Tuesday, August 10, 2010

Early lessons from the Canisius hardwood...

Early lessons:  Basketball at my high school was - and is - a big deal.  In fact, the Buffalo Catholic League - and Buffalo basketball in general - is better than you would expect.  Teams are well-coached and disciplined, coaches are respected and admired, and players are blue-collar tough and surprisingly talented.  Cliff Robinson came out of Buffalo.  So did Bob Lanier.  You probably never heard of Randy Smith but look him up - he was MVP of the 1978 NBA All-Star game (over Dr. J!) and he owned the NBA ironman record for most consecutive games before AC Green broke it.  (He also regularly abused me in pick-up games when I was a soph/junior and he was training for the '88 NBA Legends Game.)  Trevor Ruffin played for the Suns and the Sixers and once led the NBA in points per minute as a super sub (fyi...Trevor also torched me in pick-up games).  Eric Eberz had a great career at Villanova (ok, there's a theme..Eric went to my rival high school and once blocked my shot into roughly the 12th row).  Lenny Stokes played for Cincinnati.  Jonny Flynn plays for the Timberwolves.  Current Michigan coach John Beilein is a Buffalo guy and recruited me out of high school.  Christian Laettner was the top-dog in my era and his squad won the New York State championship a couple times.  You get my point.

My middle school did not have a basketball team.  I played local Boy's Club basketball (one season on the 11-and-under team and one season on the 13-and-under team) and I had no exposure to city basketball or to what I imagined that level of play to be.  And as you might expect, I was slightly intimidated by the prospect of making my "big city" (I know, I know...you can guffaw at the concept that Buffalo could ever be "big city," but as a kid who grew up in France and in the Buffalo 'burbs, it was to me), private, all-boys, gloried-and-storied tradition, high school freshman team. 

Canisius vs. St. Joe's at CHS

So, motivated by fear and by stories that over 100 kids would be trying out for 15 spots, I did what any thirteen-year-old-boy-in-the-pre-internet-and-pre-cable-television days would do:  I worked my ass off.  I suppose the benefit of relative isolation in the 'burbs (and on a 1000-acre estate, no less...my mom was the cook for the owners of the Buffalo Sabres hockey team so we had a "servant's house" on the estate) was the emphasis on drills, rather than playing, that isolation allowed.

[This, by the way, is a topic for another blog, but may explain some of my disillusion with modern basketball...back then we had to practice fundamentals, whether alone or on a team...today's AAU structure for kids just means games, games, and more games...do they ever actually practice anything anymore?]

So I spent that summer in the driveway, doing shooting drills and dribbling drills and defensive slides and anything else I could think of.  Like Jerry Rice in the prior post, I was motivated by the fear of failure, of embarrassing myself or my parents, and I wanted more than anything to just make that Freshman team.  And along the way (and I say this with the obvious benefit of hindsight), I learned a valuable lesson that I carry with me to this day:  self-esteem is not something you can stumble on, or uncover, or magically develop.  It's something you earn for yourself.  With work.  Lots and lots of work.

Anyway, let's fast-forward to October/November 1985... my world was a blur.  Canisius High School was demanding, both academically and culturally.  The Jesuits expected excellence.  It was nearly impossible to "slide by."  For me, this was the opposite of public middle school, and - once acclimated - I took to it like a fish to water.  Imagine being respected for having good grades rather than having to hide your report card from the bullies.  Imagine being revered for being a good athlete rather than being shunned by the "cool kids" who hung out on street corners in 8th grade and raided their parents liquor cabinets.  It was the best thing that could have ever happened to me, and at the absolute best time.  

Basketball season, however, loomed.  Would I make the Freshman team?  Would I play, maybe even start?  I held out hope...my goals were humble, and I had confidence in my past summer of work.  I began to piece together clues as to my chances:  Students at Canisius were divided into 4-5 sections that usually shared the same groups of teachers and same classes in any one semester.  And for that first semester, I remember we had a pretty competitive basketball game in Phys Ed.  But while I felt that I had held my own, I did not read too much into it...after all, I still wasn't sure how I measured up against the freshmen in the other sections.

When it came time for try-outs, though, a few kids in my section made a shocking announcement:  they were not trying out for the Freshman team, but instead for the Junior Varsity.  As a relatively quiet - and certainly naive - kid, I had no idea what to make of this.  Did they know something I didn't about the other sections?  Did they know something I didn't about the sophomores?  And judging by the guys who made this announcement, and the absolute confidence they showed, I was intrigued.  I should also mention that this was an era of the two-working-parents-who-had-more-than-enough-on-their-plates, which was in stark contrast to today's "helicopter" parents, hovering around every turn and involved in every decision.  So I don't ever recall mentioning any of this to my folks, but I do remember thinking that I was just as good as those guys who were so positive about their JV chances.  And in my mind, if I flopped, I'd just get downgraded back to the Frosh team and be no worse for the wear.  So I decided:  if those guys are going out for JV, I probably should too.

