Random Thoughts…

(1) Today’s shootdown of the Chinook by Taliban forces–which killed 31 American Special Operators, most of them SEALs from SEAL Team 6–is the deadliest day in the history of American Special Operations. This surpasses the tragedy of Operation Redwing–which includes the deaths of 3 SEALs, in addition to the 16 SEALs and Special Operators who died in the shootdown as they attempted to rescue the SEAL team from that mission.

A very bad loss for us.

(2) The debt downgrade is no surprise. Both political parties engaged in a very dishonest game of political theater, and the rational investor community knew–FROM THE GET-GO–that the numbers were total BS.

This week’s stock market meltdown was the beginning. This downgrade is just the next step. Until America gets serious about dealing with the DEBT–not the ceiling–this situation will not get close to improvement.

Sadly, the necessary spending cuts will sink our economy. Both political parties know this; neither wants to be tagged as the party responsible for the economic collapse.

As a result, they have voted to do business as usual with the promise of fake cuts, with the hope of deferring the heavy lifting until after the 2012 elections.

We may not get that far, as any bad development in the credit market–think in terms of the European meltdown, or anything that could spike the cost of borrowing like, say, a downgrade of U.S. debt. Oh wait, that happened today…–could be enough to bring down the entire house of cards.

Today, I heard mutual fund guru Adam Bold–on his radio program–suggest that the downgrade was already priced into the market. While this is entirely possible, keep in mind that he has a vested interest in people keeping their money in the stock market. This is probably a great time to make money if you’re an active trader.

It’s also a great time to lose a lot of money in such endeavor…

(3) Tiger Woods appears to be out of it, but not by much. He had a good start at the Bridgestone Invitational–it wasn’t great, but at 2-under-par it wasn’t a disaster either–but has steadily declined in rounds 2 and 3. He now sits at 1-over-par. He’s 13 shots behind the leader. That sounds bad–and it is by his standards–but he isn’t playing that badly.

The issue is whether his troubles are mechanical or psychological, or–if both–what percentage of the two. Overcoming the mechanical issues is a matter of practice. Overcoming mental issues–in a game that is more dependent on mental acumen than most other sports–is a totally different ballgame.

CORRECTION: The 31 dead is the worst loss in the world of modern Special Operations. The Ranger casualties at Point Du Hoc–World War II–were worse.

8 thoughts on “Random Thoughts…

  1. (1) Agreed. It sadly appears the Taliban may have avenged the death of Osama bin Laden.

    (2) The timing of the downgrade, on a Friday evening, surprised me. On the other hand, I have to wonder if S&P timed it to avoid causing the stock market to crash during a volatile Friday session. With the markets having the weekend to digest the news, Monday’s trading may not be so bad after all. We’ll see.

    The day of reckoning for the debt will eventually arrive, but the agreement may have postponed it and made it that much worse.

    (3) Another factor to consider is the state of Tiger’s leg and his Achilles tendon. I had a slight tear in my Achilles tendon a few years ago, plus tendinitis as well. It took two years to heal completely. Tiger is undoubtedly in much better physical condition than I am, but tendon injuries don’t heal quickly. Also, he’s not a young man anymore.

  2. @singleman
    That’s probably going to be Tiger’s biggest problem: he’s not young anymore. He’s at the age where tendon and ligament injuries–not to mention arthritis and related conditions–creep up out of nowhere. Staying in shape is not nearly as easy once you hit 35.

    Some of those injuries take a long time to heal, and–in Tiger’s case–time is a commodity that is running out. As he attempts to heal and rebuild his game, his opposition is not taking time off.

    As for the downgrade and debt reckoning, they may have bought time, but that may turn out to be nebulous. Initially, I thought that this “debt deal” may have given us 18 months. That may turn out to be way too optimistic.

    The Taliban hit the jackpot last night. You cannot easily replace 31 Special Operators. It takes years to train them, and SEAL Team 6 is basically the best of the best. Ditto for the Operators from the 160th Special Operations Aviation Regiment–which is based in my home state.

    Unfortunately, those Chinooks are huge targets. All it takes is one raghead with an RPG. If that copter is full of SEALs, it’s gonna cost us a lot, and you can’t just measure that in dollars.

    From what I’ve read, none of the SEALs killed last night were part of the Bin Laden mission. They were in the same SEAL team, but not part of that mission.

