As the news has turned a dramatic eye on our country’s financial regulatory system, I’ve been puttering around trying to separate the wheat from the chaffe.  For what it is worth, there are a few invalid arguments out there that really get under my skin.

The primary false argument?

“Financial Deregulation caused this economic mess we’re in” - Deregulation didn’t do anything that wasn’t already in place. Taking out the barrier between investment banking and consumer banking had very little effect on the outcome of the mortgage mess. The problem lies with the regulatory structure that didn’t change.

Imagine a huge slate of stone on the ground. When government interferes in the underlying economy it places a pointed stone underneath the slab of stone. The field becomes unbalanced. In order for the econmy to “work”, government attempts to place new stones on top of the large slab so that the economy can rest on the small stone underneath in perfect balance. While you can achieve some sense of parity where the slab is “perfectly” balanced, adding or removing weight at any given point will cause the slab to become imbalanced.

Now the arguments are often construed as a battle between adding stones (regulation) or removing stones (deregulation) on top of the slab. The crux of the argument is that both “sides” of the debate still believe that they can achieve a perfectly balanced slab perpetually so long as the other side doesn’t do anything to muck it up.

The problem is that no one looks to why balancing the slab matters. Simply remove the rock underneath and your slab rests perfectly sound and secure. No need to balance the thing, no need for placing burdens on top of the slab. In essence, remove government from having any regulatory controls and never have to deal with trying to make it work.

The political establishment is largely escaped from the very burdens they impose on everyone. There is no punishment for poor legislating even when the people demand poor legislation. The correlated problem is one where so long as government maintains the power to regulate, it maintains the ability to be influenced by specific demands of the regulated. If so-called liberals truly wanted to end the influence of corporate America in Washington, the right decision is to make Washington powerless to affect the course of the private sector. The right decision liberals would rally for would be a system of complete deregulation where corporate money can have no real influence over political affairs and the political class can have no influence over the private sector.

The Omana World Herald unwrapped a new design for Omaha.com. For the most part, I like it. I like the simplicity and organizational structure. I like how local stories have comments available to users. Overall the site feels far less clunky and a step in the right direction for a fairly run-of-the-mill newspaper.

To say the least, it is leaps and bounds above what most newspapers are doing on the Internet.

In a weird twist, Virgin has shuddered its last music store in New York as the one or two people who actually bought things at the megastore will undoubtedly shed a tear or two.

I say “weird” in the sense that if we wound back the clock a decade and a half or so ago, it was the indie retailers bemoaning the plague of the megastores and how they were being driven to the brink because they couldn’t compete.

My. How times have changed. And that is the point. For those who hate the world now, just wait a moment or two - it will change.

“Shit, if this is gonna be that kind of party, I’m gonna stick my dick in the mashed potatoes” - cred

With all of the hubbub over AIG’s executive pay, you’d think the dipshits at CNN and in the media would at least have half a brain to stop and think about what they are reporting. Then again, it’s all being fed by dipshits in Congress.

The money quote of the day:

“Schumer: AIG employees should return bonuses or face high tax”

I don’t know about Schumer, but the last time I looked at my bonus check, withholding was running me around 40% on bonus monies. So for all of the wanton raving and frothing and foaming at the mouth, the government is going to get most of this money back - just not in the way it expected. Of course, a $600k after-tax bonus would be nice in my bank account. Then again, I don’t really want to pay that person’s tax bill.

So I’m guessing the bullshit on Capitol Hill will only get deeper as they rush to pass yet-another-dumb-stupid-stupid-stupid law that will have even more dire consequences than the prior law. Unfortunately, Congress is going to have to really cross the line on this one by singling out a single company.

The only thing that pisses me off even more is those who support these maniacal bailouts. You have absolutely no reason to expect an idealistic outcome when reality (and a ton of real coo-coo for coco-puffs libertarians) told you the outcome was going to be bad. Economics 101 people. Come on.

So after my post on March 6, I went into a few more trades. I ended up at $999 for about five minutes with nothing open. I thought I saw an opportunity and jumped on it only to have it go backwards on me fast. I’ve just spent the past 4 trading days trying to catch up. At one point, my total equity in my account was down to ~$650 - nearly $340 loss. I was attempting to try out a new hedging strategy that almost ate me alive.

I was hedging hard, long on the USD/JPY and holding ground. A few stupid mistakes and I was at close to $750 in equity when I started trading tonight. Still down but better than where I was. It has take me about 4 hours of hard trading. My problem is that I was carrying two very heavy, negative trades. So I switched my strategy. I sucked it up and closed down almost 400 pips in losses (over $400). I had open trades going on so my equity wasn’t in that bad of a situation. As I was bouncing around the charts, I noticed I was sitting on the falling side of a right-shoulder so I went to all short on the USD/JPY. After riding it out and resisting temptation, it finally paid off.

So. As of today, I am out of the market with a total balance of:  $1014.01

That puts me at a total return since February of 14.18% - only ~4% this week.

My head hurts.

Milton Friedman at his Best

I’ve been toying with an app that has been around for a couple of years now and all I can say is wow. It wasn’t until tonight that I realized just how powerful DabbleDB is.  A few of my previous attempts at using the service ended in frustration. But after monkeying with it for a while, all I can say is that it kicks ass. You can build effective and useful apps in a couple of hours with a bit of poking around. I’ve been able to write about 30% of a home-brew crm for myself in a couple hours.

While the interface can seem a bit daunting, a little bit of playing will yeild some great results.