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Sunday,
Dec. 26, 2004
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Something Breaking Loose?
We noticed this evening a major - repeating MAJOR - earthquake in the area near northern Sumatra - an 8.5 Richter scale monster: Story
Not only that, but this quake follows a reported 8.1 - 8.2 shaker near the Antarctic less than a week ago. Now couple that with these follow-ups that happened within hours of the monster quake - and let's start by looking at the times on this sequence:
2004/12/26 00:58 M 8.5 OFF W COAST OF NORTHERN SUMATRA Z= 10km 3.30N 95.78E
2004/12/26 01:48 M 5.9 NORTHERN SUMATRA, INDONESIA Z= 10km 5.39N 94.42E
2004/12/26 02:36 M 5.8 ANDAMAN ISLANDS, INDIA REGION Z= 10km 12.14N 93.01E
2004/12/26 02:51 M 6.0 ANDAMAN ISLANDS, INDIA REGION Z= 10km 12.51N 92.59E
2004/12/26 03:08 M 6.1 ANDAMAN ISLANDS, INDIA REGION Z= 10km 13.81N 92.97E
We don't want to jump to any conclusions, but the obvious is that something has gotten the surface of earth quite active since that out-of-character 6.2 quake in the Cayman Islands just about 2-weeks ago. If we were in California, I would be buying extra water jugs about now.
More Sunday morning...
Saturday
Pray for George W.
It's becoming almost a common thing now, for the "establishment" press to be scooped on big stories and it looks like this may be the case again. An indy media story claims that the suspicious bulge seen under the President's coat during the debate is a health defibrillator - and that he's probably been wearing one since his fall in 2002: http://nyc.indymedia.org/newswire/display/136872/index.php. I don't know about you, but suddenly I'm inclined to pray like crazy for Bush's health because if anything were to happen to his ability to govern, the reins of power would pass to (gulp!) Dick Cheney! Would Condi Rice become VP?
The second "not-so-merry" Christmas story comes out of Germany where it appears that some survivors of the holocaust either have or are suing the President's family for $400-million dollars based on the dealilng of the (Prescott) Bush part of the family during WW II. You can get a sense of it from the translation of the page: LINK
"An appropriate request set, communicated the federal district court New York for the lawyers of the victims the Duesseldorfer victim lawyer Peter Wolz on Thursday. Auschwitzopfer had sued in the middle of October the US president for payment of 400 million US dollar. The court New York granted George W. Bush a 20-taegige period. Bush fortune from LV slave work Plaintiff is the international project group Auschwitz Sammelklagen (Ipas). After their opinion the inherited fortune Bushs is based partially from profits from LV slave work, which is to have made its grandfather Prescott Bush by business with the Nazis in the Second World War. The joint owner of a steel company profited to described Wolz so also from the slave work in the extermination camp Auschwitz. "particularly because of the much the decision of the court, a statement astonishes discussed immunity of acting presidents to the complaint reproaches of George W. Bush too fordern", Wolz said. In order to waive the immunity of the president, the Holocaust victims had requested impeachment proceedings in October against Bush unsuccessfully with the US senate. Ipas already sued US government Before three years the Ipas represented by Wolz had already sued the US government and 40 billion dollar (30.8 billion euro) remuneration for the Auschwitz victims had demanded. After their opinion the USA 1944 could have prevented the death of over 400,000 Hungarian Jews, if the military had bombarded the approach road ways and railway bridges to the camp. The federal district court Washington had explained itself not responsibly at that time as and to the national sovereignty with military decisions had referred."
While we hope it has been a Merry Christmas for the Bush family, we can see the pressures of the job are serious.
Rare Snowfall
I mentioned that Elaine and I we driving across New Mexico ahead of the storm which dumped snow into the far Western parts of Texas earlier this week. Today some follow-up from national media: http://apnews.myway.com/article/20041225/D876M1C02.html Whyile it's clear and cool at our ranch, things are warming and we should see the 40's and low 50's tomorrow.
War Count
Nine dead and 13 injured in Iraq today: http://news.bbc.co.uk/1/hi/world/middle_east/4125013.stm
Hide Out Tomorrow
Yeah, if I were working in retail, tomorrow would be the day to take off: http://www.billingsgazette.com/index.php?id=1&display=rednews/2004/12/25/build/local/30-returns.inc
Inside Report
This weekend we explore out economic story of the year: The underground economy in the U.S.
For subscription information, click here.
Friday
Mixed Blessings
There are two ways you can read the governments latest production and income numbers out yesterday: http://www.nypost.com/business/37012.htm If you're a bull, you can buy the "told you so" version which is things have not gone off the edge of the earth yet. If you're a bear, you could say "Hear that? That's the edge of the earth approaching..." The real reason for U.S. prosperity? Outsourcing to China has done wonders for U.S. capitalists: http://news.xinhuanet.com/english/2004-12/24/content_2377818.htm
Rally Continues
The short term outlook for the market isn't half bad, as the big day dawns. One reason is that oil prices are set to decline further. http://www.bloomberg.com/apps/news?pid=10000100&sid=ayEbjIozq2Zc&refer=germany But before you celebrate the return of cheap oil, notice the latest oil deal being struck by China with Venezuela http://english.aljazeera.net/NR/exeres/3B9011F5-5889-4153-984E-7B39AE0FA877.htm
National Weather
We came through El Paso last evening running just ahead of the storm which was threatening to dump more snow on the area than folks have seen since the late 1800's. http://www.wunderground.com/severe.asp This morning, we're in a nice enough motel on the outskirts of Abilene where if you hear any sound of "jingle jingle" it's either spurs or the ammo in a Texan's pocket, with the odds of it being Santa way down the list somewhere. We're on a 26.4 dial up because as far as I've been able to noodle out, bytes flow slower when there's snow on the ground.
Rumsfeld's Presence
Was noticed in Iraq: http://english.aljazeera.net/NR/exeres/AF5962BD-943C-48A9-AF03-9CBFF51DDACF.htm Say what you will about Rummy, he is a "walk the talk" kinda guy and we respect his showing up as a sign of support for the brave and honorable young people on the pointed end of the stick. (To whom we wish special best wishes and prayers..).
Money Search
We mentioned that major bank job in the UK earlier this week. Today the government agencies looking for the missing cache are raiding IRA strong points: http://edition.cnn.com/2004/WORLD/europe/12/24/uk.robbery.raids.ap/
SA Gangs
...are believed responsible for the mass murder of 23 people in Honduras: http://news.bbc.co.uk/1/hi/world/americas/4122895.stm It seems like an unlikely place for such violence, but parts of the interior of that country are a no-man's land.
That's Him
A couple of people have asked "Who was the computer programmer that spilled the beans on writing code to steal the election? We had missed that..." Sorry, should have pointed out this link at the time, but here's one version: http://www.americanfreepress.net/html/florida_election_stolen.html
Putin's Thought Police
Interesting read about how it's hard for Bolsheviks to slam Vlad on the internet without getting their computers whacked: http://www.mosnews.com/news/2004/12/21/skovor1.shtml Of course this kind of thing can't happen here, right? (You read Patriot 2 yet? Why do you think I'm so docile lately? Can you read?) Not that I have to worry yet. If you Google the search term "Bush +the eff word" you will get 1.75 million hits, so that's a lot of other computers more likely to get targeted first... (It's 1.4 million for Bush + the ess word" There rest you can run yourself.