  3. the loss is overwhelming; so extremely sad.


    i don’t wish the worst for tiger … but here’s the deal … i don’t want his personal choices, which have devestated the lives of his wife and kids, to *not* have consequences that affect every area of his life. it’s not personal to him, it’s life. it’s the law of God. you get to choose what you do, but you’ve gotta take the consequences, good and bad, with the choices.

  4. @Ame
    I agree.

    At this point, he’s lost quite a bit. Most of his endorsement contracts have been dropped; his divorce settlement was huge financial impact; his golf game has declined–and this impacts his ability to generate future income, as well as his quest to break Nicklaus’ record for major championships. While he is not bankrupt, he’s a lot lighter in the wallet. This fall could not have happened to him at a worse time.

    In Michael Jordan’s case–and Julius Erving’s case–their scandals and resultant divorces came after their basketball days were over. So while there was a larger personal impact,

    (a) the financial impacts were not as bad, as the divorce settlements were more against wealth that had already been earned, rather than against projected future earnings;

    (b) because their playing careers were over, the personal fallout from their scandals was not going to impact their ability to set more records.

    In Tiger’s case, the financial impact is smaller potatoes, although it’s a lot worse than he probably thought was possible.

    Still, the personal fallout is where it’s going to hurt the most.

    When he gets on the course, his opponents don’t fear him like they used to. If John Doe has a 6-stroke lead over Tiger in the final round of the PGA Championship, his pucker factor is not going to be elevated like it would have been 3 or 4 years ago.

    That said, he doesn’t seem to be totally out of it. His latest showing was bad by Tiger’s high standards, but it wasn’t disastrous either. He has some adjusting to do in his game, but that is a matter of practice and coaching.

    Whether he will regain his championship form again, that remains to be seen. That requires more than physical effort.

    Sports like golf and tennis require more mental toughness than most other sports. These are individual sports–not team sports–and you’re physically closer to the crowd/gallery than in sports like baseball or football.

    When you’ve got a 200-yard approach with a narrow fairway on the 17th hole and you’re down 2 strokes, or if you’re down a 2 sets to 1 and facing a break point at 4-3 in the 4th set, it’s all you. If you choke, the whole world will notice. Just ask Phil golf’s most notorious chokers–Mickelson and Greg Norman–and and Ivan Lendl, who was once the worst choker in men’s tennis before he started giving himself permission to succeed.

  5. Amir,

    My pastor just posted this analogy on his Facebook page. I thought it was very good:

    “If the US Government was a family, they would be making $58,000 a year, they spend $75,000 a year, & are $327,000 in credit card debt. They are currently proposing BIG spending cuts to reduce their spending to $72,000 a year. These are the actual proportions of the federal budget & debt, reduced to a level that we can understand.” – Dave Ramsey

    Also, as far as the stock market, it is already down 200 points at 11:00AM. Thank goodness we had a gain on Friday, as it sorta eases the pain. However, if the Dow keeps dropping at this rate, we could be in for a long month. When you are looking for a job, that is not what you want to hear.

    God Bless,

  6. @Adam
    As of a couple seconds ago, it was down more than 320.

    Personally, I’m thinking we’re going to see an irrational rally this week. That rally may continue for a while if corporate earnings don’t fall too badly, and–for a while–we’ll be a safe haven for investors fleeing the Eurozone.

    How long that rally will last? If I knew the answer to that, I wouldn’t have to worry about a real job.

  7. Amir,

    And the final tally is down almost double 320 at 633.

    I sure do hope there is a rally of some kind. We can’t keep having -600 days.

    God Bless,

  8. @Adam
    Even Denninger is predicting that there will be a rally. There’s a few reasons for that:

    (a) People who have lost money may stay in the market to recoup their losses,

    (b) Arbitrageurs who see the present volatility as a way to make money,

    (c) “Bargain hunters” who may seek to speculate on stocks that may have room to bounce.

    If you’re a rational, experienced trader who knows how to hedge your bets, it’s probably not a bad time to be in that game. As long as you understand that the economic fundamentals are very bad, and you keep yourself hedged and with a viable exit strategy–and if you have the money with which to speculate–there’s a LOT of money to be made right now.

    The problem? No one on this side of eternity knows when “The Big One” is coming down, how bad it will be, how long it will last, or what the endgame/recovery will look like.

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