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Reader Advisory: Due to pressing client projects (I do real work besides writing this site), there won't be a free update on Saturday.  However, the Peoplenomics report this weekend will cover two topics: On a practical level, we'll go over 'grab-and-go bags' and what to have in them, and on a more etheric level, in a second section we'll look at the economic impact of possible future contact with civilizations not-of-earth in a section called "Alienomics". Why we wouldn't be shorting Boeing just yet...

 

Our Very Durable Delusions

Latest from the Census Bureau:

"New Orders New orders for manufactured durable goods in June increased $1.6 billion or 0.8 percent to $215.4 billion, the U.S. Census Bureau announced today. This was the second consecutive monthly increase and followed a 0.1 percent May increase. Excluding transportation, new orders increased 2.0 percent. Excluding defense, new orders increased 0.1 percent.

Shipments Shipments of manufactured durable goods in June, up two of the last three months, increased $1.1 billion or 0.5 percent to $212.2 billion. This followed a 1.2 percent May decrease.

Unfilled Orders Unfilled orders for manufactured durable goods in June, up twenty-eight of the last twenty-nine months, increased $7.2 billion or 0.9 percent to $817.6 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.9 percent May increase.

Inventories

Inventories of manufactured durable goods in June, up eleven of the last twelve months, increased $1.8 billion or 0.5 percent to $332.2 billion. This was also at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.5 percent May increase.

Capital Goods Industries

Nondefense

Nondefense new orders for capital goods in June decreased $2.3 billion or 3.2 percent to $71.4 billion.

Defense

Defense new orders for capital goods in June increased $1.5 billion or 15.8 percent to $11.3 billion. "

OK, let's do a little math here...because the MSM isn't going to point this out so I will:

 

Defense spending was up $1.5 Billion  Durable Goods overall was up $1.6  Billion.  Back out spending on the Bush Wars and Durable goods would be what?  Flat!  Now, get out there and wage something...without the wars, the economy would truly suck.  That tees up our next story...

 

Markets: A Little Reality Intrudes

The report that the National Bank of Australia will write off 90% of its US conduit loans might cause a few folks on Wall Street to hit the Tums (or Jack) a bit earlier than usual today.  Of course, if you've been following this site for very long, you probably have already figured that the Home Loan Bubble is only the first to let go, and that there's likely an equally big bubble left to pop with collateralized debt obligations (bundled credit cards and such) start letting go, although it will be a quieter mess because it's less publicly reported.

 

But, I figure that's still to come this fall when the Mother Of All Crashes (MOAC) looks possible in October, which I figure will be timed to coincide with some kind of next (and orders of magnitude more terrible) next "terror" event.

 

But we don't need to wait for fall to see terror right up close and personal.  Nope:  RealtyTrac reports that foreclosures are up an amazing 121% compared with the same period a year ago.  Here's their press release:

"IRVINE, Calif., July 25 /PRNewswire/ -- RealtyTrac(R) ( http://www.realtytrac.com ), the leading online marketplace for foreclosure properties, today released its Q2 2008 U.S. Foreclosure Market Report(TM), which shows foreclosure filings were reported on 739,714 U.S. properties during the second quarter, a nearly 14 percent increase from the previous quarter and a 121 percent increase from the second quarter of 2007. The report also shows that one in every 171 U.S. households received a foreclosure filing during the quarter.

RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties, with over 1.5 million properties from over 2,200 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal's Real Estate Journal.

"Although much of the fallout from foreclosures is being driven by rampant activity in a few states, such as Nevada, California, Florida, Ohio, Arizona and Michigan, most areas of the country are seeing at least some increase in foreclosure activity," said James J. Saccacio, chief executive officer of RealtyTrac. "Forty-eight of 50 states and 95 out of the nation's 100 largest metro areas experienced year-over-year increases in foreclosure activity in the second quarter.

"Bank repossessions, or REOs, accounted for 30 percent of total foreclosure activity in the second quarter, up from 24 percent of the total in the first quarter," Saccacio continued. "This shift in the distribution of activity indicates that there is a progression toward purging the problem loans out of the system -- at which point the housing market can regain some sense of normalcy. Of course if another surge in defaults occurs, which could well happen later this year, it would refill the foreclosure pipeline and prolong the recovery."

Nevada, California, Arizona post top state foreclosure rates

One in every 43 Nevada households received a foreclosure filing during the second quarter, the highest foreclosure rate among the states and nearly four times the national average. Foreclosure filings were reported on 24,657 Nevada properties during the quarter, up 26 percent from the previous quarter and up 147 percent from the first quarter of 2007.

Foreclosure filings were reported on 202,599 California properties during the second quarter, the highest total among the states and a rate of one in every 65 households -- the nation's second highest state foreclosure rate. Foreclosure activity in California increased 19 percent from the previous quarter and was nearly three times the level reported in the second quarter of 2007.

With one in every 70 households receiving a foreclosure filing, Arizona posted the nation's third highest state foreclosure rate in the second quarter. Foreclosure filings were reported on 37,230 Arizona properties during the quarter, up nearly 36 percent from the previous quarter and close to four times the number reported in the second quarter of 2007.

Florida documented the nation's fourth highest state foreclosure rate in the second quarter, with one in every 78 households receiving a foreclosure filing during the quarter - more than twice the national average. Foreclosure filings were reported on 109,433 Florida properties during the quarter, the second highest total of any state and an increase of nearly 25 percent from the previous quarter.

Despite a nearly 15 percent quarterly decrease in foreclosure activity in the second quarter, Colorado posted the nation's fifth highest state foreclosure rate - one in every 129 Colorado households received a foreclosure filing during the quarter. Second quarter foreclosure activity in Colorado was still up more than 50 percent from the second quarter of 2007.

Foreclosure filings were reported on 37,689 Ohio properties in the second quarter, the third highest total among the states and a rate of one in every 134 households -- the nation's sixth highest state foreclosure rate. Second quarter foreclosure activity in Ohio was up nearly 21 percent from the previous quarter and nearly 27 percent from the second quarter of 2007.

With foreclosure filings reported on 32,868 properties during the second quarter, Michigan notched the fifth highest total among the states. One in every 137 Michigan households received a foreclosure filing during the quarter, the nation's seventh highest state foreclosure rate.

Other states with foreclosure rates among the top 10 were Georgia, Massachusetts and Illinois.

Top 20 metro areas include Las Vegas, Phoenix, Miami, San Diego and Detroit

The Q2 2008 U.S. Foreclosure Market Report also ranks the nation's 100 largest metropolitan areas by foreclosure rate. California and Florida metro areas accounted for 16 of the top 20 metro foreclosure rates, with the California cities of Stockton and Riverside-San Bernardino taking the No. 1 and No. 2 spots.

One in every 25 Stockton households received a foreclosure filing during the quarter -- nearly seven times the national average -- and one in every 32 Riverside-San Bernardino households received a foreclosure filing during the quarter -- more than five times the national average. Other California metro areas in the top 20 were Bakersfield at No. 4, Sacramento at No. 5, Oakland at No. 8, Fresno at No. 9, San Diego at No. 11, Orange at No. 15, Ventura at No. 16 and Los Angeles at No. 19.

Las Vegas documented the third highest metro foreclosure rate, with one in every 35 households receiving a foreclosure filing during the quarter. Foreclosure filings were reported on 21,742 Las Vegas metro properties during the quarter, up more than 25 percent from the previous quarter and up nearly 144 percent from the second quarter of 2007.

The highest ranked Florida metro area was Fort Lauderdale, which ranked No. 6 with one in every 51 households receiving a foreclosure filing during the quarter. Other Florida metro areas in the top 20 were Miami at No. 10, Orlando at No. 13, Sarasota-Bradenton-Venice at No. 14, Tampa-St. Petersburg- Clearwater at No. 17 and Palm Beach at No. 18.

