COLD

Steve Baker: “To your point . . . ‘do not complain about the weather it is all relative’ . . . as I type this (in Winnipeg, Manitoba Canada – sadly where I am right now) it is minus 32 degrees Celsius with a 15 km wind making it with wind chill minus 42 (which is minus 43.6 Fahrenheit).  Yes dressing in layers does keep you warmer but in this weather it helps if the outer layer is a house!”

MORE FREE MUSIC

Vince: “Since you like pandora, you will also enjoy theradio.

F Pandora really works on my iPhone!  Not sure theradio is quite as far along.

EXPENSIVE MUSIC

Roger Booth: “I’m with you regarding a class action suit against Sirius Radio.  I have

been trying to cancel for a couple of days, I keep getting different numbers to call.  The last one wanted me to pay for something!”

F It’s not possible to cancel a Sirius subscription unless you have your account number.  And somehow, they are even able to keep the charges going after your credit card expiration resets.  (American Express tried to help me, too, but so far, no luck.)

Peggy V.:  “I have been trying since 4:00 pm today (Jan 2 2009) to cancel my subscription...it is now 7:14 pm. My son gave me Sirius last year (2007) for Christmas and I don’t want to renew.  I got a statement in the mail today, statement date is 11/23/08, due date 11/23/08.  Sirius was activated 12/23/07.  I’ve been trying since I brought the mail in to cancel, hold for 15-20 minutes, then get busy signal and have to start over.  I have other people living in the house with me and can’t tie up the phone that much...don't have that many minutes on my cell phone, can’t cancel online.  I was told if I don’t pay it will go to collections, I don’t want this on my credit report and I don’t want extra charges.

F Tough.  You’re just going to have to listen to Sirius Satellite Radio.

SHOE THROWING

Peter Kaczowka:  “Even if (like me) you don’t support Iraqi journalist Muntadhar al-Zaidi’s act of throwing his shoes at President Bush, you must admit it is an example to would-be terrorists of a more effective way to both express their views and gain public support.  I say ‘shoe-throwers, not shoe-bombers.’ ”

F Hear, hear!

SELL RSW, SDS – AND MAYBE EVEN TBT

We did okay, but there are two reasons to sell these “double-inverse” ETFs that profit from a decline in the S&P 500 (RSW and SDS).  The first reason, as noted last week, is that the index could rise further.  The second less obvious reason – as explained in detail here – is that these funds (as well as TBT, designed to rise twice as fast the 20-year Treasury bond falls) are “reset daily.”  Which means that if the index they’re short goes up 10% one day, they go down 20% that day.  And then if the index goes down 10% the next day, they go up 20% the next day.  Which means (in this example) after two days, your $1 million (let’s say, just to make it fun) has gone down 20% the first day to $800,000 and then up 20% the next day to $960,000 – and you are out $40,000 in two days.  That mathematical quirk can dwarf the 1% or so annual expense fee, and means you not only have to be right about the direction of the market you are betting against, but it also has to decline fairly steadily, without too much choppiness along the way.

So – nicely as RSW did for us – and confident as I am that long-term U.S. Treasury bonds are overpriced, discretion in the face of frictional costs like these may be the better part of valor.  (Being not all that discreet, I can’t resist holding on to my TBT for a while – but that’s me.)