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Barron's Catches Up
We're pleased not to be the only economics media looking at the size of the underground economy. Last week, our Inside Report series focused on the underground economy as the story of the year for 2004. This week's forthcoming Barron's http://online.barrons.com/public/main/ has a covery story called "In the Shadows". Their tease line is: "The underground economy is growing unchecked, at the expense of the legitimate one. What it means for tax and immigration reform. A bull market in dishonesty." Nice to know we're not the only people who've noticed...
New Year's Colds
Elaine and I are in La Cruces, New Mexico - heading for her son's place in Phoenix. Yes, you can stay at a first rate Hilton for about 20% less than you can stay in Bandera, Texas on New Year's eve.
E's son injured in Iraq has a son who has shared a hum dinger of a cold...so E and I are snorting and coughing with what is for us, a very rare thing, a cold - despite the zinc tabs, and so forth. We'll get Inside Report up for subscribers tomorrow evening upon our return to Burbank
Friday
Quake: Many Heard it Coming!
If you are a regular reader of this site, you will know that we conducted an entirely unscientific poll yesterday among readers after the web bot project (a proprietary large scale spidering of the internet looking for [and then interpreting] linguistic shifts) that seems to foretell certain aspects of the future kicked out an amazing statistic: Based on a sample of about 18-million reads (of 2048 bytes each) the sample run before the killer quake, it appeared a large portion heard it coming and in our follow up we found that more than 50% of respondents may have heard the quake coming. Here's the tabulation as of 8:05 AM Eastern time today, when I cut off the inputs. Remember, these are answers to the question "Did you have an odd ringing in your ears between December 1 and December 24?
Heard something 134 50.95% Didn't heard anything 129 49.05% Total Responses 263 100.00%
I think you'll admit, this is far greater than I would have expected from such a question. More to the point, the comments - and I received hundreds of comments - typically went like these:
"I have bad ears anyway, from years of touring rock n roll and working as a stage carpenter without hearing protection. However, that said, the ringing has been significantly worse for the past two weeks, to the point where I have trouble talking on the phone..."
"I have a ringing sound which I usually associate with with dry weather and sinus problems. I also have a feeling of dread which started the first of December and has not stopped but gotten worse since the earthquake / tsunami. I had this same feeling before 9/11 and mentioned it to my wife at the time and now I am feeling very unsettled because I feel something else is about to happen. I hope that I'm wrong..."
"I just verified with my wife and son that I had complained about unusual ringing in both ears during the week of December 19th. What I find interesting is that while I have constant ringing in my ears due to piloting aircraft for years without proper hearing protection, the unusual ringing was broken, irregular and had a screeching quality; it was, as I expressed, "most unusual." By the way, I live in the Phoenix area..".
"Yes, very distinctly. I remember thinking what is that..."
- "I had a ringing and so did my daughter and her 10 year old son. We live about 100 miles southeast of Memphis, TN near Tupelo, MS..."
- "A whole variety of tones and blocks for weeks. I'm having "chirps" right now sensitives think this isn't over yet. Here's a recent article on research into hearing EQ hums:
Insight to the mystery of Ear Tones prior to Earthquakes – how they occur and why.
snippet:
"The culprit to sensing tones without any sound or electromagnetic source is found in the unique nature of earth generated ‘chirps’. These pulses with trailing decay are much different than traditional electromagnetic waves. The ‘chirps’ will pass through shielded enclosures and generate pulses of current, even in human cells. Field studies have shown that these signals however, require a collective atomic mass to charge density ratio in order to ‘tune’ in to generate a response. This is the reason only a few percentage of the population is sensitive to these signals. It also is the reason why symptoms can vary from person to person, the ratio is extremely sensitive to atomic & resonant dimensions just as found in each person’s unique tissue anatomy dimensions."
"Had ringing ears...? I still have it, as I write this! I've felt ill also, enough so that I have missed work this past week. It started a few weeks ago, and I suspected some sort of dental problems causing some sort of inner ear infection, as I went to the emergency room a few days ago and was told I had vertigo. I went to the dentist yesterday and X-rays showed no infections on a tooth that I thought may have been the cause. It has me concerned because it has been at least 3 to 4 weeks now. I also have a mild to moderate headache and have been getting a lot of sleep, which I usually don't get. "
As we noted in our initial report yesterday, our methodology is highly suspect; first because we asked people to self-report so the negatives (NO's) would be expected to under report, and secondly because the kind of people that read this site seem, to be a bit out of the normal kind of humans running around - they seem to be extremely interested in what is about to happen rather than what happened in the past. This subtle difference in world view likely makes our readers a lot more likely to "sense" something impending.
