Been dealing with mom's move the past couple of weeks and have been much of the time without easy internet access. That's now past and I've returned from the horrible Manhattan weather with mom reasonably settled in her new place. Much work to be done in the future, but it can happen gradually and won't involve me directly.

Got a new Sharp Aquos TV for my effort. Mom likes me to have the same stuff so I can provide user support...

Markets have not done much and neither have I. I don't think this current rally/consolidation is done, and I don't think we've finished the work on the downside, so remain cautious and in lots of cash.

Air travel is hellish, even when I treat myself with frequent flier miles and put myself in first class as I did on this last trip. Thoughts on this and how to deal with it later.

-btc

Just put in a wire request at Charles Schwab (NasdaqGS:SCHW), where I've had the bulk of my money. The request was to transfer out about half my cash, or a third of the account value. It's going to my E*Trade (NasdaqGS:ETFC)account, which has always been smaller and a place where I've tended to keep long-term investments that I don't look at much.

As a project manager, I tolerate a lot. Fuck ups are part of the territory.

But I don't tolerate incompetence, especially not in mission critical stuff.

So when Charles Schwab exhibited extreme incompetence this morning, it was the last straw. I've been increasingly uneasy for the past several weeks and with even money funds turning out to own all sorts of mortgage junk, I've felt like maybe splitting my money between institutions was a good idea. And Schwab's trading interface has gotten increasingly clunky compared to newer competition.

No, I'm not talking about the financial markets. I'm talking about the toy market. The cat food market. And overall the market for offshore outsourcing.

And more than anything else, what I'm seeing is a lack of proper management of risk and quality in these big offshore deals.

Historically, outsourcing has been pretty easy. You made a deal with a contract manufacturer and the contract manufacturer, among other things, made sure that the product met all applicable standards: your own and the legal ones for the market you're selling into. You thus have been able to outsource not only the manufacturing, but also much of the quality control. Whether the manufacturer was in the US, Mexico or anyplace else, you had real leverage to insist on those standards being met. If they weren't, the contract manufacturer ate the costs.

Crazy day today. I'm working on a lot of little things and watching the market.

• I'm working on a complete revamping of my business website. My business works mostly on referrals, so I haven't ever thought about this much, but I really should have one even if it's only a few simple pages. Building from a fairly nice template, but the content is what's getting me.

  I can come up with dozens of anecdotes and stories to tell about my work and what I bring to the table. But summing them up into a few simple pages is turning out to be more of a challenge than I expected. My focus has changed somewhat since I started and bringing that new context to the pages is forcing me to rethink what I'm actually selling. I got so frustrated with this yesterday that I decided to skip a networking meeting this morning so I could refine my pitch before I botch it in front of fifty people.

• I've been getting lots of postcards and letters from real estate agents in Miami. Actually,they're addressed to the former resident of this place, who pretty much dropped off the face of the earth when he left here. (Some suspect he went back to Europe. Others have suggested that he had "pharmaceutical" issues of some sort. Nobody knows.)

  In any case, from what I've been able to tell, he's been trying to sell his Miami condo. Unsuccessfully. Last year, the card were all from agents anxious for the listing. This year they're all from agents noting that his listing has expired from the Miami MLS, and offering their "specialty" services in disposing of properties that are not selling well. The latest one was from a vulture who is offering to trade the condo (presumably at a very low valuation) for income-producing commercial real estate (presumably at a high valuation). Why the title on this condo still lists my address is unknown.

  I suspect things in the hot markets have not gotten as bad as they will. I'm waiting for the foreclosure notice.

• Apparently Miami Beach is also having a problem with receding sand, and there is no easy solution in sight.
• Not much new to say about the markets. We'll know more about hedge fund redemptions tomorrow and it'll be interesting to see if the selling is taking place in advance of expected redemptions, or if the redemption requests will trigger more selling. In any case, virtually impossible to game it right now. I'm doing very little. Sold a bit of the silver position in my IRA because I'm increasingly concerned about deflation and a further wave of selling everything, and added a bit of Korea Fund (NYSE:KF), but it's a tiny position.
• I do not believe that the Fed is going to loosen unless things get a lot worse. The Fed quite clearly is intent on crushing speculation in all markets. Until or unless the political pressure gets big enough to demand otherwise, I think they'll stay in that mode. Ultimately the economy will benefit far more than they would from a more accomodative policy, but it could be a painful second half.
• Caution is still the only reasonable strategy.

-btc

"The best place for Palm to hide a software glitch so it can't be found is in one of their wireless devices, because nobody's buying them..."

