Suitably Flip: January 2009

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Stimulus, Illustrated - Part II

Yesterday, we took a graphical look at the relative size of the ineptly named "stimulus" bill, in comparison to some of the largest government initiatives in history.

It was one of our most popular posts in weeks and - as we aim to please - here's another helping of horrific stimulus visualization.

Click the image for a higher-res version.

Related:

Stimulus, Illustrated - Part III

Stimulus, Illustrated

What Else Can We Get For Our $1.2 Trillion?

Handcrafted by Flip on January 31, 2009 | Permalink | Comments (15) | TrackBack

Obama Now Officially President

George obama Let's face it - you're not truly President until your brother gets busted.

Kenyan police say the half brother of President Barack Obama has been arrested for possession of marijuana.
Area police chief Joshua Omokulongolo said George Obama was picked up Saturday and was being held at the Huruma police post in the capital. Omokulongolo said officers found one joint of marijuana on him.

George joins an esteemed BROTUS roster that includes Billy Carter (comically failed beer baron, purveyor of White House access to Libya), Roger Clinton (coke dealer, reckless driver, peace disturber), Neil Bush (S&L scandal entanglee, among other things), and Ted Kennedy (bad bridge-stayer-onner).

(HT: Dan Riehl)

Handcrafted by Flip on January 31, 2009 | Permalink | Comments (1) | TrackBack

Check Out PETA's Newest Sponsor

Yum!

Handcrafted by Flip on January 30, 2009 | Permalink | Comments (1) | TrackBack

What Else Can We Get For Our $1.2 Trillion?

Barack Obama has made it to the shopping round on Wheel Of Fortune, having banked an impressive $1.2 trillion in buying power. The studio is filled with glamorous prizes, though he can always decide to put that balance "on account" and not fritter it away on needless home furnishings.

Still, that T-note is burning a hole in his pocket and he's keen to unload it. The audience is cheering for the dinette set, the Barbados getaway, or the collection of sparkling pendants made of precious metals that might even appreciate in value.

Deaf to their cries, it looks like the contestant is about to go for the plastic camper with the faux wood grain.

In response to my previous post, visually comparing the "stimulus" bill to our country's other grand adventures (the moon, the New Deal, Iraq, etc.), Ace wrote to ask how much of a federal payroll tax holiday we could buy with that $1.2 trillion (the total including interest on incremental borrowing) and how much of a jobs boost that might give us.

Well, let's do the math. GDP in 2009 will come in at around $14 trillion (assuming a -2% nominal output growth for the year). If federal payroll taxes hold at approximately 6.5% of GDP, they will total $910 billion. Half of this is withheld from employees (including the self-employed), while the other half is paid by their emlpoyers. Between Social Security and Medicare, the employer's share of the load adds up to 7.65% of gross compensation (up to the annual maximum per employee).

Excusing employers from paying this tax would cost an estimated $455 billion per year (ignoring the growth effect of removing hiring disincentives). With $1.173 trillion to play with, you could fund a payroll tax holiday for more than 2.5 years.

Rep. Louie Gohmert (R-TX) has proposed something similar, but he's only looking for a two-month holiday. He'll be delighted to hear we can stretch it for more than 30!

Extrapolating from estimates by Heritage's Center for Data Analysis, a 1-point change in the payroll tax rate ratchets the pace of job creation by 147,000 per year. Eliminating the employer-side payroll tax completely would be a 7.65-point reduction. Acknowledging that the delta of 147,000:1% wouldn't be static the whole way down, using that as a general guide gets us to 1.12 million incremental jobs per year.

Over 2.5 years, that's good for more than 2.8 million new jobs.

Yes, that's lower than the President's most recently upgraded "create or preserve" estimate, but ours has the benefit of being neither pulled from thin air, nor based on a discredited theory of economics. Plus - as briefly noted above - our estimate ignores the inevitable growth effect of lowering the cost of doing business. Businesses will be able to add more jobs, get more done, ship more things, and earn higher profits (which increases corporate and individual income tax revenues, thus partially offsetting the cost of the tax holiday).

If per capita GDP remains constant at $45,700 and assuming a 28% average effective individual tax rate, those 2.8 million new jobs would account for $45 billion in incremental tax revenues during the 2.5 year payroll tax holiday and $18 billion per year thereafter. Over the 11-year duration of proposed stimulus outlays, this would haul in an extra $207 billion. The above analysis doesn't include incremental borrowing costs associated with the tax holiday, but this incremental individual income tax revenue would offset most of it. Incremental corporate tax revenues (owing to incremental corporate profitability) would likely offset the rest, with room to spare.

It's also worth noting that these 2.8 million new jobs would all be private sector jobs generated in the free market, which is significantly more advantageous and productive than conjuring up jobs by swelling the ranks of government agencies and/or empowering a handful of lawmakers to pick winners and losers among the prviate sector.

But we're not going to get millions of private sector jobs generated in the free market. Because we're not going to get a payroll tax holiday (or any other genuine tax relief).

We're going to get a trillion-dollar camper with faux wood grain.

Previously: Stimulus, Illustrated

Handcrafted by Flip on January 30, 2009 | Permalink | Comments (1) | TrackBack

Stimulus, Illustrated

It's difficult to visualize a million dollars, much less a million million dollars. But that's the true threshold cracked by the "$825" billion "stimulus" bill, when you include $347 billion in estimated interest costs associated with the incremental borrowing required.

So how big is the resulting $1.2 trillion spending package? Big enough to dwarf any government program in history, even after adjusting for inflation. It's bigger than the New Deal and the Iraq War combined. The interest alone will be costlier than the Louisiana Purchase or going to the moon. The $18 billion in bonuses paid legally by private Wall Street firms in 2008 - decried by the President as "shameful" - is vanishingly small in comparison (smaller even than the bill's incremental food stamps expenditures).

The only relatively modest component of the spending bonanza is the money tagged for infrastructure and energy efficiency (the ostensibly stimulative part), which accounts for less than 14% of the total.

Feast your eyes on the ghastly enormity.

(Data includes estimates from Bianco Research, via The Big Picture.)

Update: As requested in the comments, here's a higher-res version of the image.

Click here to subscribe to the FlipSheet, an investment newsletter for politically turbulent markets.

Handcrafted by Flip on January 30, 2009 | Permalink | Comments (29) | TrackBack

GDP Growth Considerably Less Awful Than Feared

The advance fourth quarter GDP report was expected to show annualized output growth dropping from -0.5% to a dreadful -5.5% in the most recent quarter. Instead, it came in at a less dreadful -3.8%.

But...

[E]quity futures turned around from earlier declines, until, of course, it was revealed that the headline figure was basically a mirage.
...
The very thing that helped GDP in the fourth quarter — an increase in business inventories, by a $6 billion annual rate — will hurt in the first quarter, as reduced demand forces businesses to pull back and cut back on inventories. That realization caused a turnaround in stock futures, and caused bond yields to fall as investors moved back into fixed income.

Handcrafted by Flip on January 30, 2009 | Permalink | Comments (0) | TrackBack

Strategy Room 3:00-4:00

Sr2 ~~I'll be in the Strategy Room at FoxNews.com this afternoon from 3:00-4:00, with Eric Bolling.~~ Click here to stream the show live.

And click here to email the show.

Our Strategy Room viewer forum will also be live throughout the day, where you may delight in our lineup of Twitter feeds, links to hosts' and guests' blogs, access to Strategy Room mugs, shirts, and other paraphernalia, and the "Strat's Brats" Skype chat set up by the proprietors of the Strategy Room Facebook groups.

