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Tuesday, August 28, 2007

 

Late Summer Musings

Nice of Jim Caruso to visit the blog and comment. Mr. Caruso puts the Monday night shows together at Birdland.

A couple of additional jazz tips. WKCR.org is the site for the live stream feed of the annual Pres/Bird birthday marathon. It started yesterday on Lester Young's (Pres) birthday and continued today with a mix of Young and Charlie "Yardbird" Parker. Tomorrow is all Bird. If it's possible that these are unfamiliar figures to you, Lester Young was a fixture on tenor sax in the Basie band after making jazz history playing behind Billie Holiday. Young's tone on the tenor was unmatched and he practically pioneered the bebop solo. Charlie Parker pioneered bebop along with Dizzy Gillespie, and became the idol of the beat generation before his untimely death in 1955. Perhaps no one ever played with more facility and brilliance than he did on the alto sax. To this day, his music is played every weekday morning on Birdflight hosted by Phil Schaap on WKCR.

Also, this week at Dizzy's Club Coca Cola, an outstanding young tenor sax headlines, Eric Alexander.
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With the resignation of Attorney General Gonzales, the poor judgment of President Bush in appointing a Texas crony who didn't really have the chops for the position reaches its inevitable culmination. I still would submit that this says little or nothing about the substance of the dispute over the fired attorneys, who served at the President's pleasure. Instead of trying to justify the firings on competence grounds, Gonzales and the Administration should have simply said that the firings were political, just as were the firings of all 93 US attorneys by the incoming Clinton administration in 1993. That would have been the end of the controversy.
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Speaking of embarrassed public figures, we have Michael Vick, de facto Commissioner of the Ulitmate Dog Fighting Federation. Frankly, I don't see how dog fighting differs that much from cock fighting, which is actually still legal in one state (though no longer in Bill Richardson's New Mexico). Though both "sports" are reprehensible, I hardly think that Vick earned the equivalent of the football death penalty. From a football point of view, the real crime he committed was enabling and abetting a betting ring. For consorting with known gamblers, Paul Hornung and Alex Karas earned a one year suspension back in the 60's, so why is Vick's suspension "indefinite," meaning it could be longer?
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It's sad to watch the decline of Mike Mussina, such that he will have to be dropped from the hapless Yankee rotation and probably be moving to the end of his career. Mussina has really had an outstanding career, and he is in that second tier of pitchers probably just outside of Hall of Fame consideration. That group would include names like Billy Pierce, Jim Maloney, Ron Guidry, Camilo Pasqual, Johnny Podres, Jerry Koosman, Vern Law, Lou Burdette, Mickey Lolich, Mudcat Grant, Dwight Gooden, Dave McNally, you get the idea.
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The Bourne Ultimatum nears $200 million at the box office, virtually assuring a fourth installment. We do love it so.
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Most magazine and newspaper columnists rely on you to read their stuff when it is hot off the press. That way, you are unlikely to check up on their predictions and recommendations. They should only have the burden of making their guesses on an Internet blog, where they will be preserved forever.

Anyway, those who know me know that I am often reading some fairly old stuff, so that frustrates the hopes of the writers I am reading. A case in point is poor Forbes Columnist Marilyn Cohen who, in the July 23rd issue (which would have hit the stands around July 9) boldly recommended Countrywide Financial in the face of an unraveling subprime mortgage market. My sympathies to anyone unfortunate enough to follow such silly advice.
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On August 22nd, I bought 1800 shares of Wolverine Tube (WLVT) at 1.16, a very risky average down. Then today, I sold 200 shares of Conrad (CNRD) at the opening at 14, the first sale since July 20. These shares were purchased on 2/9/05 for 2.25. I had put in a limit order yesterday at 14.15, but it never executed, so i changed it to a market order. Jim Cramer is very strong on limit orders, but it is a mistake for long term players. Limit orders connote a short term trading strategy where a few cents in the price might make a significant difference in return. For long term players, you just want to get the transaction done and a few pennies in price either way is less important. This was a six timer, not a case of making a point or two. As it turns out, if I had put in a market order on Monday, it would have executed at 14 anyway.

By the way, this market is looking fairly precarious. We are retesting the lows, which was predictable. What is more difficult to predict is whether we will bounce off the previous low, or go through to much lower lows. From a technical point of view, we previously achieved correction status on an intra-day basis, namely a 10% drop from the highs before we bounced. The bounce fell well short of the previous high, and now we are retesting the correction low, possibly headed toward a bear market low (20% off the high). Why? The credit crunch has removed the silly buy-backs and the overpriced takeovers from the market pricing calculation. Unless the Fed can bring itself to effectively add back some of the missing liquidity, we are headed much lower. If the Fed succeeds, the cost will be a new round of inflation. That will hurt bonds, but the equity market would cope.



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