Saturday, December 31, 2011

Sticky Tape X-rays!

How weird is that?  Sticky tape emits light - and X-rays - as it unpeels.  Researchers at UCLA have shown that simply peeling ordinary sticky tape in a vacuum can generate enough X-rays to take an image of a finger. "At one point we were a little bit scared," says Juan Escobar, a member of the research team.  But he and his co-workers soon realized that the X-rays were only emitted in a vacuum. "We don't want to scare people from using Scotch tape in everyday life," Escobar adds. This kind of energy release - known as triboluminescence and seen in the form of light - occurs whenever a solid (often a crystal) is crushed, rubbed or scratched. It is a long-known, if somewhat mysterious, phenomenon, first seen by Francis Bacon in 1605. He noticed that scratching a lump of sugar caused it to give off light. The leading explanation posits that when a crystal is crushed or split, the process separates opposite charges. When these charges are neutralized, they release a burst of energy in the form of light. As long ago as 1953, a team of scientists based in Russia suggested that peeling sticky tape produced X-rays. But "we were skeptical" says Escobar. His team decided to look into the phenomenon, and found that X-rays were indeed given off, in high-energy pulses. When the researchers placed a small plastic window in their vacuum chamber, they were even able to take an X-ray image of a finger, using a dental X-ray film. Their results are published in Nature1. "Of the total electron discharges, only one in ten thousand emits X-rays," says Escobar. The energies of the individual X-ray pulses, typically a few nanoseconds long, are about 15 kiloelectron volts. The energy of the X-rays is directly related to the amount of charge that builds up at the surface of the tape as it is peeled. "We are not exactly sure why the tape is so heavily charged," Escobar says. The sticky-tape X-ray is also baffling others in the field. "You wouldn't have thought that so much of the mechanical energy would come out as X-rays," says Ken Suslick, an expert in mechanoluminescence at the University of Illinois. "The adhesive on the tape is an amorphous liquid, not crystalline. What's causing the transfer of charge, of electrons or protons, what the accepting and donor groups are - these things are unclear." The researchers suggest that the high charge density generated by peeling the tape could be great enough to trigger nuclear fusion. Michael Loughlin, a nuclear analyst at the international nuclear fusion experiment, ITER, in Cadarache, France, is skeptical. But he adds that if he is proven wrong, a system that could provide fusion reactions at the flick of a switch would be very useful.  Suslick now intends to revisit mechanoluminescent systems he has worked on in his lab.  Meanwhile, Escobar and his colleagues plan to look at different types of adhesive to see whether they get the same effect. But the biggest challenge will be to figure out exactly how it works, Escobar says. "That's first on our list."  (From an article by Katharine Sanderson at Nature.com)

Friday, December 30, 2011

Understanding Repos, Part 2

In the US, repurchase agreements or "repos" were used as early as 1917 when war time taxes made older forms of lending less attractive.  At first repos were used only by the Federal Reserve to lend to other banks, but the practice soon spread to other market participants.  The use of repos expanded in the 1920s, fell off through the Great Depression and WWII, then expanded again in the 1950s, enjoying particularly rapid growth in the 1970s and 80s due in large part to computer technology.  Although classic repos are credit-risk mitigated instruments, there are residual credit risks.  Though essentially a collateralized transaction, the repo seller (borrower) may default by failing to repurchase the securities at the maturity date.  The buyer (the lender or investor) then is stuck with the security, and has to liquidate it in order to recover the cash lent. The security, however, may have lost value in the mean time due to market movements.  To mitigate this risk, repos often are over-collateralized as well as being subject to daily mark-to-market margining (ie. if the collateral decreases in value, a margin call is triggered demanding the borrower post more securities).  Conversely, if the value of the security rises there is a credit risk for the seller (borrower) in that the creditor may not sell them back.  If this is considered to be a risk at the outset, the borrower may negotiate a repo which is under-collateralized.  Credit risk associated with a repo is thus subject to many factors: term of repo, liquidity of security, the strength of the counterparties involved, etc.  If a party involved in a repo transaction does not have specific securities at the end of a repo contract, this may cause a cascading string of failures from one party to the next, for as long as different parties have transacted for the same underlying instrument.  In 2008, attention was drawn to a form of repo known as "repo 105" following the Lehman Brothers collapse, as it was alleged that repo 105s had been used as an accounting trick to hide Lehman's worsening financial health.  Another controversial form of repurchase order is the "internal repo".  In 2011 it has been speculated, though not proven, that internal repos used to finance risky trades in sovereign European bonds may have been the mechanism by which MF Global lost client funds prior to its bankruptcy in October 2011.  Previous to that, concerns arose among bankers and the financial press that if the 2011 U.S. debt ceiling crisis led to a default it could cause considerable disruption to the repo market. This is because U.S. Treasury bonds are the most commonly used collateral within the U.S. repo market, and a default would downgrade the value of Treasuries - resulting in repo borrowers having to post far more collateral.  The U.S. Federal Reserve and the European Repo Council both try to estimate the size of their respective repo markets.  At the end of 2004, the U.S. repo market reached $5 trillion.  The European repo market reached €6.4 trillion by the end of 2006.  Especially in the US and to a lesser degree in Europe, the repo market contracted in 2008 as a result of the financial crisis.  But by mid 2010 the market had largely recovered and at least in Europe had grown to exceed its pre-crisis peak.  Other countries including Chile, India, Japan, Mexico, Hungary, Russia, China, and Taiwan, have their own repo markets, and no global survey or report has been compiled. (Wikipedia)

Thursday, December 29, 2011

Understanding "Repos", Part 1


Funny, Spiky and Eccentric?
A repurchase agreement - also known as an "RP"or "repo" - is the sale of securities combined with an agreement by the seller to buy them back at a later date.  The subsequent repurchase price being greater than the sale price, the difference represents interest or "repo rate".  The party that buys the securities is effectively a lender.  The seller is effectively a borrower, using their security as collateral for a cash loan at a rate of interest. A repo is therefore equivalent to a secured cash transaction combined with a forward contract, two legal instruments combined in one product for ease of use.  The cash transaction results in a transfer of money to the seller in exchange for legal transfer of the security to the buyer, while the forward contract ensures repayment of the loan to the buyer and return of the collateral of the seller.  The difference between the forward price and the spot (current) price is effectively the interest on the loan, while the settlement date of the forward contract is the maturity date of the loan. A repo is thus economically similar to a secured loan, with the buyer (the lender or investor) receiving securities as collateral to protect him against default by the seller (the borrower).  Highly liquid securities are preferred as they are more easily disposed of in the event of a default and, more importantly, they can be easily obtained in the open market.  Unlike a secured loan, however, legal title to the securities actually passes from the borrower (seller) to the lender (buyer).  Coupons (interest payable to the owner of the securities) falling due during the period the repo buyer owns the securities are, in fact, usually passed directly on to the repo seller.  This might seem counterintuitive, as the legal ownership of the collateral rests with the buyer during the repo agreement.  (The agreement might instead provide that the buyer receives the coupon, with the cash payable on repurchase being adjusted to compensate, though this is atypical.)  Although the transaction is similar to a loan, and its economic effect is similar to a loan, the terminology differs from that applying to loans because the seller legally repurchases the securities from the buyer at the end of the loan term.  However a key aspect of repos is that they are legally recognised as a single transaction (important in the event of counterparty insolvency) and not as a disposal and repurchase for tax purposes.  Repurchase agreements when transacted by the Federal Open Market Committee of the Federal Reserve (the "Fed") adds reserves to the banking system and then after a specified period of time withdraws them; reverse repos initially drain reserves and later add them back.  This tool can also be used to stabilize interest rates.  Under a repurchase agreement, the Fed buys securities from a primary dealer who agrees to buy them back, typically within one to seven days; a reverse repo is the opposite.  (Thus the Fed describes these transactions from the counterparty's viewpoint rather than from their own viewpoint.)  If the Federal Reserve is one of the transacting parties, it is called a "system repo", but if they are trading on behalf of a customer (eg. a foreign central bank) it is called a "customer repo".  Until 2003 the Fed did not use the term "reverse repo" - which implied that it was borrowing money (counter to its charter) - but used the term "matched sale" instead. (Wikipedia)

