2007 - A Fubar'ed Financial Year in Review

Well, I spent large portions of 2006 and 2007 telling you what I thought would happen in financial markets this year.

I'm going to attempt to review some of those calls here and critique what we got right and what we screwed up royally.

1.) US residential housing would fall HARD

check

2.) Bank failures would be more prevalent

check -- however, forces are fighting hard to liquidate markets to keep insolvent lenders alive

3.) The reliquification would create a drop in the value of the US dollar

check

4.) Commodities would benefit from the dollar crunch, Gold out of credit tightness and fear

check

5,) Uranium prices would dip in summer and then reignite in fall

check

6,) Uranium juniors would be a good bet in fall through spring 2008

NOT...in fact junior miners across the board have been hit hard with some (very few) notable exceptions.

7.) financials were ripe for a fall from grace

check. in fact, we've already seen quite a few BIG names taking on serious water. expect more of this as the depth of the fraud and excesses becomes better known in 2008.

8.) The broader market was ripe for a fall at Dow 13,000

NOT. I reiterated my call again at 14,000 and it seems to be under significant pressure, but so far Sovereign wealth fund investments in financials (classic knife catchers, imo) and a falling dollar has meant that dollar holders are looking for something to buy. This has kept the market bouncing between 13 and 14k.

The broader market has gone basically nowhere since summer.

What my "call" for 2008?

Not nearly as exciting or risky as my calls for 2007. more of the same.

As 2007 turned out I had very little time for trading and just stuck (mostly) with my macro trends (dollar down, stuff up). Trend following is the most predictably profitable trade, and calling the turn (down) in the broader markets is where i lost the most money in 2007.

Calling a "turn" in a market is not for the faint of heart or weak of pocketbook. If I'd had more time for trading I would have had more time for research and been leaning pretty heavily (short) on subprime lenders. But, I didn't, and probably won't in 2008 either. So, it will be an exercise in trying "not to lose" rather than winning.

"Trying not to lose" is a little like the NFL's "prevent defense" when I try it. Not very successful. It is something where I have a VERY spotty record, so it will be interesting to see if I'm able to figure things out without getting washed out.

Good luck to all, and a prosperous new year.

ciao,
fuBarrio

Blogs About Uruguay

Tired of reading the same lame crap in the my Blog About Uruguay?

Here is a semi-complete list of Blogs about Uruguay from other points of view:

A Cup of Mate a Day...: http://acupofmate.blogspot.com/
A Girl And Guy In Uruguay: http://adamleandra.blogspot.com/
A Maverick's Odyssey: http://www.amavericko.com/
A Year In Uruguay: http://www.chuckstull.blogspot.com/
Alyssa In Uruguay: http://alyssainuruguay.blogspot.com/
Amargo y Dulce: http://bittersweetinuruguay.blogspot.com/
Arrancopelito: http://arrancopelito.blogspot.com/
Beneath the Southern Cross...A Family's Adventures in Uruguay: http://uruguayadventures.blogspot.com/
Christopher's Tales: http://christopherstales.blogspot.com/
Coastal Uruguay: http://coastaluruguay.com/
Dustin Goes To Uruguay: http://dustinsaldarriaga.blogspot.com/
El Diablo Tranquilo Comes Together: http://www.eldiablotranquilo.com/blog/
Elli's Story: http://ellijelli.blogspot.com/
From Uruguay: http://www.from-uruguay.com/
Las Alas del Alba: http://thewingsofthedawn.blogspot.com/
Latitude -30º -35ºS MVD - UY: http://accrux.blogspot.com/
Laurin In Uruguay: http://laurinariail.com/
Learning Uruguay: http://urufish.wordpress.com/
Lessons @ UY: http://a-philosophical.blogspot.com/
Living In Montevideo: http://livinginmontevideo.blogspot.com/
Odeliza: http://www.odeliza.com/
Pde-uy.com/wordpress/: http://kzlv.com/wordpress/
Place No Limits: http://placenolimits.blogspot.com/
The Beautiful Changes: http://www.fionamarie-site.blogspot.com/
The Latin Americanist: http://ourlatinamerica.blogspot.com/
The Seven C's: http://cleanorganizedandontime.blogspot.com/
This Is Uruguay: http://guay.wordpress.com/
Uruguay Adventure: http://adventureathand.blogspot.com/
Uruguay Blog: http://blog.totaluruguay.com/
Uruguay Dreaming: http://uruguaydreaming.com/
Uruguay Guy: http://uruguayguy.blogspot.com/
Uruguay Living: http://www.uruguayliving.com/
Uruguay News Blog: http://news.totaluruguay.com/
Uruguay News and Views: http://uruguaynews.blogspot.com/
Uruguay's Wildlife & Natural Sanctuaries: http://uruguay1.blogspot.com/
Viviendo en Uruguay: http://tafw.blogspot.com/
Waiting on the Master: http://worldstoosmall.blogspot.com/
Zest for Life: http://jules-zestforlife.blogspot.com/
and, just added, Teckno Yanqui http://tekno-yanqui.blogspot.com

List compiled by Thorn and folks at sociedadsouthron, uruguay forums

Enjoy,
fuBarrio

Ron Paul - $6 Million Dollar Man

As you may have surmised, I'm a big Ron Paul fan.

It looks like his Boston Tea Party money bomb is probably going to raise around 6MM today. Of course, things are still too good in the US for someone like Paul to win....It's interesting to see a stat that something like 61% of repubnicans polled said they would *never* vote for Paul.

Good thing they have locked down the primaries to only those that have registered for a given party. Otherwise we might actually change the disasterous course the US is on....

Just another reason why 61% of fuBarrios will *never* vote for a repugnican...or demorat...Be interesting to see how much cash Paul burns through trying to reach unreachable idiots in those early states.....what a collosal boondoggle for the media outlets in iowa and NH ....

ciao,
fuBarrio

Dazed and Confused

It's not just the seasons that are reversed here....it's the academic schedule.

I can almost hear alice cooper playing in the background. Not sure if kids still participate in the end-of-year book burning ritual in the states......but this isn't the states.

Granted, I don't talk to many kids here....and I certainly wouldn't count anyone under 20 as a close acquaintance, but from a distance, the kids in Montevideo always remind me a little of my cousins who went to high school in the late 70's and early 80's in california.

It's not just the mullets or retro-fashion revival, a little bit of it seems to be the laid back attitude....late night partying....occasionally inappropriate "adult-like" behaviour, and the general laissez-faire attitude among the adults with regard to supervision of their kids.....especially during summer break.

ciao,
fuBarrio

Parque Rodo Beach

We took an interesting walk through parque rodo this morning. There was an amazing amount of activity from the top of the park, all the way down to the beach.

A flea market with holiday (prechristmas?) shoppers took up a huge swath of the middle of the park.

Down closer to the water, there were mate sippers, dog walkers,

snoozing old men, and little kids everywhere.

In addition, there were about 50 adults taking part in some Tai Chi direction in the shadow of the Confucious statue....

while techno music pumped out over the lower part of the park from the "W" lounge (who in the heck is listening to techno in a club at 10:30a.m.? :))

We eventually crossed the riverside road and down to the boardwalk and beach. At one of the staircases i noticed a sign that said "animals not allowed". fuBarrio ignored this notice, as did golden lotus and midori (our lab puppy) after seeing a couple of dogs playing in the water and the lifeguard looking on passively.

Midori and Golden Lotus navigated past the girls playing volleyball,

the men playing soccer (futbol) and the sunbathers....... down to the river at low tide, and into the river water. Golden Lotus reported that the water was "quite warm".

