Life in the Context Shift

It's really starting to read more like "life in the blender" with all the things shifting now  - into new positions that will require people to do some serious "re-centering" in order to keep their balance emotionally and mentally in this increasingly strange world.  A thoughtful Lubbock (TX) reader offers this overview:

"Add it all up. Ambassador to Venezuela gets his car egged in traffic. Cyclist pound on his car. CNN releases the video. That required editorial permission. Mexican labor riots in the streets here in the US. An immigration bill that won't fly for most people. Civil war (pretty much) in Iraq. Iran tests new weapons and brags about them. Can cut a large war ship in half. Still promising to open the oil bourse. Wall Street stagnant. Debt out of site on all fronts and subject to catastrophe if anything shifts the wrong way. Bush down to 36% at best. These are the elements that call for drastic measures from the White House to protect the American people. I can see it coming. One big event and we shut the Republic down. Context shift?? An understatement. Even my old conservative republican buddies are ready for this man to be gone. People are waking up. That is a big shift in thinking when you have known them as long as I have."

And to be sure, the ride up this box canyon looks bad on the energy front, with the British Times reporting that the "World 'cannot meet oil demand'  (some see a relationship between the price of gas and presidential popularity) and the rumors that Treasury is printing up "new money" at breakneck speed keep resurfacing on the net.

Then, thanks to global warming (more appropriately blamed on the sun changing, than humans as I read it) has been going nuts, killing 11 in the Southeast/Midwest.

Judas Debate

Another big context change involves the release this week of the Gospel of Judas.  While some scholars are saying that this could revolutionize the perception of Judas, a number of readers have already written in that they are not about the discard the popular (until this week) image of Judas as a "bad guy" and "betrayer of the Lord"  Comments like this one are common:

"Hmmmmm.......how long after he caused YAHSHUA'S/CHRIST'S crucifixion did he write this 'gospel"????  After all, he was supposedly hung himself right after the event!  I out this in line with all the middle ages religious objects from that time span.  Baloney!!  "

 

Another reader writes:

 

"The so called "Gospel of Judas" is one of many books written by various cults a few centuries after Christ came to Earth. It wasn't written by anyone remotely near the Apostles and it was totally rejected by the early church fathers. It's sort of early Christian pulp fiction. There is no need to rethink any position because of this book. "

Here's the problem: Dates of the Gospels of the various apostles have been a widely debated subject and this week's word of a "Gospel of Judas" just throws gasoline on the fire.

Safe Deposit Boxes

The other day (Thursday) I asked people to report in on any "strangeness" involving "red back dollars" and revisions in safe deposit box handling by banks.

On the subject of safe deposit boxes, while we haven't found specific references to any formal DHS plans to open boxes in the event of a national financial crisis, we were able to find a number of references to anti-money laundering efforts of the Federal Financial Institutions Examination Council and what they are putting out as "Red Flag" customer activities.  Among these, as it relates to your safe deposit box, the official documents reference:

1. Frequent visits. The customer may visit a safe deposit box on an unusually frequent basis.

 

2. Out-of-area customers. Safe deposit boxes may be opened by individuals who do not reside or work in the banks service area.

 

3. Change in safe deposit box traffic pattern. There may be traffic pattern changes in the safe deposit box area. For example, more people may enter or enter more frequently, or people carry bags or other containers that could conceal large amounts of cash

 

4. Large amounts of cash maintained in a safe deposit box. A customer may access the safe deposit box after completing a transaction involving a large withdrawal of cash, or may access the safe deposit box prior to making cash deposits which are just under $10,000.

 

5. Multiple safe deposit boxes. A customer may rent multiple safe deposit boxes if storing large amounts of currency..

And plenty of folks wrote in the tell us that keeping cash, precious metals coins, and firearms in such boxes is prohibited now by most safe deposit box rental agreements.

All of which gets us to asking the question, "What is a safe deposit box good for?" A few banks won't take jewelry.  No one in their right mind would keep a will in such a box because banks routinely secure boxes upon hearing of someone's death - keeping the heirs and spouses out, and then on documents like car insurance or house insurance, those can be kept (along with the will) at a friend's home some miles distant.

Red Backs

The story of red backs in another one of those "Plenty of smoke, little fire" kinds of stories.  Lots of readers pointed out that Sean David Morton reportedly mentioned this a couple of years ago as a "remote viewing" outcome.  And then, of course, the recent changes to the $10 bill include some red, so it's easy to see how such things propagate around the net.  But if there's some nefarious plan to flood the world with red-backs, it's hard to see it yet.

Microsoft and Open Source

A great article to wade through at TGDaily on Microsoft's possible movement toward (rather than running and screaming from) open source computer software.

Peoplenomics

This weekend, Peoplenomics (subscription info) looks at "The Toilet Paper Index" and other alternative measures of personal economics.

