Gone Till November

It's funny how the simple act of clicking down the font-drop down and selecting Veranda stops me in my tracks for a second. Six months on and the emotions are still largely the same, though they're a lot more content to live with themselves than they used to be. It must be that whole sand of time thing; sand-paper of time that is, wearing down the sharp edges with a little more fourth dimensional distance from what you're looking at.

Things are good -- except the things that aren't, of course. Those are important though, so they can be however they'd like to be. It's a little like attempting to separate the concept of consciousness when studying Kant in a college philosophy course. I loved college philosophy. At least the classes where you had already weeded out the kids that started answers with something moronic like "I feel like...". The logician's obstacle course was more fun for me than most; I appreciated that -- being at home.

Just came back quickly today for a little free write I suppose. A lot of things clouding my never empty head. No one reads this space any more. That's ok.

A little while back the sun of epiphany burned of a little of that Santa Monica marine layer that was making it hard to see the Pacific through the sea of plaid. Something like that. Most things got much better with that sense of effortless momentum you felt when you took those first few solo rides on your bicycle sans-training wheels. Like the safety net itself had been a hindrance to your real down-hill speed abilities. Mom was still ready with band-aids though. You know your knees have scars from it.

Neither here nor there. I've figured a lot of it out. Some things still hurt -- most don't. Honesty and forgiveness are two uniquely wonderful human traits. There is a lot of faith involved when you think they're in the room. They never announce themselves when they leave you know. Call me naive but I believe it when she says they're here. The rest of it is all such a distraction. That can be dumb -- I never aspired to be smart.

One thing I am very happy to still know: I am very much in love.

I have a feeling I'll be back soon.


-I Heart Palindromes

patience, forgiveness,
Irish pride. Now, why would I
settle for any less?

(null set)

Retired Words
Gorgeous and stunning.
Perfection and favorite.
You will remain hers.

-BRM3 

Mr. Market

Annualized 
Short Vega is much
like the yen carry. It works
until it doesn't.

Jimmy C. 
Catch the falling knife,
in the after-hours trade.
Booyah I scream.

Technical vs. Fundamental 
The chartists agree;
there is no optimal scale.
What feels right? It's wrong.

Deep Value 
Look out B. Graham, 
many fortunes read only:
B.K. de-list now.

Pre-Decimal 
You can carbon date
a trader by the shoe size
to a drill bit line.   

Word, 

-I Heart Palindromes

Sunday Reflections

There is no better metaphor for living in Los Angeles than what I witnessed last night on the 405: an asian woman, on her cell phone, with her hazard lights on, driving in the middle of two lanes of traffic, fifteen miles per hour below the posted speed limit. Yep, that about sums up the personality of the southern half of this state.

It isn't all bad. As I write this I am mentally preparing for my Sunday stretch run as the weather here has allowed me to dellude myself into thinking that I'm going to run a marathon. I have 176 miles under my belt in the past two months -- time flies. I never thought I would be one of those people that employed the impressive scale within the GPS technology niche to know such statistics. Alas, the pacific ocean does weird things to people. I actually know what gluten-free means, the odds were stacked fairly heavily against that. I can't help but take that with me when I leave.

So, my golf game is much improved, which is nice. I haven't spent 60 hours of a week in the office for about two months, which is a record.  I spent my weekend downloading new music; I pride myself on my ability to source good new music. It's the hipster that lives deep-deep inside me I suppose. I am made oddly happy that my iPod now includes six new bands I had never heard of when I woke up yesterday. Authenticity and all that. I need something to balance out all the Marky-Mark I've got on there. What? He's a musical genius. Probably a non-descript genius as well. These are facts.

I want to be sitting outside at Martha's with Boondock surrounded by pups and house-wives right now. I will settle for excruciating pain as I run in slow motion along the pacific instead. Word.

I Heart Palindromes (Philosophy Major)
It's like that moment where you come to a stop
on the train tracks. No train for miles but you can't
help but feel a twinge of panic, a sense of palpable risk.
At one moment or another you realize that life is,
to a great extent, risk.
That's why evolution wired us that way.
We were built for this.

I Heart Palindromes (Finance Major)
You can manage your Delta but no one can account
for Vega. There's no underlying you can hedge
that out with. That isn't normally distributed either,
there's some ugly negative skew in Vega, if you forget that
your spread disappears. Nickles in front of a steam-roller,
they say. Knowing that makes all the difference.
Because I have a natural position; in me.

-I Heart Palindromes

Friend! Part Trois

What can I say, when it rains it pours:

So I got pulled over for the 3^rd time for my lack of inspection today. However, this time I’m within the 15 day rejection window. I was stopped by a motorcycle cop on I-64 on my  way back into work (Stu your Bav Auto parts are at the house by the way). The trooper pulls me over on an uphill highway exit:

Cop: Do you know why I pulled you over

The General: Inspection

Cop: Yes, why isn’t you car inspected?

The General: It was, but it was rejected

Cop: Where is your rejection sticker?

The General: hands Cop rejection sticker

Cop: Why isn’t this on your windshield

The General: It fell off. I am within the 15 day window

Cop looks at sticker

Cop: It says you were rejected for brakes. Do you think its safe

to drive a car without good functioning brakes?

The General: Officer my brakes are fine, it failed for a loose drivers side parking brake cable.

Cop: So your parking brake doesn’t work?

The General: No it does, there is one on each side of the car, one side is loose that’s all. The other side works great.

Cop: So your parking brake isn’t functioning…

The General: Sir, with all due respect if my parking brake wasn’t functioning my car would have rolled down this hill and over your motorcycle by now.

Cop: (chuckles) You know you might have a point there. Please get your car inspected soon. Have a nice day. 

Word,

-I Heart Palindromes

Friend! Part Deux

What is below came across my wire courtesy of The General. My favorite part would, of course, be the practical advice given about how to respond to a Goose attack, which sounds oddly similar to how to respond to a Bear attack. This is a little bird-hate shout-out.

