Don't have any special or original thoughts today, but here are some of the more interesting reads I've seen:

Barry Ritholtz joins with a global crew of money managers to discuss the world's economy and investment opportunities on Prieur du Plessis’s blog.

Barry also comments on the similarities between Enron and the current Bear Stearns CDO debacle. He correctly notes that both are inevitable results of the same problem:

Remember, this is all courtesy of lots of Fed induced liquidity, and a willingness of lenders to provide lots of cash to high risk borrowers at low rates with easy terms.

Not to mention the implied promise of a liquidity bailout should anything go wrong. Why not take risks and leverage yourself to the moon if somebody's always got your back?

Mish has a couple of book recommendations. Why do I get the impression that Mish is on vacation and passing along pre-written stuff? Anyway, I concur with both recommendations. I've read Fari's book (in which my friend David Miller has a chapter) and have always liked Caroline Baum's work too. Why is it that my reading list continues to grow faster than my ability to read. Fortunately -- or maybe not -- there are a few long flights in my future.

Kevin Wassong has been weighing in on the possible reality of the iPhone, as distinct from the hype.

This court ruling didn't get the attention it should have in the midst of the Fed's release this afternoon. It should have as it could substantially transform retailing. Fortunately, today many of the retailers have more power than the manufacturers. Also, expect a Democratic congress to revisit this one at some point.

My buddies at Institutional Risk Analytics have published their take on the CDO implosion.

-btc

I just got a call telling me that my Israeli passport is ready.

I didn't know that I needed one until recently, when I made one of my rare family visits to Israel. Usually the family is over this way -- or at least in some mutually convienient location -- often enough that I don't need to bother going all the way there. On this visit I was advised on my exit that I was, in fact an Israeli citizen and had a passport in the past, 1973 to be precise.

I knew that my dad was originally an Israeli citizen, and apparently I had a passport myself for a while due to difficulties of traveling with him otherwise. Since I've been an adult and traveling myself, this has never been an issue and I've used my American passport with no problems.
But Israel has apparently upgraded their systems and identified me on a combination of name, birth date and place of birth. (Our TSA, apparently, still dreams of such capabilities.)

In my previous entry, I mentioned Taleb's latest book, The Black Swan, and one of its key lessons.

I was thinking of Taleb this afternoon. Walking from my place to the liquor store down the street, I passed two individuals who were perfectly set up to be the Turkey in Taleb's tale. He talks about the turkey who over the course of 1000 days learns that he has nothing to fear from the farmer who feeds and takes care of him. He sees no evidence of any ill intent and concludes all is well. He learns otherwise on day 1001, which just happens to be the week before Thanksgiving.

First, I ran into a woman parked outside the gate, desperately trying to get anybody's attention. She couldn't figure out where she was going. The destination was about five miles away from here and based on the scrawled notes she had it seems she was traveling from some distance away. I knew where she was going and gave her directions and even drew a map. It turns out, she had written down some directions from MapQuest, without even printing a map. As often is the case, MapQuest sent her on the shortest, but not the simplest route.

She might have realized it if she had a MapQuest printout with the map. Or if she had bothered to have a map in her car. But she didn't. Apparently, in her world nothing bad could happen. A turkey in waiting.

I have a car with a built in and updated nav system, yet I still carry the full set of AAA maps I get for free as a member. (If you don't have some kind of auto club membership and drive any distance, I can add you to the "turkey" category as well.) Sometimes I have the Google Maps -- it's better than MapQuest -- printout as well. Just in case.

Then the next group. Their car had been towed. Mom and dad are simultaneously on cellphones trying to get a ride and trying to figure out where their car might have been towed to. They "parked behind somebody else" and "didn't realize it was a driveway." Didn't look is more like it. Or possibly "didn't want to pay $10 for the beach parking lot and didn't want to walk from further away, so decided to chance it." Turkeys, turkeys, and more turkeys.

And what turkeys they were. The mom couldn't tell the person who she was talking to what the registration number for her car was, where she was exactly (next to a street sign!), or even what time of day they first parked. Such turkeys.

In my little loft development, I am aware of only one other guy who has an emergency plan. This is a low-lying area in earthquake country, but only 12% of us have thought about what we would do in an emergency. Nice. That's 88% turkeys.

Which brings me to this week's developments in financial markets

Up in Utah where I spend as much of my winters as I can, I'm friendly with a dog named Midas. Midas is the senior avalanche dog on the Snowbird Ski Patrol, and also one of the most experienced dog/volunteers of Wasatch Backcountry Rescue. I've done some avalanche training at Snowbird and seen Midas in action. In his career he's been responsible for at least a couple of successful rescues that I know about. During the 2005-2006 ski season, which was the most deadly on record for the Utah backcountry, Midas was responsible for recovering many of the victims.