One of the most interesting emails (in the "NO" column, by the way) came from a professor at a prestigious school who works in the sound lab:
George:
On your website, you may want to ask if patients with Meniere's disease (of
which one of the symptoms is tinnitus) noticed an increase in symptoms
prior to the quake. These patients are very sensitive to low frequency
pressure changes (thunderstorms, weather fronts, etc) and could represent
the "canary in the coalmine".
In my lab we are researching low frequency pressure effects on the ear. The
interesting thing is that in mammals, the sensory cells in the auditory
part of the ear transduce (i.e. respond and convert to an electrical
signal) frequencies as low as 0.1 Hz (1 cycle every 10 seconds). This
information is apparently not sent to the brain as auditory nerve fibers
only respond to higher frequencies (above 20 Hz) . If you stimulate your
ear with 1 Hz, you can't hear it at all but it can cause tinnitus later (I
know, I tried it !). Which makes you wonder - why do our ears respond to
such low frequencies and then throw the information away? And why do
infrasonic, low frequencies cause tinnitus? Part of the answer is that many
other body functions generate infrasonic low frequencies (heartbeat,
breathing, swallowing, head movements) as do air movements such as driving
with the car window open and building duct noise, so it is probably
advantageous to ignore these background noises. But maybe some people are
more attuned to them and the long-term effects they have on the ear
(causing tinnitus) may be important for detecting pre-quake signals.
This from a professor of otolaryngology makes me think that the mechanism at play that seems to have told thousands of animals to literally head for the hills, may also exist in humans, but it's unevenly distributed and likely either ignored or dismissed by heavily left-brain (logical analytical) people more so than than the intuitive (more right-brained) thinkers. Informally, the responses felt like more engineers, CPA's, and people who put LLC in their email signature were in the "NO" column. But even about 10% of the "No's" admitted things like "But my girlfriends dogs were quite out of sorts."
Further Research: If you live on a line between Vermont and San Diego, where the reports seemed concentrated, and you don't mind being labeled a nut job, ask 10 of your closest friends if they heard any unusual ringing in their ears. If they look at you funny (or just hang up on you!) write it off to this web site as being a dangerous place inhabited by people who ask odd questions. But once you've found 10-people who will give you honest answers, CLICK HERE and send along a summary of your results. If we get enough responses, that we can get up around 400-people sampled, we can start projecting something like a 80-90% confidence level for internet savvy people.
On the African Coast
Reports coming out of Somalia about the damage done by tsunamis there: http://news.bbc.co.uk/1/hi/world/africa/4134485.stm
Buck'in Trouble
Yes, once again, we have to report that the U.S. dollar has sunk to new lows against the Euro today: http://biz.yahoo.com/ap/041230/dollar_4.html Not that there's anything we can do about it, except prepare for higher gas prices as a result - and more expensive imported cars and parts for them.
Disco Murder
In Argentina, 169 people are reported dead - with the toll like to rise - from a nightclub fire: http://news.bbc.co.uk/1/hi/world/americas/4136625.stm Now, coming from a family of fire fighters, I always look for the cause - and once again we find that someone locked the exits at the club in order to keep people from paying. Instead of putting in bouncers and keeping the club safe, the doors were locked and firefighters had to smash them in. So, the next time you go to a big public performance (or a crowded tavern, for that matter), notice whether the emergency exits are chained shut as they are at dozens of places right here in the U.S. every night. When you find such a place, go call 9-11 and tell the operator that there's a clear danger and ask that the Fire Marshall's office be dispatched immediately to catch the club owns and given 'em a good whack upside the head and pocketbook before more people die from this kind of crap.
Russia Losses Gas
Turkmenistan has shut off natural gas supplies to Russia in an incident that has the potential to escalate into a military show down: http://www.mosnews.com/news/2004/12/31/turkmgas.shtml
Inside Report
This week's report is "News Laws for 2005" - a collection of laws we'd like to see in order to facilitate economic change, and a few comments on the investment prospects for the coming year. Subscription Information
Tell A Friend...
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Thursday
FLASH!
With 100 returns in an amazing 43% of respondents heard ringing in their ears or a humming noise right before killer quake! This is so far over chance I don't think it's even a question. If it was 10-20% maybe - but 43! This is like tapping in to forgotten human knowledge! Vote below!
Death Toll - and Ringing Ears
The count of the dead from the killer earthquake this week is now over 100,000: http://www.thisislondon.com/news/articles/15630695?source=Evening%20Standard&ct=5/
As you may know, our colleague Cliff is running a special private web bot run for subscribers only. I chatted with him last night and he advised that the bots are pointing to something big happening today - the 30th - but time has never been the strong point of the software technique, as people refer to time in all kinds of ways, making linguistic shift analysis very dicey. Nevertheless, a first cut will be posted at www.halfpasthuman.com by perhaps noon Saturday as both a .PDF and an HTML file. There was special (error>posting) email yesterday for ALTA 105 members.
