   8
12   3

Crude Daily Range >$5.00

Month N

1    2
2    0
3    2
4    1
5    2
6    8
7    6
8    4
9    6
10   5
11   3
12   2

SP500 average day June, July and August=  -.25 point
SP500 average day not June, July or August=  .09 point

Crude average day June, July and August= $-.06
Crude average day not June, July, or August $.01



 The east flank of the Chocolate Mountain Gunnery Range, second largest in the world, lies one mile walk from my trailer doorstep where five years ago on a Sunday with scanty jets and thousand-pound bombs lacing the airspace, and the mistletoe draped thick in ironwood trees to duck beneath Navy prop-plane security, I hiked twenty miles across the range to the Salton Sea to visit 320-lb. Big John bobbing on his canoe in the Salton Sea.

The range is where pistol-whipping 'coyotes' abandon illegal Mexicans in the Promised Land who spot dry mouthed the gleam of my trailer and walk in reverse to arrive chewing barrel cactus for moisture and near-death. They were frightened out the range, they say, by the bombs that leave house-sized craters, larger than my modest 10' burrow.
The range is of historic value as General Patton's training ground for hundreds of thousands of troops for the WWII hot Africa campaign and the wide old tank tracks gather sand and stink bugs past my outhouse where the US Border patrol four years ago high-speed chased a vanload of illegals who plummeted into the Millipetas Wash, fled and were never seen again… though others turn up with their heads buried in the cool sand and stiff burning legs.

 Patton's dated 1940's shells, some 6'' long that serve as tea goblets to an annual handful of visitors for a refreshing taste of Sand Valley, trickle down mile-wide Milipetas Wash from the range in semi-yearly cloudbursts that brim the bank 100-meters from the library, outhouse, cook trailer and burrow.

Linux-Care CEO Art Tyde answers invitations to high tea leafleting the property from 500' in his Cherokee Piper with photocopy pleas to ensure one blows to Rancho Scorpion to pick him up in an hour at the nearest cross-road town of Blythe.

We recline on lawn chairs 15-feet above the 110F desert night floor on the library semi-truck van roof via a spiral staircase to view Orion and four-hour war stages of a half-dozen helicopters with blinking red taillights dropping Marines here-and-there and sometimes mistakenly near ground-zero flashlights at the Rancho. We ease back in the chairs as a dozen roaring jets climb and dive and release like Dumbo 6'-bombs that pock and shatter the eardrums sending ten-story brown blasted plumes that drift like War of the Worlds on westerlys with parachute flares that light an itinerant three-mile cone to the rancho as 5-mile-long rainbow tracers from 1000-rounds per second airborne machine guns and the rockets' red glare blasted from jets at green dummies on the ground.

The show is all the Fourth of Julys across the great nation and the Star Spangled Banner rolled into one that costs the taxpayers two million dollars per week by my conservative estimate. After a sound night's sleep on the burrow waterbed, that double as an emergency bank, I ride the range in another neighbor's custom dune buggy gathering hundreds of pounds of aluminum bomb fins and brass copter shells to sell at the Salton Sea recycler for a record $1000 for one day's take. My fixed expense for this is $23/year property tax that's paid for by the range collectables among sidewinders and tarantulas.



 Instead of all the stories about seizure of the most significant and detailed terrorist intel in history, wouldn't it have been wiser to leak the story that the hard drives and cellphones were pretty much wiped clean, that OBL was scrupulous in protecting his terrorist network? That way all OBL's Al Queda lieutenants and contacts might have been misled for a time, might not have changed all their communication and codes and scattered away immediately from their existing locations.

But I guess this continued bragging for the media and electorate is a lot more important than actually rolling up the OBL's network.

Pitt T. Maner III writes:

The geological clues from the early OBL videos looked promising at the time in the efforts to pinpoint his location. Perhaps more of these type of physical backdrops will be uncovered in recent pictures, videotapes, hard drives, etc. There are probably similar electronic data location clues as well.

Dr. Jack Shroder, a geologist from the University of Nebraska Omaha, was a key player in the field of geomorphological hide and seek:

After September 11, local reporters contacted Shroder and others at the Afghanistan Studies Center. Then, one day, a reporter for the San Francisco Chronicle called and asked him if he knew where Osama bin Laden was in the September video that aired on CNN. "In an inadvertent moment, I let that San Francisco Chronicle guy know that I knew where it was and all hell broke loose after that." Shroder says he knew the rocks and landforms and could place them in the western Spinghar (White Mountain) region of Tora Bora and nearby. "I was smart enough to know that I ought to mislead the media a little bit before I gave away something that I shouldn't have." So, to protect the sensitivity surrounding bin Laden's whereabouts, Shroder told the reporter a location he knew was probably not exactly right. He didn't want the press to have that precise information before the U.S. government did.



The debt crisis in Greece has taken on a dramatic new twist. Sources with information about the government's actions have informed SPIEGEL ONLINE that Athens is considering withdrawing from the euro zone. The common currency area's finance ministers and representatives of the European Commission are holding a secret crisis meeting in Luxembourg on Friday night.


Paolo Pezzutti writes: 

I think Europe will be in a serious crisis when a slowdown or recession comes. The system is so fragile and some countries are so close to the edge of non sustainability of debt payment that it is only a matter of time before we see them sink. However, the system is so resilient that you don't know how long this situation can last. I have been betting on this event for months and months now and I have put together only losses on this scenario.



 An interesting revelation in an article by Ireland economist Morgan Kelly.  But why Geithner's veto? "Perhaps haircutting the Irish bonds by two-thirds would have made Geitner and the Administration look particularly bad in light of their $160 billion full bailout of AIG in order to make sure Goldman and French counterparties were paid in full":

"The IMF, which believes that lenders should pay for their stupidity before it has to reach into its pocket, presented the Irish with a plan to haircut €30 billion of unguaranteed bonds by two-thirds on average. [Irish Finance Minister] Lenihan was overjoyed, according to a source who was there, telling the IMF team: "You are Ireland's salvation."

The deal was torpedoed from an unexpected direction. At a conference call with the G7 finance ministers, the haircut was vetoed by US treasury secretary Timothy Geithner…"Perhaps haircutting the Irish bonds by two-thirds would have made Geitner and the Administration look particularly bad in light of their $160 billion full bailout of AIG in order to make sure Goldman and French counterparties were paid in full.

Full more here.



The world lost a good one. 



 With the new documentary HOW TO LIVE FOREVER, director Mark Wexler examines what it takes to live a long and—fulfilling? life —physically, mentally, and spiritually. The one-two punch experiences of the death of his painter-mother and the arrival of his AARP card were the seedbeds of his filmic research, in which he explores the most fundamental of human connections to life.

As a Southern California native, Mark's natural instinct was to live longer and, as Botox, surfing and Hollyweird attests, younger. In HOW TO LIVE FOREVER he embarks on a global trek to investigate what it means to grow old and what it could mean to really live 'forever.' But whose advice should he take? Does 94-year-old exercise guru Jack LaLanne have all the answers, or does British Buster, a now-103-year-old grizzled, chain-smoking, ale-guzzling marathoner? What about futurist Ray Kurzweil, sci-fi guru Ray Bradbury, a 'laughter yoga' maven, or an unassuming 74-year-old new-age Japanese recent porn-stud celeb (who chuckles: "I've made what I think are 200 films since I became a porn star." Amazing clips of some of his starring vehicles expand the average viewer's mental apparatus on what constitutes the upper regions of sexuality. He is part of the growing industry of older porn that is apparently taking the Far East by storm)? Wexler explores the viewpoints of piquantly unusual characters, alongside those of health, fitness, and life-extension experts in this engaging doc, which by the final credits challenges our notions of youth and aging with sometimes-dour if often-comic poignancy.

Begun as a study in life-extension, studying beauty contests for the AARP-aged, wandering to Las Vegas for connubial ceremonies for first-time married octogenarian set, then to cryogenic facilities for preservation of bodies ($150,000 a year) and 'neurologies' (heads alone, a bargain $80,000/year) until medicine finds a way to re-vivify these preserves in their jet-age stainless steel cylinders, LIVE FOREVER evolves into a thought-provoking examination of what gives life meaning.

One amusing sequence has Wexler confronting pierced and tatted teens through flinty centenarians, "If you had a pill that extended your life 500 years, would you take it?" Shades of the 2011 sci-fi LIMITLESS, which energetically explores a similar concept, except expanding the brain's capabilities to its maximal level. As many people say no to the 5-century-pill offer, interestingly, as say yes. Even the quite young think a beat, then often say that life gets its seasoning from being limited. One couple in their 80s is asked. The husband immediately assents to the idea: "Sure!" He agrees—lots of things to do, learn, experience. His wife looks on, unperturbed. At her turn, she answers, "Why would I want to stay married [to him] another 500 years? No, please!"
In addition to Jack LaLanne (a year before his recent death at 95) and futurologist Kurzweil, the film also features zesty interviews with writer Ray Bradbury, the still hysterical (in both senses) Phyllis Diller, newsman/interviewer Willard Scott, exercise doyenne Suzanne Somers, and writer Pico Iyer (a former colleague from when we worked at TIME). One physician, a surgeon, is still practicing surgery daily at 94. (He doesn't look it.) He shares the amusing nugget that he "doesn't often tell colleagues how old [he] is." He's thinking of leaving the office next year, but enjoys the camaraderie of the 'superior people' he encounters in his field, and regrets having to stop work, when and if.

