Friday, June 20, 2008
1) Three workers find themselves locked up, and they ask each other what they’re in for. The first man says: “I was always ten minutes late to work, so I was accused of sabotage.” The second man says: “I was always ten minutes early to work, so I was accused of espionage.” The third man says: “I always got to work on time, so I was accused of having a Western watch.”
And here are the nine runners-up:
2) An old man is dying in his hovel on the steppes.
There is a menacing banging on the door.
‘Whose there?’ the old man asks.
‘Death ‘comes the reply.
‘Thank God for that,’ he says, ‘I thought it was the KGB.’ A KGB officer is walking in the park and he sees and old Jewish man reading a book.
The KGB says "What are you reading old man?" The old man says "I am trying to teach myself Hebrew."
KGB says "Why are you trying to learn Hebrew? It takes years to get a visa for Israel. You would die before the paperwork got done."
"I am learning Hebrew so that when I die and go to Heaven I will be able to speak to Abraham and Moses. Hebrew is the language they speak in Heaven." the old man replies.
"But what if when you die you go to Hell?" asks KGB.
And the old man replies, "Russian, I already know." Larry Rasczak
3)Pravda announced that it welcomed letters to the editor. All correspondents were required to include their full name, address and next of kin.
4) Q. "Why do the KGB operate in groups of three?" A. "One can read, one can write and one to keep an eye on the two intellectuals."
5) Leonid Brezhnev pays a state visit to France and he's given a VIP guided tour of Paris. He's conducted round the splendours of the Élysée Palace, but remains as stony-faced as ever. He's shown the masterpieces of the Louvre, but the curators fail to get any reaction out of him. He's taken to the Arc de Triomphe, but displays not the slightest interest. Eventually, the official motorcade drives him to the foot of the Eiffel Tower, where Brezhnev finally stares up in amazement and astonishment. He turns to his French hosts and asks in bewilderment: "But, Paris is a city of 9 million people... surely you need more than one watchtower?"
(first heard by me in the Brezhnev era)
6) Stalin decides to go out one day and see what it's really like for the workers, so he puts on a disguise and sneaks out of the Kremlin.
After a while he wanders into a cinema. When the film has finished, the Soviet Anthem plays and a huge picture of Stalin appears on the screen. Everyone stands up and begins singing, except Stalin, who smugly remains seated.
A minute later a man behind him leans forwards and whispers in his ear: "Listen Comrade, we all feel exactly the same way you do, but trust me, it's a lot safer if you just stand up."
7) A man saves up his ruples and is finally able to buy a car in Soviet Russia. After he pays his money the he is told he will have his car in three years.
"Three years!" he asks "What month?"
"August? What day in August?" He asks
"The Second of August" is the reply
"Morning or Afternoon?"
"Afternoon. Why do you need to know?"
"The plumber is coming in the morning."
8) Why do ex-Stasi officers make the best Berlin taxi drivers?
Because you only need to tell them your name and they'll already know where you live!
9) Moscow in the 1970s. Deepest winter. A rumour spreads through the city that meat will be available for sale the next day at Butcher's Shop no. 1.
Tens of thousands turn up on the eve of the event: wrapped up against the cold, carrying stools, vodka, and chessboards, they form an orderly queue.
At 3 am the butcher comes out and says, "Comrades, I've just had a call from the Party Central Committee: it turns out there won't be enough meat for everyone, so the Jews in the queue should go home."
The Jews obediently leave the queue. The rest continue to wait.
At 7 am, the butcher comes out again: "Comrades, I've just had another call from Central Committee. It turns out there will be no meat at all, so you should all go home."The crowd disperses, grumbling all the while: "Those bloody Jews get all the luck!"
Saturday, June 07, 2008
The market is ignoring new significant finds in China and Brazil, declining demand due to economic softening., among other factors. Yes, the US dollar is tanking, but that does represent the run up in price (see right) over the past two years. Fundamentally, with the dollar where it is, my stab is that "fair value" is closer to $70 than $130.
Comapre with the run up of the NASDAQ 100 from 1995 through 2001 (below):
My experience on this was first hand. I was working as a broker for a firm up in Canada, and I have several stories about the irrationality of investor behavior. I had one client - married couple, whom I invested their RRSP (for those of you in the US, think IRA) in a balanced portfolio of stocks - both domestic and international, some growth and some value, bonds, and cash. They had a 12% total return in 1998 and they fired me because their friends where invested in tech and were averaging 35%/year and were furious that I wasn't making them 20%+. I had another client who kept buying Nortel stock, even though I did a comprehensive analysis showing it was way overvalued - when it finally tanked in 2001, the client lost $4 million from the time I pleaded with him to sell.
Now, since I'm on a chart fetish, lets look at US real estate prices using the Case-Shiller Index. This chart from the New York Times shows you the run up through mid 2007. As we know, the index has dropped precipitously since then:
We are all aware of this chart - once again, the same facts. An asset (Oil, Tech stocks) starts showing appreciation, then speculators jump in. Initially there are easy profits and they are disproportionate relative to historic returns. As speculators continue to enter the market, pricing no longer is based on fundamentals (in the case of housing, it has no bearing on median income) driving beyond reason until there are no more marginal buyers and the prices collapse.
There is a historical pattern. It repeats itself because human nature is constant. When there is easy profits, speculators jump in, drive up the price well beyond fundamentals, until a point where there there are no marginal buyers and the price collapses from lack of demand. The question at hand, though, is when will the tipping point occur, and what will the top be. We'll only know in retrospect.