Within the last week or so we have had reports of geese on the property attacking people as they leave or enter the building.  As a reminder we are  requesting the wildlife on site no longer be fed by ANYONE.

Geese have adapted to the ponds and maintained lawns in our area which has unfortunately placed employees and geese in close proximity to one another.  This is especially apparent now (the spring season) when geese are aggressively defending their nesting territories. 

When fed by humans, geese tend to lose their natural fear of people.  This lack of fear often leads to more violent attacks during the spring season.  In addition, when geese lose their fear they begin to nest close to areas that people frequent such as buildings, flower beds, parking lots, etc which has occurred on our site. 

In order to prevent anymore attacks to employees everyone MUST STOP FEEDING geese ASAP.  This request is being made to safeguard the health and safety of everyone located at the West mark campus.

WHAT TO DO IF A GOOSE ATTACKS

• Maintain direct eye contact and keep your chest and face pointed at the goose
• If the goose acts aggressively, calmly and slowly back away, watching for obstacles
• Maintain a neutral demeanor, try not to act hostile or show fear

We appreciate everyone’s cooperation as we try to deter the geese from the property.

 Be safe out there,


-I Heart Palindromes

Lost In Translation

I have a new favorite holding company:

Thank you broker spam e-mails for making my Monday AM.

Word,

-I Heart Palindromes

Haiku Part Cinq

Sunny weekend -- missing a partner in crime but making the most of it. I am becoming disturbed at how tan I am. This is not how I Heart Palindromes is supposed to look. I suppose there are worse arrows of fate one could suffer. Craving a Sunday bar date with Boondock. I'll settle for a hamburger with the Cubs on TV. Oh, and Haiku.


Saved By The Bell
Screech was a stalker.
Somehow it was endearing.
Not so much now though.


Dinosaurs
Likely the apex
of modern society.
Animatronics!


GUTS
Agro-crag dreams and
glitter explosions. Somehow
it was topical.


Hey Dude
You can carbon-date the
the writing because the rich
girl* was from Detroit.

*for those that don't recall; her name was Brad.

Hey Dude (2) 
New Yorker freaks out,
buys a dude ranch? I don't know,
odds were on a Porche.

Alf
Can you really watch
this without thinking about
the midget in there?

Not my best work, getting back into the swing of it. Almost there.


Word,


-I Heart Palindromes

Friend!

An excerpt from an e-mail entitled "BULL RIDING". Yes, this is par for the course with my friends:

Getting drunk is awesome.  Riding a bull is more awesome.  That's why I will spend one weekend going to the Wicked R Bull riding training class on May 7th and 8th.  It is a mere 2 hours away in Wyoming, Delaware.  The two-day class features safety tips and riding techniques.  The first day starts with a mechanical bull and moves on to a "beginner" bull.  The second day gives us the chance to go eight seconds on a real bull.  Fuck. Yes.

Saturday night is spent in the cowboy bunkhouse and includes a barbeque/bonfire.  Are you ready?  Let's do this.

Yeefuckinghaw,
 

The Hammer

http://www.wickedr.com/

Word,

-I Heart Palindromes 

Finance Dork

File under: things that only Boondock ever found interesting or entertaining about me. In reality, my life changed the first time I ever set foot on the floor of the Chicago Board of Trade. All those childhood dreams of being the next Ryne Sandburg sank pretty quickly in the rushing river of tickers and bids and offers. Those aren't bids and asks, that equity-only stuff. It's bid or offered. I don't ask you a price, I offer you a price and I don't take your ask, I take your offer. Sorry E*Trade baby, I'm a stickler for such parlance accuracy.

It's like the first time you ever got to count P&L in millions. That's when the director of our non-taxable desk told me to always remember that it's "just a job... and not your money", though I think he really meant those in inverse order of importance. Leave it to the guy in muni-land (the most retail focused of all market segments) to hold that view. At least the Harvard MBAs at Goldman Sachs really only mess with other lesser Harvard MBAs running large multi-national organizations. That whole Wall Street vs. Mainstreet sham only really exists in the land of punditry. It's much more Wall Street vs. Wall Street. The guys that hurt individual investors don't work in midtown, they're wealth managers and mid-tier brokers in CT or NJ that invest retail money in things they barely understand, not to mention their client's. Investment bankers are immoral and have agency issues, the latter group of guys are criminals and have competency issues. There is a difference between those two predicaments.

As for me, I've been lucky to always be on the buy side where I had no conflicts. I wanted to make money on every investment idea just as much for myself as for the clients whose money was being pushed around by some 20-something who spent his weekends with his head in CFA books instead of playing beer-pong in Alphabet-City. It worked out reasonably well. I covered financials in 2006-2009. Heck of a time to cut your teeth. Dinosaur quality by SPX: 666.

I'm told that I'm young yet, which is true by most measures. I've packed a lot into the last six years though. Figuring out what it all adds up to may be more a shell game at the moment. I have a lot left to do and a new appreciation for time. In any event, I'm at least in the right field and finding my way back to the exact right position in that field. It's like the first time you ever put a full-sized position on based on your work alone. Suddenly you dream in tick-values and it takes you a good week before you can do anything other than stare at the jacked excel spreadsheet you built in an effort to track your overall P&L for the fund. Eventually you calm down and just try to work harder and smarter than the other average looking white dudes who also know anyone who speaks on CNBC is either talking their book (the smart ones) or a self-aggrandizing laughing stock (the Jim Cramer syndrome).

I like it here. I'm better at this than most other things. I'm good with that. It isn't enough to sustain me in isolation but that is hard fought lesson I'm keeping with me.

-I Heart Palindromes

Dear John

Dear Western Europe,

You are an economy that has been in secular decline since the 1800's. You have a stagnant private sector and a shrinking tax-base. You protest budget cuts with riots that force police over-time and damage property that tax coffers pay to preserve and repair. You protest the rationalization of legacy benefits tied to a great and expanding empire to the languishing Republics that now comprise you. You will have budget cuts. You will have entitlement cuts. You will have higher unemployment. You will face higher taxes. You will be forced to cope with the emigration of your most educated and talented. I am sorry Western Europe, you will go the way of all bankrupt soverigns. No matter how historically wealthy, the world will find a conservator for you that will manage your wind-down and sale. So stop throwing trash cans through the windows of the very legitimate institutions that are leaving you behind for growth elsewhere; it just makes you look like spoiled children. Which you are.