Wednesday, December 28, 2011

Re-Gifting

With all kinds of opportunities over the several weeks of this festive season to give (and get), we are all presented with at least one potential situation for re-presenting a present, ie. "re-gifting".  Ah, yes ... re-pack that schmaltzy sweater, re-wrap that soppy CD, re-box those uggly Uggs, and re-gift them to someone less, shall we say, discerning.  We all do it, and you're a prevaricator if you say you don't.  It's okay.  Re-gifting is actually a form of recycling if you think about it.  Recycling - that's good isn't it?  Of course it is!  So herewith, in the spirit of the season, are the 12 Rules of Re-Gifting (by MP Dunleavey of MSN Money):
1. Make sure you take out the previous gift card. (Duh!)
2. Don't mention the re-gift to anyone.
3. Use new wrapping paper.
4. Don't give hand-me-downs as regifts.  Regifts should be new and unused.
5. Keep track of who gives you a potential regift so you don't give it back to them.
6. Don't EVER regift candles, soap, random books, mysterious CDs, obscure software, cheesy jewelry, scarves, fruitcake, pens, picture frames, cologne, boxed sets of extinct bath products, videos, DVDs, socks, or obsolete small appliances. (Are you kidding?  What's left?)
7. Make sure your regift is clean.
8. Regifts can be funny, but make the prank crystal clear.
9. Don't give something you've owned for a while - the recipient may have seen it in your house.
10. Regifting champagne - or a bottle of any liquor - is just fine (unless it's really cheap or given to a confirmed abstainer).  Eventually every bottle will find a happy home.
11. Don't give products from defunct companies as the age of the regift is immediately obvious.
12. Sell your gifts on eBay or Kijiji instead of re-gifting them if you want. Everyone does it.

Tuesday, December 27, 2011

My Seven Predictions For 2012

1. Obama will win re-election, the result of an uninspiring Republican candidacy and government gridlock.
2. The Iranian government will be overthrown by its own people, but not until it scares the bejesus out of the rest of us.
3. The Euro currency will survive but without Germany, which will revert to the Deutschmark after Merkel loses the next election big-time.
4. As a result of the confirmed sighting of the Higgs boson "God particle", and the discovery of a planet able to sustain life, physics will be front page news.
5. There will be hostilities between China and India.
6. The Australian dollar will become the strongest currency in the world.
7. Non-muslims will flee Europe for North America in droves.

Monday, December 26, 2011

Foxes, Boxes, Leftovers, and Shopping

"Boxing Day is a bank or public holiday that occurs on December 26, or the first or second weekday after Christmas Day, depending on national or regional laws. It is observed in Australia, Canada, New Zealand, Great Britain, some other Commonwealth nations, and across most of the Province of Ulster (Northern Ireland). It is also called Day of Goodwill (South Africa) and St. Stephen's Day or the Day of the Wren in most of the Republic of Ireland. In some European countries it is celebrated as the Second Christmas Day. The exact etymology of the term "boxing" is unclear and there are several competing theories, none of which is definitive. The tradition has long included giving money and other gifts to those who were needy and in service positions. The European tradition has been dated to the Middle Ages, but the exact origin is unknown and there are some claims that it goes back to the late Roman/early Christian era; metal boxes placed outside churches were used to collect special offerings tied to the Feast of Saint Stephen. In the UK, it was a custom for tradesmen to collect "Christmas boxes" of money or presents on the first weekday after Christmas as thanks for good service throughout the year. This is mentioned in Samuel Pepys' diary entry for 19 December 1663. This custom is linked to an older English tradition: in exchange for ensuring that wealthy landowners' Christmases ran smoothly, their servants were allowed to take the 26th off to visit their families. The employers gave each servant a box containing gifts and bonuses (and sometimes leftover food). Boxing Day is a popular day in the U.K. and U.S. for mounted fox hunters. Despite fox hunting being banned by the Hunting Act of 2004, Boxing Day remains the biggest hunt of the year for most hunts in the UK by use of scent drag trails instead of live quarry." (Wikipedia)  In fact, Boxing day is a popular day for sporting events of all kinds against local rivals in many countries around the world - including the pugilistic arts (boxing) in southern Europe.  All in all, Boxing Day is a happy custom threatened only - and everywhere - by the modern emergence of that most popular pastime, shopping.

Sunday, December 25, 2011

Saturday, December 24, 2011

Medical Essays and Observations, Vol. V, Part 1

Almost 300 years old.
"... Revised and Published by A Society in Edinburgh ... Printed by T.W. and T. Ruddimans ... M.DCC.XLII" (1742) is probably my favourite antique book.  That's right, it was published the same year that George Frederick Handel's Messiah was performed for the first time ever (in Dublin, no less), and Benjamin Franklin invented the Franklin Stove.  Originally "For Tony", it was given by him to my mother, and then by her to me on Christmas 1987.  The Preface: "A Society being formed in this Place for the Improvement of Natural Knowledge, in which all the Branches of Medicine are included; and the Members of our Society being adopted into this new one, the Design of publishing more Volumes of Medical Papers was dropt some Time ago.  It is now at the Desire of the Gentlemen of this new Society that we cause this fifth Volume to be printed, which is so much enlarged by the Papers which they generously furnished us from their Repository, that we are obliged to divide it into two Parts.  The first of these, containing the Register of the Weather, Account of epidemical Diseases, Papers on the Materia Medica, Chemie, Anatomy, Animal O Economy and Surgery, is now in your Hands, Hands thro' the Impatience of the Booksellers, who would not delay the Publication of this Part till the second, containing the Papers on the Theory and Practice of Medicine, the Improvements made elsewhere, List of Books published, and Nouvelles Literaires, was also printed, tho' it is ready for the Press."  And so on.  My favourite article?  "XXIX. Artificial Passages for natural Liquors, by Alexander Monro P.A. p.403". 