One in every 51 households in the Phoenix metro area received a foreclosure filing during the quarter, ranking No. 7; one in every 66 households in the Detroit metro area received a foreclosure filing during the quarter, ranking No. 12; and one in every 91 households in the Atlanta metro area received a foreclosure filing during the quarter, ranking No. 20.

Housing starts is due out at 10.  I hope both of them got started...

 

That'll Fix It

We can't help but notice that a newspaper in Iran has been banned over its economic reporting.  Since the SEC's imposition of martial law with (17) bank stocks, we figure it will only be a matter of time until reporting anything but happy-talk about US markets will be in the works, such is the nature of controlled markets.  Pointing out the emperor's clothing in any country is not acceptable of late.

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Several readers have pointed out that the SEC rules on naked short selling have been on the books since the 1930's (T+3 rule) or more recently regulation SHO, and more than a few are asking "Why just these stocks?"  TA possible answer is this has more to do with the size of campaign checks from fat-cat hedge funds and less to do with the even-handed administration of law, but I can only guess.

 

Nevertheless,. we continue to hear stories about inter-market arb'ing where a commodity (say silver?) might be bought or sold on the COMEX with and offsetting trade made in a stock (or more likely ETF).  If there's an area for any new super-agency/ "Uber Regulator" to look for abuse, this might be one...

 

Close Call

A Qantas flight dropped 20-thousand feet after a cargo door failed after take-off from Hong Kong.  Reports sound as though crew handled it textbook -- well done.

 

Bus Fare

A lot of rural schools around the country are considering four-day school weeks to make up for the high cost of gas - which is pushing up school bus costs.  In some states there could be issues because of laws which require so many "school-days".  Also puts a crunch on school bus drivers who often have to work several jobs to make ends meet - the change of hours could hurt.  But, with gas prices up, what's a rural district to do?  Shorter school year anyone?  Rural home schooling programs, perhaps?

 

Pollution Headlines

The Universe sometimes presents symmetry if you go looking for it.  Take for example, the headline that "Oil spill closes 80 miles of the Mississippi River" from New Orleans to the Gulf after more than 400,000 gallons of fuel oil leaked from a Liberian flagged oil tanker.  Think 'restrictions on travel' here.

 

On the other hand, "California adopts stiff pollution rules for ships" to the chagrin of the shipping industry.

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Although there will almost certainly be fines and legal action involved, we note the cost of the fuel oil spill is over a million dollars at the wholesale level.  So, seems to me that industry has an economic incentive right there to be careful...that's a fair chunk of change to see flushed out into the Gulf.

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Speaking of which... we get to the news about the health of the Gulf of Mexico itself.  A report out today says the "dead zone' there due to pollution and such, could hit a record of more than 8,800 square miles - a big chunk of water.

 

Here's An Idea!

Say...with word that a senate committee heard appeals yesterday for a federal task force to combat polygamist sects, I have an idea!  Let's make sure that  Senator John Edwards is on the panel...yeah, dat's dah ticket..

 

Them Winds: Tornado in New Hampshire?

A deadly storm hit New Hampshire this week, but I don't recall New Hampshire as being prone to tornados, do you?

 

Pork and Corn

"Agribusiness Group forms to protect Ethanol Subsidies."  Why companies like ADM, Monsanto, DuPont and Deere need tax-money to move into ethanol is just beyond me.  Isn't that what capital markets are for?  Meantime, the price of food - especially corn-finished beef -  is being bid up by - you'll love this - our own tax dollars!  Is this a marvelous country, or what?

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I'm serious as a heart attack here:   ADM's gross profit for the past 12 months is $3.24 billion, Monsanto's was $4.29 billion, put DuPont down for $9.09 billion, and Deere did $7.83 billion gross profit.

 

I must be 24-kinds of stoopid (sic)  to want to see companies with a combined gross profits (ttm basis) in excess of  $24 billion dollars start sucking off our hard-earned income taxes.  Send them to the capital markets!  If ethanol makes sense, let the free markets do their job!

 

Who are these dopes in Washington who aren't getting it?  Socialize losses, underwrite the rich, and privatize profits.  No different than communists back when, except instead of a dacha, there's Vail trips and use of corpgov jets.  Oh...did I forget something?  Campaign contributions for the incumbent recipients...OMG...how foolish of me... forget I mentioned this.

 

Do As We Say Department

California's "Yacht Party" is in trouble because they're being called out over the tax loophole that lets the super-rich keep their private yachts and jets free of taxes... Remind us not to leave our Gulfstream in the Golden State too long...

 

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Coping: Who's Surfing?

In a report out today "China says has more people surfing the Web than US".  Ah...this is only on gross numbers - not percentage-wise.  All those computers at people's offices?  I figure the amount of lost productivity due to corporate web surfing is easily into the billions, which is why more and more corporations have installed net nannies to keep workers focused.  Now, get back to work.

 

Toxic Workplaces

Keep an eye on the battle by the Bushistas' Labor Department to put in rules which will allow industry to avoid compliance with righter workplace toxic chemical exposure rules. The Labor Department has so far refused to release the rules publicly which a thoughtful person could take as a big RED FLAG.

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Say, this isn't key fund-raising time, is it?...naw...there I go again...

 

Language Arts

If you don't know the difference when a woman refers to her "Ask me out boots" or her "ignore me boots", time to sign up for the Urban Dictionary's daily word.  They do a major public service.  Not only can I use hep abbreviations, but I can almost understand my kids.  Almost...not quite...almost....

 

Brain Food

A good set of pictures of "Ancient Egyptian Flying Vehicles" might be an interesting diversion if you're sick of too much financial reality.

 

Roswell Confessional?

Since former Astronaut Edgar Mitchell's 'outing' of alien contact this week, several people have sent me notes like this one:

"George:

I ordered a book last week that purports to be the transcript from the first hand account of an Air Force nurse who attended to the "Crash Victims" at Roswell. Interestingly, one survived for two months and she found that she could communicate telepathically whereas the men could not. Consequently, she was used to "debrief" the alien. The book listed below is that story. I have just started reading it and it is fantastic. Thought you might be interested.

http://www.lulu.com/content/2144178

Hmmm...OK, on the reading list...

 

Better than Bowser?

"BigDog"  the "most advanced quadruped on earth" looks like just the ticket if you're tired of feeding the dogs... No more Milk Bones...just top off the hydraulic fluid and....

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Send snip and save items to george@ure.net

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Peoplenomics.com 

Forecasting the "Fall"

I'm not going to beat around the bush on this:  The numbers are horrific.  But, step by step, I show you this week how I arrive at the most painful financial conclusion I've ever reached:  If your 401(k) has retained even half its value by the end of this year, you will be doing very, very well, compared to most.  If you're thinking "Gee, wonder if that means a Dow under 9,000?"  You may be horrified how far under.  Plus, a few more thoughts on PCP (personal contingency planning) for October.

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UrbanSurvival has a very interesting business model - one that depends on growth.  This business model is a lot like capitalism in that growth is required, but of course we won't ever get to cutting down the rainforests. So even if you don't subscribe to our premium newsletter at www.peoplenomics.com, please tell everyone you know about this site.  The more this site grows, the more time and content will show up on the free site...  Click here to send 'em an invite...  Thank you!

 

"Live on $10,000" Updated

There's now a single-page website devoted to my little ebook "How to Live on $10,000 a year (or less) at www.liveontenthousand.com.  Yep - still possible.  I also took a bit of additional material that was pertinent from recent issues of Peoplenomics and included them.  The whole thing runs about 65 pages, but it gives you a vision of how to not only live on the aforementioned dollar amount, but also how to migrate up the economic foodchain if you make a little more than that and do some active savings...  Click here for the page with more details on it.

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Last week's report is here.    For back issues of this site, click here.  (Goes back to 1997!)

 

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Thursday July 24, 2008

Bigger than Money?  

