Global Market Comments
January 30, 2025
Fiat Lux
Featured Trade:
(THE MAD HEDGE DICTIONARY OF TRADING SLANG)
The Diary of a Mad Hedge Fund Trader is read in 140 counties. About a quarter of our readers run the letter through a Google Translator before reading.
That has created a problem.
Stock trading is probably the most slang and acronym-ridden profession on the planet, second only to the United States Marine Corps. (Semper Fi).
And guess what? The Google Translator has never worked on the floor of a major stock exchange.
That means its translations often come out as gobbledygook or complete nonsense. So, the customers email me asking what the heck I am talking about in my daily newsletters, eating up a portion of my day.
I am therefore enclosing “The Mad Hedge Fund Trader’s Dictionary of Traders’ Slang” below.
To keep this a PG-rated publication, I have left some terms undefined, but you can make a good guess as to their true meaning. It turns out that most traders never went to finishing school, and many are not even gentlemen.
If any of you out there have additional terms you would like to add, please email them to me at support@madhedgefundtrader.com and put “DICTIONARY” in the subject line. I’ll use them in a future update. No doubt there are hundreds if not thousands, more.
Read, enjoy, and laugh.
Accelerated Time Decay – The increasing decline of the value of a stock option as it approaches its expiration date
Black Swan – A term made popular by Nassim Taleb that refers to a sudden, unexpected, low-probability event that has a disproportionately high impact on your portfolio.
Boredom Trading – reaching for marginally profitable trades during quiet markets because there is nothing else to do. Usually a bad idea.
Bottoming Process – When a market makes several failed attempts to make new lows, creating a medium-term bottom
Blow-off Top – The top of a price spike upward is usually associated with a volume spike as well.
Bubble – Any asset class rising in price far above and beyond any rational valuation measures
Buy the Dip – BTD/BTFD/BTMFD-Buy the recent decline in prices.
Don’t Catch a Falling Knife – don’t try and buy a stock in free fall.
Don’t be a Hero – keep positions small during volatile markets.
“Be greedy when others are fearful, and fearful when others are greedy” is a classic Benjamin Graham quote which means “buy bottoms and sell top.”
Pigs get Slaughtered – Buy a position that is too big for you and it will turn around and bite you.
Bull Trap – a strong market move-up that sucks in buyers and then dies as soon as the last one is in
Bear Trap – A strong market move-down that sucks in lots of short sellers and turns around as soon as the last one sells
Buy When There is Blood in the Streets – Buy stocks at market bottoms.
Capitulation Bottom – The last bull throws in the towel, gives up, and dumps all his stock, making the final bottom of a major move.
Capitulation Top – The last bear throws in the towel, gives up, and jumps into the market late, making the final top of a major move
Choppy – sudden and erratic price moves within a narrow range
Contrarian – one who trades against the general market consensus
Dead Cat Bounce – A brief rally in s stock that has just seen a sharp drop
Dialing for Dollars – Calling brokerage house customers to sell stocks for commissions
Don’t fight the Fed – Don’t expect markets to fall when interest rates are falling.
Don’t Fight the Tape – Don’t trade against the market trend. Comes from the paper ticker tapes that once transmitted stock prices by telegraph
Dry Powder – Keeping cash in reserve for better trading opportunities
Dumb Money – what inexperienced retail investors are doing. Thanks to the Internet, they’re not as dumb as they used to be
Get Filled – Your order is executed.
The Greeks – Greek alphabet letters that refer to option valuation components, such as delta, theta, gamma, and vega
High-Frequency Traders (HFT) – Firms using sophisticated computer programs to take positions for infinitesimally short periods taking microscopic profits in enormous volumes. They account for roughly 70% of daily trading volume.
Holding the Bag – you are left holding stock in a falling market or short in a rising one.
Honor Your Stops - don’t make excuses for ignoring stop losses. This is where the really big hits come from
Killing It – Making a series of successful trades
Locked Market – When the bid and offer are identical
Market Makers – firms that provide market liquidity with two-sided bids and offers, now largely replaced by computers
Melt Up – A straight line move upward in shares with no pullbacks whatsoever, usually triggered by a news or earnings release.