Pictures take a while to upload, but over the course of the next few days I'll try to upload a few more here so you can get a flavor for the beautiful day.

Ciao,

fuBarrio

You + US = FUBAR!

oops.


UBS just announced *another* $10B in writedowns??? Blamed bad "subprime" mortgages of course.

holy crap.

anyone remember the good ole days when a "rogue trader" nick leeson lost a "mere" $1.4B and bankrupted Barings, a 233 year old bank?

what's it gonna take before the first of these goliaths get involved in a "take under"?


another couple $10B here and there and that's gonna start to add up to real money :)

...at least until the fed makes it all go away with another rate cut. (that was sacrcasm by the way)


ciao,
fuBarrio

A "Date" that will Live in Infamy

Today is the 4th anniversary of Golden Lotus and fuBarrio's first date.

(uh...oh yeah....and some dudes dropped some bombs on hawaii too)

At the fuBarrio household as you might imagine however, the year 2003 is much more important than 1941.

Dec the 7th each year starts a "murderer's row" of special dates to be remembered and commemorated for fuBarrio culminating either with Golden Lotus's birthday in January or Valentine's day scarcely more than 30 days later.

While maturity and poverty have meant that fuBarrio can step down the financial extravegance of the gifts.....the maturity of the relationship means that he has to put special thought into doing something "special" for each -- anniversary, xmas, new years eve, bday, vday

:)

LUCKILY, now that we live in south america....nice weather outdoors this time of year opens up a new wealth of possibilities. not available when we lived in the north

....(i won't give you all the details of our surf outing on her birthday during a january storm in california....let's just say i'm still coughing up salt water)

Any ideas that can help a bald spotted rabid dog with his quandry can be placed in the comments section or emailed to me.....(and, yes, massive facial reconstructive surgery was contemplated but voted down due to cost and the recovery time would mean i'd miss the westminster kennels prequalifiers)

ciao,
fuBarrio

Punta Carretas

Punta Carretas is the neighborhood that Golden Lotus and fuBarrio call home. Golden Lotus shot these fotos the other day on a walk to the grocery store.

Golden Lotus seems to be a lot more talented at taking pictures than fuBarrio....must be the opposible thumb ....or the eyes without cataracts...

ciao,
fubarrio

Yellow Lab Puppy

It should be obvious to all by now that Golden Lotus has a soft spot for canines.

After all, she has managed to overlook fubarrio's generally disagreeable temperment and unsettling appearance for all these years.

Let's just say that, unfortunately, fuBarrio is facing his most serious challenge yet to his alpha-dog supremecy....."Midori". Two months old.

ciao,

fuBarrio

Our Accomodations in Brasil - Lexus Ingleses

Here is where we stayed.....I didn't really know anything about if before we got there. It was setup by a travel agent. I guess they aren't too strict on trademark infringement in Brasil yet.

The room included breakfast and dinner. 5 days, four nights, flights from mvd and 50 minute trip to hotel from a/p and back ran about $1000 including taxes and airport charges (ugh)....of course the visas were another $340 -- remember get your brasilian visas up north. they gouge here in montevideo.

The restaurant was ok....the outdoor pool a little lame....the indoor pool looked cloudy/filthy. the location on the beach was awesome, water still a little chilly this far south this time of year....weather was amazing most days....the rooms were "adequate", but not high-end. They seemed like they were outfitted to make it easier to clean the sand out that that guests invariably track in. Each room was actually a suite, and also had a little fridge, plates dishes, cups, silverware, pots/pans and a "hotplate" of sorts for cooking in the rooms.

While the hotel overall wasn't bad, the name "Lexus Ingleses" made me laugh, and I told Golden Lotus that it was more like the "Hyundai Ingleses" :)


That said, of course, it was markedly better looking that this thing down the beach from us.....get a load of the name on the matching boat out front.....fitting since this paintjob is a total nightmare.

Fishermen In Brasil

Some Brasilians Cleaning out their nets on an overcast morning after fishing in Praia Inglesis, Florianopolis, SE Brasil. The seagulls are circling around waiting for the droppings...

fB

Florianopolis, Brasil

after almost a year and a half of talking about it, golden lotus and i finally went to brasil for a short (5 day) trip.

the country is huge, and we didn't see much of even the town we visited, but i'll give you some general impressions here and follow it up with some pictures in a later post:

It's a cool place.

They have a lot more diversity there than uruguay -- even in the whitewashed south east corner that we visited. some (especially uruguayos) may disparage it, but it was a welcome change for me.

it's a lot more of a car culture. i think the taxes are lower on cars. the roads are big. lots of malls with big parkings lots. looked a lot more like the US than either argentina or uruguay -- closer to chile. btw, i noticed that gasoline was 2.50 reales, and ethanol was 1.50 reales per litre (sugar based)

the dollar's shellacking has hurt "affordability" for expats. it's still cheap-ish but the real has gone from about 3 to the dollar to 1.75 (ouch) -- i guess that's what energy independence and subsequently not being forced to secure supplies in the desert will get you. amazing, since these guys are notorious for destroying currencies.

weather in SE part was awesome. this would be the "colder" part of the country

although i'm sure there is crime there, it is NOTHING like advertised from what i saw (again in SE part only). saw no crime, or signs of it. saw people walking around with valuable watches/jewlery in not that great of neighborhoods. i was very concerned about security after talkin to people about rio and sao paulo, but again, it's a big country with lots of texture i guess.

portuguese, while relatively understandable for spanish readers (while in written form) is pretty hard to follow with only 5 days of exposure! :) i got by with a little bit of hacky portuguese (VERY little) and spanish most of the time. lots of people will understand your spanish and then talk back to you in portuguese :) good luck. i've been told speaking spanish loudly with a gringo accent is bad form in sketchier areas as it can make you an easy target of tourist crime.

the people --

almost *anyone* could look like a potential brazilian -- we even saw asians.

now, all my single guy friends will want to know about the women. i've *heard* that the NORTH is where all the beautiful women are. again, we were in the south.

golden lotus and i talked about this and concluded that people in the south (for the most part) looked very average -- with women wearning tighter clothes and heels (not very typical in Uruguay).

however, the "looks" didn't follow a normal bell curve distribution. there were a bunch of average people but a disproportionately larger number of women that were very well "taken care of" -- outliers if you will....only there were too many to account for them all as outliers.

i assume that the guys followed the same pattern but golden lotus was kind and said that she only had eyes for her balding spotted dog! :)

I'll follow up with some pics once i download them from the camera.

ciao,
fuBarrio

GIX.V

Was watching Canadian Biz TV and a guy who makes a living promoting junior miners was talking about GIX on the Canadian venture Exchange. He talked about lots of stocks but this one seemed the most interesting.

I woke up the next morning to see that the stock had shot up on his words....but rather than kick myself for missing out on the move, I noticed something really interesting starting to set up on this thing....

If physical gold pulls back a bit in the next little bit from the 780-790 range -- or for some other perfectly sound reason, this stock cools off and pulls back from it's recent highs after touching near it's previous high, this is one I'm goin to be watching.

While the volume didn't die out completely, this is a "decent" little cup formation on the back of an explosive upmove....If the chart for whatever reason creates a nice little trough (or "HANDLE") to aforementioned cup it could be setting up a nice little trade.