Astronaut Mitchell: "We've Been Visited"

Yes, it's a bit far afield for an economics-oriented site, but the prospect of aliens visiting earth is a mind/paradigm altering thing, which if I were to make a wild guess, has the possibility of influencing our future is some pretty amazing ways.  So, with this in mind you have got to hear this interview:  Apollo Astronaut Edgar Mitchell, the 6th man to walk on the moon, has a bit of a bombshell:  He says earth has been visited by off-planet beings; something that's been covered up for 60 years.

 

"There's quite a bit of contact going on..."  "...the Roswell crash was real..." 

 

On disclosure: "...the amount of disinformation...seems to be decreasing..."

 

On his personal safety for going public "...I don't think they're knocking people off for that anymore..."

 

"...if they were hostile, we'd be gone by now..."

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No doubt my inbox will be flooded with the usual "you're losing credibility by reporting this stuff.." and other responses that will go to the heart of denial, but is what Edgar Mitchell says is true, your government and mine has been lying to us for 60-years about what's arguably the biggest story in recorded history - off planet contact.

 

No, I'm not saying it's so - please don't confuse the messenger with the message on this stuff.  There are lots of possibilities, not the least of which was outlined in "A Report from Iron Mountain on the accessibility and desirability of peace" that creation and disclosure of 'aliens' would be a dandy population control mechanism.  On the other hand, if what Mitchell says is true, then government has been lying - and that brings up the question "What else might they be lying about?"

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The pictures that come in are pretty much continuous.  A reader sent some which were taken up in the Sedona Arizona area several weeks back.  But, having misplaced those, it's not like you can't find plenty of pictures of them.  Like this set from Australia.

 

Was the Russian crash of a UFO in 1969 real?  Or, was it a crash of back-engineered technology?

 

I haven't made up my mind on the topic yet, but as usual, we'll try to sort through what 'facts' can be distinguished and Mitchell's claims might be considered another significant step on the road to disclosure.  OK, now back to the field of economics....

 

Contributed Paper

The History of "Blaming Speculators"

It has become vogue, for the umpteenth time, for the Federal Reserve and Treasury to set about blaming "speculators" that what which ails us in the markets.  This morning, I'm please to serve up some serious brainfood about this 'rush to blame" business, in the form of a research note my friend Jim Goulding authored and sent out to clients of GH Traders, LLC, and was kind enough to give me permission to post here. 

"When All Else Fails Blame the Speculators

History is replete with society attacking traders and speculators. This paper takes a look at that history.

 

History is full of cycles. I enjoy studying cycles because they lead to predictability and predictability is a trader’s friend. If we are to believe the news stories, the speculators and traders are destroying the world.  I wondered if there was a cycle for society backlash against the trading industry? Indeed there is a cycle. When the economy turns down, society lashes out against the financial industry in the form of sticking a ‘Scarlet A’ on traders/speculators.

 

In this research note I set my sights on certain economic panics in the market. Specifically, the big panics like 1929, 1893, 1857, etc. I looked at articles preceding, during, and after the crashes from the Dataquest database, via the Elmhurst Public Library (where I live). The dbase allows access to the Chicago Tribune historical dbase, 1860-2008. I also utilized Google’s new search-engine dbase that places events for search terms in chronological order.

 

I begin with the ‘crash’ of 1929.

 

In Chicago, the headline was “Wheat declines on the threat of legal changes”[1]. In article that followed, Senator Arthur Capper of Kansas wanted to limit speculators because of the volatility in the wheat markets.  Messer Capper said the trading in the Chicago Board of Trader (CBOT) was an “economic crime”. He wanted “legislation against the volume of trading”. He and others were against the ‘day traders’ who didn’t carry positions. The article went on to state that it was better that you held a position and didn’t trade in an out of the market. However, they forgot the other part of the equation, liquidity. The golden rule in trading is trade where there is liquidity, period. More on liquidity later.

 

In France, the headline was “Police curb speculators in Franc in France”. [2] “With the franc still sinking, the minister of justice today ordered extreme measures taken to squash speculators.” 

 

In Russia, “Grain Hoarding Brings Produce Crisis in Russia: Official Speculators to Be Arrested.” [3]

 

Back in Chicago, the headline was “Order Inquiry On Disparity in Wheat Prices”[4]. This article states that the speculators are ‘bent on depressing incoming prices”. Take note that speculators are taken to task because they are said to be ‘depressing’ prices. That’s the opposite of today’s backlash, in the grain market.

 

“EDITORS THINK SPECULATORS HAD IT COMING” [5] That headline was published on October 30^th, 1929. Hindsight is 20/20 in trading. We all know it’s easy to look in the rearview mirror to explain recent happenings but very difficult to look out the front window to predict.

 

In Italy, “MUSSOLINI URGES DEATH PENALTY FOR SPECULATORS; Rages at Those Who Cause Crises.” [6]

 

In Belgium, “Belgian Says Speculators Depress World Wheat Price”[7]

 

Back in America, Representative A.J. Sabath, a democrat from Illinois, ‘assailed Wall street speculators who sell ‘short’ as responsible for many of the evils of stock exchange operations. He then introduced a bill that would tax short sellers. But, not just in the stock market, he wanted to tax “grain, wheat, cotton, or all commodities equal to 5 percent of the amount of the sale”. However, he didn’t stop there. He wanted to introduce another bill that would make it a crime “punishable by imprisonment”, to sell short.  He wasn’t a one-off either. Representative Brand, of Georgia, introduced a bill to make it a felony to speculate also. [8] 

 

Let us duly note the date of those previous headlines. It was, 02/10/1930. That date also marks the government’s creation of the Farm Board’s Grain Stabilization Corporation. Their purpose was to buy grain (mostly wheat) on the Chicago Board of Trade’s futures market. That’s because the speculators were being accused of selling too much. [9]

 

Remember, today (2008), speculators are accused of buying too much. Further reading of the article from 02/10/1930, finds that maybe it wasn’t the speculators, it might be the Russians. A Senate investigation, soon after found no one at fault.

 

The result of the Grain Stabilization Corporation can be seen in the following headline:

 

“WHEAT DIVES 8 CENTS; LOWEST IN 16 YEARS; Board Pays 10-16c Over Market.” [10]
 

The following headline is very confusing. It lauds the opening of a new futures market a mere week after that last headline above, Hog futures were given the go ahead to begin trading on March 3^rd, 1930. [11]  The headline was, “Start Trading in Hog Futures for First Time in History; NEW FACILITIES SEEN INSURANCE FOR PRODUCER Gives Privilege of Lessening Risks”.[12]  [my emphasis]

 

The implication is very confusing. Suddenly the trader is a good guy, an insurer of sorts. “Gives privilege of lessening risk”. Just a week earlier the paper said traders were the scorn of society.

 

Then the government got stuck when they found themselves owners of 150 million bushels of wheat.  “SPECULATORS OF GRAIN TRADE SEE BLACK OUTLOOK”; Government Holds, Sells All Buyers Want. [13]  

 

There weren’t any buyers because government interference in a free market made it a rigged game. There was no liquidity.  

 

What about the mortgage bond-market, in the early 30s? President Hoover had a meeting with four leading bankers, in late August and told them he’d have ‘no more of the selling of mortgage bonds’ (shorting the bonds) in this down-market. He said that the ‘speculators where taking advantage of the current depression to pound down prices of mortgage bonds’.[14] The President wanted the bankers to refuse credit to these speculators. Again, it’s rigging the game. Similar to today’s [2008] SEC interference in the financial stocks, issuing a ban on naked-short selling. The seller’s of those stocks will dry up and the stocks will rally, artificially inflating their prices.

 

H.H. Bartelle wrote in to the Tribune, at the end of 1931, highlighting exactly why the future markets were needed. He lauded how easy it was for a farmer to hedge, in the markets, before the government interference. Most farmers were sitting on their corn (and other grains) at the end of 1931 waiting for the government to come in and buy grain (bail them out).[15] However, prices weren’t going up because trading in the grains had become a rigged game and no one wanted to play anymore. Who suffered? The farmer & the grain operators. [16]

 

Let’s go back in time and see if history repeats itself? How about the crash of 1893? That was the first crash labeled as a depression.