Momo – Momentum-based trading, buying rising markets and selling falling ones
Never Short a Dull Market – Quiet markets can often rally sharply because the selling is done
Noise – Random media reporting that has no true impact on the direction of stock prices
Pain Trade – the market is moving against the positions of the trading community.
Permabear – A persona who is always bearish, usually driven by some bizarre Armageddon-type ideology, or suffering from paranoia
Permabull – a person who is always bullish, despite deteriorating fundamental conditions
Picking Up Pennies in Front of a Steamroller – Sell short naked put options.
Pump and Dump – Unethical brokers run the prices of small illiquid stocks and then sell them to clients at market tops. The shares usually collapse afterward. See the movie Wolf of Wall Street.
Resistance Level – A price on a stock chart offering technical resistance to further price appreciation
Sell in May and Go Away – The preference for selling shares ahead of a period of seasonal weakness.
Sell the Rip – STR/STFR/ STMFR
Short Squeeze – A sharp run-up in share prices that forces short sellers to buy to avoid accelerating losses.
Smart Money – what the best informed, most experienced investors are doing. Not as smart as they used to be.
Snakebit – A surprise news development that comes out of the blue and costs you money
Spoofing – entering orders without any intention of executing them and canceling them before they can be executed. It is a common tactic of high-frequency traders.
Spoos – S&P 500 futures contracts
Squawk Box – A small loudspeaker on a desktop in a trading room constantly broadcasting news reports and large trades
Support Level – A price on a stock chart offering significant technical support
Stop Loss-a price at which when reached, a liquidation of the position is automatically triggered.
The Trend is Your Friend – Trade with the market direction, not against it.
Theta Burn – Time decay on options
Ticker Tape – A white ¾ inch-wide paper tape used to transmit stock prices by telegraph at the rate of 500 characters a minute that was used until the 1950s to transmit stock prices. See the ticker tape parade and delayed tape.
Topping Process – occurs when a market makes several failed attempts to make a new high, creating a medium-term top
Turnaround Tuesday – the tendency of markets to reverse direction after the markets digest weekend news on a Monday
Yellen Put – an assumption that the Fed will come to the rescue with a monetary easing on any substantial market selloff
“When asked how he manages the time to be chairman of Microsoft, run the world’s largest charity, and raise three kids, Bill Gates answered, “I don’t mow the lawn.”
Global Market Comments
January 29, 2025
Fiat Lux
Featured Trade:
(WHY GLOBALIZATION WORKS)
Having been a vociferous supporter of globalization since its dawn, first during a decade spent as a reporter for The Economist magazine, and then as an investor, I can explain how our international trading system works, and especially why it works for the US.
While waiting for a flight at Miami Airport, there was a polyglot of travelers from all over the world.
Large groups of Chinese were led by flag-bearing guides. Italian Millennials mobbed the bars at night. English couples strolled the majestic limestone fortress walls soaking up the sunshine.
There was even the occasional American student backpacker repeating my own adventure from the 1960’s.
And you know what? This disparate international group shared many things in common.
Most of them spent much of the day glued to iPhones or Androids run by US-designed apps. Many were staying in accommodations organized by Airbnb (there were over 200 listings for the immediate Dubrovnik area).
They may have made the trip from the airport in an Uber cab. They wore Levis Strauss blue jeans. American pop music pulsed through their earbuds. Probably half of them arrived on a Boeing jet financed by the US Export-Import Bank.
In short, they were all sending enormous amounts of money to US companies and shareholders in more ways than they could possibly count, without realizing it.
You never used to see tourists from most countries, like Russia, Spain, Portugal, Italy, or Ireland.
They were too poor.
Rapidly rising standards of living created by globalization changed all of that, creating an enormous new market for American products, especially technology ones.
My Airbnb neighbors in Dubrovnik included a family from Malaysia and a young couple from South Korea.
You can see some of this impact in international balance of trade statistics. In 2024, the US ran a trade deficit with the world of $634 billion with consumer electronics, oil, clothes, and cars our largest imports.
