31 March 2009

Catherine Wheel

While reading this piece in The Onion's A.V. Club on records that must be listened to straight through, I was surprised to see a Catherine Wheel mention amongst the expected Hüsker Dü Zen Arcade and XTC Sklyarking records:

13. Catherine Wheel, Adam And Eve (1997)
Catherine Wheel’s swooping Adam And Eve was up against some stiff competition when it came to 1997 sorta-concept albums by British bands with a couple of hits under their belts. (In case the reference isn’t clear enough: OK Computer.) Adam And Eve was apparently too ambitious or ill-timed to hit the big time, in spite of the huge singles “Delicious” and “Ma Solituda.” Maybe that’s because it’s best to listen in one big chunk, with the spare, bluesy “Intro” and “Outro” bookending the band’s strongest set of recorded material. There’s no real theme per se, but at least a few running ideas about the future. But it all means something, maaaaan.

I had moved on from listening to Catherine Wheel by '97, so I missed this album the first time around. But thanks to the interweb, I don't have to pour through stacks of discs on St. Marks, trying to dig out those records I failed to pick up during the previous decade.

Delicious was a single off of Adam and Eve:

Rob Dickinson playing Heal solo and acoustically:

And my introduction to the band, Black Metallic:

30 March 2009

Fast Money on FASB 157 a.k.a. Mark-to-Market

The Commissioner-less Fast Money crew discussed this Thursday's mark-to-market ruling coming out of FASB:

You can also read the CNBC recap if you're so inclined, but the gist of the segment is on April 2, FASB will almost certainly make some adjustment to the mark-to-market rules. This rule change should be a positive catalyst for financial stocks. Finerman suggested the XLF; Najarian suggested the juicier FAS. Guy posited that the "stars could align" and we'll see a retest of S&P 741 this week, followed by a financials-led run. I hope he's right, as that's my market outlook this week, and it's how I've set up my portfolio.

Portfolio Changes and What is Affecting This Week's Trading Outlook

Sold a couple hundred shares of FAZ at $23.595 this morning. These were the same shares I bought last week for $19.51, but my accounting methods dictate that I note the position's overall cost basis of $29.52 and write up the loss of $5.925 per share, or 20.1%.

I wanted to free up some cash for FAS/FAZ swing trading purposes.


There are downward pressures on the market arising from the recent sharp but overdone rally, as well as the terrible news on Japan's exports:

“Production cuts may already be bottoming out,” said Shinichiro Kobayashi, a senior economist at Mitsubishi UFJ Research and Consulting Co. in Tokyo. “That that doesn’t necessarily mean overseas demand is already recovering.”

Exports plunged a record 49.4 percent in February from a year earlier as sales of cars and electronics dried up. The World Trade Organization said last week that global commerce will shrink 9 percent this year, the most since World War II.

Also, Big Picture commenter Andy Tabbo posted this forecast this morning, accentuating the negative:

It is my conviction, though, that the SP500 will NOT go up unless the DX is falling, as the market is looking for assurances that “deflation” is behind us, at least temporarily.

Last Thursday I dropped a note about the SP500 looking a little tired and exhausted, in need of a pullback. I think this could be the beginning of a decent few days of corrective behavior, which is important in order to sustain larger moves higher. It would be a classic move to see a retrace back to 750/730 zone. We may see some support at 770 first, but a classic correction should get us back to 750/730. I still think this first leg higher from 666 was the initial wave of a larger bear market correction and that we’ll see higher levels in the SP500 coupled with lower levels in the DX. DX should have some good resistance into 86.70/87.20. I would look to sell those levels on the DX, becoming very nervous on any action above 88.30.

So Tabbo sees another ~20-to-60-point drop in the S&P in the next few days as a distinct possibility.

The following CNBC video from this morning points out the negative technical outlook for the markets if the S&P falls below 790 (which it already has), but also mentions this Thursday's ruling on FASB 157, a.k.a. mark-to-market:

A loosening of mark-to-market rules should be a big catalyst for the financials. I presume to the upside, even though the market may have already priced in some changes to FASB 157 in the recent run-up of bank stocks.

The bottom line: This week's strategy is to stay short the financials via FAZ into Wednesday, and prepare to swing to the long side via FAS for Thursday's news.

