In light of the ongoing European financial crisis, Rocky is pleased to learn that the European Central Bank now provides visitors to their headquarters with a “hard hat” at no cost! However, they do ask visitors to ”wear socks.”
No mention is made whether visitors must empty their pockets of spare change upon entering.
For a full text of the ECB’s dress code, see “What to wear” at:
Knowing that he’s been a gold bull for years, Rocky’s friends keep asking: “What you do think of gold, NOW?” (These people actually think that Rocky and certain other TV commentators can predict the future.)
Rocky’s answer: “I have no idea, and have NEVER had any idea about what the price of gold will do tomorrow.”
But does he still own gold?
“Yes, and I also own some stocks. And I own some real estate. And I own some bonds. And I own a copy of last week’s People Magazine. And I have no idea what the price of these will do tomorrow either. My experience has been that pundits who claim perfect knowledge of the future are generally either liars or idiots. (Whoopi Goldberg is the exception to this rule.) What I’m doing is called diversification.”
But when will he sell gold?
“The PRICE of gold is irrelevant. As I’ve written on this blog, I will sell gold when the gold story (or more accurately, the market’s perception of the gold story) changes! Gold’s ascent is a confluence of negative real interest rates; undisciplined central bank behavior; a growing loss of confidence in government policies and financial systems; loss of Swiss bank secrecy; an accumulation of economic wealth by individuals in parts of the world without stable property rights and rule of law. Can gold drop $100 tomorrow? Sure it can! Can gold drop $300 next week? Sure it can! Can gold drop $1000 next year? Sure it can! But so long as these FUNDAMENTAL factors remain in place, the underpinnings and demand for hard assets that are beyond the reach of governments will remain.”
“Almost all of my really smart friends are very bearish right now. They all think this move is idiotic. Many think this is a bubble. And eventually they will be right. But eventually could be a really really long time. And it could include a trip to unimaginably higher prices first. Their skepticism is not predictive of anything. And importantly, they are not betting that gold will decline either. All it tells you is that they aren’t long gold and missed this move. I’ll admit that I get nervous when prices rise quickly. And historically, buying after a sharp rally isn’t a good idea. But why should any of this market chatter affect my long-term porfolio construction/diversification? After all, I’m not afraid to admit that I have absolutely no idea what prices will do tomorrow.”
[Disclosure: Rocky NEVER gives investment advice. He's owned gold for a long time. And he owns some hedges that will protect him if gold drops sharply while he's asleep. And some day, he will sell his gold. But whether it's at $2,000/oz or $10,000/oz is out of his control. It's in the control of millions of other investors around the world, and how they react to the policies of their central banks and governments.]
Rocky just approved his employee paychecks for the first pay period of 2011. He noticed that everyone’s paycheck increased by almost 2%.
“I don’t remember approving any raises!” Rocky grumbled to his CFO. ”Especially not for Bosley in the mailroom. That’s the guy who nodded off while sitting in front of the postage meter — and his forehead wasted a few hundred dollars in postage stamps!”
“Rocky, it’s the tax cut,” explained the CFO. “Congress passed a one year holiday on Social Security and Medicare taxes. Everyone’s paycheck went up by about 2%.”
“That’s great,” said Rocky. “Allowing people to keep their own money is always a good thing. But what should we do with all those wasted postage stamps? Maybe we should hand them out as holiday bonuses?”
[Disclosure: Reducing taxes is the most efficient way to stimulate an economy.]
Inflation, says Rocky, are rising prices for the things that you WANT to buy. Deflation, says Rocky, are declining prices for the things that you DON’T WANT to buy.
Although it uses a more analytically rigorous definition, there are many problems with the government’s Consumer Price Index (CPI).
It’s exciting to announce that MIT has gone live with it’s “Billion Price Project” (BPP) — which monitors daily prices of 5 million items sold by 300 online retailers!
Here’s the link to the Billion Price Project: http://bpp.mit.edu/
[Disclosure: It costs the Labor Department $234 million each year to calculate the CPI, and it's only reported once each month. For more details, see: http://www.slate.com/id/2278623/ ]
For long-term investors with a dedicated portion of their portfolio in bonds, Rocky believes that there’s currently an opportunity to reduce exposure — without reducing return.
The “trick” is to extend maturities with a portion of their bonds, and to put the balance of their exposure in cash. This is called a bar-bell trade (named after the exercise equipment) — and the steepest yield curve in 30 years (see chart) provides a rare opportunity to do this trade.