Thursday, December 22, 2011

The Claresholm Slaughter

It's been a week now since the early morning slaughter of three young people and maiming of another - followed by the equally young shooter's own suicide - on a cold stretch of highway north of Claresholm, Alberta.  The shock and tragedy of it all is still almost incomprehensible.  All four families of the deceased deserve our heartfelt sympathy and support, as does the plucky lone survivior.  It's pretty obvious now that two of the deceased and the wounded survivor were "in the wrong place at the wrong time".  That's disturbing enough for all of us who have socially-active young people because there's no way to protect them from random acts of violence such as this.  It was a hideous twist of fate for them - no more, no less.  That doesn't make it any easier on their bereaved families, but that is the cold, hard truth.  The "domestic dispute"on the other hand (as we sanitize what was obviously a premeditated murder hours after a jealous confrontation) is where we need to dig deeper to try to understand this tragedy.  There apparently were signs that the shooter was coming unglued both that day and in the weeks preceding; the requests that his friends spy on his girlfriend when he was away, the pushes and shoves on several occasions, the verbal threat and physical confrontation earlier in the evening.  (Physical abuse of any kind should be a red flag to us all, people.)  Someone should have said something to somebody.  As for the availability of firearms, I believe he would have found a way to kill whether or not he legally owned four guns - but it certainly made the carnage worse.  Still, someone had to load those guns and pull the trigger.  So what was wrong with this young man?  There are those who point to his "failure" as a young Mormon.  Sadly, that may be part of it - but there were other factors.  Friends say - without using the term - that Derek Jensen was a "pleaser", who could fix anything and would "give you the shirt off his back".  Laudable qualities.  Who wouldn't want a friend like that?  I look at the picture of him over and over again.  I think I see things in his eyes, his face, his posture.  But that's all retrospective bunk.  My conclusion?  Some of us live to please others - but what happens if our efforts are rejected by our church, our girlfriend, others in our life?  This was a young man who needed help.  Somebody should have said something to somebody.  My heart goes out to all.

Just Say No To Rugs!

Bearded is more "rugged".
(... to paraphrase a former First Lady.)  I've always been completely baffled by men so vain that they resort to wearing a toupee. Now, thank Buddha, the rug is going the way of the dinosaur.  But for those who don't know its ugly history:  "Toupée is related to the French words for "top" or "tuft"; as the curl or lock of hair at the top of the head, not necessarily relating to covering baldness. While wigs have a very long and somewhat traceable history, the origin of the toupée is more difficult to define. The earliest known example was found in a tomb near the ancient Predynastic capital of Egypt, Hierakonpolis. The tomb and its contents date to c.3200 BC. At least two ancient Greek statues of men wearing toupées survive today. Julius Caesar is known to have worn one in dismay at his pattern baldness.  He tried both wearing a toupée, and shaving his head. Some state that he wore his trademark ceremonial wreath to disguise his shrinking hairline. Roman men of the era were also known to paint their bald heads to appear to have hair. Key to the modern promotion and acceptance of toupées was improved hairpiece craftsmanship pioneered by Max Factor, the supplier of choice for most Hollywood actors. Toupée and wig manufacture is no longer centered in the U.S., but in Asia. Researchers at both the Daiwa Institute and Nomura Research – two key Japanese economic research institutes – conclude that there is "no sign of a recovery" for the toupée industry. There are at least four charities that specialize in providing hairpieces for children that have lost hair due to chemotherapy, medical condition or head injury." (Wikipedia)  So there you have it, the demise (hopefully) of an ugly male accoutrement.

Wednesday, December 21, 2011

Routine Failure

No, I'm not talking here about failing on a routine basis, ie. routine failure, but rather the failure of a routine, ie. routine failure.  My routine, to be exact.  I like my routine just the way it is.  Interruptions to my routine are unwelcome - unless, of course, it's an old friend calling or my wife ... well, let's not go there.  In particular, I hate computer glitches, ISP interruptions, telemarketers, shopping trips, and missing a day in the stock market (especially when any of the former make me miss the latter).  My day-trading, blogging, reading, resting, projects, male-bonding, Friday nights out, and dozens of other weekly events are all intricately woven into my routine.  I have become a creature of habit.  I have made order out of the chaos in my universe.  On the other hand, I strangely don't mind a power outage, a complete blackout during a storm.  Being humbled by nature.  So maybe it's just that I don't mind routine failure due to disturbances that I think are either worthwhile or beyond human control - I just don't like routine failure caused by frivolity. Yes, that's it. Thanks for helping me work that out.

Tuesday, December 20, 2011

Falkland Islands Redux

The Falkland Islands sovereignty question is about to heat up again early in 2012, so who has the better claim? OH2 let's you decide for yourself:
1690: The British land on the islands and name them after the 5th Viscount of Falkland.
1764: France founds the first settlement, Port Louis in East Falkland.
1765: Capt. Byron claims the group for Britain.
1766: Spain claims the islands under the 1713 Treaty of Utrecht. France leaves, Britain doesn't.
1770: The Spanish expel the British colony at Port Egmont on Saunders Island, but a treaty in 1771 allows them to return, with neither side relinquishing sovereignty.
1774: Economic pressures leading up to the American Revolutionary War force Britain to withdraw, with a plaque asserting British sovereignty left behind.
1811: The islands are abandoned by the Spanish settlers, in turn leaving a plaque asserting Spanish sovereignty.
1816: The future Argentina declares its independence from Spain. Britain and the US do not recognize the territory claimed by the new state which calls itself the United Provinces of the River Plate.
1820: American privateer David Jewett takes refuge in Puerto Soledad. On November 6, he claims the islands for the UPRP.
1823: Argentina grants some land on East Falkland to Luis Vernet, who fails with his first expedition.
1826: Vernet's second attempt, sanctioned by the British this time, also fails.
1828: Luis Vernet again approaches the British for permission to build a settlement at the former Puerto Soledad, under British protection. Approved, Vernet provides regular reports to the British. The Argentine government meanwhile grants Vernet all of East Falkland, including its resources. He takes settlers (including British Capt. Matthew Brisbane as his deputy) and before leaving once again seeks British permission.
1829: The Argentine government appoints Vernet governor, to which the British object, and protest again when Vernet announces his intentions to exercise exclusive rights over fishing and sealing. Similar protests are received from the U.S. One of Vernet's first acts is to curb seal hunting. The British consul protests and restates Britain's claim. Vernet seizes the American ship Harriet for breaking his restrictions, and sends the captain to Buenos Aires to stand trial. The American Consul protests, again states the U.S. objection to Argentine sovereignty, and dispatches the USS Lexington to Puerto Luis to retake the confiscated property. Vernet returns to Buenos Aires before the Lexington's attack and resigns as governor. Upon leaving the islands, the captain of the Lexington declares them to be res nullius (the property of no one).
1831: The raid of the USS Lexington and Argentine assertions of sovereignty spur the British to establish a military presence on the islands.
1832: Governor Francisco Mestivier is appointed by Argentina, again drawing protests from the British. The Argentine ship Sarandí, commanded by José Pinedo, begins to patrol the islands. Mestivier is murdered by mutineers while Pinedo is at sea.
1833: On 2 January, Capt. James Onslow arrives at Port Luis and tells the Argentine administration to leave. Pinedo protests but departs without a fight on 5 January. The islands continue under a British presence until the 1982 Falklands War.
1945: Argentina pushes its case in the UN. The UK offers to take the dispute to the International Court of Justice in the Hague three times (1947, 1948 and 1955); on each occasion Argentina declines.
1964: The United Nations passes a resolution calling for negotiations, which take place over the next 17 years but fail to reach a conclusion on sovereignty.
1976: The British Government commissions a study on the ability of the Islands to sustain themselves, led by Lord Shackleton, son of the Antarctic explorer Ernest Shackleton. Argentina refuses to allow Shackleton to travel to the Islands, severs diplomatic links with the UK, and an Argentine naval vessel later fires on the ship carrying Shackleton as he visits his father's grave in South Georgia.
1978: Completion of a permanent runway by the British. Although sovereignty discussions enhance economic and transport links, there is no progress on the question of sovereignty. Any measure that the British Foreign Office suggests on the sovereignty issue is loudly condemned by the Islanders, who re-iterate their determination to remain British. This leads to the British Government maintaining that the right to self-determination of the Islanders is paramount.

