1) Note to small investors seeking income: when someone friendly from Wall Street shows up with an income vehicle, keep your hand on your wallet.  One of the oldest tricks in the game is to offer a high current yield, where the yield can get curtailed through early prepayment (typically in low interest rate environments), or some negative event that forces the security to change its form, such as when a stock price falls with reverse convertibles.  Wall Street only gives you a high yield when they possess an option that you have sold them that enables them to give you the short end of the stick when the markets get ugly.

2) When times get tough, the tough resort to legal action.  Financial Guarantee Insurance contracts are complicated, and the guarantors will do anything they can to wriggle off the hook, particularly when the losses will be stiff.

3)  The loss of confidence in financial guarantors has not changed the operations of many muni bond funds much.  With less trustworthy AAA paper around, many muni managers have decided that holding AA and single-A rated muni bonds isn’t so bad after all.  Less business for the surviving guarantors, it would seem.

4) Jefferson County, Alabama.  Too smart for their own good.   So long as auction rate securities continued to reprice at low rates, they maintained low “fixed” funding costs from their swapped auction rate securities.  But when the auctions failed, the whole thing blew up.  There will probably be a restructuring here, and not a bankruptcy, but this is just another argument for simplicity in investment matters.  Complexity can hide significant problems.

5) Spreads were wide one week ago, even among European government bonds, and last week, as these two posts from Accrued Interest point out,  we had a significant rally in spread terms last week.  Now, credit can be whippy during times of stress, and there are often many false V-like bottoms, before the real bottom arrives.  Be selective in where you lend, and if the sharp rally persists for another few weeks, I would lighten up.  That said, an investor buying and holding would see spreads as attractive here.  When spreads are so far above actuarial default rates, it is usually a good time to buy.  I would not commit my full credit allocation here, but half of full at present.

6)  I don’t fear ratings changes, if that is the only thing going on, and there is no incremental credit degradation, or increased capital requirements.  But many investors don’t think that way, and have investment guidelines that can force sales off of downgrades that are severe enough.  Personally, I think Fitch is best served being as accurate as possible here; they don’t have as large of a base to defend, as do S&P and Moody’s.  So, if downgrades are warranted, do them, and then make the other rating agencies justify their views.

7) I have not been a fan of the ABX indices, and I thought it was good that an ABX index for auto ABS did not come into existence.

So what is a auction rate security worth if it is failing?  Par?  I guess it depends on how high the coupon can rise, and the debtor’s ability to pay.  It was quite a statement when UBS began reducing the prices on some auction rate securities.  Personally, I think they did the right thing, but I understand why many were angry.  A complex pseudo-cash security is not the same thing as owning short-term high-quality debt.

9) Then again, there are difficulties for the issuers as well, particularly in student loans.  Not only are costs increased, but it is hard to get new deals done.

10)  GM just can’t seem to shake Delphi.  In an environment like this, where liquidity is scarce, marginal deals blow apart with ease, and even good deals have a difficult time getting done.

11)  Regular readers know that I am not a fan of most complex risk control models that rely on market prices as inputs. My view is that risk managers should examine the likely cash flows from an asset, together with the likelihood of the payoff happening.  With respect to bank risk models, they were too credulous about benefits of diversification, as well as what happens when everyone uses the same model.  Good businessmen of all stripes focus on not losing money on any transaction; every transaction should stand on its own, with diversification as an enhancer in the process.

1) A lament for Bill Miller.  Owning Bear Stearns on top of it all is adding insult to injury.  Now, living in Baltimore, I get little bits of gossip, but I won’t go there this evening.  I think Bill Miller’s problems boil down to lack of focus on a margin of safety, which is the main key to being a good value manager.  During the boom periods, he could ignore that and get away with it, but when we are in a bust phase, particularly one that hurts financials.  When financials get hit, all forms of accounting laxity tend to get hit, making the margin of safety more precious.

2) Now perhaps one bright spot here is rising short interest. Short interest is a negative while it is going up, but a positive once it has risen to unsustainable levels.  What is unsustainable is difficult to define, but remember Ben Graham’s dictum, that the market is a voting machine in the short run, and a weighing machine in the long run.  The value of stocks in the long run will reflect the net present value of their free cash flows, not short interest or leverage.

