Scams, fitness style

While this isn’t necessarily financially related- except to the extent you don’t waste your money- I did find it fascinating and worth spreading.  You’ve all seen those ads on web pages. The ones with the “before” and “after” pics of someone who lost weight and got buff. I’ve always assumed the pics were either taken months apart (which isn’t likely) or photoshopped. Well, someone finally exposed how its done. Enjoy:

 

 

Even more hilarious, is the youtube vid I noticed off to the side of this debunking video:

Did the stimulus work? A new book.

Yes, according to a new book “Money Well Spent”. Interview with the author (below). Interesting that he still gives the stimulus a grade of “C” despite the book’s title. Might be a good read.

Unfortunately, WordPress will not embed a video on Yahoo!, so I have to give you a link:

http://finance.yahoo.com/blogs/daily-ticker/author-grabell-stimulus-deserves-somewhere-between-b-c-191641177.html

Too many metaphors

I have to admit, I’m stuck at a literary crossroads. There are simply too many metaphors to draw upon! Where to start? As Yogi said, when you come to a fork in the road, take it. Consider that it is now 2012, the year which the Mayans supposedly predicted the world will end. It also happens to be the 100th anniversary of the sinking of the Titanic. And almost as if on cue, a cruise ship just sank under mysterious circumstances in Europe. Yet it gets better: Europe is all too similar to a slowly sinking ship, listing feebly in the cold night, while the band plays and the crew runs about helplessly (cluelessly?) Greece was just the tip of the iceberg afterall. Will the captain (Germany) abandon ship or order the water tight compartments to close? Will the water tight compartments hold or does the water spill over into neighboring holds, causing the ship to slip deeper and deeper into the sea? Will le passagers in first class survive? The lowly steerage passengers will almost certainly absorb the brunt of the losses. Or will the HMS Eurozone sink suddenly, like the Lucitania (coincidentally torpedoed by the Germans)? If Europe does sink fast, will it bring the end of the [financial] world? Is this what the Mayans predicted, “Eurogeddon”? What will happen to the survivors and what of the wreckage is salvagable? About the only thing I can predict with certainty is that there will be a bull market in metaphors this year- hopefully by writers who will have a more eloquent and creative time with them than me!

It’s January – you know what that means

I was saving this post for the end of the month, but the tea leaf-reading, fortune-telling, divining rod, hocus-pocus is starting early this year, so I’ll post it today.

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You guessed it, it is prediction time! Along with the new year, the pundits will come out and make confident, bold predictions about the year to come. They’ll hardly ever revisit last year’s forecast and how wrong it was, but no matter, they will confidently predict this year’s path anyway. Of course, this annual exercise tends to hit the press in January and January is the month that supposedly predicts the stock market for the rest of the year. (Recaps of this topic here and here.) I’m going to pre-empt the February 1st or 2nd headlines right now.

For 2011, the January Barometer was wrong, again. January 2011 was an up month and the rest of the year was down, albeit slightly. That makes the miss three-in a row, 50% on the last decade and only 64% since 1926. No doubt pundits that will choose a time period with more favorable statistics which to cite as evidence (you get 69% by choosing just 1940 onward).

Let’s play a game, shall we? Please post in the comments links to any January Barometer articles you find, so we can chuckle at their ignorance of statistics and logic. I expect them to start appearing in early February.

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And here are the TWO instances of nonsense I’ve already seen:

In this article from CNBC.com, we learn that “Since 1945, a positive January in an election year has never missed in predicting a full-year gain for the Standard & Poor’s 500, going 8-for-8″. Wow, a whole 8 data points, conveniently ignoring pre-1945 data (why?) 8 data points is not statistically significant for, well, anything. But go ahead and peruse the article anyway, it’s laughable. It includes gems like “Whatever the S&P 500 doesn’t provide in absolute return this year, it will likely make up for in predictability”. What the heck does that even mean? I’m floored.

And then we have this little interview on the otherwise good ‘Breakout’ on Yahoo!Finance. At about 2:10 into the interview, the guest disclaims “even with a few errors”, the January Barometer is still “pretty good”. Uh huh.

Please use the comments to share other incidences of magical thinking.

Hedge Fund Manipulation

Happy New Year, everyone! What better way to start the year than highlight rampant fraud?

Hedge funds seem to make all the headlines. Rarely do we hear about plain old mutual funds much anymore. ETFs, derivatives and hedge funds are the investments du jour (or perhaps, “du la decennie” or “of the decade”?) There is a tremendous misunderstanding of what “hedge funds” are, how they invest and what to expect from them. The category is as broad and diverse as the “mutual fund” category is.

Deflation or Inflation?

Admittedly this is anecdotal. But also significant. It looks like auto prices are set to…drop. That’s right, the price of new cars- even new and improved models- is set to fall. Seems odd in the face of reasonably strong commodity prices doesn’t it? Sales numbers have been decent and global capacity was cut right after the crisis three years ago. The Yen is strong, the Euro is holding in there despite being a disaster, so it’s not like the dollar has suddendly greatly appreciated to lower import prices. All of this means that auto prices should be up modestly, not down. (click graphic below for article). Hmmmm….

Technical Nonsense

I read as much as I can about the world of finance and economics. And though I consider technical analysis to be fortune telling, it shows up everywhere. So I often skim it anyway, just to see what the witch doctors are saying and observe whether some of them are actually right with any consistency. The last few months have been rather amuzing in how the technical analysts spun the reading of tea leaves. Here’s how it went:

Still think it’s a level playing field?

We’ve discussed the idea of free trade here many times and we all seem to agree that free trade is a good thing. I’ve argued a number of times that US-Sino trade is definitely not free, however. I emphasis that a tilted playing field does not deliver the same benefits and can instead be harmful. The primary culprits tilting the field are the artificial exchange rate and the lax environmental laws which greatly reduce overhead for industry.  Another is the “voluntary” transfer of technology to China, which is a requirement that U.S. firms “transfer” technological know-how to China as a condition of doing business there. This often takes the form of establishing R&D facilities in China and/or a joint venture with a Chinese firm where the U.S. firm contributes the technology and the Chinese firm contributes cheap labor. While such ventures look like voluntary actions, they are prerequisites of doing business there. But this post is about a field un-leveler that we don’t hear or see much about.

The Corporate Hierarchy Explained

This seems to capture the feeling inside most management structures…

You can Occupy Wall St too- from the comfort of your couch

A friend turned me on to this video today. It is eerily reminiscent of Karl’s old credit card mailer idea- maybe he got the idea from Karl? I find it ingenious how people are finding ways to protest.