Monday, December 19, 2011

Social Media Faux Pas

Two days in a row now, we've been taken aback by social media faux pas.  On Thursday, about 3 am, four young people were tragically gunned down just north of Claresholm on Highway #2, an unspeakably evil act.  As we were travelling to Calgary that afternoon, twelve hours later, I thought that the easiest way to get up-to-the-minute details on the highway closure would be on Twitter - the AMA being notoriously slow to update their road reports.  I "follow" about seventy news sources all day long on Twitter, and occasionally broadcast my own inspirational "tweets" to all two dozen "followers" of mine, so I'm used to it as a quasi-dependable ultra-fast news source - everything gleaned thereupon taken with a large grain of salt however.  Sure enough there was a "hashtag" (#Claresholm) established where locals were providing the latest info on the tragedy, so I hung about waiting for someone to indicate the status of the highway.  A seemingly decent young lady (you never really know, I suppose) tweeted the question about the highway being open before I could, so I awaited a response - which fifteen minutes later had still not come.  Undeterred, I tweeted "Can anybody tell me if the highway through Claresholm is open yet?"  Almost instantly I was attacked thusly: "Four people won't be spending Christmas with their families this year, show some respect!"  Ouch!  To which I responded: "I just asked a simple question".  No response followed.  You see, my mistake was in treating Twitter as a news source when in fact the vast majority of people treat it as person-to-person shout-out to their close circle of friends.  Nevertheless, I felt bad that I had offended someone.  That feeling lasted about 10 minutes - until I read the profile and recent tweets of my attacker (apparently his "carpet smells like a Motley Crue concert").  Lovely.

Sunday, December 18, 2011

Why We Have Guns Out Here

People in the city often are ignorant of the need for firearms out here on the Eastern Slopes of the Rocky Mountains.  2011 was unusual for us because it is the first full year in memory that we have not seen bears in our backyard, although we did have one pile of droppings early in the summer so we know they're around.  Consider this story dated Sept. 20, 2010:  "These two gentlemen were calling elk in the Saddle Hills south of Woking, Alberta, when this big grizzly slipped in on the caller. The shooter spotted the bear about 8 yards from the caller, and dropped him with 5 shots from his .338 Winchester Magnum.  Farmers in the area knew about the bear but weren’t able to track it, even after it had killed 3 horses, 5 cows, 13 sheep, and a pen full of chickens on several different homesteads in the area.  Fish and Wildlife officers had bear traps set up in the area but noticed on surveillance videos that whenever he would enter a trap, his hump would hit the top of the culvert, slowing him enough that the trap door would whack him on the head before he was all the way in.  This bear weighed in just under 1300 pounds, and would have stood almost 12 feet tall on its hind legs."  A bear that kills horses, and too big for a bear trap!  The picture shows his "island-sized" paw.

Saturday, December 17, 2011

Merry Christmas to You Too!

From John Ivison of The National Post:  "Like fighting in hockey, hearing politicians swear in public almost makes it worth sitting through all those boring questions about Kyoto and F35 fighter jets, with nary an answer at the end of them.  The last Question Period of the year was proceeding along in typically mundane fashion when Peter Kent, the Environment Minister, denigrated his NDP critic, Megan Leslie, for not attending the Durban conference on climate change. This inflamed the excitable Mr. Justin Trudeau, since the government decided not to accredit any opposition members, making it hard for them to attend. He leapt to his feet, shouted out: “You piece of sh–” and stared down the Conservative benches."  A chip off the old block, eh Justin?  All I can say is "it takes one to know one".  Western Canadians are sick and tired of Trudeaus - but don't worry, soon there won't be a Liberal Party banner to run under.

Friday, December 16, 2011

Thursday, December 15, 2011

Part 3: Re-Hypothecation Re: Canada

Captain Canada to the rescue?
It's clear that I must be missing something re: the implications for Canadian investors from the re-hypothecation controversy brought to the fore recently by the stunning bankruptcy of Jon Corzine's MF Global.  A recent story on Thomson Reuters asserts that "engaging in hyper-hypothecation have been Canadian Imperial Bank of Commerce (re-pledged $72 billion in client assets), Royal Bank of Canada (re-pledged $53.8 billion...)" (Christopher Elias, see Parts 1 and 2)  Now contrast that seemingly shocking statement with the following from Bruce Krasting, a highly-respected retired Wall Street veteran: "The Canadian customers of MFG got their money back within 10 days of the MFG bankruptcy. The accounts that have lost money are either USA- or UK-based. In Canada, re-hypothecation is not permitted. I got these comments from a Canadian MFG account holder: The trustee where segregated MF Global Canada customers' funds were held was RBC Dominion Securities. I don't think any of these funds ever left the trustee in Canada. Likelihood is if they left, the Canadian government would have made the parent Royal Bank of Canada eat up the losses and make full restitution."  The apparent conflict between these two statements, both from reliable sources, raises several questions.  If the latter statement is true, and re-hypothecation is not permitted, how could CIBC and RBC get away with doing it?  Or, if the former one is true, was this MFG investor just lucky that various Canadian regulatory and investment industry backstops kicked in to cover his specific loss?  (And if so, is the Canadian government potentially on the hook for billions more re-pledged by Canadian financial institutions overseas?)  Finally - and above all - can the average Canadian investor rest easy that the financial institution they invest through won't go under because of such offshore shenanigans?  There is a surprising dearth of Canadian collateral re-hypothecation information available to mere mortals such as we non-lawyers and non-accountants on the internet, a fact I can attest to after three full evenings re-searching every corner of it.  (I stopped short of the Canada Revenue Agency and several technical subscription-only sites.)  The only recurring theme I could detect out there was the opinion that if you open an account with a commodities broker or even with a stock broker on margin, you sign a document acknowledging that the company has the right to use the securities and cash in your account as collateral against the financing they get from banks to loan to you.  In other words, if you're using their money to invest in whatever you want, then they're only going to let you do so if they can use your account assets as collateral in their speculative activities - such as re-hypothecation in a foreign jurisdiction.  No margin account, no problem.  At least that's the way it looks to me.  Feel free to correct me if I'm wrong.