Tell Your Friends

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Friday April 7, 2006

Employment #'s

The good people over at the Department of Labor have just issued their monthly employment report.  A couple of reminders as you read this:  a) People are not counted as unemployed if their unemployment benefits have run out.  This is because the unemployment rate would be about twice as high as "reported" if they were.  This is politics out of the hands of BLS and managed by corpgov.

The second point is that Table A-12 (Alternative Measures of Labor Underutilization) is a much better read of the economy.  That's where you find the software engineers now scraping by as baristas and burger meisters. That said, look for a rally as the happy spin begins!

Here's the headline part:

Nonfarm payroll employment increased by 211,000 in March, and the unemploy- ment rate was little changed at 4.7 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Over the month, job growth was widespread in the service-providing sector.

Unemployment (Household Survey Data)

Both the number of unemployed persons, 7.0 million, and the unemployment rate, 4.7 percent, were little changed in March. The jobless rates for the major worker groups--adult men (4.1 percent), adult women (4.1 percent), teenagers (15.7 percent), whites (4.0 percent), blacks (9.3 percent), and Hispanics (5.4 percent)--showed little or no change over the month. The unemployment rate for Asians was 3.4 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-- also was little changed over the month. This group accounted for 18.4 percent of the unemployed, down from 21.5 percent a year earlier. (See table A-9.)

Total Employment and the Labor Force (Household Survey Data)

Total employment was up in March to 143.6 million; the employment-population ratio--the proportion of the population age 16 and over with jobs--was little changed at 63.0 percent. The labor force participation rate remained at 66.1 percent and has been at or near that level for a year. (See table A-1.)

The number of persons working part time for economic reasons edged down to 4.0 million in March. This category includes persons who indicated that they would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs. (See table A-5.)

Persons Not in the Labor Force (Household Survey Data)

Nearly 1.5 million persons (not seasonally adjusted) were marginally attached to the labor force in March, slightly less than a year earlier. These individuals wanted and were available for work and had looked for a job some- time in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 451,000 discouraged workers in March, about the same as a year earlier. Discouraged workers were not currently looking for work specifically because they believed no jobs were available for them. The other 1.0 million marginally attached had not searched for work for reasons such as school attendance or family responsibilities. (See table A-13.)

There was an improvement in the U-6 category of A-12: Dropped from 9% to 8.5%

Do Nothing Markets

While it's not my place to whine about the markets, because as I've told you, our family fortune (both dollars) are tied up in paid off land and home, a couple of ounces of silver and a few of gold.  Nevertheless, I would be remiss if I didn't remind you that two Fridays ago, the Dow closes the week around 11279.7 and a week ago it closed around 11121.1.  The midway point between them is 11,200.4 - so if you were going to ask me to stake a small wager on where the markets will end up this week, that'd be a guess.  The market has been stalled for many weeks now, unable to "get traction" on the upside, or (conversely) to fall apart.  Gold and silver look healthy, though.

---

I had an interesting thought about "economic factions" this morning while I was staring alternately at the latest futures reports and the first cup of go juice.  It went like this:

Bankers and Robber Baron's hijacked America from its lawful owners, the people, somewhere between 1862 and 1913 (by which time the Federal Reserve Act and permanent income taxes were enacted).  Since that time, banksters have been charging our own government "rent" for the privilege of printing paper money.  (It's they who should be paying the government, but follow my point.)

What if we are seeking a "second hijacking" of the political system taking place today.  Suppose for a moment that a group of major stock/bond/derivatives players went to the misnamed Fed and issued an ultimatum.  "You either give us free money (now that the Japanese yen carry trade [the previous source of free money] is ending, or we are going to bring down the whole financial world!"

To this, I would expect the banksters to say (in so many words) OK, we'll do that - by issuing your digidollars quietly in order for you to take the market where you will, but two conditions: You can't let on that we're doing this is the first one, and the second is that you push back any collapse of the markets until after the republicans leave office.  They're simply too good for the death industries plus their war-mongering has allowed economic "growth" in ways that benefit us, although not necessarily all people.  The War on Terror you see has saved the world from collapse so far.

The vision winds up with the stock/bond/derivatives contingent shaking hands, going to dinner with, and having cigars and brandy after with their partners, when one remarks: "Do you really think the American people would care even if they figured out what we're doing?" one asks.

"Nope," replies another, "All we have to do when the people start to stir in the direction of real reform - like lobbying and such - it to bait them.  We've got immigration and La Raza going now, bird flu in the wings, we can set off another terror event any time...and the war keeps as many young men and women out of the country so no one has time to think - they're all spending so much time trying to make ends meet.  Very well crafted, if I do say so."

"I'm sure glad no one thinks about who really runs America these days - they vote out the IRS, the Federal Reserve, and there would go our free money."

"Aw, you worry too much.  We own both political parties and there's nothing to worry about..."

