Not only will the Bridge to Europe be beautiful, it will be a Suspension Bridge.

Apologies for not writing more. Hasn't been for a lack of funny stories but more a function of general laziness and sloth.

As mentioned in the Introduction to the Blog, Peerless grew up in South Philly. People like to romanticize South Philly as being a place of tough people who all fit the Rocky Balboa Underdog stereotype. While generally this vision is correct because people from there (including myself) are not exactly going to just give in and let "the man" screw us, there really are a bunch of Local Village Idiots residing on Passyunk Ave.

An awesome story was once told to Peerless by someone who we shall refer to as an "Uncle" of his Family. Basically, the "Uncle" was telling Peerless that all the idiots on the planet are located in the vicinity of 8th and Tasker Streets in S Philly.

One day, the "Uncle" walks into a bar there and proceeds to listen to 2 gentlemen discussing the Bridge they are building from the United States to England. The funniest part about this discussion was that the 2 guys were arguing about whether the Bridge was going to be a Suspension or a Pontoon Bridge. In other words, it was already assumed it was possible to build a bridge across the Atlantic Ocean but the real debate was what type of structure they would build.

The scary thing about this discussion is that while it was assumed a Bridge would be built, the 2 guys probably couldn't locate France or Germany on a map.

Peerless tries to explain the US$ weakness

I wrote the paragraphs below as an assessment on the US$ Outlook to my clients.  Since the report contains info useful to Macroeconomics as well, I thought it would be nice to include it as a blog post.

"Nuclear Quantitative Easing"

By way of a quick background, the term "Quantitative Easing" comes from the policy pursued by the Bank of Japan in the 1990's when they pumped vast amounts into the banking system to facilitate loans in credit in the wake of their Economic Crisis.  With the events of the Subprime Crisis crippling the US and the Worlds' Major Economies, we are seeing a return to the Quantitative Easing School of Macroeconomic policy.  

With that definition out of the way, the US$ Index saw a bounce from its lows in August 2008 to recent Highs in the beginning of March, 2009.  In fact much of its rally had taken place during the Lehman Brothers Default as well as the AIG crisis.  The reason for this strength had nothing to do with fundamentals but was simply the unwinding of the "Yen Carry Trade" where multinationals would borrow money in Japanese Yen at low interest rates and then lend in US markets at higher levels.  However, the US Treasury announced on 18 March a plan to add $1.1 TRILLION to the=2 0US Monetary Reserves over the course of the next year (Including $300 billion over the next 6 months).  When one considers that the US Monetary base is already up $1 Trillion from July 2008 until now as well the fact US Treasury Debt has grown from $6.5 Trillion in 2003 to $11 Trillion presently, the word Nuclear has been attached to Quantitative Easing by many other analysts.  Simply put, The US is printing money at a rate which could outstrip demand for its debt instruments (T Bills, etc) and setting the stage for huge inflationary concerns.  In fact, the yield for 30 year treasuries (which move inversely to principal value) is expected to be as high as 4.6%.

Since of course, it would be akin to yelling "Fire" in a crowded movie theater, the Central Banks of the World are trying to talk down this huge increase in US$ Money Supply.  The most recent US Treasury Report that lists the total debt flows in the US and what nations are investing in them shows a net outflow of $91 billion.  Yet, the individual breakdown has China increasing to a record value of US debt held and also has the Russian Federation at an all time high.  However, in spite of US=2 0statistics showing Russia purchasing $30 billion of US Debt since August 2008, their net FX reserves decreased $221 billion and the US$ share of the total Russian FX reserves is down to 41% from 47.5% (stats from Bank Rossii). Simply stated, the numbers don't exactly reconcile with each other and we would appreciate feedback from any of our readers more familiar with the situation.  

So, the question becomes, what exactly keeps the US$ from a total meltdown? The answer is that the system is now too large to fail.  The last thing China and Japan want to have happen is to see yields on their collateral rise sharply (remember the inverse relation between yield and principal) so they are not speaking out too strongly yet.  Also, the fact the Gulf Arab Nations insist on being paid for Oil in US$ serves in a way to make sure the US$ is on an "Oil Standard".  It should be noted that this second point is of great chagrin to the Fundamentalist Regime in Iran as well as other radical Islamists who feel Governments in places such as Saudi Arabia are merely "de-facto" extensions of the US and its policies.  

