Chan's Personal Blog

May you live in interesting times. Sounds like a Chinese proverb doesn't it? On the surface it does sound like one, but actually it's actually a curse. Interesting times usually involve drama and conflict, whereas boring times usually means peace. A quick glance around will reveal that we are indeed living in interesting times. The West is involved in two wars, we're in the midst of a once-in-a-century financial crisis, the US is having one of the most important elections ever, etc.

Myron made a remark that we're finally growing up because we're encountering our first ever full blown recession. Technically we did go through the 2001-2003 recession which was caused by the dot com bubble bursting; however, we were still in academia, and our jobs were only co-op jobs. I've been pondering how long this recession will last, and how it me on a day-to-day basis.

Some of the people I talk to thinks that this recession will only last a year. Some people have this delusional view that their messiah, Barack Obama will get the economy back in order after he takes office. Unfortunately, I'm quite skeptical about the short recession scenario. If we look at the dot com bust, most of the damage to the economy was restricted to key sectors like tech. This credit crisis has spilled over to a lot of sectors including financials, autos, natural resources, media, retail, housing, etc.

In terms of how this recession will affect us, I think the number one threat is obviously job loss. A recession usually means unemployment goes up, and there's less jobs to go around as company's make less money. If you've been following the headlines, Yahoo recently announced that it will layoff 10% of its workforce. I've had a few people ask me if I'm worried about this. Honestly, I'm not worried simply because I've learned to only worry about things that I can control, and this is something totally beyond my powers. The last round of layoffs has probably made me a bit numb over the whole process, as the first time is always the scariest.

I remember the first time we had the threat of layoffs, I was talking to a Yahoo manager who was part of Inktomi (the search engine that Yahoo bought during the dot com bust). Basically, Inktomi is one of those stories where the stock was in the hundreds, and it fell all the way to a few dollars. Anyways, during the dot com burst, the manager said he endured nine rounds of layoffs because the company kept bleeding cash. He basically reached a point where he no longer feared layoffs as he was a survivor. Lets hope the economy doesn't get so bad that it will require multiple rounds of layoffs.

I've been hearing a lot of rhetoric in the news about how bad the current financial crisis is. A common phrase being thrown around is that this is a once in a century event. The New York Times has a very informative chart which illustrates how bad the stock markets are going, and how they compare to other bear markets.

I remember a couple months back, I was pondering if I was being bearish and pessimistic enough. Basically I wasn't. The scary thing is, it appears I'm still not bearish enough when you look at the chart. We've lost 50% of the stock market so far; however, during The Great Depression, the stock market lost 80% of its value.

Of course, there is a silver lining in all of this. A market crash is actually a boon if you're investing for retirement, ie you need your money in 40+ years. In the long-run, this is the ultimate play on "buy low, sell high" if your time horizons are long enough. That is why, I'm still doing some buying for my retirement fund.

Looks like last weekend, both Senator McCain and Senator Obama were at the Alfred E Smith Memorial Dinner, and they took turns roasting each other. There's some pretty good material there. Myron, your best friend Keith Olbermann is mocked as well.

Enjoy!




Does anyone think that McCain looks like Saul Tigh in this video? Go Tigh / Roslin 2008!

Here's some photos from Adam & Sarah's trip to Monterey Bay California. Highlights of the trip include eating at Bubba Gump's Shrimp Company and a visit to the famous Monterey Bay Aquarium. Enjoy.

I've been watching some of The Daily Show's coverage of the McCain campaign, and some of the people who attend those rallies are just amazing. Observe.


The level of ignorance displayed by the lady at the end is truly jaw dropping.

I just got this bit of local news from my Senior Correspondent in the Victoria Bureau, Myron. The headline is "Homeless Allowed To Pitch Tents In Parks," in Victoria.

With a full blown financial armageddon upon us, I pondered to myself, what stocks could possiblely be up after massive drops everyday? It turns out there are stocks that actually move up. Observe the UltraShort S&P500 ProShares (SDS)


This is a fund that makes money whenever the markets go down. This is known as shorting which is where you're betting that the market is going down. If you read the chart, this fund has been doing extremely well this month. Today it was up more than 10%. Looks like the bears are winning big time.

Note: I am not advocating shorting the market or investing in the UltraShort fund. I'm merely highlighting that whether the market is up or down, someone is making money in the market.