JV try-outs, like so many things at that age, were also a blur.   Maybe there were 50 kids out for the team that first day.  Maybe there were more.  The JV coach was an intimidating guy who had a Magnum P.I. look and an ex-athlete's swagger.  In fact, Coach Dave Butler was something of a Canisius legend, having excelled in football, basketball, and baseball during his time as a student, and then earning a football scholarship to college.  Now back at Canisius, he coached three sports and had a familiarity with the football guys - the guy's guys - that made me feel like Anthony Michael Hall in The Breakfast Club.  As a result, he scared the crap out of me.  He demanded discipline, he was highly organized, and he seemed to only mingle with students he already knew and who had already proven themselves as athletes.  In short, I felt very much like an outsider, and my confidence was fading fast.

[It's also worth pointing out at this point that our Varsity team was highly decorated and expected to compete for the Catholic League championship - and maybe more - that year.  The Varsity guys walked among us like gods: Jerome Rodgers, Kevin Milligan, Mike McCarthy, Ray Flannery... these dudes were right out of the Chip Hilton books I devoured at the time.  It was all incredibly intimidating, and I can't even imagine how much extra pressure having girls around would have added to the mix for me - thank god it was all-boys and I could pick my battles at that age.]

But as luck would have it, either because of the sheer number of players trying out or because of his obsessive-compulsive organizational style, Coach Butler decided that the first two days of JV try-outs would be minimum playing and maximum fundamentals-testing.  Imagine that.  I had spent the entire summer doing basketball drills alone and now I was going to be graded - and subsequently rewarded - for that?  I began to think it all might work out for me after all, and I was more than a little hopeful...

A funny thing happened, though.  The testing didn't quite go as I had expected.  While Coach Butler - tape measure, clipboard, and stopwatch in hand - measured our sprint pace, our defensive slides, our vertical leap, our time in dribbling end to end, or dribbling around chairs, or revolutions of a basketball passed around our waists, he shared none of the results with us.  I remember little but grunts and scowls as he noted my times.  This lasted for two days, Thursday and Friday, and none of us had any clue as to where we stood.  We had anxiously looked to the coach for hints on our standing, or lack thereof.  But for two days he continued to yuck it up with the sophomores and to treat the frosh - especially the ones he did not know, me included - like the peons that we were.  I started to feel deflated and - looking around - got the same vibe from my fellow freshmen.  A couple of early and obvious cuts had already been made from Thursday to Friday, but even though a few of us were still around on Friday afternoon, we were beginning to get the drift.  Just like a turkey on the third Wednesday in November: after Friday's testing ended, we expected the axe to fall.

But somehow, it didn't.  Try-outs, and thus final cuts, had been extended another day...and into the weekend. This presented an interesting logistical dilemma.  For those of us in the suburbs (most of us, actually), coming back in for a Saturday try-out when no one was of age to drive presented a real issue.  Most guys thought their parents might bring them back (if they had no prior commitments...again, this was a time when parents lives did not revolve around their kids), but no one felt good about it.  In fact, most of the freshmen felt that it was just an oversight on Coach Butler's part that he failed to post cuts on Friday night...and that we'd all be struggling to come into the city on a Saturday for absolutely nothing.

One of my classmates, let's call him Tim Bosgrove, was particularly incensed.  I was impressed by him, really.  For a fellow freshman, he clearly had more confidence - and much bigger balls - than me.  Listen, guys, he argued, my parents are busy tomorrow.  They're not gonna bring me back in here.  And what for anyway?  Butler hates us, he has no use for us...he's just gonna cut us regardless.  Tim had a point, to be sure.  And he was convincing.  Really convincing.  My 13-year-old self nodded along to his argument.  Hell, my 38-year-old self is still nodding along.  After a few minutes of this, it was agreed by the group that Timmy B would speak for all of us, and to ask Coach Butler his true intentions for Saturday practice.  Somehow (and I wish I could remember how that happened), I was nominated to tag along. 

