Memorial Day

Thank you to all that have served.

Summer's Here!

Woof!

Bernanke Re-Confirmation in Jeopardy: Contact Your Senator

The re-confirmation of Ben Bernanke as Chairman of the Federal Reserve appears to be in jeopardy. A month ago, it appeared to be a foregone conclusion that Bernanke would continue on as Chairman. Now, it appears some are looking at his record at the Fed and have determined that continuing with Bernanke while expecting different results might be the definition of insanity.

If you have an opinion one way or the other, call or e-mail your Senator and let them know.

If you oppose Bernanke's re-confirmation, but you're not sure what to say, you might start with:

Dear Senator [so-and-so],
I am a resident of [City, State] and ask that you please oppose the re-confirmation of Ben Bernanke for Federal Reserve Chairman. Bernanke has proven he cannot fulfill the Federal Reserve's dual mandate of price stability and full employment and thus has shown he is not qualified to serve a second term as Chairman.

The vote for cloture (to end a filibuster blocking a vote on his re-confirmation) looks to be close right now, so your input may make a difference if your Senators have not decided yet.

Simple Daily Backup Script for Subversion Repositories

Here's a simple shell script for backing up a Subversion repository on *nix:

#!/bin/sh

# get current date in YYYY-MM-DD format
CURR_DATE=`date +%F`

# define the filename for today's backup, e.g. repo-dumpfile.2009-11-22.gz
FILENAME="/var/backup/svn/repo-dumpfile.${CURR_DATE}.gz"

# set umask so that the file created has permissions of 600
umask 0177

# perform the backup
# note: stderr is being re-directed to /dev/null - you may not want this
/usr/bin/svnadmin dump /var/cm/svn/repo/ 2>/dev/null | gzip > $FILENAME

AZ MVD Either Super-Hip or Super-Unhip

Does the MVD know what this license-plate means?


Pretty sweet either way.

In Case You Forgot What a Dust Storm Looks Like...

Jen provoked this dust storm by getting her car washed and waxed yesterday; it's pristine. Luckily, we thought ahead and took the Cherokee, which is already at maximum dirtiness.

US Attorney Inserts Goldman Sachs' Foot into Goldman's Mouth

Bloomberg is reporting that Assistant U.S. Attorney Joseph Facciponti told a federal judge:

The bank [Goldman Sachs] has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways

Naturally, this is in contrast to Goldman Sachs' usage of the program to manipulate the markets in fair ways.

Facciponti made this statement as part of the criminal complaint filed against Sergey Aleynikov, a former trading platform developer at Goldman Sachs who allegedly (and admittedly, apparently) took a copy of the trading platform software when he left.

Now that Goldman's ability to manipulate the public stock and commodity markets is a matter of record, will there be an investigation into if and when Goldman Sachs has manipulated the markets to their advantage?

Surely GS did not develop the power to manipulate markets just to sit on it, especially given GS' role as the NYSE's Supplemental Liquidity Provider and ownership of more than 50-60% of the NYSE's program trading volume.

Independence Day

Here's what Thomas Jefferson and the Second Continental Congress had to say about Independence Day:

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

The Declaration of Independence is a key document and turning point in the history of our nation; I encourage you to re-read it. The Declaration lists many grievances, but the ones describing lack of representation by the people and the King's refusal to assent to laws struck the strongest chord with me.

I wonder what Thomas Jefferson and the other members of the Continental Congress would say about the current issues of our day: the wars in Iraq and Afghanistan, bailouts of private banks and companies by the People, the influence of lobbyists in government, universal health care, cap-and-trade carbon taxation, etc. Would the Continental Congress say our current government is working as they hoped and intended? Would their viewpoints be relevant given the tremendous change of the intervening 233 years?

Today, the Declaration of Independence has reminded me that We have the right to petition the government and an expectation of response by our elected representatives. Further, the Declaration has reminded me that we have the right to change the government to serve the people. I hope it reminds you of something, too.

Google Wave - The Next Big Thing?

