Tuesday, August 14, 2007

Virtual Office, $820. Dow, -211.18, 13025.51.

HPT, $500 on 26 contracts traded.
OBAT, $401 on 3600 shares traded.
Bubs, $304 on 1100 shares traded.
Me, $117 on 24,800 shares traded.
Denarii, no trades.

Misstrade, no trades.
Evolution, -$574 on 38,400 shares traded.

Well, volume was a little higher than the totals for yesterday, but still light compared to last week.

Bad news is still hitting this market. Today, Sentinel made a request to halt redemptions from it's fund. As I type, Thornburg Mortgage, TMA, is halted for trading due to pending news. Perhaps it's good news! HAHAHAH! Right. Anyway, it's tough out there...

It was a really wishy-washy day in the VO... no one really made or lost too much.

Let's see what tomorrow brings. Will the Dow hold 13,000? Will those who voted in my "poll" that the Dow would hit 12,500 before 14,000 "win?" We shall see.

NOTE: Meanwhile, if anyone subscribes to the WSJ online and wants to fill me in on the link made to my site from a comment made on this article I'd appreciate it. I'm not a subscriber... You can either email me or place a comment here. Thanks.

UPDATE: I just figured it out... The Wall Street Journal was probably just fishing for a link from my site. Pikers. Still, my request for information stands.


Student_Of_The_Trade said...

Maria's Mortgage
August 14, 2007; Page A16

George Bernard Shaw once announced that "love consists in overestimating the difference between one woman and another." A similar principle can also apply to financial decisions, and it may provide some insight into the current swirl.

Financial overestimates maintain the engine of savings and investment. Both buyer and seller have to think they are making an excellent deal. As in love, an element of human nature plays a key role and the cold cloth of perfectly rational analysis is set aside.

Consider Maria. Brimming with confidence about her job and night school credits and the neighborhood in which her house is being built, she buys a dwelling for somewhat more money later than she has now -- a modest and conventional overestimate which has usually worked for most people. Allen, her mortgage banker, fills out the forms and takes his fee. Though he would not personally loan Maria that amount of dough, he knows that his organization can sell the alloy of Maria's real income, the sweat of her brow and her inner optimism, as a security to an investment house in Sarnia, Ontario or Milan, Italy.

Soon it and others like it become a large tranche of an offering from Banque Paribas that is purchased for the endowment of a teaching hospital in Denver. At that point no one remembers or needs to that Maria and Allen had inked a deal predicated on Maria's zesty zeal about her life and money and Allen's confidence that his bosses and the rating agencies would conclude that in the larger scheme of things everyone estimated perfectly.

Maria's occasional sweat about late 2007, when the interest rate on her loan bumps up, is soothed by the knowledge that so many others are engaged in the same hopeful game. Then, suddenly, folks indigenously optimistic about the future feel a wind of fear about Maria and her overestimate and her cash. It's a wind felt by the people who provided Allen that money which they now want back because they hate losses -- and no one can blame them for that.

Not only have millionaires lost confidence in a million Marias -- but they suddenly face the sophisticated perplexity of trying to find just where that money they took from their pockets actually is.

The task is bewilderingly difficult because many of the transactions were actually managed by computers with whirring models assessing countless points of yesterday's data. So there's nothing for the anxious investor looking for his money to do but trudge trudge trudge through the financial thickets. Even James Bond would have to shoot his way through the bonds upon bonds. Then triumphantly he finds where his stash is actually located! It's perched in New York in an entity called (don't try this at home) the High-Grade Structured Credit Strategies Enhanced Leveraged Fund. A very reassuring name! What intrepid literature! But then he notices a sign on the door saying "Closed. Oops. No Money Here."

Meanwhile, Maria, her sweat now cold, is calling all her relatives who still live on the same old street and perhaps have a few socks full of cash they can spare. Allen has been told to find other work. Companies whose stocks were valued at $70 are now $40.

Psycho-economists opine that The Confidence has been lost, or perhaps mislaid for a bit, and that the power of the economy should not be seen through Maria's sob-colored glasses. And of course there are blamers galore with lots to go around.

For the Allens who never checked Maria's paperwork and who assumed because she had a heartbeat she was both fine and subprime all at once and who, worse, didn't give a damn. And blame for the companies who lurked outside the gated-city building sites promising the moonlight, on the deck, for just a little overestimate please.

And blame for the regulators who couldn't follow the trail of crumbs leading from an intimate overestimate by a hopeful buyer of a bungalow to massive Paris banks who decide to close their cash window and take a long lunch. And the rating agencies largely paid by the companies they rate.

The kernel fact of our economic nature is that we evolved as hunters and gatherers and only those folks made it who awoke in the morning and announced "What a fine day to try to catch an impala or find all the ripe sweet fruit."

It's always been the job of decent bankers to keep careful track of the inventory of the pantry. They manage credit for us and do not or should not give credit where credit is not due.

At the same time, as the proverb in the Good Book says, where there is no vision the people perish. And there is the ongoing matter of the vital overestimate. The blade balance between optimism, accomplishment and recklessness is known very well to race-car drivers who, if they get it wrong can cause a pileup on the track and people get dead.

It's utterly amazing that Maria's mortgage has been so important to the huge money movements of the wealthiest humans in history. Just hope her Uncle Sal has some cash in that argyle sock.

Mr. Tiger teaches anthropology at Rutgers and is the author of "The Decline of Males" (St. Martin's, 2000).
Blog Posts About This Topic
• Collecting my Thoughts collectingmythoughts.blogspot.com
• For The "Maria" Voters dinosaurtrader.blogspot.com

Dinosaur Trader said...

Thanks a lot!

Clearly, they didn't read my post that they were linking to! HAHAHA!