Thursday, December 30, 2010

Intermittent fasting benefits

Is skipping breakfast now and then really so bad? The idea of intermittent/short-term fasting is to boost growth hormone (GH) levels via fasting anywhere from 12- 48 hours at a time INFREQUENTLY so the body does not adapt with slowing metabolism. GH is important for several reasons,

1) GH helps the body gain/retain lean muscle tissue
2) GH boosts fat utilization
3) GH increases bone density
4) GH increases skin thickness for youthful looks

I became first interested in 2005 having reviewed a research paper by Louise Moller MD. As expected, this concept has become relatively well known in the bodybuilding circles today. Here're some pretty informative excerpts from an interview from Leigh Peele with Martin Berkhan.

Interview source

Leigh Peele- What was it that drove you to intermittent fasting? Is this an idea you have been toying with for sometime?

Martin Berkhan- ... I started to question the need for regular feedings and the way it was constantly being pushed as the most optimal way to eat for physique conscious people. The science certainly didn’t support the approach, so how come everyone was ranting about high meal frequency patterns being ideal?


Was eating every second or third hour important in order to “stoke the metabolic fire”? No, there was no scientific support for that idea and studies on the subject were carefully controlled, showing no correlation at all between meal frequency and metabolism.


Digestion of a regular meal takes about 6-7 hours and during this time amino acids are being released into the bloodstream. 30 g’s of casein takes about 7 hours to get fully assimilated. Double that amount and you will have amino acids in the bloodstream most of your waking hours.


There are also some correlation studies showing a link between high meal frequency and lower bodyweight in the general population, but this is easily explained when you look at the behavioral aspects surrounding low meal frequencies among “regular” people. For example, your average low meal frequency eater is usually a spontaneous eater, snacks between meals and has no clue about proper nutrition (a snickers bar on the go, maybe something from the vending machine after lunch, and so forth).

Leigh Peele-Can you give us a really brief rundown into the bare basic principals of your approach to IF? The quick and easy if you will.

Martin Berkhan- Intermittent Fasting involves a longer period of no food intake followed by a relatively brief period of eating. There’s not really a clear cut definition of it, and studies looking at IF, and human subjects, have been using a wide range of fasting periods; 20 hours in a recent study and up to 48 hours in studies on ADF (Alternate Day Fasting). This is where it becomes a bit problematic with regards to weight training and diet adherence...


My take on IF shortens the fasting period down to 16 hours – in my opinion, an ideal compromise between getting the best out of the fasting, without the negatives that may follow with a longer fast. This leaves eight hours as your eating window, in which myself and most of my clients, eat three meals, leaving room for proper pre – and post workout nutrition. I should note that I cycle calorie intake depending on where the current priority lies (fat loss, recomposition or lean mass gain). However, regardless of goals, the absolute majority of the day’s calorie intake is to be ingested in the post workout window. In my experience, this may have a nutrient partitioning effect which makes it possible to gain, or maintain, muscle even on a weekly calorie deficit, or when dieting to very low bodyfat levels.

Leigh Peele-Is it safe to say then that even with IF, just as any other fat loss plan, overall energy (in an out) is still just as important? That the users of IF need to understand that this isn’t some sort of free pass to binge on any and everything, they still need to fit it within their caloric needs for daily energy? This would make “eating to your hearts content” mean more like “don’t be stupid and scarf down a box of doughnuts correct?

Martin Berkhan-Exactly...


Monday, December 27, 2010

S&P 500 VEQTOR Index

VEQTOR stands for Volatility EQuity Target Return. Noticed it while browsing through Standard & Poors strategy indices. After some digging, found a great article explaining how it works at Surly Trader.

The strategy gains its volatility overlay through the use of short-term VIX futures.

Basic idea here is to take a long position in VIX futures against equity holdings, rebalanced frequently with respect to expected future cross correlations. As a result, it theoretically offers a much smoother return and potentially make a net profit off volatility jumps like that of late 2008.

Performance of a Dynamic VEQTOR Strategy Allocation Algorithm against a naked long S&P500 position, (click on image to see the whole thing)

Wednesday, December 22, 2010

Earnings info before press release

Wow, somebody must've made a killing off this. Another example of passing market inefficiency exploited by smart money.

So THIS Is How Bloomberg Gets Earnings Reports Hours Before They're Publicly Released...