3)  Now, if you want the opposite of Bill Miller in the value space, consider Bob Rodriguez of FPA Capital.  Along with a cadre of other misfit value managers that are willing to invest in unusual long-only portfolios aiming for absolute returns while not falling victim to the long/short hedge fund illusion, he happily soldiers on with a boatload of cash, waiting for attractive opportunities to deploy cash.

4) Retirement.  What a concept amid falling housing and equity prices.  Though we have difficulties at present from the housing overhang, and the unwind of financial leverage, there will be continuing difficulties over the next two decades as assets must be liquidated and taxes raised to support the promises of Medicare, and to a lesser extent, Social Security.  My guess: Medicare gets massively scaled back.

5) I get criticism from both bulls and bears.  I try to be unbiased in my observations, because amid the difficulties, which I have have been writing about for years, there is the possibility that it gets worked out.  When there are problems, major economic actors are not passive; they look for solutions.  That doesn’t mean that they always succeed, but they often do, so it rarely pays to be too bearish.  It also rarely pays to be too bullish, but given the Triumph of the Optimists, that is a harder case to make.

6) Bill Rempel took me to task about a post of mine, and I have a small defense there, and perhaps a larger point.  Almost none of my close friends invest in the market. It doesn’t matter whether we are in boom or bust periods, they just don’t.  These people are by nature highly conservative, and/or, they are not well enough off to be considering investments in equities.  They are not relevant to a post on investing contrarianism, because they are outside the scope of most equity investing.  They are relevant to a discussion of the real economy, and where your wage income might be impacted.

7) To close for the night, then, a note on contrarianism.  When I read journalists, they are typically (but not always) lagging indicators, because they aren’t focused on the topics at hand. They get to the problems late.  But when I think of contrarianism, I don’t look for opinions as much as financial reliance on an idea.  Many opinions are irrelevant, because they don’t reflect positions that have been taken in the markets, the success of which is now being relied upon.  Once there is money on the line, euphoria and regret can do their work in shaping the attitudes of investors, allowing for contrary opinions to be successful against fully invested conventional wisdom.  But without fully invested conventional wisdom, contrarianism has little to fight.

I’ve written about “the lost decade” before at RealMoney.  A lost decade is where  the stock market goes nowhere, or loses money for ten years.  My purpose in doing so was to point out:

• That it is normal for lost decades to occur.  Stock returns are weakly autocorrelated.  Good years tend to be followed by good years, and bad years by bad years.
• Once a generation, you have to get a severe boom and a severe bust.  It is partly driven by monetary policy/financial regulation laxity, followed by tightness.  It is partly driven by the fear/greed cycle, because most people, even professional investors, chase performance.
• This has a chilling effect on retirement planning.  Recall my recent article on longevity risk.  In that article, I tried to point out the similarities for retirement investment planning between Defined Benefit plans, and an individual with his own unique retirement circumstances, typically with defined contribution plans.

I’ll amplify the last point, because the WSJ doesn’t do much with it.  Nothing kills a DB plan’s funding level worse then a protracted flat/falling equity market, and low bond yields (showing not much alternative for reinvestment).  Same for an individual financial plan.  If a DB plan has an assumed earnings yield of 8%, and the stock market earns zero, and bonds earn 5%, with 60/40 stocks/bonds, than plan earns 2% when it needs 8%.  The funding deficits grow rapidly, and corporations finally bite the bullet, and begin making contributions to their DB plan, cutting earnings in the process.

As for individuals, they should start to save more for their retirements after such a long bad market, in order to get their retirement funding back on track.  Oops, wait.  This is America.  We don’t save personally (particularly Baby Boomers), and our governments run deficits (even more on an accrual basis when we look at Medicare, Social Security, and other long-term inadequately funded programs.  Only our corporations save on net.

So, what to do?

• Save more.
•  Don’t materially increase or decrease allocations to stocks.  Things may be rough for a while longer, until excesses in the US financial system and in China are worked out, but positive returns will recur.
• Avoid investing in companies with large pension funding deficits.
• Avoid investments with high embedded leverage, whether individual companies, or ETFs.
• Be wary of investing in esoteric asset classes this late in the performance cycle.  They may do well for a while longer, but their time is running out.  (It could be one year or another decade.)
• Be ready for increasing inflation.  Even with the income giveup, it is probably wise to have bond durations shorter than the benchmark.
• To the extent you can, push back retirement, or plan that you will do it in phases, where you slowly leave the formal labor force.