Clearly, Wexler finds elderly who are both sensate and compos mentis in addition to being up there in moon count. It's no great shakes being older than the galaxy if you aren't also full of the life that could make use of the increasing years. He dismisses the claims of many in exotic climes who stake their ages to high triple digits because they offer no proof, and suggests they are motivated by competition, cultural tendrils and other aspects of society to claim older years than they are entitled to by the clock.

The people Wexler does find, among them a 122-year-old who seems unsurprised and unimpressed by the news she is the world's oldest person, offer a mix of advice for staying alive: From "Get yourself good parents and genes" to "Drink a coupla glasses of vodka, eat lots of chocolate and meat every day" and "smoke yourself a pack or two of fags" just to stay in the game.

Some gerontologists might disagree, but then again, how many of them can offer competing digits along with their advice and bromides to the longest lived?



Speaking of commodity spillover, I'd be interested to know the historical effect on near-term stock prices when commodities hit a "high" and then decline.

Many thanks,


Russ Sears writes: 

One data point that may be applicable is Silver Thursday

Mar 27 1980 S&P closed 98.2
next day 100.68
5 trading days 102.25
21 days (April 28) 105.64
June 27 116.00

Looks pretty bullish.

Tim Hesslesweet adds:

Spot energy.

Nymex energy futures.

Kim Zussman writes: 

Using Tim's linked data for Cushing WTI spot crude weekly prices, constructed the attached comparison plot of log (spot crude) and log (sp500). Log (spx) was scaled -1 log unit (divided by 10) in order to readily compare the two.

The chart shows a similar gain for crude and SPX over the interval, 1/87-5/11. Crude remained relatively flat through the 90's while stocks gained. Oil bottomed in 1998, and from this bottom to the peak in 5/08 gained about 10X.

IQ1 marks the 1st Iraq war, with an expected spike in crude price and drop in stocks. Both stocks and oil were near many-year highs in 9/00, and both declined together until a few months after 9/11, when stocks continued to drop but crude rose. At the outset of IQ2, oil spiked and stocks sagged - like the prior Iraq war. From this point SPX rose consistently, and after a few months oil followed.

Stocks hit a many year high in 9/07 before turning down, and crude did the same 8 months later in 5/08. Subsequently oil bottomed faster - in 12/08 - and stocks in 3/09.

For crude and SPX there does not seem to be a clear relation between peaks and valleys, though there was a contemporaneous inverse relationship with two wars in the middle East.



 One of my favorite employees has a funny husband. Raised in the Midwest, his folksy sayings are often quoted by her during surgery. "Daddy's on the floor!" he shouts, in the morning once he's arisen from a night's slumber; out of bed, ready for a day's enlightenment (in retirement). The man of the house has arisen….and to every one and the only listener, he requires the family's attention.

This phrase again came to mind with yesterday's image of an Osama lieutenant; lying executed next to a child's fluorescent green toy water pistol. Some children have mass murderers for fathers, and I wondered if as a result this child is less a child and father is less a father.

We read they lived in full purdah– wives are required to not slumber with their husbands. And that the master killer wore a traditional salwar kameez when posing for the described portraits. Cultural traditions that seem different from ours, but in framework the same. The daughter who witnessed her father's disassembly was named for a spy who "killed a Jewish spy at the time of the prophet"; though it was as not so much this kind of spy that laid him down as it was cowboys of different cultures.

Dan Grossman writes:

I admire Kim's lending a little sanity to the Administration's celebration of the event.

I myself have no problem with sending Navy Seals to execute someone we are at war with, who planned the terror attack that took the lives of 3,000 Americans and that has cost us all years and hundreds of billions of dollars of delay, pat-down, and other sniveling procedures as we continue to allow the government (in what is more a "theatre of security" than anything effective) to permanently disrupt the lives of 310,000,000 of us. What I do feel uncomfortable about is:

1. Having the raid televised back to the White House situation room so that Obama (who was so crucial to the planning that he was actually on the golf course and had to rush back), Panetta, Hillary et al. could watch every step. This had to make the raid less efficient and more dangerous to the Seals, and why was it at all necessary other than to give the situation room viewers the false thrill of video-game-like participation?

2. The Administration's putting out the story (presumably to somehow justify the execution) that the unarmed OBL acted in a "cowardly fashion" when the Seals burst into the bedroom where he was with his family. Let us imagine how Obama himself, Panetta, Hillary or any of us might act if we are in our bedroom with our family and armed executioners burst in about to shoot us in the head.

And if Obama had to fly to Ground Zero and then fly to the Navy Seal base to keep the favorable publicity going (but of course not "to spike the ball"), it would have been classy to have invited George W. Bush to appear at Ground Zero with him. For all his faults, Bush did have a calming effect on the country and show personally bravery by, among other things, throwing out the first pitch at Yankee Stadium at a time when there was great fear of another attack and credible rumors of a nuclear weapon in NYC. 



 Would you attribute the decline to knowledge that the man who doesn't like to spike the ball is 100% likely to become boss and increase the service rates for fairness, or the positions of the chief terrorist are being liquidated, or the spillover declines in metals and commodities and oil and oats down 5% is affecting stocks, or my favorite disillusionment, that the father figure above all next to the scholarly former Princeton chair has shown his spots, and they are black, and new info will be disclosed by the temporarily disgraced and discarded right hand man, and that this creates the loss of a father figure et al.

Gary Rogan writes:

100% is way too high. Both predecessors had over 90% popularity at their respective warrior moments of glory but it didn't last at one for the first one, and only barely for the second one.

He is resorting to deliberate confusion about releasing the photos just to prolong this for a few more days. He has done a lot of damage to the meme that his not of this place, but only temporarily. In just a couple of weeks he will face a renewed assault. He'll be winning on the gas price then and talking that up, but there is nothing he can do about unemployment: there is a feedback mechanism in place, the higher his chances are the higher unemployment will go.

Victor Niederhoffer writes:

Exactly the latter point you make. But what does intrade say now?

Gary Rogan writes: 

Well, even that is only at 60.9, but I have not found its predictive power meaningful so far in advance. Two days in advance it's really good because people with access to some hard data or are doing the cheating are moving the numbers, but now it's just as susceptible to the temporarily enthusiasm as an average man on the street.

Jim Sogi writes:

The Princeton pundit did say the spike in commodities was going to be short lived a few days back. Remember also the advice to buy stocks the day before the low. It may be worthwhile not to discount them at their word on these things because they have a lot at stake and are willing to do anything to stay in power.



One admires the way bonds have gone up 6 days in a row "very quietly" as Grandpa Martin would say to a 6 month high in a clear manifestation of gestalt theory, the theory of least observable differences, the frog in hot water theory, and how to inflict maximum pain on one side of the market, the shorts, without giving them cause to jump off the bandwagon. And also, how the bonds predicted the decline in commodities.



 One day in 1979, I went down to Staten Island during the day to play Ruben Gonzalez a game of racketball. It was while I was pyramiding gold, and I had been able to pyramid 50,000 into 20 milion in 6 months. I had given instructions to my staff before hand that if I ever lost half, they should sell me out, plug their ears with cotton and not listen to me if I told them to disregard my previous instructions, having read The Iliad and learned from my hoodoo father in law, (who lived to 90 with one leg and a completely dissipated intestinal system (as he liked to boast and prove he could outdrink any man)) that people in Vegas always had a stop point for how much to lose, but never from how much to win.

We split the first two games, and then I called my office. It was a day like yesterday when all commodities were down 10% my office told me. (It all started after our first game). I had lost 15 million. They had followed my instructions but before they could get me fills, I had lost another 5 above the 10, (those were the days when silver traded limit down for a week, and the only way to get out was exchange for physical, etc).

I left the court and club without saying goodbye to Ruben after that second game (it's two out of three) after berating my staff for selling me out (that staff is still next to me 31 years later, as Pug Pearson's wife said about the diamond ring she's still wearing that her husband threw into a pot after taking it off her ring finger as collateral during a no limit poker game on the evening of her honeymoon).

Yesterday at 5 pm, for the first time in 31 years, I saw Ruben again. He has been playing pro racketball for 35 years, has won many world championships, and last year got to the quarterfinals of the nationals, and still plays in the open circuit. Ruben was hear to deliver some art that he had painted, and I loved the paintings I bought.

Ruben was the best sport in racketball aside from Hobo, and we hugged when we met. He said to me, "Vic, I haven't seen you in 30 years, since you walked out of that racketball court without saying goodbye to me. How come?"

