Inflection Research

March 31, 2008

Intermodal Container Tracking Device Providers

Filed under: Technology, Wireless — Tags: , — semanticzen @ 3:18 am

Over the past two years I’ve looked at nearly a dozen different companies’ wireless container tracking devices (not trailer tracking devices); many are just vapor ware products. Impeva seems to be best of breed with a reasonable price point. Intermodal container tracking devices are more prevalent now. Below are a few of the major device providers and major satellite operators

    • Provides a rugged device that is being tested by the US Army
    • Network: Multi-band cellular and Iridium
    • A major consolidator in the industry, but its disparate products are not on the same platform (frequency, air interface protocol, etc) so little is gained so far from their consolidation
    • Also provides a solution more specific to trucking services
    • Network: CDMA, AMPS (first generation analog cellular), Orbcomm
    • In January 2007 purchased Terion, a major North American trailer tracking player
    • Purchased Veriwise, which products for Europe, Africa, and Asia
      • Network: SpaceChecker which uses 5 satellites over 2 different Networks; it has a GEO-stationary satellite network in L-Band
      • For Europe it uses the European Space Agency (ESA) satellites
      • Uses the Express satellite network for coverage over Europe, Africa, and Asia
    • T2 Untethered TrailerTRACS asset management system
    • This may finally be a useful product, but with Sprint moving to WiMAX and Verizon moving to LTE I wouldn’t want to rely long-term on CDMA; so in five years expect to find a new equipment provider
    • Network: MSAT
    • Uses Globalstar
    • Previously Vistar, now owned by Transcore which is a subsidiary of Roper Industries
    • Network: Globalstar
    • Network: AT&T cellular and L-Band Sattellite (MSAT)
    • Doesn’t appear to have a device for tracking containers

March 30, 2008

Satellite Communication Networks

Filed under: Technology, Wireless — Tags: — semanticzen @ 12:34 am

There are several global and regional satellite operators. Below I’ve listed a brief overview of the existing and potential operators. I looked up this information when researching RTLS (Real-time Location Solutions). It is pretty basic, but hopefully you’ll find it useful.

  • Iridium
    • 66 operational LEO satellites + 14 in-orbit spares
  • Globalstar
    • 48 LEO satellites that relay messages to ground-based gateways (then call passed to Internet and terrestrial telephone network)
    • Can maintain connection using the same IP address
    • Coverage
      • Covers the US from 70 degrees north to 70 degrees south
      • Covers 80% of the world’s landmass (excluding Antarctica) and territorial waters in North America, South America, Europe, Asia, Australia, and New Zealand
    • Offers “secure asset tracking” service (small modem placed inside shipping container serving as tracking system, modem programmed to track container’s position)
    • Has three times more overall capacity than Iridium (in 2003 Globalstar’s capacity was seven million users or devices)
    • The maximum voice and data capability is 9.6 kilobits (four times faster than Iridium)
      • Globalstar also has multi-channel modems offering up to 144 kilobits data transfer
    • Has 30 low-earth orbit (LEO) satellites
    • Trades on the Nasdaq under ORBC
  • Inmarsat
    • Has over 24 Earth Stations and 4 active geo-synchronous orbits (GEO) satellites, providing Global satellite coverage
    • 62 member-country, internationally owned cooperative, formed over 20 years ago
    • Communications at up to 64kbit/s to over 210,000 ship, vehicle, aircraft, and portable terminals
    • New Inmarsat I-4 satellite system, which since 2004 supports Inmarsat Broadband Global Area Network (B-GAN) offering mobile data communications up to 432kbit/s
  • Thuraya Satellite Communications Company
    • Provides blanket coverage to 99 countries spanning Europe, North and Central Africa, Middle East, Central Asia, and Indian Subcontinent (approximately 40% of the world’s population)
    • Has 2 MSAT (Mobile Satellites)
    • Covers most of North America, Central America, and the Caribbean
    • launched in 1995 and 1996, plans to launch replacement satellites in 2009
    • parent company SkyTerra trades on OTC as OTC:SKYT
  • ICO Global Communications
    • Attempting to build a “next generation” network through satellites and terrestrial stations
    • Merged with Teledesic

Types of Satellite Networks

LEO (Low Earth Orbit)

Small non-geostationary satellites 485 miles high, operate in LEO, providing mainly mobile data services (e.g. Orbcomm)

