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Rebellion/Revolution Arrives

Shutting Out Fox

Most Americans this Labor Day weekend are almost completely unaware of what is developing in Mexico and the implications it holds for the rest of North America as the Fall progresses.  Let's start at the top:  First, and making surprisingly little news among Nortes is that Mexico's President was shut out of the capitol yesterday and was prevented from giving his State of the Union address from Congress.  This is absolutely unprecedented. It would be like George Bush show up to deliver his State of the Union and being sent packing by CONgress.  Truly landmark stuff.

 

The second data point to keep in mind is that Mexico, with a population of over 100-million, has more than 1/10th of its population living in the United States.

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Not that keeping Fox out of the Mexican Congress stopped his speech for good: It was later broadcast from his official residence.

---

We have been picking up bits and pieces on our "software radar" about Aztlan/Reconquista demonstrations to come later this month.  While the "rickety time machine" at www.halfpasthuman.com says we should expect an "emotional whump about now, and turning a president away from his Congress is a big deal, what may be happening is that a large portion of the US is about to be "blind sided" by the breadth and depth of the protests to come.

 

Recall that at the end of March, while the web bot project was forecasting a "context creation period" there seemed to be little going on - yet we had a huge pro Aztlan outpouring of emotions during the "reconquista" demonstrations.  A few days later, the mass marches, protests and the creation of the context shift - which remains almost nameless even today.

 

We may be presently on the verge of another such massive outburst of emotional energies.  If you haven't been following the alternative media coverage of what's going on in Oaxaca in border state indy media, you need to do some heavy-duty catch-up reading to get current with the times.

---

One of the reasons I expect large-scale participation by young people in possible demonstrations this month is that as the time monks tell us, the nation is going through something of an "echo" of the 1970's.  If you're too young to remember the period, it was rocked by resistance to an unpopular war (Vietnam = Iraq), there was a scandal involving corruption in government (Watergate = either 9/11 or Florida elections) and there was a back-to-earth movement (hippies = environmentalists).

---

One of the galvanizing events of the 1970's was the shooting death of four Kent State (Ohio) protesters.  Not only was the shooting of anti-war protesters the subject of much speculation, but it also resulted in a very popular song by Crosby Stills and Nash (Ohio lyrics) that became thematic of the anti-war movement.

 

If the time monks are correct (and they are more often than not) then what should concern us later this month would be any violence in confrontations between demonstrators and either counter-demonstrators or "officialdom" that results in shootings/violent/death/martyrdom.

 

Depending on the strength of the 1970's echo, and coupled with "not-quite-invisible hand operations" like the government's deliberately misleading "Security and Prosperity Partnership of North America (code words for North American union, and based on direction from the Council on Foreign Relations), one can almost see the Hegelian Dialectic in action: First, the "problem is created",. the reaction planned and promoted, to be followed by the powers-that-be imposing their intended solution - no doubt one that would never have been accepted by otherwise right-thinking humans.

 

In this case,  there's plenty of evidence that people in government deliberately didn't enforce laws concerning illegal entry into the US, and thus, set the stage for the problems we are about to go through.  At a minimum, that's criminal malfeasance/misfeasance, but at worst, traitorous behavior.  Not by the rank and file Border Patrol agents, though!  Oh no, this rot or planning was and is at the top.  Think about it: 1/10th of the population of Mexico walks in and no one lifts a finger except symbolically! And Janet Reno took automatic weapons away from Border Patrol agents during the Klintonistacorp  regime.

 

We'll be waiting for the ramp up of the "problem" to appear on in-your-face TV later this month along with the planned excessive reaction.  Already though, we know what the "planned solution" is - a North American Union.

 

It seems you're not as free as you think...notice how US corpmedia brand those blocking the Fox address as "leftists" because they didn't swallow a questionable election hook, line, and sinker.

 

That Not-So-Civil War

The bombings have continued overnight in Iraq.  Depending on who you listen to, the country either IS on the brink of a disastrous civil war (such as this South African News 24 report, or, if you're George Bush, you'll deny the reality of civil war. As the Toronto Star reports, the Pentagon is admitting that mounting sectarian violent has pushed the US occupied country to the brink of civil war. Sadly, by the time the Pentagon gets around to admitting it, it's likely already well underway.

 

Denver's Plutonium?

A curious post at Rumor Mill News has us wondering just how much plutonium has been put into a Denver superfund pollution clean-up site. Here's a link to an interview on the subject if you have enough bandwidth, with Adrian Anderson on point. Interview starts about 2:20 into the Windows Media file. Interesting stuff about Denver's water supplies.

 

UK "Terror" Raids

14 people were arrested overnight in the UK in what are described as anti-terrorist operations.

 

Reset Iran Clock

The EU figures Iran should have two more weeks ion the nuclear standoff.  Might push back earnings of defense contractors bristling for more business, huh? Give it time...

 

Hurricane Turns

Remember earlier on this week when I was warning that next week Los Angeles weather could be impacted by Hurricane John which made landfall today in Baja?  Well, click here and check out the five-day projections and you'll see that San Diego (or at San Ysidro) is now "in the cone".  Not surprised.

 

As Housing Collapses...

We notice the article in the Seattle Post Intelligencer this week about smaller footprint condos.  The story details how a 296 square foot condo has an asking price of $149,950. That pencils out to $506 a square foot.  Gulp.

 

Hmmm...let me see: That means the house and offices here at the ranch would be worth well north of $2-million..and that's before land!  Hallelujah!  Is this a great country, or what?.

 

Peoplenomics: The Turbulent Future of Air Travel

It's almost an Article of Faith: America owns the sky.  Air travel and America's economic dominance of the world seem almost inseparable in dozens of ways.  We transport our troops, our Western lifestyle, and import everything from flowers to salads to machine parts on planes as small as Cessna's and as as large as 747 jumbo freighters.  But, for all their convenience, our reliance of air travel has some serious costs; primarily economic and environmental, along with a set of risks which is not decreasing. This week, a quick course in airline management, from building city-pairs and setting fares to pricing tickets, and then on to assessing the public cost and social impacts of air travel in general and pension plan default in particular.  As you'll see as we run through the numbers and the forecasts, what's ahead looks like an even bumpier ride than we've seen lately.  (Subscriber Access).    Subscription info: $30/year.

 

More than Tuna Casserole

Oh sure, there are plenty of ways to eat cheaper in our e-book "How to Live on $10,000 a year - or less" but it's a whole lot more than eating on the cheap.  Why, there's drinking on the cheap and other tips, too.  Available in the www.peoplenomics.com/bookstore.htm

 

"Confess or I'll...."

UrbanSurvival's readership has still not recovered from the "hack attack" of a couple of weeks ago.  So please, take a few minutes and recommend this site to your friends.  Click here for an Outlook email - or just send them a link to www.urbansurvival.com/week.htm. Thanks...

 


Friday September 1, 2006

Employment Number

Another day of stats from the Labor Department to digest.

Total nonfarm payroll employment increased by 128,000 in August, and the unemployment rate was little changed at 4.7 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employ- ment grew notably over the month in education and health services; several other industries had modest increases. Average hourly earnings rose by 2 cents, or 0.1 percent, in August following larger gains in the prior 2 months.