The idea is that you'd want to buy the stock at the point it broke through the point of resistance...one can often get a quick 20%+ on such a setup

I'll keep you posted.

ciao,

fubarrio

the Return of Bread and Circuses...part II

Hi all,

fuBarrio's snaggle-toothed snarling grin is already salivating in apparent pavlovian response to something that happened last week.

in perhaps one of the coolest things ever one of my three dedicated readers did something that single-handedly cemented the likeli-hood of a higher frequency of deranged fuBarrio sightings than has been seen over the last 6 months.

you see, while Uruguay is the land of milk 'n honey, one of the things it unfortunately (for fuBarrio) is NOT, is the land of HOSTESS!!!

why is this relevant?

well, in case you are new around here, fuBarrio often appears after over consumption of corn syrup and sugar laden "north american style" junk food, in all of its empty calorie grandeur! The fuel that keeps fuBarrio going most assuredly is the oft-cited, Hostess Twinkie Snack Cakes.

...the golden fluffy sponge cake, centering the "creamy" whipped-oil-sugar "goodness" on the inside. two great tastes that taste great together!!! especially when consumed in inappropriately large amounts for someone with my blood-sugar temperament.

After numerous unsuccessful calls to the people at Hostess, and a miserably failed letter writing and petition campaign, the people at Hostess informed me that Twinkie's would NOT be coming to store shelves in Uruguay anytime soon. After many inquiries, they muttered something about the infrastructure of international "baked goods" being weak.....

...devestation, disappointment, malaise...who knew that a twinkie could actually go "bad"?....for that matter, who knew that a twinkie could be classified as "baked good"???

So, while my Circuses (north american cable tv) had been suitably replaced with a slingbox strategically placed withing WA Huskies broadcast territory (thanks mom and dad!) and high speed connectivity, *Bread* (aka Twinkies Hostess Snack Cakes) were still missing.

It's like pepper without salt, peaches without cream, simon without garfunkel....while "OK" by itself, the yin of "Circuses" only become sublime when paired with its yang of "Bread". Almost no sooner than this (ok, semi-original) thought flashed through my mind, I got a phone call from the UruguayLiving.com office. The second (of my three) readers had brought me a gift from the states.....a in home twinkie maker to satisfy my every (over) indulgence in the snack cake of the gods.

Golden Lotus has graciously offered to help with the "whipped sugar oil" filling since apparently it is best attempted by someone with opposible thumbs.

To the two of you who have enjoyed a kindler, gentler, blog these last few months I have some disappointing news; you can probably expect a lot more junk-food fueled, maniacal fuBarrio sightings here in the near future.

"chow" :),
fuBarrio

Damages are Contained -- to Earth

I was watching "Damages" season finale last night on my Circuses box (slingbox).

For those that haven't seen it, it's about a big class action lawsuit carried out on a shady businessman (think Enron) who got out of his stock with inside information before the SEC announced an investigation into shady accounting. This, of course, is being carried out by an even shadier lawyer.

It was funny, because I know they filmed this in the spirit of Enron (and probably worldcom, tyco, etc etc), but they things they were saying sounded earily familiar.

He was being investigated for "hiding debts in offshore entities made to hold bad debts off the balance sheet" and "booking income in the present period based on expected income." (cash flows that were future hopes rather than present realities).

I know alot of you are thinking "Yeah, Enron", but look at our current lending environment.

You've got banks creating SIVs...(not sieve) to hold bad assets off their current balance sheets -- otherwise they'd have to pony up more in the way of reserves for the banking regulators.

AND you've got option ARM writers booking the increase in mortgage principal that payers are adding to their loans by paying the minimum as REVENUE. In other words, in some bizarre twist of logic and GAAP reason, they are booking money with the lowest probability of ever bein repaid as revenue in the current period.

DOH!

I mean, I know we are a stoopid people...after all, if you couldn't see shades of Vietnam -- especially in the rhetoric before it all started -- you were blinder than the cataract encrusted pooch that resides here.

but, C'MON for crap sakes....Enron only blew up like 6 years ago and the trial of the principals JUST FINISHED.....ridiculous.

In other news, I was going to run a really tasteless headline like, "Suprise, So Cal RE is ON FIRE"...or "RED HOT"...or pick your other tasteless joke. Just heard my cousin and his family barely got out of their house with their lives....in fact he was hospitalized.....

They'll be able to return to the house in a day or two to see if anything made it, but as of now, from what I hear, they have their pajamas and each other (and that's it).

Good luck to them, and the prayers of Golden Lotus and I are with them and all the other leftcoasters caught in the blaze.

ciao,
fuBarrio

Estadio Centenario - Montevideo

GL and I attended the Uruguay v. Bolivia futbol (soccer) match on October 13th. It was the opening weekend of the SouthAmerican qualifiers for the 2010 World Cup.

It rocked.

Uruguay got up 2-0 and then a player from the Bolivian team was red-carded for some rough play after a previous yellow (unwarranted) for arguing a call that the linesman missed. The final tally was 5-0 Uruguay.

The crowd seemed to love every minute of it, and was very familiar with all of the players, including gettin very excited when they could tell when one of their favorite substitutes was gettin ready to come into the game.

About a month from now Chile comes to town for a match...definately planning on going to that match....nothing would be sweeter for fuBarrio than to have little Uruguay stomp the Chileans

I have alot more pics, but blogger is making me a bit crazy -- the last couple of days it's been unwilling to upload my pics without cutting off my connection. I'll try to remember to add them later.

ciao,
fuBarrio

Velodromo - Montevideo

Close to "Estadio Centenario" (Century Stadium) is the Montevideo "Velodromo" (Velodrome).

Estadio Centenario looks like it was built for the 1930 World Cup that was held here in Montevideo. The Velodrome, appears to have been built during the same time period with the art deco lettering, but I can't verify that as I'm too lazy to google or wikipedia it :)

As you can see it seems to be in a state of disrepair, however it still receives what looks like a fair amount of use.

Ciao,

fuBarrio

fuBarrio Shrugged

I just looked at my blog and noticed that I haven't been keeping up with my normal flury of semi-coherent posts the last couple of weeks.

What can I say?

Is it that the world has finally come to its senses? No. I can't definitively say that is the case at all? Are there fewer absurdities to ridicule? No. Again, I wouldn't say that.

Why just today I was reading an article posted on the New York times about a professor who wrote a paper about gold and stocks.....he thinks that they are disconnected from their historical adverse relationship and either gold is anticipating inflation or it is *wrong* right now....his reason: inflation has gone down the last 5 years at the same time gold was going up. do professors shop, go to the hospital, pay tuition or drive cars?

the counter argument is that the gov't stats for inflation are cooked.

his "counter-counter" is that if the numbers are cooked, it's ok, cause he is only measuring changes in the cooked numbers to changes to the cooked numbers now....

uh, fuBarrio's counter counter counter is that you can't use something that can be CHANGED as a baseline for anything!!! the cpi measurements have changed countless times over that period, and in everycase I'm aware of, the changes understate price inflation.

Look, I realize that this story and my arguments against this egghead aren't backed up by links, direct quotes, or even a storyline that is easy to follow....And, it's the same reason that i haven't posted a lot lately:

I would have to chalk it up to good old fashioned apathy.

The reach of some egghead professor getting a writeup in the New York Times is mindboggling. Nevermind that his analysis is completely flawed, and as a matter of fact if you'd followed his advice up until now you'd have LOST MONEY.

It seems like anyone that doesn't have something to gain by having their voice heard is drowned out by the rampant commercialism of opinions these days.

Larry "cocaine" Kudlow was telling me - on CNBC where he's afforded an hour every day - gold was going back to 400 shortly before I came down to Uruguay because his connections at the Fed were bound and determined to crush out speculation as it was a signal to the market that inflation was cropping up.