I realized at that time that commodities today, May 5th, had had their worst day ever since 31 years ago when I had seen Ruben for the last time. What are the chances of that happening without attributing it to a commodities hoodoo?

But as Paul Harvey would say that's not the end of the story. Ruben challenged me to a game of racketball on the squash court down stairs. We played. ( I used a tennis racket and he used a racketball racket).

One– at the age of 90 + (older than the octogenarian sage who is equally sanctimonious)– I will not be overly hubristic to reveal the outcome of the game. I will say however, that I bought some more art from Ruben, (a very good thing), and he's going to deliver it when he finishes it.

I'll tell you a day in advance when he's due.

Vic (l), Ruben (r).











I thought this was a great article explaining the decline of thoroughbred racing in the USA.



 My friend Art Shay grew his journalistic teeth I believe at Columbia University. The actual impetus though was playing army bugle, picking up the melodic keys for his trademark pen. He also navigated a harrowing WWII bombing mission of which he's prouder so it was probably no big deal getting shot at a couple miles high. Make no mistake though, he's the greatest B&W photographer of the 20th century, his strength is in copy. He told me Life & Look originally hired him for copy, and he transitioned into photography to shoot over a thousand covers for publications. His recent kudos are buried in my folders, but you may find a two-month old feature on 'Shay and Raquetball photography' by Huzek in "Racquetball" mag, and the treasure trove Chicagoist "Art Shay's Vault" published biweekly that I've occasionally forwarded.



 This story seems to have died (or died down). Could it be the ace in the hole to get the debt limit approved without major cuts?

"Sex Scandal Might Bring Down John Boehner"

Progressives could use some positive political news, and here is the best I've heard in some time: John Boehner's speakership in the U.S. House of Representatives might be short lived.

Boehner has been involved in extramarital affairs with at least two women, according to a new report in the National Enquirer. We don't normally cite supermarket tabloids as primary source material. But the Enquirer was first to write about the John Edwards' infidelity, and the newspaper proved to be right on target. And back in the early '90s, the mainstream press picked up on the Bill Clinton/Gennifer Flowers story after it broke in a tabloid.

In Boehner's case, the Enquirer gets into specifics–and that gives the story a ring of truth:
Capitol Hill insiders and political bloggers have been buzzing about an upcoming New York Times probe–detailing an alleged affair that the 61-year-old married father of two had with pretty Washington lobbyist LISBETH LYONS.

And an ENQUIRER investigation has uncovered a bedroom encounter that Boehner–second in line of succession to the presidency–allegedly had with LEIGH LaMORA, a 46-year-old former press secretary to ex-Colorado Congressman JOEL HEFLEY.

Here is the full story.



 TRUE LEGEND held a lot of meaning for me, partially because I lived in Hubei Province, and the scenery/settings of the film were familiar to me from my travels in China. The costumes were gorgeous, inventive and worth a whole review in themselves. I liked the omission of ill-treatment of women, which was of course the case in the latter part of the dynastic period ending in the early nineteen teens. The period of this film is 1869. Though it was not historically accurate, I enjoyed the love story and the magnificent though strained familial ties greatly, especially absent the usual dismissive treatment of females during that time–a wise scripting choice for this viewer, at least.

Su Qi-Er retired from his life as a renowned Qing dynasty (1644-1914) general in order to pursue his creation of a family with his lovely, accomplished wife, Ying, and his own martial arts school in wushu. Su's idyllic life is destroyed peremptorily when his angry adopted brother, Yuan Lie, kidnaps his son, Feng, and leaves the soulful Su for dead in a harrowing near-death by cataract waterfalls. Saved from his watery demise by his loving Ying and the reclusive, ethereal doctor Yu (who rapels off precipitous heights regularly to get the herbs growing wild against the steep cliffsides that she heals her patients with), Su resolves to heal fully and perfect his technique so that he may defeat his brother-in-law Yuan Lie and reunite his family. Aided by the mystical "God of Wushu" and the eccentric, long-white-bearded Old Sage who is a staple in such films and myths, Su masters the stupendous art of Drunken Boxing, and embarks on the restorative fights for honor and family path that eventually gave rise to the legend of the "King of Beggars."

I very much appreciated the costume drama for its stately reconstitution of the nineteenth century in gorgeous, exotic backdrops, exorbitantly beautiful scene backdrops, paintings and photography, marvelous sets and nature captures, as well as the remarkable CGI effects that showed off the martial arts to extravagant effect. Like CROUCHING TIGER, some 10 or so years ago, LEGEND's flights of martial art wushu soaring provided magic and fantasy that lifts the spirit and offers a soaring vision for viewers to ponder and marvel at.

The actors too were well within the limits of believable, with a winsome leading lady, Ying, a charming and believable young boy, Feng, and handsome combatants in the brothers-in-laws, father-in-law and worthy court retainers.

It was a pity that David Carradine was seen for such a brief time, but it was understandable, given his regrettable death shortly thereafter; perhaps there was a problem with his total footage, and the segments were not therefore re-shootable.

The single thing I found negative was that the fights were far too lengthy and the choreography after a time became a bit boring, as no fight in the world could last as long as they did throughout the film, particularly in the last scenes, where the protagonist sustains attacks by four brutish Caucasians for an endless amount of body bruising. I know young boys go to this type of film for the fights and the choreographed mastery of hand to hand combat, but even a stalwart defender of these arts gets exhausted at the idea that a human being could continue to fight without a break for so many untrammeled minutes. The film could be just as good with a series of minutes lopped off, and the fighting contained to a more sustainable few minutes each. There is ample eye-candy to charm and tease the eye and mind without these extended combat sequences.



It is refreshing to experience mythology in real-time. Yesterday, CL stop running was near picture perfect, acceleration through resistance, a short reversal and pause to retest, then a sharp move to take out the next.

But then again, describing a chart formation as being a resistance or support is subject to one's perspective. For clarity, support should replace resistance.

Victor Niederhoffer writes:

One must not forget the ecology of markets. All related. Down big in so many has gravitational and equilibrating return. 

Jonathan Bower comments:

Overnight CL trading reminded me of this Simpson's episode. Enjoy.



 A while back, someone asked about the value of doing nothing. I had two positions on going into this morning - short S&P, and short natural gas. Had I not turned on a computer today, I would have made enough money to forgive many a sin of the first quarter. As it is, I ended the day breaking even when I had started out being significantly short two markets that gapped in my favour and then later basically went over a cliff. I won't go into the gory details of what and why I traded - nor share my feelings - but I'm pretty convinced that I'm going to have to hire a guy with a gun who, after I've set up the trade and the risk management, under contractual obligation is required to say to me "Sir, step away from the keyboard, or I'm going to have to shoot you in the head."

I would say there is value in doing nothing.

Speaking of doing nothing, the hockey game is on and the couch beckons.

Alston Mabry comments:

 One sympathizes. It brings to mind this proverb.

Kim Zussman writes:

 Randomly speaking, the market might have just as easily shot up and you could have avoided regret.

Gordon Haave writes:

Whenever I am in a business meeting and someone has come to it with some pressing need we have to react to right away, I always ask "what if we do nothing?". Everyone is always stunned.. they haven't even considered not doing anything. After asking that usually the consensus become to, in fact, do nothing.

Alston Mabry writes: 

 I would say that the over-arching issue is that the Market Mistress can torment her lovers in many, many ways. And experience would lead one to believe that tormenting her lovers is, in fact, her main obsession.

George Parkanyi replies:

Oh sure, Kim, you're right about that. But I had my risk management in place. Stops. But the point is, I had my idea right, and the method of executing basically set up to exploit the anticipated scenario. That would have played out very well, since there was nothing more that I needed to do at that point. Then I started changing stuff …

I don't mind being wrong, because that always happens in the markets, and you plan for it. What really gets me angry at myself is when I'm right and then I get in my own way. What other people do, I can't control, but what I do I SHOULD be able to control. Not being able to maintain self-discipline is a character flaw that has to be actively managed, and today it got the best of me. Doesn't always, but today it did. (Tomorrow may not be so good either, because before the close I went long a little silver.)

Jim Sogi writes:

Well, the next best thing to doing nothing is doing just a little to see what happens. If you're wrong, not such a big deal, but a small sample gives a good sign. Like Commodore when the guy gives him a hot tip in Reminiscences of a Speculator. See how it gets swallowed up.

Jeff Watson writes:

Jim mentioned probably the best thing I ever learned in my speculation game which is still going since 1973. "See how it gets swallowed up." Second best lesson I ever learned, but it only works with big orders and can tell so much about the markets, where they are, where they're going, who want's what, etc. Many things can be said with words, but until the order is put to the market, one can't say anything. The order getting digested is where the rubber hits the road and contains so much information(even in these electronic days), almost 10,000 pages per order if one is willing to keep an open mind and analyze it. The Commodore's system still works well in the grains, more than any other market I've seen and has been responsible for much of my limited success.

