The Destroyer of Finance

 Recap of Glacier National Park?  Not yet.

 Good times to be a bank?  Not yet.

 Light at the end of the tunnel?  Not yet.

 Bad news: Oil at $143.  Don’t think I need to explain this one.

 Bad news: Expected corn harvest drops due to flooding.  7% drop!  F!

 Bad news: Eurozone inflation up to 4%.  Bad because if the EU Bank raises rates to fight inflation and the US doesn’t, it will drive down the strength of the dollar more… making oil more expensive.

 Bad news: EU telecom merger undone.  When companies start becoming prudent with their mergers, it’s generally not a good sign.

 Good news: I got a new phone this weekend?

 Here’s to the lucky ones,

 Charles VIII of France

 For today’s recap of the stock market, I require audience participation.

 Please find a water hose of some sort: garden, detachable sink faucet, shower head, fire hose, super soaker, etc.  Ensure ready supply of water.  Really even a regular bucket of water will do.

 Engage the supply of water (hose or bucket) in such a manner as to apply a steady steam of water against your person.

 Now scream.

 Louder.

 While continuing the above, view the picture below

 If you’d like you could maim yourself now, but that’s likely taking things too far.

 Given that 1 in 5 stocks across all three major markets (NYSE, AMEX, NASDAQ) was actually green (up) today, odds are pretty good you might have lost some money today.

OIl at $140?  You think Congress can wave a wand and make it go back to $60?  Oil futures are trade globally now… outlaw them in the US, their trading will go to London, Paris, Geneva, Hong Kong, Singapore, Abu Dhabi, Dubai, Kuwait City, Moscow.  It could go anywhere.  The people who testify to congress that congress could legislate oil back to $60?  Want to bet that they’re getting killed being on the wrong side of some oil derivatives?

 Anyway, I have changed my mind on the gas tax repeal.  In the short run, if you lifted the federal gas tax ($.18/gal) I do think the price of gas would drop.  It probably wouldn’t drop 18 cents (the refineries would want to get some of their lost profit margin back), but probably 10-15 cents.  I forgot, and was reminded, that the gasoline retail market is such a competitive one that gas stations make next to no profit on the gas they sell, relying instead on snacks and sodas for the Hamiltons.  This is assuming, of course, that it’s not the only gas station within miles or right next to the rental car place at the airport.  Or at a boat dock.

 Anyway, I was remebered this in Omaha when I was startled to note that “super” (mid grade) gas there was 10 cents cheaper than regular (premium was 30 cents higher than mid grade).  Ultimately, I learned that mid grade is cheaper because it has ethanol in it and the other grades apparently don’t (and since it’s NEBRASKA, corn ethanol is cheap).  Also, it’d be interesting to know what the MPG difference was (ethanol has a significantly lower energy content / volume, and thus less MPG than gasoline… no, octane has nothing to do with energy content, look it up) and whether or not it was worth the 10 cent discount to get the mid grade.

 Ah, stats!

 Boats float, banks sink;

 Colonel Tom Parker

 My review of the Omaha, Nebraska located College World Series opening weekend.

 In pictures:

 In words:

 The baseball: greatness.  Even if Miami did lose to Georgia (in a panic button breaking atomic meltdown 9th inning that saw the closer throw a routine ball into the outfield and me leaping out of my seat screaming “Oh no! FUCK!”)

 The atmosphere: greatness (thanks to the LSU crowd for Sunday night especially)

 The chaos: greatness.  A total carnival… outside the stadium felt like a state fair with twice as many people partying as were inside the stadium watching the game.

 Did I mention there was T and A everywhere you looked?  Oh, to be back in college…

 Imagine this true life re-enactment of a conversation I actually heard while in line for a hotdog.  Principles: a person I never saw (behind me) and to the side, a cute college co-ed with short denim shorts and a red halter top.. around her waist, as she’s untied the top in order to better expose her bikini top.

 Coed: What the FUCK!  I totally didn’t even see you there!  blah blah blah… and I’m sitting next to this guy who’s, like, “I have my 5 year old kid with me” (ed note: apparently objecting to her attire) and I was like, “Look mister, the is the COLLEGE world series!  And what’s college about?  Drinking and Fucking!  And I’m here to drink and fuck!!!”