Russian Break Time
Their equivalent of Congress has signed a bill into Russian law that gives most citizens a 10-day winter break: http://www.mosnews.com/news/2004/12/24/holiday.shtml. Now you could ask "Why would they do that when the weather is so cold?" We have a theory: Russia as you know is facing a demographic time bomb with most of its citizens too old or fast approaching retirement. A real dearth of young people. But, give folks 10-days off in the dead of winter and a bottle vodka and come back in 20-years to more workers...you'll find a new crop of workers. That's out story and we're sticking with it.
Travel & Pilot Humor
Best of the Christmas jokes I have received this year - which may only be funny if you're a pilot or have worked for an airline at some point:
"Check ride for Santa
Santa Claus, upon trudging out to his sleigh for his annual night freight trip around the world, was surprised to find a guy standing next to his rig. Santa asked him why he was there. The man replied, " I'm from the FAA, and this is an unscheduled 135 inspection. I'll ride right seat." Santa responded, "With all due respects, sir, I've been doing this flight for over 700 years--but if you insist, well, let's go." As they both climbed into the sleigh, Santa noticed that the FAA inspector brought his shotgun along with him, placing it in his lap, with his finger on the trigger. Santa queried, "What's the shotgun for?" To which the FAA inspector grumbled,
"I'm not supposed to tell you this, but you're going to lose an engine on takeoff..."
(No animals were really hurt in the making of this joke.)
Yup, I can tell I'm back in Texas...my sense of humor has gone militant already...
On a more sincere note, Out best wishes for a Merry Christmas eve and we'll pass on tomorrow's update until some time after noonish Texas time. Say hi to the fat bag man for us...
Thursday
The Houston Attack Rumor Grows
We mentioned a few days back that there was a rumor flying around the net that a nuclear something would happen in Houston, Texas on Monday following Christmas weekend. Well, here's more on the rumor: http://www.thetruthseeker.co.uk/article.asp?ID=2596 While we usually don't report what could be characterized by the Radio & Television News Directors Association as a "bomb threat" I think this is a little more serious. My thinking is that if enough people are aware of the threat in advance, and who might potentially be behind it, then maybe it will be a pressure for the event NOT to happen. Hopefully, we'll be here to report next Tuesday that it was just a bomb threat by some ill-informed nim wits.
About this Rally
I don't have any problem with the market rallying, and although the market could open up a bit this morning and continue the all too convenient rally, the longer term picture looks cloudy to us because of the continued weakness of the U.S. dollar. http://biz.yahoo.com/rb/041223/markets_forex_3.html Despite the trend upward, when we look at how the transports are doing, we have to wonder how long can a good thing continue. More to the point: If the rally does fizzle, what pressures would there be for manipulators of prices to spawn another "terror" event to push the country into a more compliant mood for the ongoing reduction of our previous freedoms?
Like 'Nam
I frequently get email from people who don't understand why I read the Arab Press for reports on the war. The answer is pretty simple: The watered-down version of what passes for news in the U.S. is largely a me-too kind of journalism where original reporting and mention of facts that don't support the Administration's preconceived version of the truth is rare. On the other hand, what we see in the Arab press are occasional stories about how third parties are viewing the war - stories that should be lead items in the U.S. if we, the voters (I know, were we?) are to fulfill our obligation to be an informed electorate. As an example, here's an under-reported piece on how a couple of think tanks are viewing the war efforts: http://english.aljazeera.net/NR/exeres/9D84012B-190C-4A59-B640-1DCE3FA385C5.htm
On a different, but related matter, we've received word from the "Wandering Texan's" home base that the team is by now, mostly out of harms was and headed for a Christmas in Paris. We'd offer a glass of holiday cheer should the team make it back to our part of Texas before we head out for a "Cowboy New Year" down in the San Antonio area. Monday's threat, notwithstanding.
Putin Gets Honest
Well, well, well, what have we here? Vlad "no third term" Putin says the elections in the Ukraine and the elections in the U.S. were just about equally bad: http://www.mosnews.com/news/2004/12/23/uselections.shtml. Wowzer! Not that often I find Vlad making sense, especially when he says in almost the same breath that he trusts George Bush completely: http://www.mosnews.com/news/2004/12/23/trustbush.shtml. With the U.S. now spending at old-time socialist rates, I keep asking myself "Did the Communists win the Cold War?"
Tea Time?
Here's an interesting claim from Chinese media: People who drink tea tend to have less body fat than those who don't: http://news.xinhuanet.com/english/2004-12/23/content_2373087.htm We have to wonder is this report won't set up a rivalry between Cortislim and Lipton...
On the Road Again
Just can't wait to get on the road again... We had a great dinner with relatives in Phoenix last night - and tonight we should make it at least part way across Texas. This, while much of the rest of the country has adverse weather conditions, especially in the area of Indiana and adjoining states: http://cbsnewyork.com/topstories/topstories_story_358082832.html I will take care of setting up a couple of new subscribers this morning, then gulping some coffee, hitting the shower and then cranking up to continue our eastward jaunt.
Arizona's Right Move
A court in Arizona has allowed enforcement of rules that will ultimately deny some state benefits to illegal immigrants in that part of the U.S. It's all fallout from something called Prop 200: http://www.reuters.com/printerFriendlyPopup.jhtml?type=domesticNews&storyID=7165438 We don't have a problem sharing our social services with our countrymen, but the point here is that the people who will be denied the benefits are those who are here illegally. Now in the country I grew up in, people who did something illegal were punished. If there's a need to get more workers into the U.S. - fine, so be it. But there are processes to be followed, and if they are not, I don't have any problem supporting deportation - and in our book, Arizona's move ought to be followed by every other American state.
Reader Letter
Here's one:
"George,
I am a regular visitor to your site (urbansurvival.com). Even before I visit the news sites of my own country, I visit yours (I am in India). I too have a small website www.akgupta.com and I have been looking for a good, reliable and cheap host. Can you please tell me who is the host of your site? Your answer will be greatly appreciated as I can understand the demands on your time.
Thanking you in anticipation,"
The outfit that does our hosting is called www.invotion.com and they have a related site worth checking into: www.halfpricehosting.com I have had very good success with them, a few issues on stats notwithstanding, but then a lot of sites don't have the kind of traffic this one does. I have put a couple of corporate sites on the provider because they do a very good job. In 2005 we will likely move onto a dedicated server, to consolidate several domains like www.independencejournal.com which Elaine will start updating again on a regular basis when my Christmas present (a new P-4 with HT notebook ) arrives from TigerDirect and the Vaio goes back to her... Moving everything from one notebook to the other will be an all-day adventure I'm not looking forward to...
Wednesday
Iran Before Feb. 1
That's the word from our sources in the Middle East who sent us the following dispatches overnight after being out of communications range for about a week while they visited people who don't like sat-phones...
Greetings from the Mideast. Sorry to be out of touch for so long, one of the conditions of meeting with my old friends was that we not use any communication devices while staying with them. Over here while you are chatting on the phone, large explosive devices can show up. There is much to tell you about things we have seen and heard. First: every one over here expects Israel to move on Iran by the first of Feb. Second: there is much more fighting in Iraq on a daily basis than you are told. Third: and I am not sure how to express this, there is just an awful lot of movement on all sides over here. Not just in Iraq, but in all the "stans," Afghanistan, Pakistan, etc. Four: George raised the question, " will Afghanistan become the worlds narco-state?", Count on it. Count on more U.S. troops in Afghanistan for much longer than we thought. Five: Remember, Turkmenistan, Tajikistan, Uzbekistan, Kyrgystan, and Kazakstan, they're all involved. If their people are not directly involved in fighting then they are in the weapons and drug smuggling trade. I realize after a long absence, this is not the first report you probably had in mind. We have spent the past days on horseback or on foot, humping across some of the roughest terrain in the world. We are tattered, torn, worn, and sick. As we regroup, our minds clear, and hopefully we find a good supply of beer, we will tell you about the important stuff.