Unemployment (Household Survey Data)

The number of unemployed persons (7.1 million) and the unemployment rate (4.7 percent) were essentially unchanged in August. A year earlier, the number of un- employed persons was 7.4 million, and the jobless rate was 4.9 percent.

Over the month, the unemployment rates for most major worker groups--adult men (4.1 percent), adult women (4.1 percent), teenagers (16.2 percent), whites (4.1 per- cent), and Hispanics (5.3 percent)--showed little or no change. The jobless rate for blacks declined to 8.8 percent in August. The unemployment rate for Asians was 2.9 percent, not seasonally adjusted.

My favorite number, the U-6 underemployed from table A-12 ran  at 8.3% unemployed in August of this year, compared with 8.9% in August of 2005...

 

The CES Birth/Death model contributed 121,000 new jobs - which may or may not be real as CES is a guestimate kind of number.

 

To my jaundiced eyes, it looks like when I back out the CES model, the economy gained 7,000 jobs for the month.  Big whooop.

 

Mexico Flashpoint?

Watch later today for Mexico to be a flashpoint for the rebellion/revolution meme (thought virus) as Vincente Fox gives a State of the Union speech in Mexico City.  Protesters say they will disrupt the proceedings. The speech ought to be an interesting revelation in itself.  Fox, after six years hasn't done much we can see to improve the lot of the average Mexican and we note than fully a 10th of the country is living in economic exile in the US to make ends meet.

---

I was shocked yesterday when I called Bank of America to be treated to an on-hold message telling me how they have a new safe way to send money to Mexico.  And this was on the English language side of their call distribution system.  Go figure.

 

Already Checked Out

One of the interesting sidelights of operating a web site like this one is that it provides all kinds of statistics - like the number of people reading a particular web page on a particular day.  I noticed about a 20% decline in page views for Thursday - and a similar decline today would come as no surprise, as lots of UrbanSurvival readers seem to take four and five-day weekends when they can.  They're not alone.  The traffic nationally should be a bear starting this afternoon, say starting after lunch - as millions take to the road for the last fling of summer.

 

Not to be missed: The possible impact of Tropical Storm Ernesto on the East Coast.  Having made landfall in North Carolina, it's now meandering its way northward and soaking everything in its path along the way. In those areas, traffic oughta be a double-joy as the four-wheeled Exodus continues this afternoon.

 

The one holiday celebration that I regret not being able to attend is the "Burning Man" festival in Nevada next week.  That's definitely on the list of "once-before-I-die" things to see.

 

LA Weather

I see this morning that Hurricane John, making landfall about now at the southern tip of Baja California (Mexico) shows a more northerly track today.  The top of the five day cone is almost up to even with San Diego.   I've got a nagging feeling about southern California weather impacts next week - but it's probably just jitters on my part.

 

Iran Watch

It's been another week of "more ink that action" on the Iran nuclear question.  A sampling of the ink:

Iraq Bombing

With 55 people killed in the latest day of the civil war in Iraq (which we're assured isn't really a civil war by US "leadership"), we're wondering how long before 100+ per day becomes the new "normal".

 

Muddy River Blues

The drought, which has caused so many problems in the nation's cattle belt, is now starting to be felt along the banks of the Mississippi River, which is shrinking. Possible impacts on farming, shipping, and water supplies are on the horizon.

 

Quakes Up

There has been what anecdotally "feels" like an increase in earthquakes in the past few days.  A 5.7 magnitude temblor struck Japan's southern islands Friday morning (their time).  While the 5.6 recorded this morning up in the Kamchatka region of Siberia is no big deal, the 6.8 magnitude quake in the Papua New Guinea area is certainly large enough to get our attention.

 

Just in at press time - a 6.0 in the Aleutian Islands.  Hmmm...

 

Shortage Indicator Climbs

The concept of "shortage" seems to be popping up in news stories again, although I don't expect new highs to be hit for perhaps three weeks to a month:

 

 

Oil Back Up

The price of crude oil is back over $70 in many markets this morning due to threats from NBiegerian workers who say they will be going on strike. I swear, if it's not one thing, it's another with oil lately.

 

Accounting Packages

I'd had lots of feedback on Thursday's question about which accounting package is the friendliest and offers the ability to operate multiple subsidiaries (or at least departments) and then roll everything up into a single series of financial statements.

 

You'll recall that this has application for me personally as well as a consulting client. On the personal side, I'm looking for something that will show me our farm/ranch operation separate from our www.peoplenomics.com site, separate from my consulting (real) work. 

 

The best bang-for-the-buck seems to be QuickBooks Pro which is going brand new on Amazon for $125 or so. One suggestion is that I use "class" identifiers  (E.G. "F" classed items would be "farm", "W" would be web related, etc.) and then run reports in QB Pro using filters to I would get just the particular class I'm interested in.  No guarantees it would be simple, but it's cheaper than buying an enterprise version of something for $500+ a whack. I like the online services (they do all the backups and such) but I HATE monthly bills for anything, and I'm not sure if they'd charge $20/month per subsidiary, or if the $20/month is for "all you can eat." 

 

Bottom line for me will probably be QB Pro...

 

Cliff's Dome

Several people have written in wondering if www.halfpasthuman.com Cliff's grow dome was available as a kit or if there was a book about it.  No and no.  Cliff reports he's too busy with the web bot project to go off doing a book - too much of a detour.  On the other hand he suggested that Elaine and I build a dome and write it up with the math, pictures, etc.  We're thinking about it, but there are a zillion other projects ahead of that one.  It's not like we don't have plenty to do on 30-acres...

 


Thursday August 31, 2006

Digging Your Personal Hole

The government's latest "Personal Income and Expenditures" report is out today.  The blah-blah goes like this:

"Personal income increased $60.2 billion, or 0.5 percent, and disposable personal income (DPI) increased $63.9 billion, or 0.7 percent, in July, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $78.7 billion, or 0.8 percent. In June, personal income increased $60.0 billion, or 0.6 percent, DPI increased $47.8 billion, or 0.5 percent, and PCE increased $36.6 billion, or 0.4 percent, based on revised estimates."

Sounds peachy, so far, right?  Well, read on and you'll see where it sucks -  I've added a highlight so you can see it clearly through your personal morning fog:

"Personal outlays -- PCE, personal interest payments, and personal current transfer payments increased $79.7 billion in July, compared with an increase of $41.0 billion in June. PCE increased $78.7 billion, compared with an increase of $36.6 billion.

Personal saving -- DPI less personal outlays -- was a negative $83.5 billion in July, compared with a negative $67.6 billion in June. Personal saving as a percentage of disposable personal income was a negative 0.9 percent in July, compared with a negative 0.7 percent in June. Negative personal saving reflects personal outlays that exceed disposable personal income. Saving from current income may be near zero or negative when outlays are financed by borrowing (including borrowing financed through credit cards or home equity loans), by selling investments or other assets, or by using savings from previous periods.

So, there you go.  The harder you work, the behinder you get. It's the corporate thing. So, stop reading and start digging that personal financial hole, would you?