We found the coach among the seats in the auditorium, holding court with a parent or alum or two.  He eyed us warily as we approached.  I was quiet as Timmy B launched into his soliloquy.  Coach Butler patiently watched, betraying no emotion whatsoever.  Finally, Timmy got to the point:  ...so, we were just wondering...you know...based on how things have gone...with Saturday practice and all...I mean, do you think it's worth it for us to come in?  Butler first arched his eyebrows, and then honed a narrow gaze toward his inquisitor, countering with the question that any teacher or coach could rely on in this situation:  Well, Timmy...do you think it's worth it? 

Caught a bit wrong-footed now, Timmy stammered in an effort to regain his balance.  Well, umm.  I'm really not sure, that's why I'm asking...umm...ah...it's just that it might be hard to get a ride in tomorrow and all...  At this, Butler nodded nonchalantly, uh-huhn, and then switched his focus to me.  So what about you? he asked.  I either said something incredibly articulate like I dunno, or just smiled weakly and shrugged.  I don't remember.  But I do remember Coach Butler's next comment, and it's one of those silly phrases that is indelibly seared into my brain, for reasons unknown.  It just affected me somehow.  He stood, shook his head slightly, and said with a smirk...well, ya gotta do what ya gotta do...and walked away. 

Whaaaat?!  It had totally backfired.  He gave us no clues to work with, and we had probably pissed him off to boot.  Now he would hate us whiny freshman even more than before.  And he ultimately left us with some kind of friggin' koan like what is the sound of one hand clapping?  I mean, to a young 9th grader...what the heck does ya gotta do what ya gotta do mean??  How - exactly - do I interpret that?  Was Coach Butler saying, hey, it's no big thing, if you don't want to come back, fine with me...don't come back? 

That had to be it.  He meant whatever...do what you want.  He really didn't care.  Any spark of hope that I held out for myself was extinguished in a wash of confusion and despair:  I saw my chances of making the team at near zero, I had no idea how the skills testing even went, and I had only played some minimal (3-on-3) basketball to that point.  It all seemed like a waste of time. 

Except for those words, which continued to rattle around in my brain:  ya gotta do what ya gotta do.  And ultimately, forced to make a choice, I did just that.

Looking back, I think it was another important lesson (again, hindsight makes this easy).  In thinking about it later that night, I took Coach Butler's phrase to mean:  make a decision, and take responsibility for your own actions.  I can't say exactly how it all went down, but somehow I got back the next day.  And what I discovered that Saturday morning was - at least to me - nothing short of amazing.  Remember, when approached the afternoon prior, the coach did not betray the smallest possibility of the slightest potential of the tiniest glimmer of my chances (or anyone else's) of making that team.  The guy was a rock.  But on Saturday morning, there it was posted for all to see:  in black-and-white, across the board, on each and every test, I had finished at the top.  And he probably knew that all along.  

The rest is far from history...but of that season, I will say this:  I don't remember if Timmy Bosgrove made it back that day, but whether he did or didn't was irrelevant - he played freshman ball...

In the end, two freshmen made that 1985-86 JV team (lefty Chris Mullin-clone Mark Popadick was the other).  Apparently that had not happened in some time.  And as a freshman, I started and played every game.  I won every sprint in practice.  I soaked up the coaching and the discipline and the opportunity to play against other city schools, both in the public and catholic leagues.  I learned to enjoy when other teams sought to pressure us, because we would instead calmly and clearly make them pay for their assumptions.  I won the Coaches Award for determination, hustle, team play, all of that...and I cemented friendships with the class above me that remain intact to this day.  It was, in the best possible sense of the word, the beginning...

And yeah...I was a little angry at Coach Butler for not telling me, hey kid, you better come back, you scored off the charts on the fundamental testing...you are making this team.  But - in an early indication of a theme throughout my Canisius experience - the Jesuits teachers and lay-person coaches like Dave Butler treated us like men...and he let me figure it out.  He forced me to think about the consequences of my actions, to do what I had to do, and to trust myself rather than give mind to the prattling of others.  What an invaluable lesson.  And I haven't forgotten it, or its corollaries:  do the work, be humble, try your best, take responsibility for your actions, man up, ignore the crowd, believe in yourself. 

And that was my introduction to high school basketball.  Thank you, Coach Butler.

That's it for now, sorry for the length if you made it this far... Next up I hope to tackle that freshman-to-sophomore summer and then sophomore season....we'll call that one, the jump.  And I don't even know where to begin with regards to Ray Calhoun's and Luther Winfield's influence on me that summer... it'll be interesting.

Stay in touch,

Morning Note...