I was thinking about Midas last night as I watched MythBusters clumsily go about "busting" all sorts of myths about avalanches. I have been a fan of MythBusters since it started airing several years ago and have generally found it to be pretty well put together, if not always completely thorough.

Until last night, that is.

Last night's episode was so badly done that it makes me doubt I can ever take them seriously again. For me, it was one of those "jump the shark" moments, in which a show goes from being good, to being one that is coasting on its past glory, trying desperately to be as cool as it once was but unable to because it has exhausted all real possibilities.

There were so many things wrong with the experiment it's not even funny.

If you've looked at this blog, you'll note that there are now some Google ads embedded in the main page as well as in all of the posts. There are a few reasons for this:

• I've finally hit the point where the traffic justifies trying to monetize this thing.
• Anecdotal evidence suggets that pages with embedded Google ads do much better in Google's rankings than pages without them. I suspect the reason for this has less to do with an overt bias and more to do with the fact that sites with ads get crawled a lot more frequently, but I wouldn't put it past Google or anybody else to favor the folks who drive traffic their way.
• My accountant would really prefer that my business has multiple streams of income, even if they are small. I've never considered this blog a "business," but I suppose I might if there's a few hundred bucks a year in it.

I've rebuilt the pages to keep the ads as unobtrusive as possible. They should blend in pretty well and are located at natural break points or at the ends of blog entries.

I have also updated my search box to use Google for searches both on this site and on the web.

-btc

A couple of weeks ago when I was in Utah I experimented a bit with panorama photographs. I didn't have much to work with since, as I mentioned at the time, I had decided to leave the good camera home in order to make room for some (ultimately useless) hiking boots and other equipment.

So I played around a bit, trying to keep everything lined up and level as much as possible just by eyeballing it on my pocket digital's tiny screen. In the end I got four of them, all taken on my second day there, in the general environment of the Snowbird resort.

Snowbird from the balcony of a lodge where I had dinner. One thing I notice about panoramas which is true of all wide-angle perspectives is that the perspective tends to make the mountains look a lot less steep than they are. Virtually everything left of the middle is advanced or expert terrain, though it doesn't quite look that way.

The western panorama from Hidden Peak, at the top of the Snowbird Tram. The Salt Lake valley is off to the right under the haze. Note the skier walking back up on the far left. He's just skied the Little Cloud bowl's north-east facing slopes, then walked back up the opposite side where there wasn't much snow. At this time of year, walking back up to take the tram down is a lot easier than walking down 2/3 of the mountain through varying terrain and conditions.

The eastern panorama from Hidden Peak, at the top of the Snowbird Tram. Alta is just past Mt. Baldy, which is the closest big peak. The terrain to the left is part of Snowbird's Peruvian Gulch and the terrain to the right is called Mineral Basin. You can just barely make out the cables for the Mineral Basin chairlift at the very far right.

A northwestern panorama from Hidden Peak, including a the Snowbird tram and a bit of the loading dock

A few learnings here.

I find that participating in a resort HOA finance committee is an interesting way to learn about the economic realities away from the media-centers of Los Angeles and New York. My particular association is outside of Salt Lake City, and while it's definitely a resort setting, it's close enough to town that it shares many of the same economic realities as the rest of the area. Salt Lake City is -- for a large city -- about as far away from Los Angeles or New York as you can get in terms of culture, lifestyle and overall outlook. Looking at the area gives me a great alternate viewpoint, which has proven beneficial in the past.

Our association is a microcosm of the economy as a whole. We buy food, deal with constructions and maintenance, hire workers, pay energy bills, deal with property taxes, depend on revenues from customers, set fees and prices, and even have to use a lawyer or two.

There are a few key learnings.

A couple of weeks ago I posted the image below, taken from Bill Ackman's presentation at the Ira Sohn investing conference.

click to view larger image

For anybody who is interested, the full presentation is available online at this time:

Who's Holding the Bag? (Please note that this is a 735K pdf!)

Also, Mish has posted a nice two-article piece that summarizes much of the information in an understandable form. It's available at Minyanville:

Mish's Monte Carlo Simulation of CDOs: Part I
Mish's Monte Carlo Simulation of CDOs: Part II

-btc

Am I the only one who thinks the timing of this announcement from Design Within Reach is about as perfect as you can get? Just as foreclosure rates are skyrocketing, they have come up with a fashionable yet relatively inexpensive option. Marketing Genius.

I wonder if you could tow it behind an old V-dubs?

For the original, announcement see: http://www.dwr.com/images/newsletter/20070531_airstream/

Airstream: still very now.

The Design Within Reach Airstream is now available. Kick the tires.

Design Within Reach have also come up with one of the greatest euphamisms of all time:

Satisfy your wanderlust = Live in your car

Words fail.

