"Are We Done? Tell Me We're Done."
MBS, ABS, CMBS, ARM, SFR, CDO, CLO, Can't spell CMO. BWIC, WTB, STC, BRB, Still Tied, Last Look, Full Fill, 5x. Spare me....
About
"Off The Desk" in Institutional Fixed Income Trading means: I don't have an answer, I had to see a man about a horse, I'm afraid to tell you what I know you don't want to hear, I'm eating a Double Fatburger, I'm in my manager's office as he's telling me I suck, I'm just too damned tired to watch the screens.
Axioms, Assertions, Admonishments, and Advice...
30 years of pontificating pedantically have made a rut well worn. More gems coming your way if you like it or not. Mr. Metaphysics, GetOffMyLawnGuy, and BackInTheDayGuy have signed on to join me as I Bobsplain...
About Me...
Retired after 16.5yrs trading Fixed Income for the Capital Group... 14yrs before that on the sell side as an Institutional Salesperson at Countrywide Securities and WAMU Capital. I've seen a lot of mortgages... PTs, Arms, CMOs, Whole Loans, Private Label... ad nauseum. I've traded rates, Agencies, Structured Products of every kind. I know all the ways to get killed because I've made all the mistakes...
First Things First...
- If you ask me I will answer... I might be wrong but I will answer
- I have a worldview based upon the search for Truth
- The First Order question is "Why?"
- The next question is "Who makes the rules?"
- It is not the ticks that matter, it's the points
- Honor and Fidelity come first
- "Done" means Done
- Just because something can be done doesn't mean it should be done
- Human nature does not change and any scheme that demands it will end in chaos
- The other guy has to feed his family, but you don't have to pay for his yacht
- If you don't know who the fish at the table is, it's you
Loquor Ergo Sum
An Autobiographical Presentation
The Pasadena Breakfast Forum
January 22nd, 2025
Thoughts from the Desk
Inspiring Poetry for Sale... Inquire Within
There was a time when poetry could move mountains...that time is long past.
My only brush with the poetic giants occurred in November of 1975... when I was a college freshman working backstage at the Harvard Square Theater...it was the Rolling Thunder Revue.. watching doors...the event was epic and to this day, Bob Dylan is the prime creative influence of my life.
But my brush with poetic greatness was far more personal than that...
Allen Ginsberg spent the entire evening trying to pick me up. He was persistent... and at each attempt I told him I was flattered... but no sale.
I have written poetry all of my life...
I have notebooks full of it and often I included pieces in my internal memos and also in the messages I sent to trading counterparties. But I never presumed to publish anything... until quite recently...
Someone I love had come back from the darkness of addiction and its resulting pathologies. I asked why this person was able to recover when so many peers did not. The answer was stunning...
"No matter how much I hated myself, how much I despaired, what harm I did to others and myself, I knew I could be forgiven."
This person's Catholic faith was like the mustard seed. It had taken root in good soil.
On the matters of forgiveness and the desire for peaceful spirit, I was moved to collate poems I had written over the years, that I had only sketched out, that I had written afresh, into a small book...
Many of them lead me to wonder where the words came from... I think I know.
The book doesn't cost much and most of the poems are not toooo long... you should give it a try.
"Songs of Redemption"
Bob Baggott
The Log
The "Green" Transition Supplies Grist for Every Mill...
A derivative of the "Green" paradigm is a focus on food that goes to waste. A farming "disrupter" posts that, "Globally, we waste about a third of all food produced - around 1.3 billion tons a year. But we're told by BIG FOOD that we need to constantly increase production..." and that, "This food cost land, water, fuel and labor to grow then never gets eaten; and if food waste were a country, it’d be the third biggest emitter of greenhouse gases behind the US and China."
N.B. Given that appending "BIG' to any human endeavor signals evilness, I suggest we target the BIG MAGICAL THINKING industry for its rejection of abundance.
The assumption that “intelligent” distribution systems can be trusted to deliver just the right amount of food at just the right time and just the right place is naive… or a calculated effort to overlay policy far less benign than ending “waste.” Complicated supply chains are fragile systems, as we saw in the Covid lockdowns. Hoarding toilet paper was an amusing anecdote; hoarding food would be a far uglier engine of chaos and atomization. There is a reason there is an overabundance of food; it is an essential element of civilization and social cohesion.
LinkedIn Follies... One Man Defending the Internet from Touts, Knaves, Fools and a Zombie Horde of Bitcoin and A.I. Shills
In response to a quant on a mission to "disrupt" the Investment Management industry...