Vince Fulco writes:

The multi-day swing boys and the deep pockets are the big winners in GC1 so far tonight. Late afternoon, the contract came in like a ton of bricks as ES tumbled, with modest movement in equities after hours, zoom goes Gold as if the latter part of the day didn't even matter. The solid long moves all seem to be held "in reserve" till the day traders are flat.

Jim Sogi responds: 

I know its so minuscule, but the market knows when I put in my and my order makes it harder for Globex to move to the price and for a fill. I try to stealth even my limit orders keeping them mental until the price is where I want, ambush like. It puts me near the end of the queue, but at least its the right queue at the right price tick. Less chance of the hunter becoming the hunted, less exposure.



 Here is a very interesting article and a quick read:

As a culture, we continue to undervalue and even demonize rest and renewal—to our collective detriment. Sleep and rest are the first things we're willing to sacrifice in the name of getting more done, even if the consequence is doing it poorly. Too many employers evaluate their employees by the number of hours they work rather than by the real value they generate. The archetypal hard worker still arrives at work at dawn, stays into the evening and brags about getting by on 5 or 6 hours of sleep. Far better to get sufficient sleep, arrive later, leave earlier, and take intermittent times to rest and renew during the day. You'll pay better attention and do better work, but you'll also be more productive, because you'll get more done in less time.

Pitt T. Maner III writes:

This concept is in use by the NBA too:

" Some N.B.A. teams have received an education in the art of napping from Dr. Charles Czeisler, the director of the Division of Sleep Medicine at Harvard Medical School and chief of the sleep medicine division at Brigham and Women's Hospital in Boston.

Czeisler, known in the N.B.A. as the sleep doctor, has consulted with the Boston Celtics, the Portland Trail Blazers and the Minnesota Timberwolves about the virtues of receiving enough sleep. Napping was a significant piece of the tutorial.

Czeisler said he thought that N.B.A. players needed more sleep than the average person, about nine hours a day. Typical N.B.A. games end about 10 p.m., and with showering, eating, interviews and unwinding factored in, many players do not get to sleep until much later. If they are traveling to the next city after a game, they may arrive at their hotels after 3 a.m. There may then be a morning shootaround that requires getting up by 9 a.m. or earlier. Who wouldn't want a nap?"

(At the moment Lebron's power siesta, however, is outdoing the Celtic power nappers.)

Check out the Harvard Sleep Medicine Website also: (with mention of air traffic controllers also –and interesting points made about tired, young texting teens).



 It is called "seat fries" in my house. Comes from giving your kids french fries in your new car…the next time you clean the back seat you are bound to see a couple of those fries someplace you cannot reach without taking apart the seat or else requires the use of surgical robotic equipment.

Modern design finds its weakness in everyday modern life.

Which is a restatement of the engineer Edward Murphy's original law which originally was "if there's any way they can do it wrong, they will" Murphy's law originally was meant to lower system design errors, by taking away the possible mistakes. Sometimes this increases convenience of the design, such as having different snap connectors for positive wires versus ground wires. However, most often preventing this type of error makes the system more inconvenient to use.

Such as 6 screens, drive thru finger food, and bicycle helmets.



Glencore (aka the metal men) IPO top ticks a number of markets within days. Not even Blackstone et. al had that kind of timing skill in the last cycle.

James Goldcamp writes:

And don't forget the tendency for central banks to move to an accumulative posture relative to the metals. Alas, the "convergence" of these types of indicators is too infrequent I would suspect to be of counting value.

Anton Johnson writes:

And let's not forget the guaranteed to happen yin yang of Zell's of near perfect timing vs. Blackstone, and his subsequent dinosaur endeavor.



Douglas Rassmussen will be speaking on the following subject on Thursday May 5th at the junto at The Mechanics Institute at 20 West 44th Street, New York, NY:

"Check Your Premises"

Defenders of Liberty grant their opponents a crucial premise, that the aim of government is to assist people in attaining their well-being. But what justifies this premise?

All are welcome. Hope to see you there.

Here is a link to the Junto's meetup group.



 It is interesting that in many of the electronic markets that one has traded millions of contracts in, but still don't know how to participate in the official "opens" where there is a "single price" determined by a complicated set of rules that would take a hundred lawyers a year to figure out, the "open" is often the extreme of the day, and the only people who get it at the extreme are those who somehow have figured out how to trade the "open" or who have the equipment to do so. Such a situation occurred in the Bunds today, where it opened at "80", set a high of "82" a nano later, and then very delicately as my grandfather Martin would say, fell all the way down to 20 or so, "relieving" all the longs of their hard earned "wherewithal". The days of Livermore and Grandpa Martin, of Morse and Little and Boss Tweed and Drew and Travers ("although of genial disposition, he was a chronic bear") are not forever gone.

Nor for that matter are the days of James Hill who could not resist succumbing to some inside trading in railroad stocks based on the Chinese situation and who Harriman, the decorated political office holder and flexion cubed of his day, turned in to the office holders of the day for "hearings" and punishment for his "inexcusable and inexplicable behavior". James Hill who built the greatest railroad, the Great Northern,and spared no expense to engineer it perfectly for safety and efficiency and inspected every inch of the track he layed. Reminds one of the Scapegoat under fire today. 

Vince Fulco writes:

I have had the chance to tour his home in St. Paul last year. I dare say while opulent for the area, it was a functioning house and not a copy of the palatial, "money is no object" places like the gilded age titans out East. In keeping with the grounded, pragmatic Midwestern mindset I have witnessed often. The boiler room running hot water through the house; the first of its kind in town, is simply not to be believed.




I was a white collar criminal. Convicted of securities fraud. I sold securities that were a classic ponzi. I went to a federal prison and served 33 months. Why did I do it? The answer is not easy. I am currently 41, and committed my crimes at the age of 27. I did it because I was impatient for success. I felt that the world was bitter and cold and that I should also be bitter and cold. I did it to impress my father. He never thought much of me and I desperately wanted his acceptance. I did it fulfill my own feelings of inadequacy. I did it for the money, it was easy and fast.

In retrospect, I was a monster. A sociopath. A very ugly person.

Would I do it again? If the stakes were right, I probably would. I have felt the terrible sting of the federal whip, have been subjected to the worst the penal system has to offer. Stuffed into a solitary cage for 39 days, slept on a cold floor with only a blanket of human hair and fingernails. Been publicly humiliated in the newspaper, TV, and internet. So, why would I possibly take such a risk?



 I knew Niederhoffer better than Hogan, and we played often at every sport imaginable, and using equipment of one against the other to homogenize our strengths. It's quite clear that he trounced me in tennis, ping pong, badminton, squash, and every other racket contest, except I was a nudge better in paddleball and racquetball. He beat me, Hogan and another top player in an informal late 90s All Racquet fest at his CT home, and carried a gimp leg into and gimper out of the event. There's no question who was the best overall.

Victor Niederhoffer comments: 

Those were the days. -v

Howard "Uncle Howie" Eisenberg writes:


My recollections of the event follow. Since it was 36 yearsago and I am at an advanced age, I may be off by a point or two in the recounting.

Vic, coming off wins in the 1975 US, Canadian, and North American squash championships decides to win the International Racquetball Assn championship, never having played the game. This is widely quoted by Sports Illustrated, People Magazine, Esquire Magazine, and other publications including a 7 page article about Vic in the NY Times Sunday edition all of which focus on the prediction of the eccentric commodities speculator who wears different colored sneakers along with his tieless business suits in meetings with clients of his 1/2 billion dollar hedge fund such as George Soros.

There is very little racquetball being played in the NY area at the time. He enlists my aid to learn the basics. Although far inferior to him in racquet sports, I attempt to impart what I know about 4-wall handball to him. He acquires the rudiments of the game practicing with me and mostly by himself at the 92'nd St. YMHA using dead racquetballs on a court with an 18 foot ceiling on which it is virtually impossible to hit effective ceiling shots. He continues his training regimen that includes running through the streets of Manhattean wearing sweat socks as gloves, holding a squash racquet "to ward off muggers". We go to Vegas 2 months later. Vic plays a 1'st round match watched by Ektelon founder, Charley Drake, Keely, and Hogan who is to be Vic's second round opponent. All of them scoff at this "big mouth" upstart who has provided locker room bulletin board material with his presumptuous prediction of victory as he lumbers around the court in a manner that would never have him confused with Barishnakoff.

Vic and I bet Drake $500 on the Hogan match. Thirty seconds before it begins, Keely comes running over with another $500 to bet which we cover. It isn't in traveller's cheques. Our upbringing at the Brooklyn dens of iniquity where the heavy action on handball, paddleball, pool, crap games or whatever takes place has tought us that if you want to ensure getting paid,the money has to be up - in cash. Hogan takes a quick 10-0 lead and it looks like Vic not only doesn't belong on the same court with Marty, he shouldn't be in the same state with him. Things get a little more under control after that with the two trading points, Hogan winning 21-11. Throughout this game and the entire match, Hogan attempts to psyche Vic out by facing the back wall, placing 2 hands on it and sticking his ass out at Vic for 8 of the 10 seconds allowed to receive serve. The 32 year old Niederhoffer has been playing tournaments and money games since he was 10 years old, so this purile attempt by the 17 or 18 year old neophyte has as much effect on Vic as a minnow on a barracuda. The second game is a continuation of the 1'st with no one taking more than a 2 or 3 point lead until 18-all when Vic gets Hogan out and runs the 3 points to win.