Futures are down ~1% this morning on weaker-than-expected economic data in the U.S., weak fundamentals in Asia, weakness in European earnings, and lack-of-conviction ahead of today’s 2:15pm FOMC rate decision.  In Europe, Intercontinental Hotels (-4.5%), Tui Travel (-7.5%), and Hanover Re (-3%) are all lower on earnings.  In Asia, China was down roughly 3% overnight as they announced import growth and the pace of property gains slowed in July.  As a result, metals and materials stocks (as a proxy for slowing economic growth as driven by China) are weaker globally.  In U.S. economic news, Q2 Nonfarm Productivity dropped substantially to -0.9% from the revised +3.9% reading.  Unit Labor Costs also rose to +0.2% for Q2 from -3.7% prior, and were weaker than the +1.5% expectation.  Further – and perhaps most importantly as it relates to job growth and the underlying engine of the American economy – the NFIB small business optimism index fell to its lowest level in four months and the “expectation for better business conditions six months from now” fell to -15%, which is the lowest since March 2009.  Worth noting that yesterday was the lightest volume day of the year.  Also worth noting that KKR pulled its $500M secondary offering last night, citing unfavorable market conditions. 

Regarding the FOMC, chances are that today’s release will be a non-event.  The Fed is likely to continue its accommodative path of low rates for an extended period of time, and may comment on the “unusual uncertainty” of financial markets…all this while the debate regarding “to re-stimulate via quantitative easing” (and increase the debt burden) rages around them.  The interesting thing to note, however, is exactly how quiet things seems to be ahead of today’s announcement.  I am not making any predictions here, but merely pointing out the fact that it’s been a long time since we had a Fed surprise of any kind…and things seem unusually quiet…and many folks are on vacation…and volumes are light…hmmmm.  I attribute the chance of a surprise at almost zero, but I would be remiss if I did not point out the fact that we’re due for a surprise – one way or another – one of these days. 

I always like a good rant, and yesterday’s commentary from Hedgeye is no exception, especially ahead of today’s FOMC decision:


"While it is true that you can fight fire with fire, it has never been suggested that you can fight water with water."
-Richard Duncan

In a newsy weekend headline that was reminiscent of Paul Krugman's infamous "PRINT LOTS OF MONEY" advice to the Bank of Japan in 1997, Barron's Jonathan Laing told Americans that it's "TIME TO PRINT, PRINT, PRINT." Scary.

While it's no longer shocking to see perma-bulls beg Bernanke to print moneys and debauch the long term value of America's currency, it is becoming quite sad to watch. 'Government Is Good' monetarists have apparently learned nothing from history's lessons.

On the topic of "quantitative easing", rather than take the manic media's word for it as they perpetuate a US stock market plea to perpetuate our traverse to economic perdition, I highly recommend reading Richard Duncan's "The Dollar Crisis." It was first published in 2003 and while it would be much more powerful if it was re-published alongside Reinhart & Rogoff's "This Time Is Different" with today's data, it's still a critical analysis.

To save you some summer reading time, you can skip right to chapter 11. It's titled Monetarism is Drowning and introduces some clever, non-consensus, thoughts like "Irrational Monetarism" that I think are well worth your time to consider. We are not going to solve America's problems by printing more money and daring Americans to lever themselves up again to chase some yield. It's time to get serious here.

The US Dollar has seen some serious destruction in the last 9 weeks. On the heels of another nasty unemployment report on Friday, the US Dollar closed down for the 9th consecutive week, taking its cumulative decline to -9.2% since the first week of June (we remain short the Dollar via the UUP).

At the same time, short term US Treasury yields closed out the week at their lowest weekly level EVER (0.51% UST 2-year yields) - and ever, as our Hedgeyes in New Haven like to say, is a very long time.

Don't worry though, the CNBC and Barron's stock market cheerleaders of a Destroyed Decade are still peddling you stories from their Watered Down Printers into whatever media outlet they have left to drive an advertising dollar. In their perverse world, Dollar DOWN + Treasury Yields DOWN = a great case for stock market "valuation." It's a good thing we didn't pay attention to them when this was happening in 2008.

Obviously no country has ever devalued its way to prosperity, and I don't think Groupthink Inc. in Washington is teeing America up to set a new precedent time around either. I don't believe in using the US stock market as a single-factor measurement tool for American progress. In an Early Look from a few weeks ago titled "Growth and Progress", I introduced the following multi-factor scorecard for a sustainable Americanrecovery:

1.       Strong Employment
2.       Strong Currency
3.       Strong Rates of Return

This isn't political commentary. This is a pragmatic plan. If you're a professional politicians who has been forwarded this email and you don't like being called names or being called out - too bad. Quit whining, pointing fingers, and fear mongering and fix these 3 things instead of printing moneys. Then maybe we won't continue to hit record all-time monthly highs in the number of Americans in line for food stamps (latest reading = 40.8 MILLION)...

