Old School Hoops in Uruguay

I mentioned in a blog entry over a week ago that I was going to play some basketball with some locals and a couple of expat friends.

Club "trouville" was the location (which I'd never visited before) in the neighborhood of "Pocitos". Trouville is also the name of a restaurant/bar and another pizza restaurant in another part of town.

Finding the location was a bit challenging (turned out to be next to the restaurant of same name) as it was set back off the street and the entrance was sheilded by a construction zone.

Club trouville was an "indoor" gym, meaning that there was a roof and walls, but it was a cavernous building (unheated) and as such the ambiant temperature in the gym was just above the level where ones breath is visible.

When I arrived I was greeted by one of my expatriate friends who mentioned to me, "from what I've seen, this is going to be 'old man fundamental' basketball."

Just as well with me...since working during the weekdays my health has taken a turn for the worse, and the thought of weazing up and down the court in the cold air was a bit concerning.

Almost immediately after that some of the Uruguayos came up and introduced themselves...It turns out at least one of them was *really* old (71!) but didn't look it....We played pickup ball, full-court, by 2's to 10. It took me about 3 games to figure out that 3 pointers counted as 2 (like I said, "old school" :) )

I managed to escape thoroughly old schooled and embarrassed several times by guys almost twice my age, but without injury....It turns out at least one of the older guys was a member of the 1956 Olympics team that secured the bronze medal....Hall of Famers Bill Russell and KC Jones led the US team to the Gold that year.

I felt a little bit better after learning that. I knew I had pitiful fitness and my basketball skills (which never were much good) were really rusty, but I was beginning to think that Cocoon 3 was being filmed or something.

ciao,

fuBarrio

Montevideo, Uruguay feria

A couple of shots that I thought looked "pretty" that Golden Lotus took at the Nuevo Pocitos "ferria". Basically (if i'm spelling it right - it turns out i wasn't it's "feria"). A feria is a street market. During the week, various neighborhoods have them to sell honey, eggs, cheese, fruits and veggies....think "farmer's market".

On the weekend, the bigger ferrias have farmers markets combined with crapfest flea markets.

ciao,
fuBarrio

"Duck!"

Ok. I admit it. I'm amazed by Hollywood.

How exactly does the action movie star *know* that the faint whining in the distance is really an 18 wheeler, out of control, about to crash into the side of a lingerie store that he and his fiancee are casually shopping in.....or that the glint of light across the street on the rooftop is actually the reflection of a careless assasins rifle scope?

It seems like the first couple of times you tackled your friends and family taking them out of "harm's way" in a false alarm it would start to get *really* annoying...."oops, sorry" as you help your loved one to her feet, dust yourselves off and sheepishly try to right the wunderbra display.

Ok...with all those caveats....

"DUCK!"

I don't know how much or how well the mainstream media is reporting or explaining what is going on in the mortgage credit markets right now....so here is my 10 second synopsis:

Lots of dudes have borrowed lots of money in a leverage way.
To borrow that money they had to have "collateral".
They pledged as collateral something that doesn't trade in the open market and is hard to appropriately value.
Chances are, if the true value were known, they would have to come up with extra money for collateral that they don't have.
But, luckily, they haven't been forced to admit what the true value is because these things don't trade very often. They can continue to pretend they are solvent.
However, there is a *chance* that someone could be forced to sell SOON and admit the true value.

The result will be a wave of repricings rippling through an overleveraged market....(yeah, there really isn't anything new out there, is there?)

So, what's the chances that I'll be sheepishly helping you to your feet and straightening your clothes after another false alarm?

Who knows.

However, this is really what I've been predicting since starting the blog....a credit crunch due to malinvestment in absurdly overpriced residential real estate leads to a big-time credit crunch and/or big inflation as the powers that be try to save the market.

If the "powers that be" manage to paper over the damage, it's just a stop-gap. The bill has to be paid by someone/somewhere....and it's much to big to be done without damaging someone somewhere.....if the damn doesn't break right here, right now, i'd be VERY suprised to see us get all the way to the end of the year so all these overpaid hacks can get their ridiculous bonus packages.