 

The first article I found didn’t call the speculators evil, they just called them embezzlers, as you can see in this headline: “EMBEZZLEMENTS OF THE YEAR.” [17] The article was looking back on the previous year, 1891, and recounting the shenanigans of the speculators.

 

Moving on, in January of 1892, Senator Washburn of Minnesota was quoted as saying he believed that wheat would be worth 20 cents a bushel more if it weren’t for the speculators in Chicago. The writer of the article states “Apparently the Senator fails to take cognizance of the fact that what a man sells in that way he must buy back…” The headline for the article was “Gambling in Wheat.” [18]

 

“The ‘Bear’ Grain Gamblers”, screams this 1892 headline. The first paragraph beats-up speculators in general for a number of reasons. One being that they sell ‘mythical’ wheat for the ‘sole purpose of breaking prices’ to ‘buy them back on the decline’. [19]

 

The next article is headlined, “Bearing the Market”. Members of the CBOT are taken to task for selling wheat. They used a particular Thursday as an example, stating “The Chicago bear ring has finally succeeded in creating panic throughout the world.” However, further down the article it states, “Of course the bear must be conceded the same right to operate that is accorded the bull. It would not be a market in the modern sense of the term if all on one side, like a jug handle. The chances are that speculative buyers would disappear if short sellers were excluded…”[20] Do ya think?

 

In February, of 1892, Senator Washburn held hearings in Washington, DC, on proposed legislation to stop the ‘short-sellers’ (the Anti-Option Bill). Many different institutions showed up to defend their interests, like, the Cotton exchange, the CBOT, the chamber of commerce for NY and St. Louis, plus the Farmers Alliance and labor organizations. The Senator said he was going to ‘press with all his vigor’ to get the bill through ‘so as to stop imaginary wheat traders’. Quote: “These Chicago speculators control the price of wheat. The Chicago speculators control the market not only of Chicago and Minneapolis but New York and Liverpool and in fact the whole world.” [21]  [my emphasis]

 

The headlines on page 1, a few days later, stated that it wasn’t the Chicago traders; it was Rockefeller and the like:

 

“IS WHEAT CORNERED; There Men Are Said to Control the World's Markets. STANDARD OIL IS IN IT. Rockefeller, Mackay, and North the Alleged Manipulators. THE ARMOURS THE BROKERS. A Short Interest in the Country of Millions of Bushels. THE PUBLIC WARNED TO STAY OUT. Attitude of the Armours. Creation of a Big Clique. Following Up Their Charities. Probably 80,000,000 Bushels "Sold" in This Market. Tremendous "Short" Interest in America. Good Time to Stay Out.”[22]

 

So, who was to blame? Like the modern day story, there was a lot going on at the time. There were bucket–shops, ‘the trusts’, the anti-option bill kept popping up threatening to tax speculators, the silver debate raged, manipulation in sugar by senators, railroads had peaked and were consolidating at the cost of massive job losses. Furthermore, the American Bankers Association had released this report to its members:

 

“We are authorizing our loan officers from the Western States to loan on properties, monies repayable by September 1st, 1894. No fatal date is to exceed this date.

“On September 1st, 1894, we shall categorically refuse all loan renewals.  On that day, we shall demand the repayment of our money, under penalty of foreclosure on collaterals.

“The mortgaged properties will become ours. (Money will have become scarce beforehand, and the repayments will have become generally impossible.) We'll thus be able to acquire, at a price agreeable to us, two-thirds of the farms west of the Mississippi and thousands more east of this great river.

“We'll even be able to possess three quarters of the western farms as well as all the money in the country.  The farmers will then become land tenants only, just like in England.” [23]

 

That memo couldn’t have helped (tongue-firmly-in-cheek). That memo was the most likely cause of the 1893 crash, and the problem in the wheat market etal, was normal cyclical volatility. Not the traders.

 

The banks did stop lending and they did it before 09/01/1894. Here’s just a few of the headlines:

 

“HOLDING THEIR CASH.; NEW YORK BANKS NOT LENDING MONEY FREELY. As a Result Their Reserve Is Largely Increasing” [24]

 

“MONEY STILL SCARCE.; COMBINED LACK OF CREDIT AND CASH KEEPS TRADE DULL”. [25]

 

“Banks Refused to Advance Money on the Collateral Proposed.” [26]

“NEW YORK TO CUT OFF SHIPMENTS.; Stoppage of the Currency Supply Likely to Embarrass Out of Town Banks.”[27]

 

In the Minnesota court-system, it was ruled that there was collusion between some railroads, grain operators, and a few others, but not the traders. [28]

 

However, the headlines that ran in 1894, when the full rage of the stock collapse was being felt, blamed the speculator, not the banker. “Gamble on the Tape”, was the headline for the first paper of the year, in 1894. The article told how speculators win at the expense of the women and children in America. [29] They didn’t say anything about the banks, in America, exporting their gold out of the country or calling in loans; just that money was tight.

 

The depression was terrible. It lasted over 4 years. And, people were sick of it. They’d endured massive down-turns in the economy consistently in the 1800s; 1811, 1819, 1837, 1857, 1873, and 1893. Not to mention the Civil War. It’s so easy to blame the speculators. However, the causes of the crashes of the 1800s have all been found. Not once was the professional trader (speculator in old-world terms) found to be the ultimate cause.

 

But, it was easy to blame the trader. Much easier than the politician, the banker, the ‘Trusts’, etc. Those people were untouchable and not accessible. The trader was accessible.

 

Let’s go back in time again to St. Paul Minnesota, February 8^th, 1860. The article was about the state legislature not able to pass a bill on railroad speculation.

 

“What a Pandora’s Box full of evils the Railroad grant has been to us! Legislatures have been corrupted, the Press subsided, and a quack currency, with the final ‘busting’ up of the whole scheme, entailed on us. A special committee of the two Houses are now investigating the acts of the Summer session of 1857, which distributed Land Grants, and the doings of the last session, which passed the same act, as it is supposed that bribery and corruption secured the passage of both these acts. Ever since the Grant was made to the Minnesota, gang of railroad speculators, familiarly known as the “forty thieves” of Wisconsin, have been prowling around our Legislative Halls and Courts…”[30]

 

Further down the article they started a new tirade against the real estate speculator. In the end, they offered no evidence, just innuendo.

 

There was a big issue, in 1860, concerning grain inspection. Remember, the Chicago Board of Trade (CBOT) was founded in 1848. Therefore, trading, storing, inspecting, and transporting grains were a new game. The canals were vying for business as were the railroads. We’d just come off a crash, in 1857, and civil unrest was around the corner.  Taking these facts, we can look at how the speculator was treated back in 1860 with the central issue of the next article being grain inspection.

 

The article was posted in the paper on May 1^st, 1860. The word “speculator” is pulled out and used as a weapon right in the beginning of the article.

 

“But like many other well conceived projects, it at once fell a prey to speculation.” [my emphasis]

 

Read further and the word is used 3 more times as a weapon. Still further and you find out that the guy who wrote the article was mad because his grain was rejected.[31]

 

The 1860-era wasn’t an era when the newspaper received a lot of letters and had an ‘opinion from the street’ section. They were moving these words by telegraph; therefore, the writer was a columnist. And, he or she left it unsigned.

 

Further reading into more articles in the 1860s show the same thing; speculators are bad. For instance, The Homestead Bills were all the rage in Congress and the Country, in June of 1860. The writer of this article damned the speculators and the free market. He wanted the government to give the land away for free to the settlers.[32] I’m not debating the Homestead Bill’s merits; I’m simply showing how the word speculator (trader) was used as a weapon throughout history because it’s so easy to attack the speculator.

 

A speculator provides liquidity and assumes risk. They have done so in many different forms in many different assets over the course of history.