26 March 2009

Charts for Today

24 March 2009

Portfolio Changes

Staring in the face of this bear market rally, I picked up additional shares of FAZ at $19.51. That brought the cost basis of my FAZ position down to $29.52. FAZ closed today at $21.15, which seems quite a long way from $29-and-change, but remember, FAZ is levered 3X. For some perspective, here's the FAZ price chart for March:

FAZ's trading range during March is $18.25 to $115.50. That's what happens when you take an inherently volatile trading vehicle and combine it with a hot sector.


After being short during today's 7% rally, I need a 12-string elixir...

21 March 2009

The Connells

20 March 2009

Bowery Electric

Bowery Electric, when the shoegaze sound moved from Brits with guitars to a couple of New Yorkers with computers.

"Fear of Flying" is from 1997. I probably first heard it on KDHX, and picked up the needlessly double-disc Vertigo at Vintage Vinyl. I revisited today while digging through piles of cd's that aren't loaded on my laptop, but really should be.

19 March 2009

The Darkness Returns

Well, sorta.

Justin Hawkins, late of the Darkness, is back with a new band called Hot Leg.

Like Life on Mars became Ashes to Ashes, Hot Leg takes its hair-metal irony from the 80's over the Darkness' 70's flair.

My take on "Cocktails" is Hawkins wrote this song so he could sing the song title's first syllable repeatedly in the chorus.

Portfolio Changes

On Tuesday, I unloaded a significant portion of my FAZ holding for $37.20, for a craptastic gain of 3.2%.

Yesterday, I picked up some additional shares of FAZ at $29.74, bringing the cost basis of my position down to $33.52.

16 March 2009


If you're really, really bored, and want to play a game, I suggest Jim Cramer's Crashteroids.

Here's a screenshot:

I scored about $13,000 on my first and only half-assed try.

Portfolio Changes

This morning I sold off the remaining shares of the 3X-Bull Financial ETF, FAS, at $5.65. From my cost basis of $3.44, that's a return of 64.2%.

While I still think there's upside in the financials arising from the Congressional demands for modifications to mark-to-market accounting, the financials are extremely overbought right now. With that notion in mind, I picked up some shares of the 3X-Bear Financial ETF, FAZ, at an average cost of $36.03.

Dent May and His Magnificent Ukulele

Dent May opened up for A.C. Newman this evening at the Bowery Ballroom.

I heard hints of Stephin Merritt. My buddy Dave heard some Morrissey. I hadn't heard the ukulele used in such a pop way since my last trip to Hawaii, where Iz Kamakawiwoʻole is still played everywhere, a dozen years after his death.

I'll also credit Carl Newman for touring with such a credible and entertaining opening act.

13 March 2009


12 March 2009

Portfolio Changes

Sold off my position in TNA, the 3X-Bull Russell 2000 ETF at $14.18, from a cost basis of $12.90, for a gain of 9.9%

The R2K chart below shows the tremendous moves over two of the last three trading days. Now that the index is short-term overbought, as shown by the over-90 RSI(2) indicator, I thought it prudent to take some profits. I may jumped off of this bear-market-rally a bit too soon, but I can always put cash back in on a pullback.

Speaking of taking profits, over the past week or so, I built up a substantial position in FAS, the 3X-Bull Financial ETF. Today, my position in FAS is still significant, but constitutes a much smaller portion of my portfolio.

I sold off a block of shares in the early afternoon for $4.50, from a cost basis of $3.44, for a gain of 30.8%.

As the trading day approached its end, I unleashed another block of shares at $5.15, for a gain of 49.7%

Why? The mark-to-market hearings didn't produce any bombshells, but the subcommittee expects the FASB and SEC to report back within three weeks on adjusting the accounting rules. Three weeks is plenty of time to trade around a FAS position.

Also, if you look at the chart below, the financials are now significantly overbought according to RSI(2) and butting up against the trendline established at the start of '09. The XLF ran up over 10% today; I started to feel a bit piggish if I didn't cash out some of the gains.

The Stills - Being Here (Live in Brooklyn)

11 March 2009

Portfolio Changes

Added to my position in FAS, the 3X-Bull Financial ETF, picking up more shares at $3.89. That takes the cost basis of my position to $3.44. Tomorrow's House Financial Services Committee meeting will determine whether or not I lighten my FAS holdings.

I sold off the remaining shares of FXP at $36.51 from a cost basis of $59.33 for a loss of 38.5%.