Here’s an example of the mechanics.
An investor has $100,000 in the Vanguard Intermediate Term Investment Grade Bond Fund. This fund yields 3.1% and has an average duration of 5.3 years.
If the investor sells that fund, and buys $58,000 of the Vanguard Long Term Investment Grade Bond Fund which yields 5.4% with a duration of 12.9 years and puts the other $42,000 in FDIC insured money market funds yielding 1.0%, a number of virtuous things can happen:
1) If nothing happens, the cash yield of his portfolio has increased by a little bit. Before the re-allocation, his portfolio was producing $3100 in income, and now it’s producing $3500 in income.
2) The investor has increased his cash balance, and since no one really knows what the future will hold, it’s always good to have lots of cash. If interest rates rise , the investor will be able to put the cash to work at higher yields.
3) If interest rates rise, the yield curve is likely to flatten (based both on history and standard economic theory). That is, short-term rates ”should” rise more than long-term interest rates. So, even though the re-allocation results in a longer duration (7.48 versus 5.3), in most scenarios this risk is overstated. Also, the risk is lessened due to the 42% cash cushion. So the practical increase in duration should be less than the theoretical increase.
4) The investor has sold the portion of the bond market that is being levitated by the Federal Reserve and purchased a portion of the bond market which is being set by market forces. (Most of the Fed’s purchases are under 7 years in maturity.) So, when the Fed stops buying or reverses its purchases, the re-allocation should have less market risk in the short maturities that usually rise the most during tightening cycles.
5) With short rates at zero, there’s nowhere for rates to go except up. However, if the USA is in a Japanese-style depression, the only yields that can still decline are the ultra-long maturities, and one might experience a “bull market flattener”. (This is a low probability event.) Due to its modestly increased duration and position on the yield curve, the re-allocation would likely outperform nicely during a bull market flattener. Additionally, the stock market will be weak in this scenario, and the 48% cash balance might be useful for purchasing some stocks at much lower prices.
Where does this strategy look worse? If all interest rates across the yield curve move higher by the same amount , then the modestly increased duration can cause an underperformance, and if the yield curve steepens even more, there can be an underperformance. Remember: Rocky isn’t suggesting to just move out the yield curve with the same amount of money… It’s important to tuck about 48% of the portfolio away in safe money market funds . Remember also that when rates rise, bond prices decline. So if interest rates rise a lot, all bond investors will lose money. The underlying theme to this re-allocation is “less exposure — same return.”
[Disclosure: This is NOT investment advice...see the Disclaimer at the top of this page! It's just something that Rocky noticed and investors should think about. It's also an observation that the yield curve is steepest its been in 30+ years. If the 30-year bond keeps rising in yield -- and the Fed keeps rates at 0%, then this strategy will not be attractive. There's no reason to think that today marks the maximum steepness. Lastly, Rocky doesn't have an opinion about when rates will rise; but they eventually will. But as Keynes supposedly said, "In the long run, we're all dead." ]
Rocky’s read a lot of information and mis-information regarding Quantitative Easing. This may be the best and clearest discussion of the issues and is worth a read:
[Disclosure: Rocky rarely agrees with Professor Landsburg, and finds some of his philosophies to be morally objectionable. Nonetheless, the Professor does a good job explaining the pros and cons of QE2 in his article.]
Rocky noticed that his friends see bubbles in bonds, in gold, in stocks, in cotton, sugar and grain prices. In fact, his friends see bubbles EVERYWHERE!
It appears that there may be a bubble in bubbles. And a look at “Google Trends” confirms this bubble. However, this bubble-in-bubbles popped early in 2010 — on the 50th Anniversary of Bubble Wrap!
[Disclosure: Rocky never gives investment advice. When asked if or when the current "bubbles" will burst, he started foaming at the mouth.]
Rocky found some fool’s gold buried in today’s Producer Price Index data.
The year-over-year change in “Karat Gold Jewelry Prices” was 12.1% Whereas the year-over-year change in “Costume Jewelry Prices” was a modest 0.9%.
According to Wikipedia, “Costume jewelry (also called fashion jewelry, junk jewelry, fake jewelry, or fallalery) is jewelry manufactured as ornamentation to complement a particular fashionable costume or garment.”