Where is the "mea-culpa"???

Steve Forbes, riding the coattails of his old man's media empire made some monster prognostication that oil was going back to $35/barrel right before I came down to Uruguay. I think I just saw that it punctured the $90 mark in the front month futures contract.

The sad part is that Cocaine Kudlow and Steve Forbes will *always* have more influence, wealth, power, comfort, supporters, for themselves and their families than some doofus like fuBarrio. Their children will enter the ivy league schools, have the introductions to others in the halls of power and continue the incestuous inbreeding that is bifurcating our society into those that have and control and those that shine their shoes.

Were Forbes and Kudlow really serious that they believed these prognostications or were they asked to lie for a grander economic or political purpose???

Either way, they should be ashamed.....tarred and feathered....strung up by their gonads and ridiculed.

Is it so bad to make a prediction and be wrong? of course now, but how about a little bit of admission of fault. Forbes did a freakin' press junket in support of his absurd $35/barrel call.

What the Hell does Steve Forbes know about Oil? The sad thing is, he has name recognition (and a conduit to be heard), so people will listen to his "wishes" over the sound reasoning and science put forward by someone like Matthew Simmons who insists that Saudi Arabia is peaking (or has already peaked) with light sweet crude production.

In light of it all, is it any wonder that fuBarrio is shrugging?

ciao,
fuBarrio

Money as Debt

Ever wonder how productivity can keep improving each year and yet we have to work harder and harder (now with two breadwinners) to keep up?

In "the fourth turning" the authors say that in the fourth turning that people eventually tend to coalesce an understanding that a lot of their struggles, concerns and "undesirable effects" are all interrelated to a root cause (or two).

This video comes as close to explaining everything in a simple manner as I've ever seen. If you can sit through this 40 minute cartoon, there is plenty more of this kind of thing online....none quite so powerful as this one in its simplicity though.

http://video.google.com/videoplay?docid=-9050474362583451279&hl=en

Enjoy,
fuBarrio

Mortgage Meltdown 2007

The title I stole from CNN.com

Pretty amusing. Here's what's NOT amusing.....

Mortgage Meltdown

Whiskey Tango Foxtrot?

From the article when talking about borrowers who had bought way more house than they could really afford by getting an ARM with low "teaser" rates to make their payments low.....essentiall either betting on a huge change in household income in a couple of years or (more likely) continued appreciation bailing them out (yeah, that's responsible)....

"'Keep it at the starter rate. Convert it into a fixed rate. Make it permanent. And get on with it,' Federal Deposit Insurance Corp. Chairman Sheila Bair said in prepared remarks at an investor's conference. "

THAT is the solution being proposed by the CHAIRMAN of the FDIC? Yeah, no moral hazard there....

To quote the venerable Mogambo guru, "We're DOOMED! DOOMED I say!

ciao,
fubarrio

Uruguay Directory

I've been doing a lot of "work" lately of dubious financial value..... I've been wasting a lot of nights studying different content management systems, creating sites of possible societal value (at least for expats living in Uruguay).

I remember shaking my head at my friend "IBMikey" as he descended down the rabbit hole trying to figure out Joomla to launch his site http://www.outinuruguay.com/ Now, I'm starting to understand how he felt. I thankfully left behind this web stuff a LOOOONG time ago. Trying to push the last 7 years into a few months is getting a little overwhelming...however, we have had some small successes...

One of the latest sites that we launched is a Montevideo Uruguay Directory.

The idea is to give those people who have something to post of a commercial nature, a place to do it, instead of getting into fights over content that lives in the free forum.

It was sort of done one a budget (meaning NO budget) so we ended up using the PHP Bulletin Board software that is freeware. LUCKILY, we have a kindred spirit in the states that helped us set it up...I won't use his name here cuz he's a little sensitive about it (i think) but it's the same dude that made the sketch of my first fuBarrio gold coin.

In that vein, check it out and keep the heckling to a minimum. If someone knows of some sort of "craigslist-esque" open source software let me know. That could be the way we go for version 2. Once we've done enough "real" work to pay for all this distraction! :)

ciao,
fuBarrio

p.s. click here to check out the Uruguay Directory

266 isn't old -- if you're a Tree!

Yeah, 266, in dog years, creeps up on you fast. Most of us, I'm sure (if we aren't so old our memories are failing) can remember pretty clearly when our parents were 266 and can remember thinking pretty clearly, "damn, you're old".


Of course, that was them...We're not old, right?

Let's see...

Did we just yesterday notice our kids rolling their eyes as we tried to interject the latest slang into our speech? It seems like just yesterday we were the ones rolling our eyes.

And for that matter, when did Madison Avenue get so "hip"?

I seem to remember they were always years behind the curve. "Old" people would chuckly maniacally as Madison avenue presented some "humorous" view on pop-culture....kids of course would notice that the representation of the kids on screen was about a year and a half out of date (a lifetime when your "with it"!)

But, 266 isn't so bad right....it's like the new 196, right?....or so those out-of-date Madison Avenue types try to tell us.

Lately though, fuBarrio has noticed that Uncle Sam isn't the only one on the decline. It started subtley. At first it was just small things. Almost straws in the wind. Lately though the evidence has begun mounting.

Ever since fuBarrio was a young (devil) pup he has joked about being "old".

Then, about 5 years ago, fuBarrio's younger friends stopped protesting such declarations

While single five years ago, and working at his job WAY too much to meet anyone, on the advice of aforementioned young/hip friends fuBarrio considered registering for online dating at match.com. fuBarrio decided not to when he noticed that the maximum age on the registration drop down was 35 :) -- hitting a little too close for home there.

fuBarrio's still limping after playing basketball with a bunch of octogenarians a couple of months ago

fuBarrio attended his 20 year reunion a couple of months ago

...but the most agredious of all the these indignities has to be.....

fuBarrio is losing his hair!!!!!

(oh the humanity)

Well, certainly there are many indignities awaiting us all on the way to puree dinners and adult diapers, but one issue bothers fubarrio more than others. Of course, not one to take such an unexpected course of events lying down (it always happens to the other guy) fuBarrio went on a made hunt for solutions. Below is a list of some options along with the short comments summarizing fuBarrio's initial research.

• becoming a "member" (har-har)
• lots of mysterious baseball hat wearing in inappriopriate situations
• aunt gemima bandana (actually saw brett michaels of poison fame trying to pull this one off on VH-1).
• Minoxidil
• Propecia
• Comb Over
• The Krylon solution
• Kojak Solution

Becoming a "member":

I think i have to actually lose more hair before this becomes a real option. The ads are full of pretty creepy dudes too...so that's a minus.

Ball Cap:

This one's pretty lame. 20 somethings can almost pull it off. I notice a lot of dudes only came to the informal Friday night portion of the (aforementioned) reunion. I couldn't tell if this was to avoid the 50 dollar charge for the Saturday dinner, or they didn't want to forced to show off their baldness. Probably a little of both.

I'd be a little more keen on this one if it didn't make my forehead breakout. Don't most people get to enjoy a period of time between breakouts and hairloss? :)

Aunt Jemima:

This one's closely related to the Ball Cap gambit. I wouldn't ordinarily think of it outside of the "hood", but I just saw Brett Michaels (of "Poison" (in)fame) trying to pull of this look on VH-1 -- For an entire series! :)

Minoxidil:

I'm not even sure they sell this in Uruguay, however, I did see on TV (in the states) that they sell it without prescription now -- so it's a LITTLE less humiliating. Probably not the good stuff though...just some watered down version. I got freaked out when a bald friend said that if you use it and stop, your hair returns to "trend". He was basically saying all the "treated" hairs that decided to stick around, which otherwise would not have, all fall out at once. Not sure if this is true but it sounds like "lock in" to me....or a serious barrier to adoption, as in my case.