-btc

A few weeks ago on Minyanville, Ryan Kreuger noted that now was the time to buy the engineering firms as the best possible values in the energy space.

Since then, they've gone parabolic. I managed to get a half a position on in Jacobs Engineering (NYSE:JEC) which has since rocketed up 10%. One of his other recommendations, Washington Group (NYSE:WNG) has already been acquired at a significant premium. All the others are also up nicely.

I should have picked up more when I grabbed that first Jacobs position, but I'm OK with my first buy being my best buy, for a change. I'll be looking for any letup in the move as an opportunity to get deeper into this group.

The reason is that over the weekend, at my HOA meeting, I spent quite a bit of time with the guy who chairs our finance committee, who is in the energy engineering business. To hear him tell what's going on, Ryan is being rather conservative. He told of a complete inability to hire qualified engineers at any price. Of a junior engineer just a couple of years out of college who turned down an offer just shy of $100,000 because he already had multiple better offers. Of nat gas pipeline operators to the west coast being able to charge premiums of almost 100% above the wellhead price because the pipelines are overworked, the engineers needed to upgrade them aren't available, and the demand insatiable.

I don't like buying into parabolic moves, even when I think the fundamental case is good, thus I am holding off a bit for now. Of all the stocks Ryan noted, Chicago Bridge and Iron (NYSE:CBI) has shown the most signs of cooling off in recent weeks and is now flirting with its latest high. Fluor (NYSE:FLR) has also moved sideways a bit and has broken above the recent high but just barely and on mediocre volume. I'll be watching all for buying opportunities.

I still want a second "half" to my small Jacobs position.

Other news from the HOA finance committee meeting was also interesting, particularly as it is illustrative of what's going on in the economy overall. More on that tomorrow.

-btc

I was in Utah over the weekend, primarily for a meeting of my vacation spot's HOA finance committee, but also to get out into the mountains, hike, maybe mountain bike a bit, and generally enjoy the outdoors. There was a lot of good, interesting information exchanged at the meeting that has wider implications and about which I will comment tomorrow.

Unfortunately, I chose to leave the nice camera home and took the little pocket one. Figured I would rather hike unimpeded than hike with a bunch of camera stuff on my back. I also generally prefer not to have lots of carry-on baggage with me when I forget to check-in early and end up in the Southwest "C" boarding group.

Leaving the good camera was a bad choice. It was a great weekend for photography and a much worse one for hiking. These conditions don't lend themselves to navigating across the terrain unless you also have snowshoes, a rope, preferably a partner, and a variety of other safety gear:

American Fork Twins

In fact, there were still a few guys skiing out there, coming off the top of the Snowbird tram which runs year-round. I thought about it chucking everything and taking a run or two, but decided that the beginning of June was not the best time to start skiing after four months, especially with the bottom 1/2 of the mountain mostly mud and rocks.

Probably could have driven to a lower elevation and found something nice, but driving would have defeated the whole purpose of being there.

So I contented myself with time in the pool with a few glasses of wine and as much photography I could do with my little "toy" digital. My friend Leo has recently been experimenting with freeware stitching software to make panoramas from multiple images, and I found the top of the Snowbird Tram to be a good place to play with the possibilities. I will post my attempts as soon as I have them put together.

And of course I dined at my usually spot, hoping for a Larry appearance. As is his habit in the summers, he was off in the trees somewhere, presumably eating pine nuts and not needing any helpings of bread. So, here's a photo of him or one of his friends, taken in January:

Larry loves bread

-btc

With all the traffic resulting from my 15 seconds of Casey Serin exposure, I've learned a few things and changed a few things.

I loosened up the spam settings a bit, this should make it less likely that you get caught in my spam comments box. Still, if you submit something with lots of links, it may get stuck in the "moderation" pile.

At the same time, I've noticed I'm getting hit by a lot more spambots, so I'm taking the precautionary measure of disabling comments on anything more than a month old. I may also from time to time just disable all comments for some minor entries that aren't worthy of commenting on, like this one.

I've also loosened the flood control a bit. Now you only have to wait 60 seconds to post your next comment.

Hope this serves to make the place more enjoyable to everybody.

-btc

I'm out in Utah for a few days, unwinding from the whole Casey mess.

OK, that's an excuse. The Casey mess is the one thing I definitely don't need to unwind from.

And no, I'm not stalking Nigel either, though I did go right past his office earlier today.

Nice to be up above 8000', where I can enjoy the company of my buddy "Larry", hike a bit (though there's still snow high up) and attend a HOA finance committee meeting for my vacation spot.

Larry

There have been many porcupines up here over the years. The original "Larry" is probably long gone. But they still show up, still beg for dinner, and one of them is always "Larry."

More meaningful comments when I'm back next week. I've got a bottle of white and I'm off to the pool.

-btc