Sincerely,

The growing developed world.

-I Heart Palindromes

Skip to my...

Really man? Deutsche? What kind of deal flow were you going to get there?! You might as well have bugged the local Schwab retail brokerage office.

http://www.cnbc.com/id/42273000/

Skeptically,

-I Heart Palindromes

Subtleties

Courtesy of The General.

 

Word,

-I Heart Palindromes

 

Dino B: Apatosaurus Who?

I guess I feel a little like the Brontosaurus did when he found out, I'm sure much to his dismay, that he was not in fact... real; generally confused, a little worried, somewhat curious as to who this Apatosaurus bloke was. In Microsoft Office, if you type Apatosaurus it will automatically attempt to correct you to Brontosaurus. I think that qualifies for a level of nerd-humor beyond my own capacity for appreciation of nerd-humor. That is saying something.

In any event, I may feel off, I may feel lost, I may have absolutely no idea what to reach out for anymore (other than odd Dinosaur metaphors, naturally), but I can certainly still write Haiku. I've said it before and I'll reiterate it for my own sake again: there wouldn't be a whole lot left of value if I ever lose my sense of humor. I can at least tether myself to that. Today, some broad market musings.

Chipotle Mexican Grill (CMG)
Go go gadget growth.
Remember, burritos won't
sell to Chinamen.

Magnatar*
Short the CDO.
The one we told Goldman to
fill with "toxic junk".

*This might be a little esoteric for my ranting blog but the fact that no major news outlet has yet highlighted the fact that what paper ended up in a particular CDO was almost always selected and/or approved by the party looking to be short the equity is still staggering to me. Poor insurance and pension funds on the other side just wanted a little more yield and a better duration match to their liabilities. Hefty price to pay.


Sell Side vs. Buy Side 
The former is a
bad joke that the latter is
too good at telling.  

BNP
Anything a French
quant can sell today. GS
will buy tomorrow. 

XAU
Not quite the Midas
touch, when the whole world finds out:
fungible is king.

PIMCO
No bid for the front 
end of the curve, just talking 
your ginormous book.

PIMCO (2)
Does this mean that Bill 
will now be shinning Black
Rock's brand new dress shoes?

Mr. Market
The sky is falling.
I say just close your eyes and
bid the Spoos. Trust me. 

Weak sauce, sorry, head is either in the clouds or in the sand. Let me know if you know which one.

-I Heart Palindromes 

 

Heading Due North

I am here to provide a general update on my moral compass.

1) Jokes about the nuclear disaster in Japan are acceptable.
2) Jokes about Knut the polar bear are in poor taste.

That is all.

Word,

-I Heart Palindromes

Story. ofmylife.

Los Angeles Hipsters: 1
I Heart Palindromes: 0

Word,


-I Heart Palindromes

post-script: Rawr.

Paging Passenger I Heart Palindromes

This is a wrap-up post to note that what fills this space is likely to be limited for a bit. Work, travel and life are about to get very very busy (by design). My core motivation for talking to the inter-web is still very much there but less productive than before. I will come back when I have something really funny and original to say; I think we both know the odds of that coming to pass on a regular basis.

Distance erodes
what was otherwise perfect.
Lost time-zone roulette.


Bid and offer it
below and above the strike.
hold your breath 'til fill.


Word,


-I Heart Palindromes

That Dog Won't Hunt

Really? This is what you went for when you all sat around and decided what you were going to name your hedge fund? These guys must be southern or something. Sniffing out those deep-value plays. I really hope that the dog with the bulls-eye also made it onto your business cards. I miss the cloistered days when you had to understand Greek mythology in order to figure out what the heck the name of a hedge fund stood for. After the Tiger cubs played-out every Tiger-iteration possible, it was all downhill.


note to self: e-mail Chase Coleman and suggest Vampire Tiger for his next macro fund. That could win me some points.

I've always enjoyed the play-on-words tendencies of finance-geeks such as myself. Like the fact that the bar at the CBOT used to be called "The Trader's Inn", though it changed its name to "Ceres" (the Greek goddess of grain -- acceptable). Or the fact that my first (and-to-be-fifth) employer's sub-prime CDO business was named after the slums of ancient Rome. Too cute.

Perhaps I'm just a bit edgy today (you can ignore the perhaps) but the idea of allocating money to a bunch of guys who want a blood-hound to be the summation of their investment acumen is a bit of a stretch for me.

CBOT
Traders, runners, props,
locals, market makers and
brokers. This is home.

ICE
Based in Atlanta?
When milliseconds matter?
That dog will not hunt.

-Dino B

Old Dog Old Tricks

It can be strange at times how competency can almost sneak up on you. I spent a good chunk of my day yesterday walking back through loan-loss provisions at mid-Atlantic community banks. I was genuinely surprised at how quickly all of that came back to me. If you don't see this as notable, pull up an income statement for a bank, or try to comprehend a balance sheet for a bulge-bracket broker. Good luck. Ruining my life for three winters/springs in the name of the CFA turned out to be worth it I suppose. I don't think I actually believe that but I certainly have to pretend.