You'll need to download Skype to participate (if you don't already have it installed), but once you do, it won't cost you anything to join either the text or the voice chat.

Visit the Strategy Room viewer forum to access all of these wonderful things.

Update: Won't be going on today after all. Back in the Strategy Room at 3:00 Tuesday.

Handcrafted by Flip on January 30, 2009 | Permalink | Comments (0) | TrackBack

CNBC Million Dollar Portfolio Challenge - Friday, Finals Week 1

After a tough day, Brad Pine slipped from 1st to 5th (having been bounced from the top spot by a member of the inumerable Lewis clan), but he's still very much in the hunt.

Here are the standings going into the last day of the first week of the final round.

1	Heidi Lewis	$1,204,003.90
2	Laura Lama	$1,183,234.00
3	Raymond Agnew	$1,149,014.63
4	stephen weber	$1,080,879.31
5	Bradford Pine	$1,067,210.54
6	Bob Holbrook	$1,053,270.11
7	Michael Clark	$1,049,108.73
8	christos vellios	$1,047,788.42
9	michael mondville	$1,013,332.14
10	Mark Girgis	$986,348.10
11	Ashwani Choudhary	$983,010.94
12	Bette Lockhart	$961,805.97
13	Eric Lasky	$961,571.97
14	Doris Lewis	$960,205.15
15	Jerry Wickey	$959,748.28
16	brian dash	$954,386.42
17	Eric Storch	$953,841.72
18	Billy Kung	$941,649.50
19	Debra Lewis	$929,308.65
20	Shirley May	$746,164.95

See all related posts in the CNBC Portfolio Challenge archive.

Finals - Week 1: Monday, Tuesday, Wednesday, Thursday, Friday

Extra Stuff: The Biggest Loser, Interview With Bradford Pine

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

Handcrafted by Flip on January 30, 2009 | Permalink | Comments (1) | TrackBack

Bye Bye Blago Haiku Contest

Inspired.

My favorite so far...

that big hair back home
now it's just a distraction
um, let's eat waffles

Handcrafted by Flip on January 29, 2009 | Permalink | Comments (0) | TrackBack

CNBC Million Dollar Portfolio Challenge - Thursday, Finals Week 1

Well, after a couple of technological false starts, the first update to the standings in the final round has been published. It's with great delight that we note dear reader Bradford Pine is #1 with a bullet, having rocketed 19.7% today alone.

Keep it up, Brad! Do that 7 more times and you're $500,000 richer.

See all related posts in the CNBC Portfolio Challenge archive.

Finals - Week 1: Monday, Tuesday, Wednesday, Thursday

Extra Stuff: The Biggest Loser, Interview With Bradford Pine

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

Handcrafted by Flip on January 29, 2009 | Permalink | Comments (0) | TrackBack

Stimulus Resistance Builds

The more time it has to air out, the more vociferous become the righteous haters.

Handcrafted by Flip on January 28, 2009 | Permalink | Comments (0) | TrackBack

Strategy Room 3:00-4:00

I'll be in the Strategy Room at FoxNews.com this afternoon from 3:00-4:00, with Eric Bolling. Click here to stream the show live.

And click here to email the show.

You'll need to download Skype to participate (if you don't already have it installed), but once you do, it won't cost you anything to join either the text or the voice chat.

Visit the Strategy Room viewer forum to access all of these wonderful things.

Handcrafted by Flip on January 27, 2009 | Permalink | Comments (0) | TrackBack

Good News: The Stimulus Money Should Be Spent In Time For the Next Recession

Marginal Revolution points out this summary paragraph from a new Congressional Budget Office report:

Assuming enactment in mid-February, CBO estimates that the bill would increase outlays by $93 billion during the remaining several months of fiscal year 2009, by $225 billion in fiscal year 2010 (which begins on October 1), by $159 billion in 2011, and by a total of $604 billion over the 2009-2019 period.

Over the last half century or so, recessions have tended to show up every 8 years (and last from 1-2 years). If the next one abides by the timetable, we should find ourselves really flagging in 2017. As long our future selves are as easily hoodwinked by Keynesian economics as we are today, we can look forward to a nice placebo effect from this week's rescue package to take the psychological edge off of "Space Recession" or "Robo-Recession" or whatever future historians might dub it.

Related prediction: Paul Krugman will win another Nobel Prize and be crowned an incomparable genius for predicting Robo-Recession, despite having incorrectly predicted recessions in 2011, 2012, 2013, 2014, 2015, and 2016.

Handcrafted by Flip on January 27, 2009 | Permalink | Comments (1) | TrackBack

Dr. Kenneth and Mr. Ken

Is The Wall Street Journal pixeltorializing?

Columbia Journalism Review notes a stunning evolution in Bank of America CEO Ken Lewis' stipple portrait.

Overnight, he went from neatly coiffed, even-tempered gent...

... to deranged, bloated, usurious baby-eater.

What happened between those two consecutive issues going to print?

Bank of America Corp. reported a fourth-quarter loss of $1.79 billion Friday and went on the offensive to answer critics and shore up support for the giant Charlotte, N.C., lender during a time of crisis.

(HT: Portfolio.com)

Handcrafted by Flip on January 27, 2009 | Permalink | Comments (7) | TrackBack

Get Ready Not To Know How To Feel About Things

Join me in a weep for the professional art and culture opinionistas, won't you?

Sheila Farr chooses her words carefully when she describes the day her job disappeared. She makes a practice of being careful with language, and this is a story she wants to get right. "Here is how it was put to me," she says, scrupulously recreating her conversation with Seattle Times higher-ups. "They were eliminating my position as art critic. The position would be gone." A fine-boned woman with a meticulous manner, fifty-seven-year-old Farr was the paper's staff art critic for eight years, and a dominant voice in the city's visual arts scene for over twenty. She is a very good art critic and she knows it. So the news she'd likely be the last staff art critic in the Times's 112-year history was a surprise.
...
As the meltdown continues, certain values become clear: the most basic of these is that breaking news is more important than anything else. This breaking-news panic is a product of Blogosphere Fear - terror that the blogs will get the story before the newspaper gets it. And since most newsrooms operate under the unexamined, cultlike belief that sports coverage must be preserved, arts coverage is what's targeted for elimination.

Yeah, the free market's a drag.

Farr may know herself to be a fine (and fine-boned) culture appreciator, but she suffers from an ironic lack of inward perspective. Which is more likely - that her contributions add more value for readers than those of her boorish colleagues on the breaking news and sports desks (a prospect that conveniently reinforces her belief that she's not wasting her life) and that the knuckle-dragging, cult mentality muckety mucks in the corner office simply haven't bothered to "examine" the dynamics of their business sufficiently to realize this beautiful truth? Or that the content judged by readers and advertisers to be less valuable is the same content that the cold, calculating cultists tasked with saving the dying business have appropriately (if monstrously, from her own rigid perspective) concluded must be weeded out?

No matter. Genghis at AoSHQ has a solution.

So the next time you pass by a former columnist on a street corner, holding a sign saying “will critique for food,” be sure to drop an abstract allegrorical invisible coin into their cup. They’ll appreciate the whimsical Bauhaus-inspired Dadaist/Postmodern/Deconstructionist ironic construct of the gesture, with its attendant underlying, subtle, anti-bourgeois-nationalist yet proto-nativist meaning.

Thank you for reading this post and loading this ad-supported page. In so doing, you've rendered me a professional cultural critic of cultural critics. I must be boorish and fine-boned.

