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Seth Godin writes:

I had a college professor who did engineering consulting. A brand new office tower in Boston had a serious problem–there was a brown stain coming through the drywall, (all of the drywall) no matter how much stain killer they used. In a forty story building, if you have to rip out all the drywall, this is a multi-million dollar disaster. They had exhausted all possibilities and were a day away from tearing out everything and taking a loss. They hired Henry in a last-ditch effort to solve the problem. He looked at the walls and said, “I think I can work out a solution, but it will cost you $45,000 if I succeed.” They instantly signed on, because if he succeeded, the project would be saved. Henry asked for a pencil and paper and wrote the name of a common hardware store chemical and handed it to them. “Here, this will work.” And then he billed them $45,000. That’s quite an hourly wage. It’s also quite a bargain.

Someone questioned me the other day about pricing. Godin’s quote came to mind. Will flesh this out further in the days to come, but for now I thought his wisdom was appropriate.

Two videos and two predictive extremes:

And the bear:

Shout to www.pragcap.com for the video ideas.

It is time to stop using the word “we.” Education is not a “we” concept. It is an individual issue. Government has proven that it is not the solution, but the notion that it can all turn around with government leadership persists. Government education will be worse 10 years from now, not better. Guaranteed.

If you are on Facebook you know who he is, but his band will be in Rock and Roll Hall of Fame one day:

More on my FB.

From Pragmatic Capitalism:

“This is the crux of the issue really. The Fed hopes they can further induce borrowing by flattening the yield curve. Their removal of interest bearing assets has a deflationary impact, however, so if there is no pick-up in borrowing we should see a relatively small change in the overall money supply due to QE. It fattens the monetary base, but that is not money in the system. There is no net change to the money in the system due to QE. Thus, it is not inherently inflationary. A study of QE in Japan and in the USA during 2009 shows that it does not result in a change in borrowing. This is why I keep saying it’s a non-event. Households will borrow when their balance sheets are able to sustain it. Ben is just trying to herd us into risk assets or attempting to make borrowers do something they really shouldn’t be doing. It’s not a real fix.”

There is some healthy debate at that link, and I agree with the comment above, but at the end of the day the only tool we all have to decipher anything to stand a chance to make any money — is to follow the trend.

From Taleb:

Asked…if returns such as those posted by Berkshire Hathaway Inc. Chief Executive Officer Warren Buffett — who amassed the world’s third-biggest personal fortune through decades of stock picks and takeovers — are the product of luck or talent, Taleb said both played a part. If given a choice between investing with Buffett and billionaire investor George Soros, Taleb also said he would probably pick the latter. “I am not saying Buffett isn’t as good as Soros,” he said. “I am saying that the probability Soros’s returns come from randomness is much smaller because he did almost everything: he bought currencies, he sold currencies, he did arbitrages. He made a lot more decisions. Buffett followed a strategy to buy companies that had a certain earnings profile, and it worked for him. There is a lot more luck involved in this strategy.”

Much wisdom there.

A chart of the bubble lifecycle spotted today on Casey Research.

An excerpt from Maria Bartiromo (my favorite) interviewing Tim Geithner:

“A lot of people say housing is missing in action in this recovery. About a half a million mortgages have been modified under the government’s Making Home Affordable program since it started almost 18 months ago. Foreclosures are still high, about 11 million borrowers are under water, and some economists say prices are likely to fall more when the banks unload the foreclosed properties they’ve been holding off the market. Do you think the administration’s programs to aid the housing markets have been a success?”

Geithner response:

“You have to judge these things against the alternatives. And what the president’s program did, alongside what the Federal Reserve did, is bring a measure of stability to house prices much more quickly than people thought. If you look at where the market thought house prices would go at the beginning of 2009, people thought they might fall another 30%. And what happened is they stabilized because we were able to bring mortgage interest rates down to very low levels, and that helped slow the pace of erosion. House prices have been reasonably stable for more than a year. Mortgage interest rates are very low. Housing is much more affordable than it’s been in a really long time. But there’s still a huge backlog of foreclosures working their way through the system. Now, we can’t reach everybody, and a lot of those foreclosures are people with a jumbo (mortgage), it’s a relatively expensive home, it’s a second home, it’s an investor-owned property or it’s a family that can’t prove income. We just don’t think it’s fair to ask the American people to use their money, their hard-earned resources, to try to extend the benefits of these programs to people who ended up just living way beyond their means. I do not agree with people who think that we should be stepping back from the housing market. That would be a mistake. It would be really unfair to all the innocent victims of this crisis.”

All I could think of? The film ‘Used Cars’:

A classic scene:

Just saw this ad online. They should change it to:

“Stupid fuck, sheep-grazing, lose all your money trading.”