Hmm...

"We squander health in search of wealth; We scheme and toil and save; Then squander wealth in search of health, But only find a grave. We live, and boast of what we own; We die, and only get a stone."

- F.S. Cozzens

IM

The asset classes have different market dynamics and interaction effects.

Institutional investors are some of the biggest shareholders of companies.

Defined benefit pension plans are being phased out.

Small cap, junk/high yield bonds risky. 

I'd like to plug a charity

The Cara Program has a mission I really like. It is rated 4 stars on Charity Navigator (http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=7698) and they work locally in Chicago.

Since its founding in 1991, the Cara Program has evolved as not only a best-in-class job training and placement provider for individuals affected by homelessness and poverty, but also a vehicle for true life transformation. Since its inception, they have placed over 3,250 individuals into quality, permanent employment (at one-year job retention rates of 77%), catalyzing the same number of families to stop the transfer of poverty from one generation to the next.

In addition, The Cara Program boasts two social enterprises - one in neighborhood beautification and the other in property preservation - that achieve a triple bottom line: over $2 million in revenue annually, more than 250 transitional jobs per year for the hardest to employ, and a steady strem of permanent jobs created within our own growing business. For every dollar invested into The Cara Program, $5.02 is generated out over five years, in contributions to society and public costs saved.

More information is available at www.thecaraprogram.org.

Draft

Sometimes, when I focus on a issue in the U.S., I can't help but think that the issue would only come up in a developed country.

I think about the larger issue at hand. The more important issue. And I wonder if I should be focusing on that instead.

There needs to be people who tackle issues in the developing world. There also needs to be people tackling issues that matter locally or nationally as well.

Today You, Tomorrow Me

This was from a long time ago (in internet time), but I thought I'd share this touching story of kindness. [Source]

Just about every time I see someone I stop. I kind of got out of the habit in the last couple of years, moved to a big city and all that, my girlfriend wasn't too stoked on the practice. Then some shit happened to me that changed me and I am back to offering rides habitually. If you would indulge me, it is long story and has almost nothing to do with hitch hiking other than happening on a road.

This past year I have had 3 instances of car trouble. A blow out on a freeway, a bunch of blown fuses and an out of gas situation. All of them were while driving other people's cars which, for some reason, makes it worse on an emotional level. It makes it worse on a practical level as well, what with the fact that I carry things like a jack and extra fuses in my car, and know enough not to park, facing downhill, on a steep incline with less than a gallon of fuel.

Anyway, each of these times this shit happened I was DISGUSTED with how people would not bother to help me. I spent hours on the side of the freeway waiting, watching roadside assistance vehicles blow past me, for AAA to show. The 4 gas stations I asked for a gas can at told me that they couldn't loan them out "for my safety" but I could buy a really shitty 1-gallon one with no cap for $15. It was enough, each time, to make you say shit like "this country is going to hell in a handbasket."

But you know who came to my rescue all three times? Immigrants. Mexican immigrants. None of them spoke a lick of the language. But one of those dudes had a profound affect on me.

He was the guy that stopped to help me with a blow out with his whole family of 6 in tow. I was on the side of the road for close to 4 hours. Big jeep, blown rear tire, had a spare but no jack. I had signs in the windows of the car, big signs that said NEED A JACK and offered money. No dice. Right as I am about to give up and just hitch out there a van pulls over and dude bounds out. He sizes the situation up and calls for his youngest daughter who speaks english. He conveys through her that he has a jack but it is too small for the Jeep so we will need to brace it. He produces a saw from the van and cuts a log out of a downed tree on the side of the road. We rolled it over, put his jack on top, and bam, in business. I start taking the wheel off and, if you can believe it, I broke his tire iron. It was one of those collapsible ones and I wasn't careful and I snapped the head I needed clean off. Fuck.

No worries, he runs to the van, gives it to his wife and she is gone in a flash, down the road to buy a tire iron. She is back in 15 minutes, we finish the job with a little sweat and cussing (stupid log was starting to give), and I am a very happy man. We are both filthy and sweaty. The wife produces a large water jug for us to wash our hands in. I tried to put a 20 in the man's hand but he wouldn't take it so I instead gave it to his wife as quietly as I could. I thanked them up one side and down the other. I asked the little girl where they lived, thinking maybe I could send them a gift for being so awesome. She says they live in Mexico. They are here so mommy and daddy can pick peaches for the next few weeks. After that they are going to pick cherries then go back home. She asks if I have had lunch and when I told her no she gave me a tamale from their cooler, the best fucking tamale I have ever had.

So, to clarify, a family that is undoubtedly poorer than you, me, and just about everyone else on that stretch of road, working on a seasonal basis where time is money, took an hour or two out of their day to help some strange dude on the side of the road when people in tow trucks were just passing me by. Wow...