 I couldn’t even begin to make up that story if it didn’t happen word for word.  I swore to myself on the spot I would remember the whole statement.  I memorized it.

 And let me tell you, there were plenty of people (dudes and dudettes) who were there for those two items primarily.  As close to spring break in Panama City Beach as you can get in a baseball stadium.  This may shock some of you, but I’ve been there, too.

 Some notes:

 A) What’s the deal with tube tops?  Pay attention girls: the odds of you looking good in a tube top is so remote as to not be worth it.  If you’ve got too little up top, it doesn’t work.  If you’ve got too much, it gives you saggy pointy boob.  Plenty of other attire works better to exhibit your wares.  Of course, if you’re looking for easy access, nothing works better.

 B) Dudes: Shaving a six pack into your belly hair IS funny, but so is a drunk hobo.

 C) To the ball girl: if you stand right next to the netting, the ball is going to roll off of it and go over your head and the stadium WILL boo you.  I would have thought you’d catch that after the first few times.

 D) To Kyle Shelton, the North Carolina left fielder who out-sprinted a member of the grounds crew to rescue a beach ball from certain death and throw it back into the stands:  We salute you.  (He also got perhaps the loudest ovation of the night).

 E) What’s the deal with short skirts and shorts?  More, plz.

 F) Stanford scoring 11 runs in the top of the 9th made a long game last an eternity.  It WAS warm/hot and sunny, by the way, which made a 4+ hour game uncomfortable.  Also, a word to the Florida State coach: what the hell were you thinking taking your best hitter and good defensive catcher OUT of your lineup after catching for 8 innings (wearing catching armor and squatting in the sun while throwing the ball back to the pitcher over and over and over) and making him pitch in a TIE game?  Sure, I understand he can throw gas, but he was clearly gassed after catching all game.  The result?  Single, 1-base error (shortstop), Sac Fly (out #1), intentional walk, single, walk, 1-base error (shortstop).

 If you like baseball, you should go at least once.  If you like college sports, you should go at least once.  If you are single and of roughly college-esque age and want to plow some turf/get plow, you should go.  If you just want to party, you should go.

 Omaha seems to be a nice city, too, by the way.

 My power is pure;

 Daniel Ludwig

College World Series = awesome

Glacier National Park = awe incarnate

ATT cell service in NW Montana <> good

Blog update = forthcoming w/ CWS review, GNP review, and finance (of course).

 Death of Blog?  Not yet.

 If you are experiencing heavy breathing you are: A) working out, B) having sex, C) in the middle of an asthma attack, D) scared about the economy, or E) far too big a fan of blog.  Or a combination thereof.

 A) Good for you

 B) Gross.  Pics or it didn’t happen.

 C) Don’t you know steroids make you hit baseballs better?

 D) see below

 E) Three letters: T R O.

 Ok, so the market is pretty rocky these days.  A couple things:

 The whole “credit” thing isn’t done yet.  Just because “we” forgot about it for a month and the DOW got back to 13,000 doesn’t mean anything really changed.  All that did was demonstrate that the market is merely a highly efficient reflection of inefficient human perception.

 Global trade isn’t going to vaporize.  China still needs loads of raw materials, and the other Asian countries aren’t just scratching their asses.  Also, China isn’t going on vacation after the Olympics.

 We can live with $130 oil.  I know this seems incredulous, but it will not end life as we know it.  It will shift our behaviours in sometimes subtle and sometimes obvious ways.  Life will, however, continue much as before.

 Oil reserve does not equal oil supply.  Well, at least not in the present time frame.  All that matters for the next 20 years (at least) is flow rate.  Everyone knows we have enough Dino to rock our asses off for 20,30,50 years.  How fast can you slurp the milkshake is what we need to know.  As long as it’s 85 million barrels a day, oil will keep getting expensiver (just not necessarily at the same rapid pace).  “Expensiver” is not a word, I know.

 Dryships!  Why hast thou forsaken me!!!!!  If you bought DryShips before the death deying plunge, stay strong.  The company is good and very profitable and will continue to be very profitable into the future.  The price will recover, you just needs a HANS device to keep from getting fatal whiplash.