The US stock market futures are up this morning, and they should be. After Friday's unemployment report, US stocks rallied from their intraday lows to give the bulls hope. Hope might work for an immediate term TRADE, but for the intermediate term TREND, ignoring both the US currency and bond markets is for a buy-and-hope crowd far braver than we.

The SP500 has immediate term TRADE upside to 1135 and our Bear Market Macro line of resistance remains up at 1144. In the immediate term, the Watered Down Printers of money better hope and pray that "print, print, print" chant keeps the SP500 above 1114 support. Praying at least has a better track record than hoping water can fight water.

Best of luck out there this week, KM

For the technicians out there, this is actually from BTIG’s Sunday night note but offers a solid perspective on the S&P500 “Death Cross” that was in the news a few weeks back:

Last Monday marked the one month anniversary of the Death Cross for the S&P 500.  On July 2nd, the S&P 500's 50 day moving average crossed below its 200 day moving average triggering the ominously named sell signal.  As market participants are well aware, the May-June equity market correction was as short and sharp a variety as one gets in this business.  This created the notable irony that this technical sell signal was triggered on the actual day of the correction low. 

The abrupt nature of the correction created an interesting dynamic.  Tracking the S&P 500 back to 1928, we have counted 44 death cross sell signals (there was a 45th that occurred two days following another one in 1941, therefore, we only used the original cross).  In examining the characteristics of the forward returns of the crosses, an interesting pattern emerged.  In half of the scenarios, the S&P 500 was higher on the one month anniversary date, and in half of the scenarios, it was lower on the anniversary date.  The interesting aspect is that this initial performance in the first month following the signal appears to have had a notable influence on the forward returns in the one year following the cross. 

For all 44 death cross signals, the average performance in the 12 months following the cross was an 0.18% loss.  The median performance was an 0.63% gain.  The average and median performances following the cross for the 22 instances where the S&P 500 sold off further that first month were -5.25% and -4.86%, respectively.  For the 22 instances where the S&P 500 rallied in the first month, the one year forward average and median gains were 4.89% and 3.39%, respectively.  Just to keep the situation in proper context, the S&P 500 was already up 10.2% in that first month. 

The data indicates two important probabilities if the market continues to follow this historic trend.  The first is that this sell signal was very likely a false positive.  The other is that it further solidifies the July low as an important lower bound and level of support for the market over the next 6-12 months. In the previous top 8 first month performances, there was only one instance where the S&P 500 was below the cross date level for any reading 2, 3, 6, 12, 18 or 24 months forward.  In other words, a single 6 month forward reading was below the actual cross date level of the S&P 500.  In the current scenario, the cross level is 1010.  Although a correction back to that level would certainly be painful, it is good to know that if it does occur, that level should hold.

The initial first month rally following this death cross has already achieved levels in the proximity of both the average and median 12 month gain for the first month positive performances.  Some might take that to indicate the market has already garnered the majority of the gains it is due to receive, but there is a relationship between the strength of the first month and the forward returns over the next year, i.e. the stronger the first month, the stronger the future forward gains tend to be.  This is the second best first month performance on record.  In the end, every situation plays out differently so in an effort to be conservative, we would not necessarily interpret the data to be an all out positive for the market, although some could.  We do think this indicates it is highly unlikely that this death cross is a negative for the market.

BCAP cuts AMD & INTC.  GSCO raises AKAM.  BofAMLCO cuts JCP and raises M.  GSCO cuts NUAN on earnings.  GSCO cuts BBY.  NOVL cuts guidance.  NUAN -10% on earnings miss.  ASEI misses by 29c.  BBBB beats by 2c.  FEED lower on arnings.  FOSL beats by 24c.  IHG lower on earnings.  RBCM cuts LOPE.  MBI higher on earnings.  Soleil cuts MR.  NGLS announces 6.5M share offering.  PEGA misses by 6c.  QGEN beats by 1c.  RAX reports in line and announces stock split.  TSEM misses by 1c.  TTM higher on earnings.  VSAT misses on revenues.  UBSS ups WFMI.  DBAB ups MAC.  BCAP ups TI.  WEFA cuts NTLS.  DBAB cuts TRW, BWA, ALV.  FBRC cuts NOC.  MSCO cuts JNJ. 