 

Wrong Labels

The president of Syria and Venezuela's Hugo Chavez are both busy today denouncing "imperialism.

 

It's curious to me is that presidents Chavez and Assad are missing a real bet in terms of PR and popular support because they're recycling old Marxist linguistics.  What they are talking about it "American imperialism."  If they were smart - and in tune with language, they'd be targeting "corporatists" "corporate elites" and "corporatism" as the cancer afoot in the world.  They'd be talking about rape and pillage of the environment/first peoples/economy/workers in the name of "corporate profits."

 

I expect that till they figure out the right words - which would resonate more - they'll be marginalized by the US mainstream media, which doesn't even begin to have a clue, being fed 95% "news releases" as their main fare.

 

Pesky Iran

Not the people, mind you, but the people in charge of Iran - they're remaining defiant today in the wake of a deadline that called for them to stop sensitive nuclear work. So later on today, look for the UN deadline to arrive and more talk about sanctions. It doesn't take a rocket surgeon to figure out that Iran won't budget, the neocons won't stop the war chant, and that's in part why gold's bottom - at least for now - may be in.

 

Selling bombing:  The latest buzz is that "Iran will have a bomb in five years."  Of course, what's not reported in Washington (there's no money in it) is that in a bit more than a year from now, war will be either out of style or there won't be any way to wage it - is one of the images the web bot folks are pondering.  Implies some massive changes, doesn't it?

 

Selling with Bombs 2

In Thailand, 23 bombs have gone off nearly simultaneously. Placed by militant Muslims figure authorities. Dozens of injuries and one death, say reports.

 

Blockade Remains

Israel has continued to dig in its heels against compliance with a UN demand that they lift their naval blockade of Lebanon. To recap incase you've been cryogenically frozen for the past month, Israel wants the blockade to remain to assure that Hezbollah won't get arms by sea. The UN figures a blockage isn't in keeping with the intent of the cease fire. Israel wants its two prisoners back before they'll talk about it.

 

An international conference on aid for Lebanon is opening in Stockholm today. In case you can't attend, they're looking to raise half a billion dollars.  I wonder if Israel will contribute anything?

 

Cat 4

Hurricane John is still hanging out off Mexico's west coast. Here's my question: What's going to happen to LA weather in a week to 10-days? Oh, sure, at the moment there are head advisories out for the South Land. And, the track map takes John out to sea next week, but forecasts do change. 

 

One safe bet: Wax up the long board - the surf oughta be up.  All that's missing from the SoCal surf scene is Paraquat Kelly's "Surf Report with a Beat" from back in the day of the mighty met, KMET. (Where did Jackson B. Snyderfish, Gonzer, and Ace Young (not the American Idol Ace Young), go? Ace is in Wyoming????  Hooooyah...)

---

Speaking of California, officials have cut a deal to reduce greenhouse gas emissions.

 

Grown Up Questions - Play Time

Here comes a holiday.  More time for projects here at the ranch.  Every so often, we come up with questions though, which are best asked of a very smart set of readers like you, rather than spending a lot of time on researching the answers myself.  Life is only so long, and if I can "farm out the research" to you, I can focus on my core value creation role.  (When I figure out what that is, I'll get back to you.)  So, to tease your coffee stewed brain, here are the two questions of the day.

 

Question #1 (Accounting):  I have been keeping the books for the farm/the urban web site, my consulting, and whatever else, as a series of spreadsheets for a long time. Cash basis, expenses in this column, income in that - you get the idea.  Well, a client of my consulting practice has grown his business and has outgrown his basic one-file-per-company accounting system.  He's got several subsidiaries, each with incomes and expenses.  What he'd like (and I would like, too) is to find a CHEAP accounting package that will roll-up several small businesses into a single financial statement, yet also offer subsidiary accounting as well. 

 

I know that QuickBooks Online offers the feature, but I'm one of those "I'd rather buy it, than sign up for perpetual payments" although as a business expense, it sort of comes out in the wash. So the first question this morning is what is the cheapest accounting solution you know of.  Here's the catch: Nothing over $00 and preferable nothing over $150, and if you're a genius, $100.

 

I know QuickBooks "Starter Edition" is on sale at Amazon for $39.99, but I'm pretty sure that package won't roll up departments or companies, but you can open different files for different companies.  I can get the "roll-up report writer" as an add-on, but that seems the wrong approach - so here we go:

 

What is the best software under $200 that will support multiple profit centers/companies and provide roll-up info that's easy to use?  Click here to send me an answer.  Of course, I'll be pleased the share the results.  Don't get cute.  I know versions of high end PeachTree/QuickBooks/Mas-90/Real-World etc will do it.  But what's the entry-level product that's not online/perpetual payments?

 

Question #2 (Metalworking).  Elaine and I are going to try some custom casting of aluminum.  I've been collecting books on home-built metal casting (two of them so far, including David J. Gingery's carcoal foundry book) and we're about ready to give it a whirl this fall.  But we need to find some pre-mixed casting sand ["green sand"] and here's the catch:  I like the idea of casting with an oil-based casting sand rather than water-based. 

 

If you're new to home foundry work (it's been 45 years since I cast anything), the idea is that you can cast a lot of things at home using materials such as crushed aluminum cans - and if you run short of metal, you simply drink more beer [my kind of recycling]. The problem is when it comes time to ram up a mold (beyond the scope of your one cup of coffee at this hour) you make the mold out of sand, which has some binders in it (clay, bentonite, etc.) which in turn are held together by water or light oil.

 

Given that water-based casting mixes are a little less safe than oil-based (think steam from too much water can "explode" in the midst of a pour into a too-wet mold) I'm looking for a good source of oil-based casting "green sand".  Not that I need much - 50-100 pounds ought to do it.  But any advice here would be appreciated.  Click here to send green sand advice and a source of cost-effective supply.

 

Hanging Out with the Time Monks

Although the web bot project occupies most of chief "time monk" Cliff's hours of daylight - he's still waiting for the big emotional "whump" between now and Sept 6 (over the holiday weekend, perhaps?)  - it's fun to see that he's made himself a "grow dome". If there's a common thread that runs among Cliff-Igor-George type folks: We like to do things. Perhaps a label as renaissance types would fit.  Life is after all, for the doing, and it's not a spectator sport.

 

Given the bot's outlook for food shortages, Cliff's "grow dome" is a 3-frequency geodesic.  Completely built by hand (including the math calcs and bending the steel channels)Cliff's grow dome is now covered and about to enter operation.  Here's a picture of him "load testing" the frame a week or two back. It's about 17 feet high at the center, and it will support at least the weight of one human.

 

 

Cliff's grow dome ensures his family a source of good food and a great (and dare I say stylish) emergency shelter should they need it.  What's more - a consideration here in drought land is that - a dome can dramatically reduce water use.  So Elaine and I are considering a small 25-30 foot dome which would be a living area/grow dome between our main house and the office/shop building.  When places like Tofino British Columbia are having a drought, we think that too much prep would be hard to do.  Climate change is already impacting the world and De Nile is a bad place to go when the alternative is personal proactive planning and actions like small-scale construction projects.

