More Bot Hits
From our colleagues at
and their eerie web scanning/future seeing software:
some general just got demoted to col. as indicated by
the bots for this
week about the general who rewarded the
and the hero
captain spoken about was likely the Hackworth death..
as a hero to the
common soldier and the foe of TPTB....
getting scary good
Sinko de Mayo
We noted with great
surprise yesterday that despite the reduction of
GM and Ford debt to junk status by S&P that the market didn't
fare worse than it did - but then it dawned on us that one of the
keys to the market - the Dow Transports - didn't reflect carmakers
any more. What? Shocked? Yeah, I was too.
But when I looked at
the list that makes
up the Dow Transportation Index, there's not a carmaker to be
found. How long ago was GM booted off the list?
I'll leave that for your research, as I'm pressed for time.
But what a way to jigger Dow Theory around: Dow Theory says
as goes the transports, so goes the rest of the market. But
with the autos in trouble and not wanting to scare the bejezuz out
of the market, if you ,take the autos out of the index - Surprise!
No mo problems!
Thus, the jobs report
out this morning holds good - and the pending layoffs at IBM, well
just forget about itg!
that jobs report:
Employment rose in April, and the unemployment rate was
unchanged at 5.2 percent, the Bureau of Labor Statistics of
the U.S. Department of Labor re- ported today. Nonfarm payroll
employment increased by 274,000 over the month. Job growth was
widespread, with gains in construction, mining, and several
Unemployment (Household Survey Data)
Both the number of unemployed persons, 7.7 million, and the
unemployment rate, 5.2 percent, were unchanged in April. The
jobless rate was down from 5.5 percent a year earlier. Over
the month, the unemployment rates for adult men (4.4 percent),
adult women (4.6 percent), teenagers (17.7 percent), whites
(4.4 percent), and blacks (10.4 percent) showed little or no
change. After declining in March, the unemployment rate for
Hispanics or Latinos increased to 6.4 percent, the same as in
February. The jobless rate for Asians was 3.9 percent, not
seasonally adjusted. (See tables A-1, A-2, and A-3.)
The number of long-term unemployed--those unemployed 27
weeks and over-- was about unchanged over the month. This
group accounted for 21.2 percent of the unemployed. (See table
Total Employment and the Labor Force (Household Survey
Total employment grew by 598,000 in April to 141.1 million,
and the employment-population ratio--the proportion of the
population age 16 and over with jobs--edged up to 62.6
percent. The civilian labor force increased by 605,000 in
April to 148.8 million; the labor force participation rate, at
66.0 percent, also was up over the month. (See table A-1.)
Persons Not in the Labor Force (Household Survey Data)
There were 1.5 million persons who were marginally attached
to the labor force in April, about the same as a year earlier.
(Data are not seasonally adjusted.) These individuals wanted
and were available to work and had looked for a job sometime
in the prior 12 months. They were not counted as unemployed,
however, because they did not actively search for work in the
4 weeks preceding the survey. The number of discouraged
workers, at 393,000 in April, declined over the year.
Discouraged workers, a subset of the marginally attached, were
not currently looking for work specifically because they
believed no jobs were available for them. The other 1.1
million marginally attached had not searched for work for
reasons such as school attendance or family responsibilities.
The catch to all this is in the definitions:
People are classified as employed if they did any work at
all as paid employees during the reference week; worked in
their own business, pro- fession, or on their own farm; or
worked without pay at least 15 hours in a family business or
farm. People are also counted as employed if they were
temporarily absent from their jobs because of illness, bad
weather, vacation, labor-management disputes, or personal
People are classified as unemployed if they meet all of the
following criteria: They had no employment during the
reference week; they were available for work at that time; and
they made specific efforts to find employment sometime during
the 4-week period ending with the reference week. Persons laid
off from a job and expecting recall need not be looking for
work to be counted as unemployed. The unemployment data
derived from the household survey in no way depend upon the
eligibility for or receipt of unemployment insurance benefits.
The civilian labor force is the sum of employed and
unemployed persons. Those not classified as employed or
unemployed are not in the labor force. The unemployment rate
is the number unemployed as a percent of the labor force. The
labor force participation rate is the labor force as a percent
of the population, and the employment-population ratio is the
employed as a percent of the population.
Now the statistical confessional:
Statistics based on the household and establishment surveys
are subject to both sampling and nonsampling error. When a
sample rather than the en- tire population is surveyed, there
is a chance that the sample estimates may differ from the
"true" population values they represent. The exact difference,
or sampling error, varies depending on the particular sample
selected, and this variability is measured by the standard
error of the estimate. There is about a 90-percent chance, or
level of confidence, that an estimate based on a sample will
differ by no more than 1.6 stand- ard errors from the "true"
population value because of sampling error. BLS analyses are
generally conducted at the 90-percent level of confidence.
For example, the confidence interval for the monthly
change in total employment from the household survey is on the
order of plus or minus 430,000. Suppose the estimate of total
employment increases by 100,000 from one month to the next.
The 90-percent confidence interval on the monthly change would
range from -330,000 to 530,000 (100,000 +/- 430,000). These
figures do not mean that the sample results are off by these
magnitudes, but rather that there is about a 90-percent chance
that the "true" over-the-month change lies within this
This means the alleged
increase is well within the error rate of +/- 430,000!
Whoopee! Of course the private Swiss report on jobs making the
rounds in Europe's financial community alleges the numbers to be
twisted and the decline was more like a net loss of 300,000 jobs,
but for today, look for the Cinco de Mayo party to rock onward and
Impeachable, but who
As the market's are
still holding 10,000 and above, the US press won't get the world
until the Uberklassen meetings later this month about dumping GWB
- but we have a series of interesting - and damning - reports
Things like the memo out saying Iraq was planned long before
WMD talk... But, like I said, cake and circuses time -
who cares? Gaygate pending? Who cares?