Propecia:

This one seems a little better, especially if i could get the pill online from one of those email spammers! :) Of course, I had a *different* friend who looked into this for a pituitary problem (lots of weird side effects with pituitary tumors) and a specialist told him it decreases the volume of your "man sauce".

uh...I'm not shooting any movies or anything so it doesn't seem like such a big deal but then it leads me thinking that it sounds more like a *symptom* of a deeper more disturbing side effect of some kind. I'll prefer to wait a few more years for them to figure that one out.

Comb Over:

I said "266" not "666". 'nuff said. (I did see a sweet documentary on google on these though)

The Krylon Solution:

This one, from what I can tell in the late night infomercial is basically just spray paint....hence, the reason i call it the "krylon solution". Oh yeah, and they also throw in some cheap plastic combs too....This one seems better suited for:

1. people balding in the back, not the front.
2. people who live with lots of blind and/or delusional people

The Kojak Solution:

This one seems to be the most well-respected option these days. It was cool in the 70's...out in the 80's....came back again in the 90's and just hasn't faded out yet....or is that just my "non-hipness" again?

If my head wasn't so pointy, and my skin so pastey and/or i didn't live beneath a hole in the ozone layer this would be the "no brainer" option I think.

Anyone have a baseball hat that would look good on a blind dog?

ciao,

fuBarrio

Inverted Cup and Handle -- Again

I went into a big crazy explanation of what I thought the psychology was behind a "cup and handle" and then later in the same post, why an "inverted cup and handle" went through some of the same psychology, only in reverse.

In case you don't want to follow the link to see what I'm talking about, I'll just summarize by saying that these are relatively predictive chart patterns. The inverted cup and handle I was most concerned about was the one in the US dollar. I had a really hard time finding a good chart that really showed this, but just today I found one on a site that stole it from GoldMoney.com.

I decided to steal it as well to help illustrate the point in more glowing detail, hopefully.

Of course, this isn't all academic. The falling dollar is what makes your imports (if you're living with dollars) cost more. In addition, it can even make things that people compete for on an international scale cost more too -- even if they are made in the USA (see wheat, corn, your local neighborhood food aisle, and comin soon to meats!)

ciao,

fubarrio

ciao,
fuBarrio

Leveraging the Efforts of Others

Ok.

Since I don't get out like I used to and take fotos of the city, AND people seem to enjoy my pictures of Montevideo a lot more than my endless rambling about how the sky is falling, I have found some nice pictures for you.

I'm not sure who took these, or who this blog belongs to, but nice job! :)

Make sure you scroll down far enough to see some of the old-school architecture....leave a comment....tell them that "fubarrio" sent you! :)

pictures of montevideo

Ciao,
fuBarrio

Life in Uruguay

Well, since Golden Lotus and I have moved through the one year in Uruguay mark, we had a chance for some reflection.

When we first moved to Montevideo without knowing anyone, or having every been to South America it was a pretty big leap. When Golden Lotus started questioning the move a few weeks before we left, I simply said, "hey, we'll go down, check it out...if we like it we'll stay....if we don't we'll leave."

That seemed to work. We arrived on the 12th of August and that August was *relatively* mild weather-wise and after about a month and half it had started to warm up. After this last winter, barring some unforeseen event we will NOT spend another winter in Uruguay.

Leave Uruguay (gasp!)

Well, the weather is only one part of the equation. Uruguay has a TON going for it, however after being here for a year+ it is lacking some things that we'd like to have around in the next few years too.

Now, before you hard-core lifers say, "well, duh" remember that 2/3 rds of my 3 person readership has never been to Uruguay.

It's choices for food are really limiting
Its cultural diversity is very limiting
It's professional opportunities are very limiting
The attitude of the people is not very open to foreign ideas or concepts
It's a little boring
(Golden Lotus entry) "the men are perverted" :)
(Golden Lotus entry) "no one knows how to cut non-mullet haircuts"

So, while a portion of our time may very well be spent in Uruguay, it will likely be that portion when a much larger percentage of the population is from somewhere else --- the summer! Our lease is expiring at the end of May with an option to extend for another six months. As of now, we do not intend on extending that lease.

Where to next, fuBarrio?

Well, that has yet to be decided. I'm goin to log off now and discuss it with Golden Lotus before she falls asleep.

Ciao,
fuBarrio

Paraisos Fiscales

Is Uruguay A "Paraiso Fiscal"?

Admittedly, even though I studied a little bit of Spanish before I arrived in Uruguay, I'd never heard this term before I got here.

Paraisos Fiscales basically translates as "fiscal paradises" -- or a more direct translation is "tax havens". To be considered a paraiso fiscal a place needs to shield money from another jurisdiction's taxation.

When I moved to Uruguay, there was *no* income tax -- not even for the locals. In one short year, that has become a fond memory. Of course, still holding my US citizenship has made this semi-irrelevant.

For US citizens we are taxed on *world-wide* income regardless of where we earn it. Luckily for us, we have an $80k/yr tax exclusion as long as we can prove we were actually residing outside of the US. I've heard numbers like 325 days/yr outside of the US, but I'm not certain there is a hard and fast rule. However, this is basically a subsidy for large multi-national corporations to give to expat Execs working overseas. Why do I say this? Well, income on investment income is taxed from the first dollar -- even when we are living in another country.

For Europeans, Australians, and other South Americans however, Uruguay is very much a paraiso fiscal.

Why is Uruguay a "paraiso fiscal"?

1.) strong banking secrecy laws

2.) strong protection for foreign property ownership (even US citizens are not obliged to disclose foreign real property ownership to the IRS (yet!) any bank account over 10k you are obliged to file a treasury dept form)

3.) foreign income for those living in Uruguay is not taxable (for those non-US citizens obviously).

In other words, if you are Australian and want to trade forex, and don't want to pay taxes on your gains....you can move to Uruguay and simply show that your money was sourced from investments made "offshore" and you are exempt.....at least that's MY understanding :)

So, yes, as far as Paraisos Fiscales go, in spite of recent political pressure to crack down, Uruguay is still very much famous for being a haven for foreign money (just have a look at some of the homes in Punta del Este with Argentinian plated luxury vehicles parked out front if you don't believe).....It's just not as a big of a haven for their own citizens and those that chose to make a living here.....

Hmmmmm....sound familiar? Ironically, the US is the biggest paraiso fiscal of them all...as long as you aren't (north) American! :)

ciao,

fuBarrio

Montevideo "Craps Out"

In a semi-amusing story that ran here locally the gov't run casino (or at least if they don't run it, they limit the competition for a generous piece) actually reported a loss last year.

I was explaining to a co-worker that I started an online casino back in the 90's and that it is about a "no brainer" of a money maker that there is -- as long as you can do the marketing the operations is relatively straightforward, not a lot of innovation required, no inventory headaches....the only problems are hackers and thieves.

He argued that you had to have a lot of money to start a casino (once the infrastructure was in place) in case you lose some big bets.

I laughed and explained that probabilities and the law of large numbers had been worked out such that other than a 15 sigma event or other highly improbable outcome it was hard to have more than a losing day here and there.

The casinos, you see, for obvious reasons, have minimum and MAXIMUM bets on most games. This precludes the naive strategy of someone using a martingale strategy and simply doubling his bet until he comes out OK.