Asia weaker overnight.  Europe roughly 1% weaker.  USD +70bps.  EUR/USD 1.3131.  Oil -215bps.  Gold -60bps.

S&P 500 PreMarket 8:30am (last/% change prior close/volume): 

Today’s Trivia:  Interesting thought in today’s “instant gratification” world of light speed communication…word of what famous announcement reached London on this date in history?

Yesterday’s Question:  Name the last President to be elected by all male voters.
Yesterday's Answer:  Woodrow Wilson was the last President elected by all male voters.

Best Quotes:  In case you missed it…interesting article in yesterday’s NY Times…

August 9, 2010
The Rise of the Permabears

LONDON — The central question dividing economists these days is whether Western governments should spend more to ward off a potential second recession or retrench to hold down their ballooning debts in a bid to restore confidence among investors.

But Albert Edwards, an investment strategist in London for the French bank Société Générale, says the debate is a waste of time. To be specific, he forecasts a “bloody, deep recession” that produces a stock market collapse of at least 60 percent, followed by years of inflation of 20 percent to 30 percent as persistent money printing by central banks desperate to improve the situation ultimately sends prices soaring.

Mr. Edwards’ leather sandals and chuckling demeanor belie his reputation as perhaps the City of London’s best-known permabear — a species that has long flourished on the outer margins of the financial industry but rarely inside mainstream banks.

That is no longer true.

With the shocking financial crisis of 2008 still fresh in people’s minds, and gloom-spinning economists like Nouriel Roubini having achieved pop-icon status, even long-standing pessimists like Mr. Edwards — who has been forecasting a Japanese-style stock market slump in the United States since 1997 — are being treated with newfound respect.

In many smart-money circles, listening to bears has become stylish, especially now that doubts remain about the sustainability of the euro zone, concerns grow that the United States may slip back into recession and that even the Chinese growth engine may seize up. But to some, the popularization of extremely dire forecasts suggests that the pendulum may have swung too far.

“Nothing is ridiculous anymore,” said Philippe Jabre, a hedge fund executive in Geneva. “There is no doubt that these days extremely negative research is being tolerated more.”

Mr. Jabre says that most of the research that comes his way has a distinctly negative bias and that finding actionable ideas with a positive spin is becoming far more difficult. “These guys are reinforcing a conviction among many who invest in hedge funds that they should remain scared,” he said.

Mr. Edwards’ newfound popularity reflects the trend. Once frequently shown the door by disbelieving clients, Mr. Edwards recently drew 600 investors to a conference in London.

Similarly, Bob Janjuah, the one strategist in London whose prognostications some see as even more dire than Mr. Edwards’ — “even I get depressed reading his stuff,” Mr. Edwards said — said he was courted by half a dozen investment banks this summer before deciding to leave his post at Royal Bank of Scotland to join Nomura. (He starts officially in October.)

“Clients are more receptive to hearing polar ends of an investment view,” said Mr. Janjuah, who expects economic growth for the major developed economies to average little better than 1 percent a year over the next five years.

Further afield, Raoul Pal, a former Goldman Sachs derivatives expert and hedge fund manager, has attracted a growing following with his monthly research note that, most recently, predicted a depression in the United States similar to the 1930s and eventual bankruptcy for Britain.

Mr. Pal writes The Global Macro Investor from a holiday village in the Spanish province of Valencia, and says that demand is so high now that he has the luxury of doling out his high-priced annual subscriptions only to clients he considers sophisticated enough to pass muster or who come recommended by people he trusts. Others must join a waiting list, Mr. Pal said, although he declined to say how large the group is. He says that 30 percent of his clientele — which includes pension and hedge funds, governments and proprietary traders at banks — consists of wealthy family offices with assets of more than $200 million.

“They are easily the most bearish of my subscribers because they invest in the longer term,” he said, “and in the longer run they see more uncertainty than ever before.”

According to TrimTabs, a funds researcher, hedge funds withdrew $3.5 billion in April and industry consultants say that many funds — positioned in July for a continuum of bad market news — were caught by surprise when the market rallied. “Where is the research telling me how good Intel’s earnings were going to be?” Mr. Jabre said. “I just have not seen it.”

In fact, if you had been following the advice of Mr. Edwards or Mr. Pal over the past month as stocks have bounced, you would have lost money, as both men readily acknowledge. Mr. Edwards has advised investors to be heavily underinvested in all equities and Mr. Pal, in addition to being short, or betting against, the U.S. stock market, is also shorting the euro in his model portfolio.

