Bank Stress Tests & Other Terms

The political talk shows this past weekend generated lots of economic, financial and accounting terms such as Bank Stress Tests, Mark to Market Valuation, Cash Flow Valuation, Positive Yield Curve and 3rd Tier (Capital) Assets to name a few.  I wonder how many viewers understood those terms.  I would like to take this opportunity to simplify them for the reader.

The bank stress test is what the Treasury Department will conduct on banks and other financial institutions to determine which institutions are undercapitalized and whether they have enough reserves to weather adverse scenarios such as the rise and fall of the stock market, interest rates and currency fluctuations and exposure to undisclosed risks.  Initially the Obama Administration indicated that the stress test would only apply to financial institutions with over $100 billion in assets, but due to the worsening economic outlook, all bets are off.

Mark to market valuation is the current FASB (Financial Accounting Standards Board) and SEC (Securities and Exchange Commission) standard of valuation of bank assets.  As an example, if Citibank is holding a mortgage derivative which was valued at $600,000 before the bubble burst, but is now only $200,000, regulations require the bank to report this asset (Capital) at Mark to Market which is $200,000.  If the bank is holding many of these derivatives, Geithner’s office may declare the bank as “in distressed” and force it to take additional capital from the government in bail out money.  Many economists such as Larry Kudlow and Lou Dobbs now advocate the Cash Flow Valuation instead of  Mark to Market on the ground that the $600,000 asset still yields the same return for the bank although it is now only valued at $200,000.

The Positive Yield (interest rate) Curve is the normal yield of investments.  Longer term maturities usually have a higher yield than shorter term.  When the yield becomes negative or inverted, it spells trouble for the banking system as what started happening in late 2006.  The incentive for depositors to leave their money with the bank for longer periods of time, say 5 to 10 years is to earn a higher interest rate.  If the interest rate is the same for 5 years as it is for 1 year, this incentive is gone.  Geithner’s job now is to classify banks’ assets into tier 1, 2 or 3.  If Geithner’s agents reclassify too many of a particular bank’s assets from tier 1 to tier 3, that bank may be classified as a distressed bank and may be forced to take bail out money as additional capital.  Tier 3 assets or capital are the most risky investments the bank holds.  Examples of these are uncollateralized debts such as credit card debts and unsecured personal and business loans.

What we have seen from Bush and Paulson to Obama, Geithner and Pelosi is that our government tends to overreach in its desire to restore stability.  The Obama administration goes one step further by taking advantage of the crisis to put through its social agenda.  As Rham Emmanuel clearly stated, “we should not let a crisis go to waste.”   As recently as a week ago, many banks including Citibank and Bank of America announced that they are not in bad shape; that they are actually making money; and that they don’t need any more government bailout money.  I hope, for our own good, that such announcements and the positive yield curve will prompt investors to pull their cash out of their mattresses and home safes and hand it over to their friendly neighborhood bank.

Any opinions and views herein are the sole responsibility of the writer.

The Obama Recession

According to the Wall Street Journal, there have been 11 recessions in the United States since World War II.  These recessions lasted between 8 months and 2 years, the longest being the Carter-Reagan recession.  This Bush-Obama recession has a potential for lasting longer than that.  I believe this because the Obama Administration appears to be in a state of chaos.  It is sending mixed messages and appears to be playing it by ear, making adjustments as it stumbles along.  If Obama is having problems dealing with the economic crisis, I shudder to think how he could deal with an international crisis if one develops.

If Obama allocated the bulk of the $800 billion stimulus package to tax cuts and in rebuilding infrastructure and schools, as I thought he would, consumer confidence would have gone up.  Instead, a big chunk of the stimulus package is going towards pork barrel spending.  To make matters worse, the Obama Administration is talking about taxing the rich, those making over $250,000 by removing the taxable income limit for Medicare Tax and limiting the mortgage and charitable contribution deductions.  Geithner does not even have a deputy secretary yet.  He appears to be working alone, formulating policy and making anti free market suggestions that the Administration will increase taxes on capital gains, corporate profits and foreign investments.  There is no doubt in my mind that the stock market plunge of over 3,000 points in the Dow since the election is a direct result of investors’ lack of confidence in the Obama Administration.  When retirement accounts lose 50% of their value, consumers get scared and postpone spending.  It so ironic that China, a communist country has no capital gains tax which must be the primary reason their stock market has recorded the highest gains this year.