Since the Government sees fit to include the “all important” costume jewelry price in the PPI, Rocky smells an arbitrage for an upcoming Trophy Wife birthday present.
Rocky currently owns gold in his investment portfolio, but this price discrepancy suggests that he should consider a “short gold / long fake gold” swap for Trophy Wife’s jewelry box portfolio.
[Disclosure: As they say on TV: "We're trained professionals. Don't try this yourselves at home!]
As regular readers know, Rocky has held a bullish speculative position in gold for many months. If today’s behavior continues for a few more days, Rocky believes that gold may be finally entering the Manic Parabolic Blow-Off Phase “MPBOP.”
The MPBOP is the most profitable phase of any bull market, and despite what experts on CNBC say, it’s impossible to know how long it will last — nor how high prices can go during the terminal stages of a MPBOP. Rocky speaks from experience having been on the wrong side of the internet MPBOP. (He was an avowed hater of the Pets.Com puppet, but he got revenge when the stock eventually went to zero.) This experience means Rocky wouldn’t scoff at $1500/oz or even $1800/oz gold by year-end.
Sadly, after the parabolic blow-off phase comes the “gravity still exists” phase, where people re-discover that gold is just a shiny piece of metal that makes an excellent dental crown. Which means prices will decline. By a lot.
Many people party on New Year’s Eve without worrying about how they feel on New Year’s Day. But not Rocky! Rocky remains long gold, but he’s beginning to think about his ultimate exit strategy. Parachutes? Ejection seats? Hari Kari? Here’s his latest thinking (posted on the blog Daily Speculations): http://www.dailyspeculations.com/wordpress/?p=5344
[Disclosures: Rocky really has no clue what gold prices will do tomorrow or the days after tomorrow and his ruminations are not investment advice. He does, however, believe in the Laws of Gravity and the First Law of Rocky: In every “macro market” (indices, bonds, commodities), all prices WILL be seen at least twice. The only unknowns are: (1) how long it takes and (2) how far prices go, before the price is re-visited. Additionally, while Rocky currently remains long gold, he also owns hedges against the proven risk that he's more-than-occasionally wrong.]
Rocky received an email that Shore Bank had been seized by the FDIC, and his account had been safety transferred to “Urban Partnership Bank.”
Rocky previously sang the praises of Redneck Bank which sends new depositors a free beer can holder, pays 2% on its money market account, and has NOT been seized by the FDIC. Redneck Bank is from a “red” state.
In contrast, Rocky surmises that Chicago-based Shore Bank got “in too deep” with the loan “sharks,” and was eventually was swept out to sea. Some news reports even suggest that the Chicago-based bank had questionable ties to President Obama and other pols. See: http://biggovernment.com/centralillinois912project/2010/08/05/shorebank-now-under-scrutiny-by-the-feds-federal-bailout-also-unlikely/
The email from Urban Partnership Bank isn’t too promising either. It begins:
It has been a very busy Monday here at Urban Partnership Bank, formerly ShoreBank. We are pleased to share with you that our new bank remains committed to meeting your banking needs and to the mission of serving low and moderate income communities. We will also continue to support energy efficiency and environmentally-friendly development.
[Disclosure: Rocky wishes that the "mission" of taxpayer-funded FDIC-insured banks was to lend money only to credit-worthy individuals and businesses. Instead of focusing on energy efficient lightbulbs, perhaps checking the loan documents should be a higher priority? Rocky also notes that without FDIC insurance, he would not have an account at Shore Bank. This is an example of "moral hazard." ]
Rocky observes that when he pinches a balloon on one end, it expands on the other end. This simple revelation has implications for his friends who continue to buy corporate bonds at ever lower yields, while ignoring the effects that it has on the stock prices of the same companies.
Bill Miller writes in his latest commentary, “US large capitalization stocks represent a once in a lifetime opportunity in my opinion to buy the best quality companies in the world at bargain prices. The last time they were this cheap relative to bonds was 1951. I was 1 year old then, but did not have then sufficient sentience or capital to invest.”
Rocky doesn’t remember 1951, so he ran some tests on Dow Jones Industrial Average stocks and bonds to test Mr. Miller’s hypothesis, and found that the conclusions are impressive — even if one makes the improbable assumption that there is ZERO real earnings growth over the next ten years.