Of course, you could be a good stock picker, but that’s not a common gift.  The choices are hard when we have a “lost decade.”  There’s no silver bullet; only ways to mitigate the pain.

Most of my friends don’t follow the economy or the markets that closely, so it has been interesting for a number of them to ask me recently, “Should I be worried about the economy?”  The answer isn’t a simple one.

Part of the answer depends on your line of work.  Stuff that’s economically necessary (utilities, staples, government, common services) will probably do okay, though there will be some slackening of demand at the edges.  For example, I visited  a hair salon recently, and asked how business was.  The answer was that customer numbers were unchanged, but that the average purchase level had dropped.  Even government positions, stable as they are will experience some pressure, because budgets have to balance, and tax revenues are starting to sag a bit.

Now if you work in an export-oriented sector, with the dollar down, you will probably do okay.  Demand for food, energy, raw materials, industrial goods, and some technologies will continue relatively strong.

But institutions that rely on credit risk, whether borrowing or lending, will have it tough.  During the boom phase, more and more bodies get added to service the cash flow.  At his point, bodies are coming out of banking, investment banking, real estate, homebuilding, etc.

You can also ask how well capitalized and profitable your current firm is.  This is not a time that rewards high degrees of leverage and short-term financing (unless you are very well capitalized). Volatility rewards firms that have excess capital; it is worth more when times are panicky.

Another part of the answer is how dependent you are on the need for continued external financing.  Can you meet all of your obligations, with some room for error over the next two years?  Do you have excess assets to aid you if you have a sudden crisis?

Finally, if you have investments, look them over.  Examine what investments are sensitive to worsening credit problems, and remove weakly financed companies from your portfolio.  You should have some investments that are inflation-sensitive, like stock in industries that have pricing power (precious few ), cash, TIPS, and foreign-currency demoninated bonds.  Now, carefully selected muni, mortgage and corporate bonds have value here, though don’t put on a full position at present.

In summary, it depends on your personal financial position, the firm and industry that you serve, and how much you have prepared to weather bad times in investing.  It’s not a pretty time as the leverage unwinds, but if you planned in advance for the possibility of trouble, then you should do adequately.

For most of my readers, this book may prove to be too basic, but we all have friends that are not “money people.” They don’t know how to take care of their finances, and they constantly get into money troubles. This book could be of help to them.

Now, as you can see from the picture, you can see that she refers to herself as, “The Internet’s #1 Personal Finance Expert.” I can’t vouch for that. I like to think that I am aware of a wide number of trends in investing and money management, and this was the first time I heard of her.

There were five main things that appealed to me about this book. First, it’s not a long book (173 pages in the main body of text), and it is simply written, so an average person not good with finances could make his way through it. Second, even though small, it is pretty comprehensive for the finances of an average person or family. Third, I think she gets most issues right for average people who have relatively simple financial problems. Fourth, it provides advice on where to get more data, without marketing herself directly. Fifth, it summarizes action points for each area of personal finance.

I do write about personal finance a little, but you will never get the detailed advice on cash management, budgeting, personal credit, hiring advisors, and shopping smart from me that you will get from this book. My contribution is a more savvy view of investing and insurance. On the latter topic, insurance, I thought she covered the bases well. (As an aside, she shares my bias against variable annuities.)

Now, was there anything that I wasn’t crazy about? I know she wrote a book on the topic, but I think it would have been worthwhile to briefly explain why keeping a high credit rating in this age is so important, because of the effect that it has on insurance premiums, and even employment, leaving aside how much you will pay in interest, and how onerous lenders and creditors will be with you if you ever make a mistake.

Now on investing topics, the book is good but not great. For the average person that doesn’t matter. For those wanting to take a step up, I would recommend The Dick Davis Dividend. She focuses on saving enough (most people don’t save enough), and asset allocation through passive investments. She is a little too bullish on real estate for my tastes. Someone following her advice in these areas will do better than most, if they have the discipline to avoid panic and greed.

But, leaving those quibbles aside, this is a solid book, and those following its advice will benefit.

Full disclosure: If you buy through Amazon.com on any of the books that I review through links on my site, I get a very modest commission.