 

Lack of liquidity is the biggest risk an economic society faces. There’s no liquidity in Citibank’s 1.1 trillion in off-the-book-assets. That’s exactly why it’s off the books. Dark-Pools have no liquidity and that’s precisely why the holders of such toxic waste are trying to create an exchange for them. If you can’t find someone to act as the trader/speculator, you have no market.

 

If we can’t learn lessons from history, what exactly can we learn from?

 

Finally, I leave you with one last quote from a Mr. William Woodwall who published a sermon in 1609 attacking “the love of luxury among the rich” and complaining of “the hardship caused to the poor by the activities of speculators in corn”. [33]

 

 

Thank you,

Jim Goulding

GH Trader’s LLC

Treas-Arb, Chicago

jgoulding@ghco.com

END NOTES:

[1] Chicago Tribune, 02/26/1926, p10

[2] ibid, 04/15/1926, p5

[3] ibid, 09/02/1929, p5

[4] ibid, 09/12/1929, p10

[5] ibid, 10/30/1929, p2

[6] ibid, 10/02/1930, p3

[7] ibid, 12/10/1930, p23

[8] ibid, 02/10/1930 p30; 02/01/1930, p21 

[9] The Financial History of the United State, By Jerry W./ Markham p217, 218

[10] Chicago Daily Tribune 02/25/1930, p23

[11] ibid, 02/27/1930, p23

[12] Ibid, 03/02/1930, p10

[13] ibid, 05/18/1930, p24

[14] ibid, 08/29/1931, p15

[15] ibid, 11/22/1931, p12

[16] Cass City Chronicle, 01/22/1931, p5

[17] Chicago Tribune. 01/01/1892, p4

[18] ibid, 01/05/1892, p4

[19] Ibid, 01/16/1892, p4

[20] Ibid, 01/20/1892, p4

[21] ibid, 02/02/1892, p10

[22] Ibid, 02/18/1892, p1

[23] _{Link 1, Link 2, Link 3} 

[24] Chicago Tribune, 06/04//1893, p15

[25] ibid 06/24/1893, p10

[26] ibid 08/02/1893, p1

[27] ibid 08/02/1893, p5

[28] ibid 03/12/1892, p4

[29] ibid 01/01/1894, p10

[30] Chicago Press and Tribune, 02/15/1860, p0_2

[31] Chicago Press and Tribune, 05/01/1860, p0_4

[32] Chicago Press and Tribune, 06/11/1860, p0_2

[33] https://www.british-history.ac.uk/report.aspx?compid=19064  

If you're wondering why so much emphasis on the history of blaming speculators, let me next direct you to the current outcry for a convenient scapegoat on which to blame almost all problems of the day, whether it's the ills of mismanaged banks that over-levered, or oil prices that went up too fast for political comfort, or food prices which are going up at double-digit rates.  Consider these:

• "Dems push for crackdown on oil speculators"

• "Loopholes and speculators, stop them, end the problem"

• "Speculators on tighter leash"

• "Punish the oil speculators (if you can find them)"

• "Why Congress blames index speculators"

 

Make a note on your calendar somewhere that what we're seeing here may very well be a prequel to a bigger economic decline to come this fall, and with that will come a major increase in blame.  If history is any guide, the liquidity-providing "speculator" will again take the heat.

 

Ron Paul on Housing Bill

Ron Paul's latest video on the housing bill is out - his outlook for the dollar sinks.  With reason...

 

Oil Outlook

One headline says the "Arctic may hold 90-billion barrels of oil, US says".  While that's almost encouraging on the surface, further reading finds "Arctic's oil could meet world demand for 3-years."

 

GM Falls

The world's #1 automaker is now Toyota.  Ohhh, what a felling, eh?

 

Edwards Follow-up

Slate headlines "Why the press is ignoring the Edwards "Love Child" story" and then follows with "A double standard is at work".

 

Changing Times

The NY Times ad sales are reported down 16.4%. Price on the stands is about to go up to $1.50.  Wonder if they will do more inflation coverage now?

 

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Coping:  Bank Problems on the Web?

The headline "Potentially serious security flaws found in most bank websites, including large bank sites, study finds" has us a little concerned.

 

Count Your Money

A Florida bank may be in hot water after a couple claims the bank gave them 10- counterfeit $100 bills.  Makes you want to carry one of those 'detection pens' around, but we haven't bought any of 'em because isn't it illegal to deface currency?

 

Food Inflation Coming

"Fertilizer prices increase 235% over part year" says mongabay.com.  Say, you don't think that will increase food prices now, do you?

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Send snip and save notes to george@ure.net

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Around the Ranch: Refrigerator Accounting, 'Dillos

Somewhere along the way, head down into client projects and oblivious to everything but small arms fire and explosions, I wandered into the house last night only to discover that Elaine had been shopping and somewhere in the process of putting things into the pantry, fridge, and so on, she had discovered something that didn't meet with her approval.

 

"The first thing opened goes from the back to the front!" she announced a bit sternly.  The capers or cottage cheese must have ratted me out - the cottage cheese most likely, as we have a his & hers brand of that.  OK.

 

FIFO - first in, first out - in accounting terms.  But it reminded me to mention to you how far we've gone in product development and 'add-ons' for the kitchen.  Being simple folks, we don't even keep a thermometer in the fridge.  If we did, I'm not sure there would be too much point to it as the Kelvinator engineers probably had some idea what they were doing. 

 

But then again, maybe not:  I pondered the problem of butter:  First putting it in its own dish, then putting it into a fridge, then putting it into a semi-heated part of the fridge so it would be maintained useable, yet not venturing over to rancid.

 

But beyond basic design issues like this one, there are now scads of ways to 'accessorize' your fridge.  There are timers, like the 'DaysAgo' food timer, "Atomic Food Containers", special high-powered magnets, and it's given me my latest 'million dollar idea to share: "www.refrigeratoraccessories.net".  The dot com is taken, so you may want to move quickly with this exciting, high growth opportunity.

---

On the way to feed the goats last night, Elaine spotted a baby armadillo  - couldn't have been but 10 - 12 inches long (including tail) wandering towards us.  They are apparently quite blind, as our path took us to within about 20 feet of it.  Undisturbed, he just continued with his routine of snout stuffing into the ground, looking for worms, larvae, and whatever else armadillos eat.

 

We've got a couple of places in the yard that the 'dillos seem to favor, one being between the house and the shop/office building where there are nightly snout marks where this worm of that has met its end.

 

There are two schools of thought about how to deal with visiting 'dillos.  One is to dispatch them back to the Almighty with a round from whatever part of the arsenal's handy.  The other says they're just looking for food - like the rest of animals on earth - and just because they don't have hedge funds, don't have to lease a car, or accessorize a refrigerator to get food, is no reason to send them off to Perdition.

 

Eventually, Pusscilla the fearless female huntress cat noticed the baby 'dillo and chased if off into the woods, where I can only presume the 'dillo went into its defensive ball shape, because the cats came back in 3-minutes or less looking frustrated.  The black cat Zeus had gone along to see what Puss was all worked up about, never one to miss horning in on a meal, should there be one.

 

To be sure, 'dillos are not without risk, especially in more densely populated areas - so much so that there are armadillo control specialists.  Partly because they can harbor the bacterium that is linked to leprosy, and partly because they carry rabies, and mostly because they can infest human dwellings.

 

For now, this one is safe...likely just wandering through.  Besides, I reckon humans are far more dangerous than armadillos.   While we don't carry leprosy bacterium or rabies, our preoccupation with war, charging interest on money, and stripping the planet bare of resources while poisoning it along the way, make us the far more dangerous species. 

 

So this one walked, or waddles is closer to it, but with a stern warning not to eye the house or shop for winter quarters.  My sense of balance only goes so far.

 

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Wednesday July 23, 2008

Special Update

Mass Layoffs Trending Up

New figures out from the Labor Department this morning.  My chart shows that mass layoffs are continuing an upward trend...:

 

 

"Brimstone" then Fire?