Handcrafted by Flip on January 27, 2009 | Permalink | Comments (0) | TrackBack

Double Dose of Good Economic News Overshadows Job Cuts

Twin rays of unexpected sunshine today, as existing home sales for December swelled from 4.45 million to 4.74 million (versus an expected decline to 4.40 million) and an index of leading indicators jumped 0.3% (versus an expected decline of 0.3%).

Major indices leapt out of the gate with every sector trading higher, shrugging off announcements of tens of thousands of layoffs and expectations of more to come.

Handcrafted by Flip on January 26, 2009 | Permalink | Comments (3) | TrackBack

CNBC Million Dollar Portfolio Challenge - Monday, Finals Week 1

Welcome to post-season trading!

We've dropped from a couple hundred thousand players to just 20, at least one of whom (Bradford Pine) hails from our esteemed collection of readers. Trading begins today and runs through next Friday, February 6. There are no Bonus Bucks and each trader has a single portfolio, which has been reset to $1 million ($900,000 in equities and $100,000 in currencies).

A couple of noteworthy oddities from the contest site:

There are only 10 finalists listed on the finalists page. I don't know whether these are just the top 10 overall finishers or whether it represents the thus-far validated finalists hailing from both the overall and the weekly ranks.
There are exactly zero members of the inumerable Lewis family (about whom much debate over possibly squirrely enrollment procedures swirled) on the list. Lewis family members finished with one weekly bid and two slots in the overall top 10. Any top 10 finishers who also won individual weeks get to the finals via their weekly bids (and the 11th-Nth place overall finishers move up accordingly), so it's possible that Lewis family members will indeed be in the finals and that we're seeing either the weekly winner-less list of "adjusted top 10" finalists or a partial list that will be updated later today.

While we didn't focus too much on currency trading here, it may prove to be a larger factor in the finals. During the initial phase of the contest, the rules strongly encouraged moon-shooting, since 1) rewards are only granted to a tiny fraction of the top percentile of performers, 2) each week was judged in isolation, 3) each trader could play with 5 independent portfolios, and 4) Bonus Bucks are more valuable to devastated portfolios.

Accordingly, the opportunity for currency gains (even to talented currency traders) was comparatively small, despite the ability to trade currencies throughout the day and the 10:1 leverage available to currency balances. The risk-seeking perversion was exacerbated this year with the introduction of ETFs (and leveraged ETFs), which enabled peak weekly gains approaching 100%. With gains of that size setting the pace, grinding out currency gains just wasn't a terribly productive use of one's time.

In the finals, none of the four above conditions hold. 1) A significant number (15%) of the finalists will win a share in the cash prize pool. 2) Standings in the finals are based on a single measurement of performance over the two-week period. 3) All finalists have just one portfolio. 4) There are no Bonus Bucks.

I don't know if there are any currency experts among the finalists, but I suspect it just became a prized area of expertise. (Note to finalists: the currency education section of the site is still live.)

If you didn't make the finals, you can (in theory*) continue pretend-trading with CNBC by logging into the contest portfolio manager and exporting your portfolios to the CNBC Investor Portfolio Tool.

* I just tried this and it's not working.

Update: The finalist roster now has a full 20 members, including 3 members of the Lewis family.

Update: Just spoke to Brad, who attempted to access the site this afternoon and make a couple changes to his allocation (well before the close) and couldn't get in. As of 4:06 pm, the site is still down. Unimpressive. And certain to result in justified complaints from the finalists.

Update: CNBC's mea culpa:

FINALS UPDATE 1/27 - 2/9

Due to technical issues on CNBC.com today, some of you were not able to place trades. As a matter of fairness, we will restart the finals tomorrow (Tuesday, 1/27) morning at 9:30am ET. Trading will continue through Monday, 2/9 until 4:00pm ET.
Before the opening bell Tuesday, 1/27, all portfolios will be reset by CNBC to 1,000,000 CNBC Bucks (900,000 for Equity and 100,000 for Currency trading).
We apologize for any inconvenience and appreciate your participation.

See all related posts in the CNBC Portfolio Challenge archive.

Finals - Week 1: Monday

Extra Stuff: The Biggest Loser, Interview With Bradford Pine

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

Handcrafted by Flip on January 26, 2009 | Permalink | Comments (3) | TrackBack

Even Keynes Wasn't This Keynesian

The quote of the week, vis a vis the trillion-dollar, pork-slathered debacle barreling toward us, comes from the man after whom the famously flawed economic philosophy being used to justify it is named.

"Organized public works, at home and abroad, may be the right cure for a chronic tendency to a deficiency of effective demand. But they are not capable of sufficiently rapid organisation (and above all cannot be reversed or undone at a later date), to be the most serviceable instrument for the prevention of the trade cycle."

(HT: Marginal Revolution)

Handcrafted by Flip on January 25, 2009 | Permalink | Comments (0) | TrackBack

Sully Speaks

Via Hot Air:

Visit msnbc.com for Breaking News, World News, and News about the Economy

Previously:
Video Of US Airways Flight 1549 Hudson River Crash Landing

Hero On the Hudson

Handcrafted by Flip on January 25, 2009 | Permalink | Comments (0) | TrackBack

Joy Behar Nearly Becomes Self-Aware

You have to watch carefully, but toward the end, there's a fleeting glint of introspection in her eye, just before she swallows her cognitive dissonance and reassures herself that the world truly is precisely as she perceives it.

(HT: JWF)

Handcrafted by Flip on January 24, 2009 | Permalink | Comments (3) | TrackBack

Obama Kool-Aid Not Doing It For You Anymore?

How about something a little stronger?

Handcrafted by Flip on January 24, 2009 | Permalink | Comments (0) | TrackBack

"Remember Who Your Dad Really Is"

A very sweet welcome message to Sasha and Malia from Jenna and Barbara.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Handcrafted by Flip on January 24, 2009 | Permalink | Comments (0) | TrackBack

CNBC Million Dollar Portfolio Challenge - Friday, Week 10

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

Welcome to the last day of regular season trading!

We've got a number of readers in contention for bids to the final round and today's action will either sustain or dash their million dollar dreams.

Brad Pine's in 6th place overall and has liquidated into 100% cash going into the final day. As he pointed out to me, Heidi Lewis (of the innumerable Lewis clan) is in 10th place, but she's already won a weekly bid, so 11th place may be good enough to reach the finals. Brad himself is also in 2nd place on the weekly leaderboard, so if he manages grab top honors for Week 10, 12th place overall might become the cutoff for the final round.

Going into today's session, our participating portfolios are allocated into our twin leveraged ETF baskets, as well as a portfolio of beaten up that reported earnings last night and manufacturing and transportation names that report this morning.

URE, UWM, UYG, RFL (Financial/Real Estate Ultrabull)
SRS, TWM, SKF, RFN (Financial/Real Estate Ultrabear)
COF, CBU, FFIN, PBCT (Beaten up banks reporting)
HOG, SLB, XRX, GMT (Manufacturing, Transportation)

Those of you still in the hunt, drop us a line and let us know how the day is going for you and where it looks like you'll end up.

For those of you who have enjoyed these daily updates and Bonus Bucks answers lo these 10 weeks and are grasping for ways to express your appreciation, we're pleased to gesture subtly toward the site's tip jar.

Thanks very much for your loyal readership during the contest. It's been a blast and I hope you'll continue to come around!

Update: Ooh, exciting. The leaderboard has been replaced by a tantalizing message.