While the last eighteen months have been a mixed bag (read: less than stellar) for my career, no one can take away what I've already managed to cram into my head. It's like that moment in a meeting with a consultant when you realize that they have absolutely no clue how to obtain a set of quotes for a SWAP (or why GS happens to be point away from C). Or the moment where I realized that the Stanford Ph.D. portfolio manager across from me had no idea how a holding company was structured and why it mattered. I've traded domestic and foreign equities, listed and OTC futures and forwards, listed and OTC options; I know how these things quote, expire, and settle. I have put on trades for both fundamental and technical reasons. I understand how market-makers never go broke. I've modeled private equity transactions that involved warrants and trust preferred securities with step-up triggers. I can delta-hedge an options portfolio without fucking up the dividends part within the basket of equities. I have had one short get bought. I have had more than one long get bought. I know what the skew of volatility is and why it's the only thing that matters; I have my own personal theories on why the volatility of volatility matters and the reasons I love asset-classes that have no arbitrage-able underlying. I can talk to a floor trader, analyst, portfolio manager or homeless man easier than I can talk to an investment banker because I actually understand how they get paid. I know what it means to have a trade DK'd and I also know what four-letter words you use on the phone with the executing broker when it happens (answer: all of them... and some you've made up on the fly). I didn't read about these things I learned them in doing. I am happy about this.

Thank you for being subjected to my pep-talk, my largest cheerleader who usually fills this role ahead of important events can't this time around. I'll have to be self-sufficient with my ego-stroking.

With that out of the way, I'll get two of these out before I hit the road:


CBOT
Bloody Bull at five.
Delta zero over night.
In between is life.


Russell Indexes (CRS)
Finance geek at heart.
She always sells herself short.
Knows more than she knows.


Wow, I just worked a finance pun into my Haiku. I don't even know what to say.


Word,


-I Heart Palindromes
 

Haiku Part Quatre

Yes, I realize that Haiku are supposed to have allusions to nature. No, I don't care. Tony Danza > Mother Nature. That is an unadulterated fact.

Note to self: edit Tony Danza wikipedia article this afternoon.

With a lot more attention being paid to work as of late, I feel a continuation of the finance theme coming on. I recall when the CFA and being an analyst dominated my life; I may be headed back that way sans Boondock to balance it out. Oh let's be honest, she's still managing that. At least I didn't memorize all those tickers for nothing. I'm going to get this out before heading to the CMG for lunch. The one next to the SBUX down the street from the MCD where I usually pick up my NYT in the AM unless they have the WPO at the WAG.

Piper Jaffray
When you made the league
tables, we all should have known
the ride was over.

Piper Jaffray (2)
At least you have the
Minneapolis market
cornered. Am I right?

Citadel
No money made in
converts since ninety-seven.
Asian arb rescues.

BNP
Those crazy frenchmen
will write a SWAP on Harry
Potter if you ask.

Barclays
You stand alone sir.
Who knew tangible book could
really go negative?!

Barclays (2)
Sell the ETF
business already. It's
not cute anymore

Bear Stearns
Always remember.
It's just a job and it's not
your money. Right Cayne?

Word,

-I Heart Palindromes

Is it Who or Whom? No, his name is Hu.

When I read research reports I suddenly realize that the whole left-brain/right-brain business is such a farce of the human condition. How is it that the world accepts entire deficiencies from otherwise capable and successful people? This is like trying to work with an Asian quant on a problem that has more than one right answer (or worse, no exactly right answer). They'll spin in circles while they rip their hair out. That's what strong scores in math and science paired with an institutionalized lack of aptitude for anything qualitative gets you. Good luck with that.

There are only three people I have ever met in my life that I am willing to detail my thoughts on Mr. Market to and also take a book recommendation from. One happens to be dead, one happens to be a bartender at a samba bar in our nation's capitol and one happens to be a jet-setting paradox of awesome. I'm especially partial to the latter.

I had an English teacher for a mother, being good at a few things wasn't good enough in our household. I think that was a key way in which my parents attempted to prepare us Murphy's for the real world. Unless you plan to be Michael Phelps and reach your singular-skill-set peak at 22, you have to be a fairly well-rounded person. Otherwise you'll find yourself being rather uninteresting at a disturbingly early age. Of course this is the exception, not the rule (as interesting people tend to be). You should hang on to those you find.

Word,

-I Heart Palindromes

Seeking: Equities Generalist

Having switched jobs four times since I left undergrad I am on just about every FIG head-hunter mailing list known to man. This little gem came across at some point last week:

"MANDARIN speaking Pre-MBA Analyst needed for PE FOF/Secondaries team"

Don't you think they could have been a little more specific? Let me get this straight, you need a 22-26 year old analyst who has experience in the secondary market for qualified purchaser securities? Oh, and they have to speak Chinese? Oh, a specific Chinese dialect? Of course.

Well, at least that HR department really knows what they're looking for, I hope they were light on the other requirements. I suppose this is better than what every other head-hunter e-mail is really headlined with in reality:

"Seeking well educated white ivy league graduate with mediocre golf game and minimal social life (or robust social life but substance dependency) which allows for 100 hour weeks. CFA preferred."

Word,

Dino B

Vampire Tigers, Dinos & Palindromes

Have you ever noticed those patterns in life? I swear by them. Neptune and all. 

I just returned from a week on the north shore of Kauai where I was reminded why that place has always been so special to me. I almost forgot how centered I can become 2,000 miles away (literally) from everything. When you leave my intellect and self to... itself, it becomes so sure and calm. There is none of the perpetual racing, just rapid comprehension. The stress of life is a bit like ambiant light I suppose, it just obscures the stars, it doesn't dim them.

So what about the fact that Hawaii's sole area code is palindromic (808) and so is Midtown's (212). To make matters more certain Chicago (312) and Los Angeles (213) are mirror images and near-but-not-quite palindromes. A good head-fake but not the real thing.

What do you suppose that means?

I have a theory.

So certain and cool.
Few can keep up pace with her.
Well, I have strong legs.

Word.

-I Heart Palindromes

Happy Valentine's Day

Always,

-BRM

Jameson Macallan Murphy

Only modestly Irish.  My friend Babson just moved from SFO to Chicago.  He is originally from Boston.  He, much like myself, was born to this world with a name that screams Irish.  He moved to Chicago for his girlfriend and last night told me that he was surprised to find the city so well set-up for an American Irishman.  I really thought he was more observant than that.  He'll be in tow for the Death March in... March (now if only someone would actually die on this thing the circle of clever-pun-ness would be complete).  I have odds on Bobster The Lobster.  Trust me, these pseudonyms actually make sense if you meet these people.  Well, for the most part. Boondock was more because I knew she'd like it than because she murdered sinners.  OK, more like 75/25 split I suppose.  I did most things because I thought she'd like them, it just seemed to make sense that way.