In the future, we expect to see a very gradual movement away from pricing in US$ as leaders such as Mr. Luiz Ignacio Lula da Silva of Brazil are calling for direct exchange of currencies between China and Brazil on commodity trades.  However, the short term result of the 'Nuclear Quantitative Easing" Policy will mean cheaper commodities on a US$ basis and spark an interest in buying by large end users such as China.  In fact, Beijing is in the process of allocating $4 trillion Yuan (approx $500 billion) for the building of infrastructure projects in China.  The direct result of which can be seen in the jump in the Baltic Freight Index to a 7-month high due to Chinese purchases of Steel, Iron Ore, Copper, etc.

The Gitmo Fiasco

It has been a while but I am not going to write something funny about the trading floor today. Instead, I am going to discuss the US Government's inability to close down Guantanamo Bay (Gitmo).

Since the opening of the Camp X-Ray in Cuba in 2001, activists in this nation as well as the rest of the world were outraged at the treatment of suspected Al-Qaeda terrorists. At first, I had no time for the points made by the people against the Gitmo facility as it seemed to be prudent to stop impending attacks on US Soil and after all, some of the detainees might have been directly involved in the 9/11 attacks.

However, as the "War on Terror" dragged on and it became obvious many of the prisoners in Gitmo didnt belong there because they were falsely accused or simply guilty by association, the time seemed right to close the facility and either release the prisoners or transfer to the US Mainland the ones who actually had committed crimes of terror. Nonetheless, the Bush Administration lept the facility open and angered many of the Liberal Democrats in the USA, who then used Gitmo as the poster child for the fear of the removal of Civil Liberties in the future.

Were the "liberals" correct? It is very possible that they were. Detaining humans for such an extended period without even the right to a trial or at least to hear the evidence against them is something one would expect from Stalin and the Gulag Archepelego. Even the Nazis were tried at Nurenburg and were subjected to due process of law. Yes, the point exists that the Nazis were proper Prisoners of War and afforded rights under the Geneva Convention while the suspected Al-Qaeda represent an organization instead of a nation and therefore, exempt from Geneva Convention supervision. However, if the prisoners were captured on a battlefield such as in Afghanistan or Iraq, they should be given a fair trial and released.

When President Obama took office, he pledged to close the Gitmo Prison and this decision was hailed around the world. After all, the United States should be the role model for a free and open society. It is simply against what it means to be an American to have a system in place that can detain people indefinately without a trial. After all, where does one draw the line on detaining someone? Is it reserved for planning violent crimes of terror only or does it extend into peoples' right to free speech when they can preach vitriol against the Government? When is the line extended to people who simply speak out against the President?

Yesterday, the Senate (which has a Democrat Majority) voted against shutting down Gitmo because it would involve relocting the prisoners on the US Mainland. To me, this vote is the ultimate in hypocrasy because it says "we think it is inhumane to subject people to torture and detain them indefinately but we dont want to actually intern these said people inside the USA proper."

It is almost a given that if it was Bush who decided against closing it, people would be in the streets and Amnesty International would surely issue an condemnation against the US Fascists. However, everyone is strangely silent now.

I want to see all the people who want to try Bush and Cheyney for War Crimes get outraged now that there was a majority that could have voted to close the US Gulag in Guantanamo and waffled when the moment of truth came.

Peerless gets ready for the Annual Meeting in NYC.

Ah yes, the 1st week of May.  For everyone else in the world, it means the weather is warmer and Spring should be in full swing.  For Peerless however, it simply means that the annual meeting of the people who trade his commodity is about to take place in NYC at the Waldorf Astoria.  Therefore, a week of parties that is somehow the Commodity Trader's version of the Cannes Film Festival is about to take place except instead of such luminaries such as Jack Nicholson, we get people like the Hit Man I was introduced to on my 1st day as the VIP's.  

Don't get me wrong, people from all over the world come to NYC for this annual party/dinner.  In fact, if someone wanted to become acquainted with the movers/shakers of my profession, this week would be the time to do so.  However, this party is much more scaled back than it used to be since we are in recession and also because London has a party every 2 years that is much better than anything NYC can do.  Nonetheless, Peerless remembers some funny stories from Annual Parties of years past.