Wednesday, December 14, 2011

Part 2: Hyper-Hypothecation Madness

"A prime broker need not even require that an investor sign all agreements with a European subsidiary to take advantage of the re-hypothecation loophole. As a result of these peripheral agreements, all or most of clients’ assets find their way down to a 'Consent To Loan Or Pledge: You hereby grant us the right, in accordance with Applicable Law, to borrow, pledge, repledge, transfer, hypothecate, rehypothecate, loan, or invest any of the Collateral, including, without limitation, utilizing the Collateral to purchase or sell securities pursuant to repurchase agreements or reverse repurchase agreements with any party, in each case without notice to you, and we shall have no obligation to retain a like amount of similar Collateral in our possession and control.'  With these transactions taking place off-balance sheet it is difficult to pin down the exact entity used to re-hypothecate such large sums of money. Matters get even worse when we consider what has for the last 6 years counted as collateral under re-hypothecation rules. Despite the fact that there may only be a quarter of the collateral in the world to back these transactions, successive U.S. governments have softened the requirements for what can back a re-hypothecation transaction. As well as collateral risk, re-hypothecation creates significant counterparty risk and its off-balance sheet treatment contains many hidden nasties. Even without circumventing U.S. limits on re-hypothecation, the off-balance sheet treatment means that the amount of leverage and systemic risk created in the system by re-hypothecation is staggering. Re-hypothecation transactions are off-balance sheet and are therefore unrestricted by balance sheet controls. Whereas on balance sheet transactions necessitate only appearing as an asset/liability on one bank’s balance sheet and not another, off-balance sheet transactions can, and frequently do, appear on multiple banks’ financial statements. What this creates is chains of counterparty risk, where multiple re-hypothecation borrowers use the same collateral over and over again. Essentially, it is a chain of debt obligations that is only as strong as its weakest link. With collateral being re-hypothecated to a factor of four (according to IMF estimates), the actual capital backing banks re-hypothecation transactions may be as little as 25%. This churning of collateral means that re-hypothecation transactions have been creating enormous amounts of liquidity, much of which has no real asset backing. Engaging in hyper-hypothecation have been Goldman Sachs ($28.17 billion re-hypothecated in 2011), Canadian Imperial Bank of Commerce (re-pledged $72 billion in client assets), Royal Bank of Canada (re-pledged $53.8 billion of $126.7 billion available for re-pledging), Oppenheimer Holdings ($15.3 million), Credit Suisse (CHF 332 billion), Knight Capital Group ($1.17 billion),Interactive Brokers ($14.5 billion), Wells Fargo ($19.6 billion), JP Morgan($546.2 billion) and Morgan Stanley ($410 billion). The volume and level of re-hypothecation suggests a frightening alternative hypothesis for the current liquidity crisis being experienced by banks and for why regulators around the world decided to step in to prop up the markets recently. To date, reports have been focused on how Eurozone default concerns were provoking fear in the markets and causing liquidity to dry up. Most have been focused on how a Eurozone default would result in huge losses in Eurozone bonds being felt across the world’s banks. However, re-hypothecation suggests an even greater fear. Considering that re-hypothecation may have increased the financial footprint of Eurozone bonds by at least four fold then a Eurozone sovereign default could be apocalyptic. U.S. banks direct holding of sovereign debt is hardly negligible. According to the Bank for International Settlements (BIS), U.S. banks hold $181 billion in the sovereign debt of Greece, Ireland, Italy, Portugal and Spain. If we factor in off-balance sheet transactions such as re-hypothecations and repos, then the picture becomes frightening."- Adapted from a Thomson Reuters article by Christopher Elias. Written with contributions from Jack Bunker and Nanette Byrnes. This article was first published by Thomson Reuters’ Business Law Currents.

Monday, December 12, 2011

Part 1: Re-hypothecation Madness

"MF Global's bankruptcy revelations suggest that funds were not inadvertently misplaced or gobbled up in MF’s dying hours, but were instead appropriated as part of a mass Wall St manipulation of brokerage rules that allow for the wholesale acquisition and sale of client funds through re-hypothecation, an asymmetry in brokerage borrowing rules that allow firms to legally use client money to buy assets in their own name. Hypothecation is when a borrower pledges collateral to secure a debt. The borrower retains ownership of the collateral but the creditor has a right to seize possession if the borrower defaults. A simple example of a hypothecation is a mortgage, in which a borrower legally owns the home, but the bank holds a right to take possession of the property if the borrower should default. In investment banking, assets deposited with a broker will be hypothecated such that a broker may sell securities if an investor fails to keep up credit payments or respond to a margin call. Re-hypothecation occurs when a bank or broker re-uses collateral posted by clients to back the broker’s own trades and borrowings. The practice of re-hypothecation runs into the trillions of dollars and is perfectly legal. Under U.S. Regulation a prime broker may re-hypothecate assets to the value of 140% of the client's liability to the prime broker. For example, assume a customer has deposited $500 in securities and has a debt deficit of $200, resulting in net equity of $300. The broker-dealer can re-hypothecate up to $280 (140 per cent. x $200) of these assets. But in the UK, there is absolutely no statutory limit on the amount that can be re-hypothecated. In fact, brokers are free to re-hypothecate all and even more than the assets deposited by clients. Instead it is up to clients to negotiate a limit or prohibition on re-hypothecation. On the above example a UK broker could re-hypothecate 100% of the pledged securities ($500). This asymmetry of rules makes exploiting the more lax UK regime incredibly attractive to international brokerage firms such as MF Global or Lehman Brothers which can use European subsidiaries to create pools of funding for their U.S. operations, without the bother of complying with U.S. restrictions. In fact, by 2007, re-hypothecation had grown so large that it accounted for half of the activity of the shadow banking system. Prior to Lehman Brothers collapse, the International Monetary Fund (IMF) calculated that U.S. banks were receiving $4 trillion worth of funding by re-hypothecation, much of which was sourced from the UK. With assets being re-hypothecated many times over, the original collateral being used may have been as little as $1 trillion – a quarter of the financial footprint created through re-hypothecation. Because re-hypothecation is so profitable for prime brokers, many prime brokerage agreements provide for a U.S. client’s assets to be transferred to the prime broker’s UK subsidiary to circumvent U.S. rules. Under subtle brokerage contractual provisions, U.S. investors can find that their assets vanish from the U.S. and appear instead in the UK, despite contact with an ostensibly American organisation. Potentially as simple as having MF Global UK Limited, an English subsidiary, enter into a prime brokerage agreement with a customer, a U.S. based prime broker can immediately take advantage of the UK’s unrestricted re-hypothecation rules. In fact this is exactly what Lehman Brothers did through Lehman Brothers International (Europe) (LBIE), an English subsidiary. Once transferred to the UK based company, assets were re-hypothecated many times over, meaning that when the debt carousel stopped, and Lehman Brothers collapsed, many U.S. funds found that their assets had simply vanished." - Adapted from a Thomson Reuters article by Christopher Elias. Written with contributions from Jack Bunker and Nanette Byrnes. This article was first published by Thomson Reuters’ Business Law Currents.

Sunday, December 11, 2011

Weekender: Tie One On!