It will either be taken on the chin by the private sector - the very people that have been profiting grossly from this very boom, or it will be paid for with tax dollars in an outright bailout, or in a stealthtax by the Federal Reserve printing more money for the debacle and inflating away all the wealth that you've accumulated with your hard work up until now.

Can you guess what I'm predicting? (hint: see my earlier post entitled 'privatizing benefits and socializing risk').

Isn't it Great?

Now, if only being "right" paid as well as being "smart" and just gorging oneself at the trough until they take it away.....sigh...I really didn't learn *anything* from the dot-com debacle, did I?

ciao,
fuBarrio

Under the Weather in Montevideo, Uruguay

I've made some references to the fact that it is winter(y) here. Here are a few snaps to give you a feel back in the northern hemisphere where i'm sure it's all "sunshine and strawberries" right now : )

Take a look at the two pics below. I tried to take the pic from the same location that this one below was taken to give you a "compare and contrast" from a couple of months ago....yikes.

ciao for now,

fuBarrio

BROUracracy in Uruguay

Banco de la Republica Oriental de Uruguay, better known as BROU is the big government bank here in Uruguay. If your visceral reaction to the sentence above doesn't conjure up visions of machine like efficiency you would be correct. I had the extremely eye-opening experience of going to downtown Montevideo in an attempt to open a local account here.

If you know fuBarrio's disdain for beauracracy, you might ask why he would subject himself to a banking relationship with an institution that so clearly places no value on its clients' time. Well, opening a non-resident account in many countries is difficult or next to impossible, but when trying to find local banking here I found that opening an account in Uruguay even as a resident was very difficult.

In fact on more than a couple of occasions I was told by large Northern hemisphere banks -- ABN Amro, Bank Boston, and Citi bank that they couldn't do anything for me once they found out that I held a US passport.

The more I asked around, the clearer it became that I was really limited as a US citizen to one of a few banks....Big govt sponsored Uruguayan banks, an Israeli bank (that had blown up during the currency crisis) and possibly Lloyds Bank TSB (which incidentally called and mailed docs to my apartment asking for my banking business). I'm not sure who told them:

a.) who i was
b.) i was looking for banking
c.) where i lived, and
d.) my phone number
....but it was an impressive marketing push.

In the end, for a number of ill-fated reasons, I dropped my resistance to opening an account with BROU (aka "Banco Republica").

....to be continued....

ciao for now,
fuBarrio

The Panic of '07

The news coming out of New York is that a large investment house lent their name to two hedge funds that now find themselves in trouble with losses from the subprime mortgage market derivatives. Merril Lynch (one of the creditors) is looking for blood, and Blackstone is trying to broker a peace deal between the two (at least long enough to float their IPO on the unsuspecting public)

Back to the Future

The Panic of '07, a financial crisis in the US, would also become known as the "Bankers' Panic".

In March '07, over-expansion and poor speculation led to a small crash. Money became extremely tight. A second crash occurred in October '07. The market falls nearly 50% from its '06 prices, the economy is in recession, and there are numerous runs on banks and financial institutions.

The primary cause of the crash is attributed to a retraction of easy credit terms...starting in New York with some big banks and quickly spreading across the country leading to bank and business closures.

To bring relief to the situation, the US Secretary of the Treasury earmarked Federal money to quell the storm. Complete ruin of the national economy was averted when powerful banking interests step in to meet the crisis, redirecting money between banks, securing international lines of credit, and propping up prices by buying the securities of selected institutuions.

However, this assistance doesn't come without a cost. The banking interests use their additional political influence to push a bill through congress which just failed one year prior to the panic. The new bill creates a public private partnership and institution for averting excesses in credit creation and backing financial institutions for the stated purpose of advancing stability and ensuring that a panic like '07 is never replayed.

Notice anything funny about this "prediction"?

Actually everything under the heading "back to the future" is actually about 1907...rather than 2007.

The US Congress passed the Aldrich-Vreeland Act which established the National Monetary Commission to investigate the panic and to propose legislation to regulate banking. In 1913, the commission recommended the adoption of the Federal Reserve Act, which mandated the creation of a central banking system to dampen the effects of future panics.