Back in the mid 1990's, Peerless had a large client from an Asian Nation who used the NYC Dinner as an excuse to come to NYC and do all sorts of things that would earn them a divorce in their home nation.  One year, a group of 6 people from the aforementioned company came to NYC and it was Peerless' Job to show them around NYC and cater to their every whim.  When Peerless suggested visiting the top of the WTC (remember this was 1997), they responded they wanted to go to Scores (the mecca of strip clubs in NYC).  So, Peerless hits up his Boss for the Company Credit Card and takes the people to Scores.  Everyone (including Peerless) is having a grand old time until one of the Asians realizes there is a Stripper from his Nation dancing there.  Not only was she from the said nation, but she had dyed blonde hair, a fake tan, and the largest breast implants Peerless ever saw on an Asian woman.  The Traveling Delegation get totally horrified and insist we leave right away. So, apparently it was ok for women from other oppressed 3rd world nations (Poland, Russia, etc) to be strippers but no one from their country would EVER do that sort of thing.

In any event, we ended the night in Chinatown at 4 AM all singing Karaoke and we literally held hands and Sang the Drunkest version of "We are the World."  So- Precious.  

This same delegation wanted to follow up on their visit to the Strip Club the next Day by going to buy Porno Movies that were illegal in their own Nation.  So, Peerless takes them to an XXX store on Times Square (this was before Disney took over).  At one point, one of the group actually says to Peerless "I would like something that resembles a Love Story but with lots of Dirty Sex involved."  Thinking 99% of all Pornos just involve sex and no one really pays attention to the Plot, Peerless turns and suggests "Big Black Babes Bare Butts" (it was in the "Bestseller" rack).  

In fact, Peerless has been asked to play "Matchmaker" more than once for a visiting client during Sugar Week. Another client (who was single and no longer in the business) wanted Peerless to arrange a High Priced Escort for Him.  So, Peerless had to call around to several places and finally came up with the one he felt was the best choice.  As a side note, the client paid for the lady, not Peerless.

Another time, Peerless and another broker from the floor were at the Sugar Dinner when a trader from another country walked by.  The other broker, thinking Peerless knew about the other guy, asked if he had to buy him any Hookers this year.  Peerless decides to try and play along and says not that year.  The other broker says he once spent $1000 for a hooker for the guy and the guy still didn't give him any business the following year. 

With all of the above being said, Peerless would like to point out that these events happened over 5 years ago and all the above people mentioned are no longer actively involved in the trading business.  Peerless is also certain that other people would be happy to tell stories that are more incriminating than those above but he chooses not to do so because he doesn't want to get people in trouble.  

People on the Floor Really Do Hate Each Other

Peerless was at work yesterday and he saw 2 brokers getting into an argument.  The divergence of opinion reached its peak when one of the participants told the other fellow that he was "going to beat the living shit out of him."  Then, almost the exact same as NHL officials try to break up a fight after the 2 combatants run out of steam, several Exchange Employees stepped in and separated the warring factions.  Instead of going to the Penalty Box, the Broker who made the threat received a 2 day suspension (The floor equivalent of a 5 min major for fighting).  

Peerless reflected on this behavior after he went home for the day and realized he sees people performing all sorts of behavior that would keep an entire army of Human Resources Personnel busy arranging severance packages and defusing employee abuse lawsuits at normal companies. However, as mentioned before, the Floor is like Prison so disputes there are handled very much like a fight in the prison yard.

Basically, people fight because of the intense pressure of trying to trade as events rapidly unfold.  The fever pitch of the market causes high anxiety and people snap.  Peerless himself has on many an occasion yelled nasty things at another trader and can testify that it feels as if an evil spirit has taken over and the venom just spews out of his mouth.  Many of the brokers have rivalries with each other because this profession almost requires people to have a huge ego just to get in the door.  Therefore, it will be inevitable for people to just snap if they feel someone is getting the better of them.  

Here are some of the better fighting/argument stories Peerless has witnessed over his 10 years:

1.  Peerless watched 2 Brokers who were in fact Brothers beat up another trader in the street outside the exchange after a dispute boiled over into fisticuffs.  However, the 2 brothers failed to be disciplined by the Exchange because it just so happened they themselves were on the committee that handled Discipline.  They simply voted against themselves being sanctioned and got another person to vote with them (it was a 5 man committee).