Subtract our $294 billion surplus in services, which includes, financial services, education, patents, and other intellectual property, and that brings our current account deficit down by more than half to only $340 billion.
But that doesn’t tell the whole story.
Trade data completely misses the enormous number of products and services that are now given away FOR FREE in exchange for the chance of earning some uncertain revenue at some future date.
And I include none other than the esteemed Mad Hedge Fund Trader in this category. Something like 99% of the visitors to my site never pay anything.
The monetary market value of the research I have given away for free is probably worth tens of millions of dollars.
In a pre-Internet, pre-globalized world, a service covering so many asset cases and individual stocks in real-time might have cost $100,000, if not $1 million.
And you know what? It would have been worth it!
Multiply this effect on a global scale and you see what I am talking about.
Give up your name and email address, and you can obtain almost any kind of online service for nothing. And as far as I know, no government agency has any measurement of this whatsoever.
Needless to say, the United States is far and away the leader in this immeasurable field.
By the way, this might also be the reason why the published productivity data has been so poor, despite the fact that US GDP has grown by 20% since 2009. Everywhere I look productivity is skyrocketing, including my own.
It also might be the reason why Amazon continuously sports a nosebleed valuation. Much of what they provide is FREE, and therefore immeasurable.
Of course, globalization wrought havoc on your life if you went into it with the wrong job in the wrong industry and an inadequate skill set.
Blue-collar workers tied to textiles, shoes, toys, and other low-value-added manufacturing were toast, as their jobs fled offshore.
If you didn’t retrain, or adapt you became an angry, mostly white man.
As my friend, New York Times columnist Tom Friedman likes to say, “Average doesn’t cut it anymore.”
However, while the jobs are gone, the bulk of the profits stayed here in the US. American companies offshored the $ 2-an-hour jobs (mass assembly) but kept the $100 an hour ones (design and marketing).
As my friends in the Chinese government never fail to point out, if they build the iPhone for $100 and we sell it for $1,500, we are the big winners, not them.
They believe we are perpetuating 19th-century colonialism by making wage slaves of their workers.
They may be right.
Globalization enables the US dollar to continue as the world’s reserve currency, as almost all international trade is conducted in the buck.
That is one of the greatest free lunches of all time. It enables the US government to indirectly control the global economy through its own monetary policy. Some half of all US government debt is owned by foreigners.
When sanctions forced Iran to drop out of the international trading system what did they get? A Great Depression that cut their GDP by 25%. You can’t run a country of 80 million with oil barter deals, gold, and bitcoins alone.
There are also the huge defense benefits that globalization brings us.
Back in the early days, the main reason to steer a country into capitalism was to prevent it from going communist, and therefore becoming an enemy.
Grow your allies and shrink your enemies, and your defense costs shrink dramatically, raising our standard of living.
That is what has happened.
Increased trade also boosted foreign standards of living, therefore creating a growing market for American goods and services.
This was the whole point of the World Trade Organization, NAFTA, and the Trans-Pacific Partnership.
Humans rarely bite the hands that feed them. They are also highly unlikely to set fire to their paycheck or bomb the sources of income.
Make a foreigner a millionaire, and you turn him into a pacifist. I have seen this unfold time and again over the past half-century, be it in China, Russia, Vietnam, Cambodia, and most recently in Iran.
Create an embedded base of businessmen in any country who are getting rich off of you, and international relations invariably improve.
Any system based on greed is guaranteed to succeed.
A side benefit of all of this is that stock markets for up forever.
Since globalization started in earnest in 1951, the Dow Average has risen from $239 to $18,392, a prodigious gain of some 77-fold.
And you wondered why?
Globalization is the mechanism through which America is paid the dividend for all of the good deeds it has done and inventions it has created for the past century.
I am thinking about the construction of the Panama Canal, Lend Lease, and the Marshall Plan, as well as the transistor, memory chip, microprocessor, personal computer, Windows, the Internet, online commerce, the iPhone, and social media.
That is why globalization is a win-win-win for everyone.
There are really only two true communist countries left in the world, Cuba and North Korea, which never joined the international trading community. They also happen to have the planet’s lowest standard of living.