Big LEO (Low Earth Orbit)

Larger non-geostationary satellite operates in LEO, providing mainly mobile telephony services. Many of new proposed ‘global mobile phone’ services are provided by this type of satellite. The satellites are located between 700km and 1,500km from Earth (e.g. Iridium, Globalstar)

MEO (Medium Earth Orbit)

Non-geostationary satellites providing mobile telephony services located 10,000km from Earth (e.g. ICO)

GEO (Geostationary)

Satellites occupying an orbital position 36,000 km above the earth that remain in a stationary position relative to Earth (e.g. Thuyara, Inmarsat)

March 27, 2008

Mesh – Implementation Factors

Filed under: Technology, Wireless — Tags: — semanticzen @ 2:19 am

Finding viable mesh products is currently very elusive. Much like fuel cells, the technology is always just around the corner. While mesh is very promising there are still very real technology issues that exist. When looking at vendors and products it is important to ask the right questions and of course understand the obstacles experienced in pilots or actual implementations. Once you have these questions answered you will know whether, for your needs, mesh is currently a pie in the sky or is a technology at the brink of taking off.

Mesh Attributes

  • Communication Performance
    • Distance, channel hopping, data rate, number of nodes, etc
    • Effects of metal, temperature, speed, etc
    • What kind of device to device communication range can we anticipate and total network range?
    • Supports how many nodes?
    • How often does the signal recalibrate? (so unaffected by other radio signals or WiFi networks)
    • What is the KB/s?
    • Can remotely flush software updates?
  • Battery Life
    • How does this affect network topology, sleep interval, etc
    • How implementing least cost routing (thru the mesh network)
  • Standards / Interoperability
    • Many providers are building proprietary implementations on top of 802.15.4
    • In the near future can we expect interoperability with any existing standard, such as
      • 802.11
      • ISO 24730
      • e-Seal standard (ISO 18185)
      • Or any other?
  • Spectrum
    • 2.4 – 2.48 GHz appears to be the preferred spectrum, but some vendors appear to be migrating to 5 GHz
  • Security
    • How could we allow partner’s mesh devices onto a secure mesh network?
    • How is security implemented: MAC level, Access control lists, encryption, etc?
  • Costs
  • Implementations / Pilots
    • Are there any implementations that you can reference?
  • Mesh Roadmap
    • Where do expect mesh technology to be in two years, from a price, feature, and performance perspective?
  • What other questions should we be asking?

March 14, 2008

RFID is Data Collection

Filed under: Technology, Wireless — Tags: , , , , — semanticzen @ 2:24 am

About a year and a half ago I wrote a white paper on deploying RFID in the containerized shipping industry after we deployed an RFID network in Alaska. It primarily focuses on giving an overview on what RFID is and how to integrate it into a company’s existing information technology system. RFID has long been at the tipping point, but I think we have finally reached that summit. As more and more companies implement RFID there are some key points to be aware of.

Achieving ROI with RFID for asset management (such as in the transportation, healthcare, and retail verticals) is no longer obscure. Use of active tags (often using Wi-Fi) on high value objects and personnel is accelerating more than item level tagging. RFID is finding some of its best adoption levels in transportation logistics; specifically in RTLS (real-time location systems), often used in conjunction with GPS.

At the company I work for we have an event driven architecture; so we were able to just create new events in our system, along with the appropriate business rules for those events, and the events flowed through our existing IT systems. It was important that we were able to quickly introduce the data into the business applications. After all the goal of an RFID project is to turning real-time or near-time data into actionable business intelligence.

RFID is a way to reduce cost of exceptions; if you design using the 80% rule the other 20% can negate ROI. As when designing any management by exception system it is critical to include your business domain experts in the design process because they can point out the 2% scenarios or the instances where valid exceptions occur.

When selecting a new RFID system spend the time to pick the right technology vendors and “flavor” of RFID and avoid implementing a solution that is not based on a standard. If you’re an early adopter you may not have the luxury of waiting for ratification of a standard, but at this point many, if not the majority of, markets targeted by RFID have a standard available.

Ensure that you build in-house expertise. You probably do not need dedicated RFID expertise, but you need to have basic understanding of how the readers and tags work and especially where and when the data is handed off, by the vendor’s products, to your system. The fears over RFID viruses have been a little farfetched, but this cloning technique could be an issue for some.