Initially in the 3'rd game, it looks like Hogan has been broken with Vic taking a substantial early lead. However, there is a pervading dynamic in this match. Hogan is playing racquetball, serving with great velocity, driving, and killing while Vic is playing squash in a racquetball court, serving softly, retrieving, keeping the ball in play and rarely going for a kill shot. Marty's well honed racquetball skills come to the fore as he gets to 17-19, then runs 3 for match point. The 5' 7" Hogan then executes a black power salute thrusting his fist in the air in Vic's direction. Undaunted, Niederhoffer approaches Hogan and reaches down to place the ball on his forehead. Hogan serves and Vic hits the 1'st back wall kill shot he has attempted in the whole match to regain the serve. This is followed by a squash shot, a boast, which is hit into the left wall, hits the right wall, and unreturnably just grazes the front wall. After a timeout giving Hogan a chance to feel the pressure, Vic hits a terrible serve which Marty drives past him deep to the left. With the ball dieing near the back wall, Niederhoffer reaches behind him and with wrist action, flicks a backhand into the left sidewall. The point of impact is more than 1/2 the court back, which if the angle of reflection is to equal the angle of incidence could never reach the front wall. However, the clockwise spin imparted causes the ball to hook at a greater angle off the wall continuing to the front where it rolls out in the right crotch.

With a full glass back wall, the only way for the players to hear sounds from the outside is via the microphone used by the ref. That is, unless there is an elated uncle bellowing in delight at 100 decibels at what has just transpired. It was this loss and a loss to the aging Charley Brumfeld in the finals of the nationals a year later after Hogan had won most pro events that resulted in the epithet of Hogan not being able to win the big ones. By the following year, Marty's superiority was firmly ensconced with him transcending whatever residual trepidation resultant from the Niederhoffer loss . Perhaps the echos of the Eisenberg victory expostulations had tamped down by then.





 An ironic point of probably no predictive value is that for the first time in a long time, the Euro-currency appears more attractive to investors than the precious metals.

…or is it just that "investors" can no longer support their speculation, as a consequence of HFT robots frontrunning Palindrome frontrunning both Portugal Bank and the CME announcements.

But of course the greater significance is the matter of a Swiss Currency boldly exploring the unheard of "85 francs to 100 dollars" — and when this today's world's singular pinnacle may finally be wearing out.



 Remote is my idea of an Eden for retirement or to spend a few months each year.

Forced into teaching retirement for trying to prevent a California playground war, I started globe-trotting to unwind from the America trials and in search of Edens. Within two years, I found myself a peripetatic ex-patriot surfing the world Shangri-las.

The top three have been Iquitos, Peru, San Felipe, Baja, and Lake Toba, Sumatra.

Iquitos, Peru at the headwaters of the Amazon is pleasantly jungle strangled and water bound to escape nearly every world influence of the last 50 years. Daily air flights from Lima drop a handful of tourists who usually imbibe the hallucinogenic ayahuasca, marvel at the 3:1 female to male ratio due to soil concentrates and, as the Yellow Rose of Texas ex-pat proprioter explains, 'Arriving in Iquitos is like traveling to the 1930's USA'. One in a thousand visitors remains, including a surprising twenty Americans entrepreuners who manage small businesses. An attractive option is a Peru resident visa to anyone on Social Security pension.

San Felipe, Baja, Mexico hugs the Sea of Cortez with the two grand advantages of location just two hours from the California-Mexico border, and a tourist slump from the global recession has opened hundreds of ranchos, houses and apartments for dirt-cheap. Meals are economical and hardy, the locals amenable, and there's lots to do in the water and desert.

I'm sitting in the third Eden, Lake Toba, Sumatra, a far flung volcanic island among the robust, beautiful Batak people. Their jungled mountainside resort of orangutans, huge butterflies and waterfalls is open for vacancy since a 1970's tremor drove most of the tourists off the island. A daily ferry drops a new trickle from the mainland and six bus hours past baboons on yield posts from the Medan international airport.

Who says you must stay in one Shangri-la forever?



 The early mornings are going to provide a huge astronomical bounty for the next couple of weeks. Lined up along the ecliptic, early mornings Mercury, Venus, Mars, and Jupiter are visible to the naked eye and Uranus and Neptune are visible with a telescope . Only Saturn is missing from the mix.  Here's an easy to use sky map of the planetary alignment.



 Yesterday's release of GBP PMI Manufacturing number saw the market drop 60 points 2 minutes before the announcement in a 74 point 1 minute range, and in line with the weaker than expected announcement. The market than went back to its happy 5-10 point 1 minute range for the rest of the evening. More flexions at work?

Paolo Pezzutti writes:

All algos working around the globe now are working to buy any type of dip following "bad" news. I don't know if there's an agreement among strong forces to do so or if, more simply, this kind of behavior has generated "spontaneously" because of other considerations (quant, fundamental or whatever). It would be interesting to learn what would take to change their trading approach. Probably a sudden and "unexpected" big loss. I don't think that "smooth"adjustments of market sentiment could influence this raging river of money flowing into the markets. However, it is well known that some believe that the least beating of wings of a butterfly is able to cause a hurricane on the other side of the world. Paolo



 I have been asked what I think about the fed model these days. Here's my answer: pretty positive.

The earnings price ratio is still way 2 percentage points ahead of the 10 year rate which is very bullish empirically. Of course with the odds of the trigger man now 100% to win, we can expect great increases in the service rate, which I believe should be factored in some way. Probably the reason that 08 went down so much. Of course, the reason the market went down so much was to force him not to raise.



 It may take Trump to get the photos released to the public.

News now cautions USA about too much jubilation!

After 9/11, we were cautioned that America might be showing too much patriotism!

G. Humbert writes:

Trump will not get involved in this as this is a loser issue for him any which way you look at it. He is just biding his time, waiting for the hoopla to die down before starting the next phase of his claims and demands. I bet OBL owes his untimely demise to Trump's success in garnering the media's attention. You've got to admit this was pretty effective in derailing Trump's momentum. Plus it takes time to do the forensic analysis on the birth certificate and decide what to do next.



 Let us augment the Zacharian situation which I used to call a Finnegan where you look at the screen and a price is too terrible to contemplate because it's ruinous to you, and then you realize to your utter delight that the price was a misprint on the screen, and you're whole, and not losing at all, but …. by the end of the day or week, the price you feared actually turns out to be worse than you feared and you lose even more. Such a situation occurred in conjunction with the flash crash of May 6 when the price of 1060, which was ruinous for individual stocks and S&P was there for a second, but then it rose 8% in a day, and then Zachar predicted it would go bak there after it rose 100 points.

Okay, two other situations deserve a name.

You look at the screen, and you smile. Your market or stock is way up you think. But then– "Oh no," you were looking at the wrong market. And your thing is the only one that's not good or up if your long. That happened to me with my Rimm and Vix today. I see a market way up. I smile. Oh no. It's not Rimm, it's Vix that's way up.

What should this be called. And what about the variant where you have a price in mind to get out, and then you go to shave or take a call from a non-agenarian, and the price is realized, but by the time you can enter the order it's not there any more. And it never gets back.

A related situation is that you're out of office for a second, and you hear an announcement. The economy is very strong. However, bonds are down because of the crazy idea that a strong economy is inflationary. But that's causing stocks to go down. Okay, you're losing money on your longs. The market is crazy right? You grit your teeth and go back to take a look. Amazingly the bonds are way up however. WHY? Because stocks are way down. In other words, you lost on stocks because bonds were going to be down, but they actually went up when stocks went down, so you lost for an opposite reason.

What are the proper names for all these? And what variants of these type of things deserve a name?

Peter Earle writes:

The one where you look at the screen and smile– perhaps that moment is best termed an "Eastwood", a "Harry", or a "Dirty Harry", or being struck with/by (a) "Sudden Impact", as demonstrated by the relevant portion of this scene: first from 0:18 to 0:51…and then from approximately 1:05 to 1:13.

Chris Tucker writes: 

The last situation could be referred to as a "Cyclone", not for the storm, but in honor of the Chair and the iconic roller coaster of his youthful digs at Coney Island. The Cyclone is terrifying, filled with thrills, dips, lunges and jerks. And people keep coming back to plunk down there hard earned cash for more.

Very nice short history of the park at Coney Island here.

Vince Fulco writes: 

The Cyclone seems most apropos. What is it about Mr. Market's ability, esp. with these leveraged ETFs to give you a nice gain but not hit your target price and then revert back to your cost in an instant (many multiple percent away and seemingly not to be seen again in the near future with the new info) then turn within pennies and return you back to profit mode testing your temperament so mightily? The silver ETFs have acted like scalded dogs the last few days.

