Dynamic Yield Curve

Link This chart shows the relationship between interest rates and stocks over time. The black line is the Yield Curve. The fading "trails" behind the black line show how the yield curve developed over the preceding days.Click anywhere on the S&P 500 chart to see what the yield curve looked like at that point in time.Click and drag your mouse across the S&P 500 chart to see the yield curve change over time.Alternately, click the Animate button to automatically move through time.

BODMAS - BracketsOrdersDivisionMultiplicationAdditionSubtraction

Go back to Basic... 3 men go into a motel. The man behind the desk said the room is $30, each man paid $10 and went to the room. A while later, the man behind the desk realised the room was only $25, so he sent the bellboy to the 3 guys's room with $5. On the way the bellboy couldn't figure out how to split $5 evenly btw 3 men, so he gave each man a $1 and kept the other $2 for himself. This meant that the 3 men each paid $9 for the room, which is a total of $27, add the $2 that the bellboy kept = $29, WHERE is the other dollar?

Soros: Market Will Retest Its Lows

Quote from Wall Streets Journal... May 7, 2008, 3:58 pm Soros: Market Will Retest Its Lows Stocks are currently in a “a bear market rally,” and will probably retest their lows of earlier this year, George Soros says. Soros “I think we’ll retest the lows, depending on what measures the authorities take,” Mr. Soros said in an interview with The Wall Street Journal Wednesday. He made similar comments later that day in a discussion at the Council on Foreign Relations in Washington. “We may go beyond” those lows, he said. But he also said the worst has now passed for the credit markets and spreads between yields and risky bonds and Treasurys will not return to their highs of a month ago. “The acute phase of the credit crisis, or financial crisis, is abating,” said Mr. Soros. Mr. Soros, chairman of Soros Fund Management which advises the Quantum funds, is one of the world’s most famous and successful hedge fund investors. “The markets are breathing a sigh of relief but the fallout in the real economy is only now beginning.” In his latest book, “The New Paradigm for Financial Markets,” Mr. Soros argues that the current credit crisis conforms to his longstanding view that markets drive fundamentals, instead of the other way around, producing bubbles and crashes– a dynamic he has dubbed “reflexivity.” The book argues the subprime crisis has triggered the bursting of a “super-bubble” that has been building for 25 years. Prior crises, from the 1987 stock market crash to the emerging markets crisis of 1997 were merely “testing events,” he writes. Because the authorities successfully averted catastrophe in those events, they encouraged consumers and investors to believe markets were fundamentally self-stabilizing and built up even more leverage, he wrote. Mr. Soros’ latest book is his third to predict disaster; prior books did so in 1987 and 1998. In the interview Mr. Soros acknowledged he sounds like the “boy who cried wolf,” but noted, “The third time, the wolf really came.” Mr. Soros said how the U.S. comes out of the current period is highly uncertain because it depends a great deal on how investors and policy makers respond to the depth of the threat. He called it “inconceivable” that the U.S. would avoid a recession that lasts at least into next year. He noted house price declines are accelerating, and said nothing policy makers can do can slow that down much. It’s quite possible the U.S. could “muddle through” after next year, he said, with 1% to 2% growth for the decade and rising unemployment. But “there are many ways for it to work out.” Mr. Soros withdrew from active investing in 2001 with the departure of his partner, Stanley Druckenmiller and his hedge funds were converted to an endowment fund run by outside managers, mostly tasked with managing the assets of his philanthropic foundations. But he returned in August, 2007 by establishing a macro account of his own. He said that while he has been mostly bearish on U.S. stocks and Treasuries, he moved to a neutral position earlier this year when he sensed a bear market rally might be in the offing. He returned to a short position on both, but too soon, he said. He has also been long stocks in China and India, but has been hurt by the dramatic selloffs in both this year. “We are not making money this year. We are slightly in negative territory.” On the dollar, “we are moving towards neutral. We have greatly reduced our short position. It’s not clear which way it’s going.” He said its depreciation to date is in effect exporting the U.S. slowdown to other countries. In his remarks to the Council on Foreign Relations, Mr. Soros said, “I personally think we have the acute phase of the financial crisis largely behind us. The authorities have as their mission to stop the system from falling apart and providing liquidity at all costs. They’ve done it and have passed several thresholds. That is a source of reassurance that the system is not going to fall apart. But the damage that has been done to the financial system has to affect the real economy, and that is only starting to be felt.” A repeat of Japan’s 1990s experience is “the pessimistic extreme” he told the audience. Japan had “a real estate bubble and a financial system loaded down with bad debt. The big difference between Japan and us is here, the losses are being recognized, written off. Some of the writeoffs may turn out to be excessive.” –Greg Ip

Steve Jobs Stanford Commencement Speech 2005

Stay HUNGRY, stay FOOLISH

50 years of market swings

Interesting link from CNN Money.com. Show you the market swing over the last 50years... http://money.cnn.com/magazines/fortune/storysupplement/investor_special/2008/index.html