I am super-impressed with what I have seen about Google Wave, the new collaborative communication tool that was announced this week.

Wave melds e-mail, instant messaging, document creation, and more into one coherent environment. There's plenty of feature-candy too, like:

• document creation functionality has notion of branches and merging as well as inline comments (that can be stripped on 'publish')
  
• context-aware spell-checker that can determine if you used the wrong correctly-spelled word
• automatic translation of text from one language to another
• the ability to split a portion of one message into its own thread within a wave; "inline replies" get their own thread
  

The product team did a great demo launch at Google I/O, you can watch it on YouTube:

Mediterranean Pictures

Jen, Tina, Jeff, and I put together a photobook of our trip to the Mediterranean:

Click here to view this photo book larger

We had it printed and we love it.

Joe the Software Engineer on Saving

My friend and colleague Joe was interviewed by the Mvelopes blog to find out how he used Mvelopes to save a bunch of money to kick the credit crack. He found Mvelopes helped him see where his money was going and helped him stick to his budget.

If you are looking for some assistance with a savings program Mvelopes may be just the ticket. There is a monthly fee, but they do have free trials.

Geithner's Gotta Go

President Obama,
Treasury Secretary Timothy Geithner needs to be replaced with a leader who engenders respect and can create and explain in detail an honest, fair, realistic, general-purpose plan to restore the US' financial health.

Many people were skeptical of Geithner's nomination since he is one of the key banking insiders responsible for our current financial crisis. After all, as head of the New York Fed, Geithner was the primary regulator for Citigroup and other Wall Street banks. Additionally, he ignored the danger of the unregulated OTC derivatives market which appears to be the most destructive, yet completely unaddressed, threat to our financial institutions. It seems unlikely a person so blind to the warning signs and ineffective in the past year will guide us out of this crisis.

Today's joint release is a shockingly perfect example of Geithner's ineffectiveness. The Magic Pixie Capital 'plan' whereby Treasury and the Fed sprinkle borrowed/printed capital on obviously insolvent financial institutions whenever they need it is worse than ineffective. The stock, bond, commodity, and political Markets are looking right through this thinly-veiled guarantee to 'bail at all costs.' The Markets know that Citigroup and its ilk are worth far less than zero, and the US taxpayer cannot bear their debt. US fiscal policy alone has placed us on the path of monetizing the debt (aka buy silver and gold - Asia, India, and the Middle East love these timeless monies). Adding the financial system's liabilities to the US' balance sheet risks the destruction of the dollar. Iceland and the UK have provided us a warning -- the krona is done and the pound is on its way. China's warning has been even more explicit.

The citizens of the United States are already on the hook for three black holes: AIG, Fannie Mae, and Freddie Mac. Combined, they have expressed need for $260B in the last 7 days! We do not need Citigroup, Bank of America, or any other institution. If a bank is insolvent, guarantee the deposits and cram down the capital structure until it is ready to go. If there is not enough capital, then liquidate them without creating more 'too big to fail' institutions. We need a functioning banking system and there are plenty of good banks out there -- the zombies are just getting in the way.

Former Treasury Secretary Henry Paulson's ad-hoc approach to the financial crisis could be explained away as the winddown of the Bush administration and the 'surprise' of it all -- classic Kick The Can by a guy who helped create the problems. However, now that we have been in the frying pan for more than a year no one can claim to be surprised, least of all Timothy Geithner.

Maybe it's time to pass the reins to Volcker; he is a respected leader with a track record of speaking clearly and he proved his mettle in hard times. There are many people qualified for the job, but perhaps the most important quality to obtain is courage as there is a lot of painful work that needs to be done and now is the best time to start that work. If the plan is honest and fair, the American people will do their part.

P.S. Press Secretary Gibbs should probably tone it down. Many people have had the chance to read the Homeowner Affordability and Stability Plan Executive Summary and it will bailout a significant number of reckless lenders and borrowers. We get that you need to throw another $100B at both Fannie and Freddie -- not your fault. However, marketing the Affordability Plan as something which will not bailout Sub-prime/Option-ARM/Alt-A/income-could-never-retire-the-debt borrowers and lenders is a mistake because it's provably not true. Gibbs probably doubled the turnout to the Chicago Tea Party with his response to Santelli which starts off decent enough, but then goes overboard on the sarcasm.