(During the 2008/2009 financial crisis, corporate bonds were getting hammered too, so one could not have done this analysis in 2008. Also, so long as the US population continues to grow, it’s extremely difficult to have zero economic growth, so this is a very conservative assumption.)
Rocky’s choice : (1) Buy an equal-weighted basket of the 10-year debt of “quality” companies or (2) Buy an equal-weighted basket of the stocks of the same companies. Buy and hold for ten years.
Analysis of choice #1 (bonds):
The average return is 3.9%. This is the best case and assumes no defaults, leveraged buyouts, or other credit events.
Analysis of choice #2 (stocks):
The current average dividend yield is 2.9% per year on the stocks.
The current average earnings yield is 6.3%.
So if one owns this stock basket and there is no earnings growth and no dividend growth, and the economy is Japanese-like, with intermittent recessions and growth, the return is 2.9% + 6.3% = 9.2% per year for the next ten years. (Which is remarkably close to the long-term average return for stocks.) Here Rocky assumes no bankruptcies and assumes a terminal p/e which is unchanged. But it also ignores the possibility that the economy could do much much better (or much worse).
Some might quarrel that Rocky is double counting … when he includes the dividends. So he says, “ok, let’s forget about the dividends.” Then, the stock basket’s earnings yield is 6.3% and the bond basket yield is still 3.9%, so it’s a pickup of 240 basis points per year for the risk/reward of owning stocks. Or, put another way, over a 10 year period, 10 x 2.4 = 24% … which means that the earnings yield could decline by more than 20% over the next decade and Rocky would still be better off in the stock market than in the bonds of the same companies.
None of this is making Rocky rush out to buy oodles of stocks tomorrow morning — because it’s certainly possible that stocks AND bonds may decline over the next ten years. However, for an investor in corporate bonds, this is an important result — particularly since in a SEVERE deflation or economic crisis, corporate bonds can get hurt badly. Note that Rocky did not include government bonds in this analysis — only corporate bonds.
Lastly, if stocks keep declining and corporate bonds keep rising, the relative values will become more attractive, however, at some point, corporations will issue new debt and use their cash to repurchase shares … and that’s what will keep the relationship between corporate bonds and stocks in line. Perhaps not at these relative valuations … but at some point.
Column1 = stock ticker
Column2 = dividend yield
Column3 = earnings yield. That is, earnings/price for the trailing 12 months.
Column4 = that company’s yield-to-maturity on its 10year corp bullet bond.
Column5 = earnings yield minus bond yield.
[There is a bit of fudging because Intel has no debt, so Rocky arbitrarily gave it a 3.2%. And he extrapolated some companies who had debt maturing in 8 years or 12 years.]
Data source: Bloomberg
|Dividend||Earnings||10 Yr Corp||Earnings YLD|
|Yield||Yield||Yield||minus 10 Yr Bond Yld|
|AA UN Equity||1.1||-5.6||5.7||-11.3|
|AXP UN Equity||1.7||3.7||4.5||-0.9|
|BA UN Equity||2.7||3.5||3.3||0.2|
|BAC UN Equity||0.3||2.5||5.8||-3.3|
|CAT UN Equity||2.6||3.8||3.9||-0.1|
|CSCO UW Equity||0.0||5.6||3.6||2.0|
|CVX UN Equity||4.0||7.4||4.5||2.9|
|DD UN Equity||4.5||6.0||3.6||2.4|
|DIS UN Equity||1.1||6.7||3.2||3.5|
|GE UN Equity||2.7||8.2||4.9||3.3|
|HD UN Equity||3.4||5.9||3.2||2.7|
|HPQ UN Equity||0.7||8.1||3.2||4.9|
|IBM UN Equity||2.1||7.6||4.0||3.7|
|INTC UW Equity||3.0||6.0||3.2||2.8|
|JNJ UN Equity||3.8||7.2||3.7||3.5|
|JPM UN Equity||0.5||6.5||5.1||1.4|
|KFT UN Equity||4.0||7.5||4.3||3.2|
|KO UN Equity||3.3||5.4||3.3||2.1|
|MCD UN Equity||3.1||6.4||4.2||2.2|
|MMM UN Equity||2.6||5.7||3.2||2.4|
|MRK UN Equity||4.3||8.8||3.4||5.4|
|MSFT UW Equity||2.1||7.3||3.0||4.3|
|PFE UN Equity||5.0||11.1||3.1||8.0|
|PG UN Equity||3.2||7.2||3.4||3.8|
|T UN Equity||6.7||7.6||4.5||3.1|
|TRV UN Equity||2.9||12.6||4.2||8.4|
|UTX UN Equity||2.5||6.6||3.5||3.1|
|VZ UN Equity||7.2||7.2||4.8||2.4|
|WMT UN Equity||2.4||6.9||3.7||3.2|
|XOM UN Equity||3.0||5.9||4.1||1.8|
|Equal Wgt Avg||2.9||6.3||3.9||2.4|
[Disclosure: Rocky is not recommending that anyone do anything that involves money or bonds or stocks or shoelaces. But he's watching this relationship and has started to gradually move some of his "high quality" corporate bonds into the stocks of the same companies -- as the relationship becomes ever more attractive. He also notes that if you pinch a balloon TOO hard, it will burst. ]
The Gillette Business Model is simple and successful. Give away razors for free. Sell the blades at a huge profit.