And Cuba will become totally capitalist within two years. Just give them a million iPhones, get them talking, and see what happens. Castro will become just another neighborhood in South San Francisco.
So why end a trading system from which America and its people have profited so mightily?
Exploring the Wonders of International Trade
“We have few, if any spare tires left,” said Mohamed El-Erian, CIO of mega bond house PIMCO, about the nail studded road ahead for the US economy.
Global Market Comments
January 28, 2025
Fiat Lux
Featured Trade:
(THE NEW OFFSHORE CENTER: AMERICA),
(SIGN UP NOW FOR TEXT MESSAGING OF TRADE ALERTS)
Officials in South Dakota have figured out how to make up for the complete collapse of their oil fracking industry. They are morphing the Peace Garden State into a major offshore banking center.
South Dakota is not alone. Some 200,000 corporations, limited liability companies, and family trusts are registered in remote Stateline, Nevada on the sparkling shores of Lake Tahoe.
And there has been a sudden outbreak of expensive John Lobb shoes, Turnbull & Asser shirts, and Brioni suites in rustic Cheyenne, Wyoming, as foreign bankers and their high-paid tax attorneys descend on the city in droves.
Meet the United States of America, the new tax haven capital of the world.
Friends in the business told me that accounts in Switzerland, the Cayman Islands, and the British Virgin Islands are being closed down by the tens of thousands and moved to the US shores.
Almost all of this money is being transferred by wealthy European, Middle Eastern, and Chinese families who are more interested in “return of capital” than “return on capital.”
It’s best to pay a few dollars in American taxes than have your money expropriated by a corrupt and covetous foreign government, have your children kidnapped, or get stood up against a wall and shot.
The move was prompted by the Obama administration, which pushed through the Foreign Account Tax Compliance Act of 2010, known as FACTA.
Its goal was to flush out wealthy Americans hiding income and assets abroad. The law saddles offshore banks with hefty penalties and fines for helping US citizens avoid the IRS.
For example, Rothschild Bank was hit with a $11.5 million fine for helping 300 Americans hide $794 million in assets.
The law has had the unintended consequence of bringing rich foreigners into compliance as well. It is almost impossible now for an American to open a bank or brokerage account in a country that is not FACTA-compliant.
You are really limited to the dubious domiciles of Nauru, Bahrain, and Vanuatu, all favorites of organized crime, drug dealers, and terrorist groups.
As a former Swiss banker myself, I can tell you that Swiss secrecy was always a myth.
The ice broke during the 1980s when Switzerland froze the accounts of the Ferdinand Marcos family (who I once interviewed for The Economist magazine), who had spent decades looting the government of the Philippines.
Investigators finally found the money invested in several office buildings in Manhattan. The money was eventually returned to the people of the Philippines.
The Swiss reputation for secrecy took a further blow in 2007 when Bradley Birkenfeld, a US citizen working for Union Bank of Switzerland, made the unfortunate decision to fly from Europe to the Caribbean, changing planes in New York City.
There, he was promptly arrested for helping his fellow countrymen avoid taxes. Among the many pearls of wisdom we learned from this case was that the bank advised clients to sneak cash out of the US by sticking large carat polished diamonds into toothpaste tubes.
As a result, 80 Swiss banks paid more than $5 billion in fines. Birkenfeld served a three-year jail sentence after turning over a list of 20,000 US clients. The IRS graciously allowed an amnesty period for his customers.
Birkenfeld was eventually paid a $104 million reward by the IRS Whistleblower Office for turning in his clients, some 30% of the taxes recovered, the largest in US history. Now, Birkenfeld has a wealth management problem of a different kind.
The Swiss haven’t been driven into the poor house yet. They are still holding $1.9 trillion in assets for foreign depositors.
The great irony in all of this is that a number of candidates have been campaigning for president, claiming that America is in a long-term decline and that money is leaving the country.
The foreign 1% beg to differ.