 Going forward, 6th-10th business day generally means no blog: tooooo busy.

 Also, next week I will be contemplating the cool air of Montana’s mountains while preparing my soul for the brimstone fired heat of the Texas summer.

 I am civilized,

 David Rockefeller

 Quite a day, no?

 Following up a great day yesterday, we get today featuring some reaming worthy of an edgy porn flick.

 How does everyone feel about $139 barrel oil?

 How about a larger than expected jump to 5.5% unemployment?

 How about corn (and wheat) jumping on too much rain in the midwest?  Hadn’t heard much about grains from me in a while, eh?  They’ve been moderating a bit… actually, the price of wheat has even still fallen quite a bit from the bire days of a few months ago.  Still, they ain’t cheap.

 Insurance giant AIG, already beset by financial woes, now faces probe by SEC regarding how they represented the value of various subprime mortgage contracts.

 AMD can’t pull its fist out of its ass long enough to beat Intel on the open market, so they’re taking to the courts.  I’m no Intel fan so I wouldn’t mind seeing a win for AMD, but it wouldn’t change the fact that AMD shat on numerous opportunities to really make some inroads against Intel without any outside help.

 I spent a few hours this morning running through the mind numbing excercise of trying to forecast the interal profit margin for a particular product at the bank for the next 18 months.  Couple highlights: its internal only, meaning its fake, hypothetical profit to begin with, and secondly how the hell am I supposed to say what our interest margin on this is going to be in 18 months?  Have you looked out the window recently?

 Rangers drafted Smoak and I approve.

 Can’t wait to drive to Omaha,

 Nathan Hale

 Those cell phone commercials with the wizard might have to get redone as Verizon is attempting to acquire Alltel for a paltry $27B.  This doesn’t seem to make a whole lot of sense given that a private equity group paid $27.5B for Alltel a little over a year ago.  Could be just another example of the irrational exuberance that existed in the world of finance as little as a year ago.

 In other acquisition deals that involve “B”s, Smucker’s thinks you need some caffeine with your jam, buys Folgers from Proctor & Gamble for $3B.  In a modestly humorous twist, PG shareholders will end up owning 53% of the new Smuckers.

 Some more better-than-a-shiv-in-your-crotch news on the economy reveals that US worker productivity was up while wage increases remained moderate, yet measurable.  So, things could be better, but at least you don’t have a shiv in your crotch.  Of course, we might be saying that about our economic read outs for a while…

 In the end, the market indexes mostly tanked after Moody’s (the rating agency) announced they were considering cutting the credit ratings for financial insurance giants MBIA and Ambac.  This won’t affect your car coverage, but it might shake your city’s ability to fund new roads and stuff.  Well, not in Texas since we apparently contract EVERYTHING to be toll roads.

 MBIA and Ambac both dropped at least 15% almost immediately, so probably not your best day if you’re still holding that bag this evening.

 In my continuing fascination: part 3: day one of how Finland does do teaching the childrens.

 So now that Hillary is officially unofficially done, we can start the VP guessing game.  Yeah.

 Hmmm… short post today.  Sounds good to me.

 Greatness,

 Angelina Jolie

 First, a correction: SINO (Sino-Global Shipping), which I covered a few days ago, has significantly more shares outstanding than I initially believed.  I’d like to revise my targets from $12 to about $7, or $8 if you are feeling more aggressive.  Since SINO dropped 10% today to $13, I hope no one bought in at $14.

 Second: man, are the US auto makers screwed.  This might seem obvious, of course, but why don’t I add a little detail to the pornography.

 A carmaker, generically, makes cars and/or trucks.  The US automaker has a business model (all three use the same model): sell cars for little to no profit and sell trucks for big money.  See, those crazy import companies, they price their cars so cheap the good patriotic American companies can’t really get a good profit in the car market.  They could have tried something radical like justifying a higher price by creating a better product, but that’s one of them dangerous communists would do.

 Better dead than red, I say.

 Anyway, the US makes elected to essentially tread water in the car market while exploiting the truck market for big margins.  Think it costs GM/Ford/Chrysler much more to make a pickup truck (think Ram/F-series/etc) than a car?

