The Big Short, or big shock

I just finished the The Big Short by Michael Lewis (of the Liar's Poker  fame). He seemed to paint a picture that because the top guys at the top wall street firms didn't know what they were doing (or what their traders were doing, or what exactly were those alphabetical soups financial vehicles, or understand how to manage risk etc) that cause the subprime crisis. 

I enjoyed reading the story (or stories) told in the book and treat them as folklores. But I disagree with his conclusion. I would just give one example LTCM (When Genius Failed). LTCM people were top guys, they had Nobel prize winners, they had super models, they were partners, and they certainly have their own money in the game yet LTCM failed spectacularly. 

Financial crisises were just financial markets' own making that was inevitable, given the financial market's logic, in the sense that you could possibly create a computer program to model the financial markets and given a initial push, the model would create all these financial crisises we been through: the internet bubble, the subprime bubble, the saving and loan crisis.

Could peer pressure play a role as well, in witness of all the major wall street firms double downed on the subprime markets almost at the same time?

In hindsight everything looks so obvious, clear, and easy. Michel Burry's investors, even with his clear explanation,  all tried to get out his fund which almost killed his CDS trades.  He was lucky that he found some bylaw in his fund contract to allow him to side pocketed his trades thus prevent his investor from pulling money out. Julian Robertson wasn't so lucky with his Tiger Fund in the earlier of 2000 decade.

Anyway, Big Short was a good reading, and gave you one angle of the story that is still unfolding before us. We don't know yet when we will come out of it.

Tax not done yet, sigh!!!

As I mentioned in the previous blog, my wife is doing the tax this year with some help from me. We have spent about 5 hours -- one hour per night whenever we have time. And we just finished the Federal return part. We were checking every instruction to make sure we understand the tax code and try to get as much return back as possible. The tax code is really broken in this country. We shall see if Mr. Obama is able to do anything about it, to close all the loopholes and to close all the exemptions.

As for this year, I just hope we could get the NY and NJ state return done in another 3 to 4 hours, and then file them away.

Washable iPod Touch?

A friend of mine told me this story. His younger son left his iPod Touch inside his Jean pocket one day. Oh, you guess what happened next? Yea, that is right. The Jean went in to the wash machine for a full cycle of soaking and cleaning. And it turned deadly dark upon its exit from its water fun. So my friend took it to the Apple store to see if he could get a exchange. Lo and behold, the Genius bar people just plug it in to the "hole" to give it a final try, and the darn thing dared to come to life.

Wow. My friend himself is a Microsoft guy, but boy he is impressed with the build quality of Apple's iPod touch. He knew me is sort of a Apple fanboy and told me the story to feed my admiration for Apple and SJ.

UN's resolution on Libya

Ever late to the game, UN's resolution against Libya "shocked" me. UN security council's credibility has suffered big hit in the past decades as it failed to act on the Rwanda, Bosnia, Kosovo, Afghanistan etc. I am surprised to see UN finally was able to make a move this time given China and Russia's huge interest in Libya. Is this vote signal a paradigm change in UN security council? Would Iran now stop its nuclear weapon program? I bet Gaddafi was surprised by this resolution. He probably wish that UN security council has passed this resolution a week ago so that he didn't launch his attack campaign on rebel and gave himself a safe exit strategy. We will see if he could still exit without a bruise.

Then I learned both China and  Russia abstained from the resolution vote. And on Monday they both criticized ally's missile attack on Gaddafi. Come on, really, guys, you meant you cannot foresee what is going to happen once the UN resolution passed? I think UN security council should have a rule that if a country abstains too many times from a resolution vote they should waive their voting right for a year or so.

I am wondering what concession China and Russia got from abstaining from the vote.

Tax season is upon us

Every year this time I did my best to avoid touching my computer at all even though I know I was going to get money back from the Federal and the State. I know it is stupid idea to lend your money to the government without charging them any interest. I guess it is just human nature or the human inertia.

But this year things are changing for better. Wife finally took interest in finance, and got her insurance agent license and is on the way getting other required certificate. So she offered to do the tax this year. What a relief! So she is pushing me to give her all the documentation and work with her to download the software, importing last year's data, reviewing W2 etc. It is so much better than doing tax just on your own.

If you haven't done your tax yet, and you did the tax by yourself in the past, may I suggest you to make a change to do the tax return with your significant other?

spend your return wisely.

I am reading "The Big Short" this week. I work in financial industry,  and I have discussed the financial crisis with friends many times. But the sheer stupidity -- or it could be just the greed blinded them -- of big firms and big executives of these firms still shocked me again.