Start early and small with specific goals but think about how the solution will scale by having a roadmap for the future. As with all new technology deployments use the snowball approach; the way to build a big snowball is to start rolling up a small one. Here it is important to test readers, test tags, and especially test data integration.

When identifying the ROI for RFID projects constantly keep in mind that RFID introduces opportunities to improve business processes. Beyond business process optimization here are some common ROI Metrics to look for.

  • Improved time to market
  • Land and equipment optimization
  • Proactive response to service disruptions
  • Security
  • Lower insurance

One of the most difficult aspects of taking full advantage of an RFID system is collaborating with your supply chain partners and implementing a data sharing policy. While this can be the most difficult to navigate this is the most long-term game changing aspect of implementing RFID.

Real Time Location Systems (RTLS) – 2007 A Year in Review

Filed under: Technology, Wireless — Tags: , , , , , , , , , — semanticzen @ 1:05 am

The year 2007 saw major improvements in RFID reader technology, edge server capability (especially with the release of the latest Microsoft BizTalk server software), and RTLS (Real Time Location Systems) solutions. All of these are improving the solutions available for yard management. All of these are improving the solutions available for yard management and decreasing the costs. Now deploying a yard management solution for a mid-sized yard can often cost in the $100,000s not the $1,000,000s; providing a straightforward ROI. These solutions no longer require using proprietary protocols, but work on industry standard protocols (WiFi or ISO 24730).

Below is an overview of the top RTLS and yard management solution providers. These solution providers all advertise successful implementations and offer the flexibility of using tags that are permanently or temporarily mounted (usually using a magnet). It is also possible to buy temporary tags directly from manufacturers such as Premo Group.
 

Solution Provider Tag Technology

Frequency

 Comments
Aero Scout WiFi 2.4GHz Standards based.
WhereNet ISO 24730 / WiFi 2.4GHz Standards based. Has a reputation for having the best technology, but being expensive.
Fluensee Passive RFID / GPS UHF Browser based UI. RFID hardware dependent on partner offerings. Hardware agnostic (Motorola is their preferred provider; for Identec would have to write a new driver)
PINC Solutions Passive RFID / GPS 905-925 MHz Offers temperature monitoring, powered by the reefer, for Thermo King and Carrier reefers.

PINC Solutions claims that ROI is usually realized in less than one year; with Aero Scout making a similar claim. Fuensee claims to be a third the cost of WhereNet. Although WhereNet, acquired in February 2007 by Zebra, is lowering prices now that its’ technology has been accepted as an industry standard. Below I’ve outlined the major RFID developments affecting RTLS and the intermodal container industry.

RFID in the Intermodal Container Industry

  • Jan 2007, Dow Chemical is piloting a RFID project to track intermodal containers with hazardous chemicals
  • March 2007, Oracle, Savi, and EPCglobal completed a pilot project to track intermodal containers in Asia
  • April
    2007,     WhereNet’s RTLS solution became a global standard (ISO standard 24730)

    This is the first global technical standard for RTLS. A major target of this standard is the international intermodal shipping industry and its more than 18 million containers in use around the world. The standard defines an API to share location data over a network using web services. It also defines an air interface standard in the 2.4GHz spectrum for tags and readers. The asset’s location can be determined by multiple 2.4GHz readers or by low frequency (120 kHz) exciters.

  • April 2007, Navis and Identec picked to design Georgia Port Management System
    • Includes installing active RFID tags on over 7500 trucks at the Georgia Port Authority’s Garden City Terminal in Savannah where a huge WhereNet active tag system already orchestrates the positioning of intermodal containers
  • May 2007, the e-seal standard (ISO 18185) was ratified

RFID Marketplace – Current State & Forecasts

Frost & Sullivan (May 2007) – North American RFID market

  • The passive RFID tag market generated revenues of $124.6M in 2006
    • Predicts $486.6M in 2013 – compounded annual growth rate (CAGR) = 21.5%
  • The RFID reader market generated revenues of $23.1M in 2006
    • Predicts $241.6M in 2013, CAGR = 40%
    • The reader market still primarily driven by Wal-Mart and US Department of Defense compliance
  • Frost cautions that read accuracy is still imperfect and represents a hurdle to wider adoption

In-Stat on WiFi RTLS (May 2007)

  • WiFi RTLS tag shipments hit 135,000 in 2006, up from 20,000 in 2005
    • Predicts CAGR of 100% through 2010
  • Unit price of WiFi tags has decreased from about $50 to $45 (expected to fall to $30 in 2007)
  • G2 Microsystems has the best chip
  • AeroScout has well over 50% market share in terms of number of tags shipped because of two advantages
    • A Close relationship with Cisco
      • WhereNet also has a close relationship with Cisco and in August 2007 entered the WiFi RTLS market through a new dual-mode device (previously they had not been using WiFi)
    • Its technology can serve large outdoor environments where other WiFi RTLS technology might not perform well.