When will the left wing radicals learn that taxing the rich will hurt the poor people more?  The rich are the ones who eat at expensive restaurants, go on vacations, buy luxury items and employ people.  I am not rich but I do not envy the rich because my goal is to get rich myself.  We all have an equal opportunity to acquire wealth in this country provided the government does not stand in our way.

Our free market economy will recover despite Obama.  Recessions are part of a normal economic cycle.  Soon consumers will come back and resume buying necessities such as refrigerators, TVs, computers, cell phones, furniture and cars.  42% of stocks in the S&P 500 gained since the beginning of the year.  Energy costs have only increased a little bit since sinking to their lowest level last December.  According to the Los Angeles Times, the highest concentration of foreclosures and decline in property value are in 5 states; California, Nevada, Florida, Michigan and Ohio.  90% of homeowners are still paying their mortgages on time.  The dollar has recovered nicely against major foreign currencies which means anything we import is costing us less.  Still, stumbling and uninspiring Obama can prolong this recession by talking down the economy.

If Obama and his cabinet members are listening, I have a sure fire way of ending this recession immediately.  Geithner has no plan yet on how to use the $300 billion allocated to fix the banking system.  So these are my suggestions.  1) Announce the formation of RTC2 (Resolution Trust Corporation) to take over toxic assets from ailing banks.  This move is similar to what solved the Savings and Loan crisis of the early 90s.  This will restore confidence in our banking system.  2) Announce the reduction of the capital gains tax from 28% to 7%.  This will attract local and foreign capital back into the stock market which would increase the value of stocks.  3) Announce the reduction of corporate tax from 34% to 10%.  This will stimulate business activity and companies will start hiring again.

What are the chances that the Obama Administration will follow my advice?  I will not hold my breath.  They are a group of ideological left wing intellectuals who have their own agenda of equal wealth distribution and of government intrusion into our lives.  Therefore let us prepare ourselves for more pain and say hello to the Obama Recession.



How We Got Here, Market Crash of 2008, Housing Bubble

I am worried just like many investors that Obama and his cabinet members do not know how to fix our present economic problems.  That is the reason, many investors have been continuing to dump stocks and pretty much keep their cash underneath their mattresses.  What is worse is that Obama and crew as well as many legislators do not seem to know how we got here.  If we do not know how we got here, how will we know how to get out?

Obama: Well, first of all, I don't think it's accurate to say that consumer spending got us into this mess.  What got us into this mess initially were banks taking exorbitant, wild risks with other people's monies based on shaky assets and because of the enormous leverage, where they had one dollar's worth of assets and they were betting thirty dollars on that one dollar, what we had was a crisis in the financial system….. My bottom line is to make sure that we are saving or creating 4 million jobs, we are making sure that the financial system is working again, that homeowners are getting some relief…..

Question: Thank you, Mr. President.  Many experts, from Nouriel Roubini to Sen. [Chuck] Schumer, have said that it will cost the government more than $1 trillion to really fix the financial system. During the campaign, you promised the American people that you won't just tell them what they want to hear, but what they need to hear.

Won't the government need far more than the $350 billion that's remaining in the financial rescue funds to really solve the credit crisis?

Obama: Well, the credit crisis is real, and it's not over.  We averted catastrophe by passing the TARP legislation.  But, as I said before, because of a lack of clarity and consistency in how it was applied, a lack of oversight in -- in how the money went out, we didn't get as big of a bang for the buck as we should have.

-end of news conference-

If I go by Obama’s first news conference, it is clear that he is not sure how we got HERE and how we are going to get out.  This is very reminiscent of the Carter Administration.

First, let us make it clear that Republicans tried to fix this problem (banking crisis) which the Democrats helped create through the creation of the CRA, Community Reinvestment Act.  In 2005 Republicans tried to reign in Fannie and Freddie.  The Senate Banking Committee passed a serious Fannie and Freddie reform bill, S.190, that would have required Fannie and Freddie to eliminate their investments in risky assets.  (See  As co-sponsor of S.190, Senator John McCain warned of the forthcoming economic crisis.  But the bill failed in the senate.