Dell Computer Corp seems to be trying a twist on the Gillette model: Sell defective computers at cost. Make profits on overpriced service contracts.
Rocky recently purchased a new Dell E6510 Laptop. The machine’s specs looked excellent, and Dell priced it well below the equivalent Apple and HP computers. On Day 46 (one day after the expiration of the return period) the laptop fan died.
Rocky to Dell: “I need to get a service call on my new E6510. The fan died.”
Dell: “You didn’t purchase an on-site warranty. You need to ship it to the Dell Service Depot for repair.”
Rocky: “I need this computer for work, and cannot tolerate a two week turnaround time. Can I upgrade my warranty to on-site repair?”
Dell: “Sure. A warranty upgrade will cost you $829.55 plus $61.18 tax = $890.73″
Rocky: “But I can buy a spare machine for that, and just keep it in the closet!”
“Dell: “Thank you for choosing Dell.”
Fortunately, Dell didn’t tell Rocky that the hardware problem was caused by Rocky performing too many difficult math calculations. That’s what Dell told the University of Texas Math Department, and resulted in a large class action lawsuit. See: http://www.nytimes.com/2010/06/29/technology/29dell.html
[Disclosure: The good news is that Dell's customer service representative spoke perfect English. The bad news is that Dell is on the same downward trajectory that has plagued every PC manufacturer since the early 1980's. Rocky has no position in Dell stock.]
Rocky’s Daughter called the office and said, ”Dad, I want to buy some BP stock.”
Daughter: “I’m thinking that they will eventually get this thing under control, and while the damage may run into the billions, you taught me to be brave when others are fearful — and to be fearful when others are brave.”
Rocky: “Yes. I did teach you that. But sometimes it’s RIGHT to be fearful. Why not buy some Apple stock? It just keeps going up…”
Daughter: “No!!! I don’t want to go near Apple. It’s a fad. It’s a cult. “
Rocky: “But BP really could go bankrupt on this situation. How do we analyze that? And, why should today be THE low?”
Daughter: “I want to buy 10 shares ($370) right now. And we’ll revisit it in a few weeks. If the stock goes a lot lower with no new developments, I might buy a little bit more. But it’s hard to imagine how the news could be worse. Please also buy some Chevron stock for diversification in the sector.”
Rocky: “Ok. You are brave!”
[Disclosure: Rocky has no position in BP shares. However, his daughter now owns 10 shares of BP at a cost of $37. Since May 1st, BP's share price has lost about $65 Billion (27%) in value, and during the same period, Chevron's share price has lost about 12%. It is not entirely crazy to think the market may be close to discounting the possibility that the leak will continue until the relief wells are finished at the end of the summer. However, there is also the possibility that the leak could continue for years; the government taxes the oil companies into oblivion; and BP faces criminal/civil penalties.]
Panera Bread just opened a a new restaurant where customers “pay whatever they want.”
From the Associated Press: CLAYTON, Mo. — Panera Bread Co. is asking customers at a new restaurant to pay what they want. The national bakery and restaurant chain launched a new nonprofit store here this week that has the same menu as its other 1,400 locations. But the prices are a little different — there aren’t any. Customers are told to donate what they want for a meal, whether it’s the full suggested price, a penny or $100.
