California’s Desolation Wilderness has far more trees than the name would suggest. The choice of photo is purely coincidental.
To reach Aloha Lake from the Echo Lakes trailhead one passes through an area marked “mosquito pass” (at least according to one trail marker). At the time we visited, snow still covered the higher elevations, though patches of broad-leafed plants gave hints to the insectile clouds summer would bring. Hiking in autumn, or at least after the first snow, provides a welcome escape from mosquitos, and gear also stays much cleaner with a few inches of snow covering the ground.
For a quick update, the following:
- Yes, I am still alive, and back in the States.
- If you haven’t been paying attention to Europe, now’s a good time to grab some popcorn.
Now for the longer thoughts. For some time (well, since the March 2009 bottom) there had been a general sense on the web that many traditional technical analysis methods weren’t behaving correctly. The market just continued a slow grind upward, mostly due, as Zerohedge put it, to a pair of computers trading shares back and forth to each other. Now, those signals are working again.
There’s also other good news; the civil suit against Goldman Sachs, and a Bloomberg story about Wall Street banks’ massive fleecing of taxpayers in the municipal bond market. The stories aren’t the news; as is usual the details have generally been known for years in advance. The news is that someone in authority seems finally willing to take notice of the problem.
Ob Griechenland über die Zeit wirklich in der Lage ist, diese Leistungskraft aufzubringen, das wage ich zu bezweifeln.
– Deutsche Bank CEO Josef Ackermann, 2010-05-13
As for Europe, most of the resolutions over Greece have been largely hand-waving. As in the U.S., leaders are still preoccupied with blaming speculators and trying to assure investors that everything is perfectly fine. While my earlier expectations of a European “summer of rage” have been delayed, I think the season is now upon us.
In the end, cash flow is what matters. The greatest threat to Greece, and to the rest of the EU, is that promised bailout monies are unable to be had. Accounting standards may be adjusted, GDP can be gamed, but eventually payments must be made. Failed bond auctions, like Spain encountered yesterday, will only add to the pressure.
Over the past few years I’ve managed to pare down my luggage requirements to a single carry-on bag and a briefcase. (Rick Steves offers some useful advice in this area.) My present trip has seen a similar reduction in the amount of stuff I carry with me on a daily basis. To select a particularly appalling example, I climbed the Great Wall carrying both a bag (containing lunch items, water, and other “essentials”), Nikon D40, and a generously-sized umbrella from the Beijing Intercontinental. To be fair, the umbrella doubled as a walking-stick and there was a decent chance of rain, but the combined weight in the face of oppressive humidity suggested I seek alternatives.
I have since traded my passport for a photocopy, the Nikon for an ultra-compact Canon IXUS 100IS, and left the bag at home. The IXUS 100IS (the SD780in the U.S.) is the smallest of Canon’s current line, can hide behind a credit card, and easily disappears into a pocket thanks to its rounded corners. While I still bring the Nikon when the situation demands, the Canon has become my daily carry.
I’m having far too much fun in Beijing to put together a decent post, but the temptation to send out another “find an exit” email grows ever stronger. Looking at my archives, the last time I sent such an email was September 20, 2008. This rally still has space in which to run, but it appears to be nothing more than a standard bear market rally. I will instead throw out some recent quotations for your amusement.
In the past, I have gone so far as to imply the Realtors group are spinmeisters. This month, I will be more blunt: Their actual data has become untrustworthy, their spokesmen lie for a living, and their “news releases” is little more than misleading junk.
– Barry Ritholtz, The Big Picture, 2009-08-24
“No, no. That’s not the one you want. You want FAS!”
– An airline stewardess commenting on Tom Sosnoff’s chart of FAZ, the financials ultra-short ETF. (This is a Joe Kennedy Shoeshine Boy moment.)
In what can only be attributed to a rogue computer blowing a vacuum tube, virtually all the names in the credit universe were wider over the past week, despite an equity market ripping, or, more specifically, AIG, FNM and FRE ripping and everyone piggybacking for the ride in a few bankrupt companies.
– Tyler Durden, zero hedge, 2009-08-24
I have been somewhat a fan of Nassim Nicholas Taleb’s black swan idea, although not without reservations. A black swan is by definition unpredictable, and yet the current financial meltdown was hardly a surprise to anyone who cared to look. I am therefore pleased to mention a new entry into our statistical bestiary, that of the dragon king. In his paper Dragon-Kings, Black Swans and the Prediction of Crises, Didier Sornette identifies statistical outliers to data sets that otherwise follow power law distributions. Such outliers appear to be the result of positive feedback mechanisms, and two interesting hypotheses may be drawn: that they are both more common than expected, and also predictable.
“Million-to-one chances crop up nine times out of ten.”
– Granny Weatherwax, Equal Rites, by Terry Pratchett