10 March 2009

Portfolio Changes

I spent yesterday away from the markets. I missed a good opportunity to lighten on my disappointing position in the ultra-short China ETF, FXP. Nevertheless, I significantly lightened my FXP holdings, selling off 370 shares at $36.78 from a cost basis of $59.33, for a loss of 38%.

It's an ugly loss, but if we're in the midst of a bear market rally, I'd rather take a smaller loss today than a bigger loss on Thursday. And it's much easier to digest a loss on a day when your long positions look this good.

Jon Stewart Versus CNBC

The initial video takedown of CNBC:

And the sequel that takes on Cramer:

Mark-to-Market Trading Opportunity?

This Thursday, the House Financial Services Committee will hold a hearing on mark-to-market rules, which are credited with exacerbating the deterioration of the banking sector's balance sheets.

Jon Najarian suggests going long FAS, the 3X-Bull Financials ETF ahead of the hearing. I did just that last week based on the early word on revisiting mark-to-market, as well as the grossly oversold state of the financial sector.

Here are a couple of CNBC videos covering this topic and trade:

This fine blog from the L.A. Times pointed out some of the industry firepower pressuring Congress to back off mark-to-market:

31 industry groups and financial institutions called for "immediate action" to halt the "spiral of accounting-driven financial losses."

In other words, end mark-to-market as it is now broadly applied to the banking industry.

The letter’s signatories included the American Bankers Assn., the Independent Community Bankers of America, the Mortgage Bankers Assn. and the U.S. Chamber of Commerce.
From the letter:

"Let us be clear, real economic losses should be recognized and are necessary for orderly markets. However, the recognition of losses that do not have a basis in economic reality is unsustainable in any environment. Appropriate changes in mark-to-market accounting should not wait until mid-year or year-end. This will only allow the spiral of accounting-driven financial losses to continue."

Andrew Snyder at Today's Financial News is skeptical of the long-term benefit of suspending mark-to-market, but he does recognize the potential short-term trading opportunity, which is all with which I am concerned:

If you think last week was a big one for the banking sector, this week could blow your mind. The catalyst will come at 10:00 a.m. this Thursday when a House subcommittee meets to discuss the near-term fate of mark-to-market accounting rules.

If the recent surge in calls for temporarily relaxing the market-regulating rules gains traction, we could easily see triple-digit share price gains at some of the nation’s most prominent banks. After all, without mark-to-market accounting, many banks could re-write their balance sheets. Assets that were once written down to nearly zero could be given just about any valuation.

Unfortunately, that is where the trouble and the opportunity lie.
If Congress starts to show ambition to change current mark-to-market accounting rules, be ready for a major charge in the equities market. But be ready to sell at the top. The gains will not last long. This is a temporary fix at best.

The only way to get out of this mess is to let the free market do its magic. Washington will keep trying to find an instantaneous solution. But we all know it will never work.

This week’s action may create some trading opportunities, but long-term investors should be wary of making any major moves.

Inner Workings
is another blog with some interesting analysis in favor of junking mark-to-market.

Finally, Trader Mike reviewed today's lackluster market action and is decidedly pessimistic about mark-to-market sparking much of anything:

The banking sector had a rare good day but that wasn’t enough to keep the entire market up today. While the S&P 500 made an inside day — a sign of a possible reversal — the Nasdaq made a new low. Volume dropped way off on both indices and the VIX barely budged, so those looking for panic were left disappointed today. The market is very oversold (T2108 is way down at 5.97) but it’s been lacking any positive catalysts to get buyers interested. Perhaps the mark-to-market hearing later in the week will do the trick… but I’m not holding my breath.

09 March 2009

Songs Inspired from Bowling in Boston

The Pig was up in Boston this weekend, celebrating the birthday of blog friend Brian Grimm. We bowled 80's-style, with black lights, glowing pins, and some old-school videos blazing on screens above the ten-pin action.

Granted, we didn't hear any of the following songs, but I'm not posting Kool and the Gang, or Miami Sound Machine on this blog. These are songs inspired by the bowling action, namely, things I would play if I were fortunate enough to own and operate an alley.

First up, a couple of songs by Cut Copy, followed by some classics that today's New Wave resurgence definitely took for inspiration.

Cut Copy - Feel the Love (Live)

Cut Copy - Hearts on Fire

Orchestral Manoeuvres in the Dark - Forever Live and Die

New Order - Perfect Kiss

05 March 2009

Catching a Falling Knife - Portfolio Changes

I caught some falling knives today by picking up additional shares of the 3X-Bull Financials ETF, FAS. Added to my position at $3.19, $2.93, and $2.75 bringing down the cost basis to $3.37.