---

Looking at the future can be quite depressing.  It's easy to doubt the outlook now, but you ought to see really "whumps" and building tensions this fall and winter.  Developing some real survival skills seems easy enough to do - now.  I don't expect you to run out this weekend and throw a geodesic dome together.  But it's not unreasonable to allocate some few number of hours per week to genuine personal preparedness.  Hour or two long walks in some good walking shoes, and two or three hours a week of reading survival and outdoor skills isn't too difficult to fit in. 

 

Your alternative is what?  Watching some lowest-common-denominator crap on TV ?  Gag me!

---

OK, there are some good things on TV like the speech yesterday by Salt Lake city Mayor Rocky Anderson...

 


Wednesday August 30, 2005

GDP Slowing

Not too much surprising in the new GDP report out today - except in how the fact that the national personal savings rate is collapsing and that fact is buried in page 10 of a spreadsheet...:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.9 percent in the second quarter of 2006, according to preliminary estimates released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 5.6 percent.

 

The GDP estimates released today are based on more complete source data than were available for the advance estimates issued last month. In the advance estimates, the increase in real GDP was 2.5 percent (see "Revisions" on page 3).

 

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE) for services, private inventory investment, nonresidential structures, exports, and state and local government spending that were partly offset by negative contributions from residential fixed investment and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

 

The deceleration in real GDP growth in the second quarter primarily reflected a deceleration in PCE for durable goods, downturns in equipment and software and in federal government spending, decelerations in exports and in PCE for nondurable goods, and a larger decrease in residential fixed investment that were partly offset by a deceleration in imports, an acceleration in PCE for services, and an upturn in private inventory investment.

On the consumer side:

Real personal consumption expenditures increased 2.6 percent in the second quarter, compared with an increase of 4.8 percent in the first. Real nonresidential fixed investment increased 4.7 percent, compared with an increase of 13.7 percent. Nonresidential structures increased 22.2 percent, compared with an increase of 8.7 percent. Equipment and software decreased 1.6 percent, in contrast to an increase of 15.6 percent. Real residential fixed investment decreased 9.8 percent, compared with a decrease of 0.3 percent.

Now to my point in all this:  Click here for the spreadsheet of supporting data and click on down to line 31 - which is the personal sales rate. Regular humans took $62.2 billion out of their savings to make ends meet in the quarter.  But hey, that's gotta fuel some kind of market rally, in this "things work backwards world" right?

 

 Personal outlays are exceeding personal income and by a wider margin in this report, perhaps due in part to the notion that bankers are doing a fine job of hypnotizing today's young people into the idea of "renting their lives" - and that debt/interest/making bankers fat is just now the world ought to operate.  In their freakin' dreams.

 

Here's the People's Economist at his simplest:  "Save 10% or more on everything you buy this year.  STOP PAYING INTEREST / USURY to these bloodsuckers. Live cheap and escape the bankers prison." 

 

While we're at it, why is our government paying the bankster cabal interest / rent on our own money?  (That's what monetary inflation amounts to and it's why 95% of the purchasing power of the US dollar has been sucked out of it since 1913...) Hmmm...smell a rat yet?

 

Calm Before the Storm

The period before a major holiday can usually be depended on to provide several things:

Old-time news managers (which I'll admit to being, but only under duress) quietly mutter about this part of the year being when "fill-in-the-blank stories" prevail.  See if you don't hear one - or more - of these pat stories over the upcoming weekend:

"The holiday festivities were marred today when _____people were (drown/injured/killed) when their ______(flipped/crashed/sank) near _____."

---

"People returning from the long weekend holiday were surprised to see an unusual sight this year - a  (something out of the ordinary) at _______.  It was all part of a ______ by the ________ to _______"

---

Police are blaming alcohol for a tragic holiday accident that claimed  _____ victims on (road name) at about (time).  Police report a vehicle driven by (suspect name) was traveling the wrong way on (street/freeway) when it ran into a (car/truck/van) drive by (innocent victim[s] name).

Not to be excessively cynical about holidays (I like them, too).  But there's a certain "holiday weekend news droning" that goes on and most of it looks like pages out of my "fill-in-the-blanks Junior Reporter News Book."

 

Boom Times

No, not the economy.  The situation in Iraq.  Another 40-dead in the various bombings of the day.

 

Let's pencil this out.  Iraq had about 26.8 million people at the start of the war. Let's say that 250,000, or so, have been killed so far.  And let's say that left us with 26.55 million people. Then let's suppose that we keep seeing 50 a day die in bombings.

 

Why at that rate, in just 531,000 days, there won't be anyone left to kill.  So you can confidently tell all your friends today that the Iraq War will be over in 1,454.7945 years (not counting Leap Years or oil embargoes).  At 33-years per generation (folks are having kids later, and military tours are being extended), we only have 44-generations to hold the "coalition of the willing" together.

 

Israel - Not Budging

Kofi Annan has been making headline talking with folks in Lebanon and environs.  Not that Israel is likely to pay any heed to Annan's demand that Israel lift its naval blockade of Lebanon.  They're worried about Hezbollah being resupplied by sea routes.

 

Hard of Hearing

If Israel is being a little hard of hearing when it comes to their naval blockade, it's a similar disease afflicting Ir

 

More Plot Charges

Three more British Muslims have been charged in connection with the 10-Planes Plot.

 

Weathering

South Florida is breathing a sigh of relief today as Ernesto's gusto dropped to 45-miles per hour.  Enough to cause some damage, but not the blue-tarp dispenser like previous 'canes.

 

On the other hand, Hurricane John, over on the Pacific side, is beating the snot out of southern Mexico today and might hit Category 4 levels by this afternoon.

 

Terminator Seed Sale

From our "buy our corporate seeds or starve, because we now own life" department, Monsanto is buying a "terminator seed" company.

 


Tuesday August 29, 2006

FOMC Notes

From the Federal Reserve's minutes:

The Manager of the System Open Market Account reported on recent developments in foreign exchange markets. There were no open market operations in foreign currencies for the System’s account in the period since the previous meeting. The Manager also reported on developments in domestic financial markets and on System open market transactions in government securities and federal agency obligations during the period since the previous meeting. By unanimous vote, the Committee ratified these transactions.

The information reviewed at the meeting suggested that the growth of economic activity in the second quarter slowed from its rapid pace in the first quarter. Residential investment contracted as activity in the housing market continued to cool. Consumer spending and business investment decelerated after posting substantial increases in the first quarter. The demand for labor moderated, with hiring in recent months below the pace of earlier this year. Consumer price inflation remained elevated in July, reflecting further increases in energy prices and shelter costs.

Nonfarm payrolls increased in June and July, but more slowly than in the first quarter. The moderation in hiring was most pronounced in retail trade but was also evident in construction and non-business services. Establishments in professional and business services continued to add jobs at roughly the same pace as that of earlier in the year. Average hours of production or nonsupervisory workers on private nonfarm payrolls edged up. The unemployment rate rose to 4.8 percent in July, above its average over the first half of the year.

