Are you having any fun?

The television is full of negatives these days. Greece, Spain and the rest of Europe are struggling to figure out how they can calm their markets. The US markets seems to have a knee jerk reaction to every bit of news out of Europe. Sometimes you have to step back and take a different view of things.

Can you or I really control what is going on in Europe? Can we control what is going on in the US markets? No, so why worry about it? Jesus taught us how foolish it is to worry. He said look at the birds in the sky. God takes care of them and he will take care of you also. There is no need to worry.

Can we control what we watch on television? Yes we can. Think about this. If the Dow Jones goes up 100 points or down a 100 points should that really make you happy or sad? Where are your priorities if your happiness, (or sadness for that matter) is dictated by what happens to the Dow Jones Industrial Average?

If this sounds like you, then you need to step out and have some fun. What is it that you really like to do? Is it walking, volunteering, teaching or mentoring others, spending time with your kids or grand kids? Whatever it is, then go do it and that is an order!

In my case, my stress release is baseball. As crazy as it seems, I am turning 56 this year and I play baseball. For me, it is a great outlet to have some fun. This Memorial Day Weekend, I drove 6 hours to Atlanta to play baseball with some baseball buddies from Savannah, GA. Who do you know that drives 6 hours to play baseball?

The Savannah guys were kind enough to allow me to play with them, when I have not done so in the past on this particular team. One of my friends, threw me right into the frying pan by telling the coach that I was a lead off hitter and left fielder. When the line up card came out, I was playing left field and batting lead off. In case you do not know, batting lead off is a very key position in baseball. You are the one that has to start the game off with a bang. Your teammates are depending on you to get a hit, lay down a bunt or do whatever it takes to get on base. In my case, I had the added pressure of performing for my friends sake. I could not let him down, so I didn't.

In the four games that we played, I had a triple, three doubles and three singles, plus I got on base two other times. I hit .467 with a .600 on base percentage, scored several runs and had a few RBI's. Two of my hits were close to going out of the park. (I need more muscles!) I had seven hits in four games which ended up being one of the most hits on the team. Not bad for an old guy. Now that is how you have some fun!

Life is short. Go have some fun and quit living your life watching television.

Credit Default Swaps Worry Me

Typically, in a normal transaction where you are betting on the direction of a stock, you can buy a call, which means that you think the price of the stock will go up. Conversely, someone on the other side will buy a put, because they think the stock will go down. One of them will be right and the other will be wrong.

What if you wanted to make a bet against Greece's Sovereign Debt? For example, you would buy a Credit Default Swap that you think Greece's Sovereign Debt is going to default. If you are right, then you get paid by a counterparty, like AIG.

The problem arises when you do not have to own any of Greece's Sovereign Debt. You can speculate all day long that Greece may default. If you have a ton of money, theorectically, you could buy tons of Credit Default Swaps and by doing so, you are in effect putting undue pressure on Greece's Sovereign Debt. As a result, speculation could in effect destroy the credit rating of Greece's Sovereign Debt.

Personally, I do not think that anyone should be allowed to speculate in this manner. This is exactly what got AIG in trouble. All these speculators bought Credit Default Swaps and AIG was the one selling them. There were so many speculators with tons of money who bought tons of Credit Default Swaps, that there was no way for AIG to pay them all their speculative gains. Therefore, the U.S. Government came to the rescue.

As of today, nothing has changed in regard to this type of Credit Default Swap speculation. As a result, I expect to see history repeat itself.

This is like if I wanted to short a stock, I could do so and not have to find someone who will allow me to bet against their stock. If I can go "naked," then I could speculate wildly on just about any stock. You are supposed to only be able to short stock if you can borrow it. The problem with the Credit Default Swaps is that they are going "naked." They do not have to borrow or own, for example, any of Greece's Sovereign Debt. Therefore, in my opinion, they could take down Greece's Sovereign Debt with a ton of speculative bets.

I do not know about you, but I do not like this situation at all.

Stay tuned.