Yeah....uh...ever heard of the Great Depression or the "law of unintended consequences"?

Ciao for now,
fuBarrio

When Good Trades Go Bad, Part II

...continued from my previous post on this matter.

Let's review some tenants of successful speculation:

1. Let your winners run
2. Good trades almost always go right, right from the "get go"
3. Cut your losses short
4. Try to buy into identifiable trends
5. Don't have an opinion
6. Don't advertise what you are doing (opinion)
7. Don't try to make the market meet your timeframe
8. Don't buy "ahead" of identifiable patterns

I previously covered what went right (not much), and wrong with the trades I previously posted...long txm.v and long sds (an s&p double short).

I left the previous post with number "4.) Try to buy into identifiable trends"

...so to continue:

Don't have an Opinion

Ok...this is a little silly, because as you know, opinions are like a-holes...everyone has 'em...especially fubarrio. But, in this case, it mean more that you shouldn't be "wed" to an opinion. One should try to analyze what is happening with as open a mind as possible and not through a lense of what they think should be happening. This is, at times, really difficult....especially if you are an opinionated bastard like fuBarrio. In general, you have to set that aside and just react to what is happening in front of you in the market. Otherwise, you could end up being "right" but not having the financial firepower to stick with a trade long enough to see it pay off (a very common thing).

In the case of these two trades I most certainly had an opinion, and jumping in front of two movin freight trains without even looking to see if there was any identifiable short term support was just stupid. In the case of sds, I wised up the next day. In the case of txm.v I just got "lucky" in the short run (although I still think after it cups this summer it is goin to be a huge hit relative to the rest of the marekt -- there I go with opinions again)

Don't Advertise what you are Doing

I first heard this from my very suspicious girlfriend, and I just attributed it to some islander voo-doo. However, for nearly a year I had a rule that I didn't tell anyone what I did for a "living". It was the most financially successful year I've ever had. Coincidence? I don't know.

I read a variation of this same "rule" in "confessions of a stock market operator" -- the psuedo biography of one of the greatest traders of all time.

After I read it, I thought about it some more and it makes sense. If you are telling people what you are doing, it is very easy to start to lose objectivity. You will be tryin to make the market something it is not...bending it to your "will"...that will never end well (see previous rule, "don't have an opinion") You may get lucky from time to time, or if you have a huge following and you tell people to buy as you fade the bounce you might get some results (for a while). But the reality is, it's better just to shut the hell up.

I obviously failed on this "rule" during these two trades

Don't try to make the market meet your timeframe....

...or any other "needs" you have. The market doesn't care. Like the rain doesn't care if you have a baseball game that day. It's irrelevant....except insomuch as it make you do irrational things.

trying to triple my stake in a few short months forced me to loose my patience and attempt to catch the market before i objectively saw that the trade was setup and ready.

another "F"

Don't buy Ahead of Identifiable Patterns

Seeing a technical pattern before it has formed is all well and good. However, if you are looking for higher success rates, not jumping the gun on those trades will do you well...In other words, buy the "break out", not the setup for the breakout.

Why?

Because the real buying activity only happens after there is confirmation in the breakout. Self-fulfilling prophecy? Perhaps. But in short-term trading we aren't looking for logic and reason so much as more predictable profits or "positive expectation"

Grade? "F" again.

As you can see, I've left my ineptitude open for the world to see in this post. That said I still think both will return 20%+ year over year (especially if taken together to guard against a market meltdown of somekind). However, the market can stay "irrational" longer than you can stay liquid....

*If* the market can continue the trend a little later into summer (really questionable at this point) I'll be looking for a turn to enter both of these trades in weight LATE in the summer with the hopes that fall/winter could be a good time to be in both. If the s&p rolls over in june or early july, i'll let you know what i plan to do then.

ciao for now,

fuBarrio

Mulletudes in Montevideo

I previously blogged about the unusually unfettered mullet population roaming freely on the streets of Montevideo.....while it may seem odd that a bald dog is commenting on anyone's hairstyle, it is merely my effort to inform with "paws on the ground". in case you've been in suspended animation the last 8 years, this will explain what a mullet is: www.mulletsgalore.com

In the states (when I left) the mullet seemed relegated to three main categories:

1. "old school" butt rockers trying to hang on to the 80's (see "dog the bounty hunter")
2. lesbians, and
3. female co-eds from Japan.

