Monday, September 29, 2008

Wild day and some NFL thoughts

Wow I didn't think the bill wouldn't pass the house. Good for the house GOP. They're fighting both Bush and the dems now. I've never seen carnage like this. The numbers were way beyond anything I've seen in my 5+ years of trading. Dow down 780, Nasdaq down 200, S&P down 95. The moment it was clear the bill wasn't going through, we sold off right to where we were before the news of a bailout first came out a little less than 2 weeks ago. We took a breather but then kept selling off some more. It was kinda scary, though I'm not so sure what's going on since we sold off hard to start the day anyway. Maybe someone knew something. I sure don't. I have no idea about anything at this point. But at least if we're going down, Buffett's coming with us this time.

Thoughts on the first quarter of the NFL season:

1. I was a Bills fan back in the days of 0 for 4, and it's nice to have a bandwagon to jump back on again, although the last time I was rooting hard for Buffalo the Music City Miracle happened. Even though they haven't beaten any really good teams, they are playing solid on offense, defense, and special teams and will get better late in the season when Parrish comes back. More importantly they are closing out games. Whether ahead or behind, they are making things happen in the fourth quarter and Trent Edwards looks confident.

2. Speaking of closing out games, that seems to be the main problem with the Raiders. But I can see them really coming on in a couple of years, because they have a lot of talent. However, they first need a head coach who doesn't kick a 76 yard field goal as his last play of the half with an opposing defender (Cromartie) who has had experience returning a ball the length of the field.

3. I will always believe that there needs to be a "game theory coordinator" in sports. Too many of these head coaches and managers have no idea how to manage clock and proper risk/reward. Another bad call that was made was when the Saints kicked a field goal already up by 11 with a 4th and 3 and 30 seconds left in the game. The FG does nothing really and gives the opponents better field position to attempt to score 2 TDs than if you go for it on 4th and 3 (which also ends the game if you convert). Sure it's trivial, but these guys make the same mistakes in major situations as well (Cleveland FG against Steelers earlier in the season), and it's a big reason why Belichick is so far ahead of the pack.

4. Can we revoke the NFC West's playoff berth and give it to the NFC East? The Eagles are in last place in that division right now.

5. The Titans are definitely for real with great old school football (defense and running) and Kerry Collins doing just enough. Did you know that Kerry Collins passed the 35000 yard mark earlier this season? If they win the Superbowl, we would at least be thinking about whether Collins belongs in the Hall of Fame, right? 35k+ yards, two SB appearances and a conference title game.

Thursday, September 25, 2008

NFL picks

So far so good to start the season (6-3-1), although I personally managed to get the Baltimore under at 38.5. This week's picks include Denver -9.5, New Orleans -5, and the Cleveland-Cincinatti over 44.5.

When the lines first came out, both Denver and San Diego were 9.5 point favorites. But Oakland is clearly a better team than Kansas City and San Diego is at best equal to Denver given how close they played. In stock-speak, I would have recommended going long one and short the other, ie. take Denver -9.5 and take Oakland +9.5. Since then, the line has moved to San Diego -7.5, so that game is now off my radar. Denver still has an amazing offense and I just can't see the Chiefs keeping up with them. And since I don't expect the Chiefs to have a shot on their last possession, that means I expect Denver to win by more than a TD, so 9.5 looks pretty solid. New Orleans is battling a lot of injuries but their offense is still very explosive with playmakers like Brees and Bush. The over might not be a bad play here. I just don't trust the 49ers, who have beaten two bad teams (yes I consider Seattle a bad team) and are playing on the road where the Saints have had a pretty good home field advantage. As for the last pick, I'm just going to point out that these two teams have played against Balt (twice), Dallas, NYG, Tenn, and Pitt. All outstanding and tough defenses. While I'm not expecting a shootout like the ridiculous one last season, mid 40s is a reasonable number to expect these teams to go over.