The North Dakota Peace Garden
A Former Swiss Banker
Global Market Comments
January 27, 2025
Fiat Lux
Featured Trade:
(MARKET OUTLOOK FOR THE WEEK AHEAD, or THE TRADE WAR BEGINS),
(SPY), (TLT), (TSLA), (NFLX)
The punitive 25% tariff against Columbia for refusing to take back their own immigrants clearly signals how international relations will be conducted going forward. Never mind that it was rolled back 25 hours later. The intentions are clear. Notice that it is America’s biggest exporters, the Magnificent Seven, that are getting absolutely slaughtered this morning.
Who’s next? There are no allies anymore.
I am normally not a shy, retiring, or timid person, as those who know me will testify heartily. However, given that I have only executed three trades this month, one might be forgiven for thinking so. Those would be successful longs and shorts in Tesla (TSLA) and a stop loss in bonds (TLT). Still, up 2.29% so far in such an indecisive month is better than a poke in the eye with a sharp stick.
Partly I have acquired a newfound shyness because I don’t want to spoil a near-perfect record for the last five months of 2025. During this period, I executed 47 trades and lost on only 4 of them for a win rate of 91.49%. This is the highest success rate in the nearly 17-year history of the Mad Hedge Fund Trader. What’s more, we took in a staggering 57.9% during this time when the stock market was earning almost nothing.
But the market is certainly indecisive, can’t decide where to go, and is awaiting its marching orders. This is not a time to bet the ranch as we did in Q4 with financials, but only to stick a nervous toe in the water until the market tells you what to do. For now, better to bet just a single cow.
By far the most interesting chart last week is that for the S&P 500 (SPY). Two weeks ago, we saw a lower low at $575 followed by a higher high up to $610 the following week. This is known as an “outside trade” in the trade and always presages an increase in volatility. And volatility we shall get.
All of the traditional market valuation indicators followed by Wall Street are now at their 98% to 100% levels of extreme. This is a clear warning signal of hard times ahead. Apple is giving us the best “tell” having its worst start to the year since 2008, down $40, or 15.38%, some $600 billion in market cap.
It could be a long wait.
The new administration is attempting to pass a Grand policy bill that will approve all of its policy initiatives in a single bill. That might take until May at the earliest and November at the latest, if it passes at all. That is a very long time for the market to wait for a result.
I explained last week that the bull case is that the new administration does nothing. We got a step in that direction last week when Trump said he would “study” tariffs rather than implement them. If Trump ends up not implementing tariffs, or only token ones, it would be good news for the growth of the US economy.
Let me summarize how the China-US trade works in a single sentence. China makes a widget for $1.00 which it then sells to an American buyer for $2.00, reaping a 100% profit. The American buyer then sells its Chinese widget for $20. Some 5% of the profit stream stays in China and 95% with the American seller. Stop this trade and that $18 US profit is lost, wiping out two million US small businesses. I argue that 95% of something is better than 100% of nothing.
By the way, the same argument applies to TikTok, which probably supports another two million single individual revenue streams.
Netflix Earnings Rocketed on the back of 19 million new subscribers. The streaming giant reported better-than-expected fourth-quarter results and raised its 2025 revenue forecast. For the fourth quarter, earnings of $4.27 per share topped Street estimates of $4.18. Revenue of $10.25 billion also topped the Bloomberg consensus estimate of $10.11 billion. Netflix added 18.91 million subscribers in the quarter versus an expected 9.18 million. Mad Hedge already took profits on a long going into the announcement.
The streaming wars are well and truly over.
Apple is in Free Fall, after multiple downgrades, taking the stock down $40, or 15% in a month. Apple has lost some market share in China and has had limited traction with its AI offerings. Even a strong dollar is hurting. Apple sells a lot of things overseas. That’s the fundamental backdrop. The technical picture shows investors what can happen if investors continue to see a deterioration in the company’s business. Avoid (AAPL) for now.
Morgan Stanley (MS) Warns Customers to Cut Stock Exposure. With the S&P 500 index touching a new all-time high Wednesday, U.S. stocks remaining pricey and valuations appearing stretched, investors should make sure to keep a diversified portfolio. The S&P 500 index’s valuation is too high, expectations for earnings growth are too ambitious, and that it’s unclear what President Donald Trump’s policies will mean for Wall Street.