A Wandering Texan
"Wandering's" reports seem to square exactly with the reports of increased attacks against our forces in country including yesterdays" http://news.bbc.co.uk/1/hi/world/middle_east/4116487.stm The Arab press reports meantime on falling U.S. support for the war http://english.aljazeera.net/NR/exeres/A441C47B-5CA8-48E5-B8EE-A617367A15C5.htm but we note that falling support in polls tends to beget terrorist events.
Although common sense says "Don't expand this war" there may be no way to avoid it given the need to win and hold the oil in the region. Although I am firmly against expanding the war to Iran and/or Syria, I'm regrettably becoming convinced by the "on the ground" reports that it's coming along with an expansion of U.S. forces and probably mandatory draft registration, not to mention an attack on U.S. home soil as a "reason" for it all to happen.
More in a few minutes... working on my coffee and up a bit late as we're about to head out for the ranch this morning from our California HQ.
Oil Makes Odd Bedfellows
China and Russia forming an alliance over energy? Yup: http://news.ft.com/cms/s/4f378318-53be-11d9-b6e4-00000e2511c8.html And all to exploit former Yukos holdings...surprise, surprise. And you know that doesn't sit well with the reigning U.S. oil patch family - the Bush's: http://www.mosnews.com/news/2004/12/22/usprotwarn.shtml
Oceans 6 or so...
We notice the $39 million bank job making headlines today and wonder if there's not an Ocean's type group in real life out there somewhere: http://apnews.myway.com/article/20041222/D874DR0O0.html $39 million is a pretty good sized withdrawal. Wonder what the ATM fees would have been?
Lehman's Buying What?
China's bad debts: More than $2-billion worth if I read this correctly: http://news.xinhuanet.com/english/2004-12/21/content_2361591.htm Is this weird, or what?
They buy bad debt and then hope to collect on it? Hmmm....it's a cinch the collections work will be interesting...
An Honest Assessment
I know that Congressman Ron Paul's column "Texas Straight Talk" is probably not on your reading list, but this week's is worth reading and thinking about, especially as it seems to contrast sharply with what's dished out by the other Texan up the street from Paul's office:
"In 2002 I asked my House colleagues a rhetorical question with regard to the onslaught of government growth in the post-September 11th era: Is America becoming a police state?
The question is no longer rhetorical. We are not yet living in a total police state, but it is fast approaching. The seeds of future tyranny have been sown, and many of our basic protections against government have been undermined. The atmosphere since 2001 has permitted Congress to create whole new departments and agencies that purport to make us safer- always at the expense of our liberty. But security and liberty go hand-in-hand. Members of Congress, like too many Americans, don’t understand that a society with no constraints on its government cannot be secure. History proves that societies crumble when their governments become more powerful than the people and private institutions.
Unfortunately, the new intelligence bill passed by Congress two weeks ago moves us closer to an encroaching police state by imposing the precursor to a full-fledged national ID card. Within two years, every American will need a “conforming” ID to deal with any federal agency-- including TSA at the airport.
Undoubtedly many Americans and members of Congress don’t believe America is becoming a police state, which is reasonable enough. They associate the phrase with highly visible symbols of authoritarianism like military patrols, martial law, and summary executions. But we ought to be concerned that we have laid the foundation for tyranny by making the public more docile, more accustomed to government bullying, and more accepting of arbitrary authority- all in the name of security. Our love for liberty above all has been so diminished that we tolerate intrusions into our privacy that would have been abhorred just a few years ago. We tolerate inconveniences and infringements upon our liberties in a manner that reflects poorly on our great national character of rugged individualism. American history, at least in part, is a history of people who don’t like being told what to do. Yet we are increasingly empowering the federal government and its agents to run our lives.
Terror, fear, and crises like 9-11 are used to achieve complacency and obedience, especially when citizens are deluded into believing they are still a free people. The loss of liberty, we are assured, will be minimal, short-lived, and necessary. Many citizens believe that once the war on terror is over, restrictions on their liberties will be reversed. But this war is undeclared and open-ended, with no precise enemy and no expressly stated final goal. Terrorism will never be eradicated completely; does this mean future presidents will assert extraordinary war powers indefinitely?
Washington DC provides a vivid illustration of what our future might look like. Visitors to Capitol Hill encounter police barricades, metal detectors, paramilitary officers carrying fully automatic rifles, police dogs, ID checks, and vehicle stops. The people are totally disarmed; only the police and criminals have guns. Surveillance cameras are everywhere, monitoring street activity, subway travel, parks, and federal buildings. There's not much evidence of an open society in Washington, DC, yet most folks do not complain-- anything goes if it's for government-provided safety and security.
After all, proponents argue, the government is doing all this to catch the bad guys. If you don’t have anything to hide, they ask, what are you so afraid of? The answer is that I’m afraid of losing the last vestiges of privacy that a free society should hold dear. I’m afraid of creating a society where the burden is on citizens to prove their innocence, rather than on government to prove wrongdoing. Most of all, I’m afraid of living in a society where a subservient populace surrenders its liberties to an all-powerful government.
It may be true that average Americans do not feel intimidated by the encroachment of the police state. Americans remain tolerant of what they see as mere nuisances because they have been deluded into believing total government supervision is necessary and helpful, and because they still enjoy a high level of material comfort. That tolerance may wane, however, as our standard of living falls due to spiraling debt, endless deficit spending at home and abroad, a declining fiat dollar, inflation, higher interest rates, and failing entitlement programs. At that point attitudes toward omnipotent government may change, but the trend toward authoritarianism will be difficult to reverse.
Those who believe a police state can't happen here are poor students of history. Every government, democratic or not, is capable of tyranny. We must understand this if we hope to remain a free people." http://www.house.gov/paul/tst/tst2004/tst122004.htm
The only concern I have about publishing the remarks of the Honorable Congressman is that despite his membership in the GOP, I have to believe that being so honest is bound to end me up on a "list" somewhere.
About the VIX
Our comments on the Volatility Index yesterday got us some interesting comments. The most useful:
"A quick synopsis:
Since February of 2003 the national debt limit has increased from $6.4 trillion to $8.18 trillion, that’s a hefty increase of 33.2% in the matter of 2 years.
We are awash in a sea of cash due to the Fed’s monetizing the debt .
Cash will gravitate to where it can get the highest return.
Foreign organizations that are paid in dollars are rolling those dollars into what can give them the highest rate of return.
Dollars are being re-invested into the US, specifically the stock market where foreign owned dollar net return is 15%.
Market advance stays intact as long as US fiscal policy maintains current course or an alternative investment begins to offer a greater rate of return.
Ah, just so...