What's so interesting about this run is that the data sample was all taken before the quake - in other words, the sampling cutoff to be included in this part of the run was Dec 24th at 11 PM Pacific - so the killer quake event had not yet happened. So now we wait and see if anything big pops in the next 24-hours or so.
Meantime, a long time reader asks:
"Hello George,
I've been waiting for your comments about the web bot outputs from 6 mo to a year ago which predicted a major water event that would focus the entire planet on the relieve and that out of said disaster a "poster child", likely a woman, would emerge to represent the victims.
Is this not the case now and the sport illustrated swim suit model Petra Nemcova is a good candidate for the poster person. We'll see.
Anxiously awaiting your comments."
CNN this morning is reporting the death toll will exceed 115,000 (not counting the illness and disease which will follow). Nevertheless, we only posted the output of the previous web bots because when we have done specific interpretations, the way linguistic shift works, it is easy to be fooled.
For example, about 70-days before the space shuttle disaster, the bots were going crazy with warnings about ship, "gem of the ocean", and maritime disaster, if you remember that series of posts. Now, who would have guessed at the time the references were to a space ship and that it was Columbia "the gem of the ocean"? That's what I mean about the difficulty with such work. Language is tricky stuff.
That said, the German government is running a similar project - and we'd love to make contact with their folks - this in addition to the Chinese effort which has been underway for several years and makes massive sweeps of the 'net.
Ringing Ears
One thing that came out in the web bot run this time - and I would like you to take part in a short pseudo-scientific poll today - is this: One cut of the pre-tsunami/quake data showed that in a certain part of the sample up to 28% of reads (before taking out baseline) were showing people referring to either a low level hum or ringing in their ears. Geographically, the highest probability of such a hum or ringing being noticed and referenced in postings to discussion groups was on a diagonal line from about Vermont down to San Diego. And I can't emphasize this enough, this was in pre-quake data.
So here's the question - I want to know if you did or did not hear a humming or ringing in your ears, could you send me an email by clicking below? The period of the ringing/hum seems to have been from about Dec. 1 through the 24th. Please vote one way or the other...
Click here if you heard a Hum or Had Ringing Ears
Click here is you DID NOT heard anything out of the ordinary. (links deactivated, polling closed)
Results tomorrow... But our hypothesis is that the reason that so many animals went into hiding and survived something that killed a lot of humans is that there is some kind of natural mechanism that we don't fully understand. If the web bot linguistic shift work is correct, we will see something like 2% of the general population and maybe 5-10% of a specific kind of population (e.g. people who are pretty well tuned in to their bodies) who will have had some kind of natural "alarm" go off in advance of the killer quake.
A personal note: I wouldn't have caught this, but both Elaine and I had ringing in oiur left ear the week before we headed back to the ranch in Texas for the Holiday. I thought it was from leaving my under-the-pillow speaker on all night listening to George Noory/Art Bell - but when Elaine had the same report I thought at the time, "My, how strange..." And we're close to that line which shows up in analysis...
Nike and the Pirates
On the one hand, Nike China has reportedly been ordered to pay for pirating a stickman cartoon character in China: http://news.xinhuanet.com/english/2004-12/30/content_2393526.htm
On the other hand, the Nike China web site has been attacked by pirates: http://news.xinhuanet.com/english/2004-12/30/content_2394580.htm
Oil Price Outlook
Here's something which is curious: The outlook for a warm winter has spurred a continuing decline in global oil markets: http://biz.yahoo.com/ap/041230/oil_prices_5.html We don't have any problem with the decline but only short term. Our reasoning? The tsunami this week apparently didn't do too much damage to oil production in that part of the world, plus at the same time, we admit that the weather outlook and inventory doesn't look too bad, either. But here's the rub. The yin and yang way of world oil consumption means that we will likely have an exceptionally hot summer - so the energy saved in the moderate winter might well be consumed with air conditioning come the really hot part of summer.
A reader in Europe wrote to me this past week that although he has worked in oil production areas his whole life, he didn't realize how serious the long term, outlook was and is. Although I recommend Matt Savinar's book at www.lifeaftertheoilcrash.net I can't help but notice that your better securities firms are still mentioning overweighting portfolios in the exploration and production sectors. Not that we offer financial advice, mind you.
Earth Changes File
Snow in the United Arab Emirate - no kidding: http://english.aljazeera.net/NR/exeres/669DA83D-AA88-4426-BB8B-76D0928B0A51.htmUAE. One other web bot note - exceptional numbers of reads about the Sun - and we're not talking Sun and in Microsystems. And yes, we noticed that the Moon was rising far north of where it should have this go round...
