Long overdue reading update - Part 1

It has been a while since my last reading update. There is a lot to write about. The backlog is long enough to provide material for 3 or more posts. The others will follow soon.

Here is the first part of the list

• Traders, Guns and Money by Satyajit Das : A very readable book, with interesting details on trades gone bad. Some of the derivatives blowups explained here require an understanding of more than addition and subtraction, but if you cannot take the effort to read and understand this book, I would argue that you shouldn't be investing in anything. The recent series of hedge fund mishaps just induces a sense of deja vu. The next edition of this book will hopefully see the numerous typos fixed!
  
• Tales from nowhere by Various authors : A collection of mostly short travel stories with interesting twists in the journeys. Good companion books would be The Lonely Planet Guide to the Middle of Nowhere and Badlands: A Tourist on the Axis of Evil. I haven't read these two but a few minutes of browsing indicated that they are worthy reads.
  
• Marriage, a History: From Obediency to Intimacy, or How Love Conquered Marriage by Stephanie Coontz - This book is filled with interesting facts about marriage as the idea progressed through the ages. But it is a hard read given the odd organization of material and too many subjective comments by the author. While the book is supposed to be a history of marriage around the world, it deals mostly with the Western hemisphere. Even with these drawbacks, there is a lot to learn here - from the evolution of the definition of incest (you will be surprised!) to the customs of the Na people in China, apparently the only society without any concept of marriage or like institution.
  
• Global soul : Jet Lag, Shopping Malls and the Search For Home by Pico Iyer: Not one of Iyer's best. Filled with long words, and even longer sentences, at times enough to give the reader a bad headache. If you have read The Lady and The Monk or some other earlier work of Iyer, you will be disappointed. That said, the stories here do give some interesting glimpses of lives of immigrants, refugees and expats.
  
• Deep Ancestry: Inside the Genographic Project by Spencer Wells - A chronicling of the effort to map mankind's migration and population of the world. Neatly organized, and the website offers even more interesting tools. The project is ongoing, and hence at some places, non-genetic clues (linguistic etc) have been used to extrapolate. There may still be a bit of old-school "we came first" showing through in such extrapolations. But hopefully they will go away with the eventual finer mapping. If the theories here are correct, there are some startling facts to reconsider about race, purity etc that still holds, unfortunately, way too much significance in this world. Looks like deep down we are all mutts, given the right timescale!
  
• Empires of the word: A Language History of the World by Nicholas Ostler - a stunningly beautiful work. While it goes into linguistic details, the average person can easily understand, or skip such portions, without losing much of the theme. Having used the contents of this book to quiz a few people, I must say that reading this will lead to some much required enlightenment!

Previous reading update.

Stop the bailout!

Bush picked a Friday before a long weekend to make the first announcement of what is really a bailout. Though this is thankfully too little, too late, it should still be opposed by all decent people. Please vote against the bailout here.

It is estimated that somewhere around 2 million houses will go into foreclosure over the next year or two. Unfortunate as that may be, and harsh as it may sound, those homes deserve to go into foreclosure. They should never have been built or bought in the first place.

Why didn't anybody complain when home prices were going up 20% a year ? Why didn't anybody cry for fed intervention to prevent those gains ? That would have been the right thing to do. People who bought houses they could not afford, did it due to a combination of stupidity, willful ignorance and greed. They played the lottery, and now that they missed the right numbers, they want help ? Oh please! Let them start over again.

Among public figures asking for a bailout - Angelo Mozilo (CEO of Countrywide Financial), Alan Mullaly (CEO of Ford), Bill Gross (PIMCO chief), Jim Cramer etc. I have a few choice words for them - Shut the $%^# up!

Mozilo should have ensured that loans made by Countrywide were more appropriate (see latest NY Times piece). Mozilo could also have showed some confidence in his company by not selling such a big portion of his shares (see insider selling details at Yahoo Finance). Shouldn't Ford CEO be taking less pay (the savings can be used for helping some of the homeowners!), and talking about building cars that people would like to buy ? Is PIMCO chief really asking for a indirect bailout for his underperforming funds, as some have speculated ?

After the tech bust, countless servers and routers were being sold at firesale prices. The same is bound to happen this time, with boats, Hummers and Escalades. Fewer arrogant Hummer/Escalade drivers on the road is good!