When I buy a car, I analyze what car I would like to buy.  I look at reliability, repair costs, overall costs, and style.  I use Consumer Reports to help me analyze this.  Then I go to the website(s) of the manufacturer in question, and copy the data on all of the used models on offer at the dealerships within 30 miles of me.  With price as the dependent variable, I then run a regression with model year as dummy independent variables, and total miles as an independent variable.  After I run my regression, I look at the cars with the biggest price deviations, the predicted price is a lot higher than actual.  I then look at the features of the underpriced cars, and choose one where there are good features with a discounted price.

I go to that dealer, review the car, test drive it, and if it passes my tests, I haggle over the price, and buy it.   In my experience, this cuts thousands off the price of the car.  What a great reason to have studied econometrics.

1) I typically don’t comment on whether we are in a recession or not, because I don’t think that it is relevant. I would rather look at industry performance separate from the performance of the US economy, because the world is more integrated than it used to be. Energy, Basic Materials, and Industrials are hot. Financials are in trouble, excluding life and P&C insurers. Retail and Consumer Discretionary are soft. What is levered to US demand is not doing so well, but what is demanded globally is doing well. Much of the developed world has over-leverage problems. Isn’t that a richer view than trying to analyze whether the US will have two consecutive quarters of negative real GDP growth?

2) So Moody’s is moving Munis to the same scale as corporates? Well, good, but don’t expect yields to change much. The muni market is dominated by buyers that knew that the muni ratings were overly tough, and they priced for it accordingly. The same is true of the structured product markets, where the ratings were too liberal… sophisticated investors knew about the liberality, which is why spreads were wider there than for corporates.

3) Back to the voting machine versus the weighing machine a la Ben Graham. It is much easier to short credit via CDS, than to borrow bonds and sell them. There is a cost, though. The CDS often trade at considerably wider spreads than the cash bonds. It’s not as if the cash bond owners are dumb; they are probably a better reflection of the true expectation of default losses, because they cannot be traded as easily. Once the notional amount of CDS trading versus cash bonds gets up to a certain multiple, the technicals of the CDS trading decouple from the underlying economics of the bond, whether the bond stays current or defaults. In a default, often the need to buy a bond to deliver pushes the price of a defaulted bond above its intrinsic value. Since so many purchased insurance versus the true need for insurance, this is no surprise.. it’s not much different than overcapacity in the insurance industry.

4) If you want a quick summary of the troubles in the residential mortgage market, look no further than the The Lehman Brothers Short Swaption Volatility Index. The panic level for short term options on swaps is above where it was for LTCM, and the credit troubles of 2002. What a take-off in seven months, huh?

5) Found a bunch of neat charts on the mortgage mess over at the WSJ website.

6) I have always disliked the concept of core inflation. Now that food and fuel are the main drivers of inflation, can we quietly bury the concept? As I have pointed out before, it doesn’t do well at predicting the unadjusted CPI. Oh, and here’s a fresh post from Naked Capitalism on the topic of understating inflation. Makes my article at RealMoney on understating inflation look positively tame.

7) The rating agencies play games, but so do the companies that are rated. MBIA doesn’t want to be downgraded by Fitch, so they ask that their rating be withdrawn. Well, tough. Fitch won’t give up that easily. Personally, I like it when the rating agencies fight back.

8 ) Jim Cramer asks if Bank of America will abandon Countrywide, and concludes that they will abandon the bid. Personally, I think it would be wise to abandon the bid, but large companies like Bank of America sometimes don’t move rapidly enough. At this point, it would be cheaper to buy another smaller mortgage company, and then grow it rapidly when the housing market bounces back in 2010.

9) Writing for RealMoney 2004-2006, I wasted a certain amount of space talking about home equity loans, and how they would be another big problem for the banking system. Well, we are there now. No surprise; shouldn’t we have expected second liens to have come under stress, when first liens are so stressed?

10) In crises, hedge funds and mortgage REITs financed by short-term repo financing are unstable. No surprise that we are seeing an uptick in failures.

11) As I have stated before, I am not surprised that there is more talk of abandoning currency pegs to the US dollar. That said, it is a getting dragged kicking and screaming type of phenomenon. Countries get used to pegs, because it makes life easy for policymakers. But when inflation or deflation gets to be odious, eventually they make the move. Much of the world pegged to the US dollar is importing our inflationary monetary policy.