They also shy away (for the most part) from taking big one time bets. They are all about taking lots of the same bet over and over and letting the laws of large numbers work to their advantage. Some (very few) may have large proposition betting departments and lots have sports books which can see large lopsided bets on outcomes out of their control. However, in these cases, when a book has a very lopsided bet they will either edge the line in one direction or the other or, more likely, "lay off", some of their exposure to another book in the industry.

Even the online guys in Costa Rica had cordial working relationships with the other players in the market and would get on the horn before a big game if their exposure became too lopsided.

Anyways, all of this is just to express my utter fascination that their weren't arrests and a very public "perp walk" by some high profile casino execs after it came to public light that they lost money for a year.

Short of massive, gross incompetence and/or outright theft this is a virtual impossibility for a casino. If time and energy permits I'll get a copy of the original spanish article to post my source as a link here.

ciao,
fuBarrio

"Now What?" -- be Afraid....

.....be very, very, afraid... :)

Today, the Fed dropped the short term rates by 1/2 a percent.

Hooray!!! housing will be saved!!!

er, not so fast. As I remember, my home equity line (back when I had a house) was based off of LIBOR. LIBOR is some fancy acroynm for interbanking lending rate.

The reason the lenders insist on this is so that the Fed or some other NON-MARKET BASED price fixer doesn't set rates artificially too low and screw the mortgage holder.

Well, the people holding mortgages are screwed for a million other reasons, but in most cases, I believe those with resetting adjustable rate mortgages will have their rates tied to LIBOR....not the Fed funds rate.

But but but....won't this make it easier/cheaper for new buyers???

yes and no.....The "problem" is that the fed doesn't directly control long lending rates nor does it control what the market demands in the way of a risk premium over and above a Treasury to back Joe/Juan Six-Pack's Half-million dollar mcstucco crap-box dream.

in addition, cutting the short term rates is killing the dollar right now, and that is goin to force foreign buyers of dollar paper to seek a higher rate of return to offset the currency risk......oops.

on the positive side of the ledger, although residential housing sucks right now because the utility as a shelter is WAY WAY overpriced to buy (and by extension to buy as an investment to rent out) there will eventually be some other property perhaps that becomes attractive to foreigners if the dollar tanks relative to their currencies.

"luckily" for the dollar, the EU is trying to liquify away their mess, Japan has political problems right now, and even the formerly tough Bank of England finally had to blink ( a little ) and agree to lend Northern Rock some funds to head off complete insolvency in the face of an old fashioned bank run (exascerbated by the fact that people could go online and withdraw AFTER normal banking hours)

so, "now what?" is answered with those tired old lines....look to diversify your holdings out of just dollars and out of just paper priced in dollars....especially if your salary, retirement, savings (everything) is in that one dollar.

but, beware of other paper assets as well....look for a little bit of precious metals, some grains perhaps, and maybe some energy assets as well.

if you want to make a paper bet, bet on long term interest rates going up -- even in the face of the Fed easing today -- I know, "crazy", huh?

ciao,
fuBarrio

p.s. I couldn't believe how lucid and clear Greenspan was on sixty minutes now that he's out of the Federal Reserve chairmanship....Funny, he wouldn't make any comments on what he's investing in other than to say he's diversified....Then, he goes on to say, expect inflation and long term rates to come back after a 25 year hiatus. :) uh....

p.p.s. my friend wants google to find her new personal blog so.... odeliza jacoba

"Sell in May and Go Away"....Now what?

Well, as my three loyal readers 'may' (har har) remember I posted about the general malaise that u308, gold, silver, and the mining stocks of all three seem to suffer from through the summer months.

uranium juniors, gold juniors (and majors), and silver stocks have been HAMMERED this summer.

then, almost on queue, the big money got back from the beach after labor day and things started moving up in these assets again.

Ok, so is it time to reenter these positions (if you got out)? should you get in if you never had a position?

First, a review....basically, my original thesis remains intact (somewhat)

namely:

• everyone should stop speculating in housing. if you can sell your primary residence and rent, do it.
• housing turbulence would kill the mortgaged backed paper market, and infect even higher grades than subprime and eventually the commercial paper market
• liquidity would get really shaky
• the US dollar index would break 80 to the downside
• we could see some bank runs and smaller regional overleveraged players falling first (just starting to play out)
• it would be challenging to find a hidin place as liquidity dried up everything would tank at first even traditional "safe havens"
• the "x" factor would be the central bankers' response....would they inflate/liquify the markets in an attempt to forestall or avoid calamity (of one kind in return for the other) and the political response (see recent proposal to liquify markets by raising limits for fannie mae backed home loan)

To date, when Wall Street has cried over their lost million dollar bonuses, the Fed has blinked and liquified the markets....massively....The European Central bank, ditto....to a lesser extent the UK.

This liquidity will find a home and it won't be new subprime homeloans.....any guesses where it might go?

(to be continued)

fuBarrio

Offshore Bank Wires -- in Hollywood

As some of you may have surmised by now, my day job involves doing some work for "up and coming" Offshore Banking Services industry here in Montevideo, Uruguay.

How do you make something as boring as "banking" sound sexy? Easy, just add in a dash of "offshore"....

Viola! Now you are dealing with arms merchants, spies, monopolistic cartels, money launderers, dirty CEOs, and drug lords.

The movies do a good job of glorifying the profession (while villifying it) and making it look a whole lot more sophisticated than my brief experience has shown it to be.

I crack up everytime someone sends an Offshore Bank Wire in a movie like Mission Impossible or "Firewall". The thief (or other unsavory type) types in his account, encryption key...pushes a couple of more buttons, and then sees a graphic onscreen filling up like an mp3 download tracking the progress.

Question: why would it take longer to wire transfer 200 million dollars than it does 2 dollars? :) technically i guess you have to send an extra 6 zeros over the wire (in binary...gasp!) but....long enough to have a progress indicator? :)

While my company recently implemented online banking, and we have fancy encryption keys, etc. However, a lot of processes -- especially sending wires to international accounts have a good deal of "hands on" processes that are still handled by people....and there is a reason....as some say, "three feet of air is still the hardest firewall to crack".

Gov't to Irradicate Inflation through Intervention

....we'll see, huh?

The article below is a translation as it ran in Uruguay Daily News today. It's amazing that they never think, "hey stop creating money faster than people create goods and services" is a solution...


Government Announces 7 Measures Against Inflation

Uruguay News

Yesterday, at a meeting between the President and the Ministers, Economy Minister Danilo Astori presented a package with seven measures to stop inflation.

This measures will entail a USD 65 million fiscal effort with the objective to act directly on four products which, according to the official analysis, are directly responsible for the rise in inflation: fuel, meat, wheat products, fruits and vegetables. The economy ministry has repeated several times that these products account for 60% of the increase in prices this year (4.74% out of 8.23%).

Vázquez’s cabinet and Frente Amplio party members expressed their support for Astori on the new measure. The PIT-CNT labor union applauded the government’s measures but considered them to be “insufficient.”
National Commerce and Services Chamber consultant María Dolores Benavente, called the government’s measures “positive.”

-According to information given by official sources to Últimas Noticias newspaper, last night, state energy company UTE received the price list of basic family products sent by the Economy Ministry Commerce Direction so UTE can print and distribute the list with their next bill. Yesterday, the Commerce Bureau received prices on 40 products and close to 100 items of merchandise sold in different parts of the country. Prices were processed and immediately sent to UTE.

-UTE rates will fall (4.3%) at a cost of USD 25 million annually and a 6% increase will be postponed until June 2008. This measure will take effect in January and will imply a USD 30 million decline in income for the state company.