"The cravat is indisputably the cornerstone of 19th century neckwear.  So many styles, so many ways to ‘tie one on’...  From baron to bank robber, the neckwear of choice for the 19th century man.  A swatch of color, not too bold, is just what a plain white starched shirt needs....  The cravat was the neckwear of choice for ‘everyman,’ from aristocratic counts to the working class.  Our Classic Cotton Cravat in Red is a practical way for the extrovert to add a punch of bright color....  Worn by gentlemen everywhere from plantation porches to poker rooms, [the cravat] is the quintessential 19th century way to ‘tie one on.’  A burst of color framing the face is just what a plain white starched shirt needs." (The Gentleman's Emporium) "The cravat is the forerunner of the modern tailored necktie and bow tie, originating from Croatia in the 1630's.  Like most men's fashions between the 17th century and World War I, it was of military origin.  In the reign of Louis XIII of France, Croatian mercenaries were enlisted into a regiment supporting the King and Cardinal Richelieu against the Duc de Guise and the Queen Mother, Marie de Medici.  The traditional Croat military kit aroused Parisian curiosity about the unusual, picturesque scarves distinctively knotted at the Croats' necks.  The sartorial word "cravat" derives from the French "cravate," a corrupt French pronunciation of "Croat".  On returning to England from exile in 1660, Charles II imported with him the latest new word in fashion: "A cravatte is another kind of adornment for the neck being nothing else but a long towel put about the Collar, and so tyed before with a Bow Knott..."  The manner of a man's knotting became indicative of his taste and style, to the extent that after the Battle of Waterloo (1815) the cravat itself was referred to as a "tie". (Wikipedia)

Weekender: And Now For a Change of Tune ...

Tim Hus could be Canada's Dwight Yoakim.  But that's not fair to Tim; it could be that Dwight Yoakim is America's Tim Hus.  Last night was a musical milestone for Stella's and for us - the first time we've tapped our toes in a long while until we just had to get up and dance.  Tim's music just won't let you sit there.  Ably backed up by his fine band, The Rocky Mountain Two, Tim's unique voice and solid stage presence show a professionalism rarely seen in more well-known acts and venues.  Close your eyes and there was enough Texas Swing to take you back anywhere you wanted to go.  A little Merle Haggard, a little Buck Owens, and a whole lot of Tim - one of Canada's best young song writers.  Catch these guys if they're in your neighbourhood, and don't forget your dancin' boots!  Follow this link for more.

Saturday, December 10, 2011

A Twenty-Something Speaks

The following is not brief, but well-worth a read.  "To my peers:  Being born in 1984 offers a special perspective on where society is at present, as well as where it might be going. We are digital natives who also remember the old ways. Our first years of elementary school were characterized by paper encyclopedias, library card filing systems, and Apple II computers. We reached our teenage years just in time for AOL Instant Messenger to become a dominant force in our social lives, and we weren’t just pioneers on Facebook, we were on THE Facebook. Having a foot planted on each side of distinct historical eras defines us. While the question of generational divides along technological lines is a commonly explored theme, the great divide unique to us is economic. Those before us only knew and only expect an ever increasing level of prosperity. Those after us only know the turmoil of collapse. The older ones are attached to a world that never truly existed, and the younger ones have trouble imagining any sort of better world. All the while we children of 1983/84 grew up in the last parabolic push of the most prosperous era in human history. It was enough that we can remember in vivid detail how it was, but it did not last so long in our lives that we have some fundamental expectation for it to persist. At least where I grew up, the idyllic childhood in the bubble years was disrupted by a sign that perhaps things were worse than appeared on the surface. Around the time my cohort was starting middle school, many of us had new kids in our classes. Atlanta being a popular place for refugee resettlement, in the mid 90’s there was a wave of immigrants from the former Soviet republics. We gave them shit as ‘ruskies’ and ‘commies’, but they came along early enough that by high school we were all just part of the same groups. They were hard, all of them. Where they came from there was hunger, deeply ingrained organized crime, and ethnic hatreds. Their parents were PhDs who had to work for the mafia just to make ends meet. There was a deep appreciation on their part that America was a place, still in those last few years, where if one followed the rules there was a shot at a comfortable life. It all seemed so dramatic. We were just kids, and those were stories from distant lands. We didn’t know they were describing the violence of collapse. They didn’t know they were only the first victims of a wave that would follow them here and one day sweep the world. Looking back, those things are clear both to us and to them. Being born 1983/84 put us in a unique position on the day of the inflection point of our time. By September 2001 we were seniors in high school and all around 18. Sure there was talk about how the government would respond, but on that day and in the following months the real question was how WE would respond. Go to college or go to war? ... Some decided to fight, some were horribly injured, and others died. I can’t commend or condemn how any of my friends decided they would respond to the attack, it was a deeply personal decision for everyone. But that was where we broke with the past. Our parents, as they were conditioned in their lifetime of prosperity, waited for someone to do something ... and we realized that someone was us. For those of us who went to college, we once again found ourselves at an interesting and unique intersection in history. As a member of the class of 2006, we had the incredible luck of entering the work force and gaining critical experience in the last year before the financial collapse. Five years later many of us are moving up to management positions, or at least have substantial resumes. This puts real decision making authority at our fingertips. There is a responsibility to those older and younger than us, since we are a bridge between eras. It is our responsibility to tell those older than us that the world they have known all their lives is dead, and they fight for it at the expense of future generations. At the same time we must make sure their knowledge does not retire when they do. Our responsibility to those younger is to show them, not tell, but show them that a better future is possible through what we can create. So far we are handling these responsibilities well. A decade of war has made our peers the most skilled, adaptable, and combat proven fighting force the country has seen since World War Two. 1980's baby Mark Zuckerberg helped found the social media industry, where people in their 20's are making fortunes working at the bleeding edge of technology and social interaction. And most dramatic of all, our peers are at the vanguard of revolutions all over the world from Tahrir to Wall Street. A source of great strength is that we see the world for what it is, but have also seen what it can be. The way we engage the world is fundamentally driven by an understanding of two great waves sweeping the world. One is collapse, a collapse that began in earnest in 1991 and since then has been deferred and delayed, but not deterred. The second wave is technology. It has the potential to organize us to defend against forces that would tear apart our societies, our families, and our faith in others. Technology has the potential to give all access to pillars of free living including health, energy, and information. And it is on us to fulfill that potential. By any quantifiable measure of wealth or opportunity, we will be the first generation of Americans to have less than our parents. Yet there is no room for self-pity. There is no room for wishing times were not so hard or that our burdens were someone else's. The coming conflagration and its fallout are ours to engage and overcome. Others wait for leaders to deliberate and decide, but we do not have that luxury. For us there is no hope. There is no fate. All there is are the things we create." - "Steak"' as quoted at Cognitive Dissonance via Zero Hedge.