Credit Card Delinquencies Soar, as have minimum monthly payments. The share of active credit card holders just making minimum payments rose to 10.75% in the third quarter of 2024, the highest ever in data going back to 2012. The share of cardholders more than 30 days past due rose to 3.52%, an increase from 3.21%, for a gain of more than 10%. Even with the rising delinquency rate, it is still well below the 6.8% peak during the 2008-09 financial crisis and not yet indicative of serious strains.
Home Insurance Costs are Soaring, for homeowners in the most-affected regions, California and Florida. For consumers living in the 20% of zip codes with the highest expected annual losses, premiums averaged $2,321, or 82% more than those living in the 20% of lowest-risk zip codes from 2018-22. This is going to get worse before it gets better.
Ban Lifted on New Natural Gas Export Facilities in 4 Years, reversing a Biden-era climate initiative. Cheniere Energy (LNG), an old Mad Hedge favorite has risen 75% since the summer and sold off on the news. The big winner here? China, which can now buy more low-priced natural gas.
Housing Starts were up 3.0% in December, with single-family homes up only 3%, while multifamily saw a 59% rise. It should be the shift away from home sales crushed by 7.2% mortgage rates. You can write off real estate in 2025.
EV and Hybrid Sales Reach a Record 20% of US Vehicle Sales in 2024 and now account for 10% of the total US fleet. And you wonder why oil prices are so low. That includes 1.9 million hybrid vehicles, including plug-in models, and 1.3 million all-electric models. Tesla continued to dominate sales of pure EVs but Cox Automotive estimated its annual sales fell and its market share dropped to about 49%.
SpaceX Starship Blows Up on test launch number seven. The Federal Aviation Administration issued a warning to pilots of a “dangerous area for falling debris of rocket Starship,” according to a pilots’ notice. Looks like that Mars trip will be delayed.
We managed to grind out a +2.29% return so far in January. That takes us to a year-to-date profit of +2.29% so far in 2025. My trailing one-year return stands at +88.88% as a bad trade a year ago fell off the one-year record. That takes my average annualized return to +50.03% and my performance since inception to +754.13%.
I used a 19% spike in Tesla shares to add a new short position there. The combination of my long and short hedging each other is known as a “short strangle.” It is a combined bet that Tesla will not fall below $310 or rise above $540 by the February options expiration in 19 trading days. Sounds pretty good to me.
Some 63 of my 70 round trips, or 90%, were profitable in 2023. Some 74 of 94 trades have been profitable in 2024, and several of those losses were really break-even. That is a success rate of +78.72%.
Try beating that anywhere.
My Ten-Year View – A Reassessment
We have to substantially downsize our expectations of equity returns in view of the election outcome. My new American Golden Age, or the next Roaring Twenties is now looking at a headwind. The economy will completely stop decarbonizing. Technology innovation will slow. Trade wars will exact a high price. Inflation will return. The Dow Average will rise by 600% to 240,000 or more in the coming decade. The new America will be far more efficient and profitable than the old.
My Dow 240,000 target has been pushed back to 2035.
On Monday, January 27, at 8:30 AM EST, Leading Economic Indicators are out.
On Tuesday, January 28 a 8:30 AM, the Durable Goods are released.
On Wednesday, January 29 at 8:30 AM, the Federal Reserve Interest Rate Decision is announced. A press conference follows at 2:30.
On Thursday, January 30 at 8:30 AM, the Weekly Jobless Claims are disclosed. We also get an update on GDP growth.
On Friday, January 31 at 8:30 AM, Core PCE is printed. At 2:00 PM the Baker Hughes Rig Count is printed.
As for me, occasionally I tell my close friends that I hitchhiked across the Sahara Desert alone when I was 16 and met with looks that are amazed, befuddled, and disbelieving, but I actually did it in the summer of 1968.
I had spent two months hitchhiking from a hospital in Sweden all the way to my ancestral roots in Monreale, Sicily, the home of my Italian grandfather. My next goal was to visit my Uncle Charles, who was stationed at the Torreon Air Force base outside of Madrid, Spain.