George Zachar comments: 

The Coney Island Cyclone was the signature thrill ride of my youth. I've ridden it well over 100 times.

What's always fascinated me about it, is how the experience varied with one's position in the 12 rows of seats.

In the very front, with the center of gravity many feet behind you, the visual danger signs led the acceleration by a couple of seconds, giving you the sensation of hanging over a cliff.

In the very back, my favorite spot, the acceleration came before you could see the rails dip, so it would catch you unawares and whip you sooner/faster than your mind anticipated.

Also, at the start of the right turn off the NW corner, the right-front wheels would leave the track for an instant, making first-time riders wonder if they were destined to die on Surf Avenue, in the shadow of the D train.

Alston Mabry writes:

The one where you're out of the office for a second, and hear an announcement– It's called "duck season".

The followup is too good to leave out: "Pronoun trouble".

Craig Mee writes:

About the one where "it's even worse than the mistaken price you mistakenly thought was your" :

I thought you were going to say, Victor, if after getting heart palpitations at the first incorrect reading, just by the fact you had done this, it's better to get out of your said stock now anyway, as you've brought bad karma to the trade.



 I had the privilege of working on civilian projects at the former Roosevelt Roads Naval Air Base in Puerto Rico back around 1998 and had the opportunity to work inside of a Seal area.

They are an extremely impressive group of guys, and the ones I talked to were nice fellows. It was common to see them up early in the morning running mile after mile of steep hills with a heavy duty Camelbak on their shoulders in 90 plus degrees and 90 plus humidity. They did lots of calisthenics (pull ups) and some evidently trained on rowing ergs. The level of physical and mental training and discipline was amazing.

The following link gives an idea of what it takes for a youngster to become a Seal.

One can only imagine what it takes to become a member of Seal Team 6.

Chris Tucker writes:

An interesting Air Traffic Control option, Air Force Combat Controllers usually accompany SEALS on active missions that may require air support.

Combat Controllers train in all fashions similar to other Special Ops team members and are authorized to call in air support and air strikes. They must have thorough knowledge of available aircraft types and capabilities and available weapons systems needed to get the job done. Cool job.



 Paul Cantor has an essay in today's Mises Daily in which he quotes Keynes' snarky summary of his own beliefs about political economy:

Ancient Egypt was doubly fortunate and doubtless owed to this its fabled wealth, in that it possessed two activities, namely pyramid building as well as the search for precious metals, the fruits of which, since they could not serve the needs of man by being consumed, did not stale with abundance. The Middle Ages built cathedrals and sang dirges. Two pyramids, two masses for the dead, are twice as good as one; but not so two railways from London to York.

One has to admire Keynes for his remarkable candor. He was direct and open about his atheism and his belief in the effectiveness of "stimulus" - i.e. having the Treasury borrow and/or print money to pay people to dig holes and fill them up again. Holes dug up and then filled in are a neat and precise activity that has none of the troubling noises and threatening speeds of railway engines and cars. The market might well want two railways from London to York - one for slow and one for fast traffic, one for freight and one for passenger trains, etc. - but people should not want or need or even tolerate such mess and confusion and waste.

Keynes and his ballerina beard of a wife and most other performers, writers and artists - then and now - instinctively love socialism as matter of aesthetics. Oscar Wilde explained this in his essay on "The Soul of Man Under Socialism". Wilde admits openly that he finds poor people ugly and deeply troublesome. According to Cantor, "he would like someone to take care of them, which almost means to get rid of them." So many artists end up being socialists because, as Cantor says, "they would like someone else" -the U.N. or the World Bank or AmeriCorps or the Gates Foundation - anyone but the poor themselves - "to take care of the problem of the un-beautiful."

As Cantor says, Wilde is "looking back nostalgically to the age of patronage. He does not like the laws of supply and demand. He doesn't like the idea that a novel by Anthony Trollope should be successful because people like it. Why should common people be able to judge Wilde? It is a very good essay to see just how reactionary socialism is. The real key to understanding why Castro is so popular with Latin American authors-and why socialism attracts so many writers and artists-is that these writers feel underappreciated by the market. They are looking for the Great Man, the dictator who will recognize their genius and exalt their talents above the petty bourgeoisie." The same impulse led others to be attracted to the socialism of the right - i.e. fascism. As Cantor says, "this was the reason behind Ezra Pound's fascination with Mussolini, for example….It all stems from the same impulse…. They hope that socialism will liberate them from their greatest fear: being judged by the common man."



 Force yourself to start slow and finish sooner than you like.

Tell yourself you deserve the punishment for getting out of shape.

The first week is the only hurdle. Tack a note on the fridge: it will get better. GE guarantees it does.

There are four paths to advance in walking called resistances: distance, frequency, speed and weight. You may toy with these or take my advice from having used walking/hiking a half-dozen times to cure various maladies.

Start with slow blocks of time spaced frequently throughout the day.

After one week increase the duration of each walk while reducing the number.

Beginning the second week don a knapsack with five pounds of stones or water.

Daily increase the weight 6-ounces.

In one month you will look back at your tracks and marvel in good health.



 Hobos are America's historic backbone. Reams of books describe how townspeople, and even RR bulls during the depression, helped them get to the fields and orchards to get the crops to market and feed the citizens. The definition of a hobo is a train rider who rides from job to kind words and helping hands. He knocks apples in Washington and plucks oranges in California but no longer cuts ice from lakes in Wisconsin. The RR bull turns a blind eye during harvest seasons if the hobo doesn't spend his wages on alcohol and can speak polysyllables on the way to the boxcar.

A King of the Road by wit, guile and grace doesn't lose a finger or end up in jail after decades on the rails. Pretenders seat him in the warmest spot near the campfire to prove himself with stories of the fast freight.

An Executive climbs in the business world by making the fastest decisions that are usually right. He comes packed with the hobo traits of intellect, humor, humility, alert drive, brinksmanship and good cheer in a storm.
The meeting place of the King of the Road and Executive is the American Dream. The King wishes dearly to pursue the financial American dream and the Exec asks himself, 'Do I dare to live the American Dream of independent travel?'

One man's dream is another man's nightmare.




I hope all is well. Just thought I would share this market coincidence with you.

It has been 42 months since the S&P 500 Index reached a monthly closing high of 1,549 in October 2007. The index is currently 12% below that level. I note that 42 months after the December 1972 peak the S&P 500 Index was also trading at approximately 12% below its peak level. Interestingly, both post peak periods were marked by declines in the order of 50% & when plotted together on a monthly interval (common base) look remarkably similar. If this path were to remain compliant then the index would peak just above 1,375 around July 2011. After this the path suggests an 18 month pullback in the order of 15% to 20% followed by new highs sometime in 2015 (approx. 7.5 years after the 07 peak). It appears to me that 42 may be the consistent theme with respect to the above consilience. The number 42, in The Hitchhiker's Guide to the Galaxy, is the answer to the "Ultimate Question of Life, the Universe, and Everything". Perhaps Douglas Adams was right.



 A recent trip to Boston leads me to note the principle of least action (i.e. that physical systems evolve via the most efficient route possible to their ultimate destination, i.e the path for which the numerical value of the action integral is smallest)  mentioned at the Boston Museum of Science, and the principle of convergent evolution, noted in the exhibit of lung fish and their deep sea counterparts at the Boston Aquarium, both visited with Aubrey and the Floyds on our trip to the Hartford science museum, the best for kids I've seen, and our trip to Sturbridge Village, where one learned that banks of the 19th century closed down at 12 so that the cashier could approve loans, and saw some great mills in action, and saw that the Boston Redsox under John Henry's management provide a much more sober and enjoyable experience at Fenway Park than any of the raucous New York arenas, with the kids is a most stimulating trip, and this will explain my absence for the last several days. I will try to think of ways to quantify the principle of least action in a general way as a meal for a life time. One thing I accomplished on my trip in my efforts to improve my mathemagician work is that I can remember 5 or 6 digits on my hands and feet and elbows and this should be very helpful if I am ever forced to spend much time alone.



 What is the significance that when Sokol brought the Lubrizol deal he showed Buffet projections, but "these projections went unexamined" by Buffett. Despite the Talmudic education I have received, I claim that when someone serves as right hand man for 10 years, and then suddenly something like this trading comes to light, it is not a single instance. Much of the posturing must be designed to cast a positive spin on this.

Bill Egan writes: 

Sokol's lawyer's latest includes:

"It is alarming that Mr. Buffett would be advised to so completely flip-flop and resort to transparent scapegoatism. After 11 years of dedicated and hugely successful service to various Berkshire Hathaway subsidiaries, Mr. Sokol would have expected to be treated fairly. That would have been in Berkshire’s interest."

Will Buffett relearn wisdom of Ben Franklin vis-a-vis Vic's comment below? "Three can keep a secret if two are dead."