Here, however, it seems pretty mainstream. While at the mall, I snapped off some "unauthorized" pics, that in retrospect seems a little mean. I'm not trying to "make fun", but merely enlighten my three readers as to what the "scene" is here in Montevideo....So with that in mind, I'm now on GL's computer so I can retrieve completely authorized fotos GL took earlier this year.

Ok...granted the pic here of a dude is with more of a faux-hawk, mad-max redux than a classic mullet...so i'll have to work to get some "authorized" straightup mullet....just trust me...they are quite common.

In general, she would walk up to people and explain that she loved their hair and wanted to get a picture of it....clearly this is easier to do for Golden Lotus than a bald dog with an attitude problem.

ciao for now,

fuBarrio

When good trades go bad....

...or when "bad trades go worse".

well, even though i moved a signficant portion of my trading portfolio to cash, i left on a trade from my "house hunting days" and got "stopped out"....forced to take a loss after a 10% loss on the trade.

to refresh your memory, i put 10% of my "house" fund in sds (something that moves in reverse of the s&p only two times faster) and 10% in txm.v with a "stop" that would force a sale in the event that i lost 10% in either investment...meaning, the most i could lose in the house fund through either investment was 1% of the total....i left the rest in cash since the rest of the trades that looked good to me felt like "picking up nickels in front of steam rollers" (high risk/low return)

I ended up selling both of these trades for a loss. So, in the hopes of getting something positive out of the experience, i'll share what i did wrong (and right) on both of these trades in a hope of helping someone avoid the same fate. ironically, neither of these trades really met any of the criteria which i've been espousing on this very blog for nearly a year...and there is a reason for that, which i will explain as well. To review, here are some of the things that I've been saying on this blog about trading, and also some things I haven't but try (often unsuccessfully) to adhere to:

1. Let your winners run
2. Good trades almost always go right, right from the "get go"
3. Cut your losses short
4. Try to buy into identifiable trends
5. Don't have an opinion
6. Don't advertise what you are doing (opinion)
7. Don't try to make the market meet your timeframe
8. Don't buy "ahead" of identifiable patterns

Good trades almost always go right, right from the "get go"

the next day, i believe, i posted that *both* of these trades were really ill-advised based on how and why i entered them and i already had "buyers remorse" -- on the sds i bailed that day not waiting to hit the stop, taking a loss of about 1% on the trade (1/10 of 1% on the fund). On the txm.v i figured it was "in the black" and i just let it "run"

Let your winners run

trading advice...like most advice is full of contradictions. "No one ever went broke taking a profit", "pigs get fat and hogs get slaughtered" and the advice of a rich man getting rich by "sellin too early" all seem to indicate that taking money off the table when "up" is how to acheive trading results.

However, "let your winners run" is also one of the most oft-advised strategies for trading. The key here, i imagine is to have some fixed rules with a "little bit" of flexibility (more contradictions!) it's important to note though that most traders make most of their money off a couple of trades that they gave a lot of time to "mature" into great trades....in fact, they are often times more often wrong than right, but they let their winners run...and....

Cut your Losses short

The flip side of "let your winners run" is to "cut your losses short". The often (ill in my opinion) advised "martingale strategy" (or some hybrid of said strategy) to to double down on a loss until you break even. Other variants of this include "dollar cost averaging", reducing your average cost of ownership by buying as the price falls.

I used to be one of the biggest proponents of this.....and, let's face it, in the 90's, in technology, this (along with almost ANY strategy) would work. But, when trading, weakness (especially relative weakness) in a security is really not a sign of anything other than your initial buy was WRONG.

Being wrong is not a sin. Not admitting you are wrong and hangin long enough to wipe out all your gains, is.