The reports continue to come in about a massive naval readiness exercise off the US East Coast called "Brimstone".  This might suggest that an attack on Iran could happen before the November elections.  Concurrently, there's an attack on the precious metals - not unusual around delivery time, but nevertheless driving prices down which would be convenient for those who wish to acquire the traditional safe haven metal before the outbreak of hostilities this fall.

 

Just as I saw the departure of Admiral William Fallon as an indicator that the neocons within the Bush administration had arranged to do a little 'personnel house cleaning' to remove any who might voice opposition to a pre-emptive strike on Iran, two US aircraft carriers which become my next 'canary in the coalmine' on the road to Tehran.

 

That first of these ships is the USS Kitty Hawk.  After first being reported ready for decommissioning after its 47-year term in service to Country, we're now reading how CV-63 is currently participating in the Rim of the Pacific exercise, on the ship's home page. 

 

Latest speculation is that the Kitty Hawk will report for decommissioning in the January-February timeframe, an event delayed by a shipboard fire aboard her replacement - and the other carrier to watch - the USS George Washington, CVN-73 in San Diego.

 

The hand-off of duties from the outgoing Kitty Hawk to the George Washington was delayed by a fire aboard the George Washington while in San Diego in May.  The ship has been undergoing repairs there, and judging by the length of time involved, the fire damage was substantial.  That said, the ship is due to head out for Japan likely in mid-September according to reports, and arrive there before the end of the month.

 

Thus, an observer might be tempted to closely watch the George Washington's movements, as its arrival in the Western Pacific would put the Pacific at full strength and most current technology; something that would be desirable prior to beginning a 'next war'.

 

This the spills over into market expectations, too, as this would seem to 'clear the decks' of major military action for another month, giving oil a chance to roll down to perhaps as low as $100 - $120 a barrel, gold to sink further, and perhaps into the $800's before investors figure out that much higher oil prices ($300-$500) might follow a pre-emptive strike on Iran, which would doubtless call upon OPEC to react to a Western first strike.

 

No, it's not a 'cast in stone' outlook.  It's just a libretto - a possible playbook - for what may happen this fall.  We can already safely assume that Iran has been 'playing for time' in most all of its nuclear talks with the West, so this morning's headline in the Chinese media that "Iran not to make concessions in  nuclear rights" should come as no surprise to anyone.

 

The Bush administration, say reports, continues to look at Iran and North Korea as an 'axis of evil' and the handoff of duties from CV 63 to CVN 73 could be seen as a deterrent to North Korea embarking on military adventurism to test America's ability to fight multiple simultaneous conflicts, especially while the West is downloading Brimstone and fire on an adversarial oil-rich objective.  It might also free the CV 63 up for one last bit of action in the Gulf in, say, early October?

---

Meantime, no doubt Iran's leadership is trying to sort through headlines that "Obama reaffirms his 'abiding commitment' to Israel" and wondering that that means...

 

Bomber Bummer

Meantime, the report that Russia is thinking about flying long-range bombers out of Cuba has US strategic thinkers angered.  That would be crossing a line they figure, yet somehow I don't see anyone linking this to our efforts to put missile systems next to Russia in Eastern Europe and what about all our nukes in Europe?  Tisk, tisk...have we forgotten about the balance of terror and other MAD policies?  Besides, global thermonuclear war could be useful as I'll explain in a moment, but first check this out:

 

Global Whating?

While the National Geographic Channel had a really good piece on last night about what Six Degrees of warming could do to this old rock, there's another side (as always) and that's found over at Global Research today under the headline "What Global Warming?"

---

OK, so here's a great movie or book plot for you:  Fast forward to a time when global warming  starts to seriously threaten the whole population of earth and a meeting of policy makers (or one of those build a burger clubs) where the issue is debated whether to have an 'earth-saving nuclear war."

 

The debate would center on how nuclear winter could be used to save the planet from global warming.  Why, except for all the dead people that would be laying around, and the radiation release, and so forth, it's really quite workable.  There:  You have questions -- we have answers!

Just call me George Stranglove....

 

The Runs: Edwards Out?

While we certainly have no way of knowing whether the headline "Sen. John Edwards caught with mistress and love child" has any validity, such headlines would seem to reduce his chances of being named a VP candidate, don't you suppose?

 

Edwards was reportedly on Obama's 'short-list' of VP candidates along with former senator Sam Nunn.  Not to sound overly conspiratorial here, but you don't suppose adverse media will befall all the VP hopefuls until the list gets down to her do you?

 

Our million dollar question of the morning is "Whop tipped off the paper?"

---

John McCain is back in new Hampshire

 

Dolly's Landfall

Only about 5% of oil and gas production in the Gulf of Mexico has been shut-in by Hurricane Dolly, and most think the impact of the storm will be short-lived. Warnings are up from Brownsville to Corpus Christi, and at the present speed, it should make landfall this afternoon. The lower Rio Grande valley looks to get soaked.  Hopefully, we'll get some rain up this way.

 

Financial Roulette

Our little rally down on Wall Street continues to play out with another higher open expected today.  Not that the financial headlines support such cheerfulness:

• The Fannie and Freddie mess could cost us taxpayers up to $25 billion (maybe more?) which leaves us with a dandy moral question:  Would you rather pay for wars, or bailing our bankers?  None of the above is not on the list of choices...

• The foreclosure rate in California is up 261% from 2007 levels.

• Wachovia has losses of $8.9 billion and is cutting 6,350 workers...that loss is for Q2 only.

 

But it's not all doom and gloom due to real estate.  A Los Angeles condo has been sold for a cool $47-million, which the LA Times pencils out to $2,848 per square foot.  Those poor folks in Gollywood.

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Existing home sales due out Thursday and Durable goods Friday, but no, not too much moving the market in the meantime - rally on...

 

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Coping: What's Bee Happening?

So, is bee colony collapse disorder just a mass beeicide event or an evil fungus? 

 

Nope: Plain old pesticide, turns out. Clothianadid made by Bayer is the number one suspect suspect, so much so France has banned it.  Meantime, in North Dakota, a major lawsuit has been filed against the company for the 1995 dieoff of bees in that state allegedly caused by spraying of Imidacloprid...

 

Now here's the interesting part:  There's a near dead silence about this in the MSM.  So, ask yourself, why isn't this the lead story on nightly news?  Why is the MSM dummying up on this instead of splashing it around like the Love Canal story before the corpgov takeover of newsrooms? 

 

Say, you don't suppose it has anything to do with the all-to-cozy relationship between the MSM and corpgov, we bee askin....

 

Another "Sure-Fire" Trading System

No, I don't endorse this, but the inventor of the Sham-poo trading indicator has another one to play with...

George, You said "Write when you get rich." Well, I'm rapidly getting there (LoL), so I'll start my letter writing campaign now, since I might have my own island in the Pacific in a few more days.

 

The trick to unimaginable wealth? Easy.

 

Just listen or watch LameStream Media to see which bank is vaporizing the most shareholder value, or who has the worst quarterly earnings announcement for the day. The more hideous the better. Then, buy all the Call Options you can afford for the nearest expiring Strike Price. Also, go Long on Full Margin if the bank has losses in excess of $4 Billion, and/or the CEO is getting at least a $20 million bonus for the most recent quarterly performance. Finally, if the CEO is a former employee of Goldman Sachs, then triple mortgage your home and bet it all on the "qualifying" bank.

 

Last week it was Bank United, which managed to score back to back 100%+ daily gains. Honorable mention went to Downey Financial, although its best one day gain was only 73%.

 

Today? Well, you actually mentioned it this morning on your 2nd headline - the link to Wachovia and their $8.9 Billion loss for Q2 2008. I'm kind of angry at them because they delayed my Pacific Island by 1-2 days. Wachovia was only up 28% today. With 25:1 leverage on the Options, I might not get my island until Friday at the earliest. Please, let's have no more of this. Shoddy rigging in the markets is every bit as annoying & detrimental as shoddy rigging on a good sailboat.