"As far as disruption goes… since when did it become a goal? The Mongol invasion was a disruption, the European colonization of the Americas was a disruption, China subsuming Tibet was a disruption. The Earth’s collision with the SMOD would be a disruption for the ages. The world’s adepts now beaver away in their quant lairs, scheming how to enlist the accumulated knowledge of mankind in the chase for log-scale wealth and power. Be careful about assuming the passivity of the sheep… or as Fat Tony would put it, “I got your disruption right here.”
Riposte...
"Hollymoly, Bob, I was referring to new ways to find more, better, and new sources of alpha."
My Old Testament Prophet Overwrought Re-Riposte Making a Molehill Mountain....
"I worked among the brilliant of the world, all trained at great social cost in things that might be useful to the world… engineering, medicine, physics, chemistry. Instead, they went looking for alpha. Sad really. Alpha today is a matter of quantum-level frontrunning and the reduction of the lives of mankind into data points. In a way, it’s all just a construct of civilizational free riding; gather the experience of mankind over all time, mix it into a vast data cloud gleaned from an all-encompassing surveillance net, pay nothing for the input, use the information in capital markets designed to reward the initiated, and sell what’s left to the rubes to craft better come-on emails, bad poetry, and even worse “art.”
What the world really needs is an end to the 3-point shot, a deader baseball with raised seams, no face mask on football helmets, and more fighting in hockey… Bah, Humbug"
O Tempora, O Mores... Harvard Flies the Gadsen Flag! Don't Tread on Me!
Lots of notes coming in on my Harvard-related feeds. Comedy Gold. They're all fired up now that the 'ol Alma Mater has chosen to fight the Big Orange... to stand up for Truth, as they choose to define it, Justice, offered as retribution, and the American Way, the new Way aborning from the ashes of an oppressive regime.
As far as a rejection of the demands now coming from the Federal Government are concerned, the organs of Uncle Sugar have been stomping on educational institutions since the 70s. But for most of that time Harvard has been pleased with who was being stomped on and why. Now it’s a matter of “Academic Freedom” and “Constitutional Rights.” Since when in the 21st century did Harvard give a flip about constitutional rights they disagreed with. Indeed, I am quite certain 85% or more of faculty think the Constitution is a retrograde tool of oppression.
If Harvard wants to go full Hillsdale, that would be the honorable course. But they won't. They'll want their own way, and everyone's else's money to pursue it, and they'll find judges that will give it to them.
Update: The 1st Meeting of the Men's Backyard Debating Society
...went well.
Ten good men came... red wine, red ale, a golden Scotch, and sparkling water were consumed... discussion was had, all participated... AI a topic of note, Medicine past and present, the nature of Certainty... all agreed that men of good will can discuss contentious issues without rancor... but the proposition was not truly tested. Next meet-up must include people with a Weltanschauung at odds with the Original Ten.
Something I'm trying to spark...
...ways to discuss and debate important things without rancor, ad hominem attack, and with open minds... I sent out this invite.
Bob Baggott Here... The Men's Backyard Debating Society Meet-up, Thursday XXXX
Since my dog Junior has heard all my thoughts, opinions and arguments and is tired of them... and my wife finds my barking back at idiots on TV painful... upon consultation with John McAniff and his moderately enthusiastic willingness to join in, we've decided that conversation in the company of civilized men who know a thing or two about things is just the thing called for.. no speakers, no invitations, no RSVPs, no dues, no table centerpieces, no dress code... just a willingness to say what you think about anything, to listen respectfully keeping personal disdain at bay (mostly), to cede the floor and not drone on (my issue... someone often has to remind me, "Bob, this is a conversation, not a lecture")... and to generally be good company with something interesting to share.
I will stock a bar, have charcuterie on hand, and host as inofficiously as I can.
If you show up at my home on Thursday, just come in the front door and head to the back... if it's raining we'll stay inside.
BOBB
Old Bloomberg Messages...
JOSEPH XXX
06:12:34 lol what is your cell?
BOB BAGGOTT
06:13:11 The boundaries of my fears
...August, 2020
A conversation with a regional dealer...
SAMMY XXXX
06:01:27 Bob, is legacy rmbs you, or XXXX?
BOB BAGGOTT
06:11:56 If by legacy you mean pre '08 then it's pretty much neither. FYI, XXXX and I are traders that face the street... we have influence of varying degrees on decisions but we do not have portfolios. XXXX is a PM/Analyst with a focus on RMBS... He will face our counterparties directly if he so chooses but I caution that he will not respond well if he ends up getting posted on "sweet candy" marketing blasts.