Houston Bureau Snips
"More on your postulate that the thaw will affect the {Alaska] pipeline: http://news.bbc.co.uk/2/hi/science/nature/4120755.stm"
"This might bear watching. Certainly no more implausible than, say, scalar tech: http://www.independent-media.tv/item.cfm?fmedia_id=10211&fcategory_desc=Under%20Reported"
Yikes! Fortunately, I'm a certifiable nut job so take everything you read here with a grain of salt and a shot of Jack or something...
You Know the Dollar is Dead When...
...the black market switches to Euros from U.S. paper: http://slate.msn.com/id/2111504/#ContinueArticle Interesting in light of the fact that most of the West Coast biker gangs have been doing silver bars instead of cash for years...
The Year in Markets
The big hype over the next day or two in the financial sector will almost certainly involve the fact that the markets globally didn't have a bad year. Or did they? Let's run through some of the big ones and see where the real gains were this past year. For the US we will assume the market will close right at yesterday's close. Ready?
| How Great was 2004? | |||
| Index | 2003 Close | Current 2004 | Change |
| Australia | 3306 | 4057 | 22.72% |
| Malaysia | 793.94 | 910.13 | 14.63% |
| Hong Kong | 12575.94 | 14163.55 | 12.62% |
| U.S. by S&P | 1111.92 | 1213.45 | 9.13% |
| U.S. by NAS!00 | 2003.37 | 2177 | 8.67% |
| Britain | 4476.9 | 4818.5 | 7.63% |
| Japan | 10676.64 | 11488.76 | 7.61% |
| France | 3557.9 | 3827.33 | 7.57% |
| Germany | 3965.16 | 4256.08 | 7.34% |
| U.S. by Dow 30 | 10453.92 | 10829.18 | 3.59% |
While this picture is not perfect (the year is not yet over) it does give you an idea of where the growth market was this past year (Australia) and what the turkey of the year was (the Dow 30).
For the reader or two who have asked "OK, George, how did your portfolio do this year, if you're so smart?" The answer is that we were 100% in gold coins again this year. While the figures aren't too precise, 2003 gold ended at about $417 and with the close yesterday it was running about $435, a modest gain of 4.3% - better than the Dow (barring a huge rally today. More to the point, there's the matter of risk - which in gold is pretty darned small by my way of thinking.
Wednesday
Massive Earth Changes Beginning?
Not only are we picking up from the killer tsunami now, but there's been a Russian volcano go active overnight - another indication of how the delicate Pacific's Ring of Fire can be easily upset when there's large-scale earth movement: http://washingtontimes.com/upi-breaking/20041228-070521-2844r.htm Russian coverage at http://en.rian.ru/rian/index.cfm?prd_id=160&msg_id=5260533&startrow=1&date=2004-12-28&do_alert=0
At Mount St. Helens, too, the watch continues because no one knows when North America's most famous recent volcano will come roaring back to life: http://www.columbian.com/12282004/clark_co/226981.html
The volcanic and earthquake activity is only a part of the problems ahead for 2005. We are renewing our warning about dangers to the Alaska Pipeline due to permafrost melting - a phenomena that's already gaining notice in Fairbanks: http://news.bbc.co.uk/1/hi/sci/tech/4120755.stm
Those are the facts. But in reaction to the facts, a couple of readers have asked "Is this the beginning of the woes that alleged psychic Edgar Cayce spoke of?" In particular, one reader wondered about Cayce's alleged forecast of a massive South Seas quake before Mount Rainier and Mount Etna gong off simultaneously would herald the arrival of a Great Quake which would innudate large parts of the American Southwest coastline. However, upon inspection of literally dozens of pages of supposed Cayce forecasts, I found little evidence that his forecast was anything more than chance predictions as his forecast of a pole shift in the 1969-1998 timeframe failed to materialize: http://www.huttoncommentaries.com/Other/Sources/Sources_Veracity_P2.htm
On the other hand, should we over the next month, or so, see Mt. Etna and Mt. Rainier go off, we would ratchet up our concerns to a higher level because we know from web bot work that when you enter the area of forecasting the future, getting the specific date right is incredibly difficult. That said, we also know that subscribers to the current run will be especially wary of tomorrow (Dec. 30th) as a potentially important day in terms of changes to the Terra entity in model space, but again the caveat is that whether it's Cayce's work or interpreting 20-million data samples in the current bot run, time is the least reliable aspect of future forecasting.
While the future forecasts from web bots - and alleged psychics like Cayce - often seem to miss precision on the timeline, there's an interesting line up of planets that could, as one Indian op-ed piece notes, cause widespread destruction around the planet over the next couple of months: http://www.indiadaily.com/editorial/12-29-04.asp Key quote:
"According to some Indian scientists, Venus, moon and Jupiter is pulling earth away from the Sun in the same one line. The linear momentum can devastate the world in the next few months."