How We Travel
I thought I'd share a few secrets of successful travel with you as many will take to the roads tomorrow. We're leaving a day early in order to have a pre-Christmas dinner in Phoenix tonight. Tip #1: Let's your wife start packing her stuff 2-days ahead of time. Tip #2: Travel llight. I travel with three bags: One is a leather bag full of clothes, shaver, toothbrush, and such with the clothes rolled up and consisting of two pairs of pants (besides what I wear out the door) a similar number of shirts, socks and shorts. I plan trips so that I can be near a washer/dryer every three or four days. Then throw in a dozen Folgers's singles coffee bags... That's bag #1. Bag #2 is the computer: A Vaio with backup copies of my whole MS Office suit, Adobe Pro 6 and the usual assortment of small peripherals like wireless card, PCMCIA network card, various phone and network cables, and whatever paperwork I'll need to stay busy. Bag #3 is where it gets interesting: The FireWire gear is in here: The DVD burner, the external 80 Gb hard drive, the Grundig shortwave, the GPS, the batteries for the portable electronics. The FinePix camera, the Yaesu VX-1R ham rig/scanner and charger, the Alinco 5-watt ham rig, plus assorted other electronic goodies - FireWire cables and such. The reason to "go lightly" is so we can retrieve more stuff from the ranch. Interesting, one of our local colleagues asked:
"Hello George, Have you seen Alaska's earthquake map this day ? There is a string of 5.0's occurring along the sound, it looks almost as busy as California as far as shakers are concerned. You couldn't have left at a better time. Say, do you have any room for a few hundred pounds of silver in your caravan ?"
The answer: I don't move other people's goods, but about glad to be out of L.A. over Christmas? You betcha - I don't sleep as well here as I do over at the ranch.
Tomorrow's report will come from Phoenix, if all goes according to plans...
Other Reader Comments:
Hi George,
I love your site. Wish I had subscribed earlier, but consider me a long-term subscriber in the future.
I would like to purchase your recently released book(s) on how to do a web site but can't find a link to where they are listed.
Please let me know how/where to order them, and please keep publishing too!!!
Best Wishes...Your Other Reader
Oh here are the links: If you want to subscribe to Inside Report, Click Here.
If you want to look at our eBooks, CLICK HERE. Unless you're looking for our How to Build a radio controlled surveillance platform video/workbook, in which case, click over to http://urbansurvival.com/lastweek.htm and scroll down a bit. I will get that added to the bookstorm sometime over the holidays...
Tuesday
Sick of the Market?
You're not alone. I received an email from a fellow yesterday who from what I can tell was previously a happy traders. But following yesterday's big up and flop, he said...
"When a major player in the markets doesn't care about making money, you won't either." (trader name - ), Dec., 2004 I believe this platitude is one for the age.
I watched this phenomenon today to a degree not closely matched in any other support program that did not have a 9/11 prefix.
I'm out. They can have their little backyard bbq. this is not just theft... this is unparalleled fraud. with no desire or hope for profit, huge dollars poured into the Dow. The VIX might shortly be under 10 as the last fools, even dumber than me, realize there is no reason to fear or to buy insurance. With P/E's so high, one would think the market cannot go up much, but this time it really is different. I just do not want to wallow in the pig slop with these creeps and their sleazy game, but I just might."
In a continuation of the conversation, I asked him for a bit more insight into his situation: "Thanks, George, my point is the same, less the expletives. There is really not much to add. Obviously, I am not the only one to notice the manipulation. the VIX is now below 12! I believe it will be under 10 fairly shortly when people even dumber than me realize the game is over. The stock market is a dead stinking carcass. "
If someone put this chart in front of me and said "OK, I think around April 2003, the powers that be started really working the market to keep it from collapsing...." I might - if I was conspiracy minded - have a tendency to believe this. While I rule our conspiracies, the chart argues that something has changed in a HUGE way.... One of my favorite Yahoo pages has dropped the ^VIX from its indices listings, too. So something has been changed, for sure. Does the volatility index just suddenly not matter (or move) anymore?
I share this with you because between now and Christmas, the market is almost sure to work high http://biz.yahoo.com/cbsm-top/041221/c3a5f57409f1507a7f747009a27d0cc9_1.html but then again, it's the close that will matter. And while there's a lot of "Good times are just around the corner" going about, the reality is that the economy still has serious problems, and as one senior Wall Streeter told me yesterday, a lot of the hype around the NASDAQ has been centered around the XM radio phenomena. The market is always looking for the "next big thing" but the idea of paying $10 a month and expecting to accrue pricing power when CD's, MP3's, and AM/FM are competing seems like just more fracturing of an already splintered market. But hey! I hung up my day trading shoes about two years ago when I reached the same conclusion as our reader.
This not to say there won't be any more rally left - of course there will be. But we can also have the historically unique situation where we could have the Dow at record levels and everyone out of a job, too. Or worse, working for minimum wages.
Where's that Damn Fat Guy?
Ain't Santa supposed to be around delivering cheer to all the good traders and traderettes? Well no sign of him showing up at Tiffanies yet according to this NY Post article: http://www.nypost.com/business/36898.htm
Not that Tiffanies is alone. The Arizona Central notes that things are less than showers of cash elsewhere, too: http://www.azcentral.com/business/articles/1221retail21.html Of course you could find the same news in the Washington Post: Link. And you'd get the same from Reuters, too. Story
Still, true believer media think the situation is in hand and moves by retailers will save the day. Take for example, Bloomberg's report on price cutting and promotion Link or the quietly buried pessimism in this one: Story
You want to know the real reason retail is soft this year? The Department of Homeland Security. Yup. Check it out: Santa travels by air, right? So doesn't it stand to reason that if he's not flying yet someone has held him up at the gate? Why, I bet the old fat dude is having to empty his bag at some Alaska outpost right now. "Turn on every one of those toys!" "Do you have a return ticket?" Gotta wonder how the reindeer like the body checks, too...
Tony in the Green Zone
Tony Blair has done a well-orchestrated visit to the Green Zone in Iraq: http://apnews.myway.com/article/20041221/D8742C980.html Where he didn't go was Mosul where another 22 people were killed in an explosion: http://news.bbc.co.uk/1/hi/world/middle_east/4115145.stm
Speaking of that part of the world, a UN report on human development in the Middle East will not be issued as an official report, rather it will be issued under the name of its authors because the report is critical of the U.S. occupation of Iraq and pokes a few jabs at Egypt's President for grooming his son to take over the reins of power there next: http://english.aljazeera.net/NR/exeres/16B46DC0-45CA-44B8-BBE0-6A7AA7A4E722.htm
One other important Middle East development to keep an eye on: Russia is reportedly negotiating to build up to 7 additional nuclear plants in Iran: http://www.energybulletin.net/3688.html If the report is true, and Russia inks the $10 billion deal, this will cause all kinds of issues for the neocons, who we insist still have designs on the oil resources of Iran and the smaller supplies of the Sudan. Oh yeah, and Syria: http://english.aljazeera.net/NR/exeres/B7365608-39EB-4D0D-9FEF-F66A3EE5231F.htm
Prediction for the new year: We will see a return of the mandatory military draft in 2005 - by hook or by crook. Although we don't buy in to the conspiracy theorists who say a massive terrorist event larger than 9/11 will be executed on American soil to bring about the draft, we notice that virtually all National Guard units that can move are out of the country and so if anything happened, the stage is certainly set for foreign troops to come assist maintaining order in the U.S. Not that I believe it, mind you, but the pieces have been moved just so...
Russian Gun Control Story
How can Russian police misplace 200,000 guns? The answer is here: http://www.mosnews.com/news/2004/12/21/weapons.shtml
Harbinger of Famine?
Call us nuts for continuing to add to our food stocks, but here's a report saying rice production is falling short of demand: http://news.xinhuanet.com/english/2004-12/21/content_2361085.htm Now what happens to food prices when supplies dwindle and we get another round of mad cow/avian flue and depletion or mercury poisoning of fish?
Economic Story of the Year
OK - We've got it: Our economic story of the year: The Underground Economy. The report and details are only for subscribers to our Inside Report series. Subscription info.