Two 1/2  Party Sideshow

The GOP is in a terrible position.  There's what's been described as a "split" with the GOP on immigration.  As I've tried to point out, if there's a split, its because some republicans still have an understanding that they report to the people.  The others report to lobbyists, special interests, and corpgov.  Yeah, I'd call that a split.  Come into focus when the interests of Americans and corpgov interests collide as in the case of the immigration (cheap slave labor) bill come up, but no one is willing to call it what it is.

DeLay Op's Slimy Tactics

Backers of embattled Tom DeLay encouraged heckling of a democratic candidate over in Sugarland this week. I have to wonder about the intelligence and integrity of supporters who behave in this manner.  Whether they realize it or not, DeLay may yet end up in the "iron bar hotel" now that one of his top lieutenants have agreed to further ratting him out.  I don't know about you, but I don't rally to support people who are hip deep in corpgov payoff scandals.  Maybe it's something in the water over in Sugarland that clouds one's judgment.

The Immigration Sideshow

The two well oiled parties in DC have worked out a way to try (they think) to pacify patriotic Americans with double talk, and yet at the same time allow hordes of invading workers from Mexico and South America to remain here working for their underpaying corporate masters.

"Under the Senate proposal, about 7 million undocumented immigrants who have lived in the United States for at least five years would be guaranteed legal status if they paid fines and back taxes, worked for six years and learned English. About 3 million more migrants who arrived two to five years ago would have to go to a border crossing and re-enter the country legally as temporary workers, entitling them to up to six years of permission to work and a chance to apply for legal status, as well. An additional 1 million to 2 million people who came here illegally in the past two years would have to return to their home country before they could apply to come back."

Folks like me, who say send everyone back and set incoming quotas - and raise the minimum wage to something realistic, are little more than a pain in the side of the corpgov steamroller.  All aboard!

Bush Knew

That's the shocker allegation in court papers filed Wednesday in the Valerie Plame outing revealed on Thursday.  But again, we see one group of people who are "my president, right or wrong." The other group says "no one is above the law."

The CorpNews Sideshow

Earlier this week I was bemoaning the idea that when there's a slow news week (we've had a couple back to back here as the context change - Mexico's pending successful invasion of America) sort of settles in.  I argued that on Friday we would still be reading about the Thai Prime Minster's exit.

• Here's a BBC report.

• Xinhua coverage

• Boston Globe op-ed.  (Why the BG offers an opinion on such a minor story is beyond me, but again, I suppose it has to do with the lack of real news lately.)

I rest my case.

Judas - A Good Guy?

A number of my deeply committed friends are having to do some serious rethinking of Church dogma about Apostle Judas.  The Gospel of Judas this week sheds new light on Biblical events.

Saturday's Follow Ups

Check back tomorrow morning (Saturday) for the red-backs report and the outcome of our Safe Deposit box question...

Thursday April 6, 2006

Libby: Cheney Cited Bush as Authority for Plame Leak

Secrets Revealed moves on - and hats off to www.thesmokinggun.com for some outstanding legwork.  They found the court filing by the Plamegate special counsel Patrick Fitzgerald which says, among other things, that Scooter Libby says the "Vice President advised defendant that the President specifically had authorized defendant to disclose certain information in the NIE. Defendant testified that the circumstances of his conversation with reporter Miller – getting approval from the President through the Vice President to discuss material that would be classified but for that approval – were unique in his recollection. (Page 20 of 39)

Fine reporting by TSG.

Weak Retail Sales

The nation's retailers are citing a couple of reasons for disappointing March sales figures.  One reason given is cooler weather.  Another one is the lateness of Easter this year.  But, the People's Economist has a much more simplified explanation: People are tapped out.  Credit card minimum payments are up, ARM's which Fedhead Easy Al was pimping are turning around to bite consumers as rates are climbing, and the nation as a whole has a negative savings rate.  In other words, money is coming out of home equity and bank accounts to keep the standard of living where it is.

This is a very tough thing for American's to stomach.  There's an unwritten ideal in the Land of Brave that if you work harder, you should be able to get further ahead, not deeper in debt.  So when retail sales slow, I'm much more inclined to pull back to the view from 40-thousand feet and say "Hey, you don't suppose that having no spending money has something to do with it, do you?"

Then there's hoopla about jobless claims falling.  Guess what?  People running out of benefits aren't counted in the unemployment numbers, so the real rates reported for unemployment are likely twice (or more) higher than what's reported by corpgov.

Looking ahead: This morning the Bank of England held rates steady.  I'd give the Fed here another quarter and then hold.

Massachusetts Health Care

Think of this as like the State (Commonwealth in this case to  be exact) tell you it has mandatory health insurance requirements about to be signed into law.  I have mixed feelings on this.  Part of me says it's a tax on all humans (therefore a cunning tool of creeping governmental/corpgov powers over citizens who are already in second place in the "powers" department.  The other part of me says it's a good idea.

I expect like most "creeping government" moves, the Massachusetts situation will be a good thing at first and then corpgov will twist it all up into a billion dollar boondoggle.  Such is the pattern of such efforts. Sell 'em the good, and screw folks once past.  Sound like a prescription drug bill?