Tsunami Survivor Stories
Meantime, we read with interest some of the reports of survivors of the tsunamis in places like the Maldives: http://breakingnews.iol.ie/news/story.asp?j=102381226&p=yxz38y788
So while we know where at least some of the surfers were, there's a deepening mystery about where all the animals that used to inhabit Sri Lanka have gone. Story.
Fraud of the Year
Why would a Russian call the sales of Yukos' core production unit the "fraud of the year?" http://www.mosnews.com/money/2004/12/28/illarionov.shtml History and context at http://seattletimes.nwsource.com/html/nationworld/2002128380_yukos23.html
Iraq Election Pressures Mounting
Whether the elections in Iraq will be held country-wide is seemingly an open question outside of official Bush Administration spinsters. For one thing, insurgents have stepped up their attacks in the country with a bombing this morning that killed 28 or more mostly Iraqi police: http://news.bbc.co.uk/1/hi/world/middle_east/4131479.stm Meantime, the Sunni Iraqi Islamic Party has pulled out of the pending elections - prompting Colin Power to urge them to come back - a move which has, as far as we can read, about zero chance of success: http://english.aljazeera.net/NR/exeres/6AEE0982-50AB-476D-8F69-E7C41DD6B251.htm
Meantime, Porter Goss continues to make changes at the CIA's analytics group: http://news.bbc.co.uk/1/hi/world/americas/4131639.stm We're also still waiting on the Plame Grand Jury which seems to be running 6-months or more behind events. Perhaps they're stalling until after the inaugural?
Suing the Dead
Here's one that caught our eye this morning: Marlon Brandon is being sued - posthumously - on grounds of sexual harassment. http://www.femalefirst.co.uk/entertainment/19832004.htm If successful, we see this as opening up a whole new field of practice for lawyers - going after people who aren't around to defend themselves any more....is it a wonder the ruling class in America is made up of lawyers?
Dollar Bounce Off Lows
Not a good day for the U.S. dollar, but it seems to be bouncing a bit in the pre0opening at the moment. Still: http://www.indystar.com/articles/2/205450-1642-223.html
Balance of Trade Hit in 2005
There's a report from Morningstar today that suggests China may turn off its commercial airplane purchases in 2005 - a move which could turn in to a major hit for the Balance of Trade deficit, which is helped a fair bit by Boeing slaes to overseas customers: Story
Tech Tip: Beyond KaZaa
I don't think I have mentioned it previously, but in the world of file swapping - which is a pain in the you know what to music companies and software authors - there's a new craze called "bit torrent" and there's a good backgrounder on the company and technology in Wired today at http://www.wired.com/wired/archive/13.01/bittorrent.html?tw=wn_tophead_2
Inside Report
This week's report is "News Laws for 2005" - a collection of laws we'd like to see in order to facilitate economic change, and a few comments on the investment prospects for the coming year. Subscription Information
Tell A Friend...
...about Urban Survival's free daily updates by clicking here.
Tuesday
Counting Up the Dead
The number of people killed by that record-setting earthquake in the Indonesia area continues to build, with estimates now approaching 50,000: http://sg.news.yahoo.com/041228/1/3pin6.html
The Other Shoe? We are waiting for reports to come out of the area on damage to oil production infrastructure in the region. I haven't seen a peep about this year, but if there's been enough land movement to push parts of the country 100 feet to the Southwest, then a little dime store logic tells me that might have screwed up some of the oil drilling in the region, which could be a real secondary economic disaster in the making if my worst fears are correct. We're seeing some "leading edge" of the oil angle leaking out in articles such as this one at CBS Market Watch which refers to "oil-rich Indonesia" as likely suffering the most casualties...
Even without damage to oil production infrastructure, the damage will be in the billions: http://news.bbc.co.uk/1/hi/business/4129515.stm
Rummy Misspoke
You've no doubt seen the reports that over the weekend, SecDef Rumsfeld reportedly mentioned something about shooting down that 9/11 plane that crashed in Pennsylvania. Now, CNN is pushing the party line: It was a misspoken remark: Story Or, was it?
Election Boycott
Not that it should surprise you, but Arab media are reporting that Osama bin Laden is asking Iraqis to boycott the upcoming elections in Iraq: http://english.aljazeera.net/NR/exeres/61B9581A-A390-413F-B60B-683939D26C67.htm
Russian Problems of Empire
bad enough for Vlad Plutin and his boyz that the Ukraine has elected a pro-West government. Adding insult to injury now? Turkmenistan may cut off gas to both Russia and the Ukraine unless they get a higher price (like something approaching market) for the gas they are sending out of country: http://www.mosnews.com/news/2004/12/28/gas.shtml
If Liars Can Figure Dept:
We notice that China is setting up a new national statistics bureau, perhaps noticing how well properly manipulated figures can control expectations elsewhere: http://news.xinhuanet.com/english/2004-12/28/content_2388498.htm We put this down as a sort of Department of Home Statistics move on the part of China.
