April 2011 Archives

Back of the Envelope Thoughts on Silver

Posted on April 21, 2011April 21, 2011 by Sam Kornstein in Markets

I need to start this post with a disclaimer. I’m far from an expert on the precious metals markets. But I am long silver, and have been for over three years. I’ve been along for the roller coaster ride through 2008 and 2009, and (with hindsight) have made some mistakes as well as some good moves along the way. Writing about the markets is a fairly new trend for this blog, but I had fun writing about treasuries the other day, so why not delve into silver? And my recent traffic tells me that at least a few people are interested in this stuff. The following are some loose thoughts about what’s going on in the silver market. Oh, and

Pirates and the Deficit

Posted on April 21, 2011April 21, 2011 by Sam Kornstein in Current Events

Two quick things: Matt Miller points out some obvious hypocrisy. This is worth reading: Remember that great scene in the 1980 film classic, “The Shining,” when the wife comes upon the typewriter of the Jack Nicholson character, who’s supposed to have been working night and day for months on his novel? To her horror, she finds thousands of pages on which Jack has typed, “All work and no play makes Jack a dull boy,” formatted in countless, crazy ways. Suddenly his suspected madness becomes all too frighteningly real. Well, debt limit mania has driven me to a similar frenzied state. If my wife came across my manuscript it would read, “The House Republican budget adds $6 trillion to the debt in

I Wasn’t Going to Post This

Posted on April 20, 2011April 20, 2011 by Sam Kornstein in Current Events

But it made me laugh. And then I realized it might make someone else laugh. Via Ezra Klein‘s Lunch Break:

Music I’ve Been Enjoying

Posted on April 20, 2011April 20, 2011 by Sam Kornstein in Music

I’ve been discovering a lot of great music lately, and thought I’d share a few album recommendations: Blakroc (2009): I’m not sure how I missed this one, but my friend Nirav just loaned it to me on vinyl a few weeks ago. It’s a pretty sweet hip-hop album recorded by The Black Keys featuring a ton of artists including Mos Def, Ludacris, RZA, and Jim Jones. Raw blues hip-hop fusion. Amazing. Old Crow Medecine Show – O.C.M.S. (2004): Everyone loves bluesgrass. Some people just don’t know it yet. These guys are a good place to start. Lupe Fiasco – Lasers (2011): It’s just solid. Not much else to say. The Strokes – Angles (2011): The Strokes are back with their first album

Additional Thoughts on US Debt and Treasury Shorting

Posted on April 19, 2011April 19, 2011 by Sam Kornstein in Markets

To add to my prior posts on the S&P “Downgrade” and treasury shorting, here are a few additional thoughts and links: Via Ezra Klein, more on why the end of quantitative easing is bad for treasury prices: The dominant view among liberals is that the low, low yields on Treasurys reflect the market’s serene confidence that America will make good on its debts. But some of the investors and economists I spoke to while reporting out my piece on the debt ceiling disagreed. PIMCO’s Bill Gross and former-Reagan budget director David Stockman both think Treasurys look safer than they are because the central bank, as part of quantitative easing, is buying up so many of them. “There’s a terrible mispricing of

Well? Why Are You Short Treasuries?

Posted on April 19, 2011April 19, 2011 by Sam Kornstein in Markets

In response to my last post on the S&P “downgrade,” Matt asks, “Well? Why are you short treasuries?” Fair question. A couple very simple reasons (with slightly detailed explanations). First off, this is not investment advice! Now that I really think it through, there are actually two and a half reasons I’m short treasuries. The first two reasons are based on my market outlook and expectations of monetary policy. I’ll start with these. 1.) Short term interest rates have essentially been at zero percent since December 2008. That’s more than two years, and is unprecedented. Given that we experienced an unprecedented recession (unprecedented at least in recent memory), sustained low interest rates were absolutely the correct policy. In fact, according to Paul Krugman’s

A Summary of Summaries on the S&P “Downgrade”

Posted on April 19, 2011April 19, 2011 by Sam Kornstein in Markets

James Fallows summarizes two thoughts that pretty much summarize my thoughts on the topic: I agree with Clive Crook’s puzzlement about the S&P downgrade “bombshell” today: “S&P adduces no new information that I can see. Competent ratings of opaque instruments such as, oh, mortgage-backed securities would be very useful to investors (not that ratings agencies troubled to provide competent ratings in that case, obviously). But why should anybody need that kind of help in judging the soundness of US government bonds? S&P knows nothing about them that you or I don’t know.” And I like James K. Galbraith’s derisive guffaw, as reported by Dave Lindorff: At least one economist burst out laughing on hearing about the S&P announcement. “They did what?” exclaimed James Galbraith, a

Something’s Brewing (In the Garden)

Posted on April 18, 2011April 18, 2011 by Sam Kornstein in Garden

Since I’ll be out of town for most of the Summer, I’m taking a risk this year and am starting our deck garden fairly early, betting there won’t be any more frosts. Here’s what I planted this morning: A bit less ambitious than last year, with fewer large plants such as cucumbers, snap peas, and tomatoes. Nonetheless, if all goes well, we’ll have plenty. The Chinook hops plant is three years old, and the Cascade plant is two. Both have already started growing new vines for the season. Each year these plants shoot up vines that reach 20-25 feet (we string them up to the roof). The hops flowers mature in the late summer can can be picked and dried for beer

Y’arrr!

Posted on April 17, 2011April 17, 2011 by Sam Kornstein in Cartoons

Via James Fallows, Taiwan’s Next Media Animation has a mock-news cartoon on Facebook’s legal issues. If you never seen one of these, they’re hysterical:

Alcohol Helps the Brain Remember, Says New Study

Posted on April 17, 2011April 17, 2011 by Sam Kornstein in Beer

From Science Daily: Drinking alcohol primes certain areas of our brain to learn and remember better, says a new study from the Waggoner Center for Alcohol and Addiction Research at The University of Texas at Austin. The common view that drinking is bad for learning and memory isn’t wrong, says neurobiologist Hitoshi Morikawa, but it highlights only one side of what ethanol consumption does to the brain. “Usually, when we talk about learning and memory, we’re talking about conscious memory,” says Morikawa, whose results were published last month in The Journal of Neuroscience. “Alcohol diminishes our ability to hold on to pieces of information like your colleague’s name, or the definition of a word, or where you parked your car