The appeals for interest rate cuts are absurd. At 5.25% we are still at unusually low levels. If anything, we should at least get back to a more reasonable level, say 7.5%, before thinking about lowering rates. Asking for rate cuts now is a sure sign of withdrawal symptoms from people used to free money. Taking the rate to 7.5% right now would be crazy, but there is no reason to cut them either.

Then there are observers talking about a severe recession in the absence of a bailout. So what ?. What is wrong with a recession ? It is part of the normal boom bust cycle. And it is about time for a deep recession - just let it happen. It will fix a few of the excesses, though in reality we need a depression to completely get rid of the hangover from the binge.

Personally I am surprised at the number of people who even after living through (and fooled by) one bubble (tech), were fooled by another so soon after the first one. Incredible! I have been predicting a 65% drop to anybody willing to listen, and the responses were very interesting. Hah - they don't make any more land!, do they ?! Evolution doesn't seem to have helped us much in dealing with bubbles!

Popular magazines served no purpose during the boom, and are not doing much now either, still reporting median price increases and fooling so many in the process. They are still doing more harm than good by insisting that we are close to the bottom and in the worst case there will be a 10% fall and a recovery within a year. What a shame! A full recovery from such a large boom will not start without a 65% fall (inflation-adjusted) from the top. Such a fall and recovery will take 12-15 years. A few folks, like Shiller, have finally started talking about 40-50% fall in prices, but they are being ridiculed by ignorant and downright stupid reporters.

Amidst all the rubbish, I found just one piece in the mainstream magazines worth reading - see Dude, where is my bailout ?.

As for those who ask what to do with their stocks, I can point to another interesting commentary, by Ben Stein.

I have kept comments on real-estate to a minimum on this blog, with past entries made when I felt that real-estate had peaked and when I thought it was time to panic. There will not be another housing related post anytime soon barring a major event.

For your daily dose of housing/real-estate bubble related updates, I recommend these blogs:

• Calculated Risk
• Bubble Markets Inventory Tracking
• Housing Panic

Untethered & mobile - Part 1

I have promised a few of you that I will be blogging soon on investments arising out of my own extensive research into cutting the cord. Where available, I will disclose any positions in companies mentioned.

First, here is the view from where I am blogging (while connected of course)

I am on a ledge where the only visible living creatures are a few turkey vultures and gulls. The nearest road is a mile away. The views, breeze and sounds are incredible, and I can't think of a better place to be blogging from. Here is another view, one from the bottom of my shoes.

The connection I have is also fast enough to play a few Youtube streams concurrently (listening to, but not watching, this - more about this in a later post). There aren't any wi-fi providers around here for sure.

All this made possible thanks to cellular broadband, courtesy Cingular and Sierra Wireless (SWIR). The latter happens to be my single largest holding right now. It wasn't this large a part of my portfolio when I bought earlier, but the stock has more than doubled since my purchase.

I believe that we are still in a very early phase of rapid growth in wireless broadband and its applications. I say very early because even after being available for more than a year now, there is not much love for 3G in silicon valley.

The 3G alphabet soup gets more confusing every day, but there is at least some hope that one or more of these will be available in multiple continents, with widespread deployments within a year or two. Sierra Wireless makes the connection devices, like these Aircards.

Speeds, especially with the new HSUPA protocol, are reaching ever higher levels. So much so that speed isn't really a concern anymore.

Availability/strength of service is still a problem. Widespread rollout, by Cingular and Verizon in the U.S, should address that soon.

Sierra Wireless does have competitors, chief being Novatel Wireless (NVTL). While Sierra seems to have an upper hand so far, it is impossible to say who will be the eventual winner. Competition from lower-cost Chinese/Taiwanese players is a concern, but as long as there is constant new activity requiring new products or constant upgrades, Sierra and Novatel shouldn't have any problems on that front.

End-user products are the most visible, but the embedded product market may be much larger. Also enterprise products are beginning to be rolled out.

Both Sierra and Novatel are likely being looked at as targets by existing network connectivity device providers. I do hope that they don't sellout now, given the growth potential ahead. Traditional cellphone manufacturers are also getting into this market building the ability to use the cellphone as a 3G modem without the need for an additional card.

Competition to existing protocols comes in the form of WiMax, with Sprint (S) and Clearwire (CLWR) in a race to provide service in major markets. WiMax, along with 3G, is also making it possible for countries without legacy wired infrastructure to leapfrog into the broadband era (see earlier post). Clearwire, founded by McCaw, is a WiMax pure play and a very tempting target for all sorts of companies, from Sprint to Comcast and Google!