Latest From our "Mobile" Correspondent
I've been amazed at the ability of our international correspondent, the "Wandering Texan" to get around - first Afghanistan, then the Green Zone in Iraq, and now this latest update from Paris where he and the wandering team spent Christmas:
Greetings from Paris. I have paused in the "City of Lights" because for me, Paris has always been a place to put things in perspective. I have sat here in the George V looking out over the city for a couple of days mulling over all I have seen and heard in the Mideast. I am not naive enough to believe the words that were spoken, even the words of old Arab friends. The books we read from are just too different to interpret literally. This is a task of reading between the words, of catching a glance from the corner of an eye, a slight upturn at the edge of a lip. Of knowing when you are hearing only the party line, and not the words of a mans soul.
One thing I can tell you without doubt, and without interpretation. All of our enemies believe one thing to be certain, " In your arrogance lies the means of your defeat." This you will hear over and over. Not just from the Arabs, but from anyone who hates the U.S. .
The Arabs believe if they keep us in enough Mideast countries long enough they will cause the U.S. to collapse like the Soviets did. They have no plans to engage us like the Afghans did the Russians. Instead they will harass us just enough to ensure that we must remain in country. The cost of fielding a U.S. presence in several countries in the Mideast, Africa, and back in Korea will be staggering. The damage to the U.S. economy will do more than any explosive ever thought of. As George has pointed out so many times in the past, the Arabs have some of the smartest people in the world working for them. On top of that, these people live in the real world, not the bubble that we have existed in for so long.
We are an arrogant people, Americans have turned their backs on reality. Preferring instead to be spoon fed pabulum that preaches all is well, take another pill and close your eyes.
Over the next few days there will be more on the nuts and bolts, who, what, when, etc..
A wandering Texan in Paris
Eye Opener
Our Inside Report this week ( subscription info ) cites the Underground Economy as our story of the year for 2004. One reason? There are serious estimates that the size of the untaxed economy, which spans everything from drugs and prostitution down to the auto-body shop down the street means revenues of more than $1-trillion are being untaxed. That startling figure brought this fmrom a thinking subscriber:
"So George, on that missing one trillion dollars in revenue that is not taxed, how much tax money are we losing? Use an average tax rate of 15%, and we can approximate $150 billion in lost taxes per year. Assuming there might be 150 million wage earners, each could roughly have a $1000 credit on their taxes if 'all' taxes could be collected. This is not a small amount of money!!
Additionally, if the tax code was simplified for everyone earning under $100K, to a simple yet precise formula, then the employer tax withholding on weekly paychecks would satisfy the individual's annual income tax (no year-end filing), thereby eliminating the need in the FedGov for tens of thousands of tax office employees and their overhead--more annual savings to credit back to tax payers.
Now, put an end to pork-barrel spending, saving how many more billions per year, all of which can reduce the tax rate (assuming debt has been paid). All pork-barrel type budget proposals to be reviewed by independent boards, not once per year, but on a monthly basis, to require reasonable justification for all non-essential spending.
And, how about the FedGov having a fire sale of all the land, buildings, and equipment, located throughout the world, that is not considered essential. How many more billions could be derived from this fire-sale, as well as the billions that it takes to maintain all of this shit?
Amazing that all of the items listed above can be achieved with little effort!!
One final thought...long ago when I was a teenager, we paid our way on most everything. However, we did have insurance for our automobiles and our homes--both considered potential catastrophic loses above and beyond our typical cash positions. Insurance was a nice option since the premiums were quite low and easily affordable as compared to a percentage of income.
Today, even people with $100K family incomes 'cannot' afford to pay their way for health care. One major illness can drive people into bankruptcy! Homeowner's insurance is skyrocketing as well as automobile insurance as a percentage of income. People now go without medical and automobile insurance because they are too expensive. While insurance was a viable and affordable option forty years ago, today, insurance is no longer affordable for the average income family. Question; what happens next?? "
Oh, that's easy: We slip into another economic Depression, and the scale this time will be one degree of magnitude greater than the Depression of the 1930's. Why? because we have hyper-extended and then pushed beyond even that, the size of the credit/debt bubble. The trick the Republicans and Democrats have been playing ever since Al Gore all too happily was defeated by George Bush four years ago, is akin to musical chairs. Each party doesn't want to be in power when the music stops and the rush for chairs takes off. But, in the meantime, the part in power will use any means necessary to follow a tax and deficit-spending path that was available to lead the country out of the last Depression. Because we're effectively spending even our "get out of jail card" now, when the depth of the New Depression becomes apparent, the means to escape its grasp will be long spent.