Our Fractalist thinks
the market is at a crossroads - once the froth of this morning
George, the markets are at fractal crossroads. While the
major Asian markets have been closed recently for holidays,
many of the major European markets have nearly filled their
nonlinear downward gaps made two to three weeks ago a day or
so of additional trading should plug the gap. A lateral
fractal basing formation in the US equities started 15 days
ago with the beginning of an upstroke movement 5 days ago. The
breakdown gap of two to three weeks ago in the NASDAQ has been
triply filled. This last 5 day upstroke which represents the
third growth fractal of the basing pattern also can
potentially represent the initial portion of a first fractal
of a new longer multi-week growth pattern. Many analysts
seeing this basing pattern and using technical indicators are
targeting higher valuations.
These analysts base their projections more on daily and
weekly oversold technical indicators, directional oscillators,
and summation indices rather than on current economic data,
which has weighed negatively on the economic balance scales.
Technical indicators are useful but should be employed in the
context of an appreciation of either a dominant expanding or a
dominant contracting credit system. The duration of the time
units of indicators are equally important especially near
terminal portions of an expanding credit cycle, i.e., phase
transitions. Equity valuations may be oversold on a daily and
weekly level, but be overbought on a yearly level and
extremely over bought on a decade level.
GM¹s rocket assisted boost by a Œplanned¹, not actual, bid
for 28 million shares of stock by a ultra wealthy investor -
who had incidentally acquired slightly less than that number
of shares over the last two weeks - put a vice like squeeze on
those shorting GM, with both speculators and short coverers
propelling GM stock upward by fifteen to twenty percent.
Unlike this questionable antecedent short squeeze Œjunky¹
equity move, GM on May 5, 2000 received its unquestionably
appropriate official junk bond status by the S and P bond
raters. Interestingly100 million GM shares have been traded in
the last few days; this would present ample opportunity to
unload million of shares acquired at 15 percent less during
the preceding two weeks.
If fractal interpretation of market valuations is to have
any value, specific patterns must be elucidated prior to
turning points. The nonlinear drop in multiple world equity
markets two to three weeks ago was such an elucidation.
Gapping down to new lows characterizes nonlinear movement. The
nodal low 5 days ago was day 130 (2.5x) of a 52 day (x) base.
Declining fractals, which are decay and credit contraction
dependent, start their descent at the top of a growth cycle.
Just as the first day of the first 40 day cycle of the
Wilshire TMWX 40/100/100 cycle started near the high of
preceding growth period and ended in early January 2005, the
first day of the sequential decay cycle started on the last
day of that preceding third cycle or on day 100. From the
January top, the declining fractal sequence has been 15/37/
and May 5, 2005 - 36 of? 37. (X/2.5X/2.5X) Significantly the
high of this potentially nearly completed growth pattern is
lower than the high in January. To corroborate this declining
fractal scenario with an ongoing well-trafficked simultaneous
growth fractal entity, RMS can be used. RMS, a REIT index and
a housing bubble protégée, shows a low nodal determined growth
sequence of 16/39/ and 5 May 2005 -31 of 32. Notably the ideal
projected terminal growth day of the growth fractal entity and
the declining Wilshire fractal sequence terminal day are on
the same day, Friday May 6, 2005.
If the lows of the preceding 2-3 week period are exceeded,
a downdraft of major proportions is highly likely. If equity
valuations increase steadily over the next three trading days,
a further multi-weekly fractal growth cycle is yet possible.
The current short term US treasury rates are still below
current inflation rates and markedly below the double digit
number the wise Mr. Volcker used to curb growing commodity
price rises in the early 1980¹s.
The devaluation and deflation of assets remain not a
question of if, but when. Only if the central government owned
all businesses and employed all citizens, could continuous
inflation by arbitrarily increasing wages remedy the current
expanding debt and consumer saturation difficulties. American
private businesses, unlike the government, cannot arbitrarily
borrow and expand credit to increase wages and accommodate
growing inflation and debt. Unlike the government, private
enterprises must be generally profitable in order to continue
their existences and continue to employ wage earners.
Blair Ditch Project Fails
- He's Back
Tony is in for another
he's not as smug as before...
Letter from a reader:
Well, our UAL pensions have been in the court system all
this year with the final hearing before the judge set for
May 10 & 11. This enterprising group is working on
replacement funds as we all know the pensions at UAL are
finished. A good sign of the times for you.
Sadly Right -
From a reader:
Been what, two
years now? You came online and said that the airlines would
lead the pack into a downward spiral. They did. You said that
the autos would follow on quickly. They are:
Your next prediction was that pension funds would crater and
The End would me Nigh. Well...guess what...
Well, we modestly
confess that was our call and it did happen that way and
yes, the end is off there somewhere after we get through the end
of this b ounce, but nothing to get upset about - like the
dolphins sing in Hitchhiker's Guide to the Galaxy, "Thanks for all
In case you wonder what
the Pope used to drive, try a Volkswagen Golf. Used,
it fetched just under a quarter million at auction.
Houston Bureau Laughing
The reason our Houston Bureau is laughing is Tom DeLay asking for
prayers on National Prayer Day. Help me here: He's
asking prayers for what? a) Saving his ass from his colleagues, b)
more brains, c) Integrity or d) mercy from real Christian voters?
Hello, Houston, we have a problem..
Eldest daughter Denise
(a/k/a/ Wendy Treat) is in an indy movie -
http://go-kustom.com/danews.html - Trailer doesn't stream well
but the pictures will give you the idea.
Honor for Our
Best and Bravest
Although I differ greatly with the present
administration on economic matters, and even on matters of
Commander in Chief level decision-making where it comes to full
disclosure and honesty, make no mistake about my loyalty, feelings
and undying respect for America's military. I lost a lot of
friends to the jungles south of the DMZ like Mike Garrett and Gil
Pfeifer. A fellow ham radio nerd turned gunship pilot and a
kindred Renaissance guy.
