Off Topic: And It’s One More Day Up in the Canyon

You might recognize that line from Counting Crow’s “A Long December”. It’s a great song and I can identify with it to a certain degree. It’s not been one of my better years. As another line goes: ‘Maybe this year will be better than the last’.

I am hopeful.

At this point, we still haven’t sold our Seattle house. See the previous post: “Movin’ on Up”. Right now though, we are spending the winter in probably one of the coolest places on earth: northern New Mexico. We are roughly 30 miles southwest of Santa Fe, butted right up against the Jemez Mountains, on the Pueblo de Cochiti.

The mountains behind us are chocked full of hiking and biking trails. Since Denise and I acquired a second home here, we’ve tried to make as much as we could of the outdoor recreation opportunities available. We’ve been told that we should definitely make the hike up Cochiti Canyon. I did some research and found out that the trail is an awesome mountain biking route as well. What a way to break in my new fat tires. The first week of December, Denise was out of town visiting clients. I decided that, since the weather was mild and snow was in the forecast the next couple of days, I’d try to make the trip up and back – about 25 miles round trip. I left around 10:30 am on Dec. 7 from our place in Cochiti Lake. I got back right about 4:00 pm and it was one of the most exhilarating and incredible things I’ve ever accomplished.

The trail begins at the Rancho de Cañada and ends at the ghost town of Pines, what’s now known as Tent Rocks Ranch. The elevation gain is about 2,000 ft in a 7.5-mile (one way) trail. I started at 5,600 ft. The air is much thinner than what I’m used to as a sea-level dweller and the track was much harder to complete than I thought. I’m 45 years old and not in excellent shape, but I’m no slouch either. I’m not going to fib, I had to walk certain portions of it – some of it because I hit snow and ice patches and some of it because it was kicking my ass, but I made it to the top. I can’t tell you how great it was to finally get to the end. For those of you that think you can’t accomplish something like that, let me tell you – you can – if you’ve got the drive and the sense of adventure.

I took pictures along the way and I’ve shared them on flicker.com. Click here to take a look. I also took my iPhone with me, loaded up with a pretty cool program (free!) called TrailGuru. Download it if you have an iPhone and like to walk, hike or bike. The phone crapped out and lost signal several times due to the elevation.  But, if you want to see the route, click here. Denise was totally jealous and we plan to do it together once summer comes.

So, Happy New Year! My wish for you is that your year is better than the last. Peace.

Helps Lubricate Stuck: Balance Sheets, Markets & Economies!

Recession versus Depression

I’m in the process of moving, and I keep hearing about the possibility of a global recession as well as the depression in the housing market these days.

Just in case you don’t understand the difference between a recession and a depression, let me educate you.

A recession is when your neighbor loses their job.

A depression is when you lose yours . . . .

Another One Breaks the Buck . . .(my apologies to Queen)

In one of the first fallouts from the failure of Lehman Brothers Holdings, (LEH) this week, one of the first and largest money market funds put a seven-day freeze on redemptions. The Primary Fund (RFIXX), which is managed by the inventor of money market funds, The Reserve, indicated Tuesday that they held $785 million worth of Lehman debt that is now worthless. The result was that the value of one share of the fund fell to 97 cents. Money market funds’ number one objective is to keep the net asset value at $1. Failure to do so - called ‘breaking the buck’ – can create a ripple effect and undermine confidence in all money market mutual funds.  MMFs are considered the bastion of ‘safety’ among uninsured stock and bond investments. The freeze on redemptions will try to prevent a run on the fund by remaining investors, and give it time to perhaps find a solution.

The fund had roughly $23 billion in assets Tuesday, falling from over $64 billion at the end of May 2008. That tells me that lots of folks knew something was going on here. Since the fund is open to retail investors (regular people like you and me), as well as institutional investors, it’s likely that individual investors could actually lose money. It would be the first time in history that has happened. I wonder if the institutional investors were able to get out and leave the losses to mom and pop?

This is the nature of ‘systemic risk‘