12) Finally, something that leaves me a little sad, people using their 401(k)s to stay current on their mortgages. You can see that they love their homes, as they are giving up an asset that is protected in bankruptcy, to fund an asset that is not protected (in most states). Personally, I would give up the home, and go rent, and save my pension money, but to each his own here.

Getting help in investing is a tough decision.  Who is worth the money that you will pay?  Precious few.  In equities, I could probably come up with a dozen “long only” managers that have real skill, and are worth their fees with decent probability.  With hedge funds and private equity, the questions are harder, and would have a harder tme judging who has a sustainable competitive advantage.

With bond funds, the answer is simple.  Go to Vanguard.  Almost all bond managers earn roughly the same amount before fees. Over a long period of time, fees make up most of the difference in performance.  In general, low fees work with equities, but with more noise.  With index funds, the lower the fees the better, they are generic.

Now there are a few places where additional money might help.   Getting a good financial plan done can be worth the money.  For those that are wealthy, advice in limiting tax liabilities is usually worth it, though be careful when things get more complex than you can understand.  Also, insurance products can be useful, but don’t let someone sell you what is convenient for them.  Get advice from someone who won’t earn a commission, and then buy the products that you truly need.

Be careful, do your research, and buy what you want to buy.  Don’t buy what someone wants to sell you.

In some ways the biggest risk that we face is unemployment risk, because the biggest asset that most people have is the stream of wages that they will earn from their jobs.

Twenty years ago, as a young actuary who had just gotten his ASA, I made a promise to myself that I would build up my investment knowledge base, and spend one hour a day improving my skills.  Why did I decide to do this?  I realized that few actuaries were good with investments (then, on this side of the Atlantic), and that most of the risks that life insurance companies faced were driven by assets, not liabilities (still true for now).  That was different than what the actuarial syllabus would lead one to believe, but nonetheless true.  I only know of one life company that failed from bad liability pricing (calculation of premiums).  All the rest died from bad asset strategies.

That “one hour a day” (six days a week) made me invaluable to many of the companies that I served, and opened a lot of employment doors for me.  It also allowed me to make a jump out of the insurance world, at least for now.  In a knowledge based economy, continually improving your skills is a great way to advance your career, and limit downside when the inevitable bumps happen due to M&A, etc.

Now, to the average person entering the work force, it pays to look at the underlying economics of the industry to see how stable employment prospects will be.  No one is perfect in making these judgments, but there are often industries to avoid.  Examples: certain traditional media companies are being destroyed by the internet.  During the tech bubble, it was cool to work for tech companies, but how much future is there if they don’t make any money.  Wall Street is wonderful, but periodic layoffs can knock out a lot of people on the margins of the business.

Also, understanding the underlying economics of your industry instantly makes you more valuable to your employer, since many only understand the technical craft that they pursue.

Finally, cultivate friends.  Be competent, but be warm.  Help others in need when they are looking for work.  Be willing to lend a sympathetic ear to colleagues in their job troubles.  Network at industry functions.  Start a blog to demonstrate expertise.  (Okay, nix that one. )  Treat vendors with kindness and respect; learn their business if you can.  Join industry task forces to solve larger problems.

We can’t control our employment futures in entire, but we can influence how well we bounce when things don’t go right. To repeat, three ways to mitigate unemployment risk:

• Continually improve your skills
• Understand your industry
• Build a network of friends in your industry

I’m just trying to clean up old topics, so bear with me:

1) This blog is not ending because of my new job. Finacorp wants me to keep it going, and they may use the posts in PDF form for clients. Also, unlike my prior employer, Finacorp wants me to have a high degree of exposure, because it aids them. You may see me in more venues, which could include TV and radio.

2) In one sense, I had an unusually productive Saturday. I built two models — one for a critique of the PEG ratio, and one for a model of the Treasury yield curve. You will see articles on both of these, and I am really jazzed on both of them. It is not often that I get one impressive result in a day. Today I got two. I’ll give you one practical upshot for now, if you are an institutional bond investor: go long 10-year Treasuries and short 7-year. We are very near the historical wides. If you are like me, and can live with negative carry, dollar duration-weight the trade, so that you are immune to parallel yield curve shifts.