2.  2 brokers who happened to be rather large individuals decided to hold Wrestlemania in the pit one day.  The reason, the first guy called the other "a big fat piece of shit" and the response was "At least I am not fucking my Clerk."

3.  In another recent event, Peerless' former boss had sadly suffered from a heart attack and decided to retire from trading.  He decided to come back to the floor to bid people farewell.  Another person who had never gotten along with the retiring individual nonetheless went up to him and tried to wish him well and mentioned he looked good considering what he had been through.  Peerless' Former Boss Replied "I had a heart attack, perhaps you should have one as well."

4.  Peerless has heard of similar stories but this event actually involved him.  He was going to Paris for a business trip and as he was leaving, someone gave Peerless a $100 bill and told him to take out flight insurance on himself because the other person was feeling lucky.

5.  Peerless and his first boss had a strong rivalry going on because Peerless left the company and the former Boss took it as a personal affront.  In fact, myself and the former boss used to taunt each other across the trading ring.  One time, Peerless got a rather large order and walked into the ring and flipped off his former Boss and called him "a fat blubbering piece of shit".  Other times, the former Boss would yell other pleasantries back at Peerless and would get a similar response in kind. At one point, Peerless wanted to make a Matrix Style Video where himself and the former Boss would fight each other Matrix style in the same way Neo fought Mr Smith in the movie.  

As a happy postscript, the 2 of us eventually reconciled after my father went to the hospital for a heart attack and the former boss was concerned.  On the same note after the boss also suffered a heart attack, Peerless was also very sad and concerned and checked on him to see if he was ok.  So now, talking about the former arguments is like recalling old war stories.  

Unfortunately, most of the times people where Peerless works are too bitter to reconcile with anyone and the hatred runs deep and rampant.  It totally wouldn't surprise me to hear people who have never worked in the trading profession being totally horrified that this behavior exists.  I won't try to justify why it happens but can only say it is part of what a person becomes when they choose to work in such an aggressive environment.

That being said, no one better get the idea of introducing yoga classes to the Floor as a method of stress management.

Peerless Really Has Been Everywhere

If there is 1 Artist Peerless Likes, it most certainly is Johnny Cash.  The Man in Black was the Ultimate cool and if there is 1 person Peerless would like to hang out with in a Bar, it would be Mr Cash.  

Anyway, Johnny Cash wrote a song called "I've Been Everywhere" that many people know from the commercial for a major hotel chain.  One day, Peerless listened to the song and all the places Johnny Cash mentions and realized that he also had been to many of the same places (including ones not mentioned because they dont fit with the Lyric Properties of the song).  So on that note (pardon the pun) here are the places listed in "I've been everywhere" and Peerless' commentary on the said places.

Reno- Was here and lost money gambling.
Chicago- Peerless has been here many times.  Great city and even better for restaurants.
Fargo- Not only has Peerless been here, but he almost died in a blizzard driving to this place.  In fact, everytime someone mentions Fargo, Peerless breaks out in a sweat.
Minnesota- Another place Peerless has been many times.  The people are very nice and there are such interesting place names.  For example, Yellow Medicine County.  WTF is Yellow Medicine anyway and why would one want to take it?
Buffalo- Been there done that.  Hope you like 80" of snow every winter because that is what you will get.
Toronto- For his 21st Birthday, Peerless went north with his Fraternity Brothers for the Beer and the Strip Clubs. In fact, Toronto was the first time Peerless saw what a Vaginal Piercing was.
Winslow- Peerless has been in Winslow, NJ (south of Philly) for a wedding.  The bride wore a strapless dress and the tattoo she had of an Angel on her left breast was visible for all to see.  He hopes that got airbrushed out of the wedding album.
Sarasota- Was there.  Couldnt give a shit.
Wichita- Peerless was never there and thanks god for that.
Tulsa- Been to Oklahoma but not Tulsa
Ottawa- There is an Ottawa in Illinois and Peerless went there for work.  it is also the place he got a shovelful of burning corn accidentally dropped on him because the idiot cleaning up the grain silo didnt look where he was dumping the stuff.  But Peerless isnt bitter or holding a grudge.