You are being redirected to this page as we are performing maintenance. The page you are trying to access should be enabled in some time.

Stay tuned - results can't be far off...

Update: Hurrrmm... frustratingly inconclusive update...

Thank you for playing!
General trading for the contest is over. We'll be in touch if you made it into the finals.

Consider all of the above to be for entertainment purposes and not meant to be used as real-world investment recommendations. The goals and strategies of the Portfolio Challenge are not to be confused with those of sensible investing.

See all related posts in the CNBC Portfolio Challenge archive.

Extra Stuff: The Biggest Loser, Interview With Bradford Pine

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

Friday January 23rd

Cnbc_trivia

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box: Question: As of Jan. 19, how much bailout funding did HSBC request from the U.K. government?

Answer: no request being made

Squawk On the Street: Question: On Dec. 14, we reported that Berkshire Hathaway raised its stake in Burlington Northern railroad to:

Answer: 20.47%

The Call: Question: According to our slideshow, Behind the Scenes Look at the Death of Seth Tobias, where was "Tiger" the night in question?

Answer: Las Vegas

Power Lunch: Question: In our slideshow, "Notable Sex Scandals," which disgraced figure is wearing a red pattern necktie?

Answer: Jim McGreevey

Street Signs: Question: In our "SPANX Million Dollar Girdles" slideshow, what archaic derogatory term is referenced?

Answer: loose woman

Closing Bell: Question: According to our slideshow, Prostitution Scandals of the Rich & Famous, who revealed Sen. David Vitter's illicit secret?

Answer: Hustler magazine

Weekly Quiz:

Question: Jobless claims are reported

Answer: Weekly

Handcrafted by Flip on January 23, 2009 | Permalink | Comments (3) | TrackBack

Hope, Change, and Just One Eensy Weensy Lobbyist

I'm loath to even call attention to this stark reversal, as doing so is surely divisive and irrelevant in the post-partisan era, but what the heck.

Handcrafted by Flip on January 22, 2009 | Permalink | Comments (0) | TrackBack

Barack Obama: Healer Of Men, Lifter Of Anvils

Aw, good for her.

[House Speaker Nancy] Pelosi said one of her favorite moments from Inauguration Day was when Marine One lifted off the Capitol grounds, signifying former President George W. Bush's exit from Washington. "It felt like a 10-pound anvil was lifted off my head," she said.

Life's a lot less burdensome without having to abide the pesky opposition, isn't it? Surely it was the anvil that was weighing down Congress' 9% approval rating under her stewardship of the 110th.

Handcrafted by Flip on January 22, 2009 | Permalink | Comments (2) | TrackBack

CNBC Million Dollar Portfolio Challenge - Thursday, Week 10

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

After two days of trading, our best-performing subgroup of participating portfolios is up a whopping 47% week-to-date (not including Bonus Bucks).

We already had at least three readers on the overall leaderboard and hopefully this will have vaulted a few more into contention for one of the top 10 overall bids to the finals.

Today, we're allocated into those leveraged ETF baskets that have treated us so well this week, as well as a portfolio of banks reporting earnings this morning.

URE, UWM, UYG, RFL (Financial/Real Estate Ultrabull)
SRS, TWM, SKF, RFN (Financial/Real Estate Ultrabear)
FITB, KEY, MTB, BBT (Banks reporting earnings)

Check back this afternoon for today's final reallocation of the regular season.

Update: Way to go, Brad Pine, who just jumped from #9 to #2 on the overall leaderboard!

Update: Here we go - the very last reallocation of the contest (not including the finals).

In addition to the two leveraged ETF baskets, we've got a lovely selection of beaten up banks that will report earnings after today's closing bell and a grab bag of manufacturing and transportation names that report before tomorrow's open.

Participating portfolios should step into them according to the last digit of their birth year:

0-2: URE, UWM, UYG, RFL (Financial/Real Estate Ultrabull)
3-5: SRS, TWM, SKF, RFN (Financial/Real Estate Ultrabear)
6-7: COF, CBU, FFIN, PBCT (Beaten up banks reporting)
8-9: HOG, SLB, XRX, GMT (Manufacturing, Transportation)

See all related posts in the CNBC Portfolio Challenge archive.

Extra Stuff: The Biggest Loser, Interview With Bradford Pine

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

Thrursday January 22nd

Cnbc_trivia

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box: Question: Which scandal-tinged investor allegedly attempted to fake his suicide?

Answer: Arthur Nadel

Squawk On the Street: Question: Which global steel maker, identified by ticker symbol, did Jon Najarian examine in his Jan. 21 Stock Blog post?

Answer: GGB

The Call: Question: In blog post called "History, Cool Segments and Competitors", what Depression-era firm(s) still exist as parts of others?

Answer: none of the above

Power Lunch: Question: According to Wednesday's reports, which executive bought shares in his/her own company over the past week?

Answer: JPMorgan's Jamie Dimon

Street Signs: Question: In Jane Wells' blog post, Adidas Attends Etnies Party, which beer brand is shown in all four photos?

Answer: Pabst Blue Ribbon

Closing Bell: Question: In Darren Rovell's "As Seen On TV" bracket, which product is numbered 9 in the Kitchen category?

Answer: Tater Mitts

Weekly Quiz:

Question: Jobless claims are reported

Answer: Weekly

Handcrafted by Flip on January 22, 2009 | Permalink | Comments (7) | TrackBack

Bolling To Obama: Fill 'Er Up

On the Fox Business "Street Meat" segment, Eric Bolling urges the President to take advantage of these crazy low oil prices and fill the strategic petroleum reserve to the brim.

With 25 million barrels of spare capacity and oil prices $100/barrel lower than they were six months ago, seems like a no-brainer. While we're at it, might be time to dig a few extra caverns and hoard as much as we can.

Handcrafted by Flip on January 21, 2009 | Permalink | Comments (0) | TrackBack

Caroline Withdraws For, You Know, Personal Reasons; Update: Or, You Know, Not

How about that.

Caroline Kennedy has told Gov. Paterson that she is withdrawing her name from consideration to replace Hillary Clinton in the U.S. Senate, The Post has learned.

Kennedy cited "personal reasons," according to sources. Her stunning move comes as sources revealed that Paterson had intended to appoint her to the now-vacant seat on Thursday.

Does it default to Cuomo, then? I guess he'll have to do. He's not royalty, but at least he's a legacy.

(HT: Ben Smith)

Update: Which is it, Highness?

Source: Caroline Kennedy remains in contest to fill Hillary Clinton's NY Senate seat.

Here's a possible chronology, including a fine bit of speculation from Allah:

Paterson tells Kennedy he plans to tap Cuomo, but will hold off on his announcement until Friday if she wants to bow out "willingly".
Kennedy bows out "willingly".
Obama grimaces at the prospect of losing a lap Senator, calls Paterson to recommend he reconsider.
Paterson (or Obama) lets Caroline know she's still in it, perhaps once again the front runner.
The awkward Kennedy backpeddle ensues.
Paterson announces he now hopes to make his pick by the end of the weekend.

Update: Ben Smith offers an arguably more odious explanation.

[O]ther Democrats who ought to be in a position to know are convinced that it's over, though the prevalent theory is that Paterson put out word that Kennedy had turned it down in order to box her in.

Update: She's back out, apparently.

There was complete confusion Wednesday night over whether or not Caroline Kennedy had dropped her bid for Hillary Clinton's U.S. Senate seat.
However, late Wednesday night Kennedy confirmed an earlier New York Post report by releasing a statement saying she is removing herself as a candidate for the now vacant New York Senate seat.
"I informed Gov. Paterson today that for personal reasons I am withdrawing my name from consideration for the United States Senate," Kennedy said in a statement obtained by CBS 2 HD.