Col David Hackworth was controversial to be sure, but when
someone like Hack dies, we put aside partisanship and agendas to
honor the most decorated American soldier.
NEW YORK, May 5 /PRNewswire/
-- Col. David H. Hackworth, the United States
Army's legendary, highly decorated guerrilla fighter and
lifelong champion of
the doughboy and dogface, groundpounder and grunt, died
Wednesday in Mexico.
He was 74 years old. The cause of death was a form of cancer
with increasing frequency among Vietnam veterans exposed to
called Agents Orange and Blue.
Col. Hackworth spent more than half a century on the
battlefields, first as a soldier, then as a writer, war
sharp-eyed critic of the Military Industrial Complex and
generals he dismissed as Perfumed Princes. He preferred the
combat style of
World War II and Korean War heroes like James Gavin and
Matthew Ridgeway and,
during Vietnam, of Hank "The Gunfighter" Emerson and Hal
Moore. General Moore,
the author of "We Were Soldiers Once and Young," called
him "the Patton of
Vietnam" and General Creighton Abrams, the last American
commander in that
disastrous war, described him as "the best battalion commander
I ever saw in
the United States Army."
Col. Hackworth's battlefield exploits put him on the line of
military heroes squarely next to Sgt. York and Audie Murphy.
The novelist Ward
Just, who knew him for forty years, described him as "the
genuine article, a
soldier's soldier, a connoisseur of combat." At 14, as World
War II was
sputtering out, he lied about his age to join the Merchant
Marine, and at 15
he enlisted in the U.S. Army. Over the next 26 years he spent
fully seven in
combat. He was put in for the Medal of Honor three times; the
is currently under review at the Pentagon. He was twice
awarded the Army's
second highest honor for valor, the Distinguished Service
Cross, along with 10
Silver Stars and 8 Bronze Stars. When asked about his many
awards, he always
said he was proudest of his 8 Purple Hearts and his Combat
A reputation won on the battlefield made it impossible to
dismiss him when
he went on the attack later as a critic of careerism and
incompetence in the
military high command. In 1971, he appeared in the field on
ABC's Issue and
Answers to say Vietnam "is a bad war...it can't be won. We
need to get out."
He also predicted that Saigon would fall to the North
Vietnamese within four
years, a prediction that turned out to be far more accurate
than anything the
Joint Chiefs of Staff were telling President Nixon or that the
telling the American people.
With almost five years in country, Col. Hackworth was the
officer to sound off about the Vietnam War. After the
interview, he retired
from the Army and moved to Australia.
"He was perhaps the finest soldier of his generation,"
novelist and war correspondent Nicholas Proffit, who described
Hackworth's combat autobiography About Face, a national
best-seller, as "a
passionate cry from the heart of a man who never stopped
loving the Army, even
when it stopped loving him back."
Having risen from private by way of a battlefield commission
where he became the Army's youngest captain, to Vietnam, where
he served as
its youngest bird colonel, he never stood on rank.
From the beginning his life was a soldier's story. He was
Armistice Day, now Veteran's Day, in 1930. His parents both
died before he was
a year old and the Army ultimately stood in for the family he
never had. His
grandmother, who rescued him from an orphanage, raised him on
tales of the
American Revolution and the Old West and the ethos of the
After the Japanese attacked Pearl Harbor, he got his first
shining shoes at a base in Santa Monica, where the soldiers,
adopting him as
mascot, had a tailor cut him a pint-sized uniform. "At age 10
I knew my
destiny," he said. "Nothing would be better than to be a
He always credited his success in battle to the training he
the tough school of non-coms who won World War II,
hard-fighting sergeants who drilled into him the basics of an
life: sweat in training cut down on blood shed in battle;
there was nothing
wrong with being out all night so long as you were present for
roll call at
5:00 a.m., on your feet and in shape to run five miles before
In Korea, where he won his first Silver Star and Purple Heart
was old enough to vote, he started his combat career in what
he later called a
"kill a commie for mommie" frame of mind. He was among the
for Korea and later for Vietnam, where he perfected his skill.
the atmosphere of violence," Ward Just observed. "That meant
he knew how to
keep his head, to think in danger's midst. In battle the worst
paralysis. He mastered his own fear and learned how to kill.
He led by
example, and his men followed."
Just met him in the ruins of a base camp in the Central
Highlands in 1966,
where he was a major commanding a battalion of the 101st
Airborne. "He was
compact, with forearms the size of hams. His uniform was
filthy and his use of
obscenity was truly inventive." What struck the journalist
most forcefully was
"his enthusiasm, his magnetism, his exuberance, his invincible
To young officers in Vietnam and long afterwards, he
unforgettable profile in courage. "Everyone called him Hack,"
Foley, a military historian and novelist who first saw him in
action with the
1st Battalion of the 327th Infantry in 1965. "He was referred
to by his radio
call sign of 'Steel Six.' He was tough, demanding and boyish
all at the same
time, stocky with a slightly leathered complexion. His light
hair and deep tan
made it hard for us to tell how old he was. He wore jungle
shower shoes, a green T-shirt and a Rolex watch. In the corner
of his mouth
was a large and foul smelling cigar. As we entered the tent,
he was bent over
a field table looking at a map overlay and drinking a bottle
of San Miguel
With Gen. S.L.A. "Slam" Marshall, he surveyed the war's early
compiled the Army's experience into The Vietnam Primer, a
bible on a style of
unconventional counter-guerrilla tactics he called "out gee-ing
the G." His
finest moment came when he applied these tactics, taking the
Infantry Battalion in the Mekong Delta, turning it into the
Battalion. The men of the demoralized outfit saw him at first
as a crazy
"lifer" out to get them killed. For a time they even put a
price on his head
and waited for the first grunt to frag him.