The full story can be found here: http://www.google.com/hostednews/ap/article/ALeqM5g__EQ-OG9DhU1YwC4Fo4s5QREdbgD9FPBIMG0
This bizarre business model has Trophy Wife jumping up and down with excitement as she hopes that Tiffany’s jewelers may adopt a similar pricing policy. Additionally, if Panera succeeds in this approach, it will be bullish for textbook publishers, as it will require a re-write of every college economics textbook!
[Disclosure: Rocky doesn't own any shares of Panera Bread (PNRA), but if he did, he might be tempted to sell them before he lunches at Panera for a penny.]
- A recent article in the New York Times quotes Gen. James Mattis of the Marine Corps as saying, “Powerpoint makes us stupid.”
- General H.R. McMaster has banned PowerPoint presentations by likening them to an internal threat. He says, “Some problems in the world are not bullet-izable.”
- General McMaster has no problem with the chart shown above. He has a problem with rigid lists of bullet points.
Rocky’s been known to put his “foot(note) in mouth,” and shoot off a few bullet points from time-to-time. However, unlike his computer-savvy daughter, he never uses animation during a Powerpoint presentation.
He suspects that so-called “death by PowerPoint” may be a Communist (or Google) plot to undermine Microsoft. Rocky suggests that banning PowerPoint is the wrong solution. Instead, he suggests that the meeting should be canceled.
It’s ironic when a General suggests that some problems in the world are not “bullet-izable.” That’s the sort of language one expects from a dovish politician. Not a military commander. Also, since the word “bullet-izable” is not in the dictionary, their mite be a grane of trooth to the beleef that Powerpoint makes peeple stoopid.
[Disclosure: At the time of writing, Rocky owned shares of Microsoft Corporation. He also just purchased a new copy of "Office 2007 Basic"which includes Excel and Word -- but lacks Powerpoint. Alas, Rocky already suffers from Powerpoint-induced brain damage. Hopefully, the damage is reversible]
College years are sometimes referred to as the “best four years of your life.”
Whether or not this is true, they sure beat the last four years of life for a Sallie Mae shareholder. (negative 76% total return).
And the next four years don’t look good either.
From Bloomberg: “SLM Corp, the biggest US student loan company, tapped the bond market for the first time in two years, paying more in interest than it charges [college students for their loans.]“
SLM sold $1.5 Billion of 8 percent notes due in 2020 at a yield of 8.25%. Stafford federal studen loans have a fixed interest rate of 5.6%.
Bright college years … ahh.
One year ago, Rocky was diligently “dollar cost averaging” in stocks, corporate bonds and other “risky” assets.
It was painful at the time, yet his models, reason and experience suggested an extremely high probability of double-digit returns over the ensuing five years. (Rocky neither predicted nor expected a 70% rally in only twelve months.)
After this historic rally, Rocky’s estimate for stock market returns over the next five years is back towards the low single digits. What’s Rocky doing? He’s not betting that the stock market will decline, but instead, he’s pruning back some exposure (with long term capital gains tax treatment) and building his cash balances. The most difficult investment today: cash yielding zero.
Rocky’s a terrible market predictor and he readily acknowledges that the stock market could easily rise another 10% over the next six months. However, Rocky notes that the most difficult investment is often the best investment. And that painful investment is now “cash.”
[Disclosure: Rocky doesn't provides investment advice. He always buys early, sells early, and goes to bed early.]
Rocky fired up his X-22 Computer and discovered that when a Scottish Terrier wins Best of Show at the Westminster Kennel Club, it’s a bullish omen for the stock market.
Rocky submitted his remarkable findings to both Daily Speculations, (the website of Victor Niederhoffer) and to the Journal of Financial and Quantitative Analysis.
Recognizing the importance of this seminal research, Daily Speculations immediately published the study. (Click Here.) In contrast, Rocky has not heard back from the editors of the JFQA.
Rocky’s primary computer contracted a horrible virus yesterday from a website which re-printed the speech.
If this was a political conspiracy, then Google is behind it too — as Google directed Rocky to this insidious site. And, if Al Gore “invented” the internet, then President Obama’s speech just un-invented it (for Rocky.)
Several websites advertise repairs for the virus ($39.95), however after consulting with Computer Man, Rocky learned that the virus is essentially irreversible. And the software vendors are simply extorting money.
[Disclosure: Rocky's primary computer was rebuilt from scratch, and his backup systems worked fine. Thanks to Computer Man for his expert advice. No thanks to President Obama. Rocky wonders whether a Republican President's State of the Union might result in a "red" Screen of Death?]