BFD

That's Bird Flu Death.  This time it's a swan in Scotland but there's almost no doubt that it will be coming to America sooner than later.  Remember what we've been saying for a year about restrictions on travel?  Try this "Measures to restrict the movement of poultry, eggs and poultry products from these zones will be brought into effect immediately."

A Safe Deposit Question

First things first:  I have had a couple of reports from readers about supposed changes to access to safety deposit boxes and what federal officials have planned as actions in the event of a market run/panic/run on banks/ and so forth. One reader reports running into less-than-cooperative bankers when the reader removed personal items from a safe deposit box.  A different reader reported that mysteriously, because the box hadn't been opened in a while, that the keys had been changed without advising the customer.  So this morning, you have a chance to report any "Safe Deposit Box" anomalies by clicking here.  If you're a bank employee and would like to pass along what is really going on anonymously click here.

There many "conspiracy theory" reports about, but I'd appreciate some first-hand information from readers.  I don't expect many real reports - but I need to ask - it's the reporter in me.

And speaking of oddball reports, try this one:

Two Tier Currency Rumor

I am trying to find a source of a disturbing rumor in an email or two yesterday about so-called "red backs" - which it was speculated might be the beginning of a two-tier currency system.  The buzz is that a "normal" bill, used inside America's borders would continue to be the "green backs" and they would be heavily devalued in the event of a monetary crisis, and that "red backs" would be used outside of the US.  The "red backs" would not be devalued.  The idea is that if your greenbacks only bought, say 25-cents on the dollar outside America, we would, as a nation, import less.  (Might cause the immigration problem to reverse, too.)  At the same time, while countries outside the US would retain their purchasing power, then our exports would soar, at least so far as we make things any more.

If you have any certain knowledge or source of this rumor please click here to pass it along.

Gold and Silver Climb

Gold futures popped over $600 this morning.  Silver was over $12 this morning.

The Mogambo and Me?

A reader who has been watching our period of quiescence reports that the Angriest Man in Economics (TAMIE, a/k/a the Mogambo Guru) has been feeling the same "something ain't right" this week, too:

I read your urban survival webpage yesterday morning and got a chuckle. This was basically the same theme as the Mogambo Guru had in his last article (titled "A Rustling in the Bushes").....things are too quiet....like falsely quiet. I had this image pop into my head of you and the guru hunkered down behind a big rock with your cowboy hats and lever-action Winchesters, scouting your surroundings.. You look at the guru and say "things are quiet". He nods and says in a relaxed Mogambo voice (RMV), "Too quiet". (TQ) He basically painted this same picture in his article. I got a big chuckle out of it when it hit me this morning.

 

Meanwhile, silver has broken $12.00/oz. Have a great day!!!

It's an interesting image, but the Mogambo has Mogambo's Fortress of Solitude (MFS), which I presume is guarded by Elite Forces of the Mogambo (EFOTM).  And me?  I'll pass on the Winchester.

Cliff, over at www.halfpasthuman.com (which is set to release Part 1 of ALTA 1006 this weekend), has taken up archery of late - with any luck, I'll be able to talk him into one of the fancy black bamboo and composite recurve hunting bows he's building.  The image I chuckle about is Cliff and me trying out these new 50/60 pound long draw hunting bows, while Igor and the Mogambo, with smallish apples super glued to their heads, eye us nervously from 100-yards off.

Walter Mitty Does Wall Street

That's this week's report for subscribers to our premium service, Peoplenomics.  It also keeps the lights on here on the free side, too.  Subscriptions are just $30 a year and are much appreciated.  For details, click here.

Wednesday April 5, 2006

This is Outrageous!

Patriotic Colors Banned!

Check it out:  Starting Monday the Oceanside Unified School District (think San Diego area) is banning all flags and patriotic clothing! I don't have a problem with banning flags of foreign countries (Mexico is a foreign country, in case you have forgotten).  But to ban US flags and patriotic colors? What the hell is going on here?  I am flabbergasted.  Am I the only one that remembers this is America? Well, there goes the few days of quiescence... 

Meantime I now have two bumper stickers I'm thinking of selling:

(Red, white and blue colors)  "This ain't Mexico"

 

"Stop immigration problems - boycott Mexican pot."

Quiescence Ending

While the first run of the new ALTA 1006 report are due to start popping out this weekend (subscription info), it's always interesting to get a short "advance" on where things are.  At the moment, we've been in a period of Cliff and Igor describe as "quiescence" - linguistically it's a sort of calm before the storm - which is due to run out in a few days time and we'll get back into the usual swing of things in the news world. For now, the lack of shocking headlines it has been an interesting break, but also as we've cautioned, it has been a time to continue preparations, set long term strategies in motion, and be ready for the emotional roller coaster that we start up on in May and which breaks into open "conflict" along about September 1, and then rises into June 2007.