Mr. Pal’s bad run began in 2009 when, after becoming bearish in 2007 and reaping the fruits in 2008, he was caught short by the powerful recovery that began in March that year. To date in his model portfolio, he has lost 96 percent on a short bet of the Indian stock exchange, 68 percent betting against the Chinese H share stock market and 68 percent on the U.S. mutual fund company Franklin Templeton. (Until 2009, he says his model portfolio was up 700 percent).

In the tradition of the great macro hedge fund investors like George Soros and Julian H. Robertson Jr., Mr. Pal, whose last job was as a portfolio manager at GLG, a hedge fund based in London, likes to pick a theme that may take years to pan out and run with it.

His big bet is that the U.S. economy is not just about to enter a double-dip recession, but that it will be far worse than anything experienced in the lifetime of anyone under 70 years old.

He points to a weak rebound in consumer and industrial spending from the 2008 plunge, suggesting that companies and people will remain loath to borrow and spend. “Never before have we entered a recession with 10 percent unemployment,” he wrote in his August report. “And if you take into account that on average a recession increases unemployment by 3 to 5 percent, we could see 15 percent unemployment in the U.S. — that is staggering.”

As for whether central banks can rescue their economies through a fresh round of money injection, both Mr. Pal and Mr. Edwards are skeptical.

Both contend that there is no evidence that the huge injections of liquidity already engineered by the U.S. Federal Reserve, the European Central Bank and the Bank of England have led to a pickup in demand for loans.

That may be so. But Ed Yardeni, an independent strategist in the United States recognized for his consistently optimistic views, says it would be a mistake to bet against the evidence from strong corporate profits, which he believes are already driving a global rebound.

“Despite all this negative spin, we have seen one of the best corporate recoveries ever,” he said. Major company executives “are being fed this same diet of pessimism but instead of shutting down they are growing their profits and expanding their operations.”

Glory Days & Self-Analysis...

Glory Days.  This morning I posted old basketball clippings from my time playing overseas to this very blog.  And this past weekend I posted old basketball photos to Facebook.  I readily admit that these postings represent odd behavior, especially at my age.  And to be honest, they are slightly embarrassing.  I read them as betraying a lingering insecurity.  But - blame the power of the internet - I simply could not help it.  The call of social networking and the appeal of cyber-archiving & cyber-organizing one's life...must stop myself...was just...must hold on...too difficult...must fight urge...to resist.

So here's the "self-analysis" part:  why?

I am not a high school kid trying to bolster my case for popularity or sex appeal:  I am 38 1/2 years old, I am happily married, and we have an amazing newborn daughter.

I am not one-dimensional:  I have been a student, a basketball player, a stock trader, a coach, and a world traveler.

I am not fighting some self-loathing depression born of an uninspired existence:  I have a good job, I stay in decent shape, and I enjoy an all-around terrific quality of life.

But if all that is true, where does this creeping insecurity come from?  Why the need to reflect on old photos and organize archives from the "Glory Days?"  Why does it feel like I am posting my credentials as some kind of evidence of a life well-spent?  Am I trying to convince others, or myself?  And truthfully, years later, who really cares about this nonsense and these old clippings anyway?  And yet while I know no one cares, still I post, and - gasp - may even continue to do so...but why?

Is it possible to be self-aware and delusional at the same time?

Or is it all innocuous...maybe it's just the need to leave a trail for my daughter one day?  Or is it worse...am I trying to still prove myself to myself in some way?  To comfort myself with, look what I have done...it's a full life...so that it's ok to now be settling down, to be acquiescing to what some might call the life of quiet desperation with the house and the kids and the white picket-fence?  Hmmm...

So what's my best guess as to why I post this crap?  Mortality, in part.  Or, more appropriately, athletic mortality.  The end of the road, so to speak, makes me reminisce about the road actually traveled.  That's certainly a big part of it, and that mortality has been creeping up over the last few years:  a knee surgery in 2005, an appendectomy in 2005, a torn Achilles in 2009, marriage, family, career...age.  After 25+ years of feeling relatively "on top of my game" with respect to my chosen sport, I am feeling - and seeing - the downward slide.  I can no longer willfully determine the outcome of a basketball game on my own anymore - I can't "turn it on" and decide what is about to happen.  My presence on a court now is substantially as...filler.  And after 25+ years of being one of the best guys on the team or on the court or in the game, it's hard to overstate what that now feels like.  Castrated is too strong a word.  So is crippledLacking is good, but not quite.  Maybe the best way to explain it is to draw a comparison that almost anyone can relate to:  the aging of a beloved family pet.  When you see that dog, for example, approaching 15 years old and starting to wobble and shake...and you can so clearly remember the puppy days and the jump-all-over-you and the fetch-for-hours and the absolutely-he's-gonna-catch-that days...isn't it just kind of...well...sad?  Do you know the feeling that I am talking about?  Why Dad?  Why can't he be a puppy forever?  Why can't he play anymore?  Why does he have to get old?