Within 10 weeks, the fiery young combat leader had so
transformed the 4/39
that it was routing main force enemy units. He led from the
front, at one
point getting out on the strut of a helicopter, landing on top
of an enemy
position and hauling to safety the point elements of a company
pinned down and
facing certain death. Thirty years later, the grateful
enlisted men and young
officers of the 4/39, now grown old, are still urging the
Pentagon to award
him the Medal of Honor for this action. So far, the Army has
On leaving the Army, Col. Hackworth retired to a farm on the
Gold Coast near Brisbane. He became a business entrepreneur,
making a small
fortune in real estate, then expanding a highly popular
Scaramouche. As a leading spokesman for Australia's
anti-nuclear movement he
was presented the United Nations Medal for Peace.
As About Face was becoming a best seller, he returned to the
to marry Eilhys England, his one great love, who became his
writing partner. He became a powerful voice for military
reform. From 1990 to
1996, as Newsweek Magazine's Contributing editor for defense,
he covered the
first Gulf War as well as peacekeeping battles in Somalia, the
and Haiti. He captured this experience in Hazardous Duty, a
volume of war
dispatches. Among his many awards as a journalist was the
Honor Medal for excellence in communications. He also wrote a
novel, Price of
Honor, about the snares of Vietnam, Somalia and the Military
Complex. His last book, Steel My Soldiers' Hearts, was a
tribute to the men of
the Hardcore Battalion.
He was a regular guest on national radio and TV shows and a
contributor to magazines including People, Parade, Men's
Playboy, Maxim and Modern Maturity. His column, Defending
appeared weekly in newspapers across the country and on the
Soldiers For The Truth (http://www.sftt.org), a rallying point for
reform. He and Ms. England have been the driving force behind
organization, which defends the interests of ordinary soldiers
Hack's conviction that "nuke-the-pukes" solutions no longer
work in an age of
terror that demands "a streamlined, hard-hitting force for the
"Hack never lost his focus," said Roger Charles, president of
the Truth. "That focus was on the young kids that our country
sends to bleed
and die on our behalf. Everything he did in his retirement was
to try to give
them a better chance to win and to come home. That's one hell
of a legacy."
Over the final years of Col. Hackworth's life, his wife
beside him during his gallant battle against bladder cancer,
which now appears
with sinister regularity among Vietnam veterans exposed to
Agent Blue. At one
point he considered dropping their syndicated column, only to
make an abrupt
about face, saying, "Writing with you is the only thing that
keeps me alive."
The last words he said to his doctor were "If I die, tell
Eilhys I was
grateful for every moment she brought me, every extra moment I
got to spend
with her. Tell her my greatest achievement is the love the two
of us shared."
Col. Hackworth is survived by Ms. England, one step-daughter
step-grandchildren, and four children and four grandchildren
from two earlier
marriages. At a date to be announced, he will be buried in
Cemetery with full military honors.
Soldiers For The Truth is now working on legal action to
Pentagon to recognize Agent Blue alongside the better known
Agent Orange as a
killer and to help veterans exposed to it during the Vietnam
contributions can be sent to Soldiers For The Truth either by
or by mail to, PO Box 54365, Irving, California,
I asked Panama Bates
about Hackworth and he described him as "clear-headed, forthright,
God rest his soul and
those of all other fallen defenders of our Constitution.
Next week on
Peoplenomics, we'll explore the relationship between technology
transfers and the ends of empires. Especially in light of how we
have transferred technology to China and other outposts of global
information. This week's Peoplenomics (formerly inside Report)
goes through a process of elimination trying to scope out what
market-rocking event is bearing down on us around May 20th.
Other stops of
interest: Elaine's head hunting page,
a must read if you are in a medical related field. Our book
How to live on less than $10,000 a year is
available at our bookstore.
Think this is an
interesting site? We'd appreciate it if you could send an
email to a few friends telling them about it.
Elaine has added a
VP Biopharmaceutical (Boston) to her executive
Jobs Report -
The Bureau of Labor Statistics of the U.S. Department of
Labor today reported preliminary productivity data--as
measured by output per hour of all persons--for the first
quarter of 2005. The seasonally adjusted annual rates of
productivity change in the first quarter were:
2.1 percent in the business sector and 2.6 percent in the
nonfarm business sector.
Productivity in the business sector grew more slowly than
in the fourth quarter of 2004, when it increased 3.7 percent.
In the nonfarm business sector, however, productivity
increased more in the first quarter than it had in the
previous quarter. Nonfarm business labor productivity
increased 2.1 percent in the fourth quarter of 2004.
In manufacturing, productivity changes in the first quarter
3.9 percent in manufacturing, 6.3 percent in durable goods
manufacturing, and 1.3 percent in nondurable goods
Productivity growth in manufacturing in the first quarter
of 2005 reflected a 3.3-percent increase in output and a drop
of 0.7 percent in hours worked in the sector. Output and hours
in manufacturing, which includes about 13 percent of U.S.
business sector employment, tend to vary more from quarter to
quarter than data for the aggregate business and nonfarm
business sectors. First-quarter measures are summarized in
table A and appear in detail in tables 1 through 5.
The data sources and methods used in the preparation of the
manufacturing series differ from those used in preparing the
business and nonfarm business series, and these measures are
not directly comparable. Output measures for business and
nonfarm business are based on measures of gross domestic
product prepared by the Bureau of Economic Analysis of the
U.S. Department of Commerce. Quarterly output measures for
manufacturing reflect indexes of industrial production
independently prepared by the Board of Governors of the
Federal Reserve System.
Let's see - output up,
wages fairly flat - and a
than expected rise in the unemployment filings. That
ought to just set the market on fire. Of course we all know
productivity numbers are a dream, but still, increase productivity
and you can lay off more workers. Want proof?
"Good" Job Cuts
I am always amazed when
a headline comes along like the ones out this morning alluding to
IBM's cut of 13,000 jobs from its payrolls. The stock is up
well over 1% in
the preopen, yet the reason that a big company sheds jobs is
that it doesn't have something productive for them to do.