Stay foolish, stay hungary.

iPad 2 line

As I mentioned in the previous email, I was in the line at a local BestBuy store for about two hours that got my iPad 2. There is one small thing I forgot to mention in the earlier blog. It may not see much to people grown up here but meant a lot to a guy like me grown up in China.

There was a young guy in his late twenty or earlier thirty that was two men before me. He talked a lot about his coming wedding and his honey moon. And he mentioned that his fiance was also in the line getting an iPad 2 as well but was way before him. I almost wanted to ask him why he didn't join his fiance and save himself some time. But something distracted and I didn't think about asking him anymore. Maybe he would be surprised by my question and would not know how to answer such a weird question at all. Maybe he would ask me back like "you mean why I didn't cut the line to join my fiance"???

In China, his not joining his fiance and cut the line would be considered to be a dumb move. No one would respect it. It is like a shocking call to me. I remembered two years ago in Sesame Street park how I cut a long line to join my friends for a raft ride (I was very reluctant but my friends insist that out family should join him). I would say his action (or inaction) allow me to shed my last culture burden once and for all. For that I thank him whole heartily.

As to the iPad 2, the first impression is kind of underwhelming but I grew to like it better and better every day.

It's moving very slow

So I left work earlier on Friday to try my luck at a local BestBuy store, for iPad 2 of course. I got to the local BestBuy around 6:10. At first glance, it seemed not many people at all to a point I was wondering that this local BestBuy may not even carry any iPad 2 at all or must have sold out it's limited stock. However after I strolled into the apple show desk, to my detriment there was quite a long line about 200 peopleish. Once I got to the end of the line, the last guy told a sales associate will be coming back to hand out more vouchers for iPad 2. After about 15 minutes the moved about 2 feet, and that last buddy decide that was it and left with a good luck to me. Of course by this time, there were about 15 people behind. I decided that I would give it another 30 minutes and if things didn't improve much I would just leave. Another 20 minutes gone and the line moved maybe another 10 feet. I was about to call it quit. Just right then a BestBuy sales guy with a sheet came to line and asked who didn't have a voucher yet. I was the first one in the line without a voucher. So I told him i need a 32G black wifi. He didn't quite get what I need while he was nervously checking the inventory. And then he asked me again what I need and I have to repeated it to him slowly. He then jogged it down on the sheet and I was able to see a number of 45 just besides the 32g black wifi model line. So it meant they have 45 32g black wifi units. I am about the last one or two counting how many fives were before me. Well, pretty lucky. Then i said to myself now I would have to be here no matter how long it would take. It was moving very slow. So I started chat with people around me. We tried to figured out what could cause it to be so slow. We sent one guy to the front to see what was going on. He reported the line was moving but people while was able to decide what iPad model to pick they really had a difficult ti me to decide which color of the smart cover would better suit them. That seems to cause a lot of delay. Who could guess that. Another hour and 15 minutes and it finally it was me. I handed over my voucher and the sales guy took it and run into a back room to fetch the iPad for me. I peek through a small opening and could see there were many big empty boxes that were host iPads and about two full cases were not opened yet. Not sure how many iPads each box could accommodate. Once I handed over my voucher it took less than 2 minutes to consummate the transaction. So I was in BestBuy slightly less than 2 hours. That's 120 minutes. BestBuy has three checkout lines for the iPads, say 2 minutes for one iPad, from 5 to 8--that was when I was done--, that local BestBuy probably sold about 270 iPads. That was a very impressive number. Say it will close on 9 on time, it would sell another 90. Wow, just from one local BestBuy. An apple retail store would at least double that number.
So when I told the BestBuy I would skip the smart cover cause only gray and beige were left, the sales guy replied, why? Pick one today and exchange it in a week or two when we would have more colors available. I thought it for about 2 seconds and decided to follow his suggestion. Nice move BestBuy. Otherwise I would certainly drove to a local apple retail store (about 30 minutes away) this weekend to pick the smart cover. I bet BestBuy had a good training on their sales people. Nice job for BestBuy. Not too bad for customer like me. And apple just made tons of money from this smart cover thing. You have to give it to SJ. No doubt that he devoted a big slice to it during his presentation.

It was frustrating waiting inline yet it was fun and interesting to chat with strangers that all share the same passion as apple does, that pay attention to details and small things. I might do it again come iPhone 5 to stand inline for the first time for the phone to get one to replace my wife's old white iPhone 3G.

So long for now, will post my review after a week of usage. But I would say that the smart cover is really smart, and I wrote this blog from the new and shiny iPad 2.