"That would have been in Berkshire’s interest…"




Here are the mean monthly returns for gold ETF "GLD", 2002-present, by two groups: months Nov-Apr, and months May-Oct (vs zero):

One-Sample T: nov-apr, may-oct

Test of mu = 0 vs not = 0

Variable    N     Mean   StDev   SE Mean       95% CI            T      P
nov-apr     41  0.02504  0.05267  0.0082  ( 0.0084, 0.0416) 3.05 0.004
may-oct   36  0.00851  0.05303  0.0088  (-0.0094, 0.0264)  0.96  0.342

> Both positive, but only the mean for months nov-apr is significantly different from zero (and 3x greater than may-oct)



 Has any one commented on the subtle reasons that the accounting firm that made the audit report for Berkshire on the Sokol trading did not ask him one question or have one meeting with him before the report? There must be a legal reason for this. But to the layman, it would appear to be that they were afraid of having to report his response.

Henry Gifford comments:

An apartment house was built in Manhattan with parapets (those brick walls at the perimeter of the roof) which leaked so much water into the apartments they were removed and replaced at great expense. The architect was one of the people sued. The architect pointed out that the contractor did not build the parapets according to the plans, thus the architect was blameless, and was dropped from the lawsuit, and was not further involved in the next two removals and replacements of the parapets in further efforts to remedy the problem.

Perhaps the architect could have been asked to refund the fees paid for supervision of the work, but nothing more.

Numerous people hired to do designs in the construction industry advise never physically going to a construction site, thus there is no responsibility for defective work.

It would be interesting to know the physical location where the auditor's work was done, and to know if there are any standards of conduct that require a visit to an office, a visit to a business if the work exceeds a certain size (such as the business I once visited that looked very prosperous until I noticed the phone almost never rang), seeing originals of documents, seeing documents while no other parties are in the room, having documents in possession for a certain period of time before a report is due, or if all work can be done remotely based on copies of documents faxed over few minutes before the report is due.

Rocky Humbert writes:

The Chair writes: "…subtle reasons that the accounting firm … did not ask him one question or have one meeting…"

From a
partner of Munger Tolles & Olson (a very large corporate Law Firm (not accounting firm) which represents Berkshire):

"Mr. Sokol was interviewed at least three times regarding his Lubrizon trading activity and contacts with Citi bankers. In connection with the preparation of the audit committee report, a request for a further interview with Mr. Sokol was made to his attorney. Mr. Sokol was not made available."

On the advice of his attorney's, Sokol stopped cooperating. What's subtle about that?

Victor Niederhoffer writes: 

There's nothing funny about that. What's funny is how the attorney for Mr. Sokol said that "without the care and deceny to ask even a single quetion of Mr. Sokol". Only two lawyers or Sholem Aleichem could show how both lawyers could be right in what they say.

Rocky Humbert adds:

A little talmudic interpretation may help:

Sokol's lawyer wrote: "I am profoundly disappointed that the Audit Committee…would authorize the issuance of its report to the public without the care and decency to ask even a single question of Mr. Sokol."

This is semantic deconstructionism worthy of Bill Clinton's the meaning of "the".

Sokol's lawyer didn't say that the Board didn't ask him questions. It says that the board didn't ask him questions about the issuance of the report! 

Stefan Jovanovich writes:

Has no one heard the joke about the lawyer, the accountant and the engineer trapped on a sand bar surrounded by tiger sharks with the tide coming in– the one with the punch line of "Professional courtesy"? What else would 2 lawyers say? The R-Man is nearly infallible; but he is wrong about Charlie Munger's firm being "very large". In the world of bulk word carriers, it is not even a PanaMax.

That does not prevent MT&O from preserving its reputation for Janus-like integrity. Before we surrendered our tail fins as LA lawyers, Eddy's Mom and I used to play a game of identifying the local law firms by show tunes. From Day One MT&O was always matched with Kurt Weill's signature tune.



 I went into a chili patch today on Lake Toba and got a lesson in island economy.

Four Batak women were hoeing the fecund earth from a 700 century old supervolcanic eruption that brought lava minerals to the surface and is in their blood. One beckoned to come rest from my jungle walk in the shade of an ingenious tarp bent over treelings, and so we sat to be joined by the other three. The seasonal rains arrived one month ago, they explained in humorously broken English, and with nil tourists they had communed to plant the chili.
The earth is tilled by shovel and hoe, parallel troughs laid across a half-acre to direct the afternoon storms, and beside us, on a green tarp under the blue overhead, sat 2000 hand-fashioned black chile pots ready to be transplanted into the dirt rows.

‘Where are you from?’ asked the first. ‘America.’

‘Are you married?‘ asked the second. ‘No.’

’Are you on pension?’ queried the third. ‘In three years.’

‘I’m the only single lady here,’ asserted the forth.

Island economy is my corollary of Island Evolution where geographic barriers such as mountains, deserts, water or even a marauding enemy isolated a region to cause observable changes that are unique to the world.

Batak is a 100km circumference jungled volcano island at 6000’ in the deepest volcanic lake at an astounding 11km depth of the world. A 300-meter waterfall crashes outside my room window to water and alter every species within drinking range. The plant, animal and human developments show ‘hot evolutionary changes’ that I’ve seen in the similar caldera of New Zealand’s Lake Taupo created by a supervolcanic eruption 300 centuries ago. Here everything in sight has a greater growth rate and size, and rich, colorful and simple patterns. The Batak people including these ladies with white palm oil smeared cheeks are the most fierce looking people I’ve met in the world and, fortunately, the most gentle and industrious in their evolved island economy.

A daily ferry runs 8km across the lake to mainland Sumatra (also an island) where a ribbon road winds past dozens of monkeys on guardrails making faces at the meager traffic three hours down to the nearest city Siantar, and sparse uphill tourists. The ferry and road is Toba village’s social and economic link to civilization, and they have evolved an independent character and economy.

The tourist trade is the chief input until the annual rains come, and this is one of the top three dirt-cheap resorts I’ve discovered anywhere in the world. (The others are Iquitos, Peru and San Felipe, Mexico.) Now few tourists disembark the ferry and I have the run of the town. A room is comped behind the Bagus Bay internet cafe every other day when a storm crashes a power line and the café closes, people invite me to meals, and I get daily propositions in so many words to marry a Batak female and ‘live happily ever after on Toba’. The requirements are that I be male, unmarried and on a pension. Three other European men have chosen this fate.

I could be a chili farmer for the rest of my life, the single girl at the patch explained as we planted. Chili loves heat, and moisture under full sun. First the plant and then the harvest, I replied and rose again to poke little holes with a stick along the rows to drop inside the 3’’ potted plants.

The gaggle paid $200 for 150 kilos of prime seed that covers the .5 acre cleared jungle garden. Drop, bunch soil, water, done. In four months the harvest will sell for $5000 across the lake, and they will enjoy fat times until the tourist season arrives to replenish.

One hundred Toba villagers likewise fanned out onto the jungle slope to plant corn, beans and other crops. These grow well, but others like cucumbers and tomatoes do not and are imported from the mainland. A huge mixed salad costs a dollar, but add tomato and cucumber and the price doubles.

I drove a motorcycle around the island broken ‘ring road’ to first note the 3:1 female to male ratio in passing among about 1000 school kids. The second interesting item is there are a handful of cars, many 100-150hp motorcycles, and a pickup truck that circles the island daily delivering vegetables. When the battered black pickup arrives at Toba the women chase and climb aboard to pick the best as the driver shakes his head in dismay, pulls out a scale, and weighs portions out to each.

The deep lake a hundred meters behind me supplies abundant fish where each morning at 6:30 the townswomen traipse a 30-meter concrete pier to fishermen’s’ motorized canoes to weigh and sell the catches. A 10’’ prehistoric looking trout sells for $US1 and each wife buys one, chucks it in her vegetable bucket, puts it on a towel on her head, and balances it home to add rice to feed the typical family of four.

My dollar stretches a ways here: A room with bath and three meals costs $10. The hotel workers and clerks earn $4 per day plus a bunkroom and meals. The cheerful workday is 13-hours six days a week and everyone is grateful to have a job, full stomach, roof over the head, and pocket money.

Smile wrinkles build, stomachs flatten, and people are more cheerful along the one town lane during this lag between the tourist and vegetable harvests. The citizens know no other way in their isolation. Nothing is locked up: Motorbikes are parked with keys in ignition, the internet café door is open all night, tools are left at construction sites, stores are unattended for an hour at a time trusting customers to pay in the register what they take, and most hut homes have no locks much less doors to hang them on.

Everyone carves at the rock-and-concrete Hobbit homes braced by ornately chipped posts that stare down like hundreds of totem poles. Nearly all play music and sing well, but none is fond of shop keeping. The deformed ‘village idiot’ next to me is the town accountant and authority on local lore. A thousand English books- classics to self-help- from the1960’s circulate town at a buck a read, and then return it to a shelf from when the tourist trade boomed before a tremor shook the island. English is taken seriously and hilariously spoken from the books and an oral tradition passed down from hippy tourist phrases from twenty countries.