This story
about the potential re-evaluation of mark-to-market accounting rules encouraged me to build up my long position in the financials:

NEW YORK (MarketWatch) - Equities investors looking for some hope in an ugly market on Thursday pointed to a news report that a House panel next week plans a hearing on mark-to-market accounting rules blamed by many for aggravating the financial sector's troubles.

Reuters on Wednesday quoted a source briefed on the matter who said the subcommittee on capital markets has tentatively slated for next Thursday a hearing on the rules that require assets be valued at current market prices.

"The accounting rule has been a major contributor to the debt spiral," Ed Yardeni, president and chief investment strategist at Yardeni Research Inc. Some financial institutions contend the rule compels them to mark down assets to artificially low prices.

Lifting the requirement "would not replace the Treasury plan to buy troubled assets, [but] it would increase the capital side of the banks' ledger and potentially alleviate the need for short-term capital from the Fed," said Marc Pado, chief market strategist at Cantor Fitzgerald.

THC below $1

These guys must be thrilled:

04 March 2009

Portfolio Changes

I picked up some shares of the 3X-Bull Financials ETF, FAS, throughout the afternoon at an average cost of $3.77.

Why did I go long on the downtrending financials?

First off, the chart below shows the oversold financials trading at the lower end of its channel:

Second, I've said several times that I wanted to swing trade the FAS/FAZ duo, and today's market provided a decent entry point. If XLF trades toward $7.50 over the next few trading days, I'll be happy to unload the FAS position.

Fortune Magazine - November 1936

Thanks to my late father and his growing up during the Great Depression, I have a fascinating collection of Fortune magazines from the 1930s.

These are large, hefty tomes, not throwaway magazines. The covers may allude to the contents, or they may not. They seem more like classic album covers to me, where the meaning isn't always clear, but it makes you want to check out what's inside.

Here's the cover to the November 1936 issue (click on the image to enlarge it to a worthy size):

The issue contains wonderful analyses of New Deal projects, like NYC's Triborough Bridge and Midtown Hudson Tunnel (now known as the Lincoln Tunnel). But that's for another time--the advertisements are the real draw.

I'm not sure if you can ignore the apple-chomping pig's head in the background, but this is an ad for Heinz Plum Pudding in a can:

Check out the ad copy:
Someone once said that Dickens was England's greatest chef because he did his cooking with pad and pencil!

Let the quip pass. There is no call to defend the culinary genius of a nation that has given plum pudding to the world.
Selling plum pudding by praising English food. That's funny.

Check out this beauty, the 1937 Lincoln Zephyr. It's got a V-12 engine that produces 110 horsepower, one more than my 4-banger '07 Fit. That's 70 years of progress right there.

Conservative, tradition-bound Philadelphia is no longer because a self-proclaimed liberal newspaper, the Philadelphia Record, has the largest morning circulation. By 1938, Moses Annenberg's Inky reclaimed the top spot and in 1947, put the Record out of business.

If Philly is too parochial for you, perhaps a sailing abroad would be of interest. Say, to Germany. Yes, Deutschland of the Third Reich, eerily advertised in an American business publication.

If that isn't enough to creep you out, how about a tour of welcoming 30's Japan? The Yen is cheap. And the Japanese tourism board is cheap as well, sporting for only a half-page ad.

The following is an advertisement for casement windows that meet the needs for buildings of moderate cost. In modern-day New York, buildings with original casement windows are something special, and rarely of moderate cost. Seeing an ad from back when casement windows were contemporary and novel is pretty cool.

Now we're at the back cover, featuring an ad for Camel cigarettes, encouraging the reader to smoke Camels "for digestion's sake!" The joke is res ipsa loquitur.

02 March 2009

Portfolio Changes

Picked up 1K shares of the 3X-Bull Russell 2000 ETF, TNA at $12.90.

And yes, I chuckle at the ticker symbol, too.

Portfolio Changes

I sold off a large portion of my short-term FAZ holding on Friday.

This morning, it looks like I was a bit premature on the profit-taking. Fortunately, I held onto 220 shares up until a few minutes ago, when I sold 'em off at $72.49, from a cost basis of $56.20, for a gain of 29.0%.

That's pretty hot on such a cold, snowy day.