It's another one of those events where the market acts in a crazy
way - rewarding a company for making cuts, yet hiding the fact
that the underlying company made those cuts for a reason -
one that may still exist going forward.
Weighing on the market
after the happy talk will be
a report that oil is up on supply concerns again. Lemme see:
Oil goes up because of a healthy global economy and we have an oil
shock. Or, oil demand is met by having a recession that
scrubs demand. My, what a fine kettle of fish this is!
Retail sales are up only slightly in reports out today.
If you have been
following Michael Nystrom's series on the housing bubble,
link to part three of the series. A slow housing pop, Jim
Kunstler's Long Emergency, can't we just speed some of this stuff
up so we can work on the recovery side of the developing *hitstorms?
Events take so long to catch up with projections.
Then we have the
jobs numbers that are due out tomorrow, so the
market is expected to turn in a mixed performance today. It's
not too often that I mention television, mostly because I don't
watch much of it. That said, Warren Buffett being
interviewed by Lou Dobbs last night on CNN was great and what
Buffett didn't say about nuclear and biological terrorism and the
pending further decline of the dollar was as interesting as what
he did say.
Gaygate About to
OK, we watch tremendous
number of web sites but check out what's popping up in data: As
many as five national magazines - mainstream media - are
about to pounce on the Gaygate story this month. We have
heard - and this is only rumor stuff so far - that Vanity Fair has
a story in the works, and there are rumors about Rolling Stone,
Wired, and a few others which may press dynamite content. So
be watching for this one to come down the pike like a railroad
train. How many can the spinsters control at once? How all
this fits with the web bot predictions for the period is something
we'll work on when there's time, but this could have a dramatic
impact on the already lowering presidential approval ratings.
Tony Blair is expected
win reelection in England, which is voting today. It
will likely be our turn to ask the question of the Brits tomorrow
that they asked by the island's press when Bush was re-elected -
"How can so many people vote so stupidly?" We expect to ask
the same question back tomorrow. Meantime, there have been small
explosions at the British consulate in New York. We wouldn't
be surprised to learn that this was a LIHOP/MYHOP deal to drive
Brits toward the "safety" of re-electing TB.
In the BBC (Bush/Blair
Conflict) MSM (mainstream media) reports that 21 people have been
killed in Iraq in
attacks aimed at security forces. Talk in Washington
$100 million in funding for Bush's war that can't be accounted for
- but then isn't that what a good war is about?
Speaking of which...
Someone in the Pentagon
not knowing the ins and outs of Acrobat has given the world much
more information about events surrounding the Italian journalist
case. From the coverage:
Pentagon report at least allows the international public to
know that there were no less than 15,527 attacks on the
occupation forces from July 2004 to March 2005. In Baghdad
alone, from November to March 12, there were 2,404 attacks.
These numbers confirm that when US Defense Secretary Donald
Rumsfeld and his minions spin that the situation in Iraq is
under control they are essentially lying."
Shocked and awed.
We have been watching
the case of an American-Israeli lobbying group which has been
involved in a spy scandal - Israel spying on the US. Latest
development is an intelligence analyst has been
charged with passing secrets to the group. In the crazy world
we live in today, the Bush administration and CONgress seem
baffled by the line between Judaism which is a religion, and
Zionist which is a political agenda. If any other country was
getting $5 billion a year in foreign aid and was spying on us,
there would be immediate actions. Or would there? What
about our relationship with China? Same kind of thing:
Nothing wrong with Chinese people - but the government of China
spying on the US with a technology theft agenda while we stock
Wal-Mart with their products? You see the non sequitors, no?
(That's more polite than admitting to any stupidity on our part.)
Still, there are some
members of the press who seem to have enough recall of elementary
school government lessons to
keep dogging Tom DeLay, one of the best politicians money can buy.
two GOP CONgressmen are stepping aside because they anted up to
Polio is Back
Indonesia so far. We expect more countries, cases, and
Lots of 5+
We have been alerted to
the number of 5+ earthquakes today...no specific worries, just a
http://www.emsc-csem.org/cgi-bin/QDM_all.sh Couple this
with all the recent very deep (>50 km depth) quakes) and a
question about the possibilities of a super quake are again
Rates: 'No Right
As we reported right
after the Fed decision on Tuesday, it is
extremely rare for the Fed to have a typo like the one explained
as an omission in something as important as the FOMC meeting
statement - so much so that we just can't buy it. The
markets are expected to
open a bit down this morning, but we expect that the downside
momentum may be only a few days from really taking hold.
some tech strength due to semiconductor sales figures out this
In truth the Fed's
steno problem comes as a surprise to us, sort of like a policy
speed bump warning that the Fed has just about reached the end of
the line as the dual forces of hyperinflation on the one hand and
fleeing foreign investors on the other leave the Fed with little
freedom of movement. Clearly, the Fed's raise of rates was
due to something but one has to consider what.
If, as the statement said, long-term inflation expectations are
well contained, it would seem there is little reason to raise
rates, especially when the durable goods orders have recently hit
the skids. There's also evidence of a slowing of consumer
confidence, and if I were a practicing economist, I would have to
say the evidence on the table should have kept the Fed from
raising. Nevertheless, they did, and the reason lurking off
in the background is foreign bond sales which are necessary to
keep the U.S. solvent.
We have picked up some
interesting intelligence now from our colleagues at
which runs the web bot project: In the present data streams
there is some movement around a Swiss employment analysis of the
U.S. which suggests that jobs in the latest month are down in
excess of 300,000 persons. When the latest BLS figures come
out later this week, we expect modest growth of jobs to be shown.
The net of this will likely be more cognitive dissonance in the
market - the condition arising when the mind rebels against the
reality of what the eyes and other senses present.