Industrial production picked up in June. For the second quarter as a whole, it grew at a robust rate that was faster than its first-quarter pace. Gains in manufacturing production were widespread across industries. The mining sector, which includes oil and natural gas extraction, expanded solidly in June, although average growth in the second quarter was below that of the first quarter, in part because the recovery from the disruptions caused by last year’s hurricanes neared completion. Utilities output grew strongly in the second quarter. The rate of capacity utilization in the manufacturing sector stepped up in June and remained above its long-run average.

The growth of consumer spending slowed considerably in the second quarter after the surge in purchases around the turn of the year. Spending on goods excluding motor vehicles posted a modest increase in June after remaining flat, on average, over the previous four months. Although nominal wages and salaries rose briskly in the first half of the year, gains in real disposable income were held down by rising consumer prices. While past gains in household wealth, particularly from home prices, supported consumer spending, higher interest rates and energy prices were likely a restraining influence. Indicators of consumer sentiment for July were mixed.

Residential construction activity contracted in the second quarter. Single-family starts declined in June to a level well below the average of the previous twelve months. Construction in the multifamily sector remained steady, with starts in June well within the typical range seen since 1995. Sales of both new and existing single-family homes slowed in June and were significantly below their peaks of the summer of 2005. Available measures of house prices indicated that price increases had moderated over the past four quarters.

After surging in the first quarter, real spending on equipment and software edged down in the second quarter. The decline was accounted for primarily by a drop in expenditures on communications and transportation equipment. Spending on high-tech equipment and software declined as well. The construction of nonresidential buildings moved up at a solid pace over the first half of the year, although activity remained well short of its previous peak in mid-2000. Outlays on drilling and mining structures continued to climb in response to high energy prices, and spending on office construction edged up as vacancy rates continued to trend down. Overall, economic fundamentals and business sentiment continued to support increased investment.

The book value of manufacturing and trade inventories excluding motor vehicles rose in May, and real nonfarm inventories excluding motor vehicles appeared to be slightly higher in the second quarter than earlier in the year. The ratio of book-value inventories to sales edged down in May in both the trade and manufacturing sectors after having remained relatively steady over the previous three months. In the manufacturing sector, however, inventories ticked up again in June. In general, inventories appeared to be well aligned with demand, and business surveys suggested that firms were comfortable with the level of inventories.

The U.S. international trade deficit widened in May, reflecting a sharp increase in imports that more than offset a sizable gain in exports. Import growth was heavily concentrated in oil, reflecting both higher prices and quantities; other categories of imports fell on balance. Exports rose across almost all major product categories; the largest gains were in consumer goods and capital goods, especially aircraft. Expansion of economic activity in the advanced foreign economies appeared to continue in the second quarter at a pace roughly comparable to that of the first quarter, on net. Incoming data for the second quarter pointed to a pickup in economic growth in the euro area and Japan but indicated that growth slowed somewhat in Canada. Recent economic indicators from the developing economies were mixed but, in general, suggested some moderation in growth from the rapid first-quarter pace.

Headline inflation continued to move up, on balance, in recent months, and consumer prices increased at a faster pace in the second quarter than over the previous twelve months. Consumer energy prices, while declining slightly in June, surged during the second quarter, on net. Core consumer prices also continued to rise, boosted by an acceleration in shelter costs, particularly those for owner-occupied residences, and some pass-through of energy cost increases. Higher oil prices showed through in producer prices for a variety of energy-intensive intermediate goods. Rising import prices, higher domestic rates of capacity utilization, and strong global demand for materials were factors underlying an acceleration in core prices for intermediate materials. The price of crude oil increased further over the intermeeting period, and strong weather-related demand caused the price of natural gas to rise considerably. The employment cost index rose somewhat faster in the second quarter than over the preceding three months, but the twelve-month change was less than that of a year ago. Survey measures of households’ inflation expectations in June and July reversed their increases in April and May.

At its June meeting, the Federal Open Market Committee (FOMC) decided to raise its target for the federal funds rate 25 basis points, to 5¼ percent. The Committee's accompanying statement indicated that economic growth had been moderating from its quite strong pace earlier in the year, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices. Readings on core inflation had been elevated in recent months, but ongoing productivity gains had held down the rise in unit labor costs, and inflation expectations remained contained. However, high levels of resource utilization and the high prices for energy and other commodities had the potential to sustain inflation pressures. Although the moderation in the growth of aggregate demand would help limit inflation pressures over time, the Committee judged that some inflation risks remained. The extent and timing of any additional firming would depend on the evolution of the economic outlook as implied by incoming information.

Investors anticipated the FOMC's decision at its June meeting to raise the federal funds rate 25 basis points, but near-term policy expectations edged lower, apparently in response to the accompanying statement. Subsequently, data releases on real activity that were weaker than expected, the Chairman’s testimony on the semiannual Monetary Policy Report, and the release of the June FOMC minutes all led investors to revise down their expectations for the future path of the federal funds rate. Yields on nominal Treasury securities fell in line with policy expectations over the intermeeting period. Yields on inflation-indexed Treasury securities declined a bit more than those on comparable nominal Treasury securities, leaving inflation compensation up slightly, albeit within recent ranges. Spreads of yields on corporate bonds over those on comparable-maturity Treasury securities were about unchanged, while those on speculative-grade bonds widened. Major stock price indexes rose modestly. The foreign exchange value of the dollar against other major currencies fell, on net, over the intermeeting period.

Debt of the domestic nonfinancial sectors was estimated to have decelerated in the second quarter after a robust first-quarter increase. Business-sector debt increased briskly, as the expansion of business loans remained robust. In the household sector, mortgage debt decelerated from the first quarter’s rapid pace in response to higher mortgage rates and slower house-price appreciation. M2 growth dropped in the second quarter and remained modest in July, consistent with moderating growth of nominal income and rising opportunity cost.

The staff forecast prepared for this meeting indicated that real GDP growth would slow in the second half of 2006 and 2007, and to a lower rate than had been anticipated in the prior forecast. The marking down of the outlook was largely attributable to the annual revision of the national income and product accounts, which involved downward revisions to actual GDP growth in prior years and prompted reductions in the staff’s estimate of potential output. The slowdown in the housing market, the effects of higher energy prices on household purchasing power, the waning impetus of household wealth effects on consumer spending, and the effects of past policy tightening were expected to hold economic growth below potential over the next six quarters. Core consumer price inflation was projected to drop back somewhat later this year and next, mainly as the effects of higher energy and import prices abated.

In their discussion of the economic situation and outlook, meeting participants noted that the slowing of GDP growth in the second quarter was generally in line with expectations, reflecting the continued cooling of the housing market, the restraining influence on demand of higher energy prices, and the lagged effects of past increases in interest rates. Going forward, output was expected to advance at a pace at or slightly below the economy’s potential rate of growth, but several participants noted that the annual revision to the national income and product accounts suggested this growth rate likely was lower than previously believed. Incoming information with regard to inflation had not been encouraging. Still, most participants thought that, with energy prices possibly leveling out, aggregate demand moderating, and long-term inflation expectations contained, core PCE inflation likely would decline gradually from its recent elevated level, though the upside risks to inflation were significant.