Handcrafted by Flip on January 21, 2009 | Permalink | Comments (0) | TrackBack

A Good Day For H&R Block

Earlier today, Treasury Secretary designate Tim Geithner discussed his years-long failure to pay certain self employment taxes for 2001-2002 during his Senate confirmation testimony:

Sen. Chuck Grassley (R-Iowa) asked: "Did you use tax software to prepare your taxes?"
Geithner: "Yes, I did."
Grassley: "Which brand of tax software?"
Geithner: "I will answer that, but I want to say I take full responsibility....It was TurboTax."

This elicited chuckles from the gallery. Nervous chuckles, perhaps. I wonder how many of them use (or now, perhaps used to use) TurboTax to prepare their own returns.

Update: TurboTax responds.

“Each year, millions of Americans use TurboTax to accurately prepare and file their federal and state tax returns,” Dan Maurer, senior vice president and general manager of TurboTax, said in a statement late this afternoon. “The software helps taxpayers report their income and find the deductions and credits they’re entitled to claim. TurboTax, and all software and in-person tax preparation services, base their calculations on the information users provide when completing their returns. TurboTax also has built-in error-checking tools that routinely catch common taxpayer mistakes. Federal law and our own privacy policy prohibit us from discussing specifics of any customer’s return.”

Handcrafted by Flip on January 21, 2009 | Permalink | Comments (3) | TrackBack

CNBC Million Dollar Portfolio Challenge - Wednesday, Week 10

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

Today, following a very strong start for our ultrabear group, our participating portfolios are split into the two leveraged financial/real estate ETF baskets and one energy-heavy portfolio.

URE, UWM, UYG, RFL (Financial/Real Estate Ultrabull)
SRS, TWM, SKF, RFN (Financial/Real Estate Ultrabear)
MMR, USO, KMP, DXO (Energy)

Check back this afternoon for today's penultimate reallocation.

And those of you within spitting distance of the top 10 (or the weekly prize), keep us in the loop. Bradford Pine began Week 10 at #9 overall, so if he can hang on, we'll have at least one reader going to the finals.

Update: Including yesterday's performance, Brad has moved up to #8 overall and reader Judith Boucher has jumped to #11.

Update: For today's reallocation, let's go with the two leveraged ETF baskets, plus for selected bank stocks that will report earnings tomorrow before the open. Choose according to the last digit of your ZIP code.

0-2: URE, UWM, UYG, RFL (Financial/Real Estate Ultrabull)
3-5: SRS, TWM, SKF, RFN (Financial/Real Estate Ultrabear)
6-9: FITB, KEY, MTB, BBT (Banks reporting earnings)

See all related posts in the CNBC Portfolio Challenge archive.

Extra Stuff: The Biggest Loser, Interview With Bradford Pine

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

Wednesday January 21st

Cnbc_trivia

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box: Question: In Maria Bartiromo's Jan. 20 video "Market Message," which of these topics did she mention first?

Answer: Apple earnings

Squawk On the Street: Question: Which company mentioned in the Stock Blog post "Diversity is the Key" is based in the Eastern Hemisphere?

Answer: both of the above

The Call: Question: According to Jim Goldman's blog "Tumult vs. Triumph," why did RBC Capital's Mike Abramsky lower his Apple estimates?

Answer: fear of Mac order slowdown

Power Lunch: Question: What were uber-trader Jon Najarian's floor call letters when he worked on the CBOE?

Answer: DRJ

Street Signs: Question: In "Cramer's 10 Tips for Obama" what did the Mad Money guru NOT suggest government do?

Answer: Help the homebuilders

Closing Bell: Question: On our Web site's Credit Spreads page (hint: find it via the Market Buzz box), what is the first type of data shown?

Answer: TED Spread

Weekly Quiz:

Question: Jobless claims are reported

Answer: Weekly

Handcrafted by Flip on January 21, 2009 | Permalink | Comments (8) | TrackBack

Thank You, Mr. Justice!

The first words uttered by our gaffetastic new Vice President Joe Biden (to Justice John Paul Stevens, having just sworn him in) were, "Thank you, Mr. Justice."

While a Supreme Court Justice's proper salutation is the gender-neutral "Justice So-and-So", Biden's elevation of Stevens to superhero status is terribly exciting.

It was just five months ago that Biden similarly crowned his runningmate "Barack America".

The nation now turns its attention to the Senate confirmations of Tim Geithner as "Captain Money" and Hillary Clinton as "Diplomarella".

Handcrafted by Flip on January 20, 2009 | Permalink | Comments (7) | TrackBack

Bush Achieved the Impossible

Barring any unfortunate incidents in the next half hour, George Bush will have pulled off what no one thought possible seven years ago - warding off another terrorist attack.

In our creeping national complacency, we've come to focus on the length of time it took to win the Iraq War, the current economic turmoil, and some fuzzy and misguided conceits about our global stature, but this President is one who focused first and foremost on his primary responsibility of keeping the country safe and succeeded against daunting odds.

In so doing, he has set a higher bar for his successor than the cumulative Hollywood fawning and Messianic press adoration could ever curse him with.

Congratulations and good luck, Presidents Bush and Obama.

Handcrafted by Flip on January 20, 2009 | Permalink | Comments (1) | TrackBack

The Way To Feel About Canada Geese

That's about right.

Previously: Schumer's Pork Nearly Killed 155 People

Handcrafted by Flip on January 20, 2009 | Permalink | Comments (1) | TrackBack

CNBC Million Dollar Portfolio Challenge - Tuesday, Week 10

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

Welcome to Week 10, home of the MLB All-Star Game prize package and your last chance to secure a weekly bid (or one of the 10 overall bids) to the finals.

Check back this afternoon for today's reallocations.

Update: Tomorrow, we've got a number of interesting companies reporting earnings, including notable airlines, energy companies, and financials.

In addition to our standard ultrabull and ultrabear baskets, we're adding a portfolio of energy names (3 earnings reporters, plus the 2x leveraged crude ETF). They don't all report before the open, but the prevailing sentiment should have sunk in by the closing bell. Participating portfolios should step into these allocations, according to the last digit of their phone numbers:

0-2: URE, UWM, UYG, RFL (Financial/Real Estate Ultrabull)
3-5: SRS, TWM, SKF, RFN (Financial/Real Estate Ultrabear)
6-9: MMR, USO, KMP, DXO (Energy)

Update: Thanks to John in the comments, who notes that NVE is not eligible (odd, because it seems like it should qualify). I've removed it from the energy basket and replaced it with the ETF USO.

See all related posts in the CNBC Portfolio Challenge archive.

Extra Stuff: The Biggest Loser, Interview With Bradford Pine

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

Tuesday January 20th

Cnbc_trivia

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box: 6:00 am

Answer: health care

Squawk On the Street: Question: What did "Dow 12,000" trader Ben Lichtenstein call a "major speed bump" on Friday?

Answer: Dow at 9,500

The Call: Question: What is the name of CNBC contributor Janice Dorn's own business site?

Answer: thetradingdoctor.com

Power Lunch: Question: Vanished Florida money manager Arthur Nadel handled assets for which Norse-named fund?

Answer: Valhalla

Street Signs: Question: On Monday, which bank announced the largest loss in Great Britain's corporate history (as of Jan. 19)?