A very knowledgeable
reader writes in response to this:
George, in order for the yoy rate of payrolls to sustain
current growth or higher (see chart), assuming no major
revisions to the previous months' data, payrolls need to grow
at least ~440,000 for Apr., 350,000 for May, and 239,000 for
June or an average of 263,000 payroll jobs per month. To match
the average yoy rate of growth for past expansions, payrolls
would need to grow at an average monthly rate of ~225,000
versus the ~186,000-200,000 per month during the past 8-12
Implausible? Perhaps not, at least in the short run. From
the CBO's figures below, annual growth of social insurance
receipts (a good proxy for payroll growth) has risen from the
recession-like 1%-2% from '01 to summer '04 to the
expansionary rate of in excess of 6%, at or above the rate of
the '90s bubble era. One should note, however, that the
quality of jobs are poor in this expansion, compared to
previous periods, making these jobs more vulnerable than in
pervious expansions to even a modest deceleration of GDP
So, at this point in the US$-reflationary- and war-induced
expansion, the headline payroll figures might seem strong on
the surface, but the yoy comparisons are a bit tougher going
forward, requiring historically STRONG payroll figures in the
260,000 range or else the yoy rate will decelerate. CBO
figures, at least over the past 4-6 months support the
expansionary growth suggested by the yoy payroll figures. It
bears watching the CBO figures in the coming months, as the
UoM survey (see below), which reflects the sentiment of the
top 20% of households ("management" and "investor" class) and
tends to lead the CB survey, is now below 90 and at levels
typically seen at the onset of bear markets and recessions. If
managers are becoming less confident going forward, we are
likely to see investment, orders, and production scaled back,
along with a slowdown in hiring later in the year.
But for the Fed, what
is being painted as an oversight is more likely the last speed
bump: As we see it, the Fed must keep raising rates to compel
foreign bond buyers, yet another hike (as was signaled by the
markets yesterday after the first cut announcement) means the
housing bubble (which is already popping) would let go in a huge
splat - assisted you understand by credit card debt, which is also
tied to rates by the predatory lenders. Last time I checked,
this was virtually everyone.
8th hike in a row, if you track it.
Behind the Fed moves,
we are seeing all kinds of machinations in the bond market.
This has led one reader to offer up the following theory:
1. As we know,
major foreign holders of U.S. treasury debt
include a significant, yet, mysterious and growing chunk
of T-Bills held by Caribbean hedge funds.
MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
(in billions of dollars)
HOLDINGS 1/ AT END OF PERIOD
COUNTRY Feb Jan
Japan 702.0 701.0
Mainland China 196.5 195.2
United Kingdom 171.0 160.7
Caribbean Banking Centers 2/ 103.6 92.6
Korea 67.1 67.7
Grand Totals 1995.8 1957.8
Of which official 1180.5 1176.2
Bills 235.2 242.3
Bonds and notes 945.3 934.0
Department of the Treasury/Federal Reserve Board
April 15, 2005
1/ Estimated foreign holdings of U.S. Treasury marketable and nonmarketable bills, bonds and notes
are based on Treasury Foreign Portfolio Investment Survey benchmarks and on monthly data
reported under the Treasury International Capital (TIC) reporting system.
2/ Includes Bahamas, Bermuda, Cayman Islands, Netherlands Antilles, and Panama.
2. These data are updated monthly:
"Historical Monthly Data. Data are UPDATED on or about the
11th business day of each month, with a 1.5 month lag. The
2005 release dates are Jan 18, Feb 15, Mar 15, Apr 15, May 16,
June 15, July 18, Aug 15, Sept 16, Oct 18, Nov 16 and Dec 15.
The time of release is normally at 09:00 a.m. in Washington D.C."
The March numbers will come out on May 16th. If Japan and China
purchased as anemically as they did in February, the numbers are
going to be interesting, to say the least.
3. I'm wondering if the Spitzer/AIG "send reporters to Barbados
and dig deeper into what insurance companies are doing offshore"
thing could intersect with this...
He called this aspect of the insurance industry a "black hole" and
called for a fundamental rewriting of insurance laws.
"The states have ultimately failed in their regulation of the
insurance industry," Spitzer said. "The Feds can get the data and
they have refused to do it."
He criticized the Bush administration for its emphasis on tort
reform while ignoring deeper problems in the insurance industry.
4. Barbados is not part of the "Caribbean Banking Centers", but
could somehow be involved in laundering magical funny money on
its way from New York to the Caymans... Factbook lists it as
an "offshore banking center and drug transshipment point":
Thoughts? The May 16th date fits nicely. What else is going on
around that time?
Kofi Annan was busily
chatting up the dangers of small countries developing nuclear
weapons, telling a group that
this threatens nuclear catastrophe. Well, it does, it
doesn't, and it does. It does because because small country
programs likely don't have the same attention to detail that the
Super Powers now employ. But, it never did, because when you
look at the earliest days of the US or Soviet nuke programs,
pollution and catastrophe were not part of the concerns, and it
does because even if small countries are careful and responsible,
we are likely to bomb their facilities, which will release
radioactive problems anyway.
Al Qaeda #3
It's not Osama, but
it's the number three player in al Qaeda being captured in
Pakistan. With the capture, we have to return to the "stumper"
of a problem: If say the top 10 of al Qaeda were all caught
tomorrow, do you believe there would be any change in travel
hassles and the behavior of the government which is determined to
'search Grandma" at the airport, yet won't effectively close the
leaky border with Mexico? Doubt it. I mean it's nice that a
capture has occurred, but even if every "evil doer" were safely
confined, it would not turn our lost Constitutional freedoms back
on. Once power is taken, it's seldom returned.
I'd like to be happily wrong on this. Doubt it, though.
One mechanism, of
course, that may be used by government to maintain it's power is
to point to foreign developments and cast them as security
problems at the heart of the empire. Thus when we see items
like the explosions in Iraq, which took 60 lives today, we
look for some linkage being made as to how this is a threat to
As was the case when
Rome was falling, the press seems to be feeding us "cake and
holidays' of such things like the Jackson (who cares?) trial, and
the craziness about American Idol - another who cares?