Romantic Statistics

Significant-other logic from the brilliant XKCD:

Shutterfly is Hiring

Shutterfly is hiring!

The most immediate openings are to staff the new printing facility here in Phoenix. The three main categories of jobs are:

• shift manager
• maintenance manager
  
• maintenance tech

Details are available on the Shutterfly jobs page.

I really like Shutterfly and recommend it. I think they are looking for folks with industrial engineering and/or supply chain experience for the shift manager positions. The maintenance folks will be responsible for printing as well as bindery tools. Shutterfly is participating in a job fair next Monday and Tuesday at the Crown Plaza Phoenix Airport location.

The jobs page doesn't list it, but if you are an Adobe Flex and Flash all-star, we would love to have you.

I will pass on your resume if you are interested in any of these jobs.

Better than BARF

The banksters are ramping up the talk of a "bad bank" to take the losing bets of the financial system and give them to the US taxpayer. Naturally, the financial system will keep the winning bets. The Bad Asset Repository Fund is a bad idea for a lot of reasons -- the best two of which are that the US taxpayer can't afford the 3-4 trillion dollar tab and no one is going to lend it to us anyway. Forbes has more of the story on BARF.

However, something must be done. The best suggestion I have seen so far is from Karl Derringer at Market Ticker and it runs basically like this (full post):

1. Bring the Credit Default Swap market above-board:
   
• Force contracts to be backed by capital -- if there's no capital, void the contract.
• Require all new CDS contracts to be written against a public exchange.
• Consider prohibition of 'naked' shorting via CDSes. (I would.)
2. Suspend trading of bank stocks for two weeks; send in the bank regulators and mark everything to market. Banks that are insolvent according to Tier Capital rules get "crammed down" and their new owners (current bondholders) decide if current management stays or goes.
3. If a crammed down bank still cannot survive, the FDIC takes over the bank and handles it like the Resolution Trust Corporation of old. This is actually a self-funding bad bank model that has no/minimal asset valuation problems. The taxpayer won't be financing a give-away to the banksters.
4. Offer the second half of the TARP to healthy banks that want it or to spin up new banks. Personally, I wouldn't mind seeing the creation of a few more P2P LendingClub-like organizations.
5. Investigate the fraud and prosecute it vigorously (go Andrew Cuomo!). The financial system is rife with it:
   
• the banks, commercial and "investment"
  
• the rating agencies
• the Fed
• the government: Treasury, FDIC, SEC, OTS, OCC, Congress -- all of them

Derringer's plan:

1. The total cost of this approach to the taxpayer is practically nothing -- stimulus bill rounding error not counting #4, and $350B with it included
   
2. Brings transparency back to the financial markets (mark-to-market), no more 'over-the-counter' CDS contracts
   
3. Punishes management and stockholders of the banks that made bad loans and decisions; gives what is left of the bad banks to its creditors -- exactly what happens to other bankrupt businesses
4. Rewards well-managed banks for their prudence by clearing the way for them to take the bad banks' customers
5. Serves up justice for the people responsible for this mess
   

Investing for the Future

What would have happened if you had invested $1000 on the last market day of the year in the following investments, starting on Dec 31 2000?


Investment value on Dec 31, 2008:

• Gold - $16,043.10
  
• Silver - $11,446.20
  
• S&P 500 - $4,370.23
  
• 5-year CD - $10,573.45
  
• Cash - $9,000.00
  

Surprising observations:

• the S&P 500 investment lost over 56% of the principal invested
  
• gold did not lose value in any year (on a year-over-year basis)

I only analyzed back to 2000 because that is when I began saving for retirement through a 401k.

This simple analysis leaves me wondering:

• Why do 401ks (at least the ones I have seen) not provide precious metals or CDs as investment options? Why must our retirement plans always have something at risk?
  