There is no village store, pharmacy, doctor or knick-knack shop, however nearly every house boasts a front porch business with a table to serve meals, or hand-made souvenirs, plus two bars with live music three times a week. Every cat has a bent tail and vehicles drive the left side of the road. A motorcycle express putters by every couple days to sell stamps and pick up mail from a community wood box near the pier.

The high school is called a ‘tourist college’ to ensure the shrewd Batak children learn English to get ahead upon graduation at one of the finer $5 hotels. Chickens are trained to lay eggs inside houses ‘where it’s more comfortable’. It’s an Eden to raise a family.

Back at the chili patch, the ladies have judged my feet to be nearly as spread as theirs from daily walks, and have talked the single girl into proposing marriage. However, I’ll visit the chili patch daily to learn more about island economy and the remarkable Batak who have evolved with it.



 Today is the anniversary of the death of "Grandfather" Michiel de Ruyter– the greatest of all the admirals.

Paolo Pezzutti writes:

His fame was not built as a bureaucrat in the government palaces where power is managed, but it was earned in an impressive number of actions and battles. This is very good. Like a successful trader with an edge, his wins were so consistent in time that they could not be random.

Interesting how, over the past three weeks, the sequence of colors
related to bonds and S&P has been exactly the same: blue, green
yellow, green.



 Any beggary tips I proffer are from observations on a hundred skid rows across America and in a hundred countries, with one exception.

Hobos call it ‘throwing your feet’ with so much walking and standing. It stares you in the face that the more panhandlers, the worse the times, and the higher the takes the bigger the boom.

Quick on the heels of a begging market comes the calamity of a region being bummed out. One year, I hopped out a boxcar along the Milk and Honey Route because of the easy alms in Salt Lake City, the Mecca. Tightened mouths under drawn hats greeted on every corner in tramp heaven until I asked, ‘Why?’

‘The city’s bummed out!’ one, and then the next cried stretching palms.

‘But why? I wondered.

‘The Bishops givin’ eats.’ I followed a string of pointed fingers to The Bishop’s front porch and a queue of thirty willing workers to sweep, wash dishes or run errands for one hour for a big sack of groceries. The news had spread like fleas up and down the rails to bring a great flux, until supply-demand had forced the immigrants to throw their feet like common beggars.

Salt Lake was bummed out. The missions jammed with not a tree remaining to sleep under, and it took a month to recover. However, I was set like Aesop’s grasshopper with twenties in my boots.

Panhandling is the world’s second oldest profession, whatever the times, so reach out to a beggar with austerity. Fully 80% of the men leaning on stop signs at intersections with upraised hands are on a government dole. The single women there have a man hiding behind a bush or building to periodically pop out to bank the cash before she’s looted by another panhandler. They are nearly all welfare moonlighters.

A Las Vegas Viet Nam veteran asserted- at least he wore a veteran’s baseball cap- ‘I clear $50 daily in the casino parking lots, and on busy days $100.‘ He migrated casino to casino judging people to tap by their gesticulations after leaving one-armed bandits. He sauntered off chewing a hash brownie. I estimate that 50% of the millions panhandled in the US alone go for drugs and steaks rather than the ‘Please give for food’, ‘Baby needs milk’, and so on that is covered by Food Stamps.

Bear times and holidays throw open hearts to win jackpots everywhere. Easter and Christmas bring the best pickin’s and I can’t say the number of times I’ve hidden behind a park bench or dumpster to keep a holiday do-gooder from forcing a turkey dinner on me.

Internationally, I recently tailed in a busy Saigon market a blind panhandler with a white cane strapped to his back and an outstretched tin cup in one hand, bullhorn in the other, bellowing pleas. I know he was blind because he walked into a truck mirror, yet when I followed him beyond to a coffee shop he pulled a thick wad for coffee and donuts as others clustered around the table. Legitimate beggars have bankrolls to share with ‘less fortunate’ friends.

The beggar stakes his busy territory and guards it jealously. If a region is bummed the fix is to move into trafficked lanes. In many countries such as El Salvador they board buses and hum a tune, pass out ‘I am deaf’ fliers or sing a psalm before staggering the aisle for payment. It is simply a job to rise to each morning. One Guatemalan beggar was a smiling legless, armless basket case who boarded my bus on the shoulder of his amigo and ambled the aisles at great profit. At the next stop he was chucked to another man who boarded a selected full bus, and little doubt each porter took his fee.

In India a crippled or scarred beggar is the golden goose, with a protective owner because beggary runs the low life economy and in a hungry recession he or she becomes the mark. Here in Lake Toba, Sumatra the coming rains have decreased tourism and turned Batak villagers to cultivate the fields where drunks live hand-to-mouth knocking on fence posts to pull weeds for small change. There is no tinkle in the cup because a dine is a paper bill.

In Egypt in a miserable sandstorm a man dashed from an alley, pleaded for alms, and when I shook my head emphatically no he jumped on my striding thigh and humped it like the affectionate dogs up and down the kennel arteries of veterinary school. It is no shame that when people get hungry they will resort to anything to feed themselves and families.

Music moochers are everywhere. In a NYC subway once a roughly dressed young man closed in singing patriotic songs so pathetically that when I put on earmuffs to block the din he drummed on my shoulder with a dollar bill until I shouted, ‘I don’t come that cheap!’

Virtuoso panhandling is a joy. How does it differ from the chamber music you pay a ticket to hear? My Sand Valley neighbor Sweet Pie altered New England statutes for burlesque music and has a standing invitation from Jay Leno to appear clad in the scantiest frill jockstrap to play the piano with a left hand signature Liberace said was the best he’d ever seen. His CD melodies confirm, and a scrapbook of Playboy, Penthouse and other risqué rags arm-in-arm with Dolly Parton and other musicians. He rejected Carnegie Hall until the contract allows after a performance to ‘pull the purse’ strolling the audience with a saddlebag hanging from his scrotum to hold up to 30lbs. of tips like the good old days.

Then there are the egghead beggars. The best I recall was a San Francisco adept on Pier 39 shouting mathematical solutions to columns of numbers and long divisions from passers-by to win change for each correct answer. But who could check him?

Are you surprised that a pro makes more per hour than you or I?

The single exception to never having less than a hundred dollars worth of twenties in each boot was in the mid-1990’s in Minneapolis where the boots were stolen. It was the projects section and so simple to borrow a quarter for the phone. On learning penniless at midnight that support would not arrive for three days, I walked into the police station and asked for a cell to overnight. Instead, the manager ran me in a squad car to the psych ward for a three-day hold pending the mental state. I was released on being able to memorize the serial numbers of a few bills in the head shrinks wallet as we played liar’s poker.

I could make the beggar venture anywhere because of an early mentor. Beggary, after all, is business or sport where the path is paved by an early teacher.

In Los Angeles in the late 1980’s the classic Midnight Mission catered to the down-and-out stew bums, car tramps and hobos alike. You walk in the peeling paint arch, sign an alias, put your gear in a locker, and take a towel, bar of soap and hot shower. Then you read donated dog-eared Women’s Days for an hour until the supper bell beckons ‘feed the spirit before the stomach’ and you stuff into church pews among the lot of demon tattooed cursing jailbirds, and good tramps too, to listen to an ‘ear pounding’ from the ‘sky pilot’, which is to say a sermon. The meal follows, and a winding stair into the building bowels to drop your pants for the Wood Lamp lice check whom are not the only creatures glowing in the dark. Then back up the stairs to the bunkhouse to sleep with your wallet between your legs. I heard gunshots outside all night in a crescendo of snores and flatulence.

The next morning I exited the Mission and was instantly accosted by a man with a tin leg that he banged with a long 45 revolver alternately pointed at my forehead, and wouldn’t stop bragging about his nitroglycerin bank heists in the old days… until a tall shadow overtook him. I looked up and a large be-whiskered old man blocked the sun.

‘Put the guy away you fool!’ The tin legged man simpered off with a resounding ping, and I turned to face my benefactor.

Now I understand it was a likely set-up for my donation; however all I could offer was, ‘Thank you. How can I possibly repay…’

He held high a huge black palm, brought it down square in front of my nose and smiled with seven teeth, ‘A tip will do.’

Instead, I bought a begging lesson from the beggar.

That my mentor had persuaded the American metropolises became obvious as he removed his hat, stringy hair drifted onto his chest, and he pushed it aside to assault each five-minute passer-by with, ‘I’ll bet you’re from so-and-so’. When he was right he got a bill; when he was close he got their attention; and when he missed the people walked on.

He instructed to always have a tale to stop a Santa Claus in his tracks, and punch it with a reason for a bit of change- $.83 to be exact that would fetch a dollar. I had a bank of stories and stood at his elbow competing for alms, beseeching while listening, and imitating each trick with my next mark. The key lesson like any sales pitch from WallMart to Macy’s is know your customer, break the ice, and appeal to his logic, emotion or intellect,… to get into his wallet.

He won hands down as I could not volunteer tears to my eyes to close the big deals. My few dollars went into his hat that I saw as a free begging lesson.

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