This period of relative calm has been interesting.  The kinds of questions coming from readers has been different over the past week.  "Should I buy a house if my company will give me a down payment if I commit to them for 5 years?" wrote one reader.  "Only if they put you on a no-cut employment agreement of equal term," was my advice.  Another writes "Do you know the gold chart at the top of this page is screwed up?"  "Yes, but I expect Kitco is aware of it and will have it fixed as soon as they can," I offered.

Overall, though, it has been a "Week on Hold" in that so little has actually happened.  Even looking at the Dow average, the indoos have moved a whopping 5 points (down) in the past week of trading.  That's not what I would exactly call a thriller for the volatility index, which since February, has been so quiet as to make the serious options addict even nuttier than usual.  While I'm in option recovery mode (with three more years of carry forwards to show for it), a glance at the long term chart shows that since March of '03 volatility has really dried up. Those heady high rolling days of a VIX of 45 and money-making swings are all but a distant memory.  The VIX yesterday was 11.14. Wake me up with the market moves, would yah?

On the other hand, there are enough people consciously (or otherwise) feeling the calm before the storm later this year gold and silver have been taking a breather here, so as not to get ahead of their apparently powerful bull market still likely in its infancy. Although the rumored Iranian oil bourse has been nixed for a while, Dubai is out with plans to launch their gold and silver exchange (complete with options) in the fourth quarter.  Would they be planning such a market if their outlook was for less interest, lower prices, and illiquidity of existing metals?  Not hardly.

So over the next week or so, we're waiting for the quiescence to turn - morphing into big headlines and a return to tension building.

DHS Bust

Horrible "egg on the face" for the Department of Homeland Security as one of their employees has been busted in a child porn investigation.  While we make the assumption that this is an isolated incident, it's got to hurt the honest career professionals of DHS.

TV's Cult of Personality

Oh boy, when the real meaningful stuff dries up (quiescence) out comes the cult of personality to fill up time on news casts.  As if the mainstream media's (MSM) coverage of itself is the ultimate filler.

• Fox coverage of Katie Couric going to CBS.

• NYT coverage of ABC losing Meredith Vieira to NBC to replace Couric going to CBS

• TV Week on Fox ratings

• Geekzone on MSNBC's Windows Mobile news service

• NewsBusters on the Washington Post on Keith Olbermann

• Interactive TV Today on expanded TV Emmy Awards

• India's Television 18 buys a stake in JobStreet Corp.

• Toronto Star on TVO, CBS, UPN, A&E, etc.

Are you getting the point here?  "We will either report the news or become the news." might be a cynical enough way to look at things.

Life Extension

Another way you can spot the periods of quiescence in the new business is by looking at something I call "story life."  The story life concept goes like this: When a big news story happens it pushes other (older or less important) stories out of the "lead" position.  For the past three or four days now, I have been reading about the Prime Minister of Thailand throwing in the towel. In a period of quiescence, reporters trip over themselves to come up with new angles on this otherwise "Who in the West cares?" story.

Back when I was running a newsroom full of very cynical reporters, we made terrible tasteless newsroom humor about leading four or five days after the death of some notable with "This just in, so-and-so still dead!"  OK, a bit insensitive, but one reason a lot of big city reporters hit the scotch a bit hard now and then is that while there's a certain "buzz" to being close to the "action" it's also hard on the soul.  Reporters don't have the option of saying "Nothing going on worth worrying about now, we'll get back to you when something pops./  Nope.  Money runs news.  So fill'er up and git 'r done.

Good news (as proven by ratings) doesn't sell papers, so reporters go looking for scandal, death, doom, etc. When you think about it, people read the news for the same reason they go to auto races - the chance of seeing something spectacular and life threatening.  Since I hung up my reporter notebook, I've perfectly satisfied to watch cars going fast and turning left when local stoplights turn yellow.  I save a trip to the speedway by doing this. The left over time gets invested in a book on something that I can gain from. But I digress.

Bet you a beer that I will still be finding Thai Prime Minister Resigns stories tomorrow and maybe Friday.  The news scene is that quiet.

The ultimate "life extension" story?  Republicans vowing to tackle ethics.  Been hearing that crap since Nixon took a hike.

Stories Not Covered

Still, there are some meaningful things going on that are current and will likely have some economic impact on us.  For example, the French labor protests, continuing today, are likely to impact France's competitive stance in the global marketplace.
 

Another big story is the report by Amnesty International on how the CIA flew clandestine prisons to keep them on ice. 

A biggie that is not getting mainstream - but we've talked about it previously in some depth - is what happens to the world when culling (read: killing) of poultry becomes a worldwide phenomena as bird flu takes hold?  There's a report that a protein shortage is already starting in Gaza because of the bird kills in Israel.  Now, rather than reports on itself, wouldn't you think that responsible (and less ratings crazed) media would focus on the notion that we've penciled out that suggests millions will die of protein shortages when bird flu goes global?