The Hammer
I did not know the
irony of naming you
after a lawyer.

The General
At home in the seat
of the south. You know, or eight
mile in Detragic.

... To be continued ...

Word,

-I Heart Palindromes

Rawr!

Los Angeles: 5,383 -- I Heart Palindromes: 0

SOUTH PASADENA -- South Pasadena authorities say they were called out to rescue a man who was treed by a pack of imaginary pumas.

Police Sgt. Brian Solinksy tells the San Gabriel Valley Tribune that officers got a report around 3:30 a.m. Tuesday that a man was struck in a tree on St. Albans Avenue.

He says the man had been drinking and believed he was being chased by a pack of mountain lions. He climbed the tree to escape and got stuck 20 feet in the air.

However, authorities say the man managed to climb down on his own when firefighters arrived.

Solinksy says the 41-year-old Los Angeles man was arrested on suspicion of being drunk in public and was held until he sobered up.

Simba,

-I Heart Plaindromes

Lazards, Tiger Cubs and Bear Stearns -- Oh, My.

Just a quick stop by today in the middle of a very busy week in the office.  I didn't want the inter-web to think that I had forgotten about it though, I hear it can be very jealous.

I had a meeting with a Goldman Sachs product-rep yesterday (this is to be distinguished from a salesperson because a product guy has generally actually traded something in his lifetime).  This particular guy was an ex-CBOT runner from the same era as me, small-worldness between two average looking white dudes who both went to college and work in finance isn't really surprising -- but gee-golly it's still fun.  In any event, he was out to explain that Goldman's latest and greatest product innovation was a swap agreement tied to the forward curve for Euro Stoxx 50 dividends (as in swaps around say, the level of 2012 dividends).  This market exists because options trade ex-dividends (generally) which means that options portfolios that use equity baskets to hedge their delta end up sticking Goldman with the short dividend risk on the physical equities (yeeeeah, I know, sorry I'm a huge finance nerd).  Anyway, I just found it staggering that product innovation continues to be like this, absolutely crazy.  More surprising, he told me that he's gotten a few endowments and foundations to actually get long the dividend forward swap.  Goldman can sell anything!  I actually liked this guy, no bullshit, very smart, straight-forward about the real risks of either side of the trade (and the real reason that GS is incentivized to dump this risk from their execution desks).  I know no one will find this interesting... maybe Boondock. 

More common fare, Haiku part trois:

Lazard Freres
No balance sheet here,
just a direct line to the
president.  Not bad.

Goldman Sachs
All respect was lost,
the day I found out that you
hired Jim Cramer.

Raymond James
Oh Ray-J how cute.
You built your HQ down in
Florida?  Too much.

Bank of America
Southern bankers meet
New York traders.  I think
we know how that ends.

Back when I was first out of undergrad and spending far too much time with investment bankers in mid-town (they found me a novelty, hedge fund guy straight out of a mid-tier public university) we used to have a lot of fun using firm names as verbs/adjectives.

If a guy was being secretive or obtuse about whether or not he was dating girl A or girl B he was Lazard'ing us.  If he was trying to date a girl that was way out of his league he was Bank of America'ing the date.  If he was so over-served that he had issues telling the cab driver what the cross streets of his apartment were he was Mr. James, and he'd be mocked for forgetting which dock in Tampa he left his sail-boat at.  If he had fallen asleep at the bar and was being preyed upon by a girl eight years his senior he was Stifel.  These remain useful short-hands.

Word,

-I Heart Palindromes

Really Man?

Ok, the inter-web is going to have to be subjected to this because I don't have anywhere else to go with it.

On Friday I had a meeting that our contact at Goldman prime brokerage asked us to take with a fund that they are doing capital-introductions for.  The group of "gentlemen" that I met with included a marketing guy from New York (who was actually southern), an analyst from Los Angeles, and a portfolio manager from London.  This already sounds like the start to a bad joke, it wasn't funny.

The meeting was roundly uneventful, the marketing guy talked too much, taking away from time for the PM.  The PM was great, sharp guy, soft-spoken, very considerate thought process - everything you want and expect from a guy running hundreds of millions of other people's money.

The meeting was wrapping up at which point LA-based analyst (who to this point had said approximately nothing, which I would come to find, was the appropriate amount of involvement for him) chimes in with his two cents on the final question I had put to the PM.  His answer basically contradicts what the PM said.  We're already ten minutes over, so I'm about to let it slide and continue to get up from the table.  This is when he cracks some joke about Brazilian women (this is an emerging market fund).  He follows it up with a second, even less funny foray just to make sure we can't ignore the first one.  The room falls silent and I am forced to actually pay attention to this kid beyond the three seconds I invested while taking his business card an hour prior.  I had mentally noted that he seemed a little greasy (bad suit, too bold of a tie, gelled hair that is actually standing up - you know, what all the cool guys did... in 8th grade) but this is when I notice that he also has one of those stub goatee's just under the lip.  He tried to awkwardly laugh it off.  The marketing guy changed the topic and asked about follow-up materials.  I couldn't stop looking at the Analyst, who's eyes were now down at the conference room table.  Everyone shook hands and they headed off for LAX.

I don't know why this bothered me so much except that it just doesn't seem right.  This kid has essentially nothing to offer the world.  He was probably 2-3 years older than me, living proof that there are diminishing marginal returns on the natural ebb of maturation over time.  It frustrates me that this kid has a job, went to university, probably has a girlfriend who thinks she's the luckiest girl ever to be dating him, and is so unaware of his own worthlessness that he opens his mouth in meetings where he should just put his head down and shut up.  He is the epitome of what is wrong with Los Angeles and why I don't fit in well here.