SAMMY XXXX
06:13:10 That is some handy information. Really appreciate the intel/education
BOB BAGGOTT
06:13:49 Axiom... the more !!!! attached to a message, the more horrible is the bond
...September, 2020
Old Notebooks have a few little gems in them...
"Meditations from a Monastery"
"Virus, masks, elections, China, Newsom, state of fear
Riots, looting, arson, Fauci, markers of the year."
...written on retreat, November 2020
"Battles are fought by scared men who would rather be someplace else.."
March, 2020
"The Revolution"
"They’ll hang us from a lamp post
If they ever get the power.
It’s a foolish thing to kid yourself.
We wouldn’t last an hour"
...December, 2018
An internal chat regarding a sell of a not great asset at a lousy time to be a seller. The PM thanked me for trying...
11:24:56 I get that you fought for us... knew you would. And sometimes the outcome is pre-ordained. Either way, there would have been only a smile after all was over.
11:25:37 I am compelled to execute the Pavanne with fidelity
11:29:37 Compelled by my acceptance of my duty in trust and my aesthetic insistence upon honor... I fall short of my professions and I am always a sinner, but yet... the star shines as a guide to the wanderer
There are no market outcomes because there is no such thing as a market… there are only the consequences, intended or not, of the ukases of Central Bankers. Behavioral Finance and an empathetic ability to anticipate second and third level input-dependent responses are better tools than research. Value, like Truth, is malleable to the collective will.
Short version: Trace destroys liquidity, confuses decision-making, makes everyone subject to the herd, lays the groundwork for tort artists, de-values research investment, and in the personal, spreads a false consciousness that has thinned the ranks of competent professionals at a time when they are most sorely needed. Long version involves meditation upon the metaphysics of markets. But hey, thanks anyway.
..been thinking about the metastasizing domination of effective-monopoly information portals... at first they serve to network the participants of long-standing cultural arrangements... very valuable tools. The cost seems minuscule given the benefits. But in the end they devour everything that came before... we are accelerating into the gravity well to the singularity of a monolithic tyranny..
Keep the faith baby! Baruch atah Adonai, Eloheinu melech ha-olam. I miss you!
...July, 2020
Serendipity Explains Much...
Only a few weeks after I had given an autobiographical speech titled, "I Didn't Plan Any of This, Or... The Wanderings of a Scots/Irish Hard Case and the Blessings of Being Oppositional, Skeptical, and Drawn to the Interesting" I stumbled upon a book review of Iain McGilchrist's tour de force book, "The Matter with Things", a study of humanity: the human brain, its complexity, its dimensional richness, the adaptations mankind has made to the natural world, and how creation is more than the sum of its parts... anyway, that's what I've gleaned and I've only just begun... it is two volumes, 1,600 pages.
The speech I had given was a narrative of being unwilling to submit to rules, of identifying the main chance and acting upon it with urgency and without looking back, of being satisfied with finding answers within the order of magnitude needed to proceed, without solving to the end and without showing my work, turning away from the categorized to turning to the interesting.
I particularly noted the last 10 years of my working life were amongst quants that distrusted intuition, an allegorical approach to problems, and an oblique reaction to offered nominals. It was difficult to be that guy.
So, I am 150 pages into McGilchrist's book, and I am gob smacked. I had always assumed I was kind of lucky, that I fell into good things, that somehow, I hadn't worked hard enough or earned whatever came my way. His book is a to-the-letter description of my life experience and an explication of true things that I intuitively felt but had no standing, or even words, to explain.
I have more to say about this... I will say now that if you have been in the same losing battle against the triumphalist quantitative view of truth and its source, McGilchrist's book will lift your spirits and stiffen your spine... to get back in the fight.
I have become my Father...
My Father was a small business owner for most of his working life, which meant he was back and forth in the house most days. When my three brothers and I got old enough to be snide, obnoxious pains in the ass, rather than just sniveling punk-ass pains in the ass, we would tease him (make fun of him cruelly, in a manner that we thought was Joe Tough Guy but probably made him smile inside) about his advancing years and his rapidly approaching status as drooling old man. Of course, we weren't paying rent and we were eating free food, but Dad was a master of the needle so we didn't fall far from the tree.
Every time he left the house to attend to something we would count the number of time times he would have to come back inside to get something he forgot. We'd shout out the count as the front door opened... "One... Two..." It never was less than three trips back, but I remember Eight as being the record.