3) I didn’t read Barron’s, Forbes, or The Economist today, but I did read the Financial Analysts Journal. In it there were three articles that are worth a comment. There was an interesting article on fundamental indexation that comes close to my view on the topic. Fundamental indexation, when properly done, is nothing more than enhanced indexing with a value tilt. Will it make you more money than an ordinary index fund? Yes, it will, over a long enough period of time. Will it work every year? No. Is there one optimal way to fundamentally index? No. There is no one cofactor, or set of cofactors that optimally define value, if for no other reason than the accounting rules keep changing.

4) The second article went over the value of immediate annuities as risk reducers to retirees, something I commented on recently. The tweak here is buying annuities that start paying later in retirement, for example at 80 or 85, with the risk that if you die before then, you get nothing. Longevity insurance; a very good concept, but the execution is tough.

5) The third article was on Risk Management for Event-Driven Funds. Here’s my take: risk arb is like being a high yield bond manager. Anytime a deal is announced, you have to do a credit risk analysis:

• How likely is it that this deal will go through?
• How badly could I be hurt if it does not go through?
• Am I getting paid more than a junk bond with equivalent risk?

But the portfolio manager must ask some more questions:

• Are there any common factors in my risk arb book that could bite me? Sectors? Need for debt finance?
• What if deal financing terms go awry all at the same time? How will that affect the worst risks in my book?
• Am I getting paid more than a junk bond with equivalent risk? (Okay, it’s a repeat, but it deserves it.)

Risk arbs have been burned lately, with all of the deals that have been busted because financing is not available on easy terms. It’s tough but this happens. Most easy arbs tend to get overplayed before blowups happen. The lure of easy money brings out the worst in people, even institutional investors.

6) Naked Capitalism had an interesting post on GM. I made the following comment:

I took some criticism at RealMoney.com for writing things like this about GM, though the author here was a much better writer.

The thing is, there are enough levers here that GM can keep the debt ball in the air for some time, as can many of the financial guarantors, so long as they can make their interest payments.

The “Big 3″ lose vitality vs. Toyota and Honda each year — in the long run GM and Ford don’t make it. Perhaps after they go through bankruptcy, and shed liabilities to the PBGC, and issue new equity to the current unsecured bondholders, they can exist as smaller companies that have focus. Maybe Ford could be a division of Magna, and GM a division of Johnson Controls. At least then there would be competent management.

7) Barry Ritholtz had a good post called, 5 Historical Economic Crises and the U.S. The paper he cited went into five recent crises in the developed world, and how the current US situation stacks up against that.  Here was my comment on one of the areas where the US situation did not seem so dire, that of the run-up in government debt:

On the last point about the increase in the debt, what is missed is that a lot of the government debt increase is hidden by the non-marketable Treasury bonds held by the entitlement programs. Add that in, and consider the unfunded promises made at the Federal, State, and municipal levels, and the debt increase on an accrual basis is staggering.

We do face real risks here.  The rest of the world will not finance us in our own currency forever.  Oh, one critical difference between the US and the 5 crises — we are the worlds reserve currency, for now.

8 )  I like Egan-Jones on corporate debt.  They have quantitative models that follow contingent claims theory, and use market based factors to estimate likelihood and severity of default.  They are now trying to do models for asset backed securities.  Very different from what they are currently doing, and their corporate models will be no help.  They will also find difficulties in getting the data, and few market-based signals that inform their corporate models.  I wish them well, but they are entering a new line of business for which they have no existing tools to help them.

9) This article from Naked Capitalism pokes at the rating agencies, and the proposed reforms from the SEC.  My view is this: the financial regulators need a model on credit risk.  They need a common platform for all credit risks.  They need one set of ratings that allow them to set capital levels for the institutions that they regulate, or they need to bar investments that cannot be rated adequately.  The problem is not the rating agencies but the regulators.  How do they properly set capital levels.  They either have to use the rating agencies, or build internal ratings themselves.  Given my experiences with the NAIC SVO, it is much better to use the rating agencies.  They are more competent.

10)  Finally, on Friday, a UBS report stirred the pot regarding non-borrowed reserves.  You can see the H.3 report here. Both Caroline Baum of Bloomberg and Real Time Economics debunked the UBS piece.  But it was simpler than that.  The Fed published its own explanation at the time they put out the H.3 report.  UBS did not include the effect of the new TAF.  Whoops.  Oh well, I make mistakes also.  It’s just better to make mistakes when one doesn’t sound so certain.
Full disclosure: long MGA, HMC