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Is the market crashing? Watch the junk credit spread.

March 31, 2018

The stock market has shown increased volatility this year after a long period without any significant declines.   This has led some investors to be asking if the market has peaked, or even if it’s about to crash.

To gain a better idea of what’s going on ‘under the hood’, we can look for signs of stress in the high yield ‘junk credit’ market.   Let’s review the jargon first.  High yield is also known as ‘junk credit’ for its higher risk of default and being rated below investment grade.  The heightened risk means  greater sensitive to tightening credit conditions.

The  Merrill Lynch High Yield index  has a yield of 6.36% at the moment.  This is close to the 6% combined ‘yield’ of the S&P500 trailing earnings and dividend.     When junk bond market is under stress and fear of default is rising, the yields ‘blow out’ or spike quickly.  We’re seeing this happen right now with concerns over TSLA credit.

Here’s two charts showing how junk credit yields blew out during times of stress.   The charts show the yield after subtracting the ‘risk free’ treasury rate.   This ‘spread’ gives us a better idea of the risk premium demanded by junk credit investors.  Currently the spread remains lower in around the range of 3.8%

Chart #1  The S&P500 index in blue compared to the Merrill Lynch B grade corporate yield spread over the 10 year Treasury.   At each of the previous peaks before the stock market crashed, there was a sudden spike in the credit spread. We even saw this spike in 2011 and 2015 when default fears increased.   At the moment we’ve yet to see a similar jump in the high yield spread.   Which would suggest that currently investors are not sensing any increasing risk of default (at least for now).   A spread approaching the long term median or average range of 5% would give cause for alarm.


Chart #2  The Dow30 index vs the Merrill Lynch high yield spread. Recession period in grey.


The Merrill Lynch high yield spread chart is updated daily here:

The WSJ updates bond benchmarks daily here:



You can’t mark everything!

June 7, 2014

Although I’ve been teaching high school for over a decade, I continue to struggle with the ever growing pile of work that seems to need marking and grading. And I know I’m not the only teacher dealing with this. Workaholism is an illness and I’ve decided it’s time to take this bull by the horns.  I’m asking around, my dear reader, and I’d appreciate any insight you have.

More than ever lately I want to know the strategies other teachers have found to help deal with all the marking. I’m turning to the power of the intertubes and harnessing this push button publishing.   If you teach, what are your strategies to manage the workload outside of class time?  And anyone who seems to be always bringing work home to do after hours, what are your tips and suggestions?  Where one little gem of an idea may not be enough on it’s own, just imagine the fortune of ideas we could collect together.

It can be a real problem to find the right “work vs life” balance. If you focus on work too much, your home life becomes neglected. It starts with neglecting your personal stuff, mess, overdue bills and so on.  Unchecked it can eventually get really ugly with a malfunctioning car, leaking roof or broken marriage.

The symptoms of this disease are obvious.  We drag the pile home, and drag it back to work, day after day in hopes of getting some more marking done.  It’s like a ball and chain which weighs you down every hour of every day of the year except perhaps for two months. This endless chore can even be depressing if it gets to you enough.  Working more is as much the illness as it is not the solution.

The routine problem: 

I’ll paint an ugly little picture that a few teachers might relate to.  Any spare time at 7am before students arrive is typically spent preparing for the next class.  There’s always something needing to be done, whether it’s designing a rubric, writing a handout, a power point, copying class lists or any other billion things to do. When they walk in to class, you’re teaching and managing 30 children until they leave.  Then there’s those extra tasks teachers are asked to do when working at a school (that has little to do with teaching your classes).   Then there’s the sorting, cleaning, organizing and you get the general idea…  Hey is it 5:30 pm already?  You grab the marking pile and head for home.

And doesn’t end there. Commuting in traffic takes another hour. You get some dinner, spend a few minutes time with family.  You’ve perhaps an hour before bedtime, so  you try to get some work done but you get through only 6 papers because you’re really tired.  84 more to go.  And you know that by the Friday due date  about 90 new assignments will be turned in by the students in each of your courses.   Does this sound familiar at all?

Admit defeat:

I sometimes feel like I’m just fighting to survive.  And so I spend too much time feeling bad about always been behind in my marking. As soon as I return one marked assignment, some students will ask about the other assignments that are not returned yet, and for another mark update.  In “The Art of War” Sun Tzu writes, “Know your enemy but not yourself, wallow in defeat every time.” It’s important to really know your weaknesses and limitations as a person.   I don’t know why it’s taken me so long to realize the truth that you can’t mark everything.  In my training and through my career, we whine about all the marking, but try to slog our way through.  The idea that not everything that the students do gets graded is hardly ever talked about. Perhaps we’re afraid we won’t win teacher of the year award if anyone finds out.  We’re worried someone might think we suck at our job.