But we aren't done yet. I thank them again and walk back to my car and open the foil on the tamale cause I am starving at this point and what do I find inside? My fucking $20 bill! I whirl around and run up to the van and the guy rolls his window down. He sees the $20 in my hand and just shaking his head no like he won't take it. All I can think to say is "Por Favor, Por Favor, Por Favor" with my hands out. Dude just smiles, shakes his head and, with what looked like great concentration, tried his hardest to speak to me in English:

"Today you.... tomorrow me."

Rolled up his window, drove away, his daughter waving to me in the rear view. I sat in my car eating the best fucking tamale of all time and I just cried. Like a little girl. It has been a rough year and nothing has broke my way. This was so out of left field I just couldn't deal.

In the 5 months since I have changed a couple of tires, given a few rides to gas stations and, once, went 50 miles out of my way to get a girl to an airport. I won't accept money. Every time I tell them the same thing when we are through:

"Today you.... tomorrow me."

tl;dr: long rambling story about how the kindness of strangers, particularly folks from south of the border, forced me to be more helpful on the road and in life in general. I am sure it won't be as meaningful to anyone else but it was seriously the highlight of my 2010.

*edit: To the OP, sorry to jack your thread, this has nothing to do with Hitch Hiking. I sort of thought I could just get this off my chest, enjoy the catharsis and watch the story languish at the bottom of the page. Glad people like hearing the tale and I hope it moves you to be more helpful in your day to day. *

Fixed Income Update

U.S. Treasuries

Not much change this week. The bond market is cautious.

<= 1 year treasuries are called T-bills, which are sold at a discount from par (face) value. 1 to 10 year treasuries are called notes (payment every 6 months), and 20-30 year treasuries are called bonds.

Say you want to buy a 2-year $1000 note. The way you read the price (from some sources like Bloomberg) is: it would cost $990 plus an additional 28.5/32 of a percent of $1000. (The + is 1/64%.) From sources like CNBC, you get a decimal: the price of a 2-year note is 99.8828. The price of a 5-year note is 99.9063.

Price and yield are inversely related. When the Fed buys, price goes up and yield goes down. In essence, we are seeing a flattening of the yield curve as the Fed replaces short-term treasuries with longer-term ones as part of a program. In trading, there were more short positions on the 10-year note.

Some Federal Reserve officials oppose the Fed buying mortgage-bond securities because of the risk of inflation.

The difference between the yields on 10-year notes and inflation-indexed securities is the gauge of expectations for consumer prices (break-even rate). This gap, which is the perceived rate of inflation, has gone up. That chart is on the right.

When the price of oil increases, growth slows (since consumers have to spend more on gas) and there would be more investment in the bond market. From the chart above on the left, the bond market is strong.

The 3rd round of quantitative easing is still on the table.

Europe

There are actually indicies for bank deposits. The charts above are yearly, ending December 2011 (last available data). Greece is on the left and Germany is on the right. Corporate and individual deposits have gone down; who would want to keep their money in countries at risk of default?

The losses are much less in Italy and Spain than in Greece. There was a year-end uptick in those charts as people cashed in assets for the holidays. Italian banks are selling bonds to stem the outflow of money. Central banks in Spain and Portugal are penalizing banks for aggressively pursuing money by paying high interest (because money that stays in the bank doesn't help the economy). Additionally, Asian companies are buying Italian and Spanish debt, since the return is six times as much as in Asia.

The Bond Market

I was curious about the size of the bond market, and it is many times bigger than the equities market, but we see it less in the news. The data above is from FINRA. The majority of the U.S. bond market debt is in U.S. treasuries at just over a quarter, followed by mortgage-backed bonds, corporate bonds, etc. (Note that there is actually more in treasuries than FINRA accounts for.) Although we mostly talk about U.S. treasuries, there are many instruments in the bond market.

Did you know? In the market for credit default swaps, which is essentially insurance for debt obligations, the cost to insure 10M of Greek debt for 5 years is $7.2M plus $100,000 annually.

Some corporate news: companies have issued/refinanced debt because of better yields that make it cheaper for them to borrow.

I seem to like macro more than micro.

MBS

http://www.nytimes.com/2012/02/25/business/homes-arent-selling-but-its-an-apartment-landlords-market.html

Saving this extremely relevant article for a blog post.

Edit 4/15: http://www.nytimes.com/2012/04/03/business/investors-are-looking-to-buy-homes-by-the-thousands.html?&pagewanted=all

The Role of Perception of Grading in the Gender Gap in Education

An interesting new study from the Centre for the Economics of Education at the LSE.

"We find that students’ perceptions strongly depend on their gender and their teacher’s gender.

Teachers are more lenient with students of their own gender.

Male students invest less when graded by a female teacher, and female students invest more when graded by a male teacher."

And the possible implication?

"Indeed, with a male teacher, the gap between boys’ and girls’ effort increases because girls invest more; with a female teacher, the gap increases because boys invest less."

http://cee.lse.ac.uk/ceedps/ceedp133.pdf

On Durkheim and Suicide

Durkheim's book on suicide and his theory of marriage.

To be posted.