I got my ass spanked in the markets over the last year.  My 401k portfolios are surviving after some severe drawdowns (25%) between 2008 and 2009 and my trading capital in my Forex and Stock accounts got destroyed.  Luckily it was only risk capital, money I could afford to lose, but it still hurts anway.  So what did I learn from this hell of a market?  I learned that I’m not as smart as the market and that I tried to second guess it too much.  When times were good my system worked, when times got bad It hammered me.  ...

For the past year I’ve been debating shutting down my blog for many different reasons. At first I grew bored of it, then I had some family health issues to deal with, and now I’m getting terribly busy with work and life. I am forced to reassess many things in my life and formulate a new personal strategy, of which I start implementing today. I will keep this site open till the end of August and may delete it completely or just hide it away from view just in case I might decide to resurrect it one day again. I have enjoyed my time with you and I wish you the best in all your future endeavors. Cheers ...

This week's data visualization post is actually a very well made video about the Credit Crisis by Jonathan Jarvis. I learned a few things from this video myself and its a fantastic way to see how we got into this mess, and who was ultimately responsible for setting this shit ball rolling (GREENSPAN).

Everyone is so hoping that the market is bottoming because they all want to recoup their losses from last year, especially us 401k holders.  For some strange reason, corporate profits appear to be beating expectations and everyone is hoping (wishing) that the market has bottomed and turned the corner. “Corporate profits are beating expectations by their widest margins in a year, pushing most equity markets within a whisker of new year-to-date highs and the dollar toward its 2009 lows,” John Normand, head of global currency strategy at JPMorgan Chase & Co. in London, wrote in a research note. [via Bloomberg] ...

I was, and still am, against any governmental stimulus plan.  The plain and simple answer as to why is because they don't work and usually create noise in the economy.  The only way things will get better is when the mal-investment is worked out of the system and assets flow from the weak hands to strong hands.  Now with talks of another stimulus plan floating around, on the heels of this year's $787 Billion stimulation, I can't help but wonder if we would make the same mistake twice? ...

My friend at Paper Economy is testing out his new data visualization engine and he pulled together a scary chart of Year over Year house prices in Phoenix, Arizona. Can you believe it? We are below 2000 prices?     This is truly a frightening chart and I suspect that real estate prices could go even lower in Arizona, and the rest of the country for that matter, if people continue to get laid off.  This would confirm my observation from earlier this year about real estate and equity prices having further to fall. ...

I wanted to take a moment and say thanks to Tibor, one of my 12 readers, for forwarding me some really interesting research papers on modeling NFL and NBA games with neural nets. There are some really good nuggets of information in those papers, especially the discussion on setting the right momentum and learning rates. I used that information to fiddle around with my neural net model and I'm posting some recent results from my DRAFT NFL neural net point spread model.  As you can see, the model is pretty good at determining if the home or visiting team will win (a negative sign means the home team wins) but the predicted spreads are way off relative to actual spreads. ...

I agree with fund manager Mobius that derivatives are a bad thing but banks love them because they make a lot of money from them.  The problem I see is that all the recent acqusitions of failing derivative portfolios (Bear Stearns, Lehman Bros) by other firms, such as JP Morgan, allows fewer and fewer firms to have more and more derivatives.  All you need now is one large financial institution to go down and you'll drag the entire system down. ...

I came across a Bloomberg article that I found absolutely tantalizing. Apple Inc. is forcing Chinese companies that make their Ipods and other products, to pay workers overtime that they deserve.  It seems that some Chinese companies routinely agree to pay their workers overtime when they negotiate with Western partners but then "forget" about it. Apple Inc., which relies on Chinese manufacturers for its iPhones and iPod music players, found 45 of the 83 factories it audited last year didn’t pay proper overtime and 23 provided less than minimum wage, according to its 2009 progress report on supplier responsibility. The Cupertino, California-based company required them to adjust practices to ensure correct payments, it said in the report. [via Bloomberg] ...

I think I’m going to start a new weekly data visualization feature on Neural Market Trends, starting with the OECD. I love web sites that take complex, and sometimes boring data, and displays them in a visually pleasing way. This week’s data visualization feature is the OECD Factbook eXplorer which is maintained by the Organization for Economic Co-operation and Development. The OECD is an organization that compiles all kinds of data for many countries and then allows you to display that onto a flash based map. You can easily find data about fertility, employment, and inflation rates for different countries, all with the click of a mouse, and display them on a colorized map. You can zoom in and out, drag the map around, and add more information from pull down menus. ...