Try to buy into identifiable Trends

Everyone thinks they are or wants to be a contrarian thinker/trader. No one wants to think of themselves as one of the sheeple...myself included. Fact is, however, the easiest/safest money is just trading with the trend. "The trend is your friend" didn't just become a famous saying because it rhymes...although that helped! :)

On this I failed miserably. I bought sds in a huge downdraft (an insane s&p uptrend that had yet to break) and txm.v had fallen off a table and broken through any identifiable support.

...this post will be "continued" later today after i donate a lung playing some hoops with the locals.

ciao,
fuBarrio

fuBarrio's great BIG dreams for Uruguay

The more time I spend in Uruguay, the more I start to think of it as "home". It is afterall where GL is, where I lay my head on a daily basis, where I spend my productive hours working (now) and where I am pursuing legal/permanent residency.

When I first came to Uruguay it was a lot easier.

I wasn't working and had no plans on starting "work" (outside of trading). I was still in "tourist" mode where if I got tired of things here I would just extricate myself at a moment's notice and put Uruguay in my rearview mirror....lots of other places to check out before I got thrown off the big blue ball.

Now, in some ways, it's not so easy.

As an "immigrant" to Uruguay, I felt that I owed a duty to my new country to try to make things easier for them -- without necessarily trying to "change" things dramatically. I toyed with a lot of ideas (including volunteering to teach business English), but what I kept hearing over and over again was that they wanted/needed above all, were economic opportunities for young people.

No problem, right?

Well....even someone as arrogant as fuBarrio doesn't really imagine that he is the missing spice that is going to turn a small, relatively beauracratic, ranching/vacation destination into a global financial powerhouse. Uruguay needs some good ideas...a lot of energy....a lot of time...a lot of help, and a lot of luck.

I heard a lot of ideas for how Uruguay would become the next nexus of "call centers", "software outsourcing", "medical outsourcing" (insert US globalization victim du jour), but none of them really sounded right to me.

Granted, there are some small software outfits that operate in small niches...and there is at least one big player operating a call center out of "zona america" (a tax-free zone operating on the outskirts of MVD)....but what, other than waiting for the chinese and indian consumption patterns on meat to drive the prices of uruguay's cattle into the stratosphere did Uruguay have that wasn't so easily reproduced elsewhere? (note: the meat price inflation is no small deal and will have a profound effect here i believe...but, i'm not a rancher.....in general don't eat cows....and they don't need me for this. it is inevitable)

What does Uruguay have?

In spite of their obnoxious beauracracy, which makes starting a small business here unattractive for a newcomer they have a few really nice things:

1.) a liberal immigration policy (people are makin businesses out of bringing immigrants/expats here and providing them services). however, that isn't really my bag....too much like a "newbie shark" for my tastes. despite my involvement with http://www.uruguayliving.com/, that organization doesn't make any money...nor does it really charge for anything i'm aware of....it's just a service to help expats, immigrants, and visitors to network.

2.) good property ownership laws for foreigners. This makes it attractive for foreigners of all stripes to come to Uruguay and purchase a ranch or vacation property on the coast without fear of having their property "repatriated". I think a decent living could be made moving realestate to foreigners. This felt a little too http://www.internationalliving.com/ to me though (the online outfit that helps people become expats, but business model seems to be predicated on conferences where they pump new realestate developments to foreigners (for a cut of the sales i suspect)...see number 1 above, where i discuss "newbie sharking".

3.) Good banking secrecy laws. This seemed the most interesting to me. I had the dream of coming to Uruguay and helping people (from elsewhere) get set up with offshore companies (if needed) and offshore bank accounts for transacting business where repatriating dollars (or Euros or loonies or whatever) didn't make sense from a taxation standpoint.

Of course, once I got here and realized:

1.) how beauracratic this place was
2.) how hard opening a simple bank account was for an American for any bank in Uruguay that had a US affiliate bank,

I got discouraged. Then, I met some guys working on the same challenge.

What I spend my days doing

It so happens that the people who organized UruguayLiving and the online forum (English) dedicated to all things expat/immigrant uruguay ( http://www.sociedadsouthron.net/ ) moved to Uruguay specifically because of the banking secrecy laws....well that, and it's a nice place to live.