Foreclosures started increasing in 2005 due to the fact that sub-prime mortgage borrowers could no longer afford their monthly payments.  Many of these loans were NINJA (no income, no job, no asset) loans offered by banks to under-qualified borrowers who were willing to pay a premium interest rate and mortgage insurance to qualify.  Some were balloon mortgages with no interest for the first few years.  When mortgage rates went up from a low of approx 3.5% in May 2003 to more than double that in mid 2006, many homeowners just abandoned their houses.  This was the primary cause of the banking crisis, the “financial meltdown” as Obama refers to it.

The recession accelerated sharply due to the energy crisis of 2007-2008 with $4 per gallon gas and $140 per barrel oil.  This energy crisis like the specter of death reached all across America strangling many businesses.  The recession increased foreclosures and bailout mania followed.

It is interesting to note that Obama and Geithner do not seem to know where the first part of the bailout (TARP) money went.  It is like this Mr. President:  Let’s say BANKONE takes in a one year time deposit of $1000 from John promising to pay him 3% interest per annum.  Then BANKONE lends $1000 to Peter for a period of one year at 7% interest rate.  Nice profit.  But at the end of one year, Peter has lost his job and can only pay $500.  But now John wants his full $1000 plus interest.  The bank does not have the money.  Where will he get it?  From the government.  That is how the first part of the bailout money is being used.  The banks simply deposited the money and entered it on their balance sheet, i.e. debit cash and credit loan from the government.  They are being over cautious and prudent as well they should be in their lending practices because the opposite is what got them into this mess in the first place.  Now Obama, Geithner and the democrats are asking where did the TARP money go?  Why are the banks not lending money?  Where is the help for the homeowners?

Finally, another interesting observation is that bailout mania appears to have pervaded our free market system and even our entire society seemingly making us ripe for a transition into something like European socialism.  Bailout for the auto industry, health care industry, the states, auto rental companies, adult entertainment industry, etc.  A woman during one of Obama’s town hall meetings even wanted a personal bailout….a new kitchen, a new car.

My neighbors and I, about 8 of us, are getting together this weekend so we can put together a plan for a bailout of our own from our banks which hold our home mortgages in our subdivision.  We found out that the bank reduced the principal owed by one of our neighbors from $795,000 to $400,000 because he had been 6 months late on his mortgage payments and he can only afford amortization payment on $400k.  Meanwhile, the 8 of us who have about the same mortgage balances have been paying our mortgages on time.  The bank says, “no bailout for you unless you are delinquent on your mortgage payment”.  Well, we do not want to be delinquent but we want some of that bailout money!



In Pursuit of the Grayling

When I catch her, I won’t eat her.  I will hug her and kiss her and sleep with her for 3 days before I finally mount her.

When I look back on all my accomplishments in life, fishing has to be there near the top of the list.  I have had this natural love for fishing ever since I was a little boy.  I remember getting up at 4AM when I went on fishing trips with my father and his friends.  There were times when we paddled on a canoe for over an hour to get to the fish and there were times when we just headed to the local river.  No matter, it was always fun just the same.  It seems that my father and I have this affinity with fish akin to the affinity Native Americans must have had with the buffalo.  Yes, in essence we hunt them, catch them and eat them.  Yet my father and I always felt it is not an adversarial relationship but instead a process of communing with a worthy opponent, a kindred spirit.  So fish of any kind be it a small sunfish or a 100 pound tuna, always commanded our utmost respect.

I believe it is this respect that has rewarded us, my father and me, with unforgettable fishing experiences.  Whether it is pier fishing at the SFO muni, Naples, FL, Corpus Christi, TX, on a party boat or on a private yacht off the Florida Keys, our catches always exceeded our expectation.  Oh sure there was one time when we came home with nothing but my father subscribed to the fishing adage, "a bad day at fishing is still better than a good day at work".  My father was a “compleat angler”, always ready with his light fishing rod and tackle box.  Wherever we went my father asked if a fishing hole just might be near our destination.  We caught fresh water fish such as sunnies, perch, crappies, trout, pikes, muskies, small mouth and large mouth bass, carps, catfish, etc etc.  And salt water fish such as lingcod, rockfish, flounder, tautog, porgy, sheepshead, albacore, bonefish, bluefish, striper, jewfish, mackerel, grouper, sea bass, shark, and many many more.  We caught anadromous fish such as shad, salmon, and sturgeon.  We caught them with heavy, medium and light tackle.  We caught them fly fishing, spinning, bait casting and jigging.  I even tried spear fishing in Yelapa near Puerto Vallarta, Mexico.