And the things that you remind yourself about your beloved, failing dog are the same things I tell myself now about my six-foot-slow-white-guy-body:  it was a good run, he was such a great friend, I couldn't ask for anything more...  Regardless, the sadness remains.  So maybe I post against that creeping mortality.  As if to look age in the eye and say, yeah, you might be winning now...but I owned you back in the dayAnd here's proof.  Of course, this does not get you very far, because you quickly realize that you can't go back and can't catch up and age is winning - will win - and the whole thing ends up being more depressing that when you started.  So let's move on to reason #2. 

Maybe I post old clippings out of some deep-rooted resistance to normalcy.  By bringing past accomplishments back to the light of day, whether athletic or otherwise, it's as if I am listing for myself all the things already checked off the Bucket List.  And that makes it somehow easier to accept my current age and stage in life.  Maybe I am saying, it's ok to slow down now...you did a lot already.  Of course, what's annoying about that reality is that it just doesn't work that way for me.  Instead, I think about how much more I could have, and should have, done.  When I look back, the most frequent question that pops into my head is always a variation of the "youth is wasted on the young" theme:  Did I accomplish enough with the resources I had?  And did I appreciate those resources, and those opportunities, while I had them?  More often than not, unfortunately, the answer is no.  I am not sure why.  And it spirals on itself, it really does.  When I come across an old picture and think back on it, invariably I come to the point at which I desire to be that again.  I want to look like that, play like that, and have that freedom (from material burdens, from responsibility, from expectation, from bills, from career paths, from "normalcy").  And that craving to go back - which is relatively insatiable sometimes - leads me to look at more photos, and reminisce more...and, subsequently, I probably end up posting those images in the hopes that somehow - once added to my "profile" or my "photo album" - the act of posting will make me that person, or more specifically that athlete, again.   And, just as with argument #1, this one is also a losing proposition.  Can't go back, can only move forward.  No help there.  How about #3...

I suppose the third possible reason to post this stuff is that underneath the bitter pill of "time past" and "age" lies the sweet ability to re-live, and perhaps re-experience and re-enjoy, past accomplishments.  I think this is the one I want to build on.  Please know that I am in no way comparing myself or any of my accomplishments to those of Jerry Rice, whom I greatly admire and consider one of the best - along with Walter Payton and Joe Montana - football players of my lifetime.  But this part of his recent Hall of Fame acceptance speech - as quoted by SI's Peter King - stopped me dead in my tracks:

"I'm here to tell you that the fear of failure is the engine that has driven me throughout my entire life. It flies in the faces of all these sports psychologists who say you have to let go of your fears to be successful and that negative thoughts will diminish performance. But not wanting to disappoint my parents, and later my coaches, teammates and fans, is what pushed me to be successful ... The reason nobody caught me from behind is because I ran scared. People are always surprised how insecure I was. But I was always in search of that perfect game, and I never got it. Even if I caught 10 of 12 passes, or two or three touchdowns in the Super Bowl, I would dwell on the one pass I dropped ... If I have one single regret about my career standing here today, it's that I never took the time to enjoy it.''   -- Jerry Rice, in his Hall of Fame speech Saturday night.

I don't know about you, but I found that poignant, and I think a little sad.

I actually get that, I really do.  And it sucks.  As Peter King notes, it is sad.  But in my case, maybe - just maybe - posting the old stuff is a way of reliving it, reframing it, and actually enjoying it.  Maybe I was also driven by fear and failure and I never really enjoyed it all as much as I should have.  And maybe posting about it is a way of going back, Marty McFly style, examining the details, and appreciating it more.  Does that make any sense? 

So...whether I call it insecurity, rampant nostalgia, a push against impending mortality, a means of accepting age and responsibility by reminding myself that I had once "been there" and "done that," or just a way to actually enjoy the past in a way I perhaps never enjoyed in the moment itself...well, I am ok with it all.  And in the name of archives and keeping this stuff fresh before I turn 75 and senility sets in - and maybe even in the name of enjoying it all one more time - I am going to be posting a few stories from my basketball career.  They won't be in order, just random memories, but what the hell.  Maybe it's over indulgent, maybe it's an epitaph.  But I think it will be fun.  And perhaps even cathartic.  (But probably not...)