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9:00 AM EST, Thursday, March 5, 2009. The stockmarket goes up during a bear market, like the one we're in. Every time it goes up (like yesterday), learned reporters and newsletter writers rejoice that we've reached bottom and it will up and away from here. They argue that, though the economy is awful, the stockmarket always turns up before the economy does. Typically that stockmarket turn-up is nine months before the economy turn-up.

If you think this economy will turn up in nine months, I want some of what you're smoking.

General Motors says it's going bankrupt, despite all the money we gave it. Surprise. Surprise. General Electric looks its' going that way also. GE reminds me of Iceland. GE knew manufacturing and did good work. Iceland knew fishing and fished well. When both got into banking, things went seriously awry.

The biggest plus about banking (in all its forms) is that you can fake profits by simple accounting "tricks" -- like not recognizing the losses on the lousy loans you made. When you run a bank -- regular, investment or finance -- you borrow lots of money so you can make more loans. In his wonderful piece on Iceland for Vanity Fair (which you must read), Michael Lewis ends thus:

When you borrow a lot of money to create a false prosperity, you import the future into the present. It isn’t the actual future so much as some grotesque silicon version of it. Leverage buys you a glimpse of a prosperity you haven’t really earned.

Oh yes, the Dow rose 150 points yesterday. Whoopee do. It made a great deal of difference to the chart:

Today's total lack of trust in Wall Street. No one trusts Wall Street any longer. And it's not coming back any time soon. Don't believe me? Read this piece from today's New York Times:

14 Trading Firms Settle Charges for $69 Million

More than a dozen Wall Street trading firms systematically cheated their customers of millions of dollars by improperly slicing bits of profit from countless trades, federal regulators said on Wednesday.

The Securities and Exchange Commission disclosed the allegations after negotiating settlements. The firms did not admit or deny the charges but agreed to pay a total of more than $69 million in forfeited profits and penalties.

The 14 firms named in the complaints are all “specialists,” trading firms that have a specific duty to maintain orderly markets by matching buyers and sellers and standing ready to conduct trades when buyers or sellers are scarce. They include units or subsidiaries of well-known Wall Street names, including E*Trade Capital Markets, Goldman Sachs Execution and Clearing, Knight Financial Products and TD Options.

Regulators said the firms had engaged in various types of “front-running,” which involves trading ahead of customer orders or timing their own trades to seize profits. For instance, specialists that had a big order to buy a stock would first buy it from a seller themselves and then illegally bid up the price moments before selling it to profit on the transaction.

Regulators say specialist firms made a total of $58.4 million, which should have gone to their customers.

According to the S.E.C., the improper trading occurred from 1999 to 2005 on the American Stock Exchange, the Chicago Board Options Exchange, the Philadelphia Stock Exchange and the Chicago Stock Exchange.

In recent years, many customer orders have been routed to electronic trading networks, which automatically match buy and sell orders without human intervention. But specialist firms still play a role in securities trading at many exchanges, handling orders that cannot be filled electronically and maintaining reliable markets when trading becomes volatile.

The specialist business is lucrative because it has exclusive rights to oversee trades in particular stocks, and it was especially so before more automated trading became prevalent in the middle of the decade.

Firms are compensated for the risks and duties they take on as specialists, which makes the violations cited by the agency more shocking, said James Clarkson, acting director of the S.E.C.’s New York regional office.

“These firms violated the public trust by abusing the privileged position they had as specialists on the various exchanges,” Mr. Clarkson said.

Although smaller in scale, the allegations are similar in nature to those the commission filed in 2004 against five large specialist firms on the New York Stock Exchange, accusing them of collecting more than $150 million in improper profits. Those firms, without admitting or denying the allegations, paid $241.8 million to settle the cases.

In the individual complaints made public on Wednesday, the S.E.C. said that the improper profits collected by the 14 specialist firms had ranged from a few million dollars at some of the smaller organizations to more than $28 million at E*Trade. ...

In bringing the charges, the S.E.C. said that specialist firms had an obligation to put orders from public customers ahead of their proprietary interests. Whenever possible, a specialist firm should fill a customer’s order to buy shares by matching it with another customer’s order to sell, giving those customers the best possible price.

According to regulators, the improper trading activity was detected through examinations by the S.E.C.’s compliance staff and investigated by its enforcement division, with the cooperation of the Financial Industry Regulatory Authority, the securities industry’s self-regulatory organization, and compliance staff members at the various exchanges.