This all came back to me because I got an e-mail from the PM this morning trying to recover from it all.  No wonder the guys I used to work for want me to come back as opposed to taking a flyer on a new guy.  If this is what is out there, I'd be worried too.

A little something I've learned over the past five years in a lot of meetings as both the allocator and as the analyst.  Don't speak unless what you have to say is really valuable.  I do a mental count in my head where I hold back until I really feel like I have to say whatever has come to my mind.  Don't talk for the sake of participating, this isn't grade school and there are no points for effort.  Also, if your PM says something, even if he happens to be wrong, don't ever contradict him.  Think of him like the girlfriend that you're madly in love with but who happens to be in a horrible mood: she is always right, you are 100% on her side, whatever she feels is entirely valid.  Just remember that and you should be good.  My advice to this guy (who's name is Jeremy... figures) is just never speak, ever.  Also, get yourself a better pair of shoes.  It isn't just women who pay attention to that.

Venting complete,

-I Heart Palindromes

The New Normal

Screw you Bill Gross.  After a very long travel day(ish), I find myself in the office on a Sunday trying to get ahead of things for a busy few weeks work wise.  I have a million things on my mind, a few big decisions to make and I'm moderately cranky because evidently flying does take a toll on me when Boondock isn't on the other end, who knew?!  Reality has a way of slowly sinking in no matter how hard you try to get it drunk so it is more likable, what a buzz-kill.

Solution: the correct ratio of passiveaggressivenotes.com and haiku should be a start.  Anything is better than rolling correlation and marginal-contribution-to-risk analysis.  True story.

Captain Planet
Our powers combined.
Wow, what great propaganda.
Evil business.

Perfect Strangers
Set in Chicago.
Cousin Balki was the best,
despite the goat thing.

Reading Rainbow
Get kids to read more.
An admirable goal, but
who picked the host*?

*In 1986, LeVar Burton appeared in the music video for the song "Word Up!" by the funk/R&B group Cameo.

GUTS
Oh Agrocraig, you
will haunt my dreams forever.
Sill searching eBay.

Family Matters
I bet you didn't
know that Eddie is now on -
Young and the Resteless

Not great, I know.  These aren't ideal working conditions.  I'll stick with it.

Word,

-I Heart Palindromes

Mr. Market Says No Mas

There is essentially no past-time more sacred to anyone who has ever actually traded anything for an institutional hedge fund than mocking the talking heads on CNBC.  Part of this emanates from our jealously at the fact that most of them have staggeringly market-applicable collegiate backgrounds in things like British literature or Frisbee golf.  The other part comes from a more legitimate objection that they just about always get things dead wrong.  I mean that in the most dramatic sense of the concept of being wrong, if we devolve into sports analogies, they aren't simply not in the same ballpark, they're often attempting a hail-Mary pass in a tennis match, at the special Olympics.  The implied causation in 99.9% of their "news coverage" is just usually flat-out fictional. 

The evolution of this CNBC-hatred follows a very strict exponential path:

1) One morning you'll wake up and hear one of the CNBC parrots squawking about some analyst changing their buy/sell/hold rating.  This will not be because it is a slow market news day but instead because Joe CFA level I candidate from XYZ research in Baton Rouge, LA really knows what he's talking about.  You take this in stride and explain calmly to your PM that Billy-Joe shouldn't influence the way he runs money (not to mention the fact that you spent two months refining your investment thesis).  He agrees with you and the world keeps on spinning.

2) One afternoon shortly after the closing bell Erin Burnett's hair will interview an old white guy wtih billions of dollars who will mention a company that you are short.  Post-interview Erin Burnett's hair will read deeply between the lines of the interview and insinuate that the company referenced might be an acquisition target for old white guy.  She will be wrong.  It won't matter as exactly three retail traders who are waiting around for Jim Cramer's show to start will bid your short up 10% in the after-market on a total of 156 shares that they traded for their 401K, each of them paying $25 to execute said trade.  This 10% mark-to-after-market loss will equal hundreds of thousands of dollars to your fund.  You explain to your PM that Erin Burnett's hair isn't the one who is a Rhodes Scholar, that's the other girl who's not as pretty.  He sticks with your short and Mr. Market sweeps away that retail money by noon the next day.  You move on.

3) Finally, the last straw approaches while you're sitting on the trading desk at 7PM on a Thursday evening trying to get your fucking VLOOKUP function to ignore non-alpha-numeric characters so you don't have to re-scrub your data set by hand (dorkville, population: me).  That's when your ears will pick up a discernible sound from the high-pitched whining that is emanating from the TV hanging over your head.  You will look up to see one of the tickers that you are positioned in prominently floating under Jim Cramer's beer gut as he throws stuffed animals at the camera.  You will cringe.  You reach up and turn up the volume to find out that Jim "have I mentioned I went to Harvard in the last three seconds" Cramer doesn't like your favorite long position because their employee uniforms are blue and he heard from a soccer mom that she's going to be shopping at a different place for back-to-school supplies this year.  This is serious fare from a guy who consistently throws around the phrase "ran a hedge fund" when he really means "blew up a hedge fund... twice".  He will throw around terms like cash-flow and earnings growth but the crux of his call will be from the aforementioned soccer mom, also that the CEO's wife's dog walker recently sold their 500 share position and that the CFO's name starts with the letter L.  At least from what you can tell before he starts juggling knives on air.  You will plead with your PM, as the stock drops 15% in the after-market on the massive 0.0001% of average daily volume that all of Jim's retail minions can muster.  Some quant algorithm will pick up on the action and gap the bid/ask 5% on the market open the next morning.  Your PM will panic, say something about not wanting to hold the risk over the weekend and blow the position out.  You will put up a meager protest but agree.

Three weeks later the stock will be up 15% from your cost basis and Jim Cramer will be recommending it as a long position while humping a plastic cow.  You will cry on the inside.