- Jeff Macke on CNBC, commenting on today's announcement by Palm
that it was again withdrawing firmware updates for Treo devices
because of real-world upgrade problems

"No one really knows how to price asset-backed securities and CDOs and that's a real problem in the market now"

- Anne Rutledge, a "structured finance consultant", quoted in the Wall Street Journal
about the fact that the very essence of her business is apparently
an outright fraud built up on meaningless "models"

-btc

Minyanville overlooked my obviously brilliant response to Kevin Depew's "Five Things" today, so here it is, in all its glory:

I borrowed some signs of a compulsive debtor from the Debtor's Anonymous website, and tried to apply them to the way we do policy. As an exercise, you could ask these same questions about a business, an industry, or the global economy.

1. Being unclear about your financial situation. Not knowing account balances, monthly expenses, loan interest rates, fees, fines, or contractual obligations.

Yes. It's called "government accounting."

2. Frequently "borrowing" items such as books, pens, or small amounts of money from friends and others, and failing to return them.

Like our use of other people's militaries and other capabilities to "help" us with problems they don't much care about, like Iraq? Or how about our "war on drugs", in service of which we employ all sorts of other countries' capabilities and use endless arm twisting to force them to see things our way even when they prefer otherwise? (Look at how much effort we put into blocking recent attempts at decriminalization of low-level use in Mexico and Canada.) Or our insistance that other countries help the IRS, even though other countries don't expect the same from us (most of them don't tax citizens living abroad, so don't care). And of course we resent it when they begin to walk away and ignore our preferences.

I was away for a week for a brief birthday away and a family visit to New York.

The big black furball was apparently not all that happy. Within seconds of my return, he decided to "mark" my suitcase which was standing inside the front door. I also noted that he did similar things in the bathroom, near the litterbox. A complete change of the litterbox (which really wasn't overdue) and cleaning of the area with Nature's Miracle seems to have solved the problem. He hasn't repeated.

Still, got to get him used to me being out of the house a little more frequently.

This video is really cool:

-btc

I've been a Delta frequent flyer for several years because their route map suits me, but I've just dropped them, perhaps with the exception of my occasional trips to Utah. The primary reason is their antiquated and disastrous Terminal 2/3 complex at JFK, which has devolved into something reminiscent of a third world travel experience. It was inadequate 20 years ago, has gotten worse since 9/11, and now has gotten even crazier with many domestic departures going out of terminal 2, but all check-in at terminal 3 (the old Pan Am terminal) which has completely inadequate space, and forces you into going all the way around the perimeter of the place just to get over to the walkway to the terminal you're actually departing from!

Unortunately, the City of New York, in it's great wisdom, has decided that certain airline terminals deserve to be considered historic landmarks. The old TWA terminal, designed by Eero Saarinen is one of these buildings. It's completely useless for any kind of modern aviation, but there it sits, unused. It has been surrounded on one side by the new concrete superstructure of the AirTrain. On the other side, it has been cut off from the tarmac, it's satellite gate areas knocked down, and the long spindly corridors that used to connect to them now suspended in mid-air, terminating at the edge of a new roadway which will access a replacement terminal.

Been offline for a bit dealing with more important stuff, so the next few days will be a bit of a catch up on many fronts.

Got to start with the market. Obviously my call of a breakout a couple of weeks ago couldn't have been wrong. True, I was cautious and advised such, but definitely appears to have been a "fake out" rather than a break out above previous levels.

So where does that leave us? Well, we're still above the (approximate) 12,000 level on the Dow that had been a ceiling since 2000. So long as we're still up here, I'm willing to give the market the benefit of the doubt, though I continue to be lightly invested, looking for some better opportunities in the next few months. Failing to hold that level, as Kevin Tuttle pointed out some months back, would be scary.

However, I would note that the S&P 500 has never really accellerated and broken out as much as the Dow, on a long-term basis. The Nasdaq, of course, has never matched it's 2000 highs, not even close.

All in all, it's a mixed bag, and I'm back to being extremely cautious on the market overall. Technicals are inconclusive, valuations are expensive by any historical measure, volume id definitely favoring the down days and the psychology is increasingly negative. I am back to making lists of stocks I'd like to buy and the prices that I think are justified by their earnings but am taking no action. Have not made any new buys, but a few more days like today could easily get me there.

In the meantime, I note that tech is holding up better than a lot of other stuff. It is less leveraged to the dollar and to debt than many other sectors, and as noted above, tech has not gained as much as other sectors in recent years. I've always been a cautious tech investors, but am slowly warming to some of these stocks again, for the first time in many years.

-btc

I'm now in sweltering New York City, after spending a few days in the mountains where it's cool and dry. Cannot wait to finish what I'm doing here and get the hell away to someplace where the climate doesn't lock me in 24 hours a day.

Here are a few images of my birthday away:

PikaField Mouse perched near it's burrow
[Many thanks to "rob boo" for pointing out the deficiencies in my knowledge of the rocky mountain animal population. More about pikas at Pika Works]

Chipmunk looking for food

Chipmunk not quite sure what to do about the long black cylindrical device pointed at it...