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The easiest, fastest, and most affordable way to become a successful trader.


"This is a great book for novice and experienced traders. Soaking up its wisdom distilled from experience and introspection will help you become more successful. And that's true even if it doesn't make you a penny." --Aaron Brown, AQR

The Fed cut rates today by 50 bps (basis points) or 1/2 of 1%. The Fed lowered what’s known as the “Fed Funds rate” to 3%. This is the interest rate banks pay one another for overnight loans. The AP reported that it’s at the lowest level since spring 2005. The Fed also lowered what’s knows as “the Discount Rate” to 3.50%. This rate is the interest the Fed charges banks on loans that the Fed itself makes to them.

This is the second Fed Funds rate cut in as many weeks – the last cut was an “emergency rate cut” of 75 bps or 3/4 of 1%. Adding it all up, you’re looking at a decline of 1.50% in key lending rates.

A “Basis Point,” as it is called, equals .01 of 1% (or one-hundreth of 1%). Financial-types use the term because it’s easier to discuss interest rates this way. So, if your mortgage rate gets readjusted from 7.25% to 7.55 %, you can say that your interest has gone up .3% or 30 bps (pronounced “bips”). From the example above, you could say that the Fed has lowered rates 1.50% or 150 “bips.”

What does these consecutive rate cuts mean for you? Nothing, you’re still screwed basically. Most likely, neither your mortgage, your student loans, your car payment, nor your credit card rates, or any other type of money you’ve borrowed will become cheaper as a result of the Federal Reserve’s recent activity. Only new activity will most likely be affected.

In case you haven’t stopped reading in utter disgust, the interest you receive in your savings account is probably going down, as will CD and Bond rates in the near future.

Ugh, what’s next – higher gas prices?

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The Honorable Rudolph W. Giuliani has bowed out of the race for President and has quickly endorsed Senator John McCain for the post. “John McCain is the most qualified candidate to be the next commander in chief of the United States,” Giuliani said. “He’s an American hero,” Hizzoner said from Simi Valley, CA today.

After the endorsement, Rudy left hurriedly for Chicago where he began his new career as a CME Floor Trader in the Eurodollar pit. Below is a shot of America’s Mayor bidding up Eurodollars after today’s Fed rate cut.

rudyeurodollarpit Rudys New Gig

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20080108 indiacar graphic My New Set of Tatas

Here is a artist’s rendition of what the new vehicle from Tata Motors will look like. It’s called Nano and it is the world’s cheapest car.

Priced at the equivalent of $2,500 I’m in for two of them given all the driving I do in LA – one for me, one for my girl.

At a combined price of $5,000, they will be the cheapest set of Tata’s ever sold in Beverly Hills.

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If you are in an MBA, CFA (or CFP Program for that matter) and are headed to Wall St. with your credentials thinking you’re going to be bullet-proof, quit while you can and save a lot of money. You don’t need them – they are useless. You need a high degree of Emotional Intelligence to manage risk or to trade. This type of intelligence was totally absent from the CFOs resumes of the major Wall St. banks. Unless you have Emotional Intelligence, no degree or designation is going to help you. You will shy away from being an individual or from being unique. You will be relegated to those that want to fit in.

You figure that at least one of the Street’s CFOs would have said, “Uh, we have way too much exposure here and we need to pull back. The trade was good while it lasted, but now we need to be proactive and at least sell this shit to someone else.” A good trader knows not only when to get in and when to get out, but what the right position size is for the level of heat he can withstand.

Why didn’t they do something? They were scared to stand out from the crowd and do something different.  The sad part is, they were scared to feel their own feelings and do something about it for themselves. Not only did they fail in protecting shareholder wealth, but they were not honest with themselves either. They are the bleating sheep now.

IMHO, the CFOs should go back to their respective Alma Maters and demand a refund. All the big-named schools and all the the bullshit designations didn’t mean shit. They are shit.

The next time a recruiter or headhunter tells you that you need a terminal degree or designation, tell them that you want to be different from the rest of Wall St. and have integrity by NOT getting one.

It’s all about how you feel and how you put those feelings to work.

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skidmark A Long Skid Mark

Tom Cruise is first in line to get the new Ducati. He must feel the need for speed. Unfortunately, here in LA there aren’t too many roads for him to open it up on because we live in a perpetual state of traffic. It is said that rush-hour starts at about 5 am and runs to 4:59 am the next day. It’s always rush-hour here.

Cruise, who looked really pissed at the SAG Awards the other night, has been the talk of the internet as Videos of him vamping on Scientology spread as fast as something like this would. My guess is he had that in the back of his mind at the SAG Awards and he knew everyone else was thinking about it too, so he felt like a big idiot.

I watched one of these videos, the one where he said “Being a Scientologist, when you drive past an accident, it’s not like anyone else. As you drive past, you know you have to do something about it, because you know you’re the only one who can help.”

I was going to take the road test for a motorcycle license a few years ago and someone who I respect a lot said to me “there are two types of motorcyclists: those who have been in accidents and those who are going to be.” I never followed through with the license.

I hope for Tom’s sake, if he ever takes a spill on his new Ducati, which I hope he doesn’t, that a friendly neighborhood Scientologist is nearby to take care of him. They’re the only ones who can really help.

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