In their discussion of the major sectors of the economy, participants noted that residential construction activity had continued to recede over the past few months and cited the housing sector as a downside risk to the outlook for growth. The rate of new home sale cancellations, which was identified as an important leading indicator by some contacts in the construction industry, had spiked higher. Single-family housing starts and permits continued to fall, and inventories of unsold housing appeared to have risen significantly, pointing to continued slowing in this sector. Some participants observed that the slowing seemed to be orderly thus far, but it was also noted that in some areas of the country housing construction had experienced a relatively sharp fall. In general, participants expressed considerable uncertainty regarding prospects for the housing sector.

Meeting participants noted that the continued increases in energy prices and borrowing costs appeared to have restrained consumer spending growth in recent months. Contacts in the retail sector generally reported a continued slowing of growth in sales, although the situation differed somewhat by region and type of good or service. Reliable, comprehensive data were not yet available on recent house price movements, but the rate of appreciation appeared to be moderating and was likely to slow further in coming months. The slower pace of increase in housing wealth would restrain consumption growth, though by how much was uncertain. However, the financial condition of households, as judged by indicators such as bankruptcy filings and loan delinquencies, appeared to remain solid. Overall, consumption spending seemed likely to expand at a moderate pace in coming quarters.

Although business fixed investment in the second quarter was a little lower than had been expected, participants noted that this development appeared mainly to reflect the timing of purchases, particularly of transportation equipment, and not weakness in the underlying trend. Some participants noted that nonresidential construction had continued to strengthen, offsetting some of the contraction in residential construction. Looking forward, strong business balance sheets and high profitability were seen as supporting continued growth in expenditures on software and equipment. However, it was noted that if the reported slowing of increases in retail sales continued, businesses might trim capital spending plans.

With regard to the federal sector, spending related to last year’s hurricanes appeared likely to abate, and federal expenditures overall would probably be providing less impetus to aggregate demand going forward. Federal receipts had been increasing rapidly, a development that reflected continued strong growth in labor and non-labor income.

Some participants noted that global demand remained strong, potentially adding to worldwide pressures on resources. Increased geopolitical risks, particularly related to developments in the Middle East, continued to put pressure on energy prices, and the prices of many other commodities also had firmed over the intermeeting period. Central banks had been raising interest rates globally, however, and this was viewed as a factor that should help to restrain global inflation pressures. But it was also noted that the recent decline in the foreign exchange value of the dollar could lead to a weakening of import competition in the form of increases in the prices of tradable goods in the United States.

As at the June meeting, all participants expressed concern about continued elevated readings on core inflation and inflation risks going forward. Several participants took note of the revisions to historical data that painted a more worrisome picture of cost trends; measures of unit labor costs had been marked up, reflecting upward revisions to labor compensation and downward revisions to labor productivity. Core PCE inflation now appeared to have been running at or above a 2 percent annual rate for more than two years, with prices accelerating over the first half of 2006. Many participants noted that the extent to which the increase in core inflation so far this year reflected transitory or persistent influences remained unclear. The recent pickup in price increases appeared to be broad-based, and a number of business contacts reported greater ability to pass through higher costs. However, some types of price pressures were not likely to continue to increase. The recent acceleration in shelter costs, which contributed substantially to the increase in core inflation this year, could prove short-lived. Moreover, while energy prices had risen further in the intermeeting period, energy prices could well level out in coming quarters. Also, the anticipated moderation in aggregate demand implied that pressures on resource utilization likely would not increase and could abate to a degree going forward. Finally, inflation expectations appeared to have remained contained despite adverse news about prices. In light of these factors, most participants expressed the view that core inflation was likely to decline gradually over the next several quarters, although appreciable upside risks remained.

In the Committee’s discussion of monetary policy for the intermeeting period, nearly all members favored keeping the target federal funds rate at 5-1/4 percent at this meeting. In view of the elevated readings on costs and prices, many members thought that the decision to keep policy unchanged at this meeting was a close call and noted that additional firming could well be needed. But with economic growth having moderated some, most members anticipated that inflation pressures quite possibly would ease gradually over coming quarters and the current stance of policy could well prove to be consistent with satisfactory economic performance. Under these circumstances, keeping policy unchanged at this meeting would allow the Committee to accumulate more information before judging whether additional firming would be necessary to foster the attainment of price stability over time. The full effect of previous increases in interest rates on activity and prices probably had not yet been felt, and a pause was viewed as appropriate to limit the risks of tightening too much. Following seventeen consecutive policy firming actions, members generally saw limited risk in deferring further policy tightening that might prove necessary, as long as inflation expectations remained contained.

All members agreed that the statement to be released after the meeting should convey that inflation risks remained dominant and that consequently keeping policy unchanged at this meeting did not necessarily mark the end of the tightening cycle. They concurred that an indication that economic growth had moderated was appropriate, and a consensus favored citing the same reasons for that moderation as in the June statement. Members also agreed that the statement should both mention factors contributing to the likely moderation of inflation pressures over time and reiterate the forces that were seen as having the potential to sustain inflation pressures.

At the conclusion of the discussion, the Committee voted to authorize and direct the Federal Reserve Bank of New York, until it was instructed otherwise, to execute transactions in the System Account in accordance with the following domestic policy directive:

"The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability and promote sustainable growth in output. To further its long-run objectives, the Committee in the immediate future seeks conditions in reserve markets consistent with maintaining the federal funds rate at an average of around 5-1/4 percent."

The vote encompassed approval of the text below for inclusion in the statement to be released at 2:15 p.m.:

"The Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information."

Votes for this action: Messrs. Bernanke and Geithner, Ms. Bies, Messrs. Guynn, Kohn, Kroszner, Ms. Pianalto, Mr. Warsh, and Ms.Yellen.

Votes against this action: Mr. Lacker.

Mr. Lacker dissented because he believed that further tightening was needed to bring inflation down more rapidly than would be the case if the policy rate were kept unchanged. The inflation outlook had deteriorated in the intermeeting period; the recent surge in core inflation had persisted and appeared to be broad-based, while the revision of the national income and product accounts indicated a recent upswing in compensation and unit labor costs. Although real growth was likely to be somewhat lower in coming quarters, in his view it was unlikely to moderate by enough to bring core inflation down. He noted, moreover, that real short-term interest rates had fallen in the intermeeting period and were still low relative to rates typically associated with sustained expansions.

The Committee then turned to a discussion of the goals and principles that should guide the review of its approaches to policy communications that it had recently undertaken. Participants agreed that communication was important for democratic accountability and could promote the effectiveness of policy. Although considerable strides had been made in FOMC communications over the past ten years or so, participants generally thought that further advances were possible. In that regard, consideration of how the Committee expressed both its economic objectives and its assessments of expected progress toward those objectives was likely to be particularly important. Conveying the degree of uncertainty and conditionality about Committee expectations of future developments was seen as a major challenge. It was recognized that communications should support appropriate decisionmaking, including respect for the diversity of views that contributed to good decisions. Participants agreed to continue the Committee’s review of communications issues at the FOMC meeting in October.