Well, now that's me... back into the house... then standing in the front hall trying to remember what I came back in for... multiple times. The only difference is that my children are much nicer than my brothers and I were. My kids just smile and shake their heads.
I read somewhere that transitions from one room to the next, one physical surrounding quickly changing to another, will blank the memory of just what the hell you got up to get or to do. I now make a habit of raising the intended task to primary consciousness. It's working... Now if only I can stop setting things down in places when I get distracted by something, I won't wander around, like my Father did, muttering "Who took my keys?"
I know that our AI Quant friends, once stuffed in HS lockers, are exacting revenge with every IPO... but c'mon guys, you can do better than this...
This came in on my timewasting feeds:
"GPT-4.5 vibes: it is really hard to explain what the difference is, but it just feels like the first LLM that you can just talk to and it feels intelligent. It doesn't slide into the 'teaching mode' or listing bullet points or some other AI slop behaviour. It is natural and effortlessly funny, it does not feel like it was RLHF'd to death, like all other models. It is the only model I've genuinely had 'laugh out loud' moments in a single conversation."
I couldn't help myself... I commented:
"Yeah, it's a real sidesplitter. I'm the first one to admit I have no friends, but I have enough self-respect to pay real people to talk to me instead of sucking up to software."
Sometimes you have to think Obliquely...
There are those who are gravely fearful of President Trump's efforts to exert executive control over the vast apparatus of the US Federal Government. They are afraid that were the President able to establish policy and enforce that policy across all Agencies, Commissions, Offices that touch the lives of every American, he would wield dictatorial power.
There are those that have been subject to the dictates of the Agencies, Commissions, Offices of the Federal Government and believe them to be capricious and without legal founding, unanswerable to any elected authority. They are cheering on President Trump in his efforts to plumb and make public the almost infinite bureaucratically- derived rules, spending priorities, accounting practices, ad infinitum, that have no clear legal provenance or accountability,
Both these broadly defined worldviews are correct... and incorrect.
Those that fear the President's efforts should fear them. Not because the President is Donald Trump, but because NO US President should be able to wield the awesome executive power that would accrue to the office, if the Federal Government were efficient, responsive, and effective. In its current form it can be sidestepped, corrupted to look away, manipulated by location shopping, baffled by complication, delayed by obfuscation. God protect the Republic if the wrong person should ever wield the full power of the state under the Executive Authority clearly afforded under the Constitution.
Those that cheer the President's efforts should cheer them. Not because the President is Donald Trump, but because the apparatus of the state has assumed a power never contemplated and never founded through any consent of the governed. NO bureaucratic edifice should rule, other than by faithful application of law and under the authority of the elected executive. At a minimum, the bureaucratic imperative means ever-growing self-declared mandates, ever-growing spending, ever-growing ways to say no to any activity, and ever-growing vectors of corruption stemming from obscuring complication, lack of oversight, and the sheer size of the beast.
What should truly be the consensus is that the power of the State has become a threat to the liberty of all, and the cost of state is beyond the nation's ability to bear. $37 Trillion in official debt and $Trillions more off the books is testimony that should arouse a cry of Enough!
An observation...
When I am thinking, trying to come up with ideas, imagining what things might look like, who in my past and present I like, who I want to get back in touch with... when an idea for a poem or an essay bubbles up... when I write a poem, commit words to paper... I use a fountain pen... with a nib, messy ink well... lately I have been using card stock on a clipboard, but in the past, I've filled up dozens of notebooks, many at the same time, none of the entries chronological in any notebook in any order. I've been going through them... they go back 20 years... some good stuff. It's like finding a $20 in the jacket you haven't worn in five years.
The tactile feedback of a pen scratching across rough card stock... the brachiate line of ink that seeps from the word written down.... the ability to strike/thru edit on the fly, the doodles that mark a pause for thought... it's an intimate and immediate connection between creating and the created.
But when I must write something for others, something that must be linear, grammatical, logical.... I use a keyboard and Word. I have tried to write long form by hand, but I indiscriminately run on... I change tenses and person, I repeat myself repeatedly, recursively, and over and over. The formatted blank Word page tells me I am working on writerly stuff... "sit up straight, don't lose focus, only two paragraphs to go."
I am certain that, although both processes seem to be the same - writing - they are not the same. They are two distinct activities: marking thoughts to be contemplated, and using the written word to communicate with others.
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…Off The Desk
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