Friday, December 9, 2011

DEFined For The Rest of Us

Jim Cramer, the screeching American populist financial guru that I try to avoid at all costs, has lately taken to describing events in Europe in terms that are not only unfamiliar to me, but also are very - how shall I say? - unfinancial.  Herewith, a primer for the rest of us of the pre-video-game generation:  "A DEFense [readiness] CONdition (DEFCON) is an alert posture used by the United States Armed Forces. It prescribes five graduated levels of readiness (or states of alert) for the U.S. military, and increase in severity from DEFCON 5 (least severe) to DEFCON 1 (most severe) to match varying military situations. The actual preparations that take place under the five DEFCONs are difficult to describe because they vary between many commands, they have changed over time as new weapon systems were deployed, and the precise details remain classified. They are:
DEFCON 5: Lowest state of readiness; normal readiness (Blue)
DEFCON 4: Increased intelligence and security measures (Green)
DEFCON 3: Increase in force readiness; medium (Yellow)
DEFCON 2: Next step to nuclear war; war readiness (Red)
DEFCON 1: Nuclear war is imminent; maximum readiness (White)
During the Cuban Missile Crisis on October 22, 1962, the U.S. armed forces were ordered to DEFCON 3. On October 23, Strategic Air Command (SAC) was ordered to DEFCON 2, while the rest of the U.S. armed forces remained at DEFCON 3. SAC remained at DEFCON 2 until November 15. The next DEFCON Level 2 was during a Soviet missile test in the Pacific in 1989. For much of the Cold War, U.S. ICBM sites were at DEFCON 4, rather than 5. The United States reached DEFCON 3 during the September 11, 2001, attacks." (Wikipedia)  I'm not exactly sure how the above relates to the current economic situation in Europe.

Thursday, December 8, 2011

The Euromess

As many regular readers of this space will know, I am pessimistic about the future of the world economic order.  On the one hand I find it so consuming and critical that I daily both consciously and subconsciously search for clues to the path forward.  On the other hand I realize it is an esoteric topic to many, such that I have (largely) banished it to the column at right.  Yet those who know me personally know that I am a natural-born optimist.  I am an early riser, anxious to greet each day, happy with my lot in life, one of the luckiest guys alive.  Sure, I'm cautious, but I don't believe my caution has been misplaced over the years, nor that it indicates some innate, repressed pessimism within.  So why am I worried about Europe?  Quite simply it is because what happens economically there could have a devastating effect on us here in North America.  Markets, banking systems, and money flows are globally interconnected these days, and governments on both sides of the Atlantic are deeply in hock.  So vastly indebted are they (we) that I fear economic sleight-of-hand by central bankers advised by the Goldman Sachs of the world has run its pitiful course.  The only answers now to the economic mess we find ourselves in are political, and there are two major problems with that as I see it.  First, at the national level, politicians will resist the tough austerity measures needed because a) politicians think only of getting re-elected, and b) routinely mouth partisan dogma.  Second, internationally, the world is still as divided and fiercely nationalistic as ever.  In other words, we are dealing with a modern, complex, international economic problem via an archaic, political system rife with provincialism, mistrust, and ancient rivalries.  The inevitable result: economic collapse.  Today and tomorrow in Europe, meetings are being held that can either "kick the can down the road" (to use an over-used expression) or almost immediately plunge us into a worldwide depression.  I don't know which I prefer, but the longer we try to fix debt with ever more debt the worse the day of reckoning will be.  Fasten your seat belts.
Post Script:  On Saturday I'm going to break with my promise to be "always brief" to bring you an exceptionally sage view of the world by a twenty-something.  Read it.

Wednesday, December 7, 2011

Smart Money

"If you're so smart, why ain't you rich?"  Is it a sign of intelligence if you're rich?  Not necessarily, given the propensity of people to lie, cheat, and steal in our society, as well as inherit money and win lotteries.  Having said that, most of the wealthy people I know worked damn hard for their money and are very smart.  So then, can you be smart if you are not wealthy?  Of course you can, the scientists who put man on the moon, invent vaccines, and unravel the genetic code are smart - but rarely wealthy.  So that settles it, you don't have to be rich to be smart (or smart to be rich).  Well then, what about the poor?  Can somebody who is poor qualify as smart?

Tuesday, December 6, 2011

What Is Romney Hiding?


(Reuters) - "Mitt Romney spent nearly $100,000 in state funds to replace computers in his office at the end of his term as governor of Massachusetts in 2007 as part of an unprecedented effort to keep his records secret, Reuters has learned. The move during the final weeks of Romney's administration was legal but unusual for a departing governor, Massachusetts officials say. When Romney left the governorship of Massachusetts, 11 of his aides bought the hard drives of their state-issued computers to keep for themselves. Also before he left office, the governor's staff had emails and other electronic communications by Romney's administration wiped from state servers, state officials say. Those actions erased much of the internal documentation of Romney's four-year tenure as governor, which ended in January 2007. Precisely what information was erased is unclear. Republican and Democratic opponents of Romney say the scrubbing of emails - and a claim by Romney that paper records of his governorship are not subject to public disclosure - hinder efforts to assess his performance as a politician and elected official. As Massachusetts governor, Romney worked with a Democrat-led state house to close a budget shortfall and signed a healthcare overhaul that required nearly all state residents to buy insurance or face penalties. Massachusetts' healthcare law became a model for Obama's nationwide healthcare program, enacted into law in 2010. As a presidential candidate, however, Romney has criticized Obama's plan as an overreach by the federal government. Massachusetts officials say they have no basis to believe that Romney's staff violated any state laws or policies in removing his administration's records. They acknowledge, however, that state law on maintaining and disclosing official records is vague and has not been updated to deal with issues related to digital records and other modern technology. Romney's spokesmen emphasize that he followed the law and precedent in deleting the emails, installing new computers in the governor's office and buying up hard drives. However, Theresa Dolan, former director of administration for the governor's office, told Reuters that Romney's efforts to control or wipe out records from his governorship were unprecedented. Dolan said that in her 23 years as an aide to successive governors "no one had ever inquired about, or expressed the desire" to purchase their computer hard drives before Romney's tenure. The cleanup of records by Romney's staff before his term ended included spending $205,000 for a three-year lease on new computers for the governor's office, according to official documents and state officials. In signing the lease, Romney aides broke an earlier three-year lease that provided the same number of computers for about half the cost - $108,000. Lease documents obtained by Reuters under the state's freedom of information law indicate that the broken lease still had 18 months to run."  Hmmm...


Monday, December 5, 2011

SDR to Replace USD?

There increasingly appears to be a sometimes subtle, sometimes not-so-subtle, international push for a reserve currency other than the endlessly indebted USD, China being only the most bold and malevolent proponent of such a move. "Zhou Xiaochuan, China's powerful central banker, has authored a proposal for international monetary reform that would replace the dollar with 'a super-sovereign reserve currency managed by a global institution.' Citing 'the inherent deficiencies caused by using credit-based national currencies,' he suggests the SDR [Special Drawing Right] could assume this role. In the view of Mr. Zhou, the way to enhance international monetary and financial stability is to have member countries gradually entrust their reserves 'to the centralized management of the IMF.' Before anyone gives any credence to the notion of having the IMF take on the task of issuing a new global currency, however, we need to remember that the original Bretton Woods system worked precisely because the dollar was convertible into gold at a fixed price." (Judy Shelton, in The Wall Street Journal, April 28, 2009)  What these international currency proponents are really after is a new gold-backed system to replace Bretton Woods in my opinion.  SDR's are not really a "currency", but that is perhaps the easiest way to think of them for the layman (like me).  From the IMF's website: "The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable [4] currencies of IMF members. ... In addition to its role as a supplementary reserve asset, the SDR ... The IMF holds a relatively large amount of gold among its assets, not only for reasons of financial soundness, but also to meet unforeseen contingencies."  So, let me get this straight.  The IMF believes gold should be held for "financial soundness" and "to meet unforeseen contingencies", the IMF issues Special Drawing Rights as a supplementary "reserve asset", and there is an international push for a reserve currency backed by something other than hot air.  Sounds to me like the USD's days are numbered as the world's reserve currency, and that everyone's portfolio should contain some gold.