It's all distractions because the press doesn't want to ask hard
questions about the misnamed Fed, the banksters, where the economy
really is, and about insurance companies. A reader concurs,
On the subject of distractions, don't forget the "Runaway
Bride", and the fact that the media is calling for a felony
conviction for embarrassing them publicly. Maybe they should
help pay the freight on the search costs out of their
advertising revenues for their news infomercials.
Of course, my favorite is the "baseball steroids"
controversy, wherein Congress wants to get involved to show
they are "protecting our kids", when they conveniently turn
their backs on the steroids pumped into all of us by the meat
and dairy industries. I wrote both of my Senators about this
and got nothing but form letters in reply stating how
"concerned" they were about sports figures influence over
A leaked report says
the US military has been sapped by Afghanistan and Iraq (no need
for genius level thinking here) and that these conflicts have
dramatically reduced our ability to win new conflicts quickly.
Notice that the version of the report that I linked to is the
Chinese Xinhau press agency - which means (you go it!) that they
have to be looking at North Korea and Taiwan and thinking "So much
for capitalist hegemony..."
Academy - Christian School?
That's the report -
that fundamentalist Christian
values are being officially promoted at the Colorado
Springs school. Not that there's anything wrong with the
values, but when any official religion creeps in to a
military institution, there are separation of powers issues
(Church/State) to be considered. Mandatory prayer, that kind of
Fed Ups a Quarter, Trips a Lot
No surprise in that -
but even more fun is the revision of the Fed comments after their
initial release. Why? because the market sensed a train
wreck and the Fed got wind of it when markets turned down...
The Board of Governors
of the Federal Reserve System has issued the following press
For immediate release
(Note: Corrects previous release to add sentence in
second paragraph, which was dropped inadvertently.)
The Federal Open Market Committee decided today to raise
its target for the federal funds rate by 25 basis points to 3
The Committee believes that, even after this action, the
stance of monetary policy remains accommodative and, coupled
with robust underlying growth in productivity, is providing
ongoing support to economic activity. Recent data suggest that
the solid pace of spending growth has slowed somewhat, partly
in response to the earlier increases in energy prices. Labor
market conditions, however, apparently continue to improve
gradually. Pressures on inflation have picked up in recent
months and pricing power is more evident. Longer-term
inflation expectations remain well contained.
And yes, you would not
be alone to read something approaching panic into the revision.
Our other reader writes in:
"I think that the US Government has just hit an all time
The Fed, a few minutes before the market was closing and
after Uncle Al saw that his legacy was being jeopardized by
the stock markets, ex post facto revised the FOMC statement.
Now from what I read and understand, Uncle Al goes into
these meetings with the statement already prepared and he gets
the various voting members to sign off. So, neither Uncle Al
or any of the other Board members (voting or not) or any of
the minions who assist, saw this supposedly critical omission
before the market was closing.
How can any of the other board members permit this to
Not a single iota of intellectual honesty.
The Plunge Protection Team is not bad enough, but to
compound the manipulation with these lies. A human with a
sheep’s brain may be an evolutionary improvement since the
survival of the fittest no longer seems to be workable.
I would appreciate if you could comment on this your
I could never have put it so eloquently. Lord help those still
in the market who remain skeptical after this one...
Web Bot Hit
Once again the "future
seeing" technology of
www.halfpasthuman.com has shocked us with its accuracy in
apparently describing in emotional impact terms, the reported
collision between two military jets over Iraq on Monday.
According to the BBC report:
"At least one US Marine Corps pilot has died and another is
missing after two F/A-18 Hornet jets crashed in Iraq. The
planes are thought to have been involved in a mid-air
collision in bad weather on Monday evening, reports say.
A US military spokesman said the planes had been flying too
high to have been shot down by hostile fire.
The search is continuing for the second pilot whose
condition is not known. The planes were operating from the
aircraft carrier USS Carl Vinson."
As to the forecast written and posted recently - well in
advance of events:
Within the aspect of the [armies] we note that the press
will be occupied with [two evil/unskilled captains], the
[possibility of ominous defeat], and the [actions] of the
[unwise](general) who is seen as [rewarding] (those) (without)
[accomplishment]. These primary stories are to be augmented
with some large level of press discussion about [confusion]
and [massacre]. Further there is also some indications of
[ships] (determinations) by their (captain) as being [outside]
the [law], but nonetheless also seen within the Populace as
being both [courageous] and [self-sacrificing]. In the end
apparently a duality will exist wherein the [actions] of the
[captain] will be seen by the Press as those of an [outlaw]
while the Populace is seen [lauding a hero]. Our indications
are that the Press will actually be aware enough to note the
Some of the labeling, such as works like "evil" are emotive
words in modelspace, and do not reflect our assessments of the
military. They arise in model space (after distilling millions
upon millions of words) due in part to the globe-spanning nature
of the linguistic shifts, which arise in some non-English
languages. Again, when it's a bot "hit" the underlying store
is usually of high negative emotive impact, which tends to jump
out of the processing. Whether it turns out to actually
have been a collision doesn't matter - what does matter is the
immediate emotional impacts which are a near perfect fit.
Needless to say, this increases our concerns about the May
15-May 29 period for markets which has shown up in data for
about 4-months - because the larger the emotive values, the
further into the future events seem to be located. The
Indonesia tsunami, for instance, was visible in August of 2004 as
references to "300,000 dead", earthquakes shaking land back to a
prior age, and "rising waters" - references which in retrospect
may be seen as a perfect fit - yet again an unfortunate one - to
later events five months on.
One thing we are watching for - off money for a moment - is
something having to do with 'double sun" and 3 bursts of something
from the sun in a 24-hour period.