Answer: Royal Bank of Scotland

Closing Bell: Question: In Darren Rovell's "As Seen on TV" Tournament, which TV product is numbered "1" in the "Everything Else" category?

Answer: Girls Gone Wild

Weekly Quiz:

Question: Jobless claims are reported

Answer: Weekly

Handcrafted by Flip on January 20, 2009 | Permalink | Comments (5) | TrackBack

Canada To Ayers: Keep Oot

From The Toronto Star, via Amanda Carpenter:

An American education professor, one of the founders of a radical 1960s group known as the Weather Underground, which was responsible for a number of bombings in the United States in the early 1970s, was turned back at the Canadian border last night.
Dr. William Ayers, a professor of education at the University of Illinois-Chicago and a leader in educational reform, was scheduled to speak at the Centre for Urban Schooling at University of Toronto's Ontario Institute for Studies in Education. But that appearance has now been temporarily cancelled.
"I don't know why I was turned back," Ayers said in an interview this morning from Chicago. "I got off the plane like everyone else and I was asked to come over to the other side. The border guards reviewed some stuff and said I wasn't going to be allowed into Canada. To me it seems quite bureaucratic and not at all interesting ... If it were me I would have let me in. I couldn't possibly be a threat to Canada."

Handcrafted by Flip on January 19, 2009 | Permalink | Comments (0) | TrackBack

Schumer's Pork Nearly Killed 155 People

Thank goodness we New Yorkers have such a stately senior Senator who can secure hundreds of thousands of dollars in pork spending to safeguard our more urbanized gaggles of geese.

A less powerful legislator might've buckled to the "worried band of federal officials who believe the geese are too close to planes carrying millions of passengers in and out of one of the nation's busiest airports."

SCHUMER:$200,000 FOR "GEESEPEACE" SOLUTION TO CANADA GEESE PROBLEM PASSES CONGRESS

Geese overpopulation is a major health hazard to local residents and the environment

US Senator Charles E. Schumer today announced that Congress has passed $200,000 in federal funds for the US Fish and Wildlife Service to implement a Geesepeace program that works to alleviate the Canada geese overpopulation problem that threatens the health of local residents and the environment. Geesepeace is a national non-profit organization that uses non-lethal methods to reduce the number of geese and redirect them to areas where they pose less of a threat to people.
This issue came up in 2004 when Geesepeace was trying to save a flock of geese from Riker's Island (in the flight path of Laguardia) rather than have the geese killed:

On one side are geese, slender-necked and given to relieving themselves liberally, who like where they are living, a stone's throw away from La Guardia Airport. On the other is a worried band of federal officials who believe the geese are too close to planes carrying millions of passengers in and out of one of the nation's busiest airports.

Previously:
Video Of US Airways Flight 1549 Hudson River Crash Landing
Hero On the Hudson

Handcrafted by Flip on January 17, 2009 | Permalink | Comments (2) | TrackBack

Video Of US Airways Flight 1549 Hudson River Crash Landing

You knew it had to have been captured somewhere. "Somewhere" (appropriately enough) turned out to be a Coast Guard video camera.

The event in question begins just after the 2:00 mark. Less than 2 minutes later, the NY Waterway ferries are en route and within 4 minutes of impact, the first one is on the scene.

Expertly done, Captain Sullenberger.

Previously: Hero On the Hudson

Update: Via JWF, here it is from another angle. I can't believe how smooth this was.

Update: Fantastic! If not for Chuck Schumer's ability to secure pork for local environmental groups, we might never have had this heroic story to marvel at.

Sullenberger did good work, but Senator Schumer is the real hero.

(HT: Gateway Pundit)

Update: Sully Speaks.

Handcrafted by Flip on January 17, 2009 | Permalink | Comments (99) | TrackBack

CNBC Million Dollar Portfolio Challenge - Friday, Week 9

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

Check back this afternoon for the first reallocation for Week 10.

Update: Expect our newfound volatility to continue on Tuesday - Inauguration Day and the first day of the contest's final, holiday-shortened week.

Accordingly, we'll kick things off with our twin financials-heavy volatility plays, according to birth month:

Jan-Jun: URE, UWM, UYG, RFL (Financial/Real Estate Ultrabull)
Jul-Dec: SRS, TWM, SKF, RFN (Financial/Real Estate Ultrabear)

Have a great long weekend!

See all related posts in the CNBC Portfolio Challenge archive.

Extra Stuff: The Biggest Loser, Interview With Bradford Pine

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

Friday January 16th

Cnbc_trivia

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box: Question: What stock(s) did Fast Money trader Joe Terranova recommend Thursday to play a gasoline price bottom?

Answer: Valero

Squawk On the Street: Question: In Cramer's Dec. 22 "outrage" over ultra-short ETFs, where was UltraShort Financials ProShares?

Answer: up 1.4%

The Call: During Doug Hirschhorn's Jan. 15 CNBC interview, what "Breaking News" headline(s) appeared on-screen?

Answer: Dow Dips Below 8000

Power Lunch: Question: According to the article "Is Microsoft's Songsmith Video Campy...", what hated TV show was the promo video compared to?

Answer: Cop Rock

Street Signs: Question: In Cliff Mason's blog post about legalizing narcotics, which economist does he refer to?

Answer: Milton Friedman

Closing Bell: Question: In the installment of "Pros Say" called "We Need More Bailouts, Bigger TARP", who praised Fed Chairman Ben Bernanke?

Answer: Michael Spence

Weekly Quiz:

Question: If the S&P 500 goes down 1%, how much does SDS go up?

Answer: 2%

Handcrafted by Flip on January 16, 2009 | Permalink | Comments (13) | TrackBack

Hero On the Hudson

Michelle's got the dossier on Captain Chesley "Sully" Sullenberger, who managed to put crippled Flight 1549 down in the Hudson River and walked the sinking plane twice to ensure all passengers had evacuated.

In addition to being a former Air Force fighter pilot, Sullenberger is President and CEO of an aviation safety consulting firm, which I predict will have a strong 2009.

Update: Talk about the right man for the job.

From Sullenberger's resume:

Driving force behind development of airline’s first CRM course and presenting course to hundreds of USAirways pilots. Significantly reduced number of operational incidents and realized reduction in number of altitude deviations. Course focuses on multi-disciplinary approach involving leadership, communication, decision-making and error management – airline went from 5 major accidents to zero. ...

Played integral role working with ATA, FAA, NATCA and NTSB to improve operations and investigate several major airline accidents. ...

Key contributor/member of National Transportation Safety Board Survival Factors Group during investigation of major airline accident at LAX, leading to improved airline procedures and training for emergency evacuations of aircraft.

Update: Video of the crash landing.

Handcrafted by Flip on January 15, 2009 | Permalink | Comments (1) | TrackBack

Strategy Room 3:00-4:00

I'll be in the Strategy Room at FoxNews.com this afternoon from 3:00-4:00, with Eric Bolling. Click here to stream the show live.

And click here to email the show.

Our Strategy Room viewer forum will also be live throughout the day. Please to enjoy our lineup of Twitter feeds, links to hosts' and guests' blogs, access to Strategy Room mugs, shirts, and other paraphernalia, and the "Strat's Brats" Skype chat set up by the proprietors of the Strategy Room Facebook groups.

You'll need to download Skype to participate (if you don't already have it installed), but once you do, it won't cost you anything to join either the text or the voice chat.

Visit the Strategy Room viewer forum to access all of these wonderful things.