Monday
Waiting on Santa
We only have the balance of this week to wait for word on retail sales. But so far, it's looking like a crapshoot - at least if you go by the NY Post Sunday story at http://www.nypost.com/business/36704.htm. I guess we would have to fall into the category of average - and we're just doing small checks for grand children this year. We figure it's environmentally responsible. My experience is that when you give kids a little cash for Christmas, they never seem to want something else - except maybe a little more "senior" presidential image on the bill.
Globally, there's a bit of pressure on Christmas this year. U.S. officials warned last week of the danger of home equity credit lines, and people are already worrying a fair be about debt - while in Australia, consumers are being urged to exercise some modicum of fiscal constraint: http://www.abc.net.au/news/newsitems/200412/s1268752.htm
One other thing that will impact shopping is the weather, and judging by the reports over at www.wunderground.com things won't be too back till right after Christmas. The interesting picture we're right now is the jet stream push of cold air down toward Texas where we will be visiting over the holidays. http://www.wunderground.com/US/Region/US/JetStream.html We're also planning to flee the big city here a day ahead of the pack if possible.
Iraq Bombings
One of the observations about the strategy of Islamic extremists that has always interested is is how they seem to love things that go "Boom!" - and this weekend, sadly, they were at it again, blowing up opposition members in Iraq: http://apnews.myway.com/article/20041219/D872UBO80.html Not getting as much play is the apparent targeting of Iraqi election officials in this: http://news.xinhuanet.com/english/2004-12/19/content_2355504.htm
Tale of Crass Commercialism
We notice the song "On the Bump of My SUV" has been moving up the charts, but according to a report out of Tennessee, not without a little "help" http://www.tennessean.com/local/archives/04/12/63065885.shtml?Element_ID=63065885 But hey, I'm sure at least some of the fans would say "it's to support our troops..."
Not Quite Fortress America
It seems that we're not the only folks who have noticed that America's National Guard is out of the country and not in place to respond should we have a large-scale civil emergency. There are two reasons for our concern. First is a report from a BBC fellow that goes into the problems of our pourous borders with Mexico - something the Bush administration hasn't tightened up because of the economic consequences to Texas of having real border enforcement. http://news.bbc.co.uk/1/hi/programmes/from_our_own_correspondent/4104055.stm The second reason is that we have the typical bunch of rumors about a terrorist attack coming over the holidays (check out this one: http://www.thetruthseeker.co.uk/article.asp?ID=2592 ) but at the same time we're mindful that even a large-scale earthquake in (gulp) California, might be used as a pretext for foreign troops coming to the U.S. for "law enforcement duties" while our own sons and daughters are off being the sharp end of the Bush Administration's gunpoint democracy plans for Oil Patch East.
But back to the Mexico problem for a moment: That country is trying to prevent inflation from rampaging as it has in the past - and more notable, unlike the U.S. where the minimum wage has moved nowhere for how many years? Mexico workers at minimum will be getting increases: http://www.ledger-enquirer.com/mld/ledgerenquirer/business/10455555.htm
More on Kerik
The news about failed DHS nominee just keeps getting worse and worse. Today's NY Post now raises questions about some stock trading adventures: http://www.nypost.com/business/36788.htm
Not to play "pile-on" journalist, just passing it along. So is the NY Daily News: http://www.nydailynews.com/front/story/263864p-225883c.html
Driving Lesson
It boils down to "When a blizzard is coming, don't take the family car out for a jaunt unless you absolutely have to". 80-cars were involved in a white out pile up on Interstate 80 unless you have to http://www.cbsnews.com/stories/2004/04/01/national/main609905.shtml And those watch for ice signs that seem a joke in the summertime around parts of the South will mean something later this week as cold air presses southward.
Salvation Army Gold
Who could make a mistake like this? The Salvation Army reports getting gold coins in its red kettles again this year: http://www.suntimes.com/output/news/cst-nws-coin20.html Nice to know that some of thems that have, share.
UFO's or Santa?
Lots of coverage in India of a huge increase in UFO sightings in the country this year. Not that it has economic consequences, but it's interesting to notice how India/China region is getting the same kind of report clustering that happened in the US in the 1950's: http://www.indiadaily.com/breaking_news/16543.asp Also of interest the slide show at http://www.indiadaily.com/editorial/12-19c_1-04.asp We've also picked up some "micro UFO" reports with "little people" only a few inches high involved. Not leprechauns - probably evles.
High Tech 'Stuffers"
Ideas on how to spend more money at Christmas abound: http://www.suntimes.com/output/business/cst-fin-watch20.html Although I have to tell you that with the exception of a few offshore sailors I know, the need for a GPS watch is pretty slim. I tend to put goodies like that in the same category as SUV's that never leave the pavement. Faux adventure.
Top Story of 2004
What do you think the most important economic story has been for 2004? Time Magazine has been getting tons of press for naming George Bush the man of the year, but we'd rather see some of the powers behind the thrown come out a bit more - like Wolfowitz or Rove. Clearly, the U.S. is in the grip of the neocons, so let's focus on them a bit more.
Click here to send us an email! We'll collect votes and next weekend on Inside Report, we'll award our Top Story and see where it's pointing for 2005.
More Monday about 9 AM Eastern - so check back.
Urban Survival: Our Annual Report
In lieu of our regular update on the subscription side (Inside Report) - I've decided to issue the first-ever UrbanSurvival.com Annual Report and ask for the equivalent of shareholder feedback on our operations and plans.
Results of Operations
The amount of traffic to this web site has increased modestly this year. The number of individual user sessions on an average daily basis has increased approximately as follows:
2000: 1,500 visits per day
2001: 2,250 visits per day
2002: 3,800 visits per day
2003: 4,900 visits per day
2004 5,979 visits per day
Moreover, as we look at traffic figures for our most recently completed operating month, we find that nearly 300,000 page views are served up per month:
November 2004:
| Page views 285,018 | ||||||||
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We note that traffic to the site does tend to follow seasonality (traffic is a bit light over the holidays) and traffic runs slightly counter to the market. When the market is rallying, our site interest declines a bit, only to head through the roof when the market heads south. A few other impressive stats for our most recently completed month:
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| Total Hits | 1,471,042.00 |
| Total Bytes Transferred | 15.15 GB |
| Average Sessions Per Day | 5,979.17 |
| Average Pageviews Per Day | 9,500.60 |
| Average Hits Per Day | 49,034.73 |
| Average Bytes Transferred Per Day | 517.12 MB |
When I started this site to explore the general topic of the Kondratieff Long Wave in economics, as an extension to the old Long waves discussion group which operated from www.csf.colorado.edu as my Masters capstone project in 1995, I didn't really expect that it would become a sort of "living hobby."
Short Term Plans: Our January Work Plan
Every once in a while I put together a small-scale plan for the UrbanSurvival.com web site - and this year, I thought I would get serious about it because I will have about a 10-day break over the Christmas period, during which we will be back in Texas briefly visiting friends and family. Of more interest to you - our reader - are some of the things which are on the horizon for January and February of 2005. Here's the outline:
Web Bots Are Back for 2005
Although my genius level computer programming colleague Cliff has not found suitable work in the computer industry, he is putting together a new major web bot run for January 2005. Frankly, until yesterday, it didn't look like it would happen, but the mere mention that we were going to turn on our future predicting software technology results in literally hundreds of hack attacks on the server for www.halfpasthuman.com. That got Cliff mad - and more than a bit suspicious - as when something like this happens, we might infer that there's something in our collective future that someone doesn't want us sensing as we do - through linguistic shifts on the internet that seem to precede major news events by anywhere from 5 days to 4-months.
A quorum of shares has been committed and we will proceed.