With protein shortages looming, pirates have hijacked a Republic of Korea fishing ship off the coast of Somalia.  No word who the no-goodnicks are, but its clear the proteins will become a global shortage problem going forward.

War Vote: Leave Now

Want another BIG story being buried by MSM?  Madison Wisconsin voters passed by a 68% margin a referendum calling for the immediate withdrawal of US troops from Iraq.

Snow Job

Treasury Secretary John Snow may be leaving.  Then along comes George Bush with the "He's a valuable player on the team" rap.  Which I figure to be the kiss of death.  Bush said something similar about the FEMA guy, right?  Policy suggestion for Bush:  Tell the staff not to quit until the replacement is in hand, then do everything at once.  The current approach drags stuff out forever and leaves the administration tainted as what kind of a ship?  You got that Karl?  Have the CEO say "I found someone with a better skill set for the next series of plays we need to run..."  This way it looks like snow senses the dollar crack up and is leaving the ship while there are still lifeboats for the elites.

Poor Plan is Good Plan

Wal-Mart is planning to open stores in distressed urban areas - a change of their tactics from their regional/rural focus. If I was writing a strategic planning paper, I'd have to say its a good move.;  Folks in big cities are due to get poorer, as lifestyles will continue to come down along with wages as the Second Depression takes hold.

Labor Bites

Delta Pilots have voted to authorize a strike.  While most experts put the odds of a strike at about 10%, I'd put them higher. Management is in a box and the pilots know it.

Union troubles also biting Denver where a transit strike continues.

Tuesday April 4, 2006

Big Picture Update

So here's the "Big Picture" for you as we muddle toward "Tax Day" and the conclusion of our "context shift."  To recap, the web bot project (which is in another run, ALTA 1006, click here for subscription info) has done an incredible job telling us where to look for the "flow of news" events these past few years.

We are in a period with two major underlying themes.  One of these is "Secrets Revealed" and there's plenty enough there to keep our attention.  The other is militancy, which we'll get to in a moment. Some examples of secrets revealed:

• The Tom Delay case.  Latest: He won't be seeking re-election and he's resigning from CONgress..

• We also note that there have been so many "secrets revealed" that prosecutor Patrick Fitzgerald is likely to seek additional indictments.

• At the same time, we are reading reports that the Bush administration is going full steam ahead with efforts to punish reporters who publish state secrets. Depending on which side you are on, this is either to stem the flow of damaging information that could damage our war-making efforts, or it's a rip off of freedom of the press. Both sides have valid points.

The key thing here is that this "secrets revealed" stuff will go one for some while yet. This biggest secret (still being pushed under the rug and glossed over) is that Florida 24th District Congressional Candidate Clint Curtis says yes, he helped design and build vote-stealing software:

"I am a former Republican who became a whistleblower that came forward and testified to Congress under oath, regarding the request from a sitting congressman to build a computer program that could, without detection, flip your vote in an election. This manipulation would allow a person or political party to take control of voting machine and decide who wins the election, regardless of the true vote count. In March of 2005, I passed a polygraph test as to the accuracy of my statements. "

Then we have the Abramoff case, the Libby indictment, and so on.  Secrets revealed and still being revealed. 

The second major descriptor set has been going to the idea of "militancy" and started with Cindy Sheehan's arrival last year at Crawford. Sheehan today it's reported, has received an apology from Georgia Republican Jack Kingston who apparently called her a "nutcase."  With the war not going well - and likely to be left by this administration for whatever comes next, perhaps the Georgia congressman sees that Americans don't want to hide from the truth.

Yes we're in a war on terror.  No, Saddam Hussein didn't crash a plane into the Twin Towers.  The administration played what has to be one of the biggest "bait and switch" deals in history here.  The fallout (besides budgetary) are reports that depleted uranium (shells used in Iraq) are now quietly poisoning millions globally including here in the USA..  So much for secrets revealed.

Encounter with Scarcity

Here's the latest chart update - looks to be continuing to build as a topic of interest - as predicted, I might add:

Watching the Invasion

Secrets reveals shades into "militancy" and right on schedule, we've had a full belly of that in the past couple of weeks.  Although it's not spoken in Mainstream Media (MSM) the back yard "over-the-fence" non sequitur is this:  Americans are willing to welcome anyone - provided they follow the rule of law we're proud of and assimilate into an operating country.

When it becomes an invasion, to my way of thinking, is when they march under the flag of a foreign country (Mexico) and run around getting whipped up talking about mythical Aztlan.

American's in the main are damn proud of their country.  Thanks to our easy exit policies at the border, anyone who wants to march in America under some foreign flag, is welcome to move back to that country.  The notion of "reconquista" of California, Arizona, New Mexico, and part of Texas is an intellectual fraud perpetrated by professional agitators, who ought to know that the real "reconquista" was the retaking of the Iberian Peninsula.