Handcrafted by Flip on January 15, 2009 | Permalink | Comments (2) | TrackBack

Postal Superstition

I get why apartment buildings and hotels often don't have 13th floors. Granted, it's a little silly, but if a meaningful segment of the population is superstitious enough that they'd shy away from living on an unlucky floor, better to accommodate them with falsified elevator button numbering than to reduce the rentability of a whole floor.

I live on the "14th" floor myself and I supposed it's moderately comforting to know that any ghoulies that may be inclined to haunt my building (assuming they're sufficiently gullible) will bypass me for more numerically significant places.

What I don't get is how this translates to postal service windows. I noticed today that the huge U.S. Post Office in Grand Central skips over the unlucky number in their window numbering scheme.

Living on the 13th floor might be unnerving to a triskaidekaphobe. Flying in the 13th row - fine. Getting married on the 13th - whatever. But buying stamps? Seems like an insufficiently weighty undertaking to warrant the precaution. The only awful things that happen at post offices happen to postal employees. How horribly wrong can this transaction go?

Waiting in line at the post office is such an exquisitely humdrum activity that if we're going to take the number 13 out of that experience, we'd better just pull it from the sequence altogether.

Handcrafted by Flip on January 15, 2009 | Permalink | Comments (2) | TrackBack

Having Officially Smelt It, NASA Claims Martians Dealt It

Yes, first contact, it seems, consists of an interplanetary fart joke.

Handcrafted by Flip on January 15, 2009 | Permalink | Comments (0) | TrackBack

CNBC Million Dollar Portfolio Challenge - Thursday, Week 9

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

Check back later this afternoon for today's reallocations.

Update: Nice day for us to be evenly split between those two leverage financial ETF baskets. Well, nice day for half of us, anyway, but that's all we ever ask for.

It's been a little while since we had a double digit up day (what with the market's stubborn lack of volatility lately), but this certainly seems to be a nice one.

For tomorrow, let's keep with this same pair but reshuffle the allocation, this time according to the last digit of your age:

Odd: URE, UWM, UYG, RFL (Financial/Real Estate Ultrabull)
Even: SRS, TWM, SKF, RFN (Financial/Real Estate Ultrabear)

See all related posts in the CNBC Portfolio Challenge archive.

Extra Stuff: The Biggest Loser, Interview With Bradford Pine

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

Thursday January 15th

Cnbc_trivia

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

Squawk Box: Question: CNBC Europe's Silvia Wadhwa has written for which German business news organization?

Answer: Handelsblatt

Squawk On the Street: Question: Which alleged "hedge fund swindler" was "barred from contact" with his girlfriend on Wednesday?

Answer: Samuel Israel

The Call: Question: After Wednesday's news about Steve Jobs, Fast Money trader Jeff Macke said what would make Apple a "trading buy"?

Answer: Down $10"

Power Lunch: Question: In Allen Wastler's blog post, "Time to Start a Fugitive Watch?", which infamous 1970s criminal does he refer to?

Answer: "D.B. Cooper"

Street Signs: Question: On our Web site's Currencies page, which pair appears first (upper left-hand corner)?

Answer: Euro/US Dollar

Closing Bell: Question: How much did Canada's EDC agree to provide in short-term financing to help Nortel emerge from bankruptcy?

Answer: up to C$30 million

Weekly Quiz:

Question: If the S&P 500 goes down 1%, how much does SDS go up?

Answer: 2%

Handcrafted by Flip on January 15, 2009 | Permalink | Comments (7) | TrackBack

PyraTwit Update

Pyratwit-small As Bernie Madoff heads back to court for yet another bail hearing, and following a very successful first round, PyraTwit (the Twitter-based simulated Ponzi scheme) is happy to announce it is not only taking on new "investors" but allowing previous "investors" to "reinvest". For existing participants, the maximum investment has been raised from 10 to 20 follows (increasing the maximum "guaranteed" return to 40 followers).

Otherwise, all the rules stay the same. You need to e-mail me with your desired investment and retweet the introductory message.

Background for the uninitiated:

PyraTwit is an ongoing social experiment on Twitter, designed to simulate a classic Ponzi scheme. No cash changes hands; instead, we're using Twitter "follows" as currency. New "investors" agree to follow a certain number of Twitterers and in return, are followed by twice as many.

The idea is to document the evolution of a Ponzi-style network in real time, mapping its viral growth and ultimate collapse.

Click here for more details and to join the pyramid!

See who else has joined the experiment.

Update: Below is a representation of the project's transaction history to date (49 investments, 934 follows accrued, 420 paid out). As illustrated, the payouts are becoming gradually more fractured. Among the investors that have realized the entirety of their 200% return, the average number of subsequent investors required to fulfill that return has been trending upward.

Even so, the pyramid is still clearly stable, despite the relatively onerous rate of "guaranteed" return. Excluding secondary investments, the shortfall is relatively small (just 46 in aggregate, across 10 investors). With an average investment size of 9 (and an average return of 18), that shortfall of less than 5 per first round investor represents a lag of just 5 or so investments.

One note on fungibility: while a typical Ponzi scheme benefits from the fully fungible nature of cash, Twitter follows are not quite so versatile. When a new investor already follows an investor awaiting a return, that new investor can't help contribute to the payout. This results in an incremental repayment delay, noted in the chart as "fungibility leakage". Since our Ponzi network is, by design, a highly interconnected one (drawing, as it does, upon referrals made within a social networking application), this leakage is a significant one, totaling nearly 10% of the current shortfall. The leakage is temporary, of course, but it does result in a payback delay, which will hasten the eventual collapse of the pyramid.

Click the image to view full size.

Handcrafted by Flip on January 14, 2009 | Permalink | Comments (0) | TrackBack

The 12 Scariest Words In the English Language

"The only elected statewide official in New York will be Chuck Schumer."

(HT: Ed)

Handcrafted by Flip on January 14, 2009 | Permalink | Comments (0) | TrackBack

CNBC Million Dollar Portfolio Challenge - Wednesday, Week 9

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

Check back later this afternoon for today's reallocations.

Update: Holders of participating portfolios: kindly line up by astrological sign:

Aries, Taurus, Gemini, Virgo, Scorpio, Sagittarius: URE, UWM, UYG, RFL (Financial/Real Estate Ultrabull)
Libra, Capricorn, Aquarius, Pisces, Cancer, Leo: SRS, TWM, SKF, RFN (Financial/Real Estate Ultrabear)

See all related posts in the CNBC Portfolio Challenge archive.

Extra Stuff: The Biggest Loser, Interview With Bradford Pine

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

Wednesday January 14th

Cnbc_trivia

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

While we're waiting for the next trivia question, a delightful way to pass the time is voting for Suitably Flip in the 2008 Weblog Awards.

Squawk Box: Question: When "Squawk Box" co-anchor Becky Quick was an undergrad, what newspaper did she lead?

Answer: The Daily Targum

Squawk On the Street: Question: According to Jon Najarian's Tuesday Stock Blog, which biotech saw options trading spike on Eli Lilly deal rumors?

Answer: DNDN

The Call: Question: In our "Top 10 Halloween Costumes 2008" slideshow, what exaggerated medical implement is the "Adult Nurse" holding?

Answer: Giant Hypodermic Needle

Power Lunch: Question: In Dennis Kneale's editorial, "10 Reasons for Hope", what word does he suggest googling along with his name?

Answer: idiot

Street Signs: Question: In a Jan. 13 interview, Putnam Investments CEO Robert Reynolds said which new fund gives an "equity-type return"?

