Monday, March 31, 2008

A Not-Investment Idea

Quote of the day:
““The Maasai of Kenya, soccer moms of Scarsdale, the Amish, the Inughuit of Greenland, European businessmen—all report that they are happy.”
--Sue Halpern in the April 3 New York Review

Now that I’ve gotten myself all worked up about what to invest in, I thought it was time to mention something not to. Or at least to be cautious about.

Gold. There is probably no investment whose cause is taken up by so many hucksters in so many varieties of garb. An excellent recommendation against gold is the scintillatingly obnoxious commercial with classical music and a woman intoning its other-worldly virtues in an oh-so-seriously-sophisticated British accent. If you haven’t seen this commercial consider yourself very lucky. It’s worse than head-on, apply directly to the forehead. Vomit city.

Precious metals and their associated stocks are perfectly valid investments. The problem is getting into them because of fear, or because you think they are “safe,” which is what that commercial is about. They are no more or less “safe” than any other investment.

With the economy having some trouble right now, a lot of folks have moved into gold, and the price has gone up significantly over the last several months. If you want to find a good time to buy gold this is not it. The price is high.

The same is true for most commodities and natural resources--including oil. The price on all these things may go higher--probably will, eventually. But a much better (less risky) time to buy is when prices are depressed--such as when the stock market is booming.

Saturday, March 29, 2008

Two Investment Ideas

Quote of the day:
“When I see people destroying their privacy — what they think, what they feel — by beaming it out to millions of viewers, I think it cheapens them as individuals.”
--Richard Widmark, on why he never appeared on talk shows.

Times of economic turmoil always present investment opportunities. A good indicator of such an opportunity is one that elicits the following response from your friends: “What are you, nuts?”

Many of us like to consider ourselves apart from “the crowd.” We say to ourselves that we are following our own unique, enlightened path. But contrarian thinking is very hard.

Investors behind the truly “smart” money are invariably contrarian thinkers. They buy when most are interested in selling, and thus they buy cheap. Smart money is patient and quiet. If and when we learn where their money is going, it’s already gone there.

The best-known contrarian is Warren Buffett, whose investments have become so large that it’s hard for him to stay quiet. It’s always news when he makes a move.

I don’t know what Warren Buffet is investing in right now, but there are two clear areas of opportunity: municipal bonds and residential real estate.

Real estate may be more obvious to the average person. There is virtual unanimity that the bottom of the market is still to come.

While everyone is standing around waiting for the bottom of the market, there are opportunities to buy properties at least 20% below their prices two years ago. Over the next two to three years, I have no idea where prices may go. But it is clear that there are some very good values appearing.

This is even more true in the municipal bond market. Because there is no tax on interest paid by these bonds, they usually pay significantly less than equivalent treasury securities.

But due to the turmoil in the credit markets--and specifically concern about the health of bond insurers--investors have been shunning municipal bonds for the rock-solid safety of treasuries. This concern has been way overdone, and top-quality munis now are yielding more than treasuries--and the yield is tax free.

Prices on municipal bonds are very low right now, and I bet there is some serious smart money taking a hard look at them.

Thursday, March 27, 2008

Video: Object of the Week

Barack Obama on Race

Quote of the day:
“Voters of all stripes have warmed to talk of a ‘new kind of politics,’ regardless of which candidate is promising it. But can such a thing ever exist without a new kind of media?”
--John Mercurio at

There’s been quite a bit of discussion about Barack Obama’s speech about race.


But get this. The New York Times reports that more people have read the transcript of the speech on its site than any of its reporting about it. And almost two million people have watched it on YouTube.

An awful lot of people just don’t care much about the analysis and punditry. They want the real thing.

It’s just as well, because most of what has been said and written is not insightful but rather reductive. According to virtually all the reports I’ve seen and read, the whole speech comes down to two questions. Did it reverse damage done by Jeremiah Wright’s comments? And, did it change the course of racial discussion in America?

The first question is about passing politics, and is of just a little bit of interest. The second question is general and grandiose and sets expectations impossibly high.

I will put aside my usual annoyance at the stunning lack of courage and thoughtfulness among reporters and talking heads. They continue to endlessly parrot phrases they are fed. Polly wanna cracker.

It took me a moment, but I have put aside my annoyance. Really.

Obama’s speech was important to me because he brought into the open the dirty little secret that all of us have attitudes about race that we talk about only in private. These attitudes are shaped by our generation and by what we learned as we grew up.

What we learned as we grew up was affected by our social class and our environment. A comfortable upper-middle class family with college-educated parents will talk about race (and many other things) differently than a struggling lower-class family with parents who did not complete high school.

Merrie and I have a 92-year-old neighbor who in passing will sometimes make a derogatory reference about race or ethnicity. He grew up in a very different time and culture than we did.

My very sweet grandmother once used the “n” word in the rhyme “Eenie, meenie, minie, mo.” Being seven and having been taught that the word is a no-no, I was shocked. She could tell something was wrong. I still remember the look on her face as she tried to explain.