My thoughts on the financial mess as it is now

First off, I'm one of the ones not drinking the Warren Buffett koolaid. I don't really think he's betting on Goldman or the economy per se. Here is a great post that describes the math of what's really happening, and don't forget to read the comments section, also filled with some very good information and views.
And given the fact that Buffett has written some US$40billion worth of S&P puts, it helps him to seem like he's confident about the economy.

As for this "bailout", it's really quite awful. The market's been overleveraged for some time now and there has not been real deleveraging except for Lehman's implosion. A bank selling leveraged bets/assets to another bank does not take it out of the system, it merely moves it around. So what happened? Basically we started with X amount of money, and in a few years, we borrowed and leveraged it so that on paper, we all had Y>>X amount of money. Those who were smart enough to take it off the table, they can retire now. Those pension funds or big mutual funds that don't just get in and out of the market, they watched Y turn back down towards X. But Y didn't really exist in the first place. This bailout sounds like it's basically going to hold onto Y until a time when it might actually become Y. A real RTC would be much more useful. Force these banks to sell off the assets, liquidate when necessary, and kill a couple banks in the process. This may be more likely to cause the implosion we need to get back away from this non-existant Y amount of money. Instead, we're going to pay Y to all these financial institutions, and Bush/Paulsson have used this "we must act now" bullshit to scare Congress into this. Not only that, but this is an election year, and for some reason "recession" sounds like death to too many people. The economy is cyclic. We need recessions. Let's just get ours over with.

Saturday, September 20, 2008

NFL picks

After going 2 for 3 in both the first two weeks of the season, I have 4 picks for this week. I like Atlanta -6 (the line was -5.5 for most of the week), Buffalo -9.5, New Orleans-Denver over 51, and Cleveland-Baltimore under 38.

Atlanta has already shown that it can win at home, and the Chiefs have allowed big games by the opponents' rushing game so far this season (McFadden last week, New England running backs averaged 5+ yards per carry) which should play right into the Falcons' hands. Buffalo has been a very solid team so far this season, having been able to beat their opponents on all three sides of the ball (offense, defense, special teams). More importantly, they can stop the run, which is the only thing Oakland has going for them. Everybody expects a shootout in Denver this week, and I don't see how these teams will disappoint. Both have big play receivers, slow secondary, and cannon-arm quarterbacks. Lastly, I just don't see how Cleveland will score against this rested and rejuvenated Ravens defense, while looking back at Baltimore's week 1 game, their two scores basically came when they broke two big run plays. Cleveland has actually handled that pretty well, keeping opponents from breaking the big play on the ground.

Although I like these picks as is, I understand that any of these picks would work well in a teaser, so have fun with that.

Friday, September 19, 2008

No shorting

Today's market just felt completely artificial. Citigroup opening at $22? So basically people could gap the stocks to ridiculous prices and force the shorts to cover into them so they can get out. What a joke. I strongly disagree with this move and think they're just trying to place the blame without actually dealing with the situation, like that pension fund moron that went on CNBC and blamed the shorts. This is America after all, where parents ban a kid from playing little league because he's too good.

These artificially high prices don't mean anything. It doesn't "instill confidence" back into the markets. Who's going to suddenly want Citigroup at 22 thinking it's going to 40 because of this? All this will do is hinder the flow of trading. They might as well have just closed the markets for 2 weeks if the move is to serve as a "timeout" so the markets can take a breather and whatever plans have been initiated so far can get rolling. At least that way I can take a vacation.

Now, I believe in the ability to short whatever and whenever you want as long as you follow protocol and locate and borrow the stock. But I propose a middle ground that might be better than this no shorting at all thing. How about the "upday rule"? Instead of only being able to short on an uptick (like the old "uptick rule"), you can only short if the stock is up on the day from the previous close. That way, when a financial stock gets beaten down, you can't pile on. Sure there might be short sellers trying to prevent bounces, but you won't have short sellers driving a stock to 0 (this is what they claim is going on after all). And there's no real way of manipulation like there is with the uptick rule. Comments anyone?