At this point we have the funds pledged which will cover the costs of the bandwidth, electricity, and assorted little machinery costs, as well as (main point here) be able to compensate 'Igor' for his diligence and labors at $10 US/hour. (Igor needs the hours as his day job has whittled him down to 18 hours a week and he is a family man, as with all of us, responsibilities for the care of others.)
It is true that we have not had enough commitments of funds to cover my time, but that is less of an issue for three reasons: first, we will be offering the ALTA105 report in an after-the-fact version for $250 via PDF file after the run is complete. The funds from these sales will go toward compensating my time; second, I have had 417 cracker attacks in the last 4 days launched at my machine. This has really pissed me off. Third, I owe Igor a debt of gratitude for previous work and if my labor can send something back his way, then I am pleased to be able to provide the energy.
Most of the cracker attacks have been rusky, or eastern eu in origin, though that means nothing. Nonetheless, stubbornness being a personal failing, once they pissed me off, that was it. Circumstances and attitude have combined into a FU attitude and so off we go to see just what it is that they are so keen to mess up. Or steal.
In any event the schedule follows:
Dec 18 - commitment letters out * buy-in links open - verbal commitment on the bandwidth costs will be given to our OSP - begin lexicon tuning, prep the processing handler programs
Dec 19 & 20 - lexicon tuning, systems fire up and test
Dec 21 - sign bandwidth commitments and pre-pay bandwidth costs
Dec 22 - router activated , t-1 fired up, data gathering test (about 4 hours - pre process for bugs as we are using a new version of prolog and have consolidated several of the old Perl scripts into an intelligent agent prolog program) - THEN GO on data gathering!
Complete data gathering sequence is currently calculated (more an intelligent guess than actual - as flow on net affects actual run times) to consume 24 days (at 24 hours per day gathering) and will end more or less around Jan 11th.
We are going to process in-stream as we have on the last 4 runs. This means that we will begin to have some results the last week in December and will aim to have the first report available for download on or before Jan 2. We anticipate a report every 7 to 9 days thereafter until all the data is processed with an anticipated total of 5 reports (maybe 6 or 7 depending on volumes). Our intent is to be able to process and provide reports posted by Sunday of every week in January.
A note about the delivery: I am using some older software here that will not allow us to convert the reports to PDF with the ability to print or copy. We will offer the PDF in this format and then anyone who needs another version that will allow text manipulation for their PERSONAL use, can request an HTML or word doc form (whatever we prepare it in - not decided yet) for printing/copying.
A progress page is being added to HPH in case there are any notes as we go along, however, anything urgent or material to this group will also be sent out via this distribution list. Including the ID/Passwords for downloading the reports as they appear.
Well, basically, that is where we stand at this point. The buy-in links are below. Thank you very much for your interest.
Link http://www.halfpasthuman.com/HPHALTA105.htm to the alta105 page.
This weekend, I will be putting up a links page which will give interested people an opportunity to read the whole store of the development of this amazing technology. One thing to mention is on costs: There were some people who subscribed to the earlier web bot runs (the 100 series, not the new 105 series). You'll recall at the time that subscriptions were priced at $30 and were accompanied with a strong disclaimer that the service may be discontinued at any time. Well, because of economic reasons, they were. However, for those who anted up the $30, the subscription for the new runs will be $70.
I've had a few readers ask if there will be summaries of the reads on this web site. The answer, unfortunately is NO. The reason is this: As you may know, the whole web bot project involves sweeping the internet in general and discussion groups in particular in our quest for linguistic shifts. When the bot run is underway (as it will be for many weeks on this run), public mention of even headlines on this site tend to be picked up on several dozen other sites and news groups - and these in turn propagate outward. Thus, while I've been generously given access to the data, the only output that will be posted will be headline only forms and then only for readers of our Inside Report series. Subscription Information. Even there, the headlines will be relatively general and will not include more than a sentence or two from the runs because this run is being underwritten by a couple of what I'd have to label and "significant investors" and they don't want the inputs to the linguistic model polluted with excess discussion.
We covered the problem of feedback into the web bot system way back in July 2001 when the model was screaming "There's a world changing event coming within 90 days!!!" - that event, of course turned out to be the attack of the WTC and the resulting War on Terror which by any standard has been a paradigm shifter of large scale. Here's how we explained the pollution of model space at the time: Ref: http://www.urbansurvival.com/tip.htm
"In the course of writing about the model during the past week, an interesting thought kept coming to mid: If a couple of guys in a think tank came up with something that has the potential to be accurate, why hasn't the government built a huge model of an even grander scale that this small (22 servers is small compared with the government's horsepower), why doesn't the government put up a massive public model so that we can all modify our behaviors on a day to day basis and do a better job of "co-creating our own futures" [after Everest's many worlds interpretation of quantum mechanics]?
The answer it turns out, is that there may be such a model, but we can never learn about it. As the think tank found out, as soon as we put the information about the model up on Urban Survival, the model shortly after began to lock up. Here's their email advisory:
We have discovered something very interesting. Your site has started to pollute more than 8 of the input streams since this morning. So the model is collapsing under its own regression algorithm for time.
When we run the model formulas, they now spin down on an iterative spiral in on themselves. It is because we are finding text from your warning appearing in the input streams coming back from the robots so they follow the chains and come back to themselves so to speak. Also the links are passed to the next layer which does the processing and all the values are spiraling up as the iterative examination for weighting starts finding, in essence, its own dictionary.
Looks like the model is collapsing. I can't get the formulas past some of the initial analysis. I run out of processing power even with multiple CPU computers.
Well, we know not to do that again.
FYI. On the last run prior to break down, the tech bot brought back some interesting info that MSFT is starting to spin desperately, the 'activation' required aspect of the new windows xp and office xp. That they are doing it prior to launch shows that their test groups are showing resistance to use will be very high and that they are running into the rising wave of public reeling under the privacy impacts. So long term your bets are on with that firm. [Ed. Note: George shorted msft 60's this cycle on Thursday]
Also, freak (very rare) wind storms NOT hurricane related crossing FL east to west. 70+ mph. Also rupture of nat gas lines in Blaine Washington. Not clear yet whether lines were involved in any sort of explainable construction accident.
As to any new info out of this model I doubt it. I have to wholly recreate it, as well as redo all the bots to scrub for ourselves. And now the further complication that our servers are going poof when the ISP goes under in about 10 days.
So all the scripts are shot anyway as they grew up with referential specifics to my ip address, but now our contamination of our own data streams actually validates the lattice algorithm that we use for our propagation formula so that at least is good.
Well, we should know more by Monday.
As they used to say in the cowboy movies, "Well, if that don't beat all!" Apparently, when some of the posters to the Prudent Bear boards started referencing this site, the model got into a complex set theory equivalent of a circular reference. "
One thing of note though even on the free size of this site: We will continue to use the model outputs as a "steering tool." In other words, when the model comes up with its predictions in January, in spite of the face that we won't pollute with forecast outcomes, you may see a subtle shift in the kind of news items that we focus on. For example, if the web bots mention an entity (a concentration of data points) around a particular set of words in the "conditions of earth" area that mention excessive water, we might steer some of our news coverage toward more keyword searches for rain, rising sea level, impact of glacial melting, and so forth. That's about all that will change on the free side of this site.
More Publications Coming
Our second bullet point for the January work plan will be the publication of more books that are aimed at helping people live a better - and less television oriented - life. One of the eBooks that we will be offering up will be our "How to Live Free" book. Weird as it sounds, with a little cleverness, a person and have a dandy standard of living with an income of less than $10-thousand dollars per year, but it takes a bit of thinking and doing to get there. The reason for eBooks is simple: it helps to generate incremental revenue to offset the expenses of this hobby run amok.