Thus with an event pinging four to five months out like
whatever it is coming in May (and impacting the populous entity
fully by the June 6 to July 28th period, we take renewed urgency
in our preparations to be ready for anything. The
references on West Coast earthquakes, for example, are one
possibility...the 3 CME's (or whatevers) are another
As an aside: We won't be attending the
convention next week - too many people who don't get it.
Many investors on Wall
St have been semi-conscious of the fact that France has an
election coming up which will be vital to maintaining the
integrity and growth of the European Union. Not that
investors care a bit about society level change, mind you, but
it's the currency fallout that does matter. So when
we read reports that French voters may adopt the Union, then
we look at the possibility of sudden catastrophic collapse of the
dollar (another one of those damn web bot predictions) as becoming
a more real possibility.
We notice that
newspaper circulation in some major cities, such as Los Angeles,
is down significantly in the past year
reports out Monday. We don't find anything particularly
amazing about the report - as newspapers are a luxury few people
can afford when compared to the much broader content offerings of
the internet, or the more compact news reporting offered by
While it is unlikely to
provide for a genuine solution to the problems of nuclear arms
UN is starting meetings today to try and jawbone away the
spread of atomic muscle. Lots'a luck. For one thing, Iran
says it will resume nuclear activities, but
insists that enrichment is not part of the program.
What's even more
frightening than proliferation is a report that US military
commanders are asking for
permission for a "first use" of nukes policy.
Sheep with Human
We were once again
CNN's coverage of the story sheep with human brains. What
they didn't point out was that we already are witness to another
miracle - humans with sheep brains...
The move to
standardize the driver's license nationally is picking up
steam again. 11 states grant licenses to noncitizens. Notice the
burden doesn't go on insurance companies?
Although there has been
plenty of hype in the media bout the President's ideas on getting
social security money in to bail out markets and buy US bonds, we
so-called intellectual reasons to end social security misleading
at best. As Senator John Kerry pointed out recent, just
not making the free lunch tax reductions for rich Americans
permanent would more than fill the gap - besides no one is talking
about Medicaid which runs out 30 years earlier. (Bush's
misnamed plan is not a plan - just some ideas.) Such is hyperbole
when sleepovers in the White House are making headlines on the
Because we're living
(albeit temporarily) in the Los Angeles area, we've been watching
the rash of
people being shot on the freeways here. A little spooky...the
headline number is 4 dead so far, but local police by press
reports put the number of shooting at 11 this year.
ISM - Growth
"(Tempe, Arizona) —
Economic activity in the manufacturing sector grew in April
for the 23rd consecutive month, while the overall
economy grew for the 42nd consecutive month, say the
nation's supply executives in the latest Manufacturing
ISM Report On Business®.
The report was issued today by Norbert J. Ore, C.P.M.,
chair of the Institute for Supply Management™ Manufacturing
Business Survey Committee. "In April, the manufacturing sector
grew for the 23rd consecutive month based on the ISM data.
This represents the longest period of growth in the last 16
years. However, the rate of growth slowed to its lowest level
since July 2003. The trend is definitely toward a slower pace
of growth, and that should relieve some of the pricing
pressure that the sector has experienced during 2004 and year
to date in 2005. Declines in Inventories indicate that
manufacturers are adjusting to slower growth in new orders."
Full details at
http://www.ism.ws/ISMReport/ROB052005.cfm but the gist of this
from a trading standpoint is that with ISM's numbers falling, a
lot of sage street-wise guys (like Carter Worth at
Oppenheimer) view the coming
week as critical to a market which could break either way. Our own
bias is to the downside, especially with the Fed meeting this
The market is poised to
open this morning on the upside, but whether than will be any
more than a huge "buy the rumor" which will be greeted with a big
"sell the news" on the other side of this week's Fed meeting seems
to be the real question. While most of the
intelligent speculation centers on the odds of the Fed raising
rates a quarter point, the fly in the ointment seems to be the
rumor that the Feds can now raise a half point with relative
impunity because of President signing the new corporate indenture
laws - misnamed bankruptcy reform. This may seem like a good day
trading opportunity, but it's in the "catch falling knives"
Bury head, admit
nothing - that's what's
coming out of Asia in the wake of the latest North Korean
missile test. The
UN meantime is ready to meet on a 1970 treaty on nuclear
weapons to see if there's some way to deal with NK and Iranian
Blair War/ Bush
As Tony Blair faces
reelection in the UK reports are surfacing that he was
preparing Britain to take part in the war to topple Saddam almost
a year before events. This despite advise from top
consultants that it was a bad move...
Laura Bush was the real hit at the White House Correspondents
Association dinner. Of course we know she'd have to have a
fine sense of humor....
28 people are dead from
munitions dump explosion in Afghanistan today. In Iraq,
dead from an attack on a funeral. More important from a
trend standpoint is the appearance of
militant Islamic groups in Egypt. Then we get to this...
We read the report of a
and injuring a 10-year old boy with interest. We've had
other reports about the high power batteries failing and causing
fires - one more reason we're not carrying around the electronic
dog leashes, thanks. It's one of our few sympathies with the
Luddites, but cell phones and drivers, questions about health, and
now more battery problems - thanks, but
Ned Ludd was
right. None of which is stopping
Verizon from upping it's MCI bid to $8.5 billion. ?
Speaking of buyouts,
Neiman Marcus has been on the bloc and now apparently
sold for a bit over $5 billion.
Warren Buffett5 was in
usual form this weekend for the Berkshire Hathaway annual meeting
complete with a Ukulele. A few shareholders are worried about
AIG fallout... Speaking of which, AIG has announced another
filing delay - and
3.3% of its net worth is going, going....
We took in the
Hitchhiker's Guide to the Galaxy last night as a little theatre up
in Pasadena - great movie, thanks for the fish, and the mice are
still in control. May we suggest that you be at least 3/4 awake to
see this one for all the one liners in it.
Elliott Wave International
On to Our Charts!
Write when you get
George Ure, The People's Economist
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something in advance of our regular Monday morning update, we call
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