 

I'm working on an agreement with Fed Ex for air service to my island. I'd like to send you some cigars & fine wine, in about 3 more banks. TTYL - (name withheld)  (Inventor of the Sham-Poo trading indicator for S&P Futures)

I'm just waiting for the SEC 'can't short 'em" rules to be extended to all stocks - why we could have a blow-off top inside 2-weeks with that one move alone, LOL.

 

Road Warrior's Budget

Here's a good one if you do any amount of traveling...

"Morning, George!

I'm writing while on the road, at the major business conferece in our industry. Husband is taking classes on new technologies, son and I run a 3rd party supplier booth for our business. We pay way too much for the classes and for the booth, and only the husband gets meals provided by the conference. It would be $88 a day each for son and I to get meal passes from the conference, and darn near the same amount if we hit the restaurants at this truly lovely resort for each meal.

Instead, we asked the hotel for a refrigerator and microwave in our room, and I took the shuttle bus to the shopping center across the street. There I hit the grocery store for cereal, fruit, milk, sliced meats, sliced cheese, loaf of bread, salad supplies. Spent about $40 total. That will be our breakfasts and lunches for the week. The only difference between here and home is lack of homemade soup/chili/etc. We'll get dinner in one of the wonderful restaurants (last night I had the spicy tuna sushi and an order of asparagus and serrano ham tapas). The portions in the restaurants are so large that son and I can often split an entree. Tonight, for example, we're probably going to share a 4 course meal at the Italian restaurant. Oh, it's not like I'm sharing with a young child - our son is 20.

While all of the meal expenses are business expenses, we have a small home-based business and the economy is ... well, you know. Saving money on food here makes a difference."

From Mr. Ure's personal experience, I can also tell you that if you like a cold martini, you can save a bundle by picking up a pint of gin for a few bucks at the local liquor dispensary and some olives at the closest Safeway.  With one of those small fridges in the room, and all the free ice from the machines, you can have several evenings of 'martins' usually for less than the price of a single at the hotel bar downstairs and for sure cheaper than room service.  Works with beer and wine as well...

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Send snip and save items to george@ure.net

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Around the Ranch: 2-Minute Timer

If you thought I was busy before, ha!  You ain't seen nothing yet.  The next couple of weeks, the free columns may be a bit shorter than usual as I'm up to my (guess what) in work demands.  The long leisurely shower is down to 3-minutes and the 3-minute egg timer for calls is down to 2-minutes.

 

I expect to catch up this morning on a couple of new subscribers to the newsletter, and the cats have been lounging around in their favorite cool spots as the weather has been on the hottish side the past week, with a couple of adventures to the 100 degree mark.  The new air conditioning system has been working like a charm, though.

 

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Tuesday July 22, 2009

Headlines and Headaches

Pull out the Excedrin for some of this morning's:  "Commercial bankruptcies soar, reflecting widening economic woes."  NSS

 

"Wachovia has $8.9 B loss, cuts 6,350 jobs, dividend", and oh, let's shut down the mortgage unit, too...

 

"Wall Street to tumble on 2Q results".

 

But to every war, a silver lining as "Booming Oil means record 2Q for Halliburton."  Like Charles Montgomery Burns  (of the Simpsons)  (head of the Springfield Republican Party) would say, "Excellent!"

 

And in case you missed it, Treasury Secretary Prank Paulson was talking on the financial channels Monday about the "Strong Dollar Policy" which we've filed next to our "Easter Bunnies are real policy."  You're not expected to figure out that a policy that essentially says "Free money is good for America" is bonkers.

 

War Department: Soon

"Senior Israeli Official:  If nuclear talks fail, Bush will order Iran attach between November and January."  While we'd like to think it will be put on the back burner for that long, the odds seem to favor before elections once the republicorps and the neocons figure they really are unelectable.  Once that's out, why wait?

 

And The Next War Is?

Cambodia versus Thailand?  Too many Thai restaurants, and not enough Cambodia?  Nope, in part it's over a disputed temple.  Say, that rings a bell (pun intended)...where have I see that before...Hmmm....

 

You Know The World is Crazy When...

"Sixteen wounded in copycat bulldozer attack in Jerusalem." Background checks for D9 drivers coming next?

 

The Runs:  Who?

The meetings of John McCain with potential VP candidates continue.  Having met with Rudy Giuliani, he reportedly will meet with Bobby Jindal.  Who?  Governor of Lose-iana.

---

My inbox is already overflowing with campaign nonsense.  The republicorps are sending out "Change?  That's all you'll have left.." notes while others are taking shots are McCain's too close to Mexico stance with "Juan McCain" stickers.  Can we get this over with?

---

Meantime, no one is talking about the real issues - like how many of the 50-million illegals in this country (30-million from Mexico, more when youi count OTM's) bought houses and keep the housing bubble afloat and that explains why the republicorps kept that bubble going, or why major corporations are giving million dollar checks to both presumed candidates.  But those are inconvenient questions, best left for a more thoughtful time.  2013 maybe?

 

Headline Borrowed?

I don't know if they borrowed my headline from yesterday, but the Drudge Report is using the "Hello Dolly" headline today.  It's either 'great minds think alike' or call my IP guy...

 

Coffins...

For several days, I've been pondering why there might be half a million coffins in Georgia.  (see video).  And then it dawns on me:  Evil's afoot...

 

Globull Nonsense?

A great  collection of inconvenient facts in an Australian op-ed piece.  Samples:

•  "The greenhouse signature is missing. We have been looking and measuring for years, and cannot find it. "

•  "There is no evidence to support the idea that carbon emissions cause significant global warming. None."

• "The satellites that measure the world's temperature all say that the warming trend ended in 2001, and that the temperature has dropped about 0.6C in the past year (to the temperature of 1980). "

 

I can hardly wait to see the hate mail for noting this one...

 

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Coping:  What Heresy this?

A reader sends this:

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Monday July 21, 2008

If You Think It's Bad Now...

We're now inside the 90-day window to what I expect will be the "Fall in the Fall" of the markets for any number of reasons.  The first, which was explained to Peoplenomics subscribers this weekend, is that the present behavior of our proprietary "Aggregate Index" is showing a very clear 'parallel price channel' which has evolved since the market topped out a few months (and several thousand points) back.  The chart is at the bottom of this page if you want to see it -- click here. Based on how it's acting, I put a 'fall low'  range and 'best guess' as to where the indices could fall before Christmas along with a dart on the Dow. 

 

The Aggregate hitting the bottom of ther PPC just happened to coincide with Robin Landry's getting his managed accounts out of shorts, and into a week of longs.  They're going back to neutral or short now, I hear.

 

If you're wondering "Hmmm...what was George's guess about the Dow?" The choices are a) either ante up the $40 a year for a subscription, or b) Just assume it's not pleasant and go about your day knowing what the headlines are already screaming, which is "Things are not right!"

 

"What headlines might those be?" 

 

Fair question.  Lemme see... ah!  Here we go:  "Recession next year: forecaster says things can only get worse".  Strangely, the UK's Independent is not writing about me...someone else sees it, too. 

 

A cross-town rival of their is the Telegraph, where Ambrose Evans-Pritchard writes that "The Global economy is at the point of maximum danger".  I'd fear it's a bigger danger than running out of coffee on Monday morning.

 

And, if you're still a "doubting Thomas" (or Thomasina to keep this PC) about inflation, rest assured you're skepticism is about to be answered.  The Financial Times reports that "US Food groups plan hefty price increases" and they go on to name names like Sara Lee, Kraft Foods, Kellogg's, ConAgra and Tyson.  Which will make the economy just that much harder to swallow.

 

Deflation?  Depends on whether you mean "Can't own three houses to flip" or "just need one to live in"...or if you just look at food and gas prices.  What's not core inflation to you and me is not meaningful to the giants of economic thinking that got us in to this...

 

Inflation Fighting

Word this morning that the "EU offers to cut farm tariffs 60 percent" may sound like good trade news on the surface.  I read it a like more darkly:  Oh, I see the EU is trying to contain food price inflation by cutting tariffs.  Oh, cynical me...