Fortunately, it will all happen in slow-motion, such that aware humans will be able to hedge against the worst outcomes. They can become gardeners, acquire some cheap, paid-up land free and clear (you can still find a lot of land in America for under $1,000 an acre) and build a strategy for surviving and even prospering through the coming bad times. In the meantime, we figure on playing the bubble, buying heritage seeds for our land, salting away a small percentage of our income in real wealth that can't be stolen through the evil that is inflation (like gold and land) and try to maintain our health and good attitude for the times ahead. As web bot colleague Cliff is so fond of saying, "Chance favors the prepared mind."
Whether it's called the "Universe," the "Force," or "God" there's always an accounting. It just takes a little longer to arrive sometimes, depending on how long the books have been jiggered.
Computer Hell
If all goes according to plan, tomorrow's report will be created on the new computer, a smoking hot P-4 Hyper-Threading laptop with a big enough hard drive to hold our basic software packages used for creating this site. A few people have asked, "What do you have on your laptop that takes so much room?" Ready?
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Office XP Suite (including Access) Outlook, Instant Messenger, private conferencing third-party tools.
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FrontPage
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Netscape and Mozilla for checking web layouts
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Two flavors of FTP software
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Adobe PhotoShop
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PageMaker
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Corel Draw 8 Suite (because it does some things later versions don't do as gracefully)
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Corel Draw 11 Suite (because there are some things earlier versions don't do)
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Adobe Acrobat Professional 6 & reader
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Magix Midi Studio 2005, Audio Studio 2005
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Several printer drivers
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Several Scanner/OCR programs
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Two favors of CD/DVD burning software packages
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Java and .NET runtimes (500 megs here, but useful now and then)
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Pinnacle Studio 8 video editing suite
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Microsoft Streets and Trips on the hard drive so I don't have to mess with CD's
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Complete local copies of the UrbanSurvival, Inside Report and www.independencejournal.com web sites.
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A complete separate directory of the LA project I'm working on, which runs about 500 megs by itself, not counting ancillary site promotion software (TrafficSeeker)
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ScanSoft PaperPort, Dragon Speaking 6, and....
All this pretty well eats in to a 60-gb hard drive, which is why there's the 80 G FireWire drive and the external Plextor CD/DVD burner for BIG projects. It's also a full day and a half just to load this stuff, then there's the coordination of files between two machines (fun and games with Outlook >PST files).
Now the really fun part: I am turning over the old laptop, which I used in California last time around, to Elaine who is interested in getting more content onto Independence Journal, including her 80-some pages on genetically modified foods. It started off as a 4-page article and sort of got out of control. She'll be working on that and other projects when we get back to Burbank about this time next week.
That may be more than you wanted to know about my computing tools, but a few people have asked. One of these days, I will ante up for something that will allow .SWF (Flash) creation, but for a serious business computer, I think this is the basics. And I hope it answers the question "What kind of software do you use?"
Monday
Now where's Santa?
As you can see by the two charts at the bottom of this page, my outlook on the market has turned decidedly bullish - which is just about always seen as the final nail in the coffin of any good rally. Nevertheless, the market seems to have put in a wonderful showing in December and one which could propel holders of Dow stocks to something like a 2-3% gain for the year - just about what they have lost in purchasing power due to the subtle theft of savings called "inflation."
As luck would have it, I'm not the only one looking at the recent rally and trying to decide if it's for real or not - lots of top analysts are thinking the same thing: http://biz.yahoo.com/ap/041226/wall_street_week_ahead_2.html
This kind of market always brings out the best of my latent schizophrenia (Did I say latent?) because the dollar looks to be setting new lows and relative to the Euro, this is the worst quarter in more than 2-years: STORY I guess, that if this were the $2 window at my favorite sports book, I would plunk down $2 on rally to win, but I'd hedge that with a $2 bet on rally to fizzle - which is why I don't play horses or this market at the moment.
Like all good blow-off's, there's no telling how far this one will go - but when you couple the low volatility index with the huge selling by insiders, you have to ask whether the Bush White House would not be opposed to a decline in the economy in the first year or two of the second term in order to set up a strong finish - and from their standpoint, a Republican encore - in the last two years of the term.
Quake Jitters
Although we don't consider the 9.0 earthquake down in the Indonesia area to be a major economic story, the death of 20,000+ is something that can't be overlooked. As we put in our Sunday update after the event, the concern is not just that we had a big earthquake, but that there's a pattern of strange/large quakes forming up here. Two weeks ago it was a quake in the normally placid Cayman Islands. Not enough to cause the problems of Ivan clean-up, but certainly enough to be worrisome because of its uniqueness. Then there was the quake of 8.2 in the Antarctic the previous week - and then this one: http://news.bbc.co.uk/2/hi/asia-pacific/4125481.stm. The biggest worry? That this is something connected with planetary events and is a precursor to something big in California. As advice, this would be a fine time to check on your earthquake preparedness kit.