It turns out that some companies don't want to wait until the 4PM market close to post their earnings online, perhaps because they're worried they'll forget. So what they do is post them online earlier, but don't link to the page from their web sites. This renders the page invisible--unless you know what to look for.

Humans are creatures of habit, and the humans who post earnings releases on company web sites are no different than any other humans.
Which means that if the web-page URL for a company's second quarter's earnings release was, say:

It's probably a safe bet that the URL for the third quarter's earnings release will be:


Wasteful spending of tax dollars

$3Million to research video games or cow farts? I have never realized how politically connected the universities are to the government until today.

In a time where unemployment and social distress runs wild, budget management appears to have jumped out the window in America. Of course it raises the concern that this phenomenon is highly probable in other nations, e.g. New Zealand as well.


#1 A total of $3 million has been granted to researchers at the University of California at Irvine so that they can play video games such as World of Warcraft. The goal of this “video game research” is reportedly to study how “emerging forms of communication, including multiplayer computer games and online virtual worlds such as World of Warcraft and Second Life can help organizations collaborate and compete more effectively in the global marketplace.”

#2 The U.S. Department of Agriculture gave the University of New Hampshire $700,000 this year to study methane gas emissions from dairy cows.

#3 $615,000 was given to the University of California at Santa Cruz to digitize photos, T-shirts and concert tickets belonging to the Grateful Dead.

#4 A professor at Stanford University received $239,100 to study how Americans use the Internet to find love. So far one of the key findings of this “research” is that the Internet is a safer and more discreet way to find same-sex partners.

#5 The National Science Foundation spent $216,000 to study whether or not politicians “gain or lose support by taking ambiguous positions.”

#6 The National Institutes of Health spent approximately $442,340 to study the behavior of male prostitutes in Vietnam.

#7 Approximately $1 million of U.S. taxpayer money was used to create poetry for the Little Rock, New Orleans, Milwaukee and Chicago zoos. The goal of the “poetry” is to help raise awareness on environmental issues.

#8 The U.S. Department of Veterans Affairs spent $175 million during 2010 to maintain hundreds of buildings that it does not even use. This includes a pink, octagonal monkey house in the city of Dayton, Ohio.

#9 $1.8 million of U.S. taxpayer dollars went for a “museum of neon signs” in Las Vegas, Nevada.

#10 $35 million was reportedly paid out by Medicare to 118 “phantom” medical clinics that never even existed. Apparently these “phantom” medical clinics were established by a network of criminal gangs as a way to defraud the U.S. government.

#11 The Conservation Commission of Monkton, Vermont got $150,000 from the federal government to construct a “critter crossing”. Thanks to U.S. government money, the lives of “thousands” of migrating salamanders are now being saved.

#12 In California, one park received $440,000 in federal funds to perform “green energy upgrades” on a building that has not been used for a decade.

#13 $440,955 was spent this past year on an office for former Speaker of the House Dennis Hastert that he rarely even visits.

#14 One Tennessee library was given $5,000 in federal funds to host a series of video game parties.

#15 The U.S. Census Bureau spent $2.5 million on a television commercial during the Super Bowl that was so poorly produced that virtually nobody understood what is was trying to say.

#16 A professor at Dartmouth University received $137,530 to create a “recession-themed” video game entitled “Layoff”.

#17 The National Science Foundation gave the Minnesota Zoo over $600,000 so that they could develop an online video game called “Wolfquest”.

#18 A pizzeria in Iowa was given $60,000 to renovate the pizzeria’s facade and give it a more “inviting feel”.

#19 The U.S. Department of Agriculture gave one enterprising group of farmers $30,000 to develop a tourist-friendly database of farms that host guests for overnight “haycations”. This one sounds like something that Dwight Schrute would have dreamed up.

#20 Almost unbelievably, the National Institutes of Health was given $800,000 in “stimulus funds” to study the impact of a “genital-washing program” on men in South Africa.


It happens because the people ALLOW it to occur without any punitive consequence to those responsible. Politicians are susceptible to greed and corruption like the rest of humanity, just they can get away with it more easily, for now.

Tuesday, December 21, 2010

Taleb's Code

I got this off Against Value at Risk excerpt (which deserves a later analysis), from Taleb's Fooled by Randomness. These concepts could apply to not just financial trading, but all little risk/reward scenarios we go through in everyday life.