A major part of teaching is the class time dedicated to giving the students activities to do where they will use their knowledge and apply the lesson.   Teachers give students assignments, but sometimes it’s for practice, and sometimes for evaluation.  And pretty much any sane person has no problem with this.  But if students find out that the assigned task isn’t being graded, most of them won’t bother to do the assigned task for learning.  So the game teachers play is to give students the impression that everything they do will affect their mark. But clearly something isn’t working smoothly in my approach right now, when like so many other teachers, I know I’m not keeping up with all the piles of assignments turned in.

I’m not alone in this struggle:

The phrase was so clear to me this week I googled it.  Chris Lehmann writes, in his “Letter To a Young Teacher”, that it takes longer than 3 or four years of teaching to learn that you can’t mark everything.  I guess it took me three times longer than this to really comprehend.  It was nice to read what other teachers think about this.  KarenB shared her problem:

I really need to find out how to leave some of my work at school. I have been bringing home SO much work and I am beginning to miss my own children. They are in high school and will be gone before I know it.

Again a 25 year veteran of the profession replies with the wisdom that you simply just can’t mark everything.  Now I’m just starting to consider this idea carefully.

Trying a different approach. 

Currently I think that my students always look for a mark on any work returned.  Maybe this is because my students have learned to expect this? Is it even possible that I could return work and my students would feel fine about not receiving a grade for it? In her blog Embro Educated, Deanna Kirwin shares her experience:

“I can’t collect everything and I certainly can’t mark everything. This is where I dabbled with the idea of the student’s perceptions of marks. When I returned there work rarely did they look for a mark. They looked for evidence that I had read through their work. That  I took the time to appreciate the work that they had put in during the period even if it was completing a worksheet together as a class or working on an in class activity and making a reflection on their learning. Through the use of comments, feedback, praise and guidelines for improvement I had found that balance.”

Kenney Peiper is a 14 year veteran English teacher at a Secondary School in Scotland. In his blog post “Marking is feedback is differentiation is planning“, he raises the question about marking everything and shares his decision to make a complete change in his approach:

I’ve tried to completely change my approach to marking. Reading about what better teachers than me do successfully  …  has turned my approach around and I love it … On closer inspection I was going for an outcome over process strategy. I spent too long marking, correcting, commenting on what became summative pieces of writing which were rarely used to set next steps. Class jotters were often neglected as I focused on the nice, final product, concerned that inspection, parents, management team would be more concerned with those. So, if I changed from outcome to process – which I should have been doing all along – what would happen?


A Secret for Success:

Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.

Sun Tzu suggests that to be victorious I need to ensure the odds will be in my favour, before the fight, and before I even step into the ring.  This is perhaps where a little planning in advance comes in.   Perhaps, by being proactive and thinking ahead, we can follow better strategies for the win.  Unless someone can help me understand how it works, I don’t think I can announce tomorrow that  “this weeks work will not be collected and not be marked.”  But maybe it’s time I stop trying to motivate students to do the work using the threat of marks?  What if I stop announcing to the class,  “this will be marked” or “hand it in on time or you will lose marks”?  Students who finish the task will next be handing it in to me, and assuming I will grade it.  They’re accustomed to this routine.

The bottom line:

I need to enter marks and their marks are reported.  In our high school the administration and parents expect to have a print out of all the grades for the semester that contribute to their overall grade.  I need about two dozen grades to be recorded for each student by the end of the semester, and every entry can count for about 3 to 7% of the student’s final overall mark.  Students will need to repeat the course if I enter a final mark under 50%.  And there’s also almost always a parent and student who complains about the final mark and demands to see a print out of all their marks.

I know there’s a few of us out there struggling to find the right balance somehow.  Have you found any ways to mark faster?  Have you found any ways to cut back on the marking load? It doesn’t matter how trivial of a strategy please share.  I hope together we can collect the whole set.