In the near future, I am hoping for the opportunity to experience other types of fishing such as ukai or cormorant fishing on the Nagara River in Japan.  Ukai is a traditional method of catching fish by using cormorant birds on leashes to catch fish.  Another fishing method I find interesting, though I’m not sure I want to try it is called “noodling”.  In noodling, the fisherman uses his bare hands to catch giant catfish.  This type of fishing is practiced mostly in southern United States.  The noodler locates a catfish nesting hole and then pokes his strong hand inside offering it as bait.  When the catfish bites, the noodler grabs its mouth and pulls the catfish out of its nest.  Catfish have no teeth so the danger in noodling is not from the catfish itself but from accidental drowning and from encountering more dangerous animals such as snakes, turtles, beavers and even alligators that can bite off the noodler’s fingers.

When it comes to eating my catch, I prefer saltwater fish to the fresh water variety, although for me the anadromous ones taste the best.  Needless to say, I do not waste my catch.  I eat it, give it away or sell it as in the case with my tuna catch several years ago.  I never understood the "catch and release" fishing practice of many American sports fishermen.  To me, if it is legal, a keeper, I'll keep it. To me, releasing my catch is like having sex sans an orgasm.

But before my final retirement to that big fishing hole in the sky, my dream is to catch a "grayling".  I have read somewhere that this rare fish with a beautiful sail like dorsal fin does not smell fishy at all.  Some accounts I have read describe it as possessing a flowery or herbal smell.  I have gone to Montana and Wyoming where, according to statistics they used to be plentiful, but they don't seem to be there anymore.  One of these days I'm going up there to northern Canada, by helicopter if necessary, to one of those pristine, clear and cold lakes where grayling are known to reside and catch me one of those graylings and make my dream a reality.

When I catch her, I won’t eat her.  I will hug her and kiss her and sleep with her for 3 days before I finally mount her. I figure the taxidermist would probably charge me $350.



How to Please Men or What Turns Men On

This article follows the one I wrote last year entitled HOW TO PLEASE WOMEN which received mixed reviews from those claiming expertise in the subject of SEXOLOGY.  Based on my past experience and having seen, heard and read answers from respected sexologists, clinical psychologists and certified sex therapists such as the diminutive Dr. Ruth Westheimer, Drs. Lonnie Barbach, Ava Cadell and Judith Kuriansky just to name a few, I have concluded that not too many women know how to please men or know what turns men on.  Oh sure when I was 22 it did not take much to turn me on.  A little leg here and there, a little cleavage, a finely tuned rounded butt were enough to “open the flood gates” so to speak.  But as time flew by, sex partners became more available, less challenging, so turning me on became more challenging to my playmates.  Admit it or not, I am sure you guys out there are not the same men you were 20 years ago.

So it is no wonder that many women are asking WHAT TURNS MEN ON?  They want their men to perform and they want to please their men.  They want their men to be happy.  They want to raise their men up to heights they have never arisen before.  Kudos to these unselfish women.  But what disappoints me are the answers from these so called experts who lack expertise in male sexuality even after years of academic study and clinical practice.  Just check out some of their answers:   “look into his eyes and tell him you love him….that is enough to turn him on” – Dr. Westheimer.  “Turning him on lies between his two ears not between his two legs” – Dr. Kuriansky.  Come now, those are the biggest cop-out answers I have ever heard.

So now, back to my situation.  A week before Christmas, an attractive female officemate asked me to have drinks with her after work because she wants to talk about “something”.  We first started talking about mundane things but after the second drink, she blurted out between sobs that her boyfriend was cheating on her.  “Why does this happen to me all the time?” she asked, “when I am so giving and I do everything for him.  Can’t men ever be monogamous?  Can’t they be faithful to just one girl?  Maybe I was too easy and I am no longer a challenge for him so he pursued someone else who may be harder to get…….”  At this point I felt she needed a hug so what the hell, I let her cry on my shoulder even though the bartender was looking at us.  I suggested maybe a stronger drink but she declined because she is driving, so we ordered another round of black and tan.  Then I felt it was my turn to ask the questions.  “What do you mean you are so giving and you do everything for him? “  I asked.  “You know, everything.  I am so giving.”  And she describes it in more detail.  “Do you let him give back?  Do you let him return the favor?”  I asked.  She answered, “Yes.  But I am Asian so I act more reserved and more demure.”  “Well” I said, “then I think I found the problem”.  “What turns men on is knowing that they are turning you on”.