-Fixed charges in ANTEL telephone rates will also fall 6.5% at a cost of USD 7 million annually.
-August CPI figures (1.73%) led the Economy Ministry to eliminate taxes paid by public companies for foreign currencies earlier than expected. The tax elimination, which was part of the new tax reform, was expected to be applied in January 2008 but was moved forward, at a cost of USD 8 million for the state (and USD 25 million less in collections for the state annually). The decree has already been created and will be signed next Monday by the ministers’ council.
-VAT exemptions on poultry at a cost of USD 2 million that will affect 17% of consumer prices and the acceleration of procedures to start vegetable exports and cause a slight reduction on prices for those products.
-Health care services will fall between 2% and 2.5%, which will be financed by employer contributions as planned by the tax reform.
-The government is planning a 2% reduction in fuel, which will be financed by the decline in the dollar exchange rate. State fuel company ANCAP parameters were calculated with an exchange rate of UYP 23.75 per dollar and last week the dollar closed at UYP 23.15.
The government expects to slightly affect inflation for October, November and December to keep inflation in the single digits for the year.

(Ultimas Noticias, Observa, 11 September 2007)

Introducing "Uruguay Guy"

UruguayGuy.com

Ok....I swear it isn't a gay porn site....Although that idea has a lot more promise of profitability.

UruguayGuy.com will eventually be a site that has some relatively useful stuff and links to information for "foreigners", visitors, expats, coming to Uruguay.

In the beginning I'm going to focus on some pretty elementary stuff just to give people another resource and maybe a little more comfort in the trip/move/relocation they are considering.

For now, until I get the website pointing to my blog, uruguayguy can be found at Moving to Uruguay

ciao,
fuBarrio

Uruguay vs. The States

...no this is not about olympic b-ball qualifiers. this is the aforementioned promise to follow up with my thoughts regarding the differences between the US and our adopted home Uruguay.

it had been a year since I'd left South America, so I'd forgotten a lot of things that I like (and that annoy me) about the states.

We flew Delta which meant that we flew through Altanta...We arrived around 6 a.m. and had a layover of about an hour and a half to fly back to the Left Coast.

Impressions:

Everyone speaks English! While this is convenient for getting around, you have to put up with listening to people speak English! (UGh!) I've become accustomed to sitting in crowds or restaurants and being able to just tune out Spanish conversations, since listening actively is the only way I can understand conversational Spanish. It just turns into pleasant background noise. At the gate I had to listen to some woman talk about her real estate speculative prowess (think shoe shine boy with stock tips) and how her husband and her were going to clean up on some upgrades they were doing to a second home. If I wasn't so tired, I think fuBarrio would have gone off on a rant.

Everyone is FAT! ugh. Husbands and wives were HORFing down bags full of fast food (the choices were amazing IN the airport) as they waited for the airplane at the gate. They were doing this STANDING. That is just something you'd never see in Uruguay. Some kids got onto the tram with some kind of *crazy* sweet smellin waffle cone the struck some sort of 1970's carnival memory in my head. Again, this was at 6 a.m.

Once we got on the plane to PDX, it was like we'd stepped into the future! My coach seat had TV on demand (live CNBC), good cheese in the snack box, and "CDs on demand" (a bunch of'em)instead of really bad commercial free radio the planes used to have. I listened to Christina Aguilera's "newish" CD and skipped over songs I didn't like.

When we got to PDX everything was slick and clean and "modern". Kids were browsing in a "mobile electronics/entertainment kiosk" (in the airport on the "inside" of security). We walked across the skybridge to the multi-level parking lot covered by a huge glass roof to let light in and keep us from havin to deal with any rain that might fall. We were driven from the airport in a Lexus SUV.

Now, what I've described is just the first few hours. We hadn't even left the airport at this point, but the trip was basically more of the same:

• Many more choices of products/food/entertainment/ways to spend your money
• Much more convenient (part of this is the lack of language barrier obviously)
• More expensive (with the exception of gasoline, electronics, skin care, nuts, ethnic foods, some clothes, and a fender statocaster :) )

ciao for now,

fuBarrio

Meanwhile back in the States....

After a few weeks back in the US, I have a renewed perspective on what it means to live in Uruguay as a US native. There are definately some things I've missed from the States....and some things I haven't. More on that later. For now, just a few pics from the "greater" 48.

ciao,

fuBarrio

The Rule of Page One

The rule of page one states that once a story gets to the front page, the trade is over (in a nutshell).

Although this story hitting the mainstream media outlets hard signaled a (short term) end to the trade, I think the carnage still has a couple more legs down. As I've said before, it's either housing or the dollar (or both). It depends on how many times the Fed is going to "blink" I guess.

ciao,

fuBarrio

The fuBarrio Index

The fuBarrio index = The Fed's Unlimited Borrowing Appearing in the Real Rate of Inflation Observations....

I don't have a picture from 1999 but my memory is it jumped in 2002 from 4.59 to $5.49 for the Halibut and Chips. You can see in the picture above what has happened in the last five years (whisky tango foxtrot?!?!?!?)

Emerald City - Strat Heaven

Golden Lotus sat patiently as fuBarrio played nearly each and everyone of the pictured guitars in search of the perfect fit.

Of course, after trying out about 40 strats, fuBarrio's paws warmed up enough to play a riff without fumbling the pick -- no small feat for someone without opposible thumbs -- and fuBarrio's strat had been found.

ciao,
fuBarrio

CarryTrade and Global Liquidity

It's been my belief for a long time that global liquidity was really the only thing floating the leaky boat, aka, the US stock market.

Unfortunately, there is so much inflation built into the system that one can feel compelled to continue trying to "pick up nickels in front of steam rollers" -- nickel and diming the market, playing a dangerous game that works really well -- until it doesn't.

I've been looking for some indicator of global liquidity flows as a more reliable predictor of when the faucet is being turned on and off.

below is an idea that i stole from a currency trader posting as "hoz" on thehousingbubbleblog.com. Interesting stuff. He believes that the marginal money coming into the US stock markets only after a series of carry trades is being carried out. The trades go something like this (according to him)

1) borrow moneys in Japan from bank
2)buy Euro sell Yen =EuroYen
3) buy British Gilts
4) buy US stocks with Gilts as your margin requirement

This url is to a graph of the EuroYen vs the SP500 for 1 yr.
The correlation is 0.94, from a practical viewpoint if the EuroYen is higher than the previous day the stock market is going up - no matter how much bad news is out there.
http://tinyurl.com/2b9f3u

fwiw, i think we are very very close to a serious problem in the markets or the dollar. if/when the problems happen it could even take down the safe havens in the immediate term as leveraged players look to raise cash.

regards,
fuBarrio

Where in the world is fuBarrio?

GLQ.TO (again)

Just a quick note this a.m.


It's an hour before the market opens and one of the promoters of this stock recommended his clients back away from GLQ.TO last night (along with a whole host of other base metal plays based on the call of an immenent pullback in base metals).


I don't think anyone was speculating with me, but in case you were and haven't already closed out your position, I thought you might want me to tell you this.

It closed at $3.82 CAN last night. His recommendation to sell base metals could cause a minature rush to the exits this a.m. So if you're selling, as I like to say, "if you're going to panic, panic early."

Go cool.

fuBarrio

Eddie Murphy's Grandma

"it's cold...i'm so cold in here......eddie.....what time is it?"

I know I sound like Eddie Murphy's Grandma complaining about the cold every 2 or 3 posts.....not very compelling copy.