She was born in the 1890s, a very different time than the 1960s. Which was a very different time from the 2000s.

And in the 2000s, it’s getting to be time for us to come clean with each other about what our attitudes are and where they come from.

That’s what Barack Obama said. He’s right. Kudos to him.

Wednesday, March 26, 2008

News Flash: Demi Moore Purifies Her Blood With Leeches

Demi Moore further solidifies her position as one of America's most wacko celebrities. The leech part of the interview is 3:30 into the clip.

Tuesday, March 25, 2008


Quote of the day:
““Anybody caught selling macrame in public should be dyed a natural color and hung out to dry.”
--Calvin Trillin

I was disappointed in Atonement. It was nominated for best picture at the Academy Awards, and I’m not sure why.

The novel on which it’s based got good reviews, and Merrie liked it. The critical vote on the film was mixed, but some critics just adored it.

Everything is fine--quite fine, actually--until about a half-hour in, when the action switches to World War One and stays there way too long. It’s unclear why this is necessary. It seemed to me that suddenly a second movie had begun with only a tangential relationship to the first.

I kept waiting for these pieces to fit together. But they never did. There may have been explanatory scenes edited out to keep the film to two hours. Even so, the film should’ve been about 20 minutes shorter still.

Let me back up a bit. The film begins when a 13-year-old girl witnesses a crime but identifies the wrong man as the perpetrator. I found myself caught up in wondering why she did that. It’s a compelling premise for a movie.

But then the action abruptly switches to the battlefields of the war, where the man accused of the crime is now fighting. The question of the wrong that’s been done to him has left the theatre to buy popcorn. There must have been a long line, because the question doesn’t come back until much later.

It just didn’t make sense to me. As a result, the rest of the film didn’t make sense either.

Maybe I’m missing something incredibly obvious.

Monday, March 24, 2008

Inflatable Banana

Quote of the day:
“ The trouble about trying to make yourself stupider than you really are is that you very often succeed.”
--C. S. Lewis

Whatever you’re doing, I suggest you stop immediately and read Nicholson Baker’s story on Wikipedia in the March 20 New York Review. Here’s an excerpt:

“Say you're working away on the Wikipedia article on aging. You've got some nice scientific language in there and it's really starting to shape up:

“‘After a period of near perfect renewal (in Humans, between 20 and 50 years of age), organismal senescence is characterized by the declining ability to respond to stress, increasing homeostatic imbalance and increased risk of disease. This irreversible series of changes inevitably ends in Death.’

“Not bad!

“And then somebody—a user with an address of, a ‘vandal’—replaces the entire article with a single sentence: ‘Aging is what you get when you get freakin old old old.’ That happened on December 20, 2007. A minute later, you ‘revert’ that anonymous editor's edit, with a few clicks; you go back in history to the article as it stood before. You've just kept the aging article safe, for the moment. But you have to stay vigilant, because somebody might swoop in again at any time, and you'll have to undo their harm with your power reverter ray. Now you're addicted. You've become a force for good just by standing guard and looking out for juvenile delinquents.

“Some articles are so out of the way that they get very little vandalism. (Although I once fixed a tiny page about a plant fungus, Colletotrichum trichellum, that infects English ivy; somebody before me had claimed that 40 percent of the humans who got it died.) Some articles are vandalized a lot. On January 11, 2008, the entire fascinating entry on the aardvark was replaced with ‘one ugly animal’; in February the aardvark was briefly described as a ‘medium-sized inflatable banana.’”

Inflation and Recession

Quote of the day:
“General Motors is preparing to shift half of its $3 billion budget to online advertising over the next three years.”
--Advertising Age

A major focus of economic coverage on the news over the last few weeks has been are we in a recession or not, and has inflation jumped?

What is rather ridiculous about endlessly waiting for official tipping points is that they come late if they come at all, because no official wants to be accused of being negative about the economy. Also, while reporters are spending all their time quizzing economists they don’t simply look for themselves.

Have you been grocery shopping lately? Duh. Have you bought gas lately? Double duh. Have you applied for credit recently? Duh, duh, duh.

The price of wheat and other grains have gone way up, causing price jumps or product shrinkage, and causing a squeeze on restaurant owners. The price of oil is near its all-time high, so the prices of the myriad of petroleum-based products are marching upward. And all who use transportation are affected.

Yes, I know that gas and food are not included in the official CPI. But we use more of these things than anything else. This is inflation that whacks us every day.

Housing prices have declined significantly over the last two years, crimping the plans of those counting on short-term equity growth. Financial institutions are facing fast-growing loan losses, and those who took the most risk are in trouble.

Credit has become difficult to get, especially for smaller businesses. This slows business growth.

Thus it’s clear that inflation and recession are both with us.

Interesting thing, though. The parking lots at Fashion Valley and Mission Center are full. There are waits to get into bustling restaurants. And this morning JP Morgan makes a more-generous offer to buy Bear Stearns.