No, seriously, ask around, that's how it goes.  What brought this up you might ask?  Well, this morning I turned on my television as I made my way to the shower and was horrified to find a Dog The Bounty Hunter episode destroying my early morning sense of calm (almost as bad as real-houswives of DC... though that hasn't happened since I had a certain house-guest).  I didn't recall leaving the television on A&E when I went to sleep but there was no time for logical deductions in this matter, I grabbed the remote and pushed in the one channel number I know by heart; CNBC.

I was greeted with this absolute gem:

"Come on now... I know the trade is your friend and you have to be invested at all times, that's your business but give me the odds of a pull back"

That little excerpt was uttered by that short British bald guy who sometimes gets lost in Erin Burnett's hair.  I have already gotten worked-up enough about this so I will keep this short.  The market cliche is "the trend is your friend" not the trade (the former of which at least has a logical progression, a "trade" isn't inherently directional so I have no idea how I could know if it is my "friend" or "enemy"?).  Also, this particular cliche refers to a chartist's approach to investing, who is almost always delta zero overnight (meaning, unlike say a mutual fund manager, they are almost never "invested at all times").

My advice to you short unfortunate-looking British guy (redundant), when you can't even get the cliches right, just pack it up and go home.  I mean now, you are cut off.

buy, I mean sell, I mean hold, I mean overweight, I mean underweight, I mean market perform, I mean market outperform, I mean beta-adjusted equal perform in odd numbered years after a presidential cycle in Kenya.

-I Heart Palindromes

Bear Down

While grabbing brunch yesterday with Ducati I noticed that ESPN was doing a special on the NFC/AFC championship game.  Upon further investigation, they were doing a "sport science" segment on the physics of Devon Hester's kick returns.  This sounds legitimate enough if I stop the description there.  The problem is, I just can't bring myself to do that.  The kicker:  they were comparing the speed/strength read-outs of the Devon Hester analysis against... a real grizzly bear.  No, I'm not being figurative here, they had a bear in the studio.

This immediately struck me as essentially the SNL sketch the "Superfans" come to life in 2011.  "Who do you like in the Bears vs. Giants on Sunday... well, I have a question... are these real Giants?"

I have a friend in DC who works for ESPN and I broke down and sent her a snarky text message.  She noted that when you have big sporting events that have huge lead-in advertising value it is sometimes hard to fill all of the air time.  I noted that this doesn't explain why there was a live bear in the ESPN studios surrounded by "scientists".  She did't respond, at least not yet.

In any event, Go Bears today.  I wish I was going to be dragging Boondock along to century city to watch me shout at televisions while wearing a Bears jersey but alas, I'll have to settle for Ducati.  That's a painful sentence to write, ouch.  The above bear story never would have made it to the inter-web if I had just been able to share it with the one person that I wanted to hear it.  Worse yet, I am incapable of conveying how indignant I was via text.  Le sigh.

There's a timeout... where?... on the field!

-I Heart Palindromes

Really? A Time-share in Greece!?

As Boondock & Jr. Investment Banker know, working "legitimately" in finance, and having had my career directly (read: negatively) impacted by a Ponzi Scheme, leaves my initial reaction to most hedge fund frauds as a mixture of disdain, boredom and vindictiveness.  That was, until I read this article from a hedge fund news boutique:

A former Chicago hedge fund manager was recently charged with allegedly bilking over $3.5 million from approximately 48 victims in an investment fraud scheme.

Since 2003, James Brandolino, 42, allegedly raised $4.7 million to invest in futures and commodities...


... Bradolino lost half of the total funds invested, and spent the remaining money on a 2004 BMW, a Rolex wristwatch and an interest totaling $107,000 on a condo in Greece


Brandolino faces up to 20 years in prison...

Seriously?  There are 48 people out there willing to fork over $100,000 to a guy named James Brandolino?  Is this New Jersey?  Have I missed something?  There has to be a Darwin tax in life at some point, like giving part of your retirement to a guy who says he's running a CTA with $5 million bucks in it.  If he's willing to take $100,000 from you it's because he has no capital, which means he's never been a profitable futures trader.  Come on now people.

As much as I want to be upset with this guy, I really just want to toss him a $20 and tell him not to buy booze with it.  A 2004 BMW?  Out of work infomercial hosts out here won't even have anything older than 2006.  Just move out to California and take out a second lein on a house, fraud the old-fashioned and federally promoted way.

I think I found a new due diligence question to ask in hedge fund research meetings: "if you had $2 million dollars left to your name, and a year left to live free, what would you buy?" and if the answer is a Rolex and a time-share, the meeting just ends right there.

I wonder if he'll have to lie in prison like guys who are really just there for trying to sell cocaine but insist that they killed a guy two times their size.  No, no, no, that's with a B... $3.5 MBillion!  Poor guy.

Compassionately,

-I Heart Palindromes

Relativity

On my way into the office this morning I was stuck rolling (at a Los Angeles-esque three miles-per-hour) behind a Toyota Lexus SUV.  After snapping out of my Green Day induced trance (yes, my iPod has a flux capacitor set to 1997) I managed to become aware of the lone Bumper sticker on said Lexus:

"My child was student of the month in Mrs. X's 5th grade class at Low Expectations Elementary"

Seriously?  This is what we've come to?  Now, given the mosaic theory, I can compile a few key facts and draw a reasonable conclusion:

a) I live in Santa Monica
b) I work in west Los Angeles, just south of Hollywood
c) The Toyota Lexus
d) They were also coming from Santa Monica

From that I can deduce that the next Norman Einstein doesn't attend an overcrowded inner-city school with fifty-five classmates.  In fact, he probably goes to one of the many prep schools in the area that likely have class sizes in the mid-twenties at most.  I know there are only nine months in a school year but come on, we're handing out "best" awards to 33% of kids now?  Name a single pursuit in life that has a 33% rate of notable over-achievement?  there isn't anything that is even close.  The only things that even have 33% or higher success rates are the binary ones or instances wehre the mean, maximum and minimum are so close that everyone just hovers around the average (think of an important example, like the amount of time anyone over the age of 13 can listen to a Miley Cyrus song... answer:  43 second average, 44 second maximum, 39 second minimum).