But, finally there is a source (with statistics!) to back up my assertion that it's been damn cold here. Apparently this is the coldest winter on record.....

The story below and the attached graphic to the story says it all:

Uruguay News on the weather.

ciao,
fuBarrio

Buceo, Montevideo in the a.m.

A picture of Buceo, with Malvin, the coastal neighborhood to the east of Buceo in the foggy background.

fuBarrio

Beach Soccer

Beach soccer, or futbol, is extremely popular in Uruguay...especially on Pocitos beach. Wide, white-sand beaches that are relatively flat have several permanent goal posts setup up to facilitate the action.

While these fields, and Pocitos beach in general have been empty the last couple of months, recent daytime sunshine has brought out the footballers again.

Clear sunny skies give way to windy evenings and cold nights as the sun sets. In another couple of months, sunny weekends will bring the brave back to Pocitos beach. In four months, you won't even recognize it as the same place :)

ciao,

fuBarrio

Montevideo Shopping's "twin towers"

In a "city" of 1.4 million, this is what passes for "twin towers".

The first time someone gave me walking directions to "Montevideo Shopping" (on of the malls) and told me to just walk towards the "twin towers" I got lost in the neighborhoods. These things don't exactly loom over everything in the immediate area.

During these colder months, and especially on the weekend, the malls are almost unnavegable as all manner of aimless citizens wander the halls like mindless robots as a way to get out of the cold. In the meantime, Montevideo's popular beaches are almost completely deserted.

The malls here aren't "vertical" like Hong Kong as you might imagine while looking at this picture. They are between 2 and 3 stories. These office towers were just constructed as part of the "complex". As you may be able to see, there has been some ongoing construction in front of the towers to create, what looks like, at least one more sibling for these twins.

ciao,

fuBarrio

Uruguayan Dryer

Electricy is not cheap and western style dryers are rare here. Many apartments in Uruguay have small rooms off to the side of the kitchen that often house a small washing machine and an area to hang clothes (to dry).

Most of the houses and top floor apartments have roof access for the express purpose of hanging wet laundry. Here you can see some clothes being hung out to dry in the dead of winter.

fuBarrio

Exaptriates are HATERZ!!!

This post is going to probably piss a lot of people off, but the truth hurts.

The Expats here are Haterz! (If you don't know what a "hater" is, then you are out of touch. Google it).

Our first 4 months in Uruguay were spent with ZERO contact with North American expats. In fact, we weren't even aware of how many existed (they blend in quite well most of the time).

However, as fate would have it, we were introduced to a circle of expatriates through a good friend, Mikey, who has recently had to return to the US (please read about mikey's trials and tribulations here http://www.amavericko.com/ and check out his entrepreneurial endeavor in Uruguay here http://www.outinuruguay.com/). Lately, I've grown nostalgic for the days when I didn't know any expats. That can't be good.

Why, you ask?

(sarcasm) Since everyone likes to be put into a box and classified (/sarcasm) I'm going to describe five types of expats I've met here in Uruguay:

1. actively working for a foreign govt (diplomatic corps) and are very well compensated by Uruguayan standards.
2. actively working for foreign multinational profits or non-profit and very well paid by local standards
3. retired and living off of big business or big govt pension or social security (common) or savings (more rare).
4. young and has some savings but will run out of money eventually and have to go back to earning money someday.
5. young (in spirit at least) and has an idea and enough cash to get something started here, but doesn't have infinite resources.

At various times I've heard some real negativity thrown around between each one of these sub-groups of people. To each and every person, of course, their source of income is honorable and beyond reproach. However, others' methods for trying to get by are questioned, demeaned, ridiculed, unsupported, negatively gossiped about, or somehow looked down on....at times, I've even heard people demeaning the way that *I* chose to support Golden Lotus and myself without realizing what I do for a living without realizing what I do.

Personally, I have my own bias as well. I'd like to attract more entrepreneurs to come and create, work and thrive here...but....

If the expats can't even support each other, how in the world do they expect a bunch of semi-xenophobic south americans that think every North American is born independently wealthy to do it?

I don't know if the "hating" is being driven by ignorance or petty jealousy or what. However, I pledge to do my part to stop the "hating" by trying to treat each person, regardless their station in life or how they came to find Uruguay, with non-judgemental dignity and respect.

Whether or not the collective decides to follow suit, I can only hope.

ciao,
fuBarrio

A Reprieve from the Freeze

Ok, it hasn't literally been freezing lately, but it has been cold and damp. Today was a very temperate 50 degrees (F) and brought some people out of hibernation. This is a shot at the end of the day of an old school fishing boat and someone getting some running in on the "rambla" -- the road and walk that lines the Rio Plata on the south side of Montevideo.

ciao,

fuBarrio

People who Save are Frickin' Idiots!

This post could also be known as "The Genius of the Collective".

I know, I know....crazy, huh? FuBarrio spends a lot of time harping on the idiotic behaviour he believe he observes in the herd mentality of people at large.

However, it's time to propose a competing argument in favor of the sheeple.

The last couple of years I've been bewildered by the willingness of consumers to overpay for nearly everything in the "other" Americas (North America). It has truly been consumerism at its most grotesque for quite some time, however, I would like to put forward the competing viewpoint that perhaps these sheeple aren't the ones lining up for the slaughter.

There is a children's tale of some fame where an ant works through the summer and a grasshopper spends its time buying "louie" bags, pedicures, and bad hair-weave jobs. Of course, in the end the grasshopper, so wishes he had wasted his youth slaving away and ferreting away those tasty scraps for the long, hard winter.

But what if the food they ant was storing had some bacteria in it and would all be rotted away by the time winter arrived?

There was a "study" done (supposedly) back in the dot-com heyday to point out the brilliance of a bunch of independently acting, not incredibly brilliant, autonomous entities. When the actions of the collective are evened out, you get a very "intelligent" behaviour, supposedly.

Since the beginning of 2006 the USDX, the dollar index, has gone from around 92 to a whisker above 80 as I type this. When you compound on top of that, that the dollar index is just an index of how easy it is the for the dollar to buy OTHER fiat currencies -- or other paper that is just being printed at will -- you get a really ugly picture.

It's a breakneck race for the bottom.

Ok, so what?

Well, the a**holes like me who saved their money, with the vain hope that i would be able to use the value received for work performed in the past (my pay from a few years ago) to purchase goods and services in the future (now and in the next few years) was incredibly naive.

So far, it has seemed to be a silent tax (to the masses anyways). Not that many people are ranting about it in wild gesticulations and maniacal tirades (with a few notable exceptions). And yet, it seems that maybe...just maybe...the North American populace isn't just a bunch of greedy, stupid, undisciplined children (who want it "NOW") :)

Perhaps, in consuming like there is no tomorrow (negative savings rate), they are voting with their wallets. Why put off what will give you 10 minutes of consumerism pleasure to hold paper that is sure to bring even less pleasure a year or two from now.

As a side note, something I haven't blogged about a lot, but one of the reasons I moved to South America. I think food inflation, especially in meat, is getting ready to take off. Feed grains are getting scarce as the developing world starts eating more and more meat. When the meat producers' hedges come off (the only thing in my opinion that has allowed soy, wheat, corn, etc prices to SOAR while keeping meat prices in check), it could get ugly fast.

It will be interesting to see if the meat prices soaring will be blamed on a weather event, ethanol subsidies, greedy oil companies, war, population growth, or irresponsible creation of cash and credit. I guess it depends on whatever sells the most advertising time.

ciao ("chow" -- food inflation is goin to get worse)
fuBarrio