RFID Reader & Ede Server Advancements

  • March 2007, Intel’s release of a new chip for RFID readers that simplifies reader design allowing reader manufactures to accelerate price cuts, add features, shrink form factor, and increase reader compatibility.
  • April 2007, EPCglobal’s ratification of the Low-Level Reader Protocol (LLRP) standard
    • This will increase reader interoperability, allow technology providers to extend RFID reader capabilities
  • May 2007, Cisco and WhereNet announced an active WiFi tag that supports the industry standard ISO 24730 transmission signal or IEEE 802.11b; these tags will be available in August for $55
    • Cisco’s Unified Wireless Network version 4.1 gives WLANs the ability to format and read data from sensors
  • September 2007, NEC has introduced an RFID reader that operates at three different frequencies: 13.56 MHz (HF), the UHF band, and 2.45 GHz. The device, which NEC indicates is the first of its kind, is novel because typically readers operate at only one frequency. For example, a Gen2 reader (Gen2 operates on the UHF band) would not read HF tags.
  • September 2007, Microsoft announced the availability of its RFID software, BizTalk Server 2006 R2

Zebra Technologies as Industry Consolidator

Zebra Technologies is the largest seller of bar-code, plastic ID, and RFID printers and a major seller of readers. The sell their products in 90 countries and more than 90% of the Fortune 500 companies use Zebra printers. In 2006, about half the company’s revenue was outside the United States. In 2007, Zebra made a major push into the RTLS and intermodal transportation market by purchasing three companies.

In January 2007, it acquired WhereNet for $126 million in cash. At the time WhereNet anticipated 2007 sales of fifty million dollars. In October 2007, Zebra acquired both Proveo (a German company, for 16.3 million in cash) and Navis (for $145 million in cash).

Proveo developed a GPS- and WiFi-based RTLS solution for airport ground handlers with installations in some of the world’s major airports such as: Frankfurt, Munich, London, Singapore, and Dubai. Navis provides logistics solutions for marine terminals and other operations that manage supply chain inventory and cargo; such as port operating systems, yard management systems, warehouse management systems, and asset visibility systems. Founded in 1988, it has installations at over 450 customer sites in 50 countries. It is the leading provider of marine terminal management software with installations at 200 ports (there are 850 ports worldwide). It expected 2007 revenue of $60 million which would be double digit growth.

If Zebra is able to successfully integrate all these assets it should be a major player in the RTLS market

Glossary & Notes

Companies are far from automating their inbound and outbound containers; 58% of companies’ distribution center yards still manage inbound and outbound traffic using clipboards and spreadsheets. Of the 42% of companies using software to manage traffic most do so using a stand-alone application that is not integrated with the rest of the company’s systems.

RTLS – Real Time Location Systems

  • Solutions to track and identify the location of objects in real time using tags attached to the objects and readers that receive the wireless signals from these tags to determine their locations. WiFi and Active RFID are the two most common wireless technologies used in RTLS solutions.

March 7, 2008

Planning for a 2008 Recession

Filed under: Credit Bubble, Investing — Tags: , , — semanticzen @ 5:54 am

The media talks about individuals defaulting on subprime and Alt-A (e.g. liar loans) loans, but this is clearly a freezing of the overall credit market. There has not been a new CLO created since May of last year; almost a year ago. I don’t see how this lack of credit liquidity could not cause a recession as businesses and municipalities are unable to finance new projects.

Understanding that the credit market is a leading indicator of the stock market is the stock market priced for a recession? I don’t think so. In one of John Maldin’s recent letters the S&P 500 earnings are discussed. Let me summarize; all numbers are for one share of the S&P 500. In January 2007, S&P estimated that the earnings would be $89.10 (FP/E = 16) for 2007. They were actually $71.56, down 20% from the estimate at the beginning of the year and down 12% from the actual 2006 earnings. The 2008 estimate has gone from $92.30 (in March 2007) to $83.90 (in December 2007, a FP/E = 17.5) to a current estimate of $71.20 (FP/E = 19.2). The scary part of S&P’s estimates is that it expects earnings will grow 20% in both the Q3 and Q4 of 2008; very doubtful if we are in a recession.