Dodging Bullets

The feared arrival of Hurricane/Tropical Storm Ernesto in the Western Caribbean didn't happen - thanks to strong winds from the west.  But how long will the Gulf continue to be lucky? Still, Florida is not out of the woods yet, and the watch is up on the Atlantic side.  At some point, no doubt a bit further along into the hurricane season, we ought to see revealed how much "diddling" of statistics there will be.  You'll remember that last year, shut-in statistics on oil (to pick one item) was based on a daily run rate out of the Gulf of Mexico (GOM) of about 1.5-million barrels per day.  I suspect that should we see shut-in oil and gas this year, the stats will be based on some smaller production cap, because it just wouldn't do to admit that there's as much permanently lost production from 2005-2006 as our friends in the oil patch keep intimating.

 

Of course, the other problem to consider when you're looking at production figures is that we've been reading how Mexico's giant Cantarell field may also be past peak now (joining Saudi Arabia).  No doubt that at some point, the GOM fields will pass peak, as well. Still, for this morning, the price of oil is down due to the relief of "no storm for now" thinking.

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If you shade your bets on world wars over energy (resources) and religion, as we do around here, there's an interesting - almost curious note - today that will likely pass by the Mainstream Media (MSM):  Iran has issued a report saying that it will miss its 2010 oil production targets by 500,000 - half a million - barrels per day!

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Regardless of whether Iran's new figures are real - or simply footwork to look less inviting as an invasion/bombing target by the oil/resource/empire driven BCRN (Bush/Cheney/Rumsfeld/Neocon) cabal is no doubt open to speculation.  But more experts keep piping up that we're only dodging the big energy bullet for a short time - then the clock runs out.  There's a very good article in the (Australian) Sydney Morning Herald about what's ahead according to California professor Richard Heinberg:

"How bad will it be? If Heinberg is to be believed, the impending dislocation caused by the end of the oil era will be about as bad as it gets.

From global resource wars as oil-dependent economies battle for control of remaining resources to widespread famine caused by the slowdown in oil-dependent agribusiness, the picture he paints is nothing short of cataclysmic.

Reactions to his predictions vary. "I've got some pretty virulent hate mail," he says. "But I have to say I've got mostly thanks from people for alerting them to this. I'm a little surprised because the message is so dire that when people first encounter the information it is a bit traumatic. Some people have to go through a period of psychological adjustment. Maybe they are better off not knowing, I don't know."

Not to throw too many rocks at our present political "leadership", or their MSM puppets, but a thoughtful person might want to pay a lot less attention to stories like the dropping of charges in the JonBent Ramsey case and a lot more attention to crop yield stories. It's depressing to think that we continue to squander an opportunity to prepare for a different energy-consumption profile lifestyle that geopolitical, economic, and geologic reality will force on us in the near future, whether we agree to such constraints, or not. Universe don't care and participation is not optional.

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A fair numbers of readers have written in to opine one way, or the other, about the New Farmer's Almanac - which is predicting a cold & snowy winter ahead.  A typical newsgroup posting goes like this:

"I've been very busy these last few weeks getting ready for winter-and I know it's gonna be a snowy one. Even before the almanac prediction came out, my dogs started shedding like crazy and are growing in a very thick coat for the winter. Gotta get the woodstove (an old double barrel sotz) sanded, repainted, and ready for action. Gotta get the "new" storage shed re-arranged to my liking. I have a whole lotta "gottas" and not much time ."

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Readers of UrbanSurvival, being a more thoughtful crew than the swirling masses, are doing what they can, yet at the same time, there's a sense that government statistics and anecdotal reports about gasoline prices somehow aren't capturing the whole "real life" experience well. A Syracusian [which I think I can call a person from Syracuse] (NY) reader sends this:

"Gas prices "may be down 15 cents per/gallon", but at Syracuse, New York we are still paying about $3.05 per/gallon. There has been NO drop whatsoever in pricing. But then, that is NOT a surprise in the highest taxed to death state in the nation!

BTW, our economy at Syracuse is in very bad shape as is ALL of upstate New York. I used to be an industrial lubricant sales rep for an independent distributor covering all of upstate New York. We supplied Exxon/Mobil/Sunoco/etc lubricating oils and cutting fluids to manufacturers. When all the factories closed our company died, I am now bartending part time and had to sell my house. New York States' response? Raise every tax and fee they can think of! The average property tax for houses here are between $4000 and $6000 per year and going UP every year! Incredible!! Utilities are going through the roof as well. My 83 year old mother burns 25 cords of wood every winter to stay warm and save money! (But wood is going up in price very fast as well)

Outside sales rep jobs here are a joke, low pay and limited reimbursement for travel expenses that do not begin to cover out of pocket driving costs. Oh well, at least we have LOTS of water here and rain every other day! (Along with plenty of chemtrails being sprayed regularly over us at upstate New York)! "

To return to my point, while the US is paralyzed by the gunpoint democracy plan, beneficial to defense contractors, I have to note that China has continued to focus on breeding new strains of crops which will ultimately result in much higher biodiesel production. I might offer that China seems more inclined to long-term strategic thinking, comes from a several thousand year history, where the US comes from a 230-year history, and the lynchpin of our Middle East policy has a 58-year history.

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While the US It's not exactly a Norman Rockwell picture of life in America, the notion that we're a country dodging bullets seems to capture at least some of the essence that comes through in our daily load of emails - usually number more than 200.

 

Election Upheld

So what kind of leader will Felipe Calderon be when he takes office on December 1st in Mexico/  Here's a summary of his previously stated positions on various issues, not that they won't change now that he's going into office.

 

All this seems on railroad tracks now that allegations of fraud have been rejected by Mexco's top electoral court. You didn't really think the outcomes would be anything else, did you? Ha!

 

How Old?

A report out of Ecuador that the world's oldest woman has died - at age 116!

 

By the way, life expectancy in the US is 19th in the world for 2006 - 77.8 years.   The short list of places to live long (>80) are #1 Japan (81.2), a three-way tie for seconds at 80.5 years between Australia, Sweden, and Switzerland, and Canada comes in 5th at 80.2 years.  Worst outlook: Angola at 38.6 years.

 

Doggie Driver

A woman in China has wrecked her car while trying to teach her dog to drive. This makes as much sense as most of the other headlines today.

 

Unless, of course, you care that Saddam Hussein was a "South Park" fan. Seems more like a Beavis and Butthead kinda guy, but no one's asking me.

 

Not a Dynamite Idea

A 21-year college student old is free on $75,000 bail while awaiting legal action for brining a stick of dynamite (along with a blasting cap) in his checked luggage from Argentina. If you're wondering which college would claim such a student, that'd be Lafayette College according to the report. I'll look up their admissions office's address later.

 

Churn

Prudential admits criminal wrongdoing says a report, and is paying $600-million for misleading mutual fund investors.  They did what?

"Federal and state authorities alleged that from 1999 through June 2003, a number of brokers at Prudential Securities deceptively placed thousands of prohibited market timing trades of mutual funds for their clients, who were usually hedge funds, the SEC and the DOJ explained in their statements on Monday.

 

By placing their trades in multiple accounts, often with multiple identities, the brokers were able to evade efforts by the mutual funds to block the market timing, the regulators said. "

Calendar:

Fed minutes due out later today.