Yes my female friends out there, the secret for turning a man on is “KNOWING THAT HE IS PLEASING THE WOMAN”.  There is no greater turn on for a man than to hear a partner moan and groan to his “touch”, or to hear her say how much she is enjoying “it”.  That is the reason men always ask if their partners have achieved orgasms.  On the other hand, it is a turn-off for most men if a woman just lies there like a dead fish or acts as if she is just doing him a favor.  The “Let’s get it over with attitude” is not conducive to a hot love-making session.

Back to my officemate.  I told her to call me just to make sure she got home safely which she did.  We talked for a while because she needed more explicit instructions and she promised to give it her best efforts so as to win back her boyfriend.  She has been on vacation since then and I can only hope everything is going well, but if not, I made it clear to her that I am always ready and willing to be of help.

Any opinions and views expressed herein are the sole responsibility of the writer.

How to please women

Let me preface this by saying that this article, although educational in nature, is of adult content and contains explicit language which some readers, especially women may find objectionable and profane.  If you think you will be offended, please do not read any further.  If you choose to forward this to your respective groups, do so at your own risk.  If you received this in error, please delete it.

Many books about sexuality describe the male and female orgasms as about the same in intensity and pleasure, but the authors admit that no one can ever be sure of this assumption because no human being has been both a man and a woman and that there are no tests to determine the truthfulness of this assumption.  I am of the opinion that women get a lot more enjoyment from sex than men and I will provide evidence that made me arrive at this conclusion.  First, God created woman to carry a lot more burdens in life than man.  Woman is the one who menstruates, gets pregnant, and carries the baby for 9 months before delivering the baby into the world. After delivery, the woman is responsible for nursing and nurturing the baby.  In addition, the woman is expected to keep house, cook, do the laundry, clean and in many cases contribute to the family income as well.  In contrast, the man though he may be the primary provider, really has it easy, sits in front of the TV, gets waited on by his mate and does not suffer the physical and emotional hardships the woman has to go through in a lifetime.

It is against this back draft that I say it is too lopsided against our adorable women.  Therefore, I have concluded that God must have created some kind of an equalizer for women.  That great equalizer I believe is that women get a lot more out of sex than men.  Most of us know that some women are capable of multiple orgasms and female ejaculation, so it is not hard for me to conclude that their orgasms must be more intense than ours……10, 20 maybe even 100 times more pleasurable than ours.  Many women try to describe “IT” in songs and poems.  The following poem by Elizabeth Barrett Browning is one of my favorites:

How do I love thee? Let me count the ways.

I love thee to the depth and breadth and height

My soul can reach, when feeling out of sight

For the ends of being and ideal grace.

Poor Elizabeth!  She was beside herself trying to grasp for the right words to describe the euphoria, the overwhelming ecstasy she must have been experiencing when she wrote this poem in the 1800s.  It is clear her soul reached unparalleled heights, not to mention the boundless breadth and abyssal depth when she was “feeling out of sight”.

Women can keep going even after an orgasm.  As a former girlfriend said to me, “it just goes on and on”. On the other hand, most men go limp after an orgasm and have to wait some time before achieving another erection.  This is called the refractory period.  18 year old males have an average refractory period of 15 minutes while those in their 70s on the average cannot achieve another erection until after 20 hours.  According to medical studies, men reach their sexual peak at the age of 21 whereas women reach theirs at the age of 40.  Are you with me?

Therefore, now that I have presented the evidence, how do we make our women happy?  How do we please women? What do women want?  I will skip the preliminaries, the dating part, the candlelight dinners, the romance because I am sure you guys out there have your own ideas and I am sure you are competent enough in that respect.  I will get right into the nitty gritty because I have given enough evidence that women are hornier than us.

In my own experience, I know of 3 different female orgasms.  I am sure there are more than 3, but borrowing Obama’s statement, anything above 3 is “beyond my pay scale”.  I have seen clitoral orgasm, vaginal orgasm and believe it or not nipple orgasm. I have also heard of anal orgasm but let’s not go there.