Trader Risk Management Lore : Major Rules of Thumb

Rule 1 - Do not venture in markets and products you do not understand. You will be a sitting duck.

Rule 2 - The large hit you will take next will not resemble the one you took last. Do not listen to the consensus as to where the risks are (i.e. risks shown by VAR). What will hurt you is what you expect the least.

Rule 3 - Believe half of what you read, none of what you hear. Never study a theory before doing your own prior observation and thinking. Read every piece of theoretical research you can - but stay a trader. An unguarded study of lower quantitative methods will rob you of your insight.

Rule 4 - Beware of the trader who makes a steady income. Those tend to blow up. Traders with very frequent losses might hurt you, but they are not likely to blow you up. Long volatility traders lose money most days of the week.

Rule 5 - The markets will follow the path to hurt the highest number of hedgers. The best hedges are those you are the only one to put on.

Rule 6 - Never let a day go by without studying the changes in the prices of all available trading instruments. You will build an instinctive inference that is more powerful than conventional statistics.

Rule 7 - The greatest inferential mistake: this event never happens in my market. Most of what never happened before in one market has happened in another. The fact that someone never died before does not make him immortal. (Learned name: Hume's problem of induction).

Rule 8 - Never cross a river because it is on average 4 feet deep.

Rule 9 - Read every book by traders to study where they lost money. You will learn nothing relevant from their profits (the markets adjust). You will learn from their losses.


Thursday, December 16, 2010

Stem cell HIV fix


HIV-positive man ‘cured’ by stem cell transplant

The man received bone marrow from a donor who had natural resistance to HIV infection; this was due to a genetic profile which led to the CCR5 co-receptor being absent from his cells," they explained. "The most common variety of HIV uses CCR5 as its ‘docking station’, attaching to it in order to enter and infect CD4 cells, and people with this mutation are almost completely protected against infection.

...stem cells from a donor that lacked the CCR5 receptor, "a condition that is present in less than 1 percent of Caucasians in northern and western Europe...

The complete case history can be found at

And we will probably never hear about this in the mainstream media unfortunately.

Wednesday, December 15, 2010

Trading the Chinese RMB

As mentioned in the Wall St. Journal, the Chinese currency Yuan, or RMB is tradeable externally for the first time.

Daily trading in the yuan has grown from zero to $400 million in the past few months... Global trading in yuan allows businesses to buy and sell the currency to finance trade, investment and borrowing...

(Predictable) manipulation?

Now that RMB/USD and RMB/EUR FX contracts are available at CME, and that there's all this talk of Chinese government's influence over the currency, the next logical question becomes a matter of exploiting it for a profit. OK, so the US claims that the RMB is kept artificially low within a predictable range. If that is true, then this trade could result in practically risk free profits.

So what's the deal here? If everyone believes they know how the RMB's being manipulated, where's the volume over CME? Something's gotta give.

Friday, December 10, 2010

Day trading outsourced to China

Welcome to globalization. The New York Times has noticed a trend in outsourcing of discretionary US stock day trading to China. Given that jobs are scarce, and a culture with strong economic incentives, this was just a matter of time.

Trading firms based in the United States and Canada are recruiting inexpensive workers in China and teaching them to engage in speculative trading. This means repeatedly buying and selling shares listed on the New York Stock Exchange and Nasdaq Stock Market, hoping for quick profits.

China prohibits its citizens from using Chinese currency to buy or sell shares of companies listed on foreign stock exchanges, though there appears to be no prohibition against trading stocks for an account owned by a foreign entity.

This constant change in market microstructure is probably the explanation for the changes in daily price evolution processes that market participants must adapt to. Where will this take us? Probably a Chinese Wall St. type of thing, as there simply aren't enough "real jobs" to go around.

'Day trading is like a battlefield,' says Qu Zheng, 24, who has been trading for more than two years and typically trades a million shares a day at Lazer Trade’s office in Beijing. 'It’s very challenging because you can feel the pulse of the market.'

Wednesday, December 8, 2010

Interesting Ben Bernanke quotes

Some interesting lines from Mr. Bernanke, the Federal Reserve chairman

#1 (October 20, 2005) “House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals.”

#2 (On 60 Minutes in response to a question about what would have happened if the Federal Reserve had not “bailed out” the U.S. economy) “Unemployment would be much, much higher. It might be something like it was in the Depression. Twenty-five percent.”