Tightening Up Subscriptions
I have to admit it, I've been very lax on access to Inside Report. A number of subscribers who have subscribed to the service way more than a year ago have had free access for several months (and in a few cases, over a year since their renewal dates. However, I've set aside one day at the range in about two weeks to go through and audio who should have access and who should not.
Expanding our Correspondent Network
A broader goal of 2005 will be to recognize and promote the interests of some of our many contributors. As you might guess, a site of this magnitude doesn't just happen on its own. We get perhaps 5-10 news tips submitted every day from reader - like you - that point out interesting snips of this or that which are worthy of pursuit because they fit our news profile of either influencing, or likely to influence the direction of the economy.
In particular, I'd like to acknowledge the valuable contributions in 2004 of the following:
My colleague Cliff: As a source of great ideas - and as a hard-headed thinker, we've been able to keep a fairly even keel about most things, although the direction of inquiry is often not what you'd call main stream. His site, www.halfpasthuman.com reflects the diversity of his interests.
The Houston Bureau: We have another colleague, Bernard, who works for an oil and gas outfit who sends us lots of material - including those great slide this year of the under reported shut-in oil and gas in the wake of Hurricane Ivan. He's a great set of eyes on the energy front. He's also keeping us posted on the Republic of Texas movement which is seeking compensation for the alleged U.S. non-payment of the debt which purchased Greater Texas.
Our Canadian Bureau, but by Tim B. sends us perhaps 20 stories a day on a continuing basis - nothing seems to miss his overview - and in particular he's watching the attack on health independence as pharmaceutical companies try to bottle wellness by attempting to take solid nutritional supplements off the market and so forth. Tim's view is that of a citizen of the world concerned about the corporatist agenda.
The Fractalist: G. Lammert gets a mention because he's out pushing the envelope on saturation theory and fractals. Although I don't get a chance to publish everything he sends me, and even though some of the short term trading calls have been wrong, there's a real lack of consideration in the (economic) literature about consumer saturation. One reason is that there are so many variables - advertising, planned obsolescence, hedonic replacement concepts, peer demand - all of these things mount up to a nearly impossible to quantify set of issues. Nevertheless, as we found in working on the web bot issues with Cliff, unconventional approaches to conventional problems sometimes yield surprising results.
Ehor: I still keep in touch with my colleague who worked with me on the Debtberg project. You can read that archived work at http://www.urbansurvival.com/muc2.htm. It essentially argues that despite the pronouncements of policymakers, the debt economy can't go on forever - at least the paper-based one we have now - and that all it takes is a good whack to a nation's confidence and things head south instantly. While we hope and pray that doesn't happen, markets which are hyper-extended often self implode in a process economists label an endogenous event.
Cheryl In Research: Cheryl is researching and sharing her work as she pursues three important questions: 1) Why are there corporations set up in states like Delaware with names of U.S. government agencies? 2) Is the process of UCC Redemption real and are those claims real - that we are all just corporate chattel until we extricate ourselves from what is effectively a government lien against all our personal property and income pledged to guarantee the debt of the United States to the bankers cabal better known as the Federal Reserve? And 3) Why does the Federal Reserve continue masquerading as a government agency when it is in fact a group of banks and bankers accountable to no one but themselves? We'll pursue gently from an academic standpoint, because we're mindful that if one steps on the "tail of the beast" that unintended consequences result. And if you think "Like Waco?" We can only offer that we honestly report and pay our taxes each year in order not to become a target.
The Gold Trader: Well connected with the "in crowd" our friend the Gold Trader blesses us with more articles on a daily basis than we can usually publish in the time we allot to this project.
There are many others, dozens in fact, although some because of sensitive positions, can't revealed. But they are like minded, freedom loving Americans in positions of local, state, and federal government, as well as the military. We are deeply in their debt for their willingness to share information that is "hidden" in the public domain..
Key Issues Focus in 2005
Because we don't yet have our new 'steering tool' outputs, we are looking at a fairly conventional set of broad issues for our focus in 2005. Specifically, we will be toning down coverage of political issues - not because of a lack of interest, but because "What's the point?" For example, Elaine and I went out to dinner last night and got to talking with a high-end programmer who makes game engines for the top 5% of video games on the market. "What the hell gives when the programmer who wrote the election stealing code comes forward and admits the crime - and it doesn't even make the national news?" he asked. This gets us directly to our point. The objective of this site and our research is not to promote any particular view, except those of a Constitutionalist and Free Man, but to the degree the general population is not concerned about the reduction in basic freedoms, we'll be content to forecast future events rather than make any attempt at "leadership."
In keeping with our worldview, that it's the physical systems of life that define our lifestyle decisions, we will focus on the following:
Food: The U.S. for the first time has become a net importer of food in 2004. This is a frightening development. At the same time giants of pharmaceutical and chemical industries are consolidating their control over seed stocks, such that heritage (unpatented seeds) are becoming harder and harder to obtain. From a legal standpoint, we will watch the court cases that are progressively stealing the publics rights to free access to the fruits of the earth by claiming intellectual property content through both grafting and genetic engineering. On the economic standpoint, we'll see how much pricing power the new food controllers choose to exercise, and on the practical side, we'll be closely watching the health impacts (such as allergic reactions) to what Elaine refers to as Frankenfoods.
Shelter: The biggest story for 2005 is likely to be the leveling off of housing prices as interest rates rise. There's little doubt that housing starts will slow because the average income of workers has slowed and with price appreciation beyond "officially reported" numbers in the Consumer Price Index, the amount of money that may be spent on housing has likely peaked. In the place of new household formation, we expect 2005 to bring with it a phenomena which we've labeled at "nest returns" - noting that in my own family, two out of three children at ages 23 and 27 have moved back in with their mother due to socio-economic reasons.
Transportation: We've heard reports that none of the big car rental outfits have purchased new stocks for 2005, although we haven't been out to the local airport to see if it's true. Nevertheless, we will pay close attention to a couple of obvious trends in transportation. First is the number of air travelers who are willing to put up with travel. We'll be on the lookout for companies and products capitalizing on this trend ( www.webex.com and others) to sell web-based conferencing as an alternative to travel, although with functionality built in to Internet Messenger, and to a lesser extent in other "chat" programs, there doesn't appear to be much pricing power in the field yet. To the extent that air travel habits change, so too will the fate of major hotel chains. The second transportation trend will be automobile sizes: We are starting to see a bifurcation with one group of consumers heading firmly down the SUV path while the Scion/Mini/Hybrids and micro cars definitely becoming an increasing market segment.
Communications: We think that 2005's big stories will be device integration, telephone pricing, and building pressure on untaxed use of the internet. We've already seen the merger of cell phones with both PDA's (Palm, Treo, et al) and video cameras (a toy more than tool in our view) and the coming merger of portable infotainment utensils such as iPods with phones - a move Apple is pursing with Motorola - and one that is sure to involve the XM radio crowd, too. The subject of cheap phone pricing will continue to evolve as literally dozens of products are being introduced into the Voice of Internet Protocol (VoIP) phone space. We look for cheap prices, at least early on. But as the demand on the internet continues to build, driven by everything from streaming delivery of movies to video data streams from cell phones, the very future of the internet will likely be questioned further in 2005 as the economy softens and inflation returns. Driving the push for regulation/registration/taxation will be claims that the internet is too serious a challenge for more conventional components of the economy such as retailers.
