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17 August 2007: DJIA 13,079; Brent Crude 69.53Lessons my mother taught me #53: Never trust a man with a beard. Now, in a house dominated by my fathers Jewish-Ukrainian heritage, that was a tough call, as there was a lot of facial hair amongst friends and relatives (and not just the men), but my dear old mom had a point. I look at Beardy Ben Bernanke and I see someone who has a bit of a credibility problem. Only a few days ago it was all sunshine and global happiness. Today its slashing the discount rate, with increased uncertainty having the potential to restrain economic growth. Thanks, Ben I should have listened to Mom.But heres the thing: the market actually likes it. Weve shed hundreds of points over 400 on the Dow in just a week thanks to the French connection - but now were on our way up again. Interest rates are coming down so lets buy more stock. Perhaps some of those trailer-trash loans will be repaid after all and theres no need to worry about sub-prime any more.I am no contrarian. If this is what the market likes, who am I to complain? Curveball is riding the waves well, and my Special Opportunities Fund is looking set for a bumper year. Im getting a new publicity photo done as I reckon Ill get a special mention in all those reviews that come out at year-end. If John Paulson knew what a great job I was doing, hed have hired me by now. Hell find out soon enough, when he sees my profile in HFR.My buddies at Goldman must be feeling a bit envious of my performance, too. Everyone in the market was feeling their pain as they announced that they would have to pump three billion bucks yes, three billion! - into their Global Equities Opportunities Fund. The Global Alpha Fund has tanked too. Oh guys, how we hurt for you. No one likes to see Goldman in trouble.My other pet project is going well. Brian and Brad at Commodity Kinetics have been in to showcase the technology platform for our Collateralized Commodity Units. It rocks. Simple as that. It is going to do just about everything, other than print money and make Grey Goose martinis. Whats coolest for me is that it will automatically generate trade orders and route them to the best venue, which pretty much leaves me to sit back in the turret and watch the cash pouring into our accounts. We get paid for trading when all were really doing is watching screens as they churn out trade instructions. Sweet.Not all is as sweet. A tricky day with David. He wanted to talk about some loans wed made to PEq firms. Now, when I said I didnt want to be in the PEq business, that was technically correct. We are not an investor in that sense. But lending money to the sector is a different matter altogether. These firms all need cash and the terms are pretty good. We know that theyre buying businesses with plenty of cash in the bank, so lending them money to finance the purchase is pretty much risk free. One small wrinkle: some of the loans have PIK toggles attached. PIK (payment in kind Ed.) normally means that they can pay interest with more debt, rather than cash. No problem as far as Im concerned, but David sees things differently. He doesnt like these toggles, and he likes even less the way Ive told my people to account for them.So David, what do you want me to do? He agrees that we shouldnt sell the loans, but wants me to try and sell the toggles. A secondary market in toggles? Well, were trading everything else with a pulse, so why not these? Thats what we pay you the big bucks for, Larry. Yeah right. Ill just call my buddies at Goldman and see what they think. When that fails, Ill call Stanley and offer him a great package of toggles that will earn him lots of bro and kudos as the first PB to execute in this exciting new market. He might just be that dumb.I shall have to deal with my toggle challenge later. I am flying back to New York to pick up the family and take a break in the Keys. I keep my Portofino down there, so we can cruise around, sip a couple of cold beers (without Charlize, sadly I suspect she and the wife just wouldnt get on), and generally forget about the crazy vagaries of this market. I dont own a property down there, but a grateful client, who has seen his side pockets stuffed with gold, gives me the run of his modest seven-bedroom bolt hole with private beach. The kids love it.Eva, of course, has reservations. The sea is too hot or too cold. The kitchen simply isnt big enough, and the beds are all uncomfortable. The maid is lazy (Eva, did you really say that?). All this I endure in order to get a break. I love Eva, but after a week I am ready to get back to work. Italian women should always be taken in small doses.