Thursday, September 18, 2008

Blue Hill

Being one of the few people who dropped a bunch of money on a day where many current and former coworkers made ridiculous sums, I needed a good meal to ease the pain. Being in the area, I stopped by Blue Hill, the critically acclaimed restaurant that is number 1 on the New York Observer's list of top 10 greenmarket restaurants. The meal was fantastic but since I didn't feel like sitting down for a long tasting menu, I'm just going to write a few things about the experience.

1. Solo diners get the full range of amuse and prestarters that would normally accompany the tasting menu or farm feast menu. They were simple and probably even better than the rest of the meal. I wish more places would treat solo diners so well.

2. For a guy who is pretty much a carnivore, I have to tell you, I enjoyed every bit of vegetable and fruit on offer. Everything had that ridiculously fresh crispness or softness to it. Among the amuse selections were just simple raw fresh vegetables and they were so, so good. I can only describe the nuttiness of the tomato flavor with the word gorgeous.

3. I walked in at 630pm and was easily seated with no reservation. There is also full menu dining in the bar area. The dining room has a really nice feel to it.

Thursday, September 11, 2008

NFL picks

I stopped with the MLB picks because there were just not enough favorable lines this year. At least I stopped with a positive record and balance. To make up for it and to give me a reason to write more posts since I've kinda neglected the blog, I'll start posting some NFL picks.

Last week for myself, I chose Detroit -3, NYJets -3, and Pittsburgh -6.5. That resulted in 2 out of 3 wins. This week, my three choices are Tennesee ML or whatever you can get, Arizona -6.5, and Seattle-SF Under 38.

It's unclear as it is whether Kerry Collins is that much of a downgrade from Vince Young, so why is a team that beat a strong Jaguars team an underdog against a Cincinatti team that couldn't beat a Joe Flacco-led Ravens squad? As for Mia@Arz, I believe that weak teams play significantly better at home, so I expect a better performance from Arizona and a worse performance from Miami compared to week 1. As for the last pick, I have no idea where any offense is coming from in that game. Good luck to all!

Thursday, September 4, 2008


Flipping channels right now between Ed Hochuli showing off his guns in the Giants game and Djokovic dominating Roddick at the US Open. After watching Mardy Fish come out strong against Nadal yesterday, I realized that to beat Nadal, a player would have to have a powerful serve with a kick and the ability to come into the net. I don't think Federer's serve is what it used to be as he doesn't have many 15+ace matches nowadays and while Roddick's serve is powerful, it's flatter. I think Sampras back in his prime would be able to consistently beat Nadal. Watching Djokovic right now though, he does have the serve that could give Nadal trouble. He doesn't come into the net much, but his ground strokes are very solid for sure. As much as everyone is looking foward to another Nadal-Federer rematch and the fight for the true number 1 ranking, I could easily see Djokovic beating Nadal. After all, this is Nadal's first US Open Semi as it is.

Right after I wrote and posted the above, Roddick has just come back to win the 3rd set, and I also realized that since Nadal is the 1 seed, Djokovic would have to beat Federer first to get to Nadal, and I'm not sure that's going to happen.

A quick point on the upcoming election

First off I'm going to remind everyone that I don't vote. As someone who works in finance, I obviously agree to some extent with general Republican policies. But the over-conservative and overly religion-based politicos of the recent regime have been driving me nuts.

So I buy a little of what both sides are selling. But I do have a preference if I were to vote this year. First, let me pose a question. Does anyone really think either of these two candidates will end up doing a horrendous job in office? I actually think either one would end up doing a very good job, though each with their own methods. So for me, it's a matter of long-term utility. If Obama loses, he's not going to pull a Gore. He seems like a guy who really believes in change, believes he'll be the person to bring that change, and just seems like a life-long politician. McCain, on the other hand, is old. It's doubtful he will run again if he loses this year. As I don't see anybody really stepping up in the near future, my feelings are quite simple: I'd rather see 4-8 years of McCain followed by 8 years of Obama than 8 years of Obama followed by I don't know who. And for those who are thinking 8 years of Obama followed by 8 years of Hillary, dream on.