#3 (February 15, 2006) “Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”

Say whaa?

#4 (January 10, 2008) “The Federal Reserve is not currently forecasting a recession.”

#5 (When asked directly during a congressional hearing if the Federal Reserve would monetize U.S. government debt) “The Federal Reserve will not monetize the debt.”

#6 “One myth that’s out there is that what we’re doing is printing money. We’re not printing money.”

#7 “The money supply is not changing in any significant way. What we’re doing is lowering interest rates by buying Treasury securities.”

#8 (November 21, 2002) “The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost.”

#9 (March 28, 2007) “At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”

#10 (July, 2005) “We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.”

#11 “Although low inflation is generally good, inflation that is too low can pose risks to the economy – especially when the economy is struggling.”

#12 (February 15, 2007) “Despite the ongoing adjustments in the housing sector, overall economic prospects for households remain good. Household finances appear generally solid, and delinquency rates on most types of consumer loans and residential mortgages remain low.”

#13 (October 31, 2007) “It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions.”

#14 (On the possibility that the Fed might launch QE3) “Oh, it’s certainly possible. And again, it depends on the efficacy of the program. It depends on inflation. And finally it depends on how the economy looks.”

#15 (November 15, 2005) “With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.”

#16 (January 18, 2008) “[The U.S. economy] has a strong labor force, excellent productivity and technology, and a deep and liquid financial market that is in the process of repairing itself.”

#17 “I wish I’d been omniscient and seen the crisis coming.”

#18 (May 17, 2007) “All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system. The vast majority of mortgages, including even subprime mortgages, continue to perform well. Past gains in house prices have left most homeowners with significant amounts of home equity, and growth in jobs and incomes should help keep the financial obligations of most households manageable.”

#19 “The GSEs are adequately capitalized. They are in no danger of failing.”

#20 (Two months before Fannie Mae and Freddie Mac collapsed and were nationalized) “They will make it through the storm.”

#21 (September 23rd, 2008) “My interest is solely for the strength and recovery of the U.S. economy.”

#22 “Economics has many substantive areas of knowledge where there is agreement but also contains areas of controversy. That’s inescapable.”

#23 “I don’t think that Chinese ownership of U.S. assets is so large as to put our country at risk economically.”

#24 “We’ve been very, very clear that we will not allow inflation to rise above 2 percent.”

#25 “…inflation is running at rates that are too low relative to the levels that the Committee judges to be most consistent with the Federal Reserve’s dual mandate in the longer run.”

#26 (June 10, 2008) “The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”

#27 “Not all information is beneficial.”

#28 “The financial crisis appears to be mostly behind us, and the economy seems to have stabilized and is expanding again.”

#29 “Similarly, the mandate-consistent inflation rate–the inflation rate that best promotes our dual objectives in the long run–is not necessarily zero; indeed, Committee participants have generally judged that a modestly positive inflation rate over the longer run is most consistent with the dual mandate.”

#30 (October 4, 2006) “If current trends continue, the typical U.S. worker will be considerably more productive several decades from now. Thus, one might argue that letting future generations bear the burden of population aging is appropriate, as they will likely be richer than we are even taking that burden into account.”

Friday, December 3, 2010

Fed. Treasury holding vs. stock market

OK I just looked at the Zerohedge post with the below graph (between Fed's US Treasury holding, the S&P500 Stock Index) and I have a problem with it.

It implies that by simply observing Fed's holdings, we can forecast future market moves, easily as pie right? Not really. I've looked up Fed's weekly statistical release of US Treasury and Marketable Securities for International Accounts vs. the S&P500 index Exchange Traded Fund SPY since 2002, and here's what I found,

Top: SPY from 2002 to this week
Bottom: Marketable Securities for International Accounts (series 1) US Treasury and (series 2)

Nevermind the ugly graphic... we can see that the Fed's holding has ALWAYS increased over time, including 07 and 08 where the stock market experienced significant volatility jumps.

OK so does anything from the Fed's weekly report "work" with respect to stock markets?
Overnight Facility (lending),
Top: SPY from 2002 to this week
Bottom: Overnight Facility

As we can see, this has a significant negative correlation to the SPY, like the VIX and the implied correlation index KCJ. So there may be some use for the professional trader.