Oklahoma- Peerless was here in Oklahoma City.  But, it must be said he doesn't care much for the place.  Besides the tornadoes, Peerless has a friend whose car was totaled by Softball sized hail and saw the photos to prove it.
Tampa- Peerless was here but doesnt really care for any part of FLA north of Miami
Panama- Peerless was in the "Redneck Riviera" otherwise known as Panama City Beach.  The closest he got to the actual nation of Panama was listening to "Mr Panama" talking about the Strip Clubs there (see earlier posting).
Mattawa- Not to Mattawa but have been to Matawan, NJ.
LaPaloma- No Idea about this one.
Bangor- Been to 2 Bangors...Bangor, ME and Bangor, PA
Baltimore- Peerless was here, got crabs (the ones from Cheasapeak Bay)
Salvador- Peerless was in Salvador, Brazil.  A very interesting place.
Amarillo- Peerless has never been here but thinks that if you happen to go there, you must be in big trouble because there is nothing there.
Tocapillo- Never Been
Barranquilla- Located in Columbia, Barranquilla resembles something out of a Star Wars movie between the Drug Lords, the Communist Guerillas, and the other hoodlums.  Peerless has not been to this hell hole but will be sure to bring Han Solo and the Millenium Falcon when he does go.
Padilla- Not Been

Boston- Peerless has been.  Liked it.
Charleston- Charleston WV.  A little joke: How do you know Jesus wasn't Born in W Virginia? Because they couldnt find 3 wise men and a Virgin.  Ho Ho Ho.
Dayton- Was there. Remember the episode of WKRP in Cincinnati when Dr. Johnny Fever had to go to Dayton at nighttime and Mr. Carlson tells him to be very careful?  Well, Mr Carlson was right.
Louisiana- Peerless Was here and thinks they should not have been allowed to reenter the Union after the Civil War Ended.
Washington- Washington DC and Washington State.  Peerless went to both.
Houston- "Heaven, Hell, or Houston"  After being to Houston, Peerless would take his chances on the first two places mentioned.
Kingston- Been to Kingston, PA (outside of Scranton)
Texarkana- Was there once.  Hot as hell.
Monterey- Peerless wasnt there but the guy from the bodega below his apartment is from there.
Fairaday- Located in Minnesota along I-35, Peerless went through there more than 1x and probably used the bathroom at the gas station there.
Santa Fe- not been.
Tallapoosa- another not been
Glen Rock- Glen Rock, NJ.  Has been
Black Rock- Not yet.
Little Rock- Was there.  Peerless has to say that while most people dont rate Arkansas highly, Little Rock and Fayetteville (Home of University of Arkansas) have some really hot women.  
Oskaloosa- Oskaloosa, Iowa.  A place that will live in infamy because Peerless had to listen to some asshole farmer rant about Jews for 10 minutes without realizing that Peerless Himself was a member of "the Tribe".  Another place they can rule out as the Birthplace of Jesus.
Tennessee- Liked it very much.
Chicopee- In Minnesota, Peerless drove through here.
Spirit Lake- In North Dakota, Peerless used to live about 100 miles from there in Minot.  Famous for its Nuclear Missile Silos.
Grand Lake- Have not been there.
Devil's Lake- Another place in North Dakota.  If Peerless was in charge of the Witness Protection Program, he would place the criminals here because they will wish they were killed within 2 hours of being relocated to this god forsaken place.
Crater Lake- Not Been but Peerless wants to Run the Crater lake marathon.  Very pretty.

Louisville- Very Nice place, Very Nice Women.
Nashville- A very Cool Place, Peerless Imagined himself walking in the Footsteps of Johnny Cash
Knoxville- Not Been but Peerless wants to go to a University of Tennessee game.
Ombabika- Only God knows where this place is.
Schefferville- No
Jacksonville- Peerless was here.  Unfortunately, Jacksonville is also the location where the Eagles lost the Super Bowl and Donovan McNabb Threw up on the field instead of trying to win the game.
Waterville- Waterville, Maine.  Peerless liked this place because they had great Seafood.
Costa Rock- No
Pittsfield- In Massachusetts, Peerless drove through.
Springfield- Many different Springfields but Peerless spent a lot of time in Springfield, Illinois. He dated a girl there once who didn't know Kansas was a State in spite of the fact she owned a Kansas University Sweatshirt.  
Bakersfield- Nothing there but Jackrabbits, Earthquakes, and undocumented foreigners.
Shreveport- No
Hackensack- Duh, right across the River from NYC.  Yes Peerless was here.
Cadillac- No
Fond du Lac- North of Madison, Wisc. Peerless was there.  Lots of Dairy Cows.
Davenport- One of the Quad Cities, Davenport was a nice place.
Idaho- One of the few states Peerless has never been.
Jerrico- Jerrico on Long Island...Peerless has been there for many a Bar Mitzvah and Bris.
Argentina-  A great Country.  Best (and cheapest) eats of any country Peerless has traveled to.
Diamantina- No
Pasadena- Peerless went there for the first Super Bowl between Dallas and Buffalo
Catalina- No