I looked at my Michelin map of the Mediterranean and quickly realized that it would be much quicker to cut across North Africa than hitching all the way back up the length of Italy, cutting across the Cote d’Azur, where no one ever picked up hitchhikers, then all the way down to Madrid, where the people were too poor to own cars.
So one fine morning, I found myself taking a deck passage on a ferry from Palermo to Tunis. From here on, my memory is hazy and I remember only a few flashbacks.
Ever the historian, even at age 16, I made straight for the Carthaginian ruins where the Romans allegedly salted the earth to prevent any recovery of a country they had just wasted. Some 2,000 years later, it worked as there was nothing left but an endless sea of scattered rocks.
At night, I laid out my sleeping bag to catch some shut-eye. But at 2:00 AM, someone tried to bash my head in with a rock. I scared them off but haven’t had a decent night of sleep since.
The next day, I made for the spectacular Roman ruins at Leptus Magna on the Libyan coast. But Muamar Khadafi pulled off a coup d’état earlier and closed the border to all Americans. My visa obtained in Rome from King Idris was useless.
I used the opportunity to hitchhike over Kasserine Pass into Algeria, where my uncle served under General Patton in WWII. US forces suffered an ignominious defeat until General Patton took over the army in 1943. Some 25 years later, the scenery was still littered with blown-up tanks, destroyed trucks, and crashed Messerschmitts.
Approaching the coastal road, I started jumping trains headed west. While officially the Algerian Civil War ended in 1962, in fact, it was still going on in 1968. We passed derailed trains and smashed bridges. The cattle were starving. There was no food anywhere.
At night, Arab families invited me to stay over in their mud brick homes as I always traveled with a big American Flag on my pack. Their hospitality was endless, and they shared what little food they had.
As the train pulled into Algiers, a conductor caught me without a ticket. So, the railway police arrested me and on arrival, they took me to the central Algiers prison, not a very nice place. After the police left, the head of the prison took me to a back door, opened it, smiled, and said “Si vou plais”. That was all the French I ever needed to know. I quickly disappeared into the Algiers souk.
As we approached the Moroccan border, I saw trains of camels 1,000 animals long, rhythmically swaying back and forth with their cargoes of spices from central Africa. These don’t exist anymore, replaced by modern trucks.
Out in the middle of nowhere, bullets started flying through the passenger cars splintering wood. I poked my Kodak Instamatic out the window in between volleys of shots and snapped a few pictures.
The train juddered to a halt and robbers boarded. They shook down the passengers, seizing whatever silver jewelry and bolts of cloth they could find.
When they came to me, they just laughed and moved on. As a ragged backpacker, I had nothing of interest for them.
The train ended up in Marrakesh on the edge of the Sahara and the final destination of the camel trains. It was like visiting the Arabian Nights. The main Jemaa el-Fna square was amazing, with masses of crafts for sale, magicians, snake charmers, and men breathing fire.
Next stop was Tangiers, the site of the oldest foreign American Embassy, which is now open to tourists. For 50 cents a night, you could sleep on a rooftop under the stars and pass the pipe with fellow travelers which contained something called hashish.
One more ferry ride and I was at the British naval base at the Rock of Gibraltar and then on a train for Madrid. I made it to the Torreon base main gate where a very surprised master sergeant picked up my half-starved, rail-thin, filthy nephew and took me home. Later, Uncle Charles said I slept for three days straight. Since I had lice, Charles shaved my head when I was asleep. I fit right in with the other airmen.
I woke up with a fever, so Charles took me to the base clinic. They never figured out what I had. Maybe it was exhaustion, maybe it was prolonged starvation. Perhaps it was something African. Possibly, it was all one long dream.
Afterward, my uncle took me to the base commissary where I enjoyed my first cheeseburger, French fries, and chocolate shake in many months. It was the best meal of my life and the only cure I really needed.
I have pictures of all this which are sitting in a box somewhere in my basement. The Michelin map sits in a giant case of old, used maps that I have been collecting for 60 years.
Stay Healthy,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
North Africa in 1968
Welcome to Florida