The S&P is currently at 1,304.34 assuming earnings fall 20% from their highs which appears very reasonable from 2006’s historical peak in margins to a recession in 2008, then earnings will be roughly $65 in 2008. That would give the S&P 500 a price/earnings over 20. Expecting at least a bear market drop to a P/E below 15 seems reasonable. So, I don’t think the market has yet to price in a recession.

My approach to the current market is one third cash, one third stocks (mostly tech), and one third short derivatives (options and inverse ETFs) and gold. Since the fall last year gold has been my biggest position and has cushioned most of the drop in my stocks. If gold keeps going up at the rate it has lately you wonder if it moves into bubble territory.

I think as other central banks start cutting rates late in 2008 the old greenback will rally some. Honestly, I’d rather have less money in straight cash, but my 401K has horrible options…only one bond fund (Who designed that!?!) and I do not have the option to go self-directed, so I’m working with what I can in that account.

 

Note: The UltraShort Real Estate ProShares (Symbol SRS) was up almost 10% today so that was a nice gain. I’m still waiting to increase my stock holdings, but prices keep getting more appealing. F5 (FFIV) dropped below 20 today giving the company a valuation around ten times cash flow. Not sure how much cheaper I can expect F5 to get. Especially considering that their much panned acquisition of Acopia Networks might actually pay off.

Shorting Goldman

Filed under: Credit Bubble, Investing — semanticzen @ 2:26 am

Last month I opened a short position in Goldman Sachs. I understand that they are best of breed and have a great franchise, but ultimately the majority of their profits come from trading. Here are a few reasons I think Goldman could have peaked

  • The fall in the Global Alpha fund during the market turmoil last year shows the weaknesses in using computer models to trade unusual markets
  • Goldman also has a huge portion of their portfolio in level 3 assets
  • Goldman may face significant counterparty risk from hedge funds, private equity, and financial guarantors
  • A highly leveraged firm in a market that is de-leveraging

 

“The derivatives business is like hell easy to enter and almost impossible to exit” – Warren Buffet

“Two parties to [a derivatives] contract might well use differing models allowing both to show substantial profits for many years” – Warren Buffet

 

Update April 2008

In early April I closed one of my two Goldman short positions. I had a put position that expired in January 2009 which I closed out at a small loss and I still have open a short straddle that expires in January 2010. I was disappointed to see the Fed provide financing to the investment banks without requiring any additional oversight or regulation.

The fact that our government is now directly financing an institution with 40 to 1 leverage is absurd. The Fed giving Goldman Sachs access to financing is like the government providing crack to a crack addict. With a Fed chairman and Treasury Secretary that are both Goldman alums you get a situation similar to Italy’s.

March 6, 2008

Calculating Risk…MBIA

Filed under: Credit Bubble, Investing — Tags: , — semanticzen @ 11:46 pm

My concern is that the current financial system is based on a pile of shit faith. The Fed is the church of the 21st century. That said, I’m in the market so I must still have some faith. I don’t expect a worldwide depression; just a recession. I do think financial engineering will have to be rethought. Consider that Basel II’s foundation is built on rating agency’s’ ratings and quantitative risk models. Checkout this or read my summary below of it of AAA rated bond insurance company MBIA.

1. Impact of losses measured on post-tax basis

  • Should be $5.13B (assuming a tax rate of 38%), not $3.18B

2. Covenant Violations and Loss of Access to Liquidity Facilities

  • Lose access to $500M

3. Loss Estimates Must Incorporate Reinsured Exposures

  • $42B ($21.5B is CDOs of ABS or CLO/CBOs) of reinsurance from Channel Re should be put back on the balance sheet
  • $11B from Ram Re
  • MBIA reinsures Ambac, and Ambac reinsures MBIA

4. Bond Insurers’ Investment Portfolios are Riskier Than They Appear

  • Portfolios include substantial amount of bonds guaranteed by bond insurer itself or other bond insurers

5. Commercial Mortgage Backed Securities (CMBS) Problems Ignored

  • MBIA insured $43B net par of CMBS securities (vast majority underwritten in 2006 & 2007)