Maybe things aren’t that bad.

Sunday, March 23, 2008


Quote of the day:
"And just so daily somewhere Messiah
is shunned like a beggar at the door because

someone has something he wants to finish

or just something better to do, something

he prefers not to put off forever

—some little pleasure so deeply wished

that Heaven's coming has to seem bad luck

or worse, God's intruding selfishness!”
--From The Dream by Irving Feldman

Whatever might be said about the decline of Christianity in America, millions of people are in church this Easter morning singing “Christ the Lord is Risen Today.”

With conservative Christians loudly speaking for the entire faith over the last few years, many people assume that all Christians today are celebrating a set of historical, scientifically impossible occurrences 2000 years ago. To reasonable, thoughtful, non-religious people, this understandably makes no sense.

The thing is, many of the people in church this morning are just as reasonable and thoughtful--if not more so.

They are not celebrating the absolute certainly of very specific, implausible facts from two millenia ago. Some or all of these things may have happened, or may not have. There is no way of knowing for sure.

What Easter is about is the inexorable rising of new life out of the worst humanity has to offer--death, despair, denial, betrayal, cruelty and pain.

And this happens purely by grace--not because we have earned it or deserve it.

It is the mystery of this that propels the joy of Easter morning.

When did Christianity come to be seen as a celebration of the absolute facts of history? It’s called the Christian faith, not the Christian certainty.

Saturday, March 22, 2008

Video: Object of the Week

Wait, There's a Game On

Quote of the day:
“Have the banks finally hit bottom?”
--Headline in today’s Barron’s

I woke up this morning, picked up the iPhone from the nightstand and figured I may as well check today’s tournament game times. Had anything started yet?

Then it hit me. After all these years, am I becoming the stereotypical march madness male?

If so, can I survive it?

Friday, March 21, 2008

Another Upset!

Quote of the day:
--The USD bench this afternoon

How about those University of San Diego Toreros? They beat 4th-seeded Connecticut 70-69 in overtime! Just like Western Kentucky, they made a basket with 1.2 seconds to go after a well-executed play.

Congrats to Bill Grier and the whole team. They’ve come a long way this year. Certainly, after the miserable way they started their season, no one thought they’d make the NCAA tournament, not to mention advance to the second round.

I hope USD is really enjoying its day in the sun!

High Drama, Live and In Color

Quote of the day:
“The old media establishment was mocked for its herd behavior, but so far, the new one looks just as conformist. Although digital technologies appear to invite innovation and originality, in practice they are giving us the opposite. Everyone does what everyone else is doing. And they move from obsession to obsession in perfect unison.”
--William Powers at

I love college basketball for its passion and unpredictability. The players have a huge emotional investment in each game, and when they’re working together as a team, it’s an extraordinary thing to watch.

The first big-time emotional moment of the NCAA tournament has just happened. With five seconds to go in overtime, underdog Western Kentucky was losing to Drake 99-98. Inbounding the ball from the Drake baseline, they executed a perfect play, making a three-point basket right at the buzzer.

Pandemonium ensued.

Thursday, March 20, 2008

Crucifixion, Resurrection

Quote of the day:
“Everyone wants to go to heaven, no one wants to die.”

On Holy Thursday and Good Friday, one of the standard sermon lines is “there is no resurrection without crucifixion.”

The point, of course, is that new life is not possible until the old one ends. We can live only one life at a time, so a decision needs to be made.

How does an old life end? Is it just discarded somehow? Do old habits and behaviors simply stop? Does a personality change overnight?

Not if a person is healthy. The way an old life “ends” is when it loses its hold on us. The way it loses its hold on us is when we accept it, in all its disappointment and pain.

It’s an unusual thing to say on one of the most significant days on the Christian calendar, but this reminds me of an essential Buddhist teaching. It is this: once one fully accepts (even embraces) the fact that life is difficult, it ceases to be difficult.

It is true that there is no resurrection without crucifixion. But it is also true that there is no crucifixion without resurrection.

Holy Thursday

Quote of the day:
“As a black and white cat, I have some things to say about Obama’s speech.”

Joke of the day:
What was the last thing said at the Last Supper?
“Everyone who wants to be in the picture, move to this side of the table.”

Statistic of the day:
Average number of times a day that a kindergartner laughs: 400.
Average number of times an adult laughs: 15.

Yes, The Daily Observation has jumped--vaulted, even--into March. My plan is to post a bit more often than daily to make up for this. We’ll see. To my loyal readers, thanks for your patience.

It’s important to note the day. In Christian tradition, today is Maundy Thursday, or Holy Thursday. In theological language, this is when the eucharist was instituted at the last supper.

What does this day mean? Just like all of holy week, today can become weighed down by the emotional power of the visual images that are recalled in the traditional story. And that can make the day either inaccessible or off-putting to non-Christians or marginal Christians.

In truth, this may be the most-deeply reflective day on the Christian calendar. The themes are friendship, devotion, decision, betrayal and love in the face of death.