Pittsburgh- Yes
Parkersburg- There is a Parkersburg outside Philly and Peerless was there.
Gravelbourg- No
Colorado- Yes.  Peerless wants to go to Boulder and train in the Rocky Mountains
Ellensburg- No
Rexburg- See the comment above on Idaho
Vicksburg- Drove through but didnt stop to see the famous battlefield.
Eldorado- No
Larimore- No
Adimore- No
Haverstraw- In Mass.  Yes
Chatanika- No
Shasta- Would like to go.  N California is very Pretty.
Nebraska- One of Peerless' best friends is from Nebraska.  In fact Peerless went there to work (get hazed) on a Hog Farm when he was training to be a Grain Trader (a story on this will follow).
Alaska- No unfortunately.  Peerless would probably like it very much.
Opalacka- In Florida but never been
Baraboo- in Wisc.  Peerless drove through and also has a good friend in NY who is from there.
Waterloo- Waterloo, Iowa.  Peerless was there.
Kalamazoo- Not been, but a lot of people are out of work from there.
Kansas City- Was there.  Didnt care for it.
Sioux City- Peerless has been to this town and the 2 below it.  They are all in Iowa
Cedar City- " " "
Dodge City- " " "

So there you have it.  Peerless has been to most of the places mentioned in the song.  Now, he is thinking about writing a Country Music tune in reverse.  This means he will get his House, Wife, and Pickup Truck returned to him.

Peerless (and 3 million others) remember 9/11

A brief apology for not writing in almost a week (more on that next time). With that out of the way, lets discuss today's comedy of errors.

As if Mondays aren't bad enough on their own merit.  Peerless awoke to news of a Health Emergency concerning Swine Flu in Mexico and 8 students in NYC coming down with it from a trip to Cancun over their Spring Break.  With the various government agencies all verklempt over what to do and how to do it, it made for an interesting morning, if not just outright depressing.

Then, around 10:15, myself and the rest of the trading floor are told to evacuate the building IMMEDIATELY as there is an emergency situation developing.  Everyone rushes out of the building to see a 747 Buzzing the Statue of Liberty and being trailed by 2 F-16 fighter jets.  The first buzzword people think of is Hijacking.  Many of the people I work with are 9/11 survivors and just the thought of a repeat attack has many trembling.  

It turns out the 747 was being used for an Air Force promotional film and, in fact, was one of the planes that comprise Air Force 1.  Furthermore, the wizards at the FAA didn't tell the NYC government that they were going to be filming a promotional video so everyone from normal people to the Police had no idea what was happening.  So, many people were needlessly evacuated from office buildings downtown and the Stock market even took a brief hit because of the panic.  

You really just have to love the FAA and Homeland Security.  Since 9/11, people have been told to report anything that seems suspicious.  While this thought might not occur to government bureaucrats, the sight of a 747 flying 200 feet over lower manhattan in the general vicinity of the statue of liberty would tend to freak out about 99.99% of the population.

At least Homeland Security is consistent.  They fail to warn us of actual terror attacks as well as events that are staged.  It is totally ok to close down an airport because someone accidentally went through a metal detector without removing their shoes but not enough to warn people about a civilian airliner that will be flying close enough to hit a building as part of a photo op.

On a more mundane note, we went back to work about 30 min after the evacuation and the market was rather boring.  Then again, it was going to be hard to top the events that had took place that morning.  Perhaps if Jack Bauer from "24" showed up and started mumbling about "getting CTU on the phone" it could have gotten better.

Peerless can't wait to see the NY Post tomorrow.