UFO's: Event Precursors?
You know what's really interesting? There are some UFO followers who claim to see a coincidence between UFO reports and major earth changes or geopolitical events. Just about a month ago, there was a swarm of UFO reports over southern India and China - and this one from Indonesia that sounded more like a meteor: http://www.cbc.ca/story/world/national/2004/12/18/ufo-indonesia041218.html and then along comes the major earthquake. ON the other hand, reports of UFO's in Indonesia go back many years. For example: http://www.unknowncountry.com/news/?id=257
Even if the link is tenuous (at best) we still find it interesting speculation as we read today about an increase in UFO reports in the vicinity of Iranian nuclear sites: http://www.rense.com/general61/swarm.htm
Saber Rattling Chinese
Speaking of things shaking: The
Chinese are doing the "new & improved" version of their Taiwan rant saying the
People's Liberation Army will crush any independence movement by their offshore
kin:
http://abcnews.go.com/International/wireStory?id=361716. Not that it's
new, but if you've invested heavily in Taiwan chip makers, you might want to
count profits as this kind of talk is not a good thing.
Chinese Eye Sudan
What's behind China's latest rant? Probably a bait & switch ploy. Here's how it works: We've been picking up from several sources that China's interest in the Sudan is a major concern to senior Bush Administration officials - the story of Chinese intrigue in the Middle East is now starting to surface: http://seattletimes.nwsource.com/html/nationworld/2002131515_chinaoil27.html But, by making noises about Taiwan, the Chinese, who have already effectively seized the Panama Canal and other vital interests of the U.S. will now buddy-up to the Sudanese in their quest for oil.
The rest of the Chinese distraction effort comes even more clearly into focus when you read the details of how Venezuelan and China are off doing oil deals. STORY Clearly, Chinese interests are stocking up on oil sources - something which has not been going well for the U.S. due to the quagmire we have gotten into in Iraq... While the U.S. may have had a plan to assure large quantities of Middle East going going in to the Iraq conflict, our becoming bogged down has allowed China a window of opportunity which they are now exploiting like there's no tomorrow -and without oil, there literally will be "no tomorrow.".
Another Bombing
13-dead in the latest car bombing in Iraq - but the good news is that the top Shia leader escaped: http://news.bbc.co.uk/1/hi/world/middle_east/4127279.stm. Elaine's son who was injured in the fighting earlier this year dropped by Sunday and is recovering well..
Worth reading: The article in today's Christian Science Monitor about how U.S. Latinas are converting to Islam because some claim that it offers women more respect than Catholicism: http://www.csmonitor.com/2004/1227/p11s02-ussc.html
IP Running Amok
Yep, intellectual property, which has already gone completely berserk in the field of seeds, where you almost can't eat without paying someone a patent royalty anymore, has hit a new high (or is this a low?) as a Russian lawyer is claiming ownership of all clouds over earth. http://www.mosnews.com/news/2004/12/24/clouds.shtml. His plan is to use his property rights to sue anyone causing substantial air pollution as damaging to his property.
On the other hand, with 850 coal plants in the planning stage, the Kyoto accords on clean air are in trouble: http://www.rense.com/general61/jyoto.htm
Ukraine's New Election
The main story is that given fair elections, the opposition leader won the rerun elections in the Ukraine on Sunday: http://news.xinhuanet.com/english/2004-12/27/content_2385291.htm But the back-story is that a former aide to Ronald Reagan will be first lady now: http://www.opinionjournal.com/diary/?id=110006076
In an odd contrast, we're still reading stories about how the Ohio vote was hacked here in the U.S. - a move which many claim handed George Bush an undeserved second term: http://www.freepress.org/departments/display/19/2004/1038 and http://www.freepress.org/departments/display/19/2004/1028
Right Wing Judge Push
The Bush Administration which submitted about 20 very conservative names to become federal judges is not giving up - and will resubmit most of the nomination again hoping the mood of the Senate will have changed: http://news.bbc.co.uk/1/hi/world/americas/4124155.stm
The criticism of Bush's performance is intense: http://www.truthout.org/docs_04/122704A.shtml
Expensive Audit
Ernst & Young is reportedly out $125-million for a failed audit of an Illinois savings bank: http://business.timesonline.co.uk/article/0,,8209-1416483,00.html or http://news.ninemsn.com.au/article.aspx?id=25297
News from Elliott Wave International
Write when you get rich,
George Ure, People's Economist
Bulldog Editions when noted are the "early editions". Check back later for a more complete update. Bulletins as warranted. Normal byte times are 8:30 AM (or earlier) CDT Monday-Friday. Weekends as the spirit moves us.