Environment: This one is a no-brainer. When you look at all the studies which have been done, there is no question but that oscillations of weather from one extreme to another will continue. Our focus in 2005 will be on the economic consequences and hedging strategies available to regular folks like us. So whether it's the relationship between the sun and earth that sets up weather, as Jim McCanney notes at his site, or the potential for scalar weather wars, to the more mundane but critically important global warming, there will be costs associated with the environment, and those must be watched.
Energy: If you thought energy was expensive this year, you ain't seen "nothin yet." That's because it appears that the world's major energy producers have decided not to pump all the world's energy at prices less than $50 a barrel, although this change has not been publicly stated. Instead, we see indicators such as OPEC's decision to cut production in 2005 because of what it says will be falling demand. But wait! What can cause falling demand except either an energy breakthrough (not likely) or a good-sized recession (or worse)? That brings us to our outlook for 2005's economy in general.
Economy: For subscribers, we have explained our expectation that inflation in 2005 will likely come in around 5.5%. The reason is that in order to continue to accumulate debt, the interest rates need to ratchet up and with that, inflation comes along quite naturally. At the same time, we look for $500 gold early in the new year, and although we have been way early on most of our gold calls, the general trend has been gold rising faster than the rate of inflation for several years. We note that governments are doing their best to revalue their existing gold reserves without putting them on the public market because they need to beef up their books and selling gold to themselves to revalue from $35 levels makes a lot of sense. http://www.miningweekly.co.za/min/news/today/?show=60985 Yet even when this is done, the inflation of paper money supplies - and the dilution of their purchasing power - has been frightening.
Unexpected Events: Our subscriber forecast for 2005 economic conditions does not extend more than the first half of the year because of our expectation that between now and June 30, 2005, we will see another paradigm shifting event, which brings us back to our interest in the future-sensing technology embodied in the web bot project. Yet even without the technology, we can already see the reasons to expect the unexpected. The attack on the world trade center took not months but a number of years since it was first targeted by terrorists. Thus, we've been in a period since the 2001 events where the daily probability of a terror strike has increased, rather than decreased, despite arguments to the contrary.
We hope to be wrong on this, but when you look at the aggregate risks facing the world, on everything from weather to 'way out' theories about Planet X, massive economic collapse, destruction of the food chain, carbon dioxide build, and combine it with terror risks, it seems like the odds of making it another year with the status quo maintained seem slimmer by far.
Management's Performance
I try to keep one question in mind for most of the day - and it's one that many people don't consciously pose to themselves, so I'd like to share it with you. The question is this: "Is what I am doing right now creating value?" My theory is that if I spend as much time creating value during the day, I will ultimately rise above fellow humans in terms of holdings and security. Put differently, about the only value created from watching television is creating some miniscule value for a TV station to sell to an advertising agency in terms of viewership, which in turn keeps the wheels of capitalism going.
That said, a subscriber wrote to me recently asking a tough question and suggesting that I deal with it as an Inside Report:
HI George,
You mentioned you could buy a house in LA, this made me think:
How have this Ure guy's theories done for HIM? I bet we'd all be interested in examples of how your radical thinking have made you rich! Tell us about your yachts!!!!
I know you've disclosed a lot of your "holdings" Texas house etc. But overall in your life, are you better off financially because of following specific radical ideas?
It seemed a fair question, so I wrote him back:
I'm not sure that it would be an interesting article, but I appreciate the thought. Here's why:
Two people can have the same net worth, say $150,000 and be in vastly different situations.
One, for example, could be in the "leveraged" position, so commonly found in America today. That is to say in financial terms, assets minus Liabilities equals owner's equity.
So their picture could be:
Assets (house, car, boat, timeshare, and "stuff") = $550,000.
Liabilities as loans payable could for example = $400,000
So any economist/financial consultant would say this person has a "net worth" of $150,000.
On the other hand, we could have a person who has:
Assets (a paid-for house, wholly owned car, stored food, etc) = $150,000
Liabilities $0 having paid cash. L= $0
So the one person is totally beholding to the economic system, while the other is pretty much (or at least to some degree) free of dependence on it.
Then it's only a matter of where you want to live on that scale. Personally, I prefer to live on the no debts end of the scale. But whether that buys me anything other than a restful night's sleep every night, is something that we will find out in the fullness of time.
But suppose for a minute that if you wanted to go anywhere, they (government or the powers that be) ran a check on your credit and debts. Say you wanted to go to some foreign country. It's entirely possible that at some point in the future you could be stopped because you could be seen as fleeing your debt responsibilities. (In a sense we already see this as some number of Americans discuss moving to Canada and New Zealand as a protest of the Iraq War.)
I have heard from several sources that this is the direction that the PTB want things to go in the future - giving people privileges of travel etc based on their credit scores. It's a worse scenario than any terrorist act, but the danger is that if you have debt, you are under someone's thumb.
As I have said many times, there are two ways to run your life: For maximum gain (in which case leverage ho!) or the other way, which is to minimize the potential for loss (in which case, live below your means and pay cash).
There's no doubt not a single "right" answer for all people, but you know which one I believe in and live...
Make sense?
That said, our assets minus liabilities increased again this year. We still drive an old car but there are no balances due on any of our credit cards. This means compared with a "leveraged" household, we can operate 5-10% more efficiently because we are not making payments to use our money - the hidden tax and thievery known as interest.
Reader Responses
I'd encourage you to take some time, whether you are a casual reader or subscriber, to sit down and ask yourself a couple of soul searching questions:
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What is the point of "work"?
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Is my "work" really fun?
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What can I do about that?
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Can I reduce my expenses?
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Can I increase my income?
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Am I kidding myself?
When you get done with the exercise, if there are any new topic areas of general interest - or ways that you think what UrbanSurvival provides in our 45-minutes daily and 6-hours on weekends, please jot them down and send them along.
My goal has been to build a popular, growing, and functional web site. Very few people visit our extensive archives of past articles, our bookstore, or participate in the economic discussion facilities we've built and provided. So tell us what to do next and that improve our service to you because the one question we like to ask all the time is "What can we do to increase our value?"
Click here to send us an email. If your browser doesn't open your email, send it to george@ure.net and make the subject 2005 plan so my email router will put it into the right reading pile. Thanks.
One last thought: The Dow closed last year at 10,453.92. Based on current market action and the overhanging condition of the market as shown in our program trading chart below (*subscriber side only), it seems reasonable for us to expect the Dow to close either at this week's level, or at levels similar. Based on 10,649 this week, and assuming the market is able to hold these levels to year end, we would expect to see stocks for the year turn in a 1.8% return on investment, not counting dividends which vary by the kind of company your happen to invest in. Please bear in mind that since the first of the year, the Federal Reserve has pumped up the money supply has been pumped such that 6% more money is sloshing around the economy.
There are two important calculations for 2004 that we hope to have encouraged you to think about. First, if your stock portfolio really gained only 1.8% for the year and money supplies are up 6%, then we would suggest that the decline in purchasing power of your portfolio (yet to be realized) on your principal would be -4.2%. If our comments about the economy have caused you to consider alternative investments, such as decreasing your personal debt exposure, stocking up on food, getting in shape, obtaining more education, planning a second, third or fourth career, and maybe moving out of a big city, then we have to believe that our efforts here have served a noble cause. The second calculation is how much paper does it take to make you happy and what are you willing to sacrifice for more paper? Without your own clear operating plan for 2005, the "means to the end" is easily confused with the ends themselves.
News from Elliott Wave International
Write when you get rich,
George Ure, People's Economist
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