• If gold is merely a store of wealth and not a 'productive' investment, then how on earth can it be providing the best returns over a non-trivial timeframe like 8 years? How big is the credit bubble? Is the US dollar a bubble and is it popping?
  

Many stock market pundits are proclaiming that now is a great stock-buying opportunity. Haven't they been saying that for 8 years? Isn't the S&P 500 still overpriced historically in terms of earnings and relative to GDP? Keep in mind that financial companies accounted for something like 40% of the S&P 500's earnings in recent years and a large portion of US GDP only exists in a credit bubble. That trend will not hold in 2009. This means stock market prices must decline to keep pace with declining earnings and GDP.

The S&P 500 closed out 2008 at 903; according to my hand-waving (aka analysis) the S&P 500 needs to go below 650 to reach valuations similar to the '74, '78, and '80 recessions. Yet having the S&P touch 650, 600, or even 550 does not mean that it is a good time to buy stocks. Consider the stagflationary period from Aug 11, 1972 to Aug 6 1982; the S&P 500 went from 119 to 103. I haven't done the math on what you'd have left after adjusting for inflationary losses after the 15% nominal loss, but it's not pretty.

It seems like saving money for the future should be a simple matter as long as one has the means and the willpower, and yet it isn't. Why is that?

Pricing data was obtained from:

• Gold and Silver: Kitco Metals Inc
• S&P 500: Google Finance
• 5-Year CD Rates: Jumbo CD Investments

My Investment Analysis is available as a Google Spreadsheet. I am most interested in any and all errors you find.

Disclosures:

• Long gold and silver
  
• Almost long energy commodities - will buy when deflation halts
  
• Short US stocks
  
• Short US real estate - residential losses halfway (changed from 'mostly') done, commercial just getting warmed up
• Short US dollar except vs Euro
  

Happy New Year!

Happy New Year 2009, everybody!

Jen and I wish you a healthy and happy one. Jojo wishes you would just pet her without looking at her.

Great Customer Service from REI

In 2006, Jen and I bought lightweight, weatherproof 'Taku' jackets from REI. I think we got them on clearance -- mine was around $80, Jen's $65, well under the $150+ jackets in this category usually retail for. Anyway, sometime in 2007, we received recall notices from REI saying that there was a defective zipper and to bring the jackets in for repair. Since our jackets were doing fine, we ignored the notices and just kept on using the jackets. Two months ago, the zipper problem struck both jackets.

Finally, it got cold enough that running with the pit-vent zipper stuck open was unacceptable to me. I took the jackets into REI sans receipt. The REI folks looked up our separately-purchased jackets via our REI membership ids. The recall period had passed, but the assistant manager offered an exchange credit. It soon became clear to her that what I really wanted was a functioning jacket (and not enough store credit to only replace one jacket), so she offered to have the zippers replaced free-of-charge. I picked up the repaired jackets today and they look good. I'll try mine out on tomorrow morning's cold, wet run with Jojo -- expecting all sunshine and rainbows from the Taku.

Thanks REI, that's great customer service!

Sometimes I wonder if paying a little more is worth being able to choose from a wide selection of high-quality products and to be assisted by knowledgeable and passionate employees who are empowered to delight their customers. Today and most days, I definitely think it is worth it.

Happy Thanksgiving!

Happy Thanksgiving, everyone!

I am thankful for...

• my bubbas, Jen and JoJo
• our families
• our jobs
• our house
• our friends
• plentiful food
• the Constitution and the Bill of Rights
• the people who protect our liberty and safety
  
• the Internet and Free and Open Source Software
  
• my physical fitness and the ability to run, hike, and play fetch
• the ability and the right to read and write whatever I want
• opportunity
  

New Kuenzli Picture Site

Jen and I have created a new 'Kuenzli Family' picture website via Shutterfly's Share service. I've uploaded a bunch of our recent pictures - trips to San Francisco and Santa Fe as well as pictures of Bandit and my niece Jacquelyn's baptism.