 Shiiit son.  Heck, naw.  Hell, they be easier to build, don’t take much extra metal, and aren’t legally required to do so good on all that fuel efficiency, e-missions, and safety bull crap.  All you’s gotsta do is take a big shitty metal box, slap some gaudy pastic moulding on the sides, drop in the biggest, baddest, loudest engine built on 1960’s technology you can find, then mark up the cost so high it makes every chaw dippin’ roper dump a spittoon on his head tryin to get one.

 Or you can close up the back of the pick up, bolt in some extree seats, and make sure the dern thing be so big that it’ll crush any car (and associated fellers inside) that it happens to run into.  Then mark the pricer up even higher and you’ll make every broad with a pack of brat-devils soak their panties with lust.

 Shucks, and everybody knows only a real ‘Merican can build a truck.  Can’t trust them foreigners to do it right, ya hear?

 Yee haw!  Boy howdy!

 ‘Course, now-a-days don’t no one want a pickem up truck.  That’s a problem.  A conversation with one of my stalwart coworkers, late of Detroit:

 Coworker: “What’s it going to take to turn this thing around?”

 Me: “A lot of pain.”

 CW: “Think they’ll have to break free of the unions?”

 Me: “Sure wouldn’t hurt.”

 So, sorry to anyone that is in or related to an auto workers union, but the unions are part of the problem now.  I’d say about 40% of the problem, with the other 60% going to past and present strategic management of the US auto companies.

 I understand all the great things unions brought to the labor scene.  As a supporter of the free market, I identify the labor unions as one of the great achievements of the development of the western market economy.  The fact of the matter is that without the US government, the auto union would fail because the big three would drop all the union workers like a rock, and that for years now the unions have stifled competitive innovation and economic growth in the US auto scene in particular and the Midwestern economy in general.

 I enter into evidence the state of Michigan.

 I digress.  Just don’t look to the auto industry to save us.

 Bernanke and Fed are now more worried about inflation, suggest more rate cuts are not forthcoming.  This gives the purchasing power of the dollar a little bump, making imported items a little cheaper.

 The essential story of the day, however, was more fretting and hand wringing about the health of financial institutions.  Today it was Lehman’s at center stage, but it could be a different bank tomorrow.  Never know these days.

 Still a good read: day 2 of visiting the Nordic education system.

 Also, the primary season sort of ends tonight with the voting in ethnically diverse Montana and South Dakota.  Regardless of the outcome, the AP reports that Obama has won the necessary number of delegates for the nomination.

 I’ve got your value right here,

 The great Rafael Nadal

 Secret fun time recipe:

-          start with one party, heavy on the dudes

-          add booze

-          shake

-          now add one (1) single girl

 Presto!  Instant Comedy and good times for all!

 Wachovia (x) CEO and (x) Chairman Ken Thompson will have lots of time to hang out with his dudes after the board of directors “asked him to retire.”  For that matter, maybe he’ll have a wingman soon, as Washington Mutual strips Mr. Killinger of his title of Chairman, requests that he focus more on the CEO part of his job.

 Honestly, if I were CEO and Chairman of Washington Mutual (a bank/thrift that’s seen its stock decline 80% in the last year), I probably would have scouted out my retirement vacation a while ago.

 And, oh. My. God.  Did you see what Lohan wore last night?  What a tramp.

 One of the major issues facing the US going forward is the… uneven quality of high school education today.  The Economist sent a writer to Finland to find out what makes there school great, and he stopped in Sweden on the way, were apparently the Swedes have decided that pandering to kids’ self esteem is bad for education.  The things these norse pagans come up with… next thing you know they’ll be throwing a squad of bikini clad blond bombshells out of a plane to promote beer.

 And in case you were wondering, construction spending both present and anticipated is down (again), while material costs for supplies makers are up (again).  I’m looking at you, USG.

 Speaking of construction, here’s some funny.  Can’t blame a guy for trying.

 Speaking of funny, here’s some over-reaction for you.  I’m not offended by the t-shirt, I’m just shocked he would be flying so close to the end of his pregnancy.

 Speaking of pregnancy… well, ok, I’ve got nothing.

 To of the morning to you,

 Tex Schramm