6. Claims-Paying Resources Definition Overstates Capital Available to Pay Claims

  • Include present value of future premiums discounted at extremely low discount rates (~5%)
    • Ignore defaults or prepayments
    • Purchasers of secondary market guarantees likely to terminate periodic premium payments
    • No provision for overhead, remediation, legal, or other costs required to run the business

7. Holding Company Liquidity Risk

  • The holding company has $45B of derivative obligations (currency, interest-rate, + CDS)
  • Holding company legal expenses and litigation claims
  • Holding company downgrade scenarios

Historically, AAA corporate bonds have performed up to 80x worse (based on defaults) than A muni bonds. Care to guess how AAA CDO bonds performance compares? So ratings by themselves are often relatively worthless. Now if I was to guess what the quant risk models are based on….

March 5, 2008

Calculating Risk

Filed under: Credit Bubble, Investing — Tags: , — semanticzen @ 9:12 pm

I don’t accept the assumption that risk is well understood in financial markets. That the risks are just priced in.  I don’t think risk is nearly as mathematically quantifiable as the many financial engineers, hedge fund managers, and quant funds managers argue.  While I’ll admit I don’t understand much of the math behind the PhD’s risk management theorems I read enough econ white papers to have a vague enough idea to recognize many of the assumptions enabling this math.  Many of the assumptions are so large that it makes the whole mathematical exercise mute.

Calculating risk is still more art than science which is largely being proved out by the failure of Moody’s and banks to accurately gauge CDO and CLO risk. Moody’s and others just follow trend lines. As Egan Jones has asked, when have the major bond rating firms ever anticipated a market inflection point?  In addition, the lack of transparency exacerbates the problem.  On top of that I-bankers and analysts are paid annually so they are rewarded if years of investor’s profits are eventually destroyed through bankruptcy. 

Greenspan had one great call (understanding productivity was dramatically increasing) and one horrible call (exuberantly supporting OTC derivatives and dramatically increased leverage). The increased leverage was justified by the financial engineers’ fancy new models that were just assumed to work; but have now been refuted. So what has happened? The financial engineers just adjusted the models to the new trend lines.

Many financial parties break risk down to nearly a purely mathematical equation.

  • Quant funds (e.g. Goldman claiming two consecutive days of 10 standard deviation events)
  • Hedge funds (e.g. Citadel whose computers often account for more than 10% of daily U.S. listed equity options contract volume)
  • Ratings firms (e.g. Fitch’s models for MBS’s did not account for falling house prices…prices never decrease?)

These models never anticipated the apparent shock of the housing bubble. Even though the cover page of every magazine at Barnes and Noble exclaimed the current housing bubble, but the models did not see it. Risk will always be much more than a mathematical equation. We don’t need better math or better data; we need better analysts.

 

Shorting Financials (while waiting for tech to rebound)

Filed under: Credit Bubble, Investing — Tags: , , , , , — semanticzen @ 3:00 pm

While I focus on technology investments, because ultimately that is what I know, all the money I’ve made the past year is on shorting financial companies and ETF’s like XHB or buying inverse ETFs like SRS, SKF, and TWM. I made some great calls shorting MBIA when it was trading in the fifties and shorting PMI when it was trading with a forty handle. Unfortunately, these gains have done nothing more than balance declines in other areas of my portfolio.

Considering my gains the past 9 – 12 months have come shorting financials (or being long gold) I’m pondering when to unwind these positions. Based on the write downs and continued freezing of the credit markets I don’t think financials have bottomed.

One metric I follow is the US banks non-borrowed reserves published by the fed, every two weeks, which are now negative and have been for three weeks.  I’m sure this played are part into why the fed lowered the fed funds rate an unprecedented 1.25% over 8 days. US banks non-borrowed reserves have fallen to a NEGATIVE $15 billion (last row on page 2, in the column nonborrowed).  I’m not implying the banking system is bankrupt; I’m implying several major banks are technically insolvent.  And yes, I realize that has happened before and many of the insolvent banks (including Citibank) recovered.

So far this year I’ve sold my puts on XHB, MBI, and PMI, but I think the financial sector will hit a new bottom. The bond market is usually a good leading indicator for the stock market and right now the pendulum in bond market has swung from greed to fear. I look forward to a bottoming in the financial market so the economy can get back to growing and I can get back to focusing on investing in the technology industry.

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