They started a "Treasury Company", Capital Conservator, as an offshore banking alternative. The unique structure helps them tackle the challenges of the immense beauracracy in Uruguay and the Uruguayan banking system, while enjoying the advantages of the banking secrecy. Our location in Uruguay, allows them to avoid the scrutiny and hassle that dealing through a bank from a recognized offshore financial center (like the bahamas) puts one through in the post 9/11 - Patriot Act - world.

While they had a small number of "high value" clients, they wanted to grow their business and brought me on to streamline the application process ( https://www.capitalconservator.com/form/step-start.php ) automate the banking transactions/secure messaging with clients, and "get the word out" :)

Working to get the first part of our project out to the public has made me feel closer to the ranching community....it's been at little bit like birthing a calf...or "herding cats" is perhaps more apt.

I've been working with collaberators, coworkers, and vendors in 6 separate time-zones...which of course got more confusing when the southern hemisphere moved the opposite direction of the northern hemisphere...and the northern hemisphere decided to change at different times :)

So what's the BIG dream for Uruguay?

We really feel like Uruguay has the chance to become the "Switzerland of South America". Of course, I realize the gravity of this endeavour will require decades of effort (at least). Meanwhile, fuBarrio has a birthday rapidly approaching (266 in dog years), and I realize it will likely be men after me that make the final push towards creating a recognized financial center out of this small ranching enclave. However, I will take solace in the fact that a played my small, insignificant role in bringing Uruguay just a little bit closer to being able to provide jobs for its educated and motivated youth.

ciao for now,
fuBarrio

"all work and no play...."

So, I've been working a lot lately....and frankly when you are working as much as I have been you don't have:

1. a whole lot of cool pics to put in your blog
2. a whole lot of interesting things to write about in your blog, or
3. a whole lot of new thought to express in your blog :)

As it gets more "winter-like" the days are getting shorter here....I think we are about a week away of hitting the equinox and enjoying some longer days.....I tend to leave for the office around 9, so it's usually light outside on the way to the office....but my evening commute usually looks a little bit like this:

Tonight, Golden Lotus would like for us to check out a new "fusion" restaurant in our neighborhood....fusion is an entirely new concept in montevideo...you'll still find very well educated/travelled baby boomers who've never had indian food, for instance.

I'll give you a review tomorrow, and luck and camera batteries permitting, a couple of photos.

ciao,

fuBarrio

"Mulling" things over in Montevideo

Granted, I may be a little "out of step" with the times...to wit:

1.) i am old
2.) i've been in south america for the last year

However, after about 6 years of calling for a full-fledged mullet revival in the US, it seems that South America is in the lead.

Why call for a mullet revival? (p.s. in case you have been living in a cave this is what a mullet is: www.mulletsgalore.com)

Well...it was mostly based on the cyclicality of fashion....i figured it was so out it was bound to be in again soon....and the youngsters who would bring it back never lived through the horror of it all the first time around.

i saw the early stages...the re-emergence of punk-wear immediatly preceding the evolution of the mullet in the late 70's and then early 80's (genesis of the 'bi-level'/mullet)....however, i never really saw the mullets being kicked hard until i got down here.

I've even managed to capture a few of these mullets on film! ..but you'll have to wait until i can get a couple of them from GL's computer....and a couple of friends' cameras.

Bein curious, i asked a few people....what's up with all the "canadian passports" and "soccer cuts"? Is the revival early in South America? I got the answer, "dude, it never left!" .....the bizarre thing is that this is not just relegated to guys working on hemi's named the spanish equivalent of "cletus" in the interior....fashionable, young ladies....otherwise perfectly put together will sport some pretty crazy mullets down here.

When i get back to the states I wonder if I'll see the same thing anywhere outside of the "Castro" in San Francisco (?)

ciao,
fuBarrio

...and even more pics of MVD

More MVD pics

foggy a.m.'s and crisp p.m.'s

rambla in a.m. and buceo at dusk.

Some more pictures of Montevideo

Some Pics!!!

I went to our local version of "walmart" (Geant) here in Montevideo to look at washers and dryers.

I snapped some shots of the trip out the window during the trip. These aren't the best pics because of the conditions (moving car) in which they were taken, but i've selected the best of the worst for your viewing pleasure. Enjoy.