Americans are fine and generous people, but sometimes not very bright.  People marching under a flag of a foreign nation inside our hard fought borders are, the way I see it, trying to impose a different government - and that's insurrection.  March with Old Glory and work to assimilate and everyone is welcome.  I have Vietnamese and Indian friends who have done precisely this: Assimilate.  Learn the language, become citizens, and "live long and prosper." 

Start talking about turning back the clock, and we'll see Native Americans pushing to send Spanish-speakers back to their country of origin, which by the way, wasn't Mexico.

The problem is that despite America's "open arms" to those who will play by the rules, we see "militancy" shading to "conflict" August 31/September 1st.

Can we all just get on with life? Italians, Germans, Jews, Italians, Japanese, Vietnamese, and almost every other country (every country in Africa, for example) who sent sons and daughters (or had then kidnapped and brought here) here have assimilated into a Great Country.  If we wanted to be like Mexico, we would move there or annex it.  And look what French separatists have done to Quebec.

Speaking of Canada Going to Pot...

They won't be any time soon.  That is to say, a measure to legalize marijuana in Canada has been shelved for now.  {Police cheer, booze peddler lobby wins, eh?)

Secrets Revealed

Clint Curtis is running for Congress.  Who?  He's the computer programmer who blew the whistle about efforts to build (a/more) vote stealing software:

I am a former Republican who became a whistleblower that came forward and testified to Congress under oath, regarding the request from a sitting congressman to build a computer program that could, without detection, flip your vote in an election. This manipulation would allow a person or political party to take control of voting machine and decide who wins the election, regardless of the true vote count. In March of 2005, I passed a polygraph test as to the accuracy of my statements.

If I were in the district (Florida's 24th) I'd vote for him, just for the "sand in the Vaseline" factor for the yet-to-be-convicted crooks in DC.

McKinney Case

You may have heard that Congresswoman Cynthia McKinney got into a tussle with a Capitol police officer last week for going past a checkpoint without her congressional ID pin, then failing to stop, and then apparently slugging an officer who tried to stop her. Looks like the case could be headed for prosecution.

Britain's New FBI

They call it the Serious Organised Crimes Agency - SOCA for short.  Britain, which hasn't had a sharp stick to poke at organized crime is now doing something about that.  With over 1,000 gangs, there ought to be plenty to do.

Climate Change

Huge flood problems in Central  Europe.  27 dead (so far) this week in Midwest and Southern USA storms.

We Did Our Part

We read that sales have declined again at GM and Ford in March.  Chrysler racked up a 2% gain.  One reason:  The Dodge Ram pickups are really popular and owners have high loyalty.  The fellow across the road bought a new one - after drive his 2001 Ram 55,000 meticulous miles.  So we bought the 2001, he got the new one.  Lot's of Dodge boys here in Lone Star land.

Fake Out Rally

If you bought into the market at yesterday's peak of more than 1209 points up, I hope you went short from there.  It was a big fizzle yesterday, and more open up, fall down action is what I'd expect going forward.  I know, "skeptical 'wrong-way' George."

Monday April 3, 2006

$600 Gold this Week or Next?

Although the markets are looking healthy - and we could see a 40 point pop to the upside around the open this morning, there's a good news, bad news, kind of thing here.  The good news part is that the Dow will be going up.  But the bad news is that the Dow is going up.  So how could the Dow going up be construed as "bad news" by any rational person?  (Not that I'd make that claim, mind you.)

I've been operating on a very curious notion for a couple of years, ever since I was handed my (expletive deleted) when the options market turned in 2002.  Specifically, I have this sneaking hunch that the markets are being valued not on the future prospects for profits, but more on the order of real estate.  And the implication of a real estate model for valuation of corporations is important how?

It may well be that we're now in the "second phase of life" for corporate entities.  In other words, in the early days of the markets, one might argue that corporations were valued based on their present and expected earnings.  Now, thanks to running out of resources at a global level, we may see that corporations (as we reach the limits of the big Petri dish called Earth) will become valued more as physical assets that have some modest income producing potential from their franchise area. 

It's sort of like a hamburger stand's SDLC (system development life cycle).  In other words, when you first open a hamburger stand in a new town (think back to the first Big Mac, if you're old enough).  It was a new and exciting thing.  And, not surprisingly, the hamburger joint was priced in the marketplace not just on the basis of how many hamburgers were sold (and could be sold) at the new stand.  Instead, pricing was about a combination of present operations and future expectations.  And the stock of McDonalds had one hell of a run.

However, as the market saturates, and other entities enter into competition, the nature of the pricing model changes.  It makes a transition from current and future growth to franchise income as its mode of valuation.

Which brings us full circle to the US marketplace.  My suspicion is that the Dow (and subordinate or parallel high tech proxies) are running out of innovation space and the modern valuation concept for companies is now franchise operations - which I'd call the equivalent of "rent" in the terms of expectation setting.