Economic 'misery' more widespread

Quoted from CNN Money... Some experts argue that true inflation and unemployment - the components of the economy's 'Misery Index' - are higher than the government's official figures. By Chris Isidore, CNNMoney.com senior writer Last Updated: May 14, 2008: 10:36 AM EDT NEW YORK (CNNMoney.com) -- Americans are feeling a lot more economic pain than the government's official statistics would lead you to believe, according to a growing number of experts. They argue that figures for unemployment and inflation are being understated by the government. Unemployment and inflation are typically added together to come up with a so-called "Misery Index." The "Misery Index" was often cited during periods of high unemployment and inflation, such as the mid 1970s and late 1970s to early 1980s. And some fear the economy may be approaching those levels again. The official numbers produce a current Misery Index of only 8.9 - inflation of 3.9% plus unemployment of 5%. That's not far from the Misery Index's low of 6.1 seen in 1998. But using the estimates on CPI and unemployment from economists skeptical of the government numbers, the Misery Index is actually in the teens. Some worry it could even approach the post-World War II record of 20.6 in 1980. "We're looking at government numbers that are really out of whack," said Kevin Phillips, author of the book "Bad Money." No inflation if you don't eat or drive According to the government's most recent Consumer Price Index, a key inflation reading, consumer prices rose 3.9% in the 12 months ending in April, down slightly from the 4% annual inflation rate in March despite record gasoline prices. But Phillips argues that consumer prices are probably up at least 5% and perhaps more than 10%. Part of the disconnect may be due to the fact that nondurable goods, such as food and gasoline, makes up only 12% of CPI. In addition, food and energy prices are eliminated from the so-called core CPI, which many economists tend to focus more closely on because they claim food and gas prices are volatile. But food and energy costs are a very important part of household budgets. And those prices have been skyrocketing: Gas prices were up about 21% over the 12 months ending in April. However, due to seasonal adjustments in the CPI, the government reported that gas prices were down 2% in April, even though on a non-adjusted basis, gas prices rose 5.6% from March. And even that number may be too low. Measures of gasoline prices by AAA and the Department of Energy suggested prices rose as much as 10% in April. Meanwhile, food prices rose 5.1% over the last 12 months, according to the report. The nearly 1% one-month jump in food prices in April was the biggest spike in 18 years. To that end, nearly half of the respondents of a recent CNN/Opinion Research Corp. poll said inflation was the biggest problem they face. CPI missed the housing bubble...and bust Another problem with the CPI figures, according to skeptics, is that it doesn't accurately reflect what's going on in the housing market. That's significant because the cost of buying a home has twice the impact on CPI as does the prices of all nondurable goods combined. The CPI showed only an 11% rise in home ownership costs from 2002 through 2006, a time that the National Association of Realtors reported that existing home prices soared 34%. The reason for the low CPI reading is because the CPI looks at equivalent rents, rather than home prices. So inflation was understated during this period, according to Phillips. He argues this may have helped feed the housing boom since it kept mortgage rates lower than they should have been. Now that the housing boom has gone bust, the CPI appears to be missing the declines in home prices as well; it estimates that the cost of owning a home posted a 12-month increase of 2.6% in April. But because the CPI figure was so far behind tracking the increase in home values, the housing component of CPI still is leading to a lower inflation reading than what it should be, Phillips said. The inflation 'con job' The unusual way that housing prices are estimated isn't the only peculiarity of the CPI report. Over the past ten years, there have been other changes in the calculations, particularly for big ticket items. Cuts to estimated prices for items like electronics and cars that are thought to have improvements in quality year-after-year have lowered the overall CPI. In addition, changes in the way certain products, such as food, are tracked by the government, have also contributed to lower readings than otherwise expected. Bill Gross, the manager of Pimco Total Return, the nation's largest bond fund, refers to the CPI as a "con job" that deliberately understates the price pressures faced by Americans in order to keep Social Security payments and other government costs pegged to the index unduly low. In a report about the CPI, he noted that some of the adjustments don't accurately reflect how much consumers pay for goods. Pimco estimates that the changes have shaved more than a percentage point off the CPI. "Did your new model computer come with a 25% discount from last year's price?" Gross wrote. "Probably not. What is likely is that you paid about the same price for memory improvements you'll never use." Another flaw with the CPI numbers is that the government now assumes that higher prices for one item will lead consumers to buy more of a substitution item. That may be true. But if people buy fewer steaks and more hamburgers, for example, it's unrealistic to say that inflation isn't a problem, skeptics maintain. "The government can claim there's no inflation but all they're measuring is a reduced standard of living," argues Peter Schiff, president of Euro Pacific Capital, an investment firm specializing in overseas investments. With all this in mind, California economist John Williams argues that CPI is understating inflation by at least 3 percentage points and perhaps as much as 7 percentage points. So instead of an annual inflation rate of 4%, the true number could be between 7% and 11%. Unemployed, but not counted Finally, there's the unemployment rate. It was at a relatively low 5% in April. But according to Williams' Web site, ShadowStats.com, the actual rate may be between 8% and 12% if you use a more accurate reading of those out of work. Even the government's own numbers show there are many unemployed people not showing up in the unemployment rate. The official reading does not include 4.8 million people who want to work but haven't found a job, for example. Many of these people are dropped from the official calculation because they have become so discouraged from looking without success that they haven't looked in the previous four weeks. Simply adding those people to the number of unemployed takes the current unemployment rate to 7.8%. The Bureau of Labor Statistics, which produces both the CPI and unemployment readings, says changes in both measures were made to more accurately reflect the real world. The BLS also says the changes have resulted in changes of less than 1% for each measure. Still, the Labor Department's own broadest measure of unemployment, which includes as jobless those working part-time jobs because they can't find full-time positions as well as some discouraged job seekers, puts the unemployment rate at 9.2% in April, the highest level for that reading in more than three years. So if you take that number and add that to the 7% that Williams thinks is a more likely annual inflation rate, you're looking at a "Misery Index" of 16.2, much worse than the 8.9 you get from the official numbers. And while that may seem a bit high, it's probably a more accurate gauge of how bad the economy is for many Americans. First Published: May 13, 2008: 4:32 PM EDT

Japanese Supermonk

Wow, I thought running a marathon, completing a Hawaii Ironman is tough... but there is always someone else out there who can beats all odds and did the real impossible. When the desire to complete something is a MUST, it can be done with all odds stacks against human being and the eventual winner is still the one who make it a MUST.