Saturday, April 4, 2026

May 18, 2010

Austerity

aus·ter·i·ty [aw-ster-i-tee]
–noun, plural -ties.

1. austere quality; severity of manner, life, etc.; sternness.
2. Usually, austerities. ascetic practices: austerities of monastery life.
3. strict economy.

—Synonyms
harshness, strictness, asceticism, rigor.

—Antonyms
leniency.

What is an austerity program?
“Quite often, the implementation of an austerity program comes after a cycle of excessive government spending. This form of belt tightening may be strictly necessary to restore balance to the economy, or it may be more politically motivated. One political party might impose an austerity program in order to cast doubts on the previous party’s fiscal policies. Cutting back on funding for the arts or social welfare programs may be preferable to cutting back on military spending, for example.”

February 16, 2010

Sovereign Outlier Triangulation

As the previously documented sovereign event approaches, the uncertainty that remains draws me closer to the prosperity that will effect the collective consciousness of my readership connection. To further dissect the economic scenario that is playing out, I will offer some thoughts on where things are, what could cause things to reverse, as well as how to best prosper from the sovereign contagion that is spreading like wildfire.

Greece

In my prior post, I outlined the sovereign default risk that we face—somewhere, sometime soon. Several geographies are flashing extremely risky scenarios. Greece is in need of a bailout and they lay on the precipice of disaster if some aid is not found. Any proposal of aid I have seen will not be a solution, rather a band-aid on a broken bone. However, a band-aid could buy Greece some time–which they are in dire need of.

Ireland

Economic woes in Ireland are severe, and they are not being given the focus they require. Further trouble in the place where I kissed the Blarney Stone could be the impetus for the contagion to spread further, causing the market dislocation that I anticipate.

Dubai

Risk in Dubai is priced where it was at the height of 2009. Further trouble and inability to restructure will cause fallout in Dubai—which will affect Europe, which will effect Greece, and the dominoes will continue to tip. Last week in Dubai, I found money dealers paying extremely large mark-ups for physical gold. Indeed, rumors of gold being used as legal tender in Dubai are true. Again we see my thesis substantiated: the risk aversion trade here is not the US Dollar, rather the precious metals–gold and silver.

Spain: The Wild Card

All of the above geographies could stabilize, or with further troubles, could act as catalysts for the contagion to spread quicker than it already is.

I’d note that Spain was a large driver of contagion over the past two years. The housing bubble in Spain was by far the largest real estate bubble compared to anywhere else. They also face a severely high unemployment rate. However, even with all this trouble, spreads on banks in Spain are not showing the stress they should. When the stress of the housing bubble and unemployment rate percolates into Spanish banks, it will be easy for Spain to pick up where it left off. More in need of a bailout this time, Spain will contribute to the strain in Europe, affecting Greece, affecting Ireland…tip, tip, tip.

All That Glitters

Though the catalyst remains uncertain, the looming event is undeniable. Remember, when the entire universe lunges to take risk off the table in a reaction to what I anticipate, gold will stand, glittering amidst the debris. I’ve said it once and I’ll say it again: if you don’t own gold, you should.

And the beat goes on.

February 13, 2010

The Greatest Superbowl Ever Witnessed

There it was, right there on the screen. You had to see it to believe it. They did it! They did it! They pulled it off. No one had ever done THAT before.

At halftime, the score sits at 10-6, the Indianapolis Colts leading the New Orleans Saints. In the locker room, someone with all the guts he needed to make something awesome happen told his idea to someone else and they agreed, and the plan was spun. It was the oldest trick in the book in action. You know, the infamous “tapping on a person’s left shoulder, when you’re standing on their right.” Who made that call? Who made that call? Who said, “We should kick the ball to ourselves”?

Playbook in hand, special teams took the field, and the New Orleans Saints did what no team had ever done. They kicked the ball to themselves at the START of the half. No one does that. Onside kicks are used when a team is under extreme duress—when there is almost no time left and it is your only choice. And since it is obviously your only option, the other team knows to line up their defense in anticipation of it.

But not that day. Not during Superbowl XLIV. They New Orleans Saints did an onside kick before they HAD to, so no one expected it, and that is why it worked! The oldest trick in the book. The surprise was beautiful. No team had ever done that before during The Super Bowl because no team ever had the guts to take that risk—until now! Now sports history is forever changed because the storybook, fairytale, underestimated, Kim-Kardashian-datin’ New Orleans Saints took that risk and it worked. They did an onside kick to start the second half and it worked. IT WORKED!!!!!!

Whatever happened after that didn’t matter because when you take that kind of risk—BELIEVING it can happen—then the universe conspires to help you achieve it. The ending was written when the risk paid off. No one ever gets there the same way, and the saints did it their way: with a gutsy, brilliant surprise.

I love this game. From here on out it will never be the same. And perhaps, after this lesson in mettle, neither will I.

Now that’s entertainment.

And the beat goes on.

The Saints Nailed It

The Saints Nailed It

February 4, 2010

Sovereign Risk Ignites

Meanwhile, as the world turns, so does the Factory and it’s cast of characters. X is monitoring world events; The Consigliere continues to build his law firm specializing in the law of attraction; Pinky Megiston is beautiful; and Anything Anywhere! seeks more avenues through which he can add value.

Apart from all that, sovereign risk spreads are igniting. The dollar is catching a flight to safety bid and stocks are crushing lower–the S&P 500 is off about 2.5% as I write. Gold and silver have been pummeled most severely, off 4% and 5.5% respectively.

Sovereign risk spreads have risen dramatically this week, led by the European majors. Holders of sovereign debt—in particular Portugal, Italy, Ireland, Greece, and Spain—are running for cover. Not surprisingly, politicians will blame these events on speculators. However, a closer look at the money flows reveals true fear: real money is fleeing sovereign debt (selling government bonds) as opposed to speculators driving risk higher by buying credit default swaps (insurance). Nations with the largest deficits and the most in need of short term financing are being sold the hardest.

Dubai has continued to see risk premiums rise, as it scrambles unsuccessfully to sell off some of it’s holdings. Like a skydiver free-falling through the air, Dubai is reaching for it’s reserve chute. The velocity is building to the perilous downside. Hope is not a viable strategy here and now; but other than bluff, it may be all they have.

The crash of 2009 was not foiled—it was postponed.

We are sitting on the precipice of something special. An event where fortunes will be made and lost. Great art will be inspired, and an ageless tale will be re-told.

And the beat goes on.

October 18, 2009

Fund Raising Through Micro Payments

The other day I was doing some R&D on my comedy. I crowdsourced the enterprise solution to a couple friends: one man and one woman. During the 360 degree review process, we ended up in a virtual loop. We danced our way out of the loop by settling the score on the dance floor. After that, we laughed about the fact that we were able to virtualize our code base out of the loop with our modular solution–the dance floor. Then, I mentioned that as great as this all sounds, the solution to the virtual loop was an offline solution. While we were dancing, none of us were online. To further our use of the internet, we need to motivate each other toward online solutions–not off. At this point everyone was confused and I started to not care so I gave the Web 2.0 grad students a break and told them the following:

Just because the dance floor solution seems offline, it may not be after all.

“How do you figure,” asked one of them.

Because while they were dancing they may have been offline but they were being videotaped. All we have to do to take the solution online is to produce the video.

YouTube is one solution, but for extra credit send some thoughts to my office on the following:

Which virtual reality would you use for an optimized monetization scheme?

Submit your thoughts to me telepathically after grading yourself. If you feel that I made you laugh, tell some social media about my T-shirts and help me monetize my alter egos.

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