Last time I checked, success in fifth grade essentially meant being able to resist the urge to talk to your BFF (who you had invested three hours of orchestration that Patton would have been proud of, in order to sit next to) while the teacher was talking.  I'm just saying.

I would like to think to myself that this phenomenon is specific to LA and will thus be awarding it one more point in it's effort to crush my soul.  If I ever get the chance to raise an I Heart Palindromes Jr. and he brings home something like this I will do what Uncle #3 of 5 did when presented with a horrendously large art project (made mostly of plywood and glitter, from what I could tell) that his daughter won an "award" for.  He looked at it, told her he was proud, and then put it in the dumpster behind the school when she wasn't looking.  He certainly didn't take pictures of it and plaster it on the back of his car.

Yeah, I know what you're thinking.  I'm sure I'll end up tempering.  Boondock could always do that, but not enough to condone a student of the month bumper sticker.  Ever. 

Los Angeles: 5,383 -- I Heart Palindromes: 0

-I Heart Palindromes

A Merging of Themes

Synergy...

True story.

-I Heart Palindromes

On a Rounding Basis

I live a life of contradictions.  It is more exciting that way.  I have an intense aversion to cliches but I also have an intense aversion to hipster's aversion to cliches.  Yes, I am working on a powerpoint flow-chart to demonstrate this.  I have, for the moment, run out of auto-shapes however, so that plan will be pending MSFT getting a little more creative.

I almost always refer to companies via their stock symbols, an out-growth of my early career as an equities analyst.  It is somewhat surprising that the brain can retain very literally thousands of three-to-four character combinations that can often be rather similar.  You would figure that some of that stuff would have fallen out of my brain by now but that just isn't the case.  Yet I can only remember three birthdays by heart: The Legend, Boondock, The Dancing Orange.  For two of those I have found a way to cheat at remembering.  For the last it is only because I grew up being constantly reminded of the number of days older she was than me, which was a really subtle form of elitism.  I always get confused with The Sky is Falling (terrible I know) because hers is so close to Thanksgiving (one of those odd holiday's tied to a day of the week instead of just the date) which always confuses me.  I am easily confused, evidently.  There is very little need for me to recall the birthdays of The Hammer, The Delorian, and The General because, well, we're boys.

It is really remarkable what gets stuck up there and what doesn't.  I can't recall the names of just about any of my high school teachers or college professors but I can remember my high school girlfriend's phone number?  That doesn't seem terribly useful.  As the moniker of this blog would highlight, I have always had a thing for numbers.  Naturally, this means that I subject the inter-web to my writing.  Again, those wonderful contradictions.

I really enjoy writing Haiku, though never about nature like they're supposed to be.  I like having to reduce an idea or a memory to that finite of a space.  It just makes you think about things differently.  Most of what I read is non-fiction but I did an independent study in creative writing at one point.  I had a short story about baseball published nationally when I was in high school which instilled high hopes in The Sky is Falling.  Alas, the gardening industry was too powerful a force to resist.  My Philosophy professors in college (the ones' whose names I can't remember) were always indignant to find out that I was also a Finance major.  It was outwardly demoralizing thing for them to realize that I could understand their gig so well without the same level of reverence for it.  That's probably how born-again Christians feel about Biblical scholars who also happen to be gay... or worse, Irish Catholic.

There are commonalities in all of those things, of course.  I gravitate toward things that rely on logic and structure.  I have always been decent at identifying drivers of complex systems, about the only prerequisite to being friends with Mr. Market.  The Chicago Mr. Market, not the New York Mr. Market, these are very different sirs, the latter is prone to spending far too much time at Brooks Brothers.  Oh, but I live in Los Angeles?  Don't worry, it makes sense.

-I Heart Plaindromes 

  

Fore

I've spent a fair amount of time awake at these hours lately, paralyzed by my stream-of-consciousness brain and its inability to shut off.  Twelve year-old Scotch will usually do the trick but I've only been imbibing for the right reasons recently, an important distinction.

I'm awake because of being unsettled, of trying to rationalize and become comfortable with a new set of facts.  I have always wanted the things that I create to be rooted in humor before anything else, I have found that harder recently than it has ever been before but that doesn't mean I remain any less committed to it than I have always been.  The potential that springs from a quantitative aptitude and a love for dinosaurs really does seem limitless.  Ever expanding like the universe.

I have never been jaded or particularly cynical and I don't really care to add those things to my repertoire.  I would instead like to think that the perpetually smiling blue-eyed kid that exists in every family photo is still at the heart of me.  I don't think I have ever thought so much about being forgotten or finite as I have recently.  Those just aren't distinctions that I would wish upon anyone, finite is about the antithesis of how I view the world.  Life isn't a zero-sum game you know, you don't balance off what you give and what you get, that's why accountants aren't much fun, it isn't a very relevant skill set to being good at life.

So here I am, trying to tilt the balance back toward myself.  I'm not good at turning off my self-reflection, I'm incapable of putting my head down and moving past things that I could only mislead myself into thinking aren't important.  So instead I have a plan; protect what matters to me, remain the committed and rather certain version of myself that I know I will always be.  I think I am better that way, best as a witty supportive partner in crime.  Always prepared with the next joke, even if I know it is going to sail over heads like the last one.  That just functions as a good screen of those around me, I know to pay more attention to the one's that laugh.  Boondock for one, always my favorite.

I know what matters to me and so does everyone else who stops to listen for more than a few minutes.  Those priorities haven't changed a bit in a rather long time and in order to let my head finally rest I'm not going to try to figure out if they should have.  They didn't and I actually think I prefer it that way.  Certainty provides calm in that respect.  I'm going to hold on pretty tightly to those things, they just mean too much to me to let them go or distort them.  The part that my head has been searching for is some kind of external OK.  I never needed one before, I don't know why I would want one now, fear does odd things to people.  I think the odds are still in my favor that I am more substantial than that, more valuable than that.  I really liked that thought right there, I think I'll leave it at that.

Good morning Mr. Market,

-BRM