In real estate, when you're building your first house, you build based on expectations of growth (a bigger family) and so forth. However, the second, third and n'th houses are based on expectations of franchise/rental income.  Yes, companies still have profits and losses, but they pay a rent of sorts  to operate in what I call the businessphere.

The "rent" a corporation pays (and is thus valued by) might be equal to breakeven operating revenue plus some contribution to either profit or expansion in the businessphere.  As soon as projected income goes negative, or profits sag, the company is revalued lower (as a beat up rental house would be) but at the same time, the status quo benefits from inflation.  This model helps to explain why a company with incomes up 5% are considered good, even though when you back out inflation, such companies are just treading water.

This is probably why if we have inflation expectations ramping up in anything approaching a "sellable" way, e.g. a target around 5.75 or 6% by the Fed, we might actually see the markets remain semi-stable because of an underlying asset-appreciation that occurs.  Given stable incomes, and growth of book value (aided by some stock buyback plans) a CEO can make a fat pile just exercising stewardship instead of leadership.  Keep the franchise going, keep the rent coming in, and use profits for stock buybacks to drive up prices of remaining shares, and running a company that wins the stock-price game becomes a no brainer.

Where things hit the rocks, of course, is if the fickle public loses faith in the franchise.  When that happens, look out.  Unless of course a "deal" can be done by the merger and acquisition boyz to keep trouble at bay and continue the game a while longer.

Some current example of mergers that might fit this include the Alcatel/Lucent deal which is making headlines this morning.  Alcatel has a franchise and Lucent went from a growth stock in the early days of its "franchise" but has run low of things to charge "rents from."  Not that Lucent "rents" things per se, but their business occupies a spot in "finance space" and therefore much produce enough income to "rent" its category.

In another "big landlord" acquiring smaller "landlord" for the underlying "property that produces 'rent'" we see how the world's biggest wine maker Constellation, is buying Canadian winemaker Vincor.  Vincor as the Canadian "space" for wines.

Ripple Effects

Not the wine, silly, the secondary effects of the emergent new paradigm in corporate valuations.  For example, if we read a report about "predictable inflation" then we should expect oil prices to firm up a lot - just as oil is doing today by edging back over $67 a barrel.  Two things are happening: The underlying oil (still in the ground and in the JIT operations and delivery systems) appreciates on a monetary basis, but it also increases in utility value because the corporations need it to keep "renting" their franchise space in the businessphere.

At some point, the stock market may conclude (if it hasn't already) that moderate inflation is compatible with higher stock prices.  Then, companies with the highest book values (and thus large assets subject to the pricing escalation of inflation) could fair very well.

Inflation seems more certain than less, as from a policy perspective deflations can last 10-years or longer, as was the case in the 1929-1941 period in the US.  Inflations - even hyperinflations such as the German Weimar experience - tend to be shorter, perhaps only 4-5 years.

When they have run their course, the government has repaid swollen debt with cheaper paper, and while citizen's don't quite comprehend what is going on, it makes intergenerational tax transfers seem more palatable (and smaller) while companies can at least hope to maintain some of their valuation, provided the implementation is smooth enough over time.

Side benefit:  Your refinanced home goes up in value. 

Risk:  Panic. Falling housing prices anyway.  But where?  More like in the already peaky areas, but not out here in rural America where prices just keep going up.  Two professors of econ see it this way too.

Condi and Jack

Ms. Rice and Mr. Straw surprised a few folks by showing up in Iraq this weekend.  They are trying to use personal power to get a workable government together in Iraq.  Without it, the civil war there devolves quickly.

Glowing Relations

We see that Australia has signed a uranium deal with China.  China says it will use the uranium only for peaceful purposes.  Right.

Shooters

I don't know what you would call a missile that is fired underwater, but whatever the technical term for an underwater missile is, Iran has reportedly now test fired one. Two possibilities come to mind here.  The new missile is claming a top speed of 100 meters per second. As I pencil that out, a mile being roughly 1609.344 meters, So the missile will do the mile in about 16.1 seconds. So the missile will do about 3.7 miles per minute times 60 minutes brings us to 220 miles an hour.  Faster than most existing naval torpedoes by a factor of 3-5, depending on which navy you're citing as a benchmark.  Possibility #1: breakthrough and dangerous tech.

Possibility #2: Sales pitch.  Is the report of the new super torpedo real or a sales pitch?  The British press reports the British government is in no-longer-secret talks about striking Iran.

C-5 Crash

17 people were aboard when a C-5 cargo jet crashed at Dover this morning.

Dali Lama on Bin Laden

The Dali Lama is calling for terrorists to be treated humanely. Says kill a bin Laden and 10-more like him will spring up.
 

(More likely to be posted later, been a bit slow this morning as I have been out meeting with the loggers who are clearing off some of our land - and tromping in the woods took some time out this morning.  Saw my first dead snake of the season.  It was trying to cross the road on the south side of the property.  Didn't make it.  Oh well, one less copperhead won't hurt.)

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