Sunday, December 4, 2011

Daffynitions

Beehive hairdo
"The Washington Post has also published the winning submissions to its yearly contest, in which readers are asked to supply alternate meanings for common words.
 
And the winners are: 
 
1. Coffee, n. The person upon whom one coughs. 
 
2. Flabbergasted, adj. Appalled by discovering how much weight one has gained. 
 
3. Abdicate, v. To give up all hope of ever having a flat stomach.
 
4. Esplanade, v. To attempt an explanation while drunk. 5. Willy-nilly, adj. Impotent. 
 
6. Negligent, adj. Absentmindedly answering the door when wearing only a nightgown.
 
7. Lymph, v. To walk with a lisp.
 
8. Gargoyle, n. Olive-flavored mouthwash.
 
9. Flatulence, n. Emergency vehicle that picks up someone who has been run over by a steamroller.
 
10. Balderdash, n. A rapidly receding hairline.
 
11. Testicle, n. A humorous question on an exam. 
 
12. Rectitude, n. The formal, dignified bearing adopted by proctologists. 
13. Pokemon, n. A Rastafarian proctologist. 
 
14. Oyster, n. A person who sprinkles his conversation with Yiddishisms. 
 
15. Frisbeetarianism, n. The belief that, after death, the soul flies up onto the roof and gets stuck there.
 
16. Circumvent, n. An opening in the front of boxer shorts worn by Jewish men."

Saturday, December 3, 2011

Mensa Invitational 2011

"The Washington Post's Mensa Invitational once again invited readers to take any word from the dictionary, alter it by adding, subtracting, or changing one letter, and supply a new definition.
 
Here are the winners:
 1. Cashtration (n.): The act of buying a house, which renders the subject financially impotent for an indefinite period of time.
 
2. Ignoranus: A person who's both stupid and an asshole.
 
3. Intaxicaton: Euphoria at getting a tax refund, which lasts until you realize it was your money to start with.
 4. Reintarnation: Coming back to life as a hillbilly.
 
5. Bozone ( n.): The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, unfortunately, shows little sign of breaking down in the near future. 
 
6. Foreploy: Any misrepresentation about yourself for the purpose of getting laid. 
 
7. Giraffiti: Vandalism spray-painted very, very high 
 
8. Sarchasm: The gulf between the author of sarcastic wit and the person who doesn't get it.
 
9. Inoculatte: To take coffee intravenously when you are running late.
 
10. Osteopornosis: A degenerate disease. (This one got extra credit.)
 11. Karmageddon: It's like, when everybody is sending off all these really bad vibes, right? And then, like, the Earth explodes and it's like, a serious bummer. 
 
12. Decafalon (n.): The grueling event of getting through the day consuming only things that are good for you.
 
13. Glibido: All talk and no action. 
 
14. Dopeler Effect: The tendency of stupid ideas to seem smarter when they come at you rapidly. 
 
15. Arachnoleptic Fit (n.): The frantic dance performed just after you've accidentally walked through a spider web.
 
16. Beelzebug (n.): Satan in the form of a mosquito, that gets into your bedroom at three in the morning and cannot be cast out. 
17. Caterpallor ( n.): The color you turn after finding half a worm in the fruit you're eating.
"

Thursday, December 1, 2011

A Festivus For The Rest of Us

As a huge Seinfeld fan, "Festivus" ranks right up there, Big Lebowski-like, in my consciousness every year about this time.  (Younger readers should start with Seinfeld's "Master of My Domain" episode to understand the show's universal appeal.)  "Festivus is a secular holiday celebrated on December 23 as a way to avoid the pressures and commercialism of the holiday season. It was created by writer Dan O'Keefe and introduced into popular culture by his son Daniel, a screenwriter for the TV show Seinfeld. The holiday's celebration includes an unadorned aluminum "Festivus pole", practices such as the "Airing of Grievances" and "Feats of Strength", and the labelling of easily explainable events as "Festivus Miracles". The original Festivus took place in February 1966, as a celebration of the elder O'Keefe's first date with his future wife, Deborah. According to O'Keefe, the name Festivus "just popped into my head". The "Airing of Grievances" occurs during the Festivus meal, each person telling everyone else the ways they have disappointed him or her over the past year. After the meal the "Feats of Strength" are performed, involving wrestling the head of the household to the floor, with the holiday ending only if he/she is actually pinned. (The head of the household selects his opponent and the person may decline if they have something else to do.) The original holiday featured more peculiar practices, as detailed in the younger Daniel O'Keefe's book The Real Festivus. The spread of Festivus is chronicled in the 2005 book Festivus: The Holiday for the Rest of Us by Allen Salkin. The Festivus pole, which is displayed unadorned, was not part of the original O'Keefe family celebration. The on-air Festivus meal was meatloaf, although the original holiday dinner in the O'Keefe household featured turkey or ham followed by a Pepperidge Farm cake decorated with M&M's. Festivus Miracles may be declared by anyone. In the original O'Keefe tradition, the holiday would take place in response to family tension, "any time from December to May". The phrase "A Festivus for the rest of us" also derived from an O'Keefe family event, the death of the elder O'Keefe's mother. The elder O'Keefe wrote a book, Stolen Lightning: The Social Theory of Magic (1982), that deals with idiosyncratic ritual and its social significance, a theme relevant to Festivus tradition. Festivus in popular culture has been expressed as: embroidery on a yarmulke, the name of a Ben & Jerry's ice cream, a term used by the Baltimore Ravens to denote the NFL Playoffs (they won the 2001 Festivus Maximus, Super Bowl XXXV), in 2006 eight young men from Brockville, Ontario, set forth on a pilgrimage to Belleville, Ontario, carrying a Festivus pole which was erected inside a local pub/pool hall, where they began "airing grievances" and performing "feats of strength" (an annual tradition celebrated on the third Saturday every December), in 2008 a Festivus pole was erected in the rotunda of the Illinois Capitol building located in Springfield, Illinois, by student Mike Tennenhouse, who along with Governor Rod Blagojevich began "airing grievances" on behalf of the people of Illinois, in 2010 an inmate in Santa Ana, CA, received Kosher meals for his Festivus "faith" (non-salami meals) for two months while the county was getting the order thrown out, in 2010 a CNN story detailed US Representative Eric Cantor's Festivus fundraiser, and the same year Festivus was a "top trend" on Twitter." (Wikipedia)  Happy Festivus!