Answer: Putnam 700

Closing Bell: Question: Boone Pickens told CNBC Tuesday that the price of oil (per barrel) would be where "within a year"?

Answer: $75

Weekly Quiz:

Question: If the S&P 500 goes down 1%, how much does SDS go up?

Answer: 2%

Handcrafted by Flip on January 14, 2009 | Permalink | Comments (9) | TrackBack

TARP Comes Full Circle

There's a certain maddening elegance to it all.

The original TARP was intended to purchase banks' toxic assets. Once everyone realized that was untenable because this sea of heterogeneous securities was impossible to value (which, ah, was the underlying problem in the first place), TARP 2.0 saved the day with direct capital injections. Once everyone realized that did little to cure the toxicity of the bad assets still on banks' balance sheets, TARP 3.0 was born. We didn't get to know that TARP (the one that was supposed to backstop losses incurred by the bum assets) as well as we might've liked, since it quickly fractured into countless, overlapping mini-TARPs, to be divvied up among the auto, steel, and porn industries.

And now...

Maybe the original financial bailout plan to have the government buy or back the toxic debt on banks’ balance sheets isn’t dead after all.
Key Federal Reserve officials Tuesday resuscitated the idea, pointing out that financial markets are still facing severe challenges.
“A continuing barrier to private investment in financial institutions is the large quantity of troubled, hard-to-value assets that remain on institutions’ balance sheets,” Fed Chairman Ben Bernanke said in a speech Tuesday to the London School of Economics. “The presence of these assets significantly increases uncertainty about the underlying value of these institutions and may inhibit both new private investment and new lending.”
Fed Vice Chairman Donald Kohn plans to repeat that quote to lawmakers later Tuesday, according to a copy of his written testimony.

For my money, the uncorrupted version of TARP 3 had the best shot at accomplishing its goal of preventing the exsanguination of the banking system and enabling credit markets to grind back to life. TARP Classic seems likely to squander half the money trying to value the securities, only to come up with a wholly unreliable and inconsistent appraisal and purchase methodology. The degree of subjectivity and the dollar amounts involved leave the door wide open to fraud, waste, and abuse (and at very least, the perception thereof, which can be its own problem).

Even so, it's a better use of the funds than handing it over to Ron Gettelfinger or Larry Flynt, so perhaps I'll just keep quiet.

Handcrafted by Flip on January 13, 2009 | Permalink | Comments (0) | TrackBack

CNBC Million Dollar Portfolio Challenge - Tuesday, Week 9

[Scroll to the bottom for answers to today's Bonus Bucks trivia questions.]

Check back later this afternoon for today's reallocations.

In the mean time, it's the last day of voting in the 2008 Weblog Awards.

The good news is that this is the last time I'm going to pester you with this. And if you can find your way to sparing two mouse clicks on my behalf, I sure enough would appreciate it.

Many thanks to all of you who have voted for this site already - and remember, as long as it's been 24 hours since your last vote, you're cleared for another go!

You don't even need to leave this site to cast your vote; just click here and cast away!

Update: Today, our participating portfolios are going into the following four baskets, according to the third digit of your ZIP code:

1-3: URE, UWM, UYG, RFL (Financial/Real Estate Ultrabull)
4-6: SRS, TWM, SKF, RFN (Financial/Real Estate Ultrabear)
7-8: JAVA, HPQ, DELL, TECD (Computer hardware)
9-0: APA, CHK, DVN, SWN (Oil operations)

See all related posts in the CNBC Portfolio Challenge archive.

Extra Stuff: The Biggest Loser, Interview With Bradford Pine

To receive additional updates by e-mail, drop a line here with the word "Subscribe" in the subject header.

Tuesday January 13th

Cnbc_trivia

Throughout the contest, each day's answers will be at the top of the CNBC Portfolio Challenge archive as soon as the questions are published, so bookmark accordingly.

Daily Trivia:

While we're waiting for the next trivia question, a delightful way to pass the time is voting for Suitably Flip in the 2008 Weblog Awards.

Squawk Box: Question: According to our Stock Blog, what was the "No. 1 Options Play Today" on Jan. 12?

Answer: Visa

Squawk On the Street: Question: In the Jan. 9 edition of Mad Mail, why does Jim Cramer tell "Suzette" he likes Molson-Coors Brewing?

Answer: low aluminum prices

The Call: Question: In Darren Rovell's "Greatest TV Product Ever" story, which product does he say he actually purchased?

Answer: George Foreman gril

Power Lunch: Question: In the Fast Money post, "Two Sectors Worth Watching", what sector does S&P's Rich Peterson suggest avoiding?

Answer: materials

Street Signs: Question: On our Web site's Green page, what section will you find located on the upper-most lefthand corner?

Answer: Major Solar Stocks (IOW, "Hey, did you know we have a green page?")

Closing Bell: Question: In a Monday CNBC interview, General Motors CEO Rick Wagoner called what factor "key" for GM?

Answer: consumer confidence

Weekly Quiz:

Question: If the S&P 500 goes down 1%, how much does SDS go up?

Answer: 2%

Handcrafted by Flip on January 13, 2009 | Permalink | Comments (7) | TrackBack

Investment Strategies For 2009

I got to meet the portfolio manager of the Congressional Effect Fund tonight.

I think he might be on to something...

Congressional Effect Fund		S&P 500
Through December 31, 2008	- 2.19%	- 34.20%
From Inception through January 12, 2009	+ 0.32%	- 35.09%
YTD through January 12, 2009:	+ 2.57%	- 3.57%
Change from Previous Day:	0.00%	- 2.26%

Handcrafted by Flip on January 12, 2009 | Permalink | Comments (3) | TrackBack

No Taxation Without Respiration - Part II

This officially marks the longest lag between Parts I and II of a post on this blog. Perhaps on any blog. Or in any medium whatsoever, to date or hereafter. With the possible exception of Chinatown and The Two Jakes.

Part I was the first post that ever graced these pages, going on four years ago.

Those were simpler times... The economy was booming. Independent investment banks roamed the earth. Barney Frank wasn't chairman of anything.

The occasion for the post was the House passing a repeal of the death tax. At the time I linked to an analysis by Heritage's William Beach (which I'm sure he's updated since then, but which is still available at the same link), detailing why this particular brand of double- (or triple-) taxation is not only unfair, it's downright abysmal policy that discourages savings and investment, undermines job creation and wage growth, constraints investment, and harshly punishes wealth creation.

The occasion for visiting the morbid topic today is the apparent will of the President-elect and his ilk in the Congress to save it from its blessed demise, currently slated for 2010.

I really don't have anything new to say about it (it's mainly an excuse to call back that absurdly old post), except to reiterate the above points with redoubled emphasis, as the inevitably harmful impact on countless small businesses (and the countless jobs they create) will be all the more dearly felt, given the weakened state of the economy.

Sadly, if Obama and his Congressional handlers want this to happen (and it appears they do), it's going to happen.

Of some consolation is the prospect that the repeal (of the repeal) might lower the senior suicide rate in 2010.

Previously: No Taxation Without Respiration

Handcrafted by Flip on January 12, 2009 | Permalink | Comments (0) | TrackBack

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CNBC Million Dollar Portfolio Challenge - Friday, Week 9

Hero On the Hudson

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Postal Superstition

Having Officially Smelt It, NASA Claims Martians Dealt It

CNBC Million Dollar Portfolio Challenge - Thursday, Week 9

PyraTwit Update

The 12 Scariest Words In the English Language

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TARP Comes Full Circle

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Investment Strategies For 2009

No Taxation Without Respiration - Part II