Women need a lot of foreplay and teasing.  So after the usual preliminaries, kissing, nibbling, pressing your naked body to hers both of you should be good and ready.  You have your full erection and her vagina is well lubricated.  At this point DO NOT JUST SHOVE YOUR DICK IN!  Tease her by ever-lightly pressing the head of your dick into her vaginal opening.  You can hold your dick and use the head to trace up and down her vaginal lips and then touch her clitoris with it lightly.  Or you can just assume the missionary position to start as if to enter her, but instead just let the head of your penis find the vaginal opening on its own while French kissing her or licking her nipples.  After a few minutes of your dickhead probing around the vaginal entrance, she will be begging for you to shove it in already by verbally telling you or by grabbing your ass or by putting you in a sort of a vice-grip hold with her two legs tightly wrapped around your back or neck.  But my advice to you, great lover that you are, or will be is to resist this and prolong the ecstasy by continuing to tease her until she has a clitoral orgasm caused by just the head of your dick touching and teasing her clit before your dick even enters her pussy.  You can shove it in while she’s having her orgasm and she would love you for it.

The vaginal orgasm sexologists are talking about is also called the G-Spot orgasm.  The G-Spot is located inside the vagina in the mons veneris general location.  Locate IT by asking your partner to lie on her back and ask her to open her legs.  With your palm facing upwards, gently insert 2 fingers, the forefinger and the middle finger into her well lubricated vagina.  Then gently probe upwards and you will feel a little mound of flesh which you can even catch in between your two fingers.  THAT IS THE G-SPOT.  Proper stimulation of this little hanging flesh can cause her to ejaculate or at least discharge some kind of liquid.  If you combine this finger stimulation of the G-Spot with the stimulation of her clitoris with your tongue it is very likely that she would ejaculate.  Some women do not like being fingered; the reason given is hygiene, dirty or long fingernails.  If your partner is like that, use clean latex gloves like the ones they use in hospitals and make sure she is well lubricated before inserting your fingers.  During intercourse, the best way to stimulate the G-Spot is obviously to thrust the penis in an upward angle towards the vaginal ceiling, mons veneris general area.  Your penis will not feel the G-Spot because the sensation of the vaginal walls on your penis is all the same.  A good position to achieve success in this worthy endeavor is to stand on your knees and let her lie on her side and let her drape one leg over your shoulder while the other leg is in between your knees.  If you enter her this way, the penis has a greater chance of making contact with her G-Spot.

I have seen several women achieve orgasms through nipple stimulation.  This can happen by employing varying light touches of your hand and tongue on her nipples.  The trick is not to zero in on the nipple right away but to lick around the areola occasionally brushing the nipple with the tip of your tongue.  You’ve hit the jackpot if she is very vocal because she will verbally give you instructions on what feels good or not so good, when to nibble, when to suck and how gentle or how hard.  But again the bottom line is to tease the nipples to the point of her begging you to do “something”.  In this endeavor, resist touching any part of her body that is below the waist.  Everything above the waist is fair game.  It would be a different explosion when she does explode.

Most women nowadays are very open and vocal about sex.  They know their bodies very well so they can help you and actually show you what feels good. They know better than you on how their clitoris and nipples should be stimulated.  Many are not shy about using sex toys such as vibrators and dildos and would gladly share the experience with their partners if they feel their partners are open to the idea.  But many men get threatened by a woman’s eagerness in employing sex toys or even if a woman touches herself.  Some men think “am I not pleasing her that she needs sex toys or has to touch herself?”  To those men I say YOU ARE SUCH PRUDES.  Let the poor woman enjoy herself after all she is the one who menstruates monthly, gets pregnant, carries the baby for nine months and gets her vagina split opened so a 9 pound bundle of joy can come out of it.  On the other hand, if you are the one who is receptive to the idea of introducing sex aids into your love making and you wish she would touch herself but she is acting like a prude, I have some pointers for you which would be the discussed in my future article on the subject.

To those of you who are not exactly spring chickens (or should, “spring cock” be more appropriate) anymore and are tempted to ask “Dido, where were you when I was young and single?” I tell you it does not matter.  Just go, use your new found knowledge and please that wonderful woman you are with.