 

Pension Problems

A friend in Israel has been thinking about my none-to-delicate handling of the broader pension issues raised by this week's www.peoplenomics.com report on airlines.  He writes:

"I've changed employers frequently in my working life. Used to feel some regret at not having stayed in one place long enough to become vested in a pension plan - in the few places that did offer a pension plan with employer contribution. Seeing as how many of the big corporations are defaulting (max $44,000 payout per person by the Pension Benefit Guarantee Corp is "peanuts"!) I feel less bad for myself, but I can imagine the chagrin of those who were counting on a livable pension as a reward for years of labor, and now end up with much less they were promised.

I wonder how the nation's municipal, state, and federal pension plans are faring? I can guess. I tend to think that FedGov will take care of its own, however, if only to encourage loyal service.

In Peoplenomics special report # 255 which focused on air travel, you wrote:

"...airlines early on evolved from the mode of travel for the elites, to mass transit by the 1980's. What seems to be happening now is the deliberate (or otherwise) slow motion end of the "mass transit" phase and a return to elite use on the horizon. Whether by price, government travel approval ('safe traveler' plans), or any number of other controls, the friendly skies are looking less inviting now than ever."

Indeed so, George - it's been hard not to notice this. One result of the rarification of air travel may be increased use of teleconferencing.

Another result - assuming this trend towards unfriendly skies continues - may be the strengthening of the psychological attachment of the individual to his locale (or to his "tribe", whatever that may be for each person), and perhaps to his state, as all beyond the radius of a 2 or 3 day car drive becomes remote. His psychological ties to his country will most certainly strengthen by default, as everything "overseas" becomes even more foreign, strange, and suspect.

I was conversing a few months ago with a fellow who was mulling over emigration from the U.S. (He was thinking about Thailand.) He speculated on the possibility of the future imposition of a "travel deposit" in the U.S., where an individual would have to deposit a sizeable amount of money in escrow before leaving the country, as a guarantee that he would return. This to discourage exodus of capital. Of course capital controls themselves are another future possibility.

Keep the ammo dry. Hope you won't need it other than in sport.

The problem with us Baby Boomers is that few have figured out exactly what will happen when everyone tries to leave the financial-casino/theater-smelling-of-smoke all at the same time. Gray Cardiff wrote a book way back in 1980 called "The Coming Real Estate Crash" (which I just ordered for a buck from an Amazon seller in order to review his scenarios).

There's this fervent hope/belief that the country will be able to survive with all of our paper assets intact as we go through what will be the largest rollover in history.  Curious bet to be making.

One of the reasons my friend Jas Jain makes such confident deflation forecasts is that he's figured out that when everyone goes to a casino, not everyone can be "winners."  And Jas' latest outlook?

"ECRI’s WLI (Weekly Leading Index) Signals US Recession In Four Months & A Specific Inflation Forecast

But, don’t expect ECRI (Economic Cycles Research Institute) economists to make a recession call until the economy is already in a recession, as was the case last time around in 2000-01.

So, how am I calling for a recession using ECRI data witch such precision?

The WLI Index is a growing series, just like the GDP, but it grows at a slower rate, around 2% a year, than the real GDP. It also fluctuate lot more than the GDP. Currently the index is BELOW where it was 28 months (the duration was arrived at scientifically) ago! Last time that the growth over a 28-month period was negative, in the previous cycle, was in late November of 2000 and the economy entered the recession in March 2001. BTW, THIS (NEGATIVE GROWTH OVER A 28-MONTH PERIOD) HAS CORRECTLY CALLED ALL THE RECESSIONS FOR THE 39 YEARS FOR WHICH I HAVE THE DATA AND NO FLASE ALARMS (DURING MID 1990s THE GROWTH NEVER FELL BELOW 2%). This fits like a glove to my forecast of the recession to begin in December 2006, give or take a month.

BTW, if one takes a long-term view of the index one can clearly see that the Scam Market is in a Secular Bear Market for economic reasons.

David Rosenberg of ML (08/28/06):

“ECRI pretty tight with S&P too. We found a relationship even better than the NAHB with the S&P 500. Try the ECRI (Economic Cycle Research Institute) leading index. A 90% correlation which points to at peak at hand. The ECRI leading growth index slipped to -1.6% as of the August 18th week from -1.4%, the weakest in 3½ years.”

-x-x-x-x-x-x-x-x-x-

Specific Inflation Forecast

Barring an attack on Iran, for Oct’06 the YoY headline CPI will be BELOW 2% and some time in 2007Q1 it will be BELOW ZERO.

The main driver would be precipitous fall in energy prices as the economy effortlessly slides into a recession, paying no attention to Bernanke & Co. The Fed would be proven to be impotent, finally."

I'm still hoping for some good old-fashioned inflation, but the deflationary pressures are out there, for sure. I'd have to say Jas is now a 70-30 favorite to win our win bet this year.


Monday August 28, 2006

Monday's Whump Watch

Look, I'll save you the trouble of getting up: The market's going down during the first part of the week and then, by the end of the week a bit of a bounce as the country makes one last fling at "party" prior to the down hill sleigh ride that will result from the transition to violence/revolution/rebellion that ought to be visible to most by the middle of September, at about the same time as the market declines get going in earnest. But since you're up already, I'll find in some of the blanks for you from the overnight headlines. 

 

Naturally, one of the stories we will be watching as the day develops will be the predicable unhappy sentiments that will come when the Mexican electoral court rubberstamps the disputed July 2 "election" results.  Tensions are already high in Oaxaca where at least one death is attributed to the election dispute. 

 

I'm intrigued to see how the USA/Pop entity in web bot model space will resolve into conflict/revolution/rebellion this fall.  Perhaps Mexico will be a flashpoint/trigger.

 

Hardly a "Civil" War

Not that a war is anything but a serious breakdown in the normal operation of the human mind, but that continues to become evident in Iraq where we've been pouring US dollars on bad decision-making for better than three years, after being "bait & switched" into the war for Iraqi oil, now gone terribly bad.  Just how bad?  Terminally bad for more than 50 people in the country this weekend.

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The violence in Iraq has also spilled over into Turkey, which along with Iran, keeps funneling support to various factions in Northern Iraq, where there's not even a charade of Western control. Result: bomb explosions that killed 27 and are linked to religious differences.  How unique for the region, huh?

 

Bomb Popularity

Not to put too much of a "gallows bent" on our normally cheerful Monday review of life (Ha! Just kidding...) but have you noticed how bombs have become something of a "news fixture" globally?  Oh sure, you'd expect to see "bomb" as a word associated with would-be terrorist suspects in the USA, but check out where else in the world they're going off lately:

And even when the actual use of bombs stops, it doesn't.  Take for example the World War II bomb that went off south of Manila and killed five people this weekend. Or, take the US use (and sale to our "friends" of depleted uranium shells, associated with climbing global disease rates.  Slogan of the day: "Bombs, the gift that keeps on giving."

 

A Telling War Apology

The head of Hezbollah has apologized for the kidnapping of two Israeli soldiers that sparked the month-long war. Regional lesson?  Abduct IDF forces and end up in a war.  I wonder if anyone's paying attention in Damascus?</