Many feeder funds who invested with Bernie Madoff thought the reason his earnings were so consistent was that he was front-running customer orders at the other part of his business that bought and sold shares on behalf of customers -- in effect, he was running a mini-stock exchange. The amazing part of this story is that they still gave Madoff billions even though they were convinced that he was earning money with their money by doing something totally illegal. But who cared? Everybody did it. And I bet they still do it.

Let me make myself perfectly clear. When you place an order to buy or sell with a broker or a machine (i.e. over the Internet), to this day you have no idea if someone or some thing is front-running your order and ripping you off.

I no longer believe that Wall Street is a place for my or your money.

The Gotcha in Short Sales: Let's say you owe $800,000 on a house that's only worth $600,000. You work a deal with your bank to sell the home at $600,000 and pay off your loan in full. Good news. The IRS will now tax you on the $200,000 (i.e. $800,000 minus $600,000) as ordinary income. There's more here.

Dumb. Dumb. Dumb. Having money (your own or some one else's) makes you super-intelligent. Can you believe this piece on today's Bloomberg?

March 5 (Bloomberg) -- Mediobanca SpA, Italy’s biggest independent investment bank, is considering buying a stake in Brioni Roman Style SpA to help fund the luxury suit maker’s expansion...

The bank may buy 30 percent of Brioni in a transaction that would value the Penne, Italy-based tailor at about 300 million euros ($378 million) including debt. ...

Brioni is known for its $5,000 suits, which have been favored by Donald Trump and Clark Gable. The firm is seeking funds to pay down about 100 million euros in debt and to open new stores as rivals slow expansion plans. Mediobanca, which wants to increase its private equity unit, is separately buying part of Ferretti SpA, the Italian maker of Riva luxury yachts.

I found both these images on the Internet. The first shows James Bond is his Brioni suit. The second shows "Brioni suits at over half off." Nieman Marcus is selling a Brioni suit for $4,600. They don't have one in my size -- 41L. Shucks! But maybe they have one in your size. Nieman Marcus suits.

This Riva boat is more my style. It's the 92' Duchessa.

There is an old saying in financial circles: If it flies, floats or f..ks, rent it.

The most comfortable saddle ever: Remember yesterday's bicycle seat?

Reader Steve Hufford writes

The bicycle seat looks wonderful in the picture. My wife and I both have what we call “big butt” seats on our bicycles. My father-in-law had located these seats at a Camping World store here in Orlando. He purchased one for himself and let me try it out and that was enough for me and my wife. They are made by Worksman Trading Corporation in Ozone Park, NY. They are extremely comfortable. I am on my second bicycle with the same seat. Those saddles that the manufacturers put on bicycles are very uncomfortable for me. To think that I used to ride on a banana seat on my Huffy when I was a kid……

This is from the Worksman Cycles website:

Extra Wide Comfort Seat #6911V. $33.99
This incredibly comfortable seat is designed to make your riding experience more enjoyable. This extra wide comfort seat is 13 inches across, is thickly padded, and contains dual springs. Fits standard 7/8" seat posts. This seat is often the difference between wanting to ride your bicycle or making excuses not to ride! After all, nobody wants to be uncomfortable!

And to think that I was making fun of a seat which I thought was designed for fat people.

In case you've recently lost your job, Worksman Cycles also makes a full line of these ice cream bikes:

They cost around $3,000.

All we ever hear are Jewish jokes. So, here are some Gentile jokes.

+ A gentile goes into a clothing store and says, "This is a very fine jacket. How much is it?"

The salesman says, "It's $500."

The gentile says, "OK, I'll take it.."

+ Two gentiles meet on the street.

The first one says, "You own your own business, don't you? How's it going?"

The other gentile says, "Just great! Thanks for asking!"

+ Two gentile mothers meet on the street and start talking about their children.

Gentile mother 1 (said with pride): "My son is a construction worker!"

Gentile mother 2 (said with more pride): "My son is a truck driver!"

+ A son calls his mother and says, "Mother, I know you're expecting me for dinner this evening, but something important has come up and I can't make it."

His mother replies, "OK."

+ A gentile man calls his elderly mother. He asks, "Mom, how are you feeling? Do you need anything?"

She says, "I'm feeling fine, and I don't need anything. Thanks for calling."

Now you know why there are no gentile jokes

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.