 

FDIC Planning More Bank Runs Ahead!

Yeah, OK, how does George get this insight, you're thinking...

 

Well, I went to the FDIC web site page titled "Is My Account Fully Insured?"

 

See what they've done?  Look at the "Select a Bank" part.

 

This is a drop down list.  If they weren't planning for more you-know-what's, they would have hard-coded a static link just to IndyMac, you'd think, right?  Ergo, Mr. Ure's infallible logic goes to work:  there's likely more/worse to come.  Or they wouldn't have used a drop down box approach,  yah think?

 

In Their Genes?

Roche is making a $44-billion run at Genentech, the gene splicer and dicer...call now, lines are open and deal makers are standing buy.  This offer won't last long...And don't forget to ask about our Three Easy Payment Plan...Hold it!    Whew!  I don't know what got into me...one too many MagicJack commercials?

 

The Calendar

Cliff of www.halfpasthuman.com is due on the Jeff Rense radio show tonight - presumably Cliff will go through the latest out of the predictive linguistics run,...although some discussion of Jeff's Mario Lanza CD's and Igor's fascination with pie may come up...who knows?

 

The Runs: War? - The Real One is for Voters

Now that Barack Obama has been mentioned as having a 16-month pull-out plan, the headlines are flying from the GOP side of the aisle:  "Bush adviser says Iraq  timeline 'very dangerous'.

 

But not to worry!  We're just a 'false flag attack' away from no elections on the one hand, or as soon as the election is over, we'll be back on the economy-saving war track, anyway.  Whether McCain or Obama, seems to me that when both sides are taking money from corpgov interests that the outcome will be essentially the same.  The election?  Ha!  A triviality, as the Pelosicrats have already demonstrated.  "End the War" talk is just that, an election persuasion block to be manipulated this way or that...

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Meantime, we're heartened to read that the UK is teaching SAS dogs to parachute into the war zone.  The war is paradogsical indeed.

 

A Bothersome Thought

Am I the only one who is bothered that neither Obama or McCain is making a HUGE DEAL out of the Iranian War question?  It's almost like - gulp - they know it'll be decided before Obama takes office in January...which sure goes to the idea of a strike before then, doesn't it?

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We read that Condi Rice wants a "serious answer" from Iran.  Where was the world when Pakistan and India were busy developing nukes?

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Speaking of which, since that cat is out of the bag, the US is trying to stuff it back in with a nuclear deal with India on tap which would - if passed there - subject India's nuke facilities to international inspections.  Even if the issue causes the Indian government to change, the US is so desperate in its 'cat stuffing" that it has plans to sign a nuclear deal even if it's with a minority government on its way out.  Which, as we read it, would open the way to a new majority government to denounce/renounce the accord as not representative of India's intent, and then we get what?

 

Hello Dolly!

Tropical Storm Dolly is heading into the Gulf of Mexico.  I'm kind of hoping that it will turn more northern and bring some rain up to our part of East Texas where things are dry.  Figure the odds of it becoming a hurricane are 30 percent, and no, we just want a smallish tropical storm and some rain, thanks, not a bigger storm than that...just enough to green up the hay fields...not to cause damage.  Oil's off six-week lows on this.  A bottom forming in short-term charts?

 

Glo-Bull Warming Debate

OK, here's another round in the global warming debate.  Turns out the American Physical Society still does hold to the view that greenhouse gases are warming the planet.  Which, of course doesn't explain why Mars and the other planets have heated, nor does it answer questions like "How much of the volcanic activity in the Arctic is contributing to ice melt?" and a bunch of others.

 

In my view, carbon credits is still just a financial scam anyway, but then again, I'm not flying around in a private jet making speeches about global warming then, either, eh?

 

Gone Batty

Yes, the new Bat Man: Dark Knight has gone into the record books for the opening weekend.  With nothing new to spend money on in the way of a "got to have" tech toy, people actually seem to be spending money on movies and such...  Good for Tinsel Town, but it sidesteps the issue for the F-1000 companies:  If you're going to grow earnings, where are sales supposed to come from?  50 Terabyte cell phone cameras?  LOL...  (Just call me an economic fundamentalist, I suppose...)

 

SOS Campaigns

Monday being the Day of Coffee I have to direct your attention to the "Save Our Starbucks" campaigns popping up in support of some of the 600-stores the company plans to close.

 

Notable Bombings?

A couple of morning rush hour explosions in Southwest China have our attention.  Terrorism by Muslim extremists is what comes to mind...or an excuse to make everyone in China terrornoid.  Good control policy, that it is...

 

To Big to Fail List

I don't know if you've had  time to read the SEC Order last week about short sales rules it has imposed, but :

"In these unusual and extraordinary circumstances, we have concluded that requiring all persons to borrow or arrange to borrow the securities identified in Appendix A prior to effecting an order for a short sale of those securities is in the public interest and for the protection of investors to maintain fair and orderly securities markets, and to prevent substantial disruption in the securities markets. This emergency requirement will eliminate any possibility that naked short selling may contribute to the disruption of markets in these securities. We described in the releases in which we proposed and adopted Regulation SHO the bases for the current requirements Regulation SHO imposes. We believe, however, that the unusual circumstances we now confront require the temporarily enhanced requirements we are imposing today."

If you're wondering why the financials seemed to put in a bottom last week, and you're wondering "Is the worst over?"  I expect the answer is no, it's just that the SEC has published its list of 'untouchables'.  Which are:

Appendix A

Company Ticker Symbol(s)

BNP Paribas Securities Corp. BNPQF or BNPQY

Bank of America Corporation BAC

Barclays PLC BCS

Citigroup Inc. C

Credit Suisse Group CS

Daiwa Securities Group Inc. DSECY

Deutsche Bank Group AG DB

Allianz SE AZ

Goldman, Sachs Group Inc GS

Royal Bank ADS RBS

HSBC Holdings PLC ADS HBC and HSI

J. P. Morgan Chase & Co. JPM

Lehman Brothers Holdings Inc. LEH

Merrill Lynch & Co., Inc. MER

Mizuho Financial Group, Inc. MFG

Morgan Stanley MS

UBS AG UBS

Freddie Mac FRE

Fannie Mae FNM

Nice to see we're defending foreign as well as domestic banks.

 

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Coping: Loafing - Perfected

One of our readers who has been unemployed a bit, has had some time on his hands to do some baking and found this:  "The Fresh Loaf: News and Information for Amateur Bakers and Artisan Break Enthusiasts."  Ah!  Loafing of the respectable sort. 

 

Windows Hint

A couple of readers have asked me howe to make the print bigger while reading this web site.  Here is a selection of answers:

• Buy a new 22" monitor

• Sit closer to the monitor.

• Buy new glasses 

 

But most seriously:  If you have XP or Vista, and a wheel scrolling mouse, hold down the control button on your keyboard (CTRL) and roll the mouse wheel forward (should make the web page look bigger) or backward (which should shrink the page).  This works across much of the Microsoft product line including Office 2007.  If you have Linux and/or OpenOffice you might go looking for similar commands.

 

Goodbye, Free Internet

Here's a 'must read': "Death of Free Internet is Imminent -- Canada will become test case."

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Yup, youi can tell when the corpgov establishment is worried - they talk about regulating something.

 

Going, Going...

WalletPop has a great article: "Top 25 Things Vanishing from America"  # 16, #4 and #1 are my biggest worries.

 

Cash Becoming "Priceless"?

As I whined about the stupidity of getting a cash-backed 'credit' card, a reader sent this:

"I was thinking about what you said about silly folks using plastic instead of cash these days. I happened to be shopping at one of our local 2nd amendment supply stores today and they were so surprised that I was paying in cash, that they cut me a discount on the spot without me even asking.

The look on his face seeing cash was 'priceless'."

Reason: 2nd Amendment dealers are probably more aware than most...

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