It’s your choice to participate in PRISM (or not)

July 11, 2013

 This year Edward Snowden made history by informing the world that the NSA is spying on them.  It’s no  surprise really.  In the 1950’s the FBI was spying on American citizens and even poets were added to the FBI watchlist for being ‘unamerican’.  These days it seems like every minute there is more protesting online from people stating now how much they resent Obama, PRISM or the democrats for PRISM. The news is full of flag burnings, and other stories, like how a German artist projected “United Stasi of America on the American embassy (a historical reference to the tyranny of the East German Soviet secret police).  The FBI is seeking to have realtime access to your gmail account.   And to make matters worse Obama has launched a federal campaign requiring federal employees to spy on each other and report potential leakers under threat of prosecution.   Attached to these news articles are thousands of facebook replies by people complaining about this “Orwellian nightmare” we now find ourselves in. Certainly ‘we the people’ appear to resent PRISM and having the right to privacy violated. We’re critical of a government that embraces a policy of spying on private citizens. But perhaps we’re being just a little hypocritical, wanting to have our cake and eat it too.

  Let’s face facts, most of us signed up for this shit. The irony is that we helped voluntarily create the PRISM database. Every day millions of people are willingly consenting to adding their personal profiles into corporate databases for Facebook, Google and the like. We are attracted to the honeypot.  But we do have the choice to add our personal data or not.

For example,  Google has been trying for at least a year now to get me to sign up for google+ and today curiosity got the better of me, to my regret.  There’s circles, hangouts and all this other cool stuff that the other kids are playing with. I’m feeling left out so I click OK and the next thing you know I’m having to enter my full real name, birthday, where I went to school, and the city I live in. I choose to activate my profile and then Google gets really creepy.  It tells me what my interests are, because somehow it’s been keeping track of the topics of my interests.  It’s tracking who I email the most and suggesting who I should be friends with (that what big brothers are for!)  I notice in the group are some co workers I emailed once on Gmail. It makes me wonder what these coworkers can see of my activities online. I value my privacy, and don’t exactly ‘hang out’ with everyone I have to work with each day on the job. 

So I try to prevent my full name from being shown.  I was raised using computers during the days of the BBS and 12oobps modems, and not to use your real name online for obvious reasons.   And today I learn that Google has implemented a full real name policy: they don’t allow to using nickname or something else (except for famous celebrities like 50 Cent or Lady Gaga who are permitted to use their stage name). You’re expected to use this one public profile for all google sites. If you try to change your name, you’re warned not to, and reminded it should be the real deal or you could be suspended. I hate Facebook for violating people’s privacy and I need to start hating Google for the very same reasons.

We hate the idea of PRISM, so why do we submit to this and voluntarily hand over our such all our personal info? Do we really trust corporations to treat us nicely? I believe it stems more from a fear of being left out somehow if we’re not plugged in to social media. Underneath it all we’re feeling lonely, and hoping that mouse-clicks on websites will help us to be more ‘social’.  We see the pretty people in the perfect looking photos and we want our own life to look like that too. It’s an illusion, but we are attracted by it.

We’re also attracted by the idea of cheap or free.  I brought home a chromebook from the store because of  the low price. But whats the long term cost? Every time they sell us using another ‘free’ service they’re still making money selling our data and advertising to us.  Google wants me hooked on using Gmail and to rely on using Google Docs, Drive, and Android.  It’s like an addiction where we’re not yet ready to admit there’s a problem, let alone deciding that we want to quit.  Maybe more people will care when intelligence services are putting people on watch lists for being ‘unamerican’ like they did in the 1950s? Maybe once full blown Neo McCarthyism is raging?

   The whole thing seems hopelessly overwhelming at first. But consider for a second how Facebook claims 1 billion active users and there’s 5 more billion of us (mostly in the developing world) that you won’t find on f-book. So potentially that means for every one who signed up for this PRISM bullshit on Facebook there’s 5 who didn’t. Just imagine the masses of people out there you won’t find on facebook. Many of whom are struggling just to find work for a dollar a day.  All this web 2.0 nonsense is the least of their concerns.

Being ‘anti-social-media’ doesn’t mean antisocial.  It means more time spent enjoying real face to face relationships. Most marriages would likely improve if spouses would spend less time gawking at f-book and more real quality time with family.  We need to teach our children the difference between a ‘friend’ link on f-book and real friendship.  Are virtual f-book ‘friend’ links really going to be there for you when you need an actual real helping hand in your life?  With the overwhelming communication technologies available have we become a better friend?  Why not just pick up the phone to chat, or emailing a note to stay in touch?  Is it suddenly a lost art to stay in touch using such ‘old fashioned’ methods?  

If we choose to “turn off and drop out” we need to be prepared for some serious lifestyle changes.  We might be faced with actually using our time to get *real* things done.  With all the time not spent on social media we won’t be able to make some excuse anymore about not having enough time for exercise and fresh air.  If you don’t like the idea of voluntarily participating in PRISM you can start to fight back.  Why not go delete your google+ account for starters.  Go to

At the bottom of the page is a link “Delete profile and remove related Google+ features.”

Big Brother Has Seen Enough squared

Saving Ustream videos using ngrep in Ubuntu

April 27, 2013

I came across a wonderful video of a guided meditation by Tenzin Wangyal Rinpoche. He has posted online a large collection of video recordings his teachings and guided meditations.  But I wanted to figure out how convert the Ustream video for listen to on my mp3 player later offline. It also means the meditation won’t be frequently interrupted by the advertisements. 
But first I needed to figure out how to download it!  It turns out it’s easy to do using the terminal in Ubuntu.  It’s like a super jackknife that can do pretty much anything.  People recommended using a URL sniffer to discover the flash video file for downloading.  In Ubuntu this is very easy to do using ngrep.  Here’s how:

Step 1 : open up your terminal and install it if you haven’t already:

$ sudo apt-get install ngrep

Step 2: activate the ngrep command:

$ sudo ngrep -d any '.flv'  port 80

Step 3: reload/refresh the Ustream video page and then look at the ngrep output.  Look through it carefully and you’ll see a section like this:

HTTP/1.1 200 OK..Date: Sat, 27 Apr 2013 56:11 GMT..Server: Apache..X-RSR C: sjc-web048..Content-Length: 112..Keep-Alive: timeout=15, max=200..Connection: Keep-Alive..Content-Type: text/html.... ############################

There’s the video link you can download using wget or pasting in your browser!


Step 4: converting the flash video to mp3 audio:

$ ffmpeg -i 1_354487_1419528.flv -ar 22050 -ab 64k -ac 1 trancending-fear.mp3

This conversion took a few minutes. It greatly reduced the file size from 140mb to 40mb. Now I can listen to it on my mini mp3 player (Sansa Clip+) whenever I like!

Syncing notes on the cloud

March 17, 2013


If you’re the thinking type who’s always writing down notes, you might want to take a closer look at   With all the little scraps of paper that have been littering my desk lately, it’s time to organize and start using less paper.  My pocket notebook is nice, but after few years of that and a dozen notebooks later, and it gets hard to find stuff when you need to look it up.  That’s why I like Tomboy.

Later Tomboy…

Tomboy has been awesome.  I have really loved using Tomboy on Ubuntu, for many years, and it works pretty well for me.  Tomboy has so many virtues: a fast search bar (like gmail) which instantly finds anything I need to look up in my notes. This is key. Why note it if you can’t find it fast later when you need it. It sits in my system tray so it’s always fast to get at, so I use it often.  It syncs and backs up to dropbox automatically.  It works when my netbook is offline.  I like it and have relied on it so much that I recommended it to my mother who also started using it.  So what’s not to like about Tomboy?

I’ve found Tomboy has lacked some key features for all these years, like web access, and a full featured Android app.  For a while UbuntuOne had tried syncing and providing web access, but it was always kind of flawed and then they cancelled it altogether so I just synced it using dropbox. I never bothered with Tomdroid on my android phone because the app was read only and I couldn’t write notes from my phone.  I don’t think it’s asking too much in this day and age of high tech so advanced it seems like scifi. There’s just got to be something out there that can sync your notes on the cloud to your Ubuntu computer and Android phone.

I’ll pass on these…

Yes there are some nerdy servers for Tomboy you can program like snowy or rainy, but they seem too complex to be practical for me.  I’m not trying to make my life more difficult here.

I know there’s an army of Evernote fans out there.  It’s popular, feature rich and looks great. However,  you only can have offline notes on android if you pay $45 a year.  The feature that enables users to download notebooks to use offline is only available to premium account holders.  People also complain that it’s slow to use. Pass. runs on Ubuntu, has a Chrome extension, syncs with Dropbox or UbuntuOne, but there’s no android app that I know of.  Too bad, it looks good. has an android app, and a nice web interface, but sadly no native Ubuntu app.  Pass.

Discovering provides cloud storage and online web interface access to your notes.   And there are all kinds of native apps on all kinds of devices that will sync with it: Android, iPhone/Pad, Windows, Mac and so on.  There’s also extensions for Chrome and Firefox for it.   Ok, now I’m interested and look further. The reviews I read say that people love it for it’s speed and simplicity:

“adored by those who pride themselves in their use of beautiful and uncomplicated software.”

~ Shawn Blanc

“Simplenote is a killer web application that does one very simple thing very, very well. That one thing? Creating, editing, and managing as many plain text notes as your heart could ever desire.”

~Adam Pash (Editor of Lifehacker)

Using nvPY on Ubuntu

nvPY is an open-source cross-platform note-taking app that syncs. It’s a clone of National Velocity (popular on Mac).   It’s fast, it’s simple to use, so it’s practical and you get things done.

It syncs with, can be used offline, has a real time search bar (like gmail and Tomboy), hyperlinks, internote linking (like tomboy), tagging, note pinning.  It also consumes very little system resources, which is great for me because both my computers getting pretty old and only have 1gb ram.

While it’s not exactly as polished as Tomboy, nvPY is working out great on my Ubuntu 12 systems. I love how I can open my netbook and fully sync all my notes with a click.  I can also access and edit my notes  at any other computer through the web, or on my Android phone.

For me it will likely replace Tomboy from here on in.  You should check it out. Besides, it’s free (as in beer).  Also, don’t be intimidated by the installation, it took less than a minute to get it set up and running.   Go review the nvPY home page and the installation instructions.  The hardest part is using the terminal — maybe soon there will be a .deb file or it will be added to the Ubuntu repository (hint hint)

Other Devices:

Android has many apps to choose from that sync to  The one I’m trying out right now is mNotes. On Windows (or Ubuntu under wine) you can use ResophNotes and there’s even a portable edition that can be run off a USB key if you need.  I don’t have an iPhone/Pad or Macbook, but there’s apps that sync with on those devices as well.

The Issues: 

I do wonder how long a good thing can last. Somehow I doubt be around forever to sync everyone’s notes for free.  There’s buyouts and bankruptcies just for starters.  Maybe someday there will be an easy to set up open source server available?

Another thing worth considering however is the inherent risk of privacy.  It’s still not the place to be putting your most precious private data on the cloud.   (Something like KeePassX synced with dropbox seems like a better idea for that.)  But I like how John Gruber puts it on his blog:

“The biggest downside to web-based syncing is the implicit lack of privacy. Your data resides on a server that someone else controls. I’m willing to accept this because the convenience is worth it, and the privacy issues with Simplenote are no different than with any web-based service.”

So dear reader (did you make it this far?!), what do you think?  As always your comments are appreciated!

Further Reading:

Tilopa’s Six Words of Advice

February 23, 2013

About a thousand years ago a great teacher named Tilopa from Bengal in India wrote a poem for his students called “Six Words of Advice”.    Eventually translated into English from Tibetan, it has become a little longer than 6 words, but is just as beautiful.  If you’ve ever had a bad day/week/month/year, you might enjoy reading these enduring words of advice:

Let go of what has passed.
Let go of what may come.
Let go of what is happening now.
Don’t try to figure anything out.
Don’t try to make anything happen.
Relax, right now, and rest.

Perhaps it’s the simplicity of this lesson from Tilopa that I enjoy most of all.  It seems lately that it’s something I need to learn, more than ever.  Increasingly I find myself preoccupied with personal problems and trying to work it all out inside. At times I find that issues at work or in marriage can be rather overwhelming.  I worry about the future, and have trouble accepting when things are less than ideal.  If you ever find yourself struggling to find happiness, or being overwhelmed by issues at work, in marriage or family … you’re not alone!

Further Reading:

Unfettered Mind: Six Words of Advice

Guru? Who? You?

March 18, 2011

Every now and then I receive a comment from a reader who has landed on my blog and questions what my site is about.  Today I’ll take a moment to explain the title, “Ubuntu Guru”.

First, I do not claim to be a guru. I strive to become more knowledgeable on many subjects, and regard my writing as a significant part of the learning process. I like to share knowledge, write, and teach, but I cannot claim having ‘great’ knowledge as there are so many experts out there with far greater knowledge.  I have always turned to them as teachers and guides, and as such I often regard them as a ‘guru’ on the subject.  Let’s examine the definition of a ‘guru’. According to the Wikipedia, a guru is:

“one who is regarded as having great knowledge, wisdom and authority in a certain area, and who uses it to guide others (teacher). Other forms of manifestation of this principle also include parents, school teachers, non-human objects (books) and even one’s own intellectual discipline”.

Ubuntu as explained in Wikipedia is both a philosophy and a computer OS named after that philosophy.

“is an ethic or humanist philosophy focusing on people’s allegiances and relations with each other.”  … “I am what I am because of who we all are.”

Ubuntu, to care about others, is a noble virtue.  This is why the logo for my site shows Buddha, the enlightened one, thinking about Ubuntu.  Buddha was a great teacher, truly among the greatest of all gurus.

Although I’ve most often focused on writing about Ubuntu the operating system for computers.  I intend to also write